EXHIBIT 10.84
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CREDIT AGREEMENT
among
FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Borrower,
BANK OF AMERICA, N.A.,
as the Administrative Agent,
BANC OF AMERICA SECURITIES LLC,
as sole lead arranger and sole book manager
and
the Lenders named herein
December 22, 2000
TABLE OF CONTENTS
ARTICLE 1 Definitions........................................................1
Section 1.1 Definitions...................................................1
Section 1.2 Other Definitional Provisions................................20
Section 1.3 Accounting Terms and Determinations..........................20
Section 1.4 Time of Day..................................................21
ARTICLE 2 Term Loan Facility................................................21
Section 2.1 Term Loans...................................................21
Section 2.2 Term Notes...................................................22
Section 2.3 Repayment of Term Loans......................................22
Section 2.4 Use of Proceeds..............................................22
Section 2.5 Term Loans Borrowing Base....................................22
ARTICLE 3 Revolving Credit Facility.........................................23
Section 3.1 Revolving Commitments........................................23
Section 3.2 Notes........................................................23
Section 3.3 Repayment of Revolving Loans.................................23
Section 3.4 Use of Proceeds..............................................23
Section 3.5 Revolving Commitment Fee.....................................23
Section 3.6 Termination or Reduction of Revolving Commitments............23
Section 3.7 Revolving Loans Borrowing Base...............................24
ARTICLE 4 Interest and Fees.................................................24
Section 4.1 Interest Rate................................................24
Section 4.2 Payment Dates................................................24
Section 4.3 Default Interest.............................................24
Section 4.4 Conversions and Continuations of Accounts....................25
Section 4.5 Computations.................................................25
ARTICLE 5 Administrative Matters............................................25
Section 5.1 Borrowing Procedure..........................................25
Section 5.2 Minimum Amounts..............................................25
Section 5.3 Certain Notices..............................................25
Section 5.4 Prepayments..................................................26
Section 5.5 Method of Payment............................................28
Section 5.6 Pro Rata Treatment...........................................28
Section 5.7 Sharing of Payments..........................................29
Section 5.8 Non-Receipt of Funds by the Administrative Agent.............29
ARTICLE 6 Change in Circumstances...........................................30
Section 6.1 Increased Cost and Reduced Return............................30
Section 6.2 Limitation on Libor Accounts.................................31
Section 6.3 Illegality...................................................31
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Section 6.4 Treatment of Affected Accounts...............................31
Section 6.5 Compensation.................................................32
Section 6.6 Taxes........................................................33
Section 6.7 Withholding Tax Exemption....................................34
ARTICLE 7 Security..........................................................34
Section 7.1 Collateral...................................................34
Section 7.2 Guaranties...................................................35
Section 7.3 New Subsidiaries, New Issuances of Capital Stock.............35
Section 7.4 New Mortgaged Properties.....................................36
Section 7.5 Release of Collateral........................................37
ARTICLE 8 Conditions Precedent..............................................37
Section 8.1 Initial Loans................................................37
Section 8.2 All Loans....................................................40
ARTICLE 9 Representation and Warranties.....................................41
Section 9.1 Corporate Existence..........................................41
Section 9.2 Financial Condition..........................................41
Section 9.3 Corporate and Similar Action; No Breach......................42
Section 9.4 Operation of Business........................................42
Section 9.5 Litigation and Judgments.....................................42
Section 9.6 Rights in Properties; Liens..................................42
Section 9.7 Enforceability...............................................43
Section 9.8 Approvals....................................................43
Section 9.9 Debt.........................................................43
Section 9.10 Taxes.......................................................43
Section 9.11 Margin Securities...........................................43
Section 9.12 ERISA.......................................................43
Section 9.13 Disclosure..................................................44
Section 9.14 Subsidiaries; Capitalization................................44
Section 9.15 Agreements..................................................44
Section 9.16 Compliance with Laws........................................44
Section 9.17 Investment Company Act......................................45
Section 9.18 Public Utility Holding Company Act..........................45
Section 9.19 Environmental Matters.......................................45
Section 9.20 Broker's Fees...............................................46
Section 9.21 Employee Matters............................................46
Section 9.22 Solvency....................................................46
ARTICLE 10 Positive Covenants...............................................46
Section 10.1 Reporting Requirements......................................46
Section 10.2 Maintenance of Existence; Conduct of Business...............49
Section 10.3 Maintenance of Properties...................................49
Section 10.4 Taxes and Claims............................................49
Section 10.5 Insurance...................................................49
Section 10.6 Inspection Rights...........................................50
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Section 10.7 Keeping Books and Records...................................50
Section 10.8 Compliance with Laws........................................50
Section 10.9 Compliance with Agreements..................................51
Section 10.10 Further Assurances.........................................51
Section 10.11 ERISA......................................................51
ARTICLE 11 Negative Covenants...............................................51
Section 11.1 Debt........................................................51
Section 11.2 Limitation on Liens and Restrictions on Loan Parties........52
Section 11.3 Mergers, Etc................................................54
Section 11.4 Restricted Junior Payments..................................54
Section 11.5 Investments.................................................55
Section 11.6 Limitation on Issuance of Capital Stock.....................56
Section 11.7 Transactions With Affiliates................................56
Section 11.8 Disposition of Assets.......................................56
Section 11.9 Lines of Business...........................................56
Section 11.10 Limitations on Restrictions Affecting Subsidiaries.........56
Section 11.11 Environmental Protection...................................57
Section 11.12 ERISA......................................................57
Section 11.13 No Prepayment of Debt......................................57
Section 11.14 No Material Change in Underwriting Standards...............57
Section 11.15 No Extension or Amendment of Certain Documents.............57
ARTICLE 12 Financial Covenants..............................................58
Section 12.1 Minimum Tangible Net Worth..................................58
Section 12.2 Maximum Net Charge-Off Ratio................................58
Section 12.3 Maximum Delinquency Ratio...................................58
Section 12.4 Minimum Consolidated Fixed Charge Coverage Ratio............58
Section 12.5 Minimum Borrower Only Fixed Charge Coverage Ratio...........59
Section 12.6 Maximum Total Liabilities plus Contingent Obligations to
Tangible Net Worth Ratio....................................59
ARTICLE 13 Default..........................................................59
Section 13.1 Events of Default...........................................59
Section 13.2 Remedies....................................................62
Section 13.3 Performance by the Administrative Agent.....................62
Section 13.4 Set-off.....................................................63
Section 13.5 Continuance of Default......................................63
ARTICLE 14 The Administrative Agent.........................................63
Section 14.1 Appointment, Powers, and Immunities.........................63
Section 14.2 Reliance by the Administrative Agent........................64
Section 14.3 Defaults....................................................64
Section 14.4 Rights as Lender............................................64
Section 14.5 Indemnification.............................................64
Section 14.6 Non-Reliance on the Administrative Agent and Other Lenders..65
Section 14.7 Resignation of the Administrative Agent.....................66
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Section 14.8 The Administrative Agent Fee................................66
Section 14.9 Several Commitments.........................................66
ARTICLE 15 Miscellaneous....................................................66
Section 15.1 Expenses....................................................66
Section 15.2 Indemnification.............................................67
Section 15.3 Limitation of Liability.....................................68
Section 15.4 No Duty.....................................................68
Section 15.5 No Fiduciary Relationship...................................68
Section 15.6 Equitable Relief............................................68
Section 15.7 No Waiver; Cumulative Remedies..............................69
Section 15.8 Successors and Assigns......................................69
Section 15.9 Survival....................................................71
Section 15.10 Entire Agreement...........................................71
Section 15.11 Amendments and Waivers.....................................71
Section 15.12 Maximum Interest Rate......................................72
Section 15.13 Notices....................................................73
Section 15.14 Governing Law; Venue; Service of Process...................73
Section 15.15 Counterparts...............................................73
Section 15.16 Severability...............................................74
Section 15.17 Headings...................................................74
Section 15.18 Non-Application of Chapter 15 of Texas Credit Code.........74
Section 15.19 Construction...............................................74
Section 15.20 Independence of Covenants..................................74
Section 15.21 Waiver of Jury Trial.......................................74
Section 15.22 Confidentiality............................................74
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INDEX TO EXHIBITS
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EXHIBIT DESCRIPTION OF EXHIBIT
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"A" Revolving Note
"B" Term Note
"C" Notice of Borrowings, Conversions,
Continuations or Prepayments
"D" Assignment and Acceptance
"E" Compliance Certificate
"F" Guaranty (Subsidiary)
"G" Subsidiary Joinder Agreement
"H" Borrowing Base Compliance Certificate
"I" Charge-off Policy
INDEX TO SCHEDULES
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SCHEDULE DESCRIPTION OF SCHEDULE
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1.1 Exempt Subsidiaries
9.4 Operation of Business
9.5 Litigation and Judgments
9.6(A) Real Property
9.6(B) Intellectual Property
9.6(C) Locations
9.9 Debt
9.10 Tax Matters
9.12 ERISA
9.14 Subsidiaries; Capitalization
9.15 Agreements
9.19 Environmental Matters
9.21 Employee Matters
11.2 Liens
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("AGREEMENT"), dated as of December 22, 2000 (the
"CLOSING DATE"), is among FIRST INVESTORS FINANCIAL SERVICES, INC., a
corporation duly organized and validly existing under the laws of the State of
Texas (the "BORROWER"), each of the banks or other lending institutions which is
or which may from time to time become a signatory hereto or any successor or
assignee thereof pursuant to SECTION 15.8(B) (individually, a "LENDER" and,
collectively, the "LENDERS"), BANK OF AMERICA, N.A., a national banking
association, as administrative agent for the Lenders (in its capacity as
administrative agent, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT"), and BANC OF AMERICA SECURITIES LLC, as sole lead
arranger and sole book manager (the "LEAD ARRANGER").
R E C I T A L S:
The Borrower has requested that the Lenders extend credit to the Borrower
in the form of a revolving credit facility and a term credit facility. The
Lenders are willing to extend such credit to the Borrower upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following terms have
the following meanings:
"ACCOUNT" means either a Base Rate Account or a Libor Account.
"ADJUSTED LIBOR RATE" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
obtained by dividing (a) the Libor Rate for such Libor Account for such Interest
Period by (b) 1 minus the Reserve Requirement for such Libor Account for such
Interest Period.
"ADJUSTED NET INCOME" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding: (a) the income of any other Person (other than its Subsidiaries) in
which such Person or any of its Subsidiaries has an ownership interest, unless
received by such Person or its Subsidiary in a cash distribution; (b) any
after-tax gains or losses attributable to an asset disposition other than in the
ordinary course of business; and (c) to the extent not included in CLAUSE (A)
and CLAUSE (B) above, any after-tax extraordinary, non-cash or nonrecurring
gains or losses.
CREDIT AGREEMENT - PAGE 1
"ADMINISTRATIVE AGENT" has the meaning set forth in the introductory
paragraph of this Agreement.
"ADVANCE PERCENTAGE" means the decimal equivalent of a fraction the
numerator of which is 100 and the denominator of which is 110.
"AFFECTED LIBOR ACCOUNTS" has the meaning specified in SECTION 6.5.
"AFFILIATE" means, with respect to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds 10% or more of any class of Voting
Stock of such Person; or (c) 10% or more of the Voting Stock of which is
directly or indirectly beneficially owned or held by the Person in question. As
used in this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of Voting Stock, by
contract, or otherwise; PROVIDED, HOWEVER, in no event shall the Administrative
Agent, any Lender or any Affiliate of any Lender be deemed an Affiliate of the
Borrower or any Subsidiary of the Borrower.
"AGREEMENT" has the meaning set forth in the introductory paragraph of
this Agreement, as the same may be amended or otherwise modified.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Account, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Account on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to the Administrative Agent and the Borrower by written
notice in accordance with the terms hereof as the office by which its Accounts
of such Type are to be made and maintained.
"APPLICABLE RATE" has the meaning set forth in SECTION 4.1.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance, in
substantially the form of EXHIBIT "D", entered into by a Lender and an Eligible
Assignee and accepted by the Administrative Agent pursuant to SECTION 15.8(B).
"BANK OF AMERICA" means Bank of America, N.A. (formerly NationsBank,
N.A.), and its successors and assigns.
"BANKRUPTCY CODE" has the meaning set forth in SECTION 13.1(E).
"BASE RATE" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate plus 0.5%, or (b) the Prime Rate. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.
"BASE RATE ACCOUNT" means a portion of a Loan that bears interest at a
rate based upon the Base Rate.
CREDIT AGREEMENT - PAGE 2
"BASE RATE MARGIN" means 1.5% per annum.
"BORROWER" has the meaning set forth in the introductory paragraph of this
Agreement.
"BORROWING BASE REPORT" means a report in substantially the form of
Exhibit "H", properly completed and executed by a Responsible Officer.
"BUSINESS DAY" means (a) any day excluding Saturday, Sunday, and any day
which either is a legal holiday under the laws of the State of Texas or the
State of North Carolina or is a day on which banking institutions located in any
such states are closed, and (b), with respect to all borrowings, payments,
Conversions, Continuations, Interest Periods, and notices in connection with
Loans subject to Libor Accounts, any day which is a Business Day described in
CLAUSE (A) above and which is also a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person according to GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"CAPITAL STOCK" means corporate stock and any and all shares, partnership
interests, membership interests, equity interests, rights, securities, or other
equivalent evidences of ownership, or any options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person (however designated) issued by any
entity (whether a corporation, partnership, limited liability company, limited
partnership, or other type of entity).
"CHANGE OF CONTROL" means the occurrence of any of the following: (a) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the
Securities Exchange Act), (b) the adoption of a plan relating to the liquidation
or dissolution of the Borrower, any Subsidiary of the Borrower, FIVH or FIFSG,
(c) the consummation of any transaction (including, without limitation, any
merger or consolidation) first occurring after the Closing Date the result of
which is that any "person" (as defined above) becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 30% of the Voting Stock of
FIFSG (measured by voting power rather than number of shares), (d) the first day
on which a majority of the members of the Board of Directors of FIFSG are not
Continuing Directors or (e) the failure at any time of FIFSG to own 100% of the
Capital Stock of FIVH or of FIVH to own 100% of the
CREDIT AGREEMENT - PAGE 3
Capital Sock of Borrower or of the Borrower to own 100% of the issued and
outstanding Capital Stock of each of its Subsidiaries.
"CHARGED-OFF RECEIVABLES" means with respect to Receivables of the
Borrower or any Subsidiary which the Borrower has determined, in accordance with
its charge-off policies consistently applied with past practices as described on
EXHIBIT I, that all or a portion of the outstanding principal balance is
uncollectable, the aggregate principal balance of all such Receivables as of the
date immediately prior to the date any such determination of Charged-Off
Receivables is made.
"CLOSING DATE" has the meaning set forth in the introductory paragraph of
this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means all Property of any nature whatsoever upon which a Lien
is created or purported to be created by any Loan Document as security for the
Obligations or any portion thereof.
"COMMITMENT PERCENTAGE" means, with respect to each Lender, the percentage
equivalent of the amount of the Commitments of such Lender (or the Commitment in
question) divided by the aggregate amount of all the Commitments of all of the
Lenders (or the Commitment in question of all the Lenders).
"COMMITMENTS" means, with respect to each Lender, the commitments
hereunder such Lender holds which may be a Revolving Commitment, a Term
Commitment, or any combination thereof and, with respect to all Lenders, all
such commitments.
"COMPLIANCE CERTIFICATE" means a certificate in substantially the form of
EXHIBIT "E", properly completed and executed by a Responsible Officer.
"CONTINGENT OBLIGATIONS" means , with respect to any Person, any
obligation or arrangement of such Person to guarantee or intended to guarantee
any Debt, leases, dividends or other payment obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (b) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is
CREDIT AGREEMENT - PAGE 4
made (or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder), as determined by such Person in good faith.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to SECTION 4.4 of a Libor Account from one Interest Period
to the next Interest Period.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of FIFSG who (a) was a member of such Board of
Directors on the Closing Date or (b) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"CONTRACT RATE" has the meaning specified in SUBSECTION 15.12(A).
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to SECTION 4.4 or ARTICLE 6 of one Type of Account into another Type of
Account.
"DEBT" means, as to any Person at any time (without duplication): (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than ninety (90) days or that
are being contested in good faith by appropriate proceedings diligently pursued
and for which adequate reserves have been established to the satisfaction of the
Administrative Agent; (d) all Capital Lease Obligations of such Person; (e) all
Contingent Obligations of such Person; (f) all obligations secured by a Lien
existing on property owned by such Person, whether or not the obligations
secured thereby have been assumed by such Person or are non-recourse to the
credit of such Person; PROVIDED, HOWEVER, that the amount of such Debt of any
Person described in this CLAUSE (F) shall, for purposes of this Agreement, be
deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Debt
or (ii) the fair market value of the property or asset encumbered, as determined
by the Administrative Agent in its reasonable discretion; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments; (h) all liabilities of such Person in respect of unfunded vested
benefits under any Plan (excluding obligations to deliver stock in respect of
stock options or stock ownership plans); and (i) all vested obligations of such
Person for the payment of money under any noncompete, consulting, or similar
arrangements providing for the deferred payment of the purchase price for an
acquisition consummated prior to the date hereof to the extent that any such
obligations are, according to GAAP, reflected as a capitalized liability on a
balance sheet of such Person.
"DEFAULT" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"DEFAULT RATE" means, in respect of any principal of any Loan, or any
other amount payable by the Borrower under any Loan Document which is not paid
when due (whether at stated maturity,
CREDIT AGREEMENT - PAGE 5
by acceleration, or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of 2.0%, PLUS
the Applicable Rate for Base Rate Accounts as in effect from time to time
(PROVIDED, that if such amount in default is principal of a Loan subject to a
Libor Account and the due date is a day other than the last day of an Interest
Period therefor, the "Default Rate" for such principal shall be, for the period
from and including the due date and to but excluding the last day of the
Interest Period therefor, 2.0%, PLUS the interest rate for such Account for such
Interest Period as provided in SECTION 4.1, and, thereafter, the rate provided
for above in this definition).
"DELINQUENT RECEIVABLES" means the aggregate principal balance of all
Receivables of the Borrower or any Subsidiary as to which more than ten dollars
of any scheduled payments remains unpaid for more than 30 days from the date at
which it is contractually due and payable.
"DOLLARS" and "$" mean lawful money of the U.S.
"EBITDA" means, for any period and any Person, the total of the following
calculated without duplication for such Person on a consolidated basis for such
period: (a) Adjusted Net Income; PLUS (b) any provision for (or less any benefit
from) income or franchise taxes deducted in determining Adjusted Net Income;
PLUS (c) Interest Expense deducted in determining Adjusted Net Income; PLUS (d)
amortization and depreciation expense deducted in determining Adjusted Net
Income; PLUS (e) other noncash charges deducted in determining Adjusted Net
Income and not already deducted in accordance with CLAUSE (D) above or CLAUSE
(B) and CLAUSE (C) of the definition of Adjusted Net Income; MINUS (f) noncash
credits included in determining consolidated Adjusted Net Income and not already
excluded in accordance with the definition of Adjusted Net Income.
"ELIGIBLE ASSIGNEE" has the meaning specified in SUBSECTION 15.8(B)(I).
"ELIGIBLE RECEIVABLES" shall mean, as of any day, each Receivable of the
Borrower:
(a) which is payable in Dollars;
(b) at the time of origination, the obligor on which has provided,
as its most recent billing address, an address located in the United States;
(c) which is not a Delinquent Receivable at the time such Receivable
becomes part of the Collateral;
(d) which is not more than 30 days contractually delinquent from the
due date, at the time such Receivable becomes part of the Collateral, nor does
the obligor with respect thereto have any other automotive receivable owing to
the Borrower which is 60 or more days contractually delinquent or defaulted at
the time of transfer;
(e) as to which at the time such Receivable first became part of the
Collateral, the Borrower will have good and marketable title thereto and which
is not subject to any Lien or claim or other encumbrance for any work, labor or
materials performed on the related financed vehicle which are Liens prior to, or
equal or coordinate with, the security interest in the financed vehicle
CREDIT AGREEMENT - PAGE 6
granted by the Receivable, and as to which, the Borrower shall have a valid and
perfected first priority security interest, free and clear of all Liens,
encumbrances, security interests and rights of others;
(f) as to which at the time such Receivable first became part of the
Collateral, to the best of the Borrower's knowledge, a bona-fide down payment
has been made;
(g) which provides for level monthly payments (provided that the
payment in the first and last month of the Receivable may be minimally different
from the level payment) that fully amortize the amount financed by maturity;
(h) which provides for, in the event that such Receivable is prepaid
by the obligor, a prepayment that fully pays the principal balance of such
Receivable and any interest accrued through the date of prepayment;
(i) which does not represent either a direct or indirect obligation
of any federal, state or local government entity;
(j) the obligor of which has not previously defaulted on an
automobile installment sales contract purchased by the Borrower at the time such
Receivable becomes part of the Collateral;
(k) which has a clear right of repossession on the financed vehicle
securing such Receivable;
(l) which is not, at the time such Receivable became part of the
Collateral, subject to any right of rescission, cancellation, setoff, claim,
counterclaim or defense (including the defense of usury) of the obligor;
(m) which has a maturity, at the time such Receivable became part of
the collateral, of 66 months or less and with respect to which the obligor
thereof has made at least one scheduled payment in full;
(n) which has an annual percentage interest rate of at least 13.0%;
(o) the due date for any payment or payments on which has not been
extended as of any date of determination; PROVIDED, that if the Obligor with
respect to a Receivable has made six consecutive payments in full on such
Receivable, such Receivable shall be an Eligible Receivable if it satisfies all
other clauses of this definition and if extensions have been granted on the
payments with respect to such Receivable either (i) in the aggregate for no more
than one month for each twelve months of the original term of such Receivable;
or (ii) no more than twice for periods of one month each during the preceding
twelve calendar months;
(p) which represents the genuine, legal, valid and binding payment
obligation in writing of the obligor, enforceable by the holder thereof in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally.
CREDIT AGREEMENT - PAGE 7
(q) which shall have complied with, at the time of its origination,
and shall remain in compliance with, all requirements of law;
(r) which had at the time of origination thereof, an outstanding
principal balance of not greater than $40,000; and
(s) which has not been acquired for the purpose of resale to an
Exempt Subsidiary or inclusion in a Securitization program.
"ENTERPRISE" means Enterprise Funding Corporation, a Delaware corporation.
"ENTERPRISE AGREEMENT" means that certain Security Agreement, dated as of
October 22, 1996, as amended, by and among FIARC, Enterprise, Wells Fargo Bank
Minnesota, N.A., MBIA Insurance Corporation, Bank of America and the Borrower,
as the same may hereafter be amended, restated, modified, renewed or extended
from time to time.
"ENTERPRISE PURCHASE AGREEMENT" means that certain Purchase Agreement,
dated as of October 22, 1996, as amended, between the Borrower and FIARC, as the
same may hereafter be amended, restated, modified, renewed or extended from time
to time (subject to SECTION 11.15 hereof).
"ENVIRONMENTAL LAWS" means any and all federal, state, and local laws,
regulations, and requirements regulating health, safety, or the environment, as
such laws, regulations, and requirements may be amended or supplemented from
time to time.
"ENVIRONMENTAL LIABILITIES" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses (including,
without limitation, all reasonable fees, disbursements, and expenses of counsel,
expert and consulting fees, and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal or civil statute, including, without
limitation, any Environmental Law, permit, order, or agreement with any
Governmental Authority or other Person, arising from environmental, health, or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations issued thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Loan Party or is under common control (within
the meaning of Section 414(c) of the Code) with any Loan Party.
"EVENT OF DEFAULT" has the meaning specified in SECTION 13.1.
CREDIT AGREEMENT - PAGE 8
"EXEMPT SUBSIDIARY" means the Subsidiaries listed on SCHEDULE 1.1 and any
other Subsidiaries added thereto with the consent of Required Lenders.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by the Administrative Agent.
"FIARC" means First Investors Auto Receivables Corporation, a Delaware
corporation.
"FIFSG" means First Investors Financial Services Group, Inc., a Texas
corporation.
"FIFSG GUARANTY" means a guaranty entered into by FIFSG concurrently
herewith in favor of the Administrative Agent, for the benefit of itself and the
Lenders, in form and substance satisfactory to the Administrative Agent and the
Lenders.
"FIIC" means First Investors Insurance Company, a Vermont corporation.
"FIRC" means F.I.R.C., Inc., a Delaware corporation.
"FIRC AGREEMENT" means that certain Second Amended and Restated Credit
Agreement, dated as of November 15, 2000, as amended, among FIRC, the financial
institutions party thereto and Bank of America, as agent, as the same may be
further amended, restated, modified, renewed or extended from time to time.
"FIRC COLLATERAL AGENT" means Wells Fargo Bank Minnesota, National
Association and any successor thereto appointed pursuant to Section 19 of the
FIRC Security Agreement.
"FIRC PURCHASE AGREEMENT" means the Amended and Restated Purchase
Agreement, dated as of October 30, 1996, between the Borrower and FIRC, as the
same has been and may hereafter be amended, restated, modified, renewed or
extended from time to time (subject to SECTION 11.15 hereof).
"FIRC SECURITY AGREEMENT" means that certain Third Amended and Restated
Collateral Security Agreement, dated as of November 15, 2000, among FIRC, the
FIRC Collateral Agent, and the agent and the banks party to the FIRC Agreement,
as the same may be amended, restated, modified, renewed or extended from time to
time.
CREDIT AGREEMENT - PAGE 9
"FISC PORTFOLIO" means the portfolio of Receivables of the Borrower and
other assets serviced by First Investors Servicing Corporation.
"FISCAL QUARTERS" means the three (3) month periods falling in each Fiscal
Year ending July 31, October 31, January 31 and April 30.
"FISCAL YEAR" means a twelve (12) month period ending April 30.
"FIVH" means First Investors (Vermont) Holdings, Inc., a Vermont
corporation.
"FIVH GUARANTY" means a guaranty entered into by FIVH concurrently
herewith in favor of the Administrative Agent, for the benefit of itself and the
Lenders, in form and substance satisfactory to the Administrative Agent and the
Lenders.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with SECTION 1.3
hereof), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"HAZARDOUS MATERIAL" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law as a result
of its hazardous or toxic nature.
"HEDGE AGREEMENTS" means any and all agreements, devices, or arrangements
designed to protect the Borrower from the fluctuations of interest rates,
exchange rates, or forward rates applicable to its assets, liabilities, or
exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and forward
rate currency or interest rate options, as the same may be amended or modified
and in effect from time to time, and any and all cancellations, buy backs,
reversals, terminations, or assignments of any of the foregoing.
"INTELLECTUAL PROPERTY" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service mark registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights and internet web sites or
domain names.
CREDIT AGREEMENT - PAGE 10
"INTEREST EXPENSE" means, for any period and for any Person, the sum of
(a) interest expense of such Person calculated without duplication on a
consolidated basis for such period in accordance with GAAP, PLUS (b) expenses
paid under Hedge Agreements during such period, MINUS (c) payments received
under Hedge Agreements during such period.
"INTEREST PERIOD" means with respect to any Libor Account, each period
commencing on the date such Account is established or Continued, or Converted
from a Base Rate Account to a Libor Account, or the last day of the next
preceding Interest Period with respect to such Libor Account, and ending on the
numerically corresponding day in the first, second or third calendar month
thereafter, as the Borrower may select as provided in SECTION 4.4 or SECTION
5.1, except that each such Interest Period which commences on the last Business
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (a) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day (or if such
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day); (b) any Interest Period which would otherwise extend
beyond the Termination Date shall end on the Termination Date; (c) no more than
ten (10) Interest Periods shall be in effect at the same time; (d) no Interest
Period for any Libor Account shall have a duration of less than one (1) month
and, if the Interest Period would otherwise be a shorter period, the related
Libor Account shall not be available hereunder; and (e) no Interest Period in
respect of any Term Loan may extend beyond a principal repayment date thereof
unless, after giving effect thereto, the aggregate principal amount of such Term
Loan subject to Libor Accounts having Interest Periods that end after such
principal payment date shall be equal to or less than the aggregate principal
amount of such Term Loan to be outstanding hereunder after such principal
payment date.
"INVENTORY" means all inventory now owned or hereafter acquired by the
Borrower or any Subsidiary of the Borrower wherever located and whether or not
in transit, which is or may at any time be held for sale or lease, or furnished
under any contract (exclusive of leases of real Property) for service or held or
used as raw materials, work in process, or supplies or materials used or
consumed in the business of the Borrower or any Subsidiary of the Borrower.
"INVESTMENT PORTFOLIO" means the portions of Receivables Securitizations
retained by the Borrower and held by the Borrower as investments, as determined
in the sole discretion of the Administrative Agent, excluding all assets which
have been or are required to be transferred under the Project Brave Purchase
Agreements.
"INVESTMENTS" has the meaning specified in SECTION 11.5.
"JOINDER AGREEMENT" means an agreement which has been or will be executed
by a Subsidiary adding it as a party to a Subsidiary Guaranty and certain of the
other Security Documents, in substantially the form of EXHIBIT "G", as the same
may be amended or otherwise modified.
"LEAD ARRANGER" has the meaning set forth in the introductory paragraph of
this Agreement.
"LENDER" has the meaning set forth in the introductory paragraph of this
Agreement.
CREDIT AGREEMENT - PAGE 11
"LIBOR ACCOUNT" means any portion of a Loan that bears interest at a rate
based upon the Adjusted Libor Rate.
"LIBOR RATE" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Dow Jones Markets Service (formerly known as Telerate)
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the term
"Libor Rate" shall mean, for any Libor Account for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period; PROVIDED, HOWEVER, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"LIBOR RATE MARGIN" means 3% per annum.
"LIEN" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security Documents,
the Joinder Agreements, any Hedge Agreement between the Borrower or any
Subsidiary of the Borrower and any Lender and all other agreements, documents,
and instruments now or hereafter executed and/or delivered pursuant to or in
connection with any of the foregoing, and any and all amendments, modifications,
supplements, renewals, extensions, or restatements thereof.
"LOAN PARTY" means (a) the Borrower, (b) FIFSG, (c) FIVH, (d) each
Subsidiary of the Borrower (other than the Exempt Subsidiaries), and (e) any
other Person who is or becomes a party to any agreement, document, or instrument
that Guarantees or secures payment or performance of the Obligations or any part
thereof.
"LOANS" means Revolving Loans and Term Loans.
"MANAGED ASSETS" means "Receivables Held for Investment" as determined
historically for inclusion under such item in the consolidated balance sheet of
FIFSG provided that such term shall: (i) not include any Receivables of ALAC
Receivables Corporation, ALAC Automobile Receivables Trust 1998-1 or ALAC LLC;
(ii) not be adjusted for any changes in GAAP; and (iii) include Receivables of
the Borrower and its Subsidiaries (other than those noted in clause (i) above)
that have been included in an off-balance sheet Securitization program created
by the Borrower or such Subsidiaries after the Closing Date.
"MANDATORY PREPAYMENT PERIOD" has the meaning specified in SECTION 5.4.
CREDIT AGREEMENT - PAGE 12
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, any material
adverse effect, or the occurrence of any event or the existence of any condition
that could reasonably be expected to have a material adverse effect, on (a) the
prospects, business or financial condition, or performance of such Person or of
such Person and its Subsidiaries, taken as a whole, (b) the ability of such
Person to pay and perform the obligations for which such Person is responsible
when due, (c) with respect to any Loan Party, the validity or enforceability of
(i) any of the Loan Documents, (ii) any Lien created or purported to be created
by any of the Loan Documents or the required priority of any such Lien, or (iii)
the rights and remedies of the Administrative Agent or the Lenders under any of
the Loan Documents or (d) a default or other event shall occur under any
Receivables Securitization program that results in accelerated amortization of
the related Securities where such accelerated amortization is not, in the sole
judgment of the Administrative Agent, subject to reversal by action readily
available to the Borrower.
"MAXIMUM RATE" means, at any time and with respect to any Lender, the
maximum rate of nonusurious interest under applicable law that such Lender may
charge the Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged, or received in connection with the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate. For purposes of determining the Maximum Rate under Texas law
to the extent applicable, if at all, the applicable rate ceiling shall be the
indicated rate ceiling described in, and computed in accordance with, the Texas
Credit Code.
"MORTGAGED PROPERTY" means, any Property consisting of real property or
interests therein which becomes or is required to become subject to a Mortgage
pursuant to SECTION 7.4, and "MORTGAGED PROPERTIES" means all of such real
property or interests, collectively.
"MORTGAGE" means any (if any) deed of trust, leasehold deed of trust,
mortgage, leasehold mortgage, collateral assignment of leases, or other real
estate security document executed and delivered pursuant to this Agreement by
any Loan Party in favor of the Administrative Agent for the benefit of itself
and the Lenders with respect to any Mortgaged Property, and any and all
amendments, modifications, supplements, renewals or restatements thereof, and
"MORTGAGES" means all of such Mortgages, collectively.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by any Loan Party or any
ERISA Affiliate at any time within the six (6) year period preceding the date
hereof or hereafter and which is covered by Title IV of ERISA.
"NET PROCEEDS" means (i) in connection with any disposition of assets of
any Loan Party (or the assets of any direct or indirect Subsidiary of a Loan
Party), the cash proceeds received by such Loan Party from such disposition
(including, without limitation, payments under notes or other debt Securities
received in connection with any such disposition, but only as and when received)
net of (a) the costs of such disposition (including reasonable, out-of-pocket
professional fees and expenses,
CREDIT AGREEMENT - PAGE 13
investment banking fees, financial advisory fees, taxes, notarial fees, survey
costs, title insurance premiums, required escrow deposits, and purchase price
adjustments and other customary fees and expenses, in each case attributable to
and actually paid in connection with such disposition), and (b) amounts applied
to repayment of Debt (other than the Obligations) secured by a lien, security
interest, claim or encumbrance on the asset or property disposed and (ii) in
connection with issuance of any equity Securities, the cash proceeds received
from such issuance, net of all costs of such issuance (including, without
limitation, reasonable, out-of-pocket professional fees and expenses, notarial
fees, underwriting discounts and commissions, and other customary fees and
expenses) actually paid.
"NOTES" means the Revolving Notes referred to in SECTION 3.2 and the Term
Notes referred to in SECTION 2.2.
"NOTICE OF BORROWING" has the meaning specified in SECTION 5.3.
"OBLIGATIONS" means any and all (a) obligations, indebtedness, and
liabilities of the Borrower to the Administrative Agent and the Lenders, or any
of them, arising pursuant to any of the Loan Documents, whether now existing or
hereafter arising, whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including, without
limitation, the obligation of the Borrower to repay the Loans, interest on the
Loans and all fees, costs, and expenses (including, without limitation,
attorneys' fees) provided for in the Loan Documents, and (b) indebtedness,
liabilities, and obligations of any Loan Party under any Hedge Agreement that it
may enter into with the Administrative Agent or any Lender if and to the extent
that such Hedge Agreement is permitted in accordance with SECTION 11.1(H).
"OTHER TAXES" has the meaning specified in SECTION 6.6(B).
"OUTSTANDING REVOLVING CREDIT" means, at any time of determination, the
aggregate amount of Revolving Loans then outstanding (or when calculated with
respect to any Lender, such Lender's pro rata share of the Revolving Loans then
outstanding).
"PAST DUE RECEIVABLES" means Receivables of the Borrower that would be
Eligible Receivables but for the failure of such Receivables to meet the
requirements of clause (d) of the definition of Eligible Receivables.
"PAST DUE RECEIVABLES AMOUNT" means, on any day, the aggregate unpaid
principal balance on such day of all Past Due Receivables.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERMITTED LIENS" means the Liens permitted by SECTION 11.2.
"PERSON" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
CREDIT AGREEMENT - PAGE 14
"PLAN" means any employee benefit plan established or maintained by any
Loan Party or any ERISA Affiliate and which is subject to Title IV of ERISA.
"PRIME RATE" means the per annum rate of interest established from time to
time by Bank of America as its prime rate, which rate may not be the lowest rate
of interest charged by Bank of America to its customers.
"PRINCIPAL OFFICE" means the office of the Administrative Agent, located
at 901 Main Street, 66th Floor, Dallas, Texas 75202.
"PROHIBITED TRANSACTION" means any transaction described in Section 406 or
407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"PROJECT BRAVE PURCHASE AGREEMENTS" means that certain Amended and
Restated Contract Purchase Agreement, dated as of August 8, 2000, by and between
First Investors Servicing Corporation and FIFS Acquisition Funding Company,
L.L.C. and that certain Amended and Restated NIM Collateral Purchase Agreement,
dated as of August 8, 2000, by and between First Investors Servicing
Corporation, ALAC Receivables Corp. and FIFS Acquisition Funding Company,
L.L.C., as amended by that certain First Amendment to Amended and Restated NIM
Collateral Purchase Agreement, dated as of September 15, 2000, as such documents
may be amended from time to time after the Closing Date provided that no such
amendment shall have the effect of reducing or changing the Collateral for the
Obligations.
"PROJECTIONS" means the Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all materially consistent with the Borrower's
historical financial statements, together with appropriate supporting details
and a statement of underlying assumptions in a form acceptable to the
Administrative Agent.
"PROPERTY" means, for any Person, property or assets of all kinds, real,
personal or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"QUARTERLY PAYMENT DATE" means the last day of March, June, September and
December of each year, the first of which shall be March 31, 2001.
"RECEIVABLES" means, as at any date of determination thereof, each and
every "account" as such term is defined in article or chapter 9 of the UCC (or
any successor statute) and includes, without limitation, all of the present and
future rights to payment under any retail installment sales contract or
installment note and related security agreement, arising from the sale of a
motor vehicle or the refinancing thereof.
"REGISTER" has the meaning specified in SUBSECTION 15.8(C).
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
CREDIT AGREEMENT - PAGE 15
"REGULATORY CHANGE" means, with respect to any Lender, any change after
the date of this Agreement (other than with respect to taxes excluded by the
first sentence of SECTION 6.6(A)) in U.S. federal, state, or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests (other than with respect to
taxes excluded by the first sentence of SECTION 6.6(A)) applying to a class of
lenders including such Lender of or under any U.S. federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
"RELEASE" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or from
property owned by such Person, including, without limitation, the migration of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property, in violation of Environmental Laws.
"REMEDIAL ACTION" means all actions required under applicable
Environmental Laws to (a) cleanup, remove, treat, or otherwise address Hazardous
Materials in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release of Hazardous Materials, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care; PROVIDED that "Remedial Action" shall not include such actions taken in
the normal course of business and in material compliance with Environmental
Laws.
"RENTAL EXPENSE" means, for any period and for any Person, the rental or
lease expense of such Person under operating leases calculated without
duplication on a consolidated basis for such period as determined in accordance
with GAAP.
"REPLACEMENT LENDER" has the meaning specified in SECTION 6.8(B).
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"REQUIRED LENDERS" means (a) at any time during the term of this Agreement
when there are three or more Lenders, a majority of such Lenders, based on the
number of Lenders hereunder, provided that such majority Lenders hold at least
66 2/3% of the total outstanding Commitments hereunder, and (b) at any time
during the term of this Agreement when there are two or fewer Lenders, all of
such Lenders.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (ii) any category of
CREDIT AGREEMENT - PAGE 16
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"RESPONSIBLE OFFICER" means either (a) the individual who is the president
of both the Borrower and FIFSG or (b) the individual who is the chief financial
officer of the Borrower and FIFSG.
"REVOLVING COMMITMENT" means, as to each Lender, the obligation of such
Lender to make advances of funds in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount set forth opposite the name
of such Lender on the signature pages hereto (or if applicable, the most recent
Assignment and Acceptance executed by it) under the heading "Revolving
Commitment", as the same may be reduced or terminated pursuant to SECTION 3.6,
SECTION 5.4, or SECTION 13.2. The aggregate amount of all the Revolving
Commitments as of the Closing Date equals Zero Dollars ($0); thereafter,
commitments of existing Lenders and commitments of new Lenders may be added
(with respect to commitments of new Lenders, with the consent of the
Administrative Agent) up to an aggregate amount for all Lenders not to exceed
Two Million Dollars ($2,000,000).
"REVOLVING LOANS" means, as to any Lender, the advances made by such
Lender pursuant to SECTION 3.1, and, as to all Lenders making such Loans, all
such Loans made or held by such Lenders pursuant to SECTION 3.1.
"REVOLVING LOANS BORROWING BASE" means, at any time, an amount equal to
50% of Past Due Receivables.
"REVOLVING NOTES" means the promissory notes provided for by SECTION 3.2
and all amendments or other modifications thereof.
"REVOLVING TERMINATION DATE" means December 22, 2002.
"SECURITIES" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"SECURITIZATION" means the Receivables warehouse line provided by the FIRC
Agreement, the Receivables warehouse line provided by Variable Funding Capital
Corporation to First Investors Auto Capital Corporation, any similar Receivables
warehouse line, the commercial paper facility provided by Enterprise to FIARC,
and any securitization of the Borrower's Receivables through the issuance of
asset-backed Securities (including the Project Brave LLP program and the First
Investors Auto Owner Trust 2000-A) on terms and conditions satisfactory to the
Administrative Agent in its sole discretion.
"SECURITY AGREEMENTS" means security agreements, pledge agreements,
securities pledge agreements, debenture pledge agreements, and other agreements,
documents or instruments evidencing or creating a Lien as security for the
Obligations or any portion thereof in form and
CREDIT AGREEMENT - PAGE 17
substance satisfactory to the Administrative Agent executed by any of the
Borrower, each Subsidiary of the Borrower, and any other Loan Party, dated the
Closing Date or a subsequent date (in the case of Subsidiaries acquired after
the Closing Date), in favor of the Administrative Agent, for the benefit of
itself and the Lenders, and any such agreement, document, or instrument executed
pursuant to ARTICLE 7, and any and all amendments, modifications, supplements,
renewals, extensions, or restatements thereof.
"SECURITY DOCUMENTS" means the Guaranties, the Security Agreements, and
the Mortgages, as such agreements may be amended, modified, supplemented,
renewed, extended, or restated from time to time, and any and all other
agreements, deeds of trust, mortgages, chattel mortgages, security agreements,
pledges, guaranties, assignments of proceeds, assignments of income, assignments
of contract rights, assignments of partnership interests, assignments of royalty
interests, or other collateral assignments, completion or surety bonds, standby
agreements, subordination agreements, undertakings, and other agreements,
documents, instruments, and financing statements now or hereafter executed
and/or delivered by any Loan Party in connection with or as security or
assurance for the payment or performance of the Obligations or any part thereof.
"SOLVENT" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations, and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SUBSIDIARY" means, (a) when used to determine the relationship of a
Person to another Person, a Person of which an aggregate of more than 50% or
more of the Capital Stock is owned of record or beneficially by such other
Person, or by one or more Subsidiaries of such other Person, or by such other
Person and one or more Subsidiaries of such Person, (i) if the holders of such
Capital Stock (A) are ordinarily, in the absence of contingencies, entitled to
vote for the election of a majority of the directors (or other individuals
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency, or (B) are entitled,
as such holders, to vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person, whether or not the
right so to vote exists by reason of the happening of a contingency, or (ii) in
the case of Capital Stock which is not issued by a corporation, if such
ownership interests constitute a majority voting interest, and (b) when used
with respect to a Plan, ERISA, or a provision of the Code pertaining to employee
benefit plans, means,
CREDIT AGREEMENT - PAGE 18
with respect to a Person, any corporation, trade, or business (whether or not
incorporated) which is under common control with such Person and is treated as a
single employer with such Person under Section 414(b) or (c) of the Code and the
regulations thereunder.
"SUBSIDIARY GUARANTY" means the guaranty of the Subsidiaries of the
Borrower (other than the Exempt Subsidiaries) in favor of the Administrative
Agent, for the benefit of itself and the Lenders, in substantially the form of
EXHIBIT "F", as the same may be modified pursuant to one or more Joinder
Agreements and as the same may be otherwise modified from time to time.
"TANGIBLE NET WORTH" means, with respect to any Person, at any time, the
consolidated stockholders' equity of such Person and its Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, MINUS intangible
assets of such Person and its consolidated Subsidiaries (including, without
limitation, capitalized fees).
"TAXES" has the meaning specified in SECTION 6.6.
"TERM COMMITMENT" means, with respect to any Lender, the obligation of
such Lender to make an advance of funds on the Closing Date (or with respect to
any Person becoming a Lender after the Closing Date, on such date) in the
principal amount set forth opposite the name of such Lender on the signature
pages hereto under the heading "Term Commitment." The aggregate amount of all of
the Term Commitments as of the Closing Date equals Thirteen Million Five Hundred
Thousand Dollars ($13,500,000). The Term Commitment of each Lender shall become
zero immediately upon the advance made by such Lender pursuant to SECTION 2.1.
"TERM LOANS" means, as to any Lender, the Term Loans made or held by such
Lender pursuant to SECTION 2.1 and, as to all Lenders making such Loans, all
such Loans made or held by such Lenders pursuant to SECTION 2.1.
"TERM LOANS BORROWING BASE" means, at any time, an amount equal to the
product of (I) the Advance Percentage and (II) the excess of (x) the sum of (a)
100% of unrestricted cash of the Borrower (which, for the avoidance of doubt,
shall exclude any amounts which have been or are required to be transferred
under the Project Brave Purchase Agreements), PLUS (b) the product of (1) the
lesser of (i) 94% or (ii) the current weighted average effective advance rate
under the FIARC Agreement and (2) the Eligible Receivables of the Borrower, PLUS
(c) 50% of the present value of the residual cash flows due to the Borrower out
of its Investment Portfolio, as determined by the Administrative Agent in its
sole discretion from time to time over (y) the Term Loan Derivative Risk
Adjusted Exposure.
"TERM LOAN DERIVATIVE RISK ADJUSTED EXPOSURE" means the outstanding
derivative risk-adjusted exposure of the Borrower determined by the
Administrative Agent in its sole discretion in an amount up to, but not
exceeding, One Million Three Hundred Thousand Dollars ($1,300,000).
"TERM NOTES" means the promissory notes provided for by SECTION 2.2 and
all amendments or other modifications thereof.
"TERM TERMINATION DATE" means December 22, 2002.
CREDIT AGREEMENT - PAGE 19
"TERMINATION DATE" means the Revolving Termination Date or the Term
Termination Date.
"TERMINATION EVENT" means (a) a Reportable Event, or (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"TOTAL LIABILITIES" means, at the time of determination and without
duplication, all amounts which, in conformity with GAAP, would be included in
total liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"TYPE" shall mean either type of Account (i.e., a Base Rate Account or
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas
and/or any other jurisdiction, the laws of which may be applicable to or in
connection with the creation, perfection or priority of any Lien on any Property
created pursuant to any Security Document.
"UNFUNDED VESTED ACCRUED BENEFITS" means with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits; all determined as of the then most
recent valuation date for such Plan.
"U.S." means the United States of America.
"VOTING STOCK" means Capital Stock of a Person having by the terms thereof
ordinary voting power to elect a majority of the board of directors (or similar
governing body) of such Person (irrespective of whether or not at the time
Capital Stock of any other class or classes of such Person shall have or might
have voting power by reason of the happening of any contingency).
"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary that is owned 100% by the
Borrower and/or a Subsidiary of the Borrower.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article, Section, and Schedule references pertain to Articles,
Sections, and Schedules of this Agreement. Terms used herein that are defined in
the UCC, unless otherwise defined herein, shall have the meanings specified in
the UCC.
Section 1.3 ACCOUNTING TERMS AND DETERMINATIONS. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Administrative Agent and the Lenders hereunder
shall be prepared, in accordance with GAAP, on a "consistent basis" with those
used in the preparation of the financial statements referred to in SECTION 9.2.
CREDIT AGREEMENT - PAGE 20
All calculations made for the purposes of determining compliance with the
provisions of this Agreement shall be made by application of GAAP, on a
"consistent basis" with those used in the preparation of the financial
statements referred to in SECTION 9.2. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period. Changes in the application of accounting principles which
do not have a material impact on calculating the financial covenants herein
shall be deemed comparable in all material respects to accounting principles
applied in a preceding period. To enable the ready and consistent determination
of compliance by the Borrower with its obligations under this Agreement, the
Borrower will not, nor will it permit any other Loan Party to, change the manner
in which either the last day of its Fiscal Year or the last days of the first
three Fiscal Quarters of its Fiscal Years is calculated without the prior
written consent of the Required Lenders. In the event any changes in accounting
principles required by GAAP, recommended by the Borrower's or any other Loan
Party's certified public accountants or requested by the Borrower (or that the
Borrower otherwise requests and the Administrative Agent and the Required
Lenders agree to accept, such agreement not unreasonably to be denied) and
implemented by the Borrower or any other Loan Party occur and such changes
result in a change in the method of the calculation of financial covenants under
this Agreement, then the Borrower, the Administrative Agent, and the Required
Lenders agree to enter into negotiations in order to amend such provisions of
this Agreement so as to equitably reflect such changes with the desired result
that the criteria for evaluating such covenants shall be the same after such
changes as if such changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent, and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such changes had not occurred.
Section 1.4 TIME OF DAY. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
TERM LOAN FACILITY
Section 2.1 TERM LOANS. Subject to the terms and conditions of this
Agreement, each Lender who holds a Term Commitment severally agrees to make one
advance of funds to the Borrower in an aggregate principal amount not to exceed
the amount of such Lender's Term Commitment as then in effect; provided,
HOWEVER, the outstanding Term Loans of all of the Lenders shall not at any time
exceed the lesser of (i) the Term Loans Borrowing Base or (ii) the aggregate
Term Commitments. Each Lender's advance of its Term Commitment will be made pro
rata among the holders of the Term Commitment in relation to their separate
Commitments. The Borrower may not repay and reborrow advances under the Term
Loans. The Borrower may establish Base Rate Accounts or Libor Accounts in
respect of Term Loans and, until the Term Termination Date, the Borrower may
Continue Libor Accounts established under the Term Loans or Convert Accounts
established under the Term Loans of one Type into Accounts of another Type.
Accounts of each Type established under the Term Loans made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Accounts
of such Type.
CREDIT AGREEMENT - PAGE 21
Section 2.2 TERM NOTES. Each Term Loan made by a Lender shall be evidenced
by a single promissory note of the Borrower in substantially the form of EXHIBIT
"B", payable to the order of such Lender, in the maximum principal amount equal
to its Term Commitment and otherwise duly completed.
Section 2.3 REPAYMENT OF TERM LOANS. The Borrower shall pay to the
Administrative Agent for the account of the Lenders who hold Term Loans the
aggregate principal amount of the Term Loans advanced as provided for in SECTION
5.4 and in installments as follows:
(a) Three Million Dollars ($3,000,000) of the Term Loans due to Bank
of America will be due and payable to Bank of America only (and not to be
paid to or shared with any other Lender), such amount to be due and
payable in principal installments of Three Hundred Thousand Dollars
($300,000) each on each six-month anniversary of the Closing Date until
such Three Million Dollars ($3,000,000), subject to reduction as provided
in the following proviso (but not by reason of payments due under CLAUSE
(B) below or under SECTION 5.4(A)), is paid in full; PROVIDED that the
amount of such payment shall be reduced dollar for dollar by the amount of
any assumption after the Closing Date and prior to payment of the last
such installment of the Term Commitment of Bank of America as provided in
SECTION 15.8, such reduction to be applied to such Three Hundred Thousand
Dollar ($300,000) principal installments in their inverse order of
maturity; PROVIDED, FURTHER, however, that neither shall any portion or
all of such $3,000,000 or any $300,000 principal installment thereof
become due and payable nor shall any $300,000 principal installment be
paid if on any date for such payment a Default shall have occurred and be
continuing.
(b) Consecutive quarterly principal installments in an aggregate
amount equal to $675,000 due and payable to the Lenders ratably on each
Quarterly Payment Date commencing on the first Quarterly Payment Date
after the Closing Date and continuing on each Quarterly Payment Date
thereafter through and including the Term Termination Date.
(c) In any event, all unpaid Obligations in respect of the Term
Loans will be due and payable on the Term Termination Date.
Section 2.4 USE OF PROCEEDS. Subject to the terms of this Agreement, the
proceeds of the Term Loans shall be used by the Borrower for general corporate
purposes and the financing of working capital requirements. Section 2.5 TERM
LOANS BORROWING BASE. Percentages used from time to time in calculating the Term
Loans Borrowing Base are for the sole purpose of determining the maximum amount
of the outstanding Term Loans and shall not be evidentiary of or binding upon
the Administrative Agent or the Lenders with respect to the market value or
liquidation value of any Collateral. Funding of Term Loans hereunder shall at
all times remain subject to confirmation by the Administrative Agent of the Term
Loans Borrowing Base. Any request for a Term Loan which, if funded, would result
in the unpaid balance of the Term Loans being in excess of the amount allowed by
this Agreement shall be declined by the Administrative Agent without prior
notice.
CREDIT AGREEMENT - PAGE 22
ARTICLE 3
REVOLVING CREDIT FACILITY
Section 3.1 REVOLVING COMMITMENTS. Subject to the terms and conditions of
this Agreement, each Lender who has agreed to provide a Revolving Commitment
severally agrees to make advances to the Borrower from time to time from and
including the Closing Date to but excluding the Revolving Termination Date in an
aggregate principal amount at any time outstanding up to but not exceeding the
amount of such Lender's Revolving Commitment as then in effect; PROVIDED,
HOWEVER, (a) the Outstanding Revolving Credit applicable to a Lender shall not
at any time exceed such Lender's Revolving Commitment, (b) the Outstanding
Revolving Credit of all of the Lenders shall not at any time exceed the lesser
of (i) the Revolving Loans Borrowing Base or (ii) the aggregate Revolving
Commitments, and (c) no advance shall be made at any time other than
concurrently with or within 3 calendar days after the closing of a
securitization of the Borrower's Receivables through the issuance of debt
Securities amortizing over time and not constituting a "warehouse" or revolving
credit facility. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, the Borrower may borrow, prepay, and reborrow
hereunder the amount of the Revolving Commitments and may establish Base Rate
Accounts and Libor Accounts thereunder and, until the Revolving Termination
Date, the Borrower may Continue Libor Accounts established under the Revolving
Loans or Convert Accounts established under the Revolving Loans of one Type into
Accounts of the other Type.
Section 3.2 NOTES. The Revolving Loans made by a Lender shall be evidenced
by a single promissory note of the Borrower in substantially the form of EXHIBIT
"A", payable to the order of such Lender, in the maximum principal amount equal
to its Revolving Commitment as originally in effect (or, if greater, its
Revolving Commitment thereafter increased) and otherwise duly completed. Section
3.3 REPAYMENT OF REVOLVING LOANS. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, the outstanding principal
amount of each Revolving Loan no later than six months after the date such
Revolving Loan was first advanced and all outstanding Revolving Loans on the
Revolving Termination Date.
Section 3.4 USE OF PROCEEDS. Subject to the terms of this Agreement, the
proceeds of the Revolving Loans shall be used by the Borrower for general
corporate purposes and the financing of working capital requirements. Section
3.5 REVOLVING COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee on the
daily average unused amount of such Lender's Revolving Commitment for the period
from and including the Closing Date to and including the Revolving Termination
Date, at a per annum rate equal to 0.35%, computed on the basis of a year of 360
days and the actual number of days elapsed (including the first day but
excluding the last day). Accrued commitment fees under this SECTION 3.5 shall be
payable in arrears on each Quarterly Payment Date and on the Revolving
Termination Date.
CREDIT AGREEMENT - PAGE 23
Section 3.6 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. The
Borrower shall have the right to terminate fully or to reduce in part the unused
portion of the Revolving Commitments at any time and from time to time, PROVIDED
that: (a) the Borrower shall give the Administrative Agent at least one (1)
Business Day notice of each such termination or reduction as provided in SECTION
5.3 hereof; and (b) each partial reduction shall be in an aggregate amount at
least equal to Five Hundred Thousand Dollars ($500,000) or any multiple One
Hundred Thousand Dollars ($100,000) in excess thereof. The Revolving Commitments
may not be reinstated after they have been terminated or reduced.
Section 3.7 REVOLVING LOANS BORROWING BASE. Percentages used from time to
time in calculating the Revolving Loans Borrowing Base are for the sole purpose
of determining the maximum amount of the Outstanding Revolving Credit and shall
not be evidentiary of or binding upon the Administrative Agent or the Lenders
with respect to the market value or liquidation value of any Collateral. Funding
of Revolving Loans hereunder shall at all times remain subject to confirmation
by the Administrative Agent of the Revolving Loans Borrowing Base. Any request
for a Revolving Loan which, if funded, would result in the unpaid balance of the
Revolving Loans being in excess of the amount allowed by this Agreement shall be
declined by the Administrative Agent without prior notice.
ARTICLE 4
INTEREST AND FEES
Section 4.1 INTEREST RATE. The Borrower shall pay to the Administrative
Agent, for the account of each Lender, interest on the unpaid principal amount
of each Loan made by such Lender for the period commencing on the date of such
Loan to but excluding the date such Loan is due, at a fluctuating rate per annum
equal to the Applicable Rate. The term "APPLICABLE RATE" means:
(a) during the period that such Loans or portions thereof are
subject to a Base Rate Account, the Base Rate, PLUS the Base Rate Margin;
and
(b) during the period that such Loans or portions thereof are
subject to a Libor Account, the Adjusted Libor Rate, PLUS the Libor Rate
Margin.
Section 4.2 PAYMENT DATES. Accrued interest on the Loans shall be due and
payable as follows: (i) in the case of Loans subject to Base Rate Accounts, on
each Quarterly Payment Date and on the Termination Date of such Loan; (ii) in
the case of Loans subject to Libor Accounts and with respect to each such
Account, on (A) the last day of the Interest Period with respect thereto, (B) in
the case of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period, and (C) on the
Termination Date of such Loan.
Section 4.3 DEFAULT INTEREST. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, the Borrower will pay to the Administrative Agent for the
account of each Lender interest at the applicable Default Rate on any principal
of any Loan made by such Lender, and (to the fullest extent permitted by law)
CREDIT AGREEMENT - PAGE 24
any other amount payable by the Borrower under any Loan Document to or for the
account of the Administrative Agent or such Lender.
Section 4.4 CONVERSIONS AND CONTINUATIONS OF ACCOUNTS. Subject to SECTION
5.2 hereof, the Borrower shall have the right from time to time to Convert all
or part of any Base Rate Account in existence under a Loan into a Libor Account
under the same Loan or to continue Libor Accounts in existence under a Loan as
Libor Accounts under the same Loan, PROVIDED that: (a) the Borrower shall give
the Administrative Agent notice of each such Conversion or Continuation as
provided in SECTION 5.3 hereof; (b) subject to SECTION 6.3 hereof, a Libor
Account may only be Converted on the last day of the Interest Period therefor;
and (c) except for Conversions into Base Rate Accounts, no Conversions or
Continuations shall be made without the consent of the Administrative Agent and
the Required Lenders while a Default has occurred and is continuing.
Section 4.5 COMPUTATIONS. Except of calculations of the Prime Rate (which
shall be made of the basis of a year of 365 or 366 days and the actual number of
days elapsed), interest and fees payable by the Borrower hereunder and under the
other Loan Documents shall be computed on the basis of a year of 360 days and
the actual number of days elapsed (including the first day but excluding the
last day) in the period for which interest is payable unless such calculation
would result in a rate that exceeds the Maximum Rate, in which case interest
shall be calculated on the basis of a year of 365 or 366 days, as the case may
be.
ARTICLE 5
ADMINISTRATIVE MATTERS
Section 5.1 BORROWING PROCEDURE. The Borrower shall give the Administrative
Agent, and the Administrative Agent will give the Lenders, notice of each
borrowing under the Commitments in accordance with SECTION 5.3 hereof. Not later
than 11:00 a.m. on the date specified for each borrowing under the applicable
Commitment, each Lender obligated with respect to such Commitment will make
available the amount of the Loan to be made by it on such date to the
Administrative Agent, at the Principal Office, in immediately available funds,
for the account of the Borrower. The amounts received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by 2:00 p.m. at the Borrower's direction by
transferring the same, in immediately available funds by wire transfer,
automated clearinghouse debit, or interbank transfer to (a) a bank account of
the Borrower designated by the Borrower in writing or (b) a Person or Persons
designated by the Borrower in writing.
Section 5.2 MINIMUM AMOUNTS. Except for prepayments and Conversions
pursuant to SECTION 5.4(A) and ARTICLE 6 hereof, each Base Rate Account
applicable to a Loan and each prepayment of principal of a Loan shall be in a
minimum principal amount of Five Hundred Thousand Dollars ($500,000) or
increments One Hundred Thousand Dollars ($100,000) in excess thereof. Each LIBOR
Account applicable to a Loan shall be in a minimum principal amount of Five
Hundred Thousand Dollars ($500,000) or increments One Hundred Thousand Dollars
($100,000) in excess thereof.
CREDIT AGREEMENT - PAGE 25
Section 5.3 CERTAIN NOTICES. Notices by the Borrower to the Administrative
Agent of terminations or reductions of Commitments, of borrowings and
prepayments of Loans and of Conversions or Continuations of Accounts shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 11:00 a.m. on the Business Day prior to (or, with respect to Base
Rate Accounts, on) the date of the relevant termination, reduction, borrowing,
Conversion, Continuation, or other repayment specified below:
==================================================================
NUMBER OF
BUSINESS DAYS
NOTICE PRIOR
Termination or reduction of Commitments 1
------------------------------------------------------------------
Borrowing of Loans subject to Base Rate
Accounts, prepayment or repayment of Loans
subject to Base Rate Accounts, or Conversions
into Base Rate Accounts 0
------------------------------------------------------------------
Borrowing, prepayment, or repayment of Loans
subject to Libor Accounts, Conversions into or
Continuations as Libor Accounts 3
==================================================================
Any notices of the type described in this SECTION 5.3 which are received by the
Administrative Agent after the applicable time set forth above on a Business Day
shall be deemed to be received and shall be effective on the next Business Day.
Each such notice of termination or reduction shall specify the applicable
Commitments to be affected and the amount of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation, or prepayment
(a "NOTICE OF BORROWING") shall be in the form of EXHIBIT "C" hereto and shall
specify (a) the Loans to be borrowed or prepaid or the Accounts to be Converted
or Continued; (b) the amount (subject to SECTION 5.2 hereof) to be borrowed,
Converted, Continued, or prepaid; (c) in the case of a Conversion, the Type of
Account to result from such Conversion; (d) in the case of a borrowing, the Type
of Account or Accounts to be applicable to such borrowing and the amounts
thereof; (e) in the event a Libor Account is selected, the duration of the
Interest Period therefor; and (f) the date of borrowing, Conversion,
Continuation, or prepayment (which shall be a Business Day). Any notices by the
Borrower of the type described in this SECTION 5.3 may be made orally or in
writing and, if made orally, must be confirmed in writing not more than two (2)
Business Days after the notice is given. The Administrative Agent shall notify
the Lenders of the contents of each such notice on the date of its receipt of
the same or, if received on or after the applicable time set forth above on a
Business Day, on the next Business Day. In the event the Borrower fails to
select the Type of Account applicable to a Loan, or the duration of any Interest
Period for any Libor Account, within the time period and otherwise as provided
in this SECTION 5.3, such Account (if outstanding as a Libor Account) will be
automatically Converted into a Base Rate Account on the last day of the
preceding Interest Period for such Account or (if outstanding as a Base Rate
Account) will remain as, or (if not then outstanding) will be made as, a Base
Rate Account. The Borrower may not borrow any Loans subject to a Libor Account,
Convert any Base Rate Accounts into Libor Accounts, or Continue any Libor
Account as a Libor Account if the Applicable Rate for such Libor Accounts would
exceed the Maximum Rate.
CREDIT AGREEMENT - PAGE 26
Section 5.4 PREPAYMENTS.
(a) MANDATORY.
(i) REVOLVING LOANS. If at any time the Outstanding Revolving
Credit exceeds the lesser of the aggregate Revolving Commitments or
the Revolving Loans Borrowing Base, the Borrower shall, within one
Business Day after the occurrence thereof, prepay the outstanding
Revolving Loans by the amount of such excess.
(ii) TERM LOANS. If at any time the aggregate amount of Term
Loans outstanding exceeds the lesser of the aggregate Term
Commitments or the Term Loans Borrowing Base, the Borrower shall,
within one Business Day after the occurrence thereof, prepay the
outstanding Term Loans by the amount of such excess.
(iii) DISPOSITION OF FIIC. If at any time the Borrower sells
or otherwise disposes of all or substantially all of the assets of
FIIC or a majority of the Capital Stock of FIIC, the Borrower shall,
concurrently therewith, prepay the outstanding Term Loans by the Net
Proceeds of such disposition. Amounts prepaid pursuant to this
SECTION 5.4(A)(III) shall be applied to the Term Loans, pro rata
with respect to each remaining payment of principal payable under
SECTION 2.3(B) until the Term Loans are paid in full and then to the
Revolving Loans.
(iv) ADVANCES UNDER WAREHOUSE AGREEMENTS MORE FAVORABLE. If at
any time the Receivables advance rate available to the Borrower
under the FIARC Agreement (or any replacement bank Receivables
warehouse line) is increased over the effective advance rate in
effect under the FIARC Agreement on the date of this Agreement, the
Borrower shall prepay the Loans outstanding hereunder in an amount
equal to the additional amount available for borrowing by reason of
such increased advance rate under such warehouse facility. Amounts
prepaid pursuant to this SECTION 5.4(A) (IV) shall be applied to the
Term Loans, pro rata with respect to each remaining payment of
principal payable under SECTION 2.3(B) until the Term Loans are paid
in full and then to the Revolving Loans.
(v) PREPAYMENTS FROM EQUITY OFFERINGS. In the event that the
Borrower or any Subsidiary of the Borrower issues Capital Stock for
cash or cash equivalents, no later than the third Business Day
following the date of receipt of the Net Proceeds from such
issuance, the Borrower shall make a prepayment in respect of the
Obligations equal to 50% of the amount of such Net Proceeds. Amounts
prepaid pursuant to this SECTION 5.4(A)(V) shall be applied to the
Term Loans, pro rata with respect to each remaining payment of
principal payable under SECTION 2.3(B) until the Term Loans are paid
in full and then to the Revolving Loans.
(b) OPTIONAL. Subject to SECTION 5.2 and the provisions of this
clause (b), the Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Administrative Agent as
specified in SECTION 5.3, prepay or repay any Loan in full or in part. Any
optional prepayment of the Term Loans shall be accompanied with accrued
interest on the amount prepaid to the date of prepayment. Any partial
prepayments of the Term Loans shall be applied to installments due under
the Term Loans, pro rata with
CREDIT AGREEMENT - PAGE 27
respect to each remaining installment of principal. Loans subject to a Libor
Account may be prepaid or repaid only on the last day of the Interest Period
applicable thereto unless the Borrower pays to the Administrative Agent, for the
account of the applicable Lenders, any amounts due under SECTION 6.5 as a result
of such prepayment or repayment.
Section 5.5 METHOD OF PAYMENT. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by the
Borrower or any other Loan Party under the Loan Documents shall be made to the
Administrative Agent at the Principal Office for the account of each Lender's
Applicable Lending Office in Dollars and in immediately available funds, without
set-off, deduction, or counterclaim, not later than 1:00 p.m. on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). The Borrower shall, at the time of making each such payment, specify to
the Administrative Agent the sums payable under the Loan Documents to which such
payment is to be applied (and in the event that the Borrower fails to so
specify, or if an Event of Default has occurred and is continuing, the
Administrative Agent may apply such payment to the Obligations in such order and
manner as it may elect in its sole discretion, subject to SECTION 5.6 and
provided that when applying any such amounts to any Loans, Loans subject to Base
Rate Accounts shall be prepaid in full prior to any application to Loans subject
to Libor Accounts). Each payment received by the Administrative Agent under any
Loan Document for the account of a Lender shall be paid to such Lender by 3:00
p.m. on the date the payment is deemed made to the Administrative Agent in
immediately available funds, for the account of such Lender's Applicable Lending
Office. Whenever any payment under any Loan Document shall be stated to be due
on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
Section 5.6 PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each Loan shall be made by the Lenders holding Commitments for such
Loan, each payment of commitment fees under SECTION 3.5 shall be made for the
account of the Lenders holding Revolving Commitments and each termination or
reduction of the Commitments shall be applied to the Commitments of the Lenders
holding the applicable Commitments, pro rata according to their respective
Commitment Percentages (calculated with respect to the Commitments for the Loans
in question only); (b) the making, Conversion, and Continuation of Accounts of a
particular Type (other than Conversions provided for by SECTION 6.4) shall be
made pro rata among the Lenders holding Accounts of such Type according to their
respective Commitment Percentages (calculated with respect to the Commitments
for the Loans in question only); and (c) each payment and prepayment of
principal of or interest on Loans by the Borrower shall be made to the
Administrative Agent for the account of the Lenders holding such Loans pro rata
in accordance with the respective unpaid principal amounts of such Loans;
PROVIDED that as long as no default in the payment of interest exists, payments
of interest made when Lenders are holding different types of Accounts applicable
to the same Loan as a result of the application of SECTION 6.4, shall be made to
the Lenders in accordance with the amount of interest owed to each; and
PROVIDED, FURTHER, that the payment due pursuant to SECTION 2.3(A) shall be
solely for the account of Bank of America. All payments of the Term Loans shall
be applied pro rata with respect to each remaining installment of principal. If
at any time payment, in whole or in part, of any amount distributed by the
Administrative Agent hereunder is rescinded or must otherwise be restored or
returned by the Administrative Agent as a preference,
CREDIT AGREEMENT - PAGE 28
fraudulent conveyance, or otherwise under any bankruptcy, insolvency, or similar
law, then each Person receiving any portion of such amount agrees, upon demand,
to return the portion of such amount it has received to the Administrative
Agent.
Section 5.7 SHARING OF PAYMENTS. If a Lender shall obtain payment of any
principal of or interest on any of the Obligations due to such Lender hereunder
directly (and not through the Administrative Agent) through the exercise of any
right of set-off, banker's lien, counterclaim, or similar right, or otherwise,
it shall promptly purchase from the other Lenders participations in the
Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment pro rata in accordance with the
unpaid principal of and interest on the Obligations then due to each of them. To
such end, all of the Lenders shall make appropriate adjustments among themselves
(by the resale of participations sold or otherwise) if all or any portion of
such excess payment is thereafter rescinded or must otherwise be restored. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any Lender so purchasing a participation in the Obligations held by
the other Lenders may exercise all rights of set-off, banker's lien,
counterclaim, or similar rights with respect to such participation as fully as
if such Lender were a direct holder of Obligations in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.
Section 5.8 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Administrative Agent shall have been notified by a Lender or the Borrower (the
"PAYOR") prior to the date on which such Lender is to make payment to the
Administrative Agent hereunder or the Borrower is to make a payment to the
Administrative Agent, for its own account or for the account of or the Lenders,
as the case may be (such payment being herein called the "REQUIRED PAYMENT"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Administrative Agent, the Administrative Agent
may assume that the Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to the Administrative Agent, (a) the recipient of
such payment shall, on demand, pay to the Administrative Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period, and (b) the
Administrative Agent shall be entitled to offset against any and all sums to be
paid to such recipient, the amount calculated in accordance with the foregoing
CLAUSE (A).
ARTICLE 6
CHANGE IN CIRCUMSTANCES
Section 6.1 INCREASED COST AND REDUCED RETURN.
(a) INCREASED COST. If, after the Closing Date, any Regulatory
Change or compliance by any Lender (or its Applicable Lending Office) with
any request or directive
CREDIT AGREEMENT - PAGE 29
(whether or not having the force of law) of any Governmental Authority,
central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Libor
Accounts, its Notes, or its obligation to make Libor Accounts, or
change the basis of taxation of any amounts payable to such Lender
(or its Applicable Lending Office) under this Agreement or its Notes
in respect of any Libor Accounts (other than franchise taxes or
taxes imposed on or measured by the net income of such Lender by the
jurisdiction in which such Lender is organized, has its principal
office or such Applicable Lending Office or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Libor Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitments
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Accounts or to reduce any sum
received or receivable by such Lender (or its Applicable Lending Office)
under this Agreement or its Notes with respect to any Libor Accounts, then
the Borrower shall pay to such Lender on demand such amount or amounts as
will compensate such Lender for such increased cost or reduction. If any
Lender requests compensation by the Borrower under this SECTION 6.1(A),
the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or
maintain Libor Accounts, or to Convert Base Rate Accounts into Libor
Accounts, until the event or condition giving rise to such request ceases
to be in effect (in which case the provisions of SECTION 6.4 shall be
applicable); PROVIDED that such suspension shall not affect the right of
such Lender to receive the compensation so requested.
(b) CAPITAL ADEQUACY. If, after the date hereof, any Lender shall
have determined that any Regulatory Change has or would have the effect of
reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from
time to time upon demand, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction.
CREDIT AGREEMENT - PAGE 30
(c) CLAIMS UNDER THIS SECTION 6.1. Each Lender shall promptly notify
the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender
to such compensation pursuant to this SECTION 6.1 and will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender
claiming compensation under this SECTION 6.1 shall furnish to the Borrower
and the Administrative Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in
the absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
Section 6.2 LIMITATION ON LIBOR ACCOUNTS. If on or prior to the first day
of any Interest Period for any Libor Account:
(a) the Administrative Agent or any Lender determines (which
determination shall be conclusive) that by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Libor Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Adjusted Libor
Rate will not adequately and fairly reflect the cost to the Lenders of
funding Libor Accounts for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
specifying the amounts or periods, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make additional Libor
Accounts, Continue Libor Accounts, or to Convert Base Rate Accounts into Libor
Accounts and the Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Libor Accounts, either prepay such Libor Accounts
or Convert such Libor Accounts into Base Rate Accounts in accordance with the
terms of this Agreement.
Section 6.3 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify the Borrower and the Administrative Agent
thereof and such Lender's obligation to make or Continue Libor Accounts and to
Convert Base Rate Accounts into Libor Accounts shall be suspended until such
time as such Lender may again make, maintain, and fund Libor Accounts (in which
case the provisions of SECTION 6.4 shall be applicable).
Section 6.4 TREATMENT OF AFFECTED ACCOUNTS. If the obligation of any
Lender to make a particular Libor Account or to Continue, or to Convert Base
Rate Accounts into, Libor Accounts shall be suspended pursuant to SECTION 6.1,
SECTION 6.2 or SECTION 6.3 (Accounts of such Type being herein called "AFFECTED
ACCOUNTS"), such Lender's Affected Accounts shall be automatically Converted
into Base Rate Accounts on the last day(s) of the then current Interest
Period(s) for the Affected Accounts (or, in the case of a Conversion required by
SECTION 6.3, on such earlier date as such Lender may specify to the Borrower
with a copy to the Administrative Agent) and, unless and
CREDIT AGREEMENT - PAGE 31
until such Lender gives notice as provided below that the circumstances
specified in SECTION 6.1, SECTION 6.2 or SECTION 6.3 that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Accounts have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Accounts shall be applied instead to
its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or Continued by such
Lender as Libor Accounts shall be made or Continued instead as Base Rate
Accounts, and all Accounts of such Lender that would otherwise be
Converted into Libor Accounts shall be Converted instead into (or shall
remain as) Base Rate Accounts.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in SECTION 6.1, SECTION 6.2 or SECTION
6.3 that gave rise to the Conversion of such Lender's Affected Accounts no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Libor Accounts made by other Lenders are
outstanding, such Lender's Base Rate Accounts shall be automatically Converted,
on the first day(s) of the next succeeding Interest Period(s) for such
outstanding Libor Accounts, to the extent necessary so that, after giving effect
thereto, all Accounts held by the Lenders holding Libor Accounts and by such
Lender are held pro rata (as to principal amounts, Types, and Interest Periods)
in accordance with their respective Commitment Percentages.
Section 6.5 COMPENSATION. Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits and, without limitation, any such
amounts incurred in connection with syndication of the Loans incurred by it as a
result of:
(a) any payment, prepayment, or Conversion by the Borrower of a
Libor Account for any reason (including, without limitation, the
acceleration of the Loans pursuant to SECTION 13.2) on a date other than
the last day of the Interest Period for such Libor Account; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in ARTICLE 8
to be satisfied) to borrow, Convert, Continue, or prepay a Libor Account
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation,
or Conversion under this Agreement.
Notwithstanding the foregoing provisions of this SECTION 6.5, if at any time the
mandatory prepayment of Term Loans pursuant to SECTION 5.4(A) would result in
the Borrower incurring breakage costs under this SECTION 6.5 as a result of
Libor Accounts being prepaid other than on the last day of an Interest Period
applicable thereto (the "AFFECTED LIBOR ACCOUNTS"), then the Borrower may in its
sole discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Libor Accounts with
the Administrative Agent (which deposit, after giving effect to interest to be
earned on such deposit prior to the last day of the relevant Interest Periods,
must be equal in amount to the amount of Affected Libor Accounts not
CREDIT AGREEMENT - PAGE 32
immediately prepaid) to be held as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance satisfactory to the Administrative Agent, with such cash collateral to
be directly applied upon the first occurrence (or occurrences) thereafter of the
last day of an Interest Period applicable to the Affected Libor Accounts (or
such earlier date or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of such Term Loans equal to the Affected Libor
Accounts not initially repaid pursuant to this sentence.
Section 6.6 TAXES.
(a) WITHHOLDING TAXES. Except as otherwise provided in this
Agreement, any and all payments by any Loan Party to or for the account of
any Lender or the Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges,
or withholdings, and all liabilities with respect thereto, EXCLUDING, in
the case of each Lender or the Administrative Agent (as applicable), taxes
imposed on or measured by its income, and franchise taxes imposed on it,
by the jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or the Administrative Agent (as the case may be) is
organized, located or doing business or any political subdivision thereof
(all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"TAXES"). If a Loan Party shall be required by law to deduct any Taxes
from or in respect of any sum payable under any Loan Document to any
Lender or the Administrative Agent (as applicable), (i) the sum payable
shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this SECTION 6.6) such Lender or the Administrative Agent (as
applicable) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the applicable Loan Party shall make
such deductions, (iii) the applicable Loan Party shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance
with applicable law, and (iv) the applicable Loan Party shall furnish to
the Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) STAMP TAXES, ETC. In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from any
payment made under this Agreement or any other Loan Document or from the
execution or delivery of, or otherwise with respect to, this Agreement or
any other Loan Document (hereinafter referred to as "OTHER TAXES").
(c) TAX INDEMNIFICATION. BORROWER AGREES TO INDEMNIFY EACH LENDER
AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES
(INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED OR
ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 6.6)
PAID BY SUCH LENDER OR THE ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND
ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO.
CREDIT AGREEMENT - PAGE 33
Section 6.7 WITHHOLDING TAX EXEMPTION. Each Lender organized under the
laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Administrative Agent (but only so
long as such Lender remains lawfully able to do so), shall provide the Borrower
and the Administrative Agent with (a) if such Lender is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the U.S. is a party which reduces to zero the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the U.S., (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and (iii) any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of the Code),
certifying that such Lender is entitled to a complete exemption from tax on
payments pursuant to any of the Loan Documents or (b) if such Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, a Form W-8, or
any subsequent versions thereof or successors thereto (and, if such non-U.S.
Lender delivers a Form W-8, a certificate (including any certificate required by
Sections 871(h) and 881(c) of the Code) representing that such non-U.S. Lender
is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such non-U.S. Lender claiming complete exemption from U.S.
Federal withholding tax on payments of interest by the Borrower under this
Agreement and the other Loan Documents. For any period with respect to which a
Lender has failed to provide the Borrower and the Administrative Agent with the
appropriate form pursuant to this SECTION 6.7 and thereby to establish complete
exemption from U.S. withholding tax (unless such failure to establish complete
exemption from U.S. withholding tax is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), (A) the applicable Loan Party shall deduct all
required Taxes from any amounts payable to such Lender under any Loan Document,
(B) the applicable Loan Party shall pay the full amount allocated to the
relevant taxing authority or other authority in accordance with applicable law,
(C) the applicable Loan Party shall furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, and (D)
such Lender shall not be entitled to an indemnification or increases in the sum
payable under SECTION 6.6 or SECTION 14.5 with respect to Taxes imposed by the
U.S.; PROVIDED, HOWEVER, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
ARTICLE 7
SECURITY
Section 7.1 COLLATERAL. To secure the full and complete payment and
performance of the Obligations, the Borrower shall, and shall cause FIFSG (in
the case of FIVH's Capital Stock), FIVH
CREDIT AGREEMENT - PAGE 34
(in the case of the Borrower's Capital Stock) and each Subsidiary of the
Borrower, to grant to the Administrative Agent, for the benefit of itself and
the Lenders, a perfected, first priority Lien (subject only to any Lien
permitted under SECTION 11.2 to the extent, if any, any such Lien would have a
higher priority by operation of law than the Liens in favor of the
Administrative Agent) on all of its right, title, and interest in and to the
following Property, whether now owned or hereafter acquired, pursuant to the
Security Documents:
(a) all Capital Stock of FIVH, the Borrower and of each direct and
indirect Subsidiary (except for Exempt Subsidiaries) of the Borrower
(including, without limitation, all direct and indirect Subsidiaries of
FIFSG other than Exempt Subsidiaries), owned as of the Closing Date or
thereafter acquired by the Borrower or any Subsidiary of the Borrower; and
(b) all other Property of the Borrower and each Subsidiary of the
Borrower (other than Exempt Subsidiaries), owned as of the Closing Date or
thereafter acquired, including, without limitation, all accounts
(including, without limitation, Receivables), inventory (including,
without limitation, Inventory), equipment, furniture, fixtures, contract
rights, general intangibles, documents, instruments, investment property,
chattel paper, permits, Intellectual Property, intercompany Debt,
licenses, and material real Property; PROVIDED that with respect to
contract rights, licenses, and permits which according to their terms are
not assignable such Liens shall not be required to attach to such
Property; PROVIDED, HOWEVER, that the Collateral shall not include any of
the property described in this CLAUSE (B) which has been or is required to
be transferred under the Project Brave Purchase Agreements or any cash
specifically pledged as collateral for any Hedge Agreement.
The Borrower covenants that none of the Capital Stock to be pledged in
accordance with this SECTION 7.1 shall be subject to any transfer restrictions,
shareholders' agreement, or other restriction except for such restrictions under
applicable securities laws and such restrictions, if any, as may be reasonably
acceptable to the Administrative Agent. In connection with and in addition to
the foregoing, the Borrower and its Subsidiaries shall execute and/or deliver
such Security Documents and further agreements, documents, and instruments
(including, without limitation, stock certificates, stock powers, and financing
statements) as the Administrative Agent may reasonably request in order for it
to obtain and maintain the perfected, first priority Liens to be granted in
accordance with this SECTION 7.1.
Section 7.2 GUARANTIES. FIFSG, FIVH and each Subsidiary of the Borrower
(except for Exempt Subsidiaries) shall guarantee payment and performance of the
Obligations pursuant to the FIFSG Guaranty, the FIVH Guaranty and the Subsidiary
Guaranty, respectively.
Section 7.3 NEW SUBSIDIARIES, NEW ISSUANCES OF CAPITAL STOCK.
Contemporaneously with the creation or acquisition of any Subsidiary of the
Borrower, the Borrower shall, and shall cause each of its Subsidiaries to:
(a) grant or cause to be granted to the Administrative Agent, for
the benefit of itself and the Lenders, a perfected, first priority
security interest in all Capital Stock in such
CREDIT AGREEMENT - PAGE 35
Subsidiary unless such Subsidiary is an Exempt Subsidiary (to the extent
such Capital Stock is not already so pledged to the Administrative Agent);
(b) cause each such Subsidiary (other than Exempt Subsidiaries) to
Guarantee the payment and performance of the Obligations by executing and
delivering to the Administrative Agent an appropriate Joinder Agreement;
and
(c) cause each such Subsidiary to execute and deliver to the
Administrative Agent an appropriate Security Agreement and such other
Security Documents as the Administrative Agent may reasonably request to
grant the Administrative Agent, for the benefit of itself and the Lenders,
a perfected, first priority Lien (except for Permitted Liens, if any) on
all Property of such Subsidiary.
Contemporaneously with the issuance of any additional Capital Stock of any
Subsidiary of the Borrower (except for Exempt Subsidiaries), the Borrower shall,
and shall cause each of its Subsidiaries and other appropriate Persons (as
applicable) to, grant or cause to be granted to the Administrative Agent, for
the benefit of itself and the Lenders, a perfected, first priority security
interest in all Capital Stock in such Subsidiary owned by any shareholder of any
Subsidiary of the Borrower, the Borrower, or any Subsidiary of the Borrower (to
the extent any of such Capital Stock is already not so pledged to the
Administrative Agent). The Borrower covenants that none of the Capital Stock to
be pledged in accordance with this SECTION 7.3 shall be subject to any transfer
restriction, shareholders' agreement, or other restriction except for such
restrictions under applicable securities laws and such restrictions, if any, as
may be reasonably acceptable to the Administrative Agent. In connection with and
in addition to the foregoing, the Borrower and its Subsidiaries shall execute
and/or deliver such further agreements, documents and instruments (including,
without limitation, stock certificates, stock powers, and financing statements)
as the Administrative Agent may reasonably request in order for it to obtain and
maintain the perfected, first priority Liens to be granted in accordance with
this SECTION 7.3.
Section 7.4 NEW MORTGAGED PROPERTIES. The Borrower shall, and shall cause
each of its Subsidiaries to, contemporaneously with the acquisition of any fee
real Property, execute, acknowledge and deliver to the Administrative Agent a
Mortgage or an amendment or modification to a then existing Mortgage covering
all fee real Property acquired by the Borrower or any of such Subsidiaries
subsequent to the Closing Date, together with evidence reasonably satisfactory
to the Administrative Agent and its counsel, including, without limitation, if
requested by the Administrative Agent, a commitment for a mortgagee policy of
title insurance or a title opinion in favor of the Administrative Agent, in form
and substance reasonably satisfactory to the Administrative Agent, that the
Mortgage creates a valid, first priority Lien on the fee estate in favor of the
Administrative Agent, for the benefit of itself and the Lenders (except for
Permitted Liens, if any), together with appraisals and surveys if requested by
the Administrative Agent. Following the date of each such acquisition of
Property, if requested by the Administrative Agent, the Borrower shall, and
shall cause each of its Subsidiaries with an interest in such Properties to, (a)
deliver or cause to be delivered to the Administrative Agent, a mortgagee policy
of title insurance insuring the Liens of the Mortgage covering such fee real
Property in an amount reasonably satisfactory to the Administrative Agent on
standard form policies (except for Permitted Liens, if any) and (b) provide
CREDIT AGREEMENT - PAGE 36
the Administrative Agent with a current environmental assessment of such
Property in form and substance reasonably satisfactory to the Administrative
Agent.
Section 7.5 RELEASE OF COLLATERAL. Upon any sale, transfer or other
disposition of Collateral that is expressly permitted under SECTION 11.8 and
upon five Business Days prior written request by the Borrower, the
Administrative Agent shall execute at the Borrower's expense such documents as
may be necessary to evidence the release by the Administrative Agent of its
Liens on such Collateral being sold, transferred, or otherwise disposed of;
PROVIDED, HOWEVER, that (a) the Administrative Agent shall not be required to
release any Lien on any Collateral if a Default shall have occurred and be
continuing, (b) the Administrative Agent shall not be required to execute any
such document on terms which, in the Administrative Agent's opinion, would
expose the Administrative Agent to liability or create any obligation not
reimbursed by the Borrower or entail any consequences other than the release of
such Lien without recourse or warranty, and (c) such release shall not in any
manner discharge, affect or impair any of the Obligations or any of the
Administrative Agent's Liens on any Collateral retained by the Borrower or any
of its Subsidiaries, including, without limitation, its Liens on the proceeds of
any such sale, transfer or other disposition.
ARTICLE 8
CONDITIONS PRECEDENT
Section 8.1 INITIAL LOANS. The obligation of each Lender to make its
initial Loans is subject to the following conditions precedent:
(a) DELIVERIES. The Administrative Agent shall have received on or
before the Closing Date and on or before the day of any such Loan all of
the following, each dated (unless otherwise indicated) the Closing Date,
in form and substance satisfactory to the Administrative Agent:
(i) RESOLUTIONS; AUTHORITY. Resolutions of the board of
directors (or similar governing body) of each Loan Party certified
by its Secretary or an Assistant Secretary which authorize its
execution, delivery, and performance of the Loan Documents to which
it is or is to be a party;
(ii) INCUMBENCY CERTIFICATE. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan
Party certifying the names of its officers (A) who are authorized to
sign the Loan Documents to which it is or is to be a party
(including, without limitation, the certificates contemplated
herein) together with specimen signatures of each such officer and
(B) who will, until replaced by other officers duly authorized for
that purpose, act as its representative for the purposes of signing
documentation and giving notices and other communications in
connection with this Agreement and the transactions contemplated
hereby;
(iii) ORGANIZATIONAL DOCUMENTS. The certificate of
incorporation of each Loan Party certified by the Secretary of State
of the state of its incorporation and dated a current date;
CREDIT AGREEMENT - PAGE 37
(iv) BYLAWS. The bylaws of each Loan Party certified by its
Secretary or an Assistant Secretary;
(v) GOVERNMENTAL CERTIFICATES. Certificates of the appropriate
government officials of the state of incorporation of each Loan
Party as to its existence and, to the extent applicable good
standing, and certificates of the appropriate government officials
of each state in which each Loan Party's principal business office
is located, as to each Loan Party's qualification to do business and
good standing in such state, all dated a current date;
(vi) NOTES. The Notes executed by the Borrower dated the date
hereof;
(vii) GUARANTIES. The Subsidiary Guaranty executed by the
Subsidiaries (other than the Exempt Subsidiaries), the FIFSG
Guaranty executed by FIFSG and the FIVH Guaranty executed by FIVH;
(viii) LIEN SEARCH REPORTS.
(A) UCC, tax, and judgment Lien search reports listing
all documentation on file against each of the Borrower and its
Subsidiaries in the central filing locations of each
jurisdiction in which any such party's principal business
office is located and in the local filing offices of each
jurisdiction in which such principal business office is
located;
(B) Federal tax lien search reports with respect to the
Borrower and its Subsidiaries;
(ix) TERMINATION OR ASSIGNMENT OF LIENS. Duly executed UCC-3
termination statements, mortgage releases, and such other
documentation as shall be necessary to terminate, release, or assign
to the Administrative Agent all Liens other than those permitted by
SECTION 11.2 hereof;
(x) SECURITY AGREEMENTS. Security Agreements executed by each
of the Loan Parties;
(xi) STOCK CERTIFICATES. The stock certificates representing
all of the issued and outstanding Capital Stock referred to in
SECTION 7.1 as of the Closing Date, in each case accompanied by
appropriate instruments of transfer or stock powers executed in
blank (as appropriate), or registration of the Administrative
Agent's Lien, in form and substance satisfactory to the
Administrative Agent (in the case of book entry securities);
(xii) FINANCING STATEMENTS. UCC financing statements and all
other requisite filing documents executed by the Loan Parties
necessary to perfect the Liens created pursuant to the Security
Documents;
(xiii) CONSENTS. Copies of all material consents or waivers
(other than consents or waivers previously delivered to the
Administrative Agent and certified
CREDIT AGREEMENT - PAGE 38
by a Loan Party as being true and correct copies) necessary for the
execution, delivery, and performance by each of the Loan Parties of
the Loan Documents to which it is a party, as the Administrative
Agent may require, which consents shall be certified by a
responsible officer of the applicable Loan Party as true and correct
copies of such consents as of the Closing Date;
(xiv) OPINIONS OF COUNSEL. Opinions of legal counsel to the
Borrower and its Subsidiaries from such jurisdictions, and as to
such matters, as the Administrative Agent may reasonably request;
(xv) LETTER OF DIRECTION. A letter of direction from the
Borrower addressed to the Administrative Agent with respect to the
disbursement of the proceeds of the initial Loans; and
(xvi) SCHEDULES. The Schedules to be attached hereto in form
and substance satisfactory to the Lenders in their sole discretion;
(b) FINANCIAL STATEMENTS. Receipt and satisfactory review by the
Administrative Agent of the consolidated financial statements of FIFSG and
its Subsidiaries for the Fiscal Year ended April 30, 2000, including
balance sheets, income and cash flow statements audited by independent
public accountants of recognized national standing and prepared in
conformity with GAAP and such other financial information as the
Administrative Agent may request;
(c) ATTORNEYS' FEES AND EXPENSES. The reasonable costs and expenses
(including, without limitation, attorneys' fees) referred to in SECTION
15.1 for which statements have been presented shall have been paid in full
(or shall be paid with the proceeds of the Loans made on the Closing
Date);
(d) COMPLIANCE WITH LAWS. As of the Closing Date, each Person that
is a party to this Agreement or any of the other Loan Documents shall have
complied with all requirements of any Governmental Authority necessary to
consummate the transactions contemplated by this Agreement and the other
Loan Documents;
(e) NO PROHIBITIONS. No Governmental Requirement shall prohibit the
consummation of the transactions contemplated by this Agreement or any
other Loan Document, and no order, judgment, or decree of any Governmental
Authority or arbitrator shall, and no litigation or other proceeding shall
be pending or threatened which would, enjoin, prohibit, restrain, or
otherwise adversely affect in any material manner the consummation of the
transactions contemplated by this Agreement and the other Loan Documents
or otherwise have a Material Adverse Effect on the Borrower or any other
Loan Party;
(f) NO MATERIAL ADVERSE CHANGE. As of the Closing Date, no material
adverse change shall have occurred with respect to the condition
(financial or otherwise), results of operations, business, operations,
capitalization, assets, liabilities (actual or contingent) or prospects of
the Borrower and its Subsidiaries since April 30, 2000, and the
Administrative
CREDIT AGREEMENT - PAGE 39
Agent shall be satisfied that the economic performance of the Borrower and
each of its Subsidiaries to the Closing Date is not materially different
from the economic projections for the Borrower and each of its
Subsidiaries through the Closing Date that were previously submitted to
the Administrative Agent;
(g) NO MATERIAL LITIGATION. As of the Closing Date, no action, suit,
investigation, or proceeding shall be pending or threatened before any
Governmental Authority that purports to affect the Borrower or any of its
Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect or that could have a material adverse effect on the ability
of the Borrower or any of its Subsidiaries to perform their Obligations
under the Loan Documents;
(h) COMPLIANCE WITH FINANCIAL OBLIGATIONS. As of the Closing Date,
each of the Borrower and its Subsidiaries shall be in compliance with all
of their respective existing material financial obligations;
(i) DUE DILIGENCE REVIEW. Receipt and review, with results
reasonably satisfactory to the Administrative Agent and its counsel, of
information regarding litigation, tax, accounting, labor, insurance,
pension liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership, environmental matters,
contingent liabilities and management of the Borrower and its
Subsidiaries;
(j) NO MATERIAL MARKET CHANGES. The absence of any material
disruption of or material adverse change in conditions in the financial,
banking or capital markets which the Administrative Agent and the Lead
Arranger, in their sole discretion, deem material in connection with the
syndication of the Loans; and
(k) ADDITIONAL DOCUMENTATION. the Administrative Agent shall have
received such additional approvals, opinions, or other documentation as
the Administrative Agent may reasonably request.
Section 8.2 ALL LOANS. The obligation of each Lender to make any Loan
(including the initial Loans) is subject to the following additional conditions
precedent:
(a) NO DEFAULT. No Default shall have occurred and be continuing, or
would result from such Loan;
(b) BORROWING BASE COMPLIANCE. After giving effect to the requested
Loan, (i) the Outstanding Revolving Credit shall not exceed the lesser of
the Revolving Commitments or the Revolving Loans Borrowing Base and (ii)
the aggregate amount of Term Loans outstanding shall not exceed the lesser
of the Term Commitments or the Term Loans Borrowing Base; and
(c) REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties contained in ARTICLE 9 and in the other Loan Documents shall be
true and correct in all material respects on and as of the date of such
Loan with the same force and effect as if such
CREDIT AGREEMENT - PAGE 40
representations and warranties had been made on and as of such date except
to the extent that such representations and warranties relate specifically
to another date.
Each Notice of Borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower that the conditions precedent set
forth in this SECTION 8.2 have been satisfied (both as of the date of such
notice and, unless the Borrower otherwise notifies the Administrative Agent
prior to the date of such borrowing, as of the date of such borrowing).
ARTICLE 9
REPRESENTATION AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement, the Borrower represents and warrants to the Administrative Agent and
the Lenders that the following statements are, and, after giving effect to the
transactions contemplated hereby, will be true, correct, and complete: Section
9.1 CORPORATE EXISTENCE.
(a) the Borrower and each Subsidiary of the Borrower is (i) a
corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation; (ii) has all requisite
power and authority to own its assets and carry on its business as now
being or as proposed to be conducted; and (iii) is qualified to do
business in all jurisdictions in which the nature of its business makes
such qualification necessary and where failure to so qualify would have a
Material Adverse Effect;
(b) Each Loan Party has the power and authority to execute, deliver,
and perform its respective obligations under the Loan Documents to which
it is or may become a party.
Section 9.2 FINANCIAL CONDITION.
(a) FINANCIAL STATEMENTS. All financial statements concerning FIFSG
and its Subsidiaries and delivered at any time to the Administrative Agent
or any Lender have been, and at all times subsequent to the Closing Date
shall be, prepared in accordance with GAAP, and present fairly, the
financial condition of the Borrower and its Subsidiaries as of the
respective dates indicated therein and the results of operations for the
respective periods indicated therein. None of FIFSG, the Borrower nor any
Subsidiary of the Borrower has any material contingent liabilities,
including liabilities for taxes, unusual forward or long-term commitments,
or unrealized or anticipated losses from any unfavorable commitments
except as referred to or reflected in such financial statements.
(b) PROJECTIONS. The Projections delivered and to be delivered have
been and will be prepared by the Borrower in light of the past operation
of the business of the Borrower and its Subsidiaries. The Projections
represent, as of the date thereof, a good faith estimate by the Borrower
and its senior management of the financial conditions and performance of
the Borrower and its Subsidiaries based on assumptions believed to be
reasonable at the time
CREDIT AGREEMENT - PAGE 41
made (it being understood that the Projections are subject to significant
uncertainties and contingencies, many of which are beyond the control of
the Loan Parties, and that no assurance can be given that the Projections
will be realized).
(c) NO MATERIAL ADVERSE CHANGE. There has been no material adverse
change with respect to the condition (financial or otherwise), results of
operations, business, operations, capitalization, assets, liabilities
(actual or contingent) or prospects of FIFSG, FIVH, the Borrower and its
Subsidiaries since April 30, 2000.
Section 9.3 CORPORATE AND SIMILAR ACTION; NO BREACH. The execution,
delivery, and performance by each Loan Party of the Loan Documents to which each
is or may become a party and compliance with the terms and provisions thereof
have been duly authorized by all requisite action on the part of each Loan Party
and do not and will not (a) violate or conflict with, or result in a breach of,
or require any consent under (i) the articles of incorporation, certificate of
formation, bylaws, or operating agreement of any Loan Party, (ii) any applicable
law, rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator, or (iii) any agreement or instrument to
which any Loan Party is a party or by which any of them or any of their property
is bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of any Loan Party.
Section 9.4 OPERATION OF BUSINESS. Each Loan Party possesses all material
licenses, permits, franchises, patents, copyrights, trademarks, and tradenames,
or rights thereto, necessary to conduct its respective businesses substantially
as now conducted and as presently proposed to be conducted, and no Loan Party is
in violation of any valid rights of others with respect to any of the foregoing
where such violation could reasonably be expected to have a Material Adverse
Effect. Except as set forth in SCHEDULE 9.4, since April 30, 2000, the Loan
Parties have conducted their respective businesses only in the ordinary and
usual course.
Section 9.5 LITIGATION AND JUDGMENTS. Except as set forth in SCHEDULE 9.5,
to the Borrower's knowledge there is no action, suit, investigation, or
proceeding before or by any Governmental Authority or arbitrator pending or
threatened against or affecting any Loan Party which could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, except as
set forth in SCHEDULE 9.5, there are no outstanding judgments against any Loan
Party.
Section 9.6 RIGHTS IN PROPERTIES; LIENS. Each Loan Party has good title to
or valid leasehold interests in its respective properties and assets, real and
personal, including, as of the Closing Date, the properties, assets, and
leasehold interests reflected in the financial statements described in SECTION
9.2, and none of such properties, assets, or leasehold interests of any Loan
Party is subject to any Lien, except as permitted by SECTION 11.2. Except as
disclosed on SCHEDULE 9.6(A), as of the Closing Date, no Loan Party owns any
material right, title, or interest in any real Properties except for leasehold
interests for offices used in the ordinary course of business. Except as
disclosed on SCHEDULE 9.6(B), as of the Closing Date, no Loan Party owns any
right, title, or interest of a material nature in Intellectual Property that is
registered with any Governmental Authority. As of the Closing Date, SCHEDULE
9.6(C) sets forth the locations of all of the offices and other places of
business of the Loan Parties and the locations of all of the material Properties
of the Loan Parties, as well as the identities of the Loan Parties who conduct
business or own Properties at such locations and the identities of the
predecessor entities who previously conducted business or owned Properties
CREDIT AGREEMENT - PAGE 42
at such locations and whose Capital Stock or assets were acquired by any Loan
Party. The Lenders' Lien on the Collateral required by ARTICLE 7 constitutes a
perfected first priority Lien subject only to Permitted Liens.
Section 9.7 ENFORCEABILITY. The Loan Documents to which any Loan Party is
a party, when delivered, shall constitute the legal, valid, and binding
obligations of the applicable Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 9.8 APPROVALS. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or other third party is
or will be necessary for the execution, delivery, or performance by any Loan
Party of the Loan Documents to which each is or may become a party or for the
validity or enforceability thereof except for such authorizations, approvals,
consents, filings, and registrations which have been obtained or are required in
connection with the recordation or perfection of Liens granted to the
Administrative Agent pursuant to the Security Documents.
Section 9.9 DEBT. Except as set forth in SCHEDULE 9.9, no Loan Party has
any funded Debt, except as permitted by SECTION 11.1.
Section 9.10 TAXES. Except as set forth in SCHEDULE 9.10, the Loan Parties
have filed all material tax returns (federal, state, and local) required to be
filed, including all material income, franchise, employment, property, and sales
tax returns, and have paid all of their respective material liabilities for
taxes, assessments, governmental charges, and other levies that are due and
payable other than those being contested in good faith by appropriate
proceedings diligently pursued for which adequate reserves have been established
in accordance with GAAP. Except as set forth in SCHEDULE 9.10, the Borrower
knows of no pending investigation of any Loan Party by any taxing authority with
respect to any material liability for tax or of any pending but unassessed
material tax liability of any Loan Party.
Section 9.11 MARGIN SECURITIES. No Loan Party is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
Section 9.12 ERISA. With respect to each Plan, each Loan Party is in
substantial compliance with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. No notice of intent to terminate a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
No Loan Party nor any ERISA Affiliate has completely or partially withdrawn from
a Multiemployer Plan. The Loan Parties and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to each Plan. Except as
set forth in SCHEDULE 9.12, the present value of all vested benefits under each
Plan
CREDIT AGREEMENT - PAGE 43
do not exceed the fair market value of all Plan assets allocable to such
benefits, as determined on the most recent valuation date of the Plan and in
accordance with ERISA. No Loan Party nor any ERISA Affiliate has any outstanding
liability to the PBGC under ERISA (other than liability for the payment of PBGC
premiums in the ordinary course of business).
Section 9.13 DISCLOSURE. All factual information furnished by or on behalf
of any Loan Party in writing to the Administrative Agent or any Lender for
purposes of or in connection with this Agreement, the other Loan Documents, or
any transaction contemplated herein or therein is, and all other such factual
information hereafter furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender, are and will be true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
Section 9.14 SUBSIDIARIES; CAPITALIZATION. SCHEDULE 9.14 sets forth the
jurisdiction of incorporation or organization of the Borrower and its
Subsidiaries, the percentage of the Borrower's or another Subsidiary's (as
applicable) ownership of the outstanding Voting Stock of each Subsidiary of the
Borrower, and the authorized, issued, and outstanding Capital Stock of the
Borrower and each Subsidiary of the Borrower. All of the outstanding Capital
Stock of the Borrower and its Subsidiaries of the Borrower has been validly
issued, is fully paid, is nonassessable, and has not been issued in violation of
any preemptive or similar rights. Except as disclosed in SCHEDULE 9.14, there
are (a) no outstanding subscriptions, options, warrants, calls, or rights
(including, without limitation, preemptive rights) to acquire, and no
outstanding securities or instruments convertible into, Capital Stock of the
Borrower or any of its Subsidiaries, and (b) no shareholder agreements, voting
trusts, or similar agreements in effect and binding on any shareholder of the
Borrower or any of its Subsidiaries or the Capital Stock of the Borrower or any
of its Subsidiaries. All shares of Capital Stock of the Borrower and its
Subsidiaries were issued in compliance with all applicable state and federal
securities laws.
Section 9.15 AGREEMENTS. Except as set forth in SCHEDULE 9.15, no Loan
Party is a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction that could have a Material Adverse Effect with respect to such Loan
Party. No Loan Party is in default in any respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party where such
default could reasonably be expected to cause a Material Adverse Effect with
respect to such Loan Party. No event has occurred and is continuing which
constitutes a default or an event of default under the FIRC Agreement or the
Enterprise Agreement, or any other financing arrangement maintained by any of
the Loan Parties.
Section 9.16 COMPLIANCE WITH LAWS. No Loan Party is in violation of any
law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except for unintentional violations which could not reasonably be
expected to have a Material Adverse Effect with respect to such Loan Party.
CREDIT AGREEMENT - PAGE 44
Section 9.17 INVESTMENT COMPANY ACT. No Loan Party is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 9.18 PUBLIC UTILITY HOLDING COMPANY ACT. No Loan Party is a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility the Borrower Company Act of 1935, as amended.
Section 9.19 ENVIRONMENTAL MATTERS.
Except as disclosed on SCHEDULE 9.19:
(a) Each Loan Party, and all of their respective properties, assets,
and operations are in compliance in all material respects with all
Environmental Laws. The Borrower is not aware of, nor has any Loan Party
received notice of, any past, present, or future conditions, events,
activities, practices, or incidents which may interfere with or prevent
the compliance or continued compliance of the Loan Parties with all
Environmental Laws;
(b) The Loan Parties have obtained and maintained, and are in
material compliance with, all material permits, licenses, and
authorizations that are required under applicable Environmental Laws;
(c) Except in compliance in all material respects with applicable
Environmental Laws, during the course of any Loan Party's ownership of or
operations on any Loan Party's real Property, there has been no
generation, treatment, recycling, storage, or disposal of hazardous waste,
as that term is defined in 40 CFR Part 261 or any state equivalent, use of
underground storage tanks or surface impoundments, use of asbestos
containing materials, or use of polychlorinated biphenyls (PCB) used in
hydraulic oils, electrical transformers, or other equipment;
(d) No Loan Party nor any of their respective currently or
previously owned or leased properties or operations is subject to any
outstanding or threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (i) failure to comply with Environmental Laws,
(ii) Remedial Action, or (iii) any Environmental Liabilities arising from
a Release or threatened Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of any
Loan Party that could reasonably be expected to result in any
Environmental Liabilities;
(f) No Loan Party is a treatment, storage, or disposal facility
requiring a permit under the Resource Conservation and Recovery Act, 42
U.S.C. ' 6901 et seq., regulations thereunder or any comparable provision
of state law. Except as would not reasonably be expected to have a
Material Adverse Effect with respect to any Loan Party, as the case may
be, the Loan Parties are in compliance with all applicable financial
responsibility requirements of all applicable Environmental Laws;
CREDIT AGREEMENT - PAGE 45
(g) Except as would not reasonably be expected to have a Material
Adverse Effect with respect any Loan Party, as the case may be, no Loan
Party has filed or failed to file any notice required under applicable
Environmental Law reporting an unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of any Loan Party.
Section 9.20 BROKER'S FEES. No broker's or finder's fee, commission or
similar compensation will be payable by any Loan Party with respect to the
transactions contemplated by this Agreement. No other similar fees or
commissions will be payable by any Loan Party for any other services rendered to
any Loan Party ancillary to this Agreement.
Section 9.21 EMPLOYEE MATTERS. Except as set forth on SCHEDULE 9.21, as of
the Closing Date, (a) no Loan Party, nor any of their respective employees, is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of any
Loan Party and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Loan Party,
and (c) there are no strikes, slowdowns, work stoppages, or controversies
pending or, to the best knowledge of the Borrower after due inquiry, threatened
between any Loan Party and its respective employees.
Section 9.22 SOLVENCY. As of and from and after the date of this Agreement
and after giving effect to the consummation of the transactions contemplated
hereby, each of the Loan Parties individually and on a consolidated basis is
Solvent.
ARTICLE 10
POSITIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it will
perform and observe the following positive covenants:
Section 10.1 REPORTING REQUIREMENTS. The Borrower will furnish to the
Administrative Agent and each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in any
event within ninety (90) days after the end of each Fiscal Year of FIFSG,
beginning with the Fiscal Year ending April 30, 2001, (i) a copy of the
annual audit report of the FIFSG and its Subsidiaries for such Fiscal Year
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings, and cash flow as at the end of such Fiscal Year
and for the Fiscal Year then ended, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, all in
reasonable detail and audited and certified on an unqualified basis by a
"Big Five" firm of independent certified public accountants or other
independent certified public accountants of recognized standing selected
by FIFSG and reasonably acceptable to
CREDIT AGREEMENT - PAGE 46
the Administrative Agent, to the effect that such report has been prepared
in accordance with GAAP; (ii) a copy of the annual unaudited report of the
FIFSG and its Subsidiaries for such Fiscal Year containing, on a
consolidating basis balance sheets and statements of income and retained
earnings for the Fiscal Year then ended, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, and in
reasonable detail certified by a Responsible Officer to have been prepared
in accordance with GAAP and to fairly present the financial condition and
results of operation of the Borrower and such significant business
divisions, on a consolidating basis at the date and for the Fiscal Year
then ended; (iii) a copy of Projections for FIFSG for the period through
and including the Term Termination Date in form acceptable to the
Administrative Agent; and (iv) copies of any management letters or other
reports delivered by such independent certified public accountants.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in any
event within forty-five (45) days after the end of each Fiscal Quarter of
FIFSG (including the fourth Fiscal Quarter) beginning with the Fiscal
Quarter ending October 31, 2000, a copy of an unaudited financial report
of FIFSG and its Subsidiaries as of the end of such period and for the
portion of the Fiscal Year then ended containing, on a consolidated and
consolidating basis, balance sheets and statements of income, retained
earnings, and cash flow, in each case setting forth in comparative form
the figures for the corresponding period of the preceding Fiscal Year, all
in reasonable detail certified by a Responsible Officer to have been
prepared in accordance with GAAP and to fairly present the financial
condition and results of operations of FIFSG and its Subsidiaries on a
consolidated and consolidating basis, at the date and for the periods
indicated therein, subject to year-end audit adjustments;
(c) [RESERVED]
(d) COMPLIANCE CERTIFICATES. (I) On or before the 30th day of each
calendar month, a Compliance Certificate demonstrating compliance with the
covenants set forth in ARTICLE 12 hereof as of the end of the preceding
calendar month and for the three immediately preceding calendar months,
and (ii) on or before the 15th day of each calendar month, a copy of the
"Monthly Debtor's Certificate" delivered by FIARC to Enterprise pursuant
to the Enterprise Agreement.
(e) BORROWING BASE REPORT. On or before the 30th day of each
calendar month during the term of this Agreement, a Borrowing Base Report
setting forth the calculations supporting the computations of the
Revolving Loans Borrowing Base and the Term Loans Borrowing Base as of the
end of the preceding calendar month and for the three immediately
preceding calendar months;
(f) NOTICE OF LITIGATION. Promptly after receipt by any Loan Party
of notice of the commencement thereof, notice of all actions, suits, and
proceedings before any Governmental Authority or arbitrator affecting any
Loan Party which, if determined adversely to such Loan Party, could
reasonably be expected to have a Material Adverse Effect with respect to
such Loan Party;
(g) NOTICE OF DEFAULT. As soon as possible and in any event within
two (2) Business Days after the chief executive officer, president, chief
financial officer, any vice
CREDIT AGREEMENT - PAGE 47
president, secretary, assistant secretary, treasurer, or any assistant
treasurer of the Borrower (i) has knowledge of the occurrence of a Default
hereunder or (ii) has knowledge of a default or an event of default under
other Debt in excess of $500,000 of any Loan Party (including, without
limitation, the FIRC Agreement and the Securitization (if any)), a written
notice setting forth the details of such Default (or, in the case, of
other agreements, default or event of default) and the action that the
Borrower has taken and proposes to take with respect thereto;
(h) ERISA. As soon as possible and in any event within thirty (30)
days after the Borrower knows, or has reason to know, that
(i) any Termination Event (other than as contemplated by the
PBGC Termination Agreement) with respect to a Plan has occurred or
will occur, or
(ii) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Plans is equal to an amount in excess of
$0, or
(iii) any Loan Party is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer
Plan required by reason of any Loan Party's complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan,
The Borrower will provide the Administrative Agent and the Lenders a
certificate of a Responsible Officer setting forth the details of such
event and the action which is proposed to be taken with respect thereto,
together with any notice or filing which may be required by the PBGC or
any other Governmental Authority with respect to such event;
(i) NOTICE OF MATERIAL ADVERSE EFFECT. As soon as possible and in
any event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect with respect to any Loan Party, written notice thereof;
(j) NOTICE OF AMENDMENTS TO OTHER AGREEMENTS. As soon as possible
and in any event within 3 Business Days after amending defaults or events
of default under any material agreements (including, without limitation,
the Enterprise Agreement agreements evidencing public or private asset
transactions), written notice of such amendment and a copy thereof;
(k) NOTICE OF MBIA INTENT. As soon as possible and in any event
within 5 days after the chief executive officer, president, chief
financial officer, any vice president, secretary, assistant secretary,
treasurer, or any assistant treasurer of the Borrower has knowledge of
MBIA's intent not to provide or continue surety bonds for Enterprise
Funding or on future securitization transactions;
(l) HEDGE AGREEMENT REPORTING. Within 30 days after the end of each
Fiscal Quarter of the Borrower (including the fourth Fiscal Quarter), a
report of the Borrower's hedge position identifying all Hedge Agreements
to which the Borrower is a party;
CREDIT AGREEMENT - PAGE 48
(m) DELIVERY OF ENTERPRISE NOTICES. A copy of (i) any notice
received by FIARC from Enterprise or any other Person under the Enterprise
Agreement promptly upon the receipt thereof and (ii) any notice that FIARC
delivers pursuant to Section 3.2(l) of the Enterprise Agreement promptly
upon the delivery or sending thereof;
(n) PROXY STATEMENTS, ETC. As soon as available, one copy of each
financial statement, report, notice, or proxy statement sent by any Loan
Party to its stockholders generally and one copy of each regular,
periodic, or special report, registration statement, or prospectus filed
by any Loan Party with any securities exchange or the Securities and
Exchange Commission or any successor agency;
(o) INTERCOMPANY CONTRACTS. Promptly upon entering into any such
arrangement or contract (to the extent permitted by SECTION 11.7), copies
or detailed descriptions of all tax sharing, cost allocation, overhead
attribution, and any similar contracts or arrangements between the
Borrower and any of its Subsidiaries at any time existing; and
(p) GENERAL INFORMATION. Promptly, such other information concerning
any Loan Party as the Administrative Agent or any Lender may from time to
time reasonably request.
Section 10.2 MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. Except as
permitted by SECTION 10.3, the Borrower will, and will cause each of its
Subsidiaries to, preserve and maintain its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications, and rights
that are necessary in the ordinary conduct of its business. The Borrower will,
and will cause each of its Subsidiaries to, conduct its business in an orderly
and efficient manner in accordance with good business practices.
Section 10.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will cause
each other Loan Party to, maintain, keep, and preserve all of its material
properties necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 10.4 TAXES AND CLAIMS. The Borrower will, and will cause each
other Loan Party to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; PROVIDED, HOWEVER, that no Loan Party shall be required to
pay or discharge any tax, levy, assessment, or governmental charge or charge for
labor, material, and supplies (i) which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves in
accordance with GAAP have been established and (ii) if the failure to pay the
same would not result in a Lien on the property of any Loan Party.
Section 10.5 INSURANCE.
CREDIT AGREEMENT - PAGE 49
(a) Each of the Loan Parties will, and will cause each of its
Subsidiaries to, keep insured by financially sound and reputable insurers
all Property of a character usually insured by responsible corporations
engaged in the same or a similar business similarly situated against loss
or damage of the kinds and in the amounts customarily insured against by
such corporations or entities and carry such other insurance as is usually
carried by such corporations or entities.
Such insurance shall be written by financially responsible companies
selected by the applicable Loan Party and having an A.M. Best Rating of
"A-" or better and being in a financial size category of "VI" or larger,
or by other companies reasonably acceptable to the Administrative Agent.
The Borrower will advise the Administrative Agent promptly of any policy
cancellation, reduction, or amendment. For purposes hereof, the term
"PERIL" shall mean, collectively, fire, lightning, flood, windstorm, hail,
explosion, riot and civil commotion, vandalism and malicious mischief,
damage from aircraft, vehicles and smoke, and other perils covered by the
"all-risk" endorsement then in use in the jurisdictions where the
Properties of the Loan Parties are located.
(b) If a Default shall have occurred and be continuing, the Borrower
will cause all proceeds of insurance paid on account of the loss of or
damage to any Property of any Loan Party and all awards of compensation
for any Property of any Loan Party taken by condemnation or eminent domain
to be paid directly to the Administrative Agent to be applied against or
held as security for the Obligations, at the election of the
Administrative Agent and the Required Lenders.
Section 10.6 INSPECTION RIGHTS. Each of the Loan Parties will, and will
cause each of its Subsidiaries to, permit representatives and agents of the
Administrative Agent and each Lender, during normal business hours and upon
reasonable notice to either FIFSG or the Borrower (as appropriate), to examine,
copy, and make extracts from FIFSG's or the Borrower's books and records, to
visit and inspect the Borrower's Properties and to discuss FIFSG's or the
Borrower's business, operations, and financial condition with their respective
officers and independent certified public accountants. FIFSG and the Borrower
will authorize their respective accountants in writing (with a copy to the
Administrative Agent) to comply with this SECTION 10.6. The Administrative Agent
or its representatives may, at any time and from time to time at the Borrower's
expense, conduct field exams for such purposes as the Administrative Agent may
reasonably request.
Section 10.7 KEEPING BOOKS AND RECORDS. The Borrower will, and will cause
each other Loan Party to, maintain proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
Section 10.8 COMPLIANCE WITH LAWS. The Borrower will, and will cause each
other Loan Party to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws), rules, regulations,
orders, and decrees of a material nature of any Governmental Authority or
arbitrator other than any such laws, rules, regulations, orders, and decrees
contested by appropriate actions or proceedings diligently pursued, if adequate
reserves in conformity with GAAP and satisfactory to the Administrative Agent
are established with respect
CREDIT AGREEMENT - PAGE 50
thereto and except for unintentional violations which could not reasonably be
expected to have a Material Adverse Effect with respect to any such Loan Party.
Section 10.9 COMPLIANCE WITH AGREEMENTS. The Borrower will, and will cause
each other Loan Party to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 10.10 FURTHER ASSURANCES.
(a) FURTHER ASSURANCE. The Borrower will, and will cause each other
Loan Party to, execute and deliver pursuant to this clause (a) such
further documentation and take such further action as may be reasonably
requested by the Administrative Agent to carry out the provisions and
purposes of the Loan Documents.
(b) SUBSIDIARY JOINDER. Within ten (10) days after the end of each
Fiscal Quarter, the Borrower shall cause each Subsidiary created or
acquired during the Fiscal Quarter then ending to execute and deliver to
the Administrative Agent a Joinder Agreement and such other documentation
as the Administrative Agent may require to cause such Subsidiary to
evidence, perfect, and otherwise implement the guaranty and/or security
for repayment of the Obligations contemplated by this Agreement, the
Subsidiary Guaranty, and any applicable Security Document.
Section 10.11 ERISA. With respect to each Plan, the Borrower will, and
will cause each other Loan Party to, comply with all minimum funding
requirements and all other material requirements of ERISA, if applicable, so as
not to give rise to any liability which could reasonably be expected to have a
Material Adverse Effect with respect to such Loan Party
ARTICLE 11
NEGATIVE COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, the
Borrower will perform and observe the following negative covenants:
Section 11.1 DEBT. The Borrower will not, and will not permit any other
Loan Party to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on SCHEDULE 9.9, and any extensions, renewals, or
refinancings of such existing Debt so long as (i) the principal amount of
such Debt after such renewal, extension, or refinancing shall not exceed
the principal amount of such Debt which was outstanding immediately prior
to such renewal, extension, or refinancing and (ii) such Debt
CREDIT AGREEMENT - PAGE 51
shall not be secured by any assets other than assets securing such Debt,
if any, prior to such renewal, extension, or refinancing;
(c) Debt of a Subsidiary of the Borrower owed to the Borrower or
another Subsidiary of the Borrower provided that such Debt is subordinated
to the Obligations on terms satisfactory to the Administrative Agent in
its sole discretion;
(d) Guaranties and other Debt incurred in the ordinary course of
business with respect to Receivables purchase commitments, reinsurance
obligations, surety and appeal bonds, performance and return-of-money
bonds, letters of credit, banker's acceptances, and other similar
obligations including those of the type otherwise described in SECTION
11.2(F);
(e) Debt of the Borrower or any Subsidiary of the Borrower
constituting purchase money Debt (including, without limitation, Capital
Lease Obligations) incurred after the Closing Date not to exceed $250,000
in the aggregate at any time outstanding secured by purchase money Liens
permitted by SECTION 11.2(G);
(f) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on the Borrower's or
any of its Subsidiaries' behalf in accordance with the policies issued to
the Borrower or such Subsidiary of the Borrower;
(g) Debt secured by the Liens permitted by CLAUSES (D) and (E) of
SECTION 11.2;
(h) Debt arising under, created by and consisting of Hedge
Agreements, PROVIDED, (i) such Hedge Agreements shall have been entered
into for the purpose of hedging actual risk and not for speculative
purposes and (ii) that each counterparty to such Hedge Agreement shall be
a Lender or shall be rated in one of the two highest rating categories of
Standard and Poor's Corporation or Moody's Investors Service, Inc.; and
(i) Intercompany obligations among Borrower, FIFSG and their
respective Subsidiaries for reasonable net rent allocation, reasonable
management fees, dividends declared, equity investments and intercompany
debt service, including, but not limited to, that certain unsecured loan
by FIVH to the Borrower pursuant to which the Borrower may borrow, repay
and reborrow an amount not to exceed $25,000,000, as evidenced by that
certain promissory note, dated April 23, 1997, issued by the Borrower and
payable to the order of FIVH, as such note may be amended, modified,
extended or increased from time to time; PROVIDED that all Debt permitted
by this clause (i) is subordinated to the Obligations on terms
satisfactory to the Administrative Agent in its sole discretion.
Section 11.2 LIMITATION ON LIENS AND RESTRICTIONS ON LOAN PARTIES. The
Borrower will not, and will not permit any Loan Party to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following ("PERMITTED
LIENS"):
(a) Liens described on SCHEDULE 11.2 hereto, and any extensions,
renewals, or refinancings of the Debt secured by such Liens as permitted
under SECTION 11.1(B), PROVIDED
CREDIT AGREEMENT - PAGE 52
that (i) no such Lien is expanded to cover any additional Property (other
than after acquired title in or on such Property and proceeds of the
existing collateral) after the Closing Date and (ii) no such Lien is
spread to secure any additional Debt after the Closing Date other than
Debt permitted by SECTION 11.1(B);
(b) Liens in favor of the Administrative Agent, for the benefit of
itself and each Lender pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually
or in the aggregate) materially detract from the value of the real
Property encumbered thereby or materially impair the ability of the
Borrower or any other Loan Party to use such real Property in their
respective businesses;
(d) Liens for taxes, assessments, or other governmental charges (but
excluding Environmental Liens or Liens under ERISA) that are not
delinquent or which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other similar statutory Liens securing obligations that are
not overdue or are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established in accordance with GAAP and are incurred in the ordinary
course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance or other social security programs or
to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety and appeal bonds, bids, and other contracts
incurred in the ordinary course of business (other than for payment of
Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; PROVIDED that: (i) the Debt secured by any such Lien is
permitted under SECTION 11.1(F) hereof; and (ii) any such Lien encumbers
only the Property so purchased or leased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Any interest or title of a licensor, lessor, or sublessor under
any license or lease entered into in the ordinary course of business;
(j) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by the Borrower
or another Loan Party in the ordinary course of business;
(k) Nonconsensual Liens in favor of banking institutions arising as
a matter of law and encumbering the deposits (including the right of
set-off) held by such banking institutions in the ordinary course of
business; and
CREDIT AGREEMENT - PAGE 53
(l) the Lien on that certain trust account described in the
Facultative Reinsurance Agreement, dated as of April 15, 1994, as amended,
modified or extended from time to time, between FIIC and National Union
Fire Insurance Company of Pittsburgh, PA, which Lien secures the
obligations of FIIC thereunder.
Notwithstanding the foregoing Permitted Liens or any other provision in this
Agreement or any other Loan Document to the contrary, none of FIFSG, FIVH or the
Borrower will enter into, and the Borrower will not permit any Loan Party to
enter into, any agreement that (i) prohibits the creation or assumption of any
Lien upon, or the pledge, hypothecation or encumbrance of, any Property of
FIFSG, the Borrower or such Loan Party in favor of any Person, including,
without limitation the Lenders, or (ii) requires any obligation of FIFSG, the
Borrower or such Loan Party to be secured in favor of another Person if any
Obligation of the Borrower to the Lenders is so secured.
Section 11.3 MERGERS, ETC. The Borrower will not, and will not permit any
other Loan Party to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or a substantial part of the business or Property of any
Person or all or a substantial part of the business or Property of a division or
branch of a Person or a majority interest in the Capital Stock of any Person, or
wind-up, dissolve, or liquidate itself; PROVIDED that as long as no Default
exists or would result therefrom and provided the Borrower gives the
Administrative Agent and the Lenders prior written notice:
(i) A Subsidiary of the Borrower may wind-up, dissolve, or liquidate
if (a) its Property is transferred to the Borrower or a Wholly-Owned
Subsidiary of the Borrower and (b) the Loan Party acquiring such Property
complies with its obligations under SECTION 10.10 simultaneously with such
acquisitions; and
(ii) Any Subsidiary of the Borrower may merge or consolidate with
the Borrower (provided the Borrower is the surviving entity) or with any
Wholly-Owned Subsidiary of the Borrower (provided the Wholly-Owned
Subsidiary is the surviving entity).
Section 11.4 RESTRICTED JUNIOR PAYMENTS. The Borrower will not, and will
not permit any other Loan Party (including, without limitation, FIFSG) to,
directly or indirectly declare, order, pay, make, or set apart any sum for (a)
any dividend or other distribution, direct or indirect, on account of any shares
of any class of Capital Stock of any Loan Party now or hereafter outstanding;
(b) any redemption, conversion, exchange, retirement, sinking fund, or similar
payment, purchase, or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any Loan Party now or hereafter
outstanding; or (c) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options, or other rights to acquire shares of any
class of Capital Stock of any Loan Party now or hereafter outstanding except:
(i) Subsidiaries of the Borrower may make, declare, and pay
dividends and make other distributions with respect to their Capital Stock
to the Borrower or Wholly-Owned Subsidiaries of the Borrower;
(ii) the Borrower may declare and pay dividends on any class of its
Capital Stock payable solely in shares of Capital Stock of the Borrower;
and
CREDIT AGREEMENT - PAGE 54
(iii) the Borrower may acquire or redeem Capital Stock of the
Borrower held by any former officer, director, or employee of the Borrower
or beneficiaries of any such Person's estate or trusts created by or for
the benefit of any such Person or their beneficiaries.
Section 11.5 INVESTMENTS. The Borrower will not, and will not permit any
other Loan Party to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stocks, bonds, notes, debentures, or other Securities of any
Person, or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "INVESTMENTS"), except:
(a) the Borrower and its Subsidiaries may make equity investments in
and may make loans to Subsidiaries of the Borrower (in the case of loans,
as permitted by SECTION 11.1) and may acquire new Subsidiaries (subject to
the requirements of SECTIONS 11.3);
(b) readily marketable direct obligations of the U.S. or any agency
thereof with maturities of one year or less from the date of acquisition;
(c) fully insured certificates of deposit with maturities of one
year or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of One Hundred
Million Dollars ($100,000,000);
(d) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poor's Corporation or Moody's Investors
Service, Inc. or any successor thereto and shares of any mutual fund
company substantially all the assets of which consist of cash and the
Investments of the type described in CLAUSE (B), CLAUSE (C), and this
CLAUSE (D);
(e) advances to officers, directors, and employees for business
expenses incurred in the ordinary course of business;
(f) if no Event of Default exists, the Borrower and its Subsidiaries
may make capital contributions to or investments in, or purchase any
Capital Stock of the Borrower authorized under SECTION 11.6 of, the
Borrower, a Wholly-Owned Subsidiary of the Borrower, or a newly created
Person organized by the Borrower or any Subsidiary of the Borrower;
(g) the Borrower and its Subsidiaries may acquire and own any
Investments of any Person received in connection with the bankruptcy or
reorganization of suppliers and customers and in connection with the
settlement of delinquent obligations of, and disputes with, customers and
suppliers arising in the ordinary course of business;
(h) extensions of trade credit in the ordinary course of business;
(i) Investments other than those described in CLAUSES (A)-(H) of
this SECTION 11.5 if the aggregate amount thereof never exceeds Two
Hundred Fifty Thousand Dollars ($250,000) at any time (determined based on
the cost or outstanding principal amount
CREDIT AGREEMENT - PAGE 55
thereof, as applicable, without regard to any write up or write down
thereof, MINUS all payments received in respect of such Investment,
whether constituting principal, interest, dividends, distributions, or
otherwise).
Section 11.6 LIMITATION ON ISSUANCE OF CAPITAL STOCK. The Borrower will
not, and will not permit any Subsidiary to, at any time issue, sell, assign, or
otherwise dispose of, except to the Borrower, a Subsidiary of the Borrower, or a
newly created Wholly-Owned Subsidiary of the Borrower, or pursuant to a public
offering of the Capital Stock of the Borrower, (a) any of its Capital Stock, (b)
any securities exchangeable for or convertible into or carrying any rights to
acquire any of its Capital Stock, or (c) any option, warrant, or other right to
acquire any of its Capital Stock.
Section 11.7 TRANSACTIONS WITH AFFILIATES. Except as provided under the
Loan Documents and except in respect of any management fee to be paid by the
Borrower or FIVH to FIFSG or by any Exempt Subsidiary to the Borrower, the
Borrower will not, and will not permit any other Loan Party to, enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate of the Borrower or
such other Loan Party, except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such other Loan Party's business
and upon fair and reasonable terms no less favorable to the Borrower or such
other Loan Party than would be obtained in a comparable arms-length transaction
with a Person not an Affiliate of the Borrower or such other Loan Party.
Section 11.8 DISPOSITION OF ASSETS. The Borrower will not, and will not
permit any other Loan Party to, sell, lease, assign, transfer, or otherwise
voluntarily dispose of: (a) any of its Receivables other than the transfer and
assignment of Receivables (i) to FIRC pursuant to the FIRC Purchase Agreement,
(ii) to FIACC pursuant to the FIACC Purchase Agreement, (iii) to FIARC pursuant
to the Enterprise Purchase Agreement, and (iv) to any other Exempt Subsidiary
for inclusion in a Securitization program; (b) any substantial portion of the
consolidated assets of the Loan Parties; or (c) any other Property other than
dispositions of Inventory and Equipment in the ordinary course of business and
sales of charged off deficiency balances in the ordinary course of business
generating aggregate Net Proceeds not in excess of $500,000 in any calendar
year.
Section 11.9 LINES OF BUSINESS. The Borrower and its Subsidiaries will not
engage in any line or lines of business activity other than the businesses in
which they are engaged on the date hereof or a business reasonably related
thereto. The Borrower will not permit any of its Subsidiaries to engage in any
line or lines of business activity other than the businesses in which the
Borrower and its Subsidiaries are engaged on the date hereof or a business
reasonably related thereto.
Section 11.10 LIMITATIONS ON RESTRICTIONS AFFECTING SUBSIDIARIES. Neither
the Borrower nor any other Loan Party shall enter into or assume any material
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its material properties or assets, whether now owned or
hereafter acquired. Except as provided herein, the Borrower will not, and will
not permit any other Loan Party to, directly or indirectly create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Loan Party to: (a) pay dividends
or make any other distribution on any of such Loan Party's Capital Stock owned
by any Loan Party; (b) pay any Debt owed to any Loan Party; (c) make loans or
CREDIT AGREEMENT - PAGE 56
advances to any Loan Party; or (d) transfer any of its Property to any Loan
Party, except pursuant to non-assignment provisions of licenses and leases
entered into in the ordinary course of business.
Section 11.11 ENVIRONMENTAL PROTECTION. The Borrower will not, and will
not permit any other Loan Party to, (a) use (or permit any tenant to use) any of
its Properties for the handling, processing, storage, transportation, or
disposal of any Hazardous Material except in compliance with applicable
Environmental Laws, (b) generate any Hazardous Material except in compliance
with applicable Environmental Laws, (c) conduct any activity that is likely to
cause a Release or threatened Release of any Hazardous Material in violation of
any Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that in any material respect violates or is likely to
violate any Environmental Law or create any Environmental Liabilities for which
the Borrower or any other Loan Party would be responsible that could reasonably
be expected to have a Material Adverse Effect.
Section 11.12 ERISA. The Borrower will not, and will not permit any other
Loan Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for
benefits under any Plan (exclusive of any Multiemployer Plan) to exist or
to be created; or
(b) with respect to any Multiemployer Plan, allow or take (or permit
any ERISA Affiliate to take) any action which would cause any unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or
to be created, either individually as to any such Plan or in the aggregate
as to all such Plans.
Section 11.13 NO PREPAYMENT OF DEBT. The Borrower will not, and will not
permit any Loan Party to, directly or indirectly, make any optional prepayment
or distribution on account of, or voluntarily purchase, acquire, redeem or
retire, any Debt prior to 30 days before its originally stated maturity or, in
the case of interest, its stated due date except for prepayments of the Loans or
other Obligations pursuant to or as permitted by the Loan Documents.
Section 11.14 NO MATERIAL CHANGE IN UNDERWRITING STANDARDS. The Borrower
will not, and will not permit any other Loan Party to, make material changes to
its written underwriting standards or to its business practices with respect to
such policies.
Section 11.15 NO EXTENSION OR AMENDMENT OF CERTAIN DOCUMENTS. Except with
the prior written consent of the Required Lenders (other than with respect to
extensions of the Credit Insurance referred to in CLAUSE (A) below), the
Borrower will not, and will not permit FIRC or FIARC to, extend, amend or
otherwise modify the terms of (a) the Credit Insurance, (b) Section 5(e) of the
FIRC Security Agreement or Articles VI or VII of the FIRC Agreement, (c) Section
3.2 or Section 5.1(a) of the Enterprise Agreement, (d) the FIRC Purchase
Agreement or (e) the Enterprise Purchase Agreement.
CREDIT AGREEMENT - PAGE 57
ARTICLE 12
FINANCIAL COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, it will
perform and observe the following financial covenants:
Section 12.1 MINIMUM TANGIBLE NET WORTH. As of the end of each calendar
month, the Borrower will not permit the Tangible Net Worth of the Borrower and
its consolidated Subsidiaries to be less than (a) the greater of $27,100,000 or
90% of Tangible Net Worth of the Borrower and its consolidated Subsidiaries as
of October 31, 2000, PLUS (b) the Net Proceeds of any sale after the Closing
Date of Capital Stock by the Borrower or any Subsidiary of the Borrower, PLUS
(c) 90% of the Borrower's cumulative positive net income (determined according
to GAAP) for each Fiscal Quarter beginning with the Fiscal Quarter ending
January 31, 2001.
Section 12.2 MAXIMUM NET CHARGE-OFF RATIO. As of the end of each calendar
month, the Borrower shall not permit the average ratio for each of the most
recent three month ends of (a) Charged-Off Receivables to (b) Managed Assets to
exceed 3.75 to 100.00.
Section 12.3 MAXIMUM DELINQUENCY RATIO. As of the end of each calendar
month, the Borrower shall not permit the average ratio for each of the most
recent three month ends of (a) Delinquent Receivables to (b) Managed Assets to
exceed 4.50 to 100.00.
Section 12.4 MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO. As of the
end of each calendar month, the Borrower shall not permit the ratio of (a)
EBITDA plus Rental Expense of the Borrower and its consolidated Subsidiaries for
the twelve month period then ending to (b) the sum of (i) Interest Expense, plus
(ii) Rental Expense, plus (iii) scheduled principal payments on Debt of the
Borrower and its consolidated Subsidiaries due within the twelve month period
then beginning (exclusive of payments due under asset securitization
transactions and the payment due under SECTION 2.3(A)), to be less than 1.10 to
1.00.
CREDIT AGREEMENT - PAGE 58
Section 12.5 MINIMUM BORROWER ONLY FIXED CHARGE COVERAGE RATIO. As of the
end of each calendar month, the Borrower shall not permit the ratio of (a)
unconsolidated EBITDA of the Borrower plus residual cash flow from Exempt
Subsidiaries of the Borrower actually received in cash by the Borrower for the
twelve month period then ending to (b) the sum of (i) the Borrower's Interest
Expense, plus (ii) net Rental Expense actually paid by the Borrower taking into
account reimbursements from and payments by the Borrower's Subsidiaries, plus
(iii) scheduled principal payments on Debt of the Borrower due within the twelve
month period then beginning (exclusive of payments due under asset
securitization transactions and the payment due under SECTION 2.3(A)), to be
less than 1.05 to 1.00.
Section 12.6 MAXIMUM TOTAL LIABILITIES PLUS CONTINGENT OBLIGATIONS TO
TANGIBLE NET WORTH RATIO. As of the end of each calendar month, the Borrower
shall not permit the ratio of (a) Total Liabilities plus Contingent Obligations
to (b) Tangible Net Worth to exceed 10.65 to 1.00 for the period from the date
hereof through June 30, 2001 or 9.75 to 1.00 on July 31, 2001 or at any calendar
month end thereafter.
ARTICLE 13
DEFAULT
Section 13.1 EVENTS OF DEFAULT. Each of the following shall be deemed an
"EVENT OF DEFAULT":
(a) the Borrower shall fail to pay (i) when due any principal of any
Loan or any part thereof; (ii) within five (5) days of the date due any
interest or fees payable under the Loan Documents or any part thereof; or
(iii) within two (2) days after the date the Borrower receives written
notice of the failure to pay when due, any other Obligation or any part
thereof, or any indebtedness, liability, or obligation due to any Lender
under any Hedge Agreement.
(b) Any representation, warranty, or certification made or deemed
made by any Loan Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan Document shall be false,
misleading, or erroneous in any material respect when made or deemed to
have been made.
(c) Any Loan Party shall fail to perform, observe, or comply with
any covenant, agreement, or term contained in SECTION 10.1, (provided the
Administrative Agent shall have delivered to the Borrower written notice
of such default under SECTION 10.1), ARTICLE 11 or ARTICLE 12 of this
Agreement.
(d) Any Loan Party shall fail to perform, observe, or comply with
any other agreement or term contained in any Loan Document (other than
covenants described in SUBSECTIONS 13.1(A)-(C)) and such failure shall
continue for a period of thirty (30) days after the earlier of (i) the
date the Administrative Agent provides the Borrower with notice thereof
CREDIT AGREEMENT - PAGE 59
or (ii) the date the Borrower should have notified the Administrative
Agent thereof in accordance with SUBSECTION 10.1(G) hereof.
(e) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner, liquidator, or the like of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "BANKRUPTCY CODE"),
(iv) institute any proceeding or file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, (vi) admit in writing its inability to, or
be generally unable to pay its debts as such debts become due, or (vii)
take any corporate action for the purpose of effecting any of the
foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of the applicable Loan Party in any court
of competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement, or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver, custodian,
trustee, examiner, liquidator, or the like of such Loan Party or of all or
any substantial part of its Property, or (iii) similar relief in respect
of such Loan Party under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and
such proceeding or case shall continue undismissed, or an order, judgment,
or decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of sixty (60) or more days;
or an order for relief against any Loan Party shall be entered in an
involuntary case under the Bankruptcy Code.
(g) Any Loan Party shall fail within a period of thirty (30) days
after the commencement thereof to discharge or obtain a stay of any
attachment, sequestration, forfeiture, or similar proceeding or
proceedings involving an aggregate amount in excess of Two Hundred Fifty
Thousand Dollars ($250,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess
of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate (to the
extent not paid or fully covered by insurance acknowledged by a carrier
reasonably acceptable to the Administrative Agent) shall be rendered by a
court or courts against any Loan Party and the same shall not be
discharged (or provision shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within thirty (30) days from
the date of entry thereof and the relevant Loan Party shall not, within
said period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal.
(i) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt (beyond the period of grace, if any) or any
termination event shall occur with respect to any Securitization
Securities if the aggregate principal amount of the affected Debt or
Securities equals or exceeds Two Hundred Fifty Thousand Dollars ($250,000)
(other than
CREDIT AGREEMENT - PAGE 60
the Obligations), or the maturity of any such Debt or Securities shall
have been accelerated, or any such Debt or Securities shall have been
required to be prepaid prior to the stated maturity thereof or any event
shall have occurred with respect to any Debt or Securities in the
aggregate principal amount equal to or in excess of Two Hundred Fifty
Thousand Dollars ($250,000) that permits any holder or holders of such
Debt or Securities or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof or require any prepayment or
acceleration of payment thereof.
(j) This Agreement or any Security Document shall cease to be in
full force and effect or shall be declared null and void or the validity
or enforceability thereof shall be contested or challenged by any Loan
Party or any Loan Party shall deny that it has any further liability or
obligation under any of the Loan Documents or any Lien created or
purported to be created by the Loan Documents shall for any reason cease
to be or fail to be a valid, first priority perfected Lien (except for
Liens permitted under this Agreement, if any, which are expressly
permitted by the Loan Documents to have priority over the Liens in favor
of the Administrative Agent) upon any of the Collateral purported to be
covered thereby.
(k) Any of the following events shall occur or exist with respect to
any Loan Party or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that could reasonably be expected to constitute grounds
entitling the PBGC to institute proceedings under Section 4042 of ERISA
for the termination of, or for the appointment of a trustee to administer,
any Plan, or the institution by the PBGC of any such proceedings; or (v)
complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of
any Multiemployer Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Administrative Agent subject the
Borrower or any of its Subsidiaries to any tax, penalty, or other
liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate could reasonably be expected
to exceed One Million Dollars ($1,000,000).
(l) The occurrence of any event or condition which constitutes a
Material Adverse Effect and thirty (30) days have passed since written
notification thereof to the Borrower by the Administrative Agent (therein
reasonably identifying such event or condition) without such event or
condition having been remedied, cured or waived.
(m) The occurrence of (i) an "Event of Default" under the FIRC
Agreement or under any of the documents executed by FIRC or the Borrower
in connection therewith, including any interest rate swap or other
exchange agreement which hedges interest payable under the FIRC Agreement,
(ii) a "Termination Event" under the Enterprise Agreement (other than with
respect to the events specified in Sections 6.1(f), (j), (t) or (u)
thereof) or the occurrence of any other default or event of default under
any of the other documents executed by FIARC or the Borrower in connection
therewith, including any interest rate swap or other exchange agreement
which hedges interest payable under the Enterprise Agreement
CREDIT AGREEMENT - PAGE 61
or (iii) a default or an event of default under agreements or other
documents evidencing securitization transactions entered into by the
Borrower or any of its Subsidiaries.
(n) A material breach by the Borrower of its obligations under any
interest rate Hedge Agreement on the interest rate payable by the Borrower
under any interest rate Hedge Agreement offsets a counter position of
FIARC under such interest rate position.
(o) A Change of Control shall occur.
Section 13.2 REMEDIES. If any Event of Default shall occur and be t 6 0
continuing, the Administrative Agent may (and if directed by Required Lenders,
shall) do any one or more of the following:
(a) ACCELERATION. By notice to the Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by the Borrower under the Loan Documents immediately due
and payable, and the same shall thereupon become immediately due and
payable, without further notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower except as where required by the specific terms of this Agreement
or the other Loan Documents;
(b) TERMINATION OF COMMITMENTS. Terminate the Commitments, without
notice to the Borrower or any other Loan Party;
(c) JUDGMENT. Initiate proceedings to reduce any claim to judgment;
(d) FORECLOSURE. Foreclose or otherwise enforce any Lien granted to
the Administrative Agent, for the benefit of itself and each Lender to
secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; and
(e) RIGHTS. Exercise any and all rights and remedies afforded by the
laws of the State of Texas, or any other jurisdiction governing any of the
Loan Documents, by equity, or otherwise;
PROVIDED, HOWEVER, that, upon the occurrence of an Event of Default under
SUBSECTIONS 13.1(E) or SUBSECTION 13.1(F), the Commitments of all of the Lenders
shall automatically terminate and the outstanding principal of and accrued and
unpaid interest on the Notes and all other amounts payable by the Borrower under
the Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrower.
Section 13.3 PERFORMANCE BY THE ADMINISTRATIVE AGENT. Upon the occurrence
of a Default, if any Loan Party shall fail to perform any agreement in
accordance with the terms of the Loan Documents, the Administrative Agent may,
at the direction of the Required Lenders, perform or attempt to perform such
agreement on behalf of such Loan Party. In such event, the Borrower shall, at
the request of the Administrative Agent, promptly pay any amount expended by the
Administrative Agent or the Lenders in connection with such performance or
attempted performance,
CREDIT AGREEMENT - PAGE 62
to the Administrative Agent at the Principal Office together with interest
thereon at the Default Rate applicable to Base Rate Accounts from and including
the date of such expenditure to but excluding the date such expenditure is paid
in full. Notwithstanding the foregoing, it is expressly agreed that neither the
Administrative Agent nor any Lender shall have any liability or responsibility
for the performance of any obligation of any Loan Party under any Loan Document.
Section 13.4 SET-OFF. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to the Borrower or any other Person (any such notice being hereby
expressly waived), to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or any other Loan Party against any and all of the
Obligations now or hereafter existing under any Loan Document, irrespective of
whether or not the Administrative Agent or such Lender shall have made any
demand under such Loan Documents and although the Obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower (with a copy to the
Administrative Agent) after any such set-off and application, PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights and remedies of each Lender hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
Section 13.5 CONTINUANCE OF DEFAULT. For purposes of all Loan Documents, a
Default shall be deemed to have continued and exist until the Administrative
Agent shall have actually received evidence satisfactory to the Administrative
Agent that such Default shall have been remedied.
ARTICLE 14
THE ADMINISTRATIVE AGENT
Section 14.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes Bank of America to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in SECTION 14.5 shall include its Affiliates (including Banc
of America Securities LLC) and its own and its Affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in the Loan Documents and shall not be a trustee or
fiduciary for any Lender; (b) shall not be responsible to the Lenders for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any Loan Party or any
other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Loan Party or
the satisfaction of any condition or to inspect the property (including the
books and records) of any Loan Party or any of its Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection
CREDIT AGREEMENT - PAGE 63
proceedings under any Loan Document; and (e) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct. The
Administrative Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
Section 14.2 RELIANCE BY THE ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely upon any certification, notice, instrument,
writing, or other communication (including, without limitation, any thereof by
telephone or telecopy) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel for any Loan Party),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
SECTION 15.8. As to any matters not expressly provided for by this Agreement,
the 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 the Required Lenders, and such instructions shall be binding on
all of the Lenders; PROVIDED, HOWEVER, that the Administrative Agent shall not
be required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to any Loan Document or applicable law. Section
14.3 DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received written notice from a Lender or the Borrower specifying such
Default and stating that such notice is a "Notice of Default". In the event that
the Administrative Agent receives such a notice of the occurrence of a Default,
the Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default as it
shall deem appropriate or as shall reasonably be directed by the Required
Lenders.
Section 14.4 RIGHTS AS LENDER. With respect to its Commitment and the
Loans made by it, Bank of America (and any successor acting as the
Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. Bank of America (and any
successor acting as the Administrative Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of their respective
Affiliates as if it were not acting as the Administrative Agent, and Bank of
America (and any successor acting as the Administrative Agent) and its
Affiliates may accept fees and other consideration from any Loan Party or any of
their respective Affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
Section 14.5 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED UNDER
CREDIT AGREEMENT - PAGE 64
SECTION 15.1 OR SECTION 15.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF BORROWER
UNDER SUCH SECTIONS) RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT
PERCENTAGES, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT (INCLUDING BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING
OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION
TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER ANY LOAN DOCUMENT; PROVIDED
THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARE
FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT
JURISDICTION TO HAVE ARISEN FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF,
THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO
BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF
SUCH PERSON. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO
REIMBURSE THE ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE
(CALCULATED BASED ON THE COMMITMENT PERCENTAGES) OF ANY COSTS OR EXPENSES
PAYABLE BY THE BORROWER UNDER SECTION 15.1 TO THE EXTENT THAT THE ADMINISTRATIVE
AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES BY THE BORROWER. IN
THE CASE OF AN INVESTIGATION, LITIGATION, OR OTHER PROCEEDING TO WHICH THE
INDEMNITY IN THIS SECTION 14.5 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE
WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE
BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR CREDITORS OR ANY PARTY ENTITLED TO
INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 14.6 NON-RELIANCE ON THE ADMINISTRATIVE AGENT AND OTHER Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Loan Parties and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under the Loan Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs,
CREDIT AGREEMENT - PAGE 65
financial condition, or business of any Loan Party or any of their Affiliates
that may come into the possession of any Agent or any of its Affiliates.
Section 14.7 RESIGNATION OF THE ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor the Administrative Agent, which successor agent shall be
subject to the approval of the Borrower if and so long as no Event of Default
has occurred and is continuing, which approval shall not be unreasonably
withheld, conditioned, or delayed. If no successor the Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring the Administrative
Agent's giving of notice of resignation, then the retiring the Administrative
Agent may, on behalf of the Lenders, appoint a successor the Administrative
Agent which shall be a commercial bank organized under the laws of the U.S.
having combined capital and surplus of at least One Hundred Million Dollars
($100,000,000), which successor agent shall be subject to the approval of the
Borrower, which approval shall not be unreasonably withheld, conditioned, or
delayed. Upon the acceptance of any appointment as the Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring the Administrative Agent, and the retiring the Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring the Administrative Agent's resignation hereunder as the Administrative
Agent, the provisions of this ARTICLE 14 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Administrative Agent.
Section 14.8 THE ADMINISTRATIVE AGENT FEE. The Borrower agrees to pay to
the Administrative Agent on the date hereof and on each anniversary of the date
hereof the administrative fee described in that certain letter dated
concurrently herewith from Bank of America and Banc of America Securities LLC to
the Borrower, as the same may be amended from time to time.
Section 14.9 SEVERAL COMMITMENTS. The Commitments and other obligations of
the Lenders under any Loan Document are several. The default by any Lender in
making a Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under any Loan Document. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. No Lender shall
be responsible for any act or omission of any other Lender.
ARTICLE 15
MISCELLANEOUS
Section 15.1 EXPENSES. The Borrower hereby agrees to pay promptly after
presentation of supporting documentation without duplication: (a) all reasonable
costs and expenses of the Administrative Agent and the Lead Arranger arising in
connection with the preparation, negotiation, execution, and delivery of the
Loan Documents and all amendments or other modifications to the Loan Documents,
including, without limitation, the reasonable fees and expenses of legal counsel
CREDIT AGREEMENT - PAGE 66
for the Administrative Agent and the Lead Arranger; (b) all costs and expenses
of the Administrative Agent in connection with any Default and the enforcement
of any Loan Document or collection of the Obligations, including, without
limitation, the fees and expenses of legal counsel for the Administrative Agent;
(c) all fees, costs, and expenses of any Lender arising in connection with an
Event of Default and the enforcement of any Loan Document or collection of the
Obligations during the continuance of an Event of Default; PROVIDED, HOWEVER,
that all Lenders (other than the Administrative Agent) shall be limited to the
legal fees and expenses of one counsel for all Lenders unless such
representation shall result in a conflict of interest, in which case the
Borrower shall pay the fees, costs, and expenses of as many counsel as necessary
to avoid conflicts among the Lenders; (d) all transfer, stamp, documentary, or
other similar taxes, assessments, or charges (including, without limitation, the
Taxes and any penalties or interest) levied by any Governmental Authority in
respect of any Loan Document or the transactions contemplated thereby; (e) all
reasonable costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or other Lien contemplated by any Loan Document; and (f) all
other reasonable costs and expenses incurred by the Administrative Agent in
connection with any Loan Document. The fees and expenses of legal counsel for
the Administrative Agent that the Borrower has agreed to pay hereunder include
the fees and expenses of legal counsel for the Administrative Agent arising in
connection with advice given to the Administrative Agent as to its rights and
responsibilities hereunder.
Section 15.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGER AND EACH LENDER AND EACH AFFILIATE
THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND
AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) TO WHICH
ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE
TO (A) ANY BREACH BY ANY LOAN PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT,
OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (B) THE PRESENCE,
RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS
MATERIAL LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE ASSETS OF THE
BORROWER OR ANY OTHER LOAN PARTY, (C) ANY AND ALL STAMP, FILING, OR SIMILAR
TAXES (INCLUDING,
CREDIT AGREEMENT - PAGE 67
WITHOUT LIMITATION, THE "TAXES" AND ANY INTEREST OR PENALTY) LEVIES, DEDUCTIONS,
AND CHARGES IMPOSED ON THE ADMINISTRATIVE AGENT, THE LEAD ARRANGER OR ANY LENDER
IN RESPECT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR (D)
ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT
LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING, THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY; PROVIDED THAT THE PERSON ENTITLED TO BE INDEMNIFIED UNDER
THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, OR
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION TO HAVE
ARISEN OUT OF OR RESULTED FROM ITS GROSS NEGLIGENCE OR ITS WILLFUL MISCONDUCT.
WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION
OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION
SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) ARISING OUT
OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. IN THE
CASE OF AN INVESTIGATION, LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY
IN THIS SECTION 15.2 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT
SUCH INVESTIGATION, LITIGATION, OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS, OR CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION
HEREUNDER OR ANY OTHER PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED.
Section 15.3 LIMITATION OF LIABILITY. None of the Administrative Agent,
the Lead Arranger, any Lender, or any Affiliate, officer, director, employee,
attorney, or agent thereof shall have any liability with respect to the Borrower
for and, by the execution of the Loan Documents to which it is a party, each
other Loan Party, hereby waives, releases, and agrees not to sue any of them
upon, any claim for, any special, indirect, incidental, consequential, or
punitive damages suffered or incurred by any Loan Party in connection with,
arising out of, or in any way related to any of the Loan Documents, or any of
the transactions contemplated by any of the Loan Documents.
Section 15.4 NO DUTY. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Administrative Agent, the
Lead Arranger or any Lender shall have the right to act exclusively in the
interest of the Administrative Agent, the Lead Arranger and the Lenders and
shall have no duty of disclosure, duty of loyalty, duty of care, or other duty
or obligation of any type or nature whatsoever to any Loan Party, any
shareholders of any Loan Party, or any other Person.
Section 15.5 NO FIDUCIARY RELATIONSHIP. The relationship between the Loan
Parties on the one hand and the Administrative Agent, the Lead Arranger and each
Lender on the other is solely that of debtor and creditor, and neither the
Administrative Agent, the Lead Arranger nor any Lender has any fiduciary or
other special relationship with any Loan Parties, and no term or condition of
any of the Loan Documents shall be construed so as to deem the relationship
between the Loan Parties on the one hand and the Administrative Agent, the Lead
Arranger and each Lender on the other to be other than that of debtor and
creditor.
Section 15.6 EQUITABLE RELIEF. The Borrower recognizes that in the event
any Loan Party fails to pay, perform, observe, or discharge any or all of the
obligations under the Loan Documents, any remedy at law may prove to be
inadequate relief to the Administrative Agent and the Lenders. The Borrower
therefore agrees that the Administrative Agent and the Lenders, if the
Administrative
CREDIT AGREEMENT - PAGE 68
Agent or the Required Lenders so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 15.7 NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 15.8 SUCCESSORS AND ASSIGNS.
(a) BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. The Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent and all of the Lenders.
(b) ASSIGNMENT. Each Lender may assign to one or more Persons all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee. As
used herein, "ELIGIBLE ASSIGNEE" means (A) a Lender; (B) an
Affiliate of a Lender or, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank
loans and is managed by the same investment advisor as such Lender
(herein a "RELATED FUND"); and (C) any other Person approved by the
Administrative Agent and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in
accordance with this SECTION 15.8, the Borrower, such approval not
to be unreasonably withheld, conditioned, or delayed by the Borrower
and such approval to be deemed given by the Borrower if no objection
is received by the assigning Lender and the Administrative Agent
from the Borrower within five (5) Business Days after notice of such
proposed assignment has been provided by the assigning Lender to the
Borrower; PROVIDED, HOWEVER, that neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Agreement or an assignment by a Lender to one of its Related Funds,
any such partial assignment shall be in an amount not less than the
lesser of [$1,000,000] or such Lender's remaining Commitments
hereunder;
(iii) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an Assignment and
Acceptance, together with any Note subject to such assignment and a
processing fee of $3,500.
CREDIT AGREEMENT - PAGE 69
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment pursuant to
this Section, the assignor, the Administrative Agent, and the Borrower
shall upon return of the assignor's notes, if any, make appropriate
arrangements so that, if required, new Notes are issued to the assignor
and the assignee. If the assignee is not incorporated under the laws of
the U.S. or a state thereof, it shall deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or
withholding of Taxes in accordance with SECTION 6.7.
(c) REGISTER. The Administrative Agent shall maintain at the
Principal Office a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent, and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice. Upon its receipt
of an Assignment and Acceptance executed by the parties thereto, together
with any Note or Notes subject to such assignment and payment of the
processing fee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and (iii)
give prompt notice thereof to the parties thereto.
(d) PARTICIPATIONS. Each Lender may sell participations to one or
more Persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and its Loans);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii)
the participant shall be entitled to the benefit of the yield protection
provisions contained in ARTICLE 6 (to the extent that the Lender selling
such participation would have been entitled thereto) and the right of
set-off contained in SECTION 13.5, and (iv) the Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Borrower relating to its
Loans and to approve any amendment, modification, waiver, or consent of
any provision of any Loan Document (other than amendments, modifications,
waivers, or consents of the types relating to the Loan or Commitment
participated in under SECTION 15.11(A)).
(e) PLEDGE TO FEDERAL RESERVE. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any
CREDIT AGREEMENT - PAGE 70
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations hereunder.
(f) DELIVERY OF INFORMATION. Any Lender may furnish any information
concerning any Loan Party in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants) subject to such Persons agreeing to being bound by the
provisions of SECTION 15.22.
Section 15.9 SURVIVAL. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by the Administrative Agent or any Lender or any
closing shall affect the representations and warranties or the right of the
Administrative Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of the Borrower hereunder, the obligations
under ARTICLE 6, SECTION 14.5, SECTION 15.1, and SECTION 15.2 shall survive
repayment of the Notes and termination of the Commitments and the Letters of
Credit.
Section 15.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
Section 15.11 AMENDMENTS AND WAIVERS. Any provision of any Loan Document
may be amended or waived and any consent to any departure by any Loan Party
therefrom may be granted if, but only if, such amendment, waiver, or consent is
in writing and is signed by the Borrower and the Required Lenders (and, if
ARTICLE 14 or the rights or duties of the Administrative Agent are affected
thereby, by the Administrative Agent); PROVIDED that no such amendment, waiver,
or consent applicable to:
(a) a Loan or Commitment which has the effect of:
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such
Loan or any fees or other amounts payable hereunder with respect to
such Loan or Commitment,
(iii) postponing any date fixed for the payment of any
scheduled installment of principal of or interest on such Loan or
any fees or other amounts payable hereunder with respect to such
Loan or Commitment or changing any optional or mandatory prepayment
provision applicable to such Loan, or
CREDIT AGREEMENT - PAGE 71
(iv) postponing any date fixed for termination of such
Commitment
shall be effective unless also signed by each Lender holding the Loan or
Commitment of the type being modified; and
(b) any change (including a waiver) in:
(i) the definition of Required Lenders or the provisions of
this SECTION 15.11; or
(ii) the conditions specified in ARTICLE 8 hereof, or
(iii) which has the effect of releasing any Loan Party in a
transaction which is not otherwise permitted hereby, or
(iv) releases of all or substantially all of the Collateral,
or
(v) releases of all or substantially all of the Guaranties
shall not be effective unless signed by all Lenders; and
Section 15.12 MAXIMUM INTEREST RATE.
(a) No interest rate specified in any Loan Document shall at any
time exceed the Maximum Rate. If at any time the interest rate (the
"CONTRACT RATE") for any Obligation shall exceed the Maximum Rate, thereby
causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below
the Maximum Rate until the aggregate amount of interest accrued on such
Obligation equals the aggregate amount of interest which would have
accrued on such Obligation if the Contract Rate for such Obligation had at
all times been in effect.
(b) No provision of any Loan Document shall require the payment or
the collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither the
Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or
any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Lender ever receives, collects,
or applies as interest any such sum, such amount which would be in excess
of the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations; and, if the
principal of the Obligations has been paid in full, any remaining excess
shall forthwith be paid to the Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, the Borrower and each
Lender shall, to the extent permitted by applicable law, (a) characterize
any non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total
CREDIT AGREEMENT - PAGE 72
amount of interest throughout the entire contemplated term of the
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
Section 15.13 NOTICES. All notices and other communications provided for
in any Loan Document to which any Loan Party is a party shall be given or made
in writing (except as otherwise permitted by SECTION 5.3) and telecopied, mailed
by certified mail return receipt requested, or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or with respect to any Loan Party, at the "Address for Notices"
specified below the Borrower's name on the signature pages hereof, or with
respect to a Lender not a party to this Agreement on the Closing Date, in its
Assignment and Acceptance, or, as to any party at such other address as shall be
designated by such party in a notice to each other party given in accordance
with this Section. Except as otherwise provided in any Loan Document, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, three (3) Business Days after
being duly deposited in the mails, in each case given or addressed as aforesaid;
PROVIDED, HOWEVER, notices to the Administrative Agent pursuant to SECTION 5.3
shall not be effective until received by the Administrative Agent.
Section 15.14 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST THE
BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN ANY TEXAS STATE COURT LOCATED IN DALLAS COUNTY, TEXAS OR
FEDERAL COURT IN THE NORTHERN DISTRICT OF TEXAS. THE BORROWER IRREVOCABLY (A)
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR
DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15.13 OF THIS AGREEMENT.
NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT THE RIGHT OF
ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER
TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF
ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY ANY
LOAN PARTY AGAINST ANY OF THE AGENTS OR ANY LENDER SHALL BE BROUGHT ONLY IN A
COURT LOCATED IN DALLAS, TEXAS.
Section 15.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
CREDIT AGREEMENT - PAGE 73
Section 15.16 SEVERABILITY. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of such Loan Document and the effect thereof shall
be confined to the provision held to be invalid or illegal.
Section 15.17 HEADINGS. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 15.18 NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (relating to certain revolving
credit facilities) are specifically declared by the parties hereto not to be
applicable to any Loan Documents or to the transactions contemplated thereby.
Section 15.19 CONSTRUCTION. The Borrower, each Loan Party (by its
execution of the Loan Documents to which it is a party), the Administrative
Agent, and each Lender acknowledges that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.
Section 15.20 INDEPENDENCE OF COVENANTS. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 15.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF ANY OF THE AGENTS OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
OR ENFORCEMENT THEREOF.
Section 15.22 CONFIDENTIALITY. Each Lender agrees to keep confidential any
information obtained by it from any Loan Party or its agents or representatives
pursuant hereto and the other Loan Documents identified as confidential in
writing at the time of delivery in accordance with such Lender's customary
practices and agrees that it will only use such information in connection with
the transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Lender's officers, directors, employees,
representatives, attorneys, agents, or affiliates who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source or as such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by law, regulation,
subpoena, or judicial order or process (provided that notice of such requirement
or order shall be promptly furnished to the Borrower unless such notice is
legally prohibited) or requested or required by bank regulators or auditors or
any administrative
CREDIT AGREEMENT - PAGE 74
body, commission, or other Governmental Authority to whose jurisdiction such
Lender may be subject, (d) to assignees or participants or potential assignees
or participants or to professional advisors or direct or indirect contractual
counterparties in swap agreements provided in each case such Person agrees to be
bound by the provisions of this SUBSECTION 15.22, (e) to the extent required in
connection with any litigation between any Loan Party and any Lender with
respect to the Loans or this Agreement and the other Loan Documents, (f) to
rating agencies, their employees, representatives, attorneys, agents, or
affiliates who are advised of the confidential nature of such information, and
(g) with the Borrower's prior written consent.
[Remainder of page intentionally left blank]
CREDIT AGREEMENT - PAGE 75
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
Address for Notices to the Borrower OR ANY
LOAN PARTY:
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
CREDIT AGREEMENT - PAGE 76
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A.,
as the Administrative Agent
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
ADDRESS FOR NOTICES:
__________________________________________
__________________________________________
__________________________________________
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
CREDIT AGREEMENT - PAGE 77
LENDERS:
REVOLVING COMMITMENT: BANK OF AMERICA, N.A.
$0
TERM COMMITMENT: By: ______________________________________
$9,500,000 Name: ____________________________________
Title: ___________________________________
ADDRESS FOR NOTICES:
Bank of America, N.A.
__________________________________________
__________________________________________
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
Lending Office for Base Rate Accounts and
LIBOR ACCOUNTS:
Bank of America, N.A.
__________________________________________
__________________________________________
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
CREDIT AGREEMENT - PAGE 78
REVOLVING COMMITMENT: FIRST UNION NATIONAL BANK
$0
TERM COMMITMENT: By: ______________________________________
$4,000,000 Name: ____________________________________
Title: ___________________________________
ADDRESS FOR NOTICES:
First Union National Bank
__________________________________________
__________________________________________
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
Lending Office for Base Rate Accounts and
LIBOR ACCOUNTS:
First Union National Bank
__________________________________________
__________________________________________
Attention: _______________________________
Telephone: _______________________________
Telecopier: ______________________________
CREDIT AGREEMENT - PAGE 79
EXHIBIT "A"
REVOLVING NOTE
$____________ December 22, 2000
FOR VALUE RECEIVED, the undersigned, FIRST INVESTORS FINANCIAL SERVICES,
INC., a corporation duly organized and validly existing under the laws of the
State of Texas ("BORROWER"), hereby promises to pay to the order of
___________________________ ("LENDER"), at the Principal Office of the
Administrative Agent, in lawful money of the United States of America and in
immediately available funds, the principal amount of __________________________
DOLLARS ($____________) or such lesser amount as shall equal the aggregate
unpaid principal amount of the Revolving Loans made by Lender to Borrower under
the Credit Agreement referred to below, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Revolving Loan, at such office, in like money and
funds, for the period commencing on the date of such Revolving Loan until such
Revolving Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
Borrower hereby authorizes Lender to record in its records the amount of
each Revolving Loan and Type of Accounts established under each Revolving Loan
and all Continuations, Conversions and payments of principal in respect thereof,
which records shall, in the absence of manifest error, constitute prima facie
evidence of the accuracy thereof; PROVIDED, HOWEVER, that the failure to make
such notation with respect to any such Revolving Loan or payment shall not limit
or otherwise affect the obligations of Borrower under the Credit Agreement or
this Revolving Note.
This Revolving Note is one of the Revolving Notes referred to in the
Credit Agreement dated as of December 22, 2000, among Borrower, Lender, the
other lenders party thereto (collectively with Lender, the "LENDERS"), Bank of
America, N.A., as administrative agent for the Lenders ("ADMINISTRATIVE AGENT"),
and Banc of America Securities LLC, as lead arranger and book manager (such
Credit Agreement, as the same may be amended or otherwise modified from time to
time, being referred to herein as the "CREDIT AGREEMENT"), and evidences
Revolving Loans made by Lender thereunder. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity of this Revolving
Note upon the happening of certain stated events and for prepayments of
Revolving Loans prior to the maturity of this Revolving Note upon the terms and
conditions specified in the Credit Agreement. Capitalized terms used in this
Revolving Note have the respective meanings assigned to them in the Credit
Agreement.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
Except for any notices expressly required by the Loan Documents and as
otherwise required under applicable law, Borrower and each surety, guarantor,
endorser and other party ever liable for
EXHIBIT A - PAGE 1
payment of any sums of money payable on this Revolving Note jointly and
severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace and all
other formalities of any kind, and consent to all extensions without notice for
any period or periods of time and partial payments, before or after maturity,
and any impairment of any collateral securing this Revolving Note, all without
prejudice to the holder. The holder shall similarly have the right to deal in
any way, at any time, with one or more of the foregoing parties without notice
to any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to release any such party or to release
or substitute part or all of the collateral securing this Revolving Note, or to
grant any other indulgences or forbearances whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder.
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
EXHIBIT A - PAGE 2
EXHIBIT "B"
TERM NOTE
$____________ December 22, 2000
FOR VALUE RECEIVED, the undersigned, FIRST INVESTORS FINANCIAL SERVICES,
INC., a corporation duly organized and validly existing under the laws of the
State of Texas ("BORROWER"), hereby promises to pay to the order of
___________________________ ("LENDER"), at the Principal Office of the
Administrative Agent, in lawful money of the United States of America and in
immediately available funds, the principal amount of
_____________________________________ DOLLARS ($____________) or such lesser
amount as shall equal the aggregate unpaid principal amount of the Term Loans
made by Lender to Borrower under the Credit Agreement referred to below, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of such Term Loans, at such office, in
like money and funds, for the period commencing on the date of such Term Loans
until such Term Loans shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
Borrower hereby authorizes Lender to record in its records the amount of
the Term Loans and Type of Accounts established thereunder and all
Continuations, Conversions and payments of principal in respect thereto, which
records shall, in the absence of manifest error, constitute prima facie evidence
of the accuracy thereof; PROVIDED, HOWEVER, that the failure to make such
notation with respect to the Term Loans or such Accounts or payment shall not
limit or otherwise affect the obligations of Borrower under the Credit Agreement
or this Term Note.
This Term Note is one of the Term Notes referred to in the Credit
Agreement dated as December 22, 2000, among Borrower, Lender, the other lenders
party thereto (collectively with Lender, the "LENDERS"), Bank of America, N.A.,
as administrative agent for the Lenders ("ADMINISTRATIVE Agent"), and Banc of
America Securities LLC, as lead arranger and book manager (such Credit
Agreement, as the same may be amended or otherwise modified from time to time,
being referred to herein as the "CREDIT AGREEMENT"), and evidences Term Loans
made by Lender thereunder. The Credit Agreement, among other things, contains
provisions for acceleration of the maturity of this Term Note upon the happening
of certain stated events and for prepayments of Term Loans prior to the maturity
of this Term Note upon the terms and conditions specified in the Credit
Agreement. Capitalized terms used in this Term Note have the respective meanings
assigned to them in the Credit Agreement.
THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
Except for any notices expressly required by the Loan Documents and as
otherwise required under applicable law, Borrower and each surety, guarantor,
endorser and other party ever liable for payment of any sums of money payable on
this Term Note jointly and severally waive notice, presentment, demand for
payment, protest, notice of protest and non-payment or dishonor, notice
EXHIBIT B - PAGE 1
of acceleration, notice of intent to accelerate, notice of intent to demand,
diligence in collecting, grace and all other formalities of any kind, and
consent to all extensions without notice for any period or periods of time and
partial payments, before or after maturity, and any impairment of any collateral
securing this Term Note, all without prejudice to the holder. The holder shall
similarly have the right to deal in any way, at any time, with one or more of
the foregoing parties without notice to any other party, and to grant any such
party any extensions of time for payment of any of said indebtedness, or to
release any such party or to release or substitute part or all of the collateral
securing this Term Note, or to grant any other indulgences or forbearances
whatsoever, without notice to any other party and without in any way affecting
the personal liability of any party hereunder.
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
EXHIBIT B - PAGE 2
EXHIBIT "C"
NOTICE OF BORROWINGS, CONVERSIONS,
CONTINUATIONS OR PREPAYMENTS
Date: _______________, ______
Bank of America, N.A., as Administrative Agent
_____________________________
_____________________________
Attention: __________________
Reference is made to that certain Credit Agreement dated as of December
22, 2000 (as the same may be amended, modified, supplemented, renewed, extended
or restated from time to time, the "CREDIT AGREEMENT"), among First Investors
Financial Services, Inc. ("BORROWER"), the Lenders named therein (the "LENDERS")
and Bank of America, N.A., as Administrative Agent for itself and the other
Lenders (in such capacity, "ADMINISTRATIVE AGENT"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.
Borrower hereby gives this Notice of Borrowings, Conversions,
Continuations or Prepayments (this "NOTICE"), irrevocably, pursuant to SECTION
5.3 of the Credit Agreement. Borrower hereby notifies you of the following
(check and/or complete the applicable item):1
____ (a) NEW LOAN.
(i) Borrower requests a [Revolving Loan] [Term Loan] in the amount
of $________ on _______________, ____.
(ii) The Loan will be of the following Type: [Base Rate Loan] [Libor
Loan].
(iii) If the Loan will be a Libor Loan, the Interest Period will be
______ month[s].
____ (b) [CONVERSION] [CONTINUATION] OF LOAN.
(i) Borrower requests a [Conversion] [Continuation] of [Revolving
Loans] [Term Loans] in the amount of $________ on __________, ____.
(ii) The Type of Loan to be [Converted] [Continued] will be a [Base
Rate Loan] [Libor Loan].
__________________________
(1) The Borrower shall also be required to provide the additional information
(if any) required by the Credit Agreement.
EXHIBIT C - PAGE 1
(iii) The Loan resulting from the [Conversion] [Continuation] will
be a [Base Rate Loan] [Libor Loan].
(iv) If the Loan resulting from the [Conversion] [Continuation] will
be a Libor Loan, the Interest Period for such Loan will be _____ month[s].
____ (c) PREPAYMENT.
(i) Borrower will make a prepayment of the principal of the
[Revolving Loans] [Term Loans] in the amount of $___________ on
______________, ____.
(ii) The Loan to be prepaid will be of the following Type: [Base
Rate Loan] [Libor Loan].
(iii) If the Loan to be prepaid is a Libor Loan, it has an Interest
Period of _____ month[s] that will end on _____________, ____.
____ (d) TERMINATION OR REDUCTION OF COMMITMENT(S).
(i) Borrower hereby terminates the [Revolving Commitments] [Term
Commitments] effective as of _________________,_____.
(ii) Borrower hereby reduces the [Revolving Commitments] [Term
Commitments] from $__________ in aggregate amount to $___________ in
aggregate amount effective as of _____________, _____.
Borrower hereby certifies, represents and warrants to Administrative Agent
and the Lenders as follows:
(a) No Default or Material Adverse Effect has occurred or is continuing or
would result from the Loans (if any) requested pursuant to this Notice;
(b) All of the conditions precedent to the borrowing, Conversion,
Continuation, prepayment and/or termination or reduction of Commitments
requested pursuant to this Notice contained in the Loan Documents (including,
without limitation, the conditions precedent set forth in ARTICLE 8 of the
Credit Agreement) have been satisfied in full (without exception or waiver
except as may have been agreed to by Administrative Agent and the Lenders in
accordance with the Credit Agreement).
EXHIBIT C - PAGE 2
IN WITNESS WHEREOF, the undersigned has executed this Notice as of the day
and year first above written.
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
EXHIBIT C - PAGE 3
EXHIBIT "D"
ASSIGNMENT AND ACCEPTANCE
Dated _____________, ______
Reference is made to the Credit Agreement dated as of December 22, 2000,
among FIRST INVESTORS FINANCIAL SERVICES, INC. ("BORROWER"), a Texas
corporation, the lenders named therein (the "LENDERS"), BANK OF AMERICA, N.A.,
as administrative agent for the Lenders ("ADMINISTRATIVE AGENT") and Banc of
America Securities LLC, as lead arranger and book manager (such Credit
Agreement, as it may hereafter be amended or otherwise modified from time to
time, being hereinafter referred to as the "CREDIT AGREEMENT" and capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement). This Assignment and Acceptance is being
executed pursuant to SECTION 15.8 of the Credit Agreement.
____________________________ (the "ASSIGNOR") and ________________________
(the "ASSIGNEE") agree as follows:
1. (a) The Assignor hereby sells and assigns to the Assignee without
recourse, representation or warranty except as specifically set
forth herein, and the Assignee hereby purchases and assumes from the
Assignor as of the Effective Date (as defined below), a ___________%
interest in and to all the Assignor's rights and obligations under
(i) the Commitments of the Assignor on the Effective Date (which
Commitments consist of Assignor's Revolving Commitment and
Assignor's Term Commitment) and (ii) the Loans owing to the Assignor
outstanding on the Effective Date (which Loans consist of Assignor's
Revolving Loans and Assignor's Term Loans) together with such
percentage interest in all unpaid interest and fees accrued from the
Effective Date relating thereto.
(b) After giving effect to the foregoing assignment, Assignor's and
Assignee's Commitments shall be as follows:
ASSIGNOR:
Revolving Commitment $_________________
Term Commitment $_________________
ASSIGNEE:
Revolving Commitment $_________________
Term Commitment $_________________
EXHIBIT D - PAGE 1
(c) After giving effect to the foregoing assignment, Assignor's and
Assignee's Loans shall be as follows:
ASSIGNOR:
Revolving Loans $_________________
Term Loans $_________________
ASSIGNEE:
Revolving Loans $_________________
Term Loans $_________________
2. The Assignor (i) represents that as of the date hereof, and before
giving effect to the assignment provided for herein, its Commitments
are $_____________, (consisting of its Revolving Commitment of
$_________________ and its Term Commitment of $___________________),
the outstanding principal balance of its Loans is $_____________
(consisting of its Revolving Loan with an outstanding principal
balance of $_______________ and its Term Loan with an outstanding
principal balance of $____________________), (all as unreduced by
any assignments which have not yet become effective); (ii) makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or
in connection with the Credit Agreement or any other Loan Document
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan
Document, other than that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest
is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or any other
Person or the performance or observance by the Borrower or any other
Person of any of their obligations under the Credit Agreement or any
Loan Document; and (iv) attaches the Revolving Note and Term Note
held by Assignor and requests that the Administrative Agent exchange
such Notes for new Notes, to be delivered to Assignee and Assignor
as appropriate, payable to the order of (A) Assignee in the amounts
assigned to Assignee pursuant hereto as set forth in paragraph 1
above, and (B) the Assignor in the amounts retained by the Assignor
as set forth in paragraph 1 above.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii)
confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements
delivered pursuant to SECTION 10.1 thereof, and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (iii) agrees that it will,
independently and without reliance upon the Administrative Agent,
the Assignor, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit
EXHIBIT D - PAGE 2
Agreement and the other Loan Documents; (iv) confirms that it is
eligible to be an Assignee; (v) appoints and authorizes the
Administrative Agent to take such action on its behalf and to
exercise such powers under the Loan Documents as are delegated to
the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that it
will perform in accordance with their terms all obligations which by
the terms of the Credit Agreement and the other Loan Documents are
required to be performed by it as a Lender; [AND (VII) ATTACHES THE
FORMS PRESCRIBED BY THE INTERNAL REVENUE SERVICE OF THE UNITED
STATES CERTIFYING AS TO THE ASSIGNEE'S EXEMPTION FROM UNITED STATES
WITHHOLDING TAXES WITH RESPECT TO ALL PAYMENTS TO BE MADE TO THE
ASSIGNEE UNDER THE CREDIT AGREEMENT OR SUCH OTHER DOCUMENTS AS ARE
NECESSARY TO INDICATE THAT ALL SUCH PAYMENTS ARE SUBJECT TO SUCH TAX
AT A RATE REDUCED BY AN APPLICABLE TAX TREATY].2
4. The effective date for this Assignment and Acceptance shall be
____________, ____ (the "EFFECTIVE DATE"). Following the execution
of this Assignment and Acceptance, it will be delivered to the
Administrative Agent and Borrower for acceptance and for recording
by the Administrative Agent.
5. Upon such acceptance and recording, from and after the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, shall have
the rights and obligations of a Lender thereunder and under the
other Loan Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement and
the other Loan Documents.
6. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal,
interest, fees, and other amounts) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
8. This Assignment and Acceptance may be executed in any number of
counterparts and on telecopy counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
_____________________________
(2) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
EXHIBIT D - PAGE 3
[NAME OF ASSIGNOR]
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
[NAME OF ASSIGNEE]
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
ADDRESS FOR NOTICES:
Telecopy No.: ____________________________
Telephone No. ____________________________
ACCEPTED BY:
BANK OF AMERICA, N.A.
as Administrative Agent
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
FIRST INVESTORS FINANCIAL SERVICES, INC.,3
as Borrower
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
____________________________
(3) Consent of Borrower, which shall not unreasonably be withheld, is not
required if an Event of Default has occurred and is continuing.
EXHIBIT D - PAGE 4
EXHIBIT "E"
COMPLIANCE CERTIFICATE
Pursuant to the Credit Agreement dated as of ________________ (as amended,
supplemented or otherwise modified from time to time, the "Agreement", the terms
defined therein being used herein as therein defined) by and among First
Investors Financial Services, Inc. (the "Borrower"), Bank of America, N.A., as
Agent (the "Agent") and certain financial institutions now or here after a party
thereto (the "Banks"), I, Bennie H. Duck, do hereby certify to the Agent and
each of the Banks that I am the duly elected, qualified and acting Chief
Financial Officer of the Borrower, and do hereby further certify to the Agent
and each of the Banks as follows:
1. The Borrower has fulfilled its obligations under the Agreement and all
representations and warranties made in the Loan Documents continue to be true
and correct, except to the extent that such representations and warranties
relate solely to an earlier date.
2. No Default or Event of Default has occurred or is continuing with respect
to the terms and conditions of the Agreement or any other Loan Document.
3. The aggregate outstanding principal balance of the Advances does not
and will not exceed the Available Amount.
4. The following calculations of the following covenants are true and correct
as of April 30, 2000 and are based upon the terms and conditions contained in
the Agreement.
5. SECTION 12.1 MINIMUM TANGIBLE NET WORTH
Tangible Net Worth of FIFS (a-b)
Book Equity (a)
Less Intangibles:
Goodwill
Deferred Financing Cost
Other _____________
Other Intangibles (b) _____________
Actual Tangible Net Worth (a-b)
Requirement Reconciliation:
Beginning amount (90% of 10/31/00 actual) (a) _____________
100% of the Net Proceeds of any sale of
Capital Stock (b) _____________
Net Income since 10/31/00
90% of Net Income since 10/31/00 (b) _____________
Ending requirement (a+b+c)
Compliance: YES
EXHIBIT E - PAGE 1
6. SECTION 12.2 MAXIMUM NET CHARGE-OFF RATIO
For the month most recently ended:
Charged-off Receivables (a)
Average Receivables Held for Investment, gross (b)
Net Charge-off Ratio (a/b) = A 3.75%
Net Charge-off Ratio for the two most recently ended months before the
current period:
B:
C:
Average (A,B,C)
Maximum Allowed 3.75%
Compliance YES
7. SECTION 12.3 MAXIMUM DELINQUENCY RATIO
For the month most recently ended:
Delinquent Receivables (a)
Receivables Held for Investment, gross (b)
Delinquency Ratio (a/b) = A _____________
Delinquency Ratio for the two most recently ended months before the
current period:
B: _____________
C: _____________
Average (A,B,C)
Maximum Allowed 4.50%
Compliance YES
8. SECTION 12.4 MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO
For the Borrower and its consolidated subsidiaries at the end of each
calendar month
for the twelve month period then ending:
Net Income before taxes (a)
Interest Expense (b)
Depreciation and Amortization (c) _____________
EBITDA (a+b+c) = A
Interest Expense (a)
Rental Expense (b)
EXHIBIT E - PAGE 2
Scheduled principal payments of Debt in the next 12-months (excluding
$3.0 million bullet due six-months after closing and securitization
debt)(c)
Fixed Charges (a+b+c) = B
Consolidated Fixed Charge Coverage Ratio (A/B) (calculated monthly on a
rolling twelve month basis)
Minimum Required 1.10x
Compliance: YES
9. SECTION 12.5 MINIMUM BORROWER ONLY FIXED CHARGE COVERAGE RATIO
For the Borrower only at the end of each calendar month for the twelve
month period then ending:
Net Income before taxes (a)
Interest Expense (b)
Depreciation and Amortization (c)
Residual cash flow from Exempt Subsidiaries of the Borrower received
by the Borrower (d)
_____________
EBITDA (a+b+c+d) = A
Interest Expense (a)
Rental Expense paid by the Borrower (i)
Reimbursements from and payments by the Borrower's
Subsidiaries (ii)
_____________
Net Rental Expense paid by the Borrower (i-ii = b) Scheduled principal
payments of Debt in the next 12-months
(excluding $3.0 million bullet due six-months after
closing and securitization debt) (c) _____________
Fixed Charges (a+b+c) = B
Consolidated Fixed Charge Coverage Ratio (A/B) (calculated
on a monthly basis)
Minimum Required 1.05x
Compliance: YES
10. SECTION 12.6 MAXIMUM TOTAL LIABILITIES PLUS CONTINGENT OBLIGATIONS TO
TANGIBLE NET WORTH RATIO
Total Liabilities
Contingent Obligations
EXHIBIT E - PAGE 3
_____________
Total Liabilities + Contingent Obligations (a)
Tangible Net Worth (b)
Total Liabilities plus Contingent Obligations to Tangible Net Worth
(a/b)
Maximum allowed through 6/30/00 10.65x
Maximum allowed after 6/30/00 9.75x
Compliance: YES
In Witness Whereof, I have executed this Compliance Certificate in the
name and on behalf of Borrower this ___ day of ____________, 2000
First Investors Financial Services, Inc.
By: ___________________________________________
Bennie H. Duck
Vice President and Chief Financial Officer
EXHIBIT E - PAGE 4
EXHIBIT "F"
GUARANTY
(Subsidiary)
WHEREAS, FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas corporation,
("BORROWER") has entered into that certain Credit Agreement dated as of December
22, 2000, among Borrower, the lenders party thereto (individually a "LENDER" and
collectively, "LENDERS"), BANK OF AMERICA, N.A., as administrative agent for
itself and the other Lenders ("ADMINISTRATIVE Agent") and BANC OF AMERICA
SECURITIES LLC, as lead arranger and book manager (such Credit Agreement, as it
may hereafter be amended or otherwise modified from time to time, being
hereinafter referred to as the "CREDIT AGREEMENT" and capitalized terms not
otherwise defined herein shall have the same meaning as set forth in the Credit
Agreement);
WHEREAS, the execution of this Guaranty is required by the Credit
Agreement as a condition to making extensions of credit thereunder from and
after the Closing Date;
WHEREAS, each Guarantor has determined that (i) it will directly and
indirectly benefit from the availability of financing to the Borrower under the
Credit Agreement and from the other transactions evidenced by and contemplated
in the Loan Documents, (ii) it will benefit, directly and indirectly, from
executing and delivering this Guaranty Agreement, (iii) it is in such
Guarantor's best interest, and within its corporate purpose, to execute and
deliver and, if called upon to do so, to perform its obligations under this
Guaranty Agreement, and (iv) execution and delivery of this Guaranty Agreement
and the other Loan Documents to which such Guarantor is a party is necessary or
convenient to the conduct, promotion, and attainment of the business of such
Guarantor.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each of the undersigned Subsidiaries and any
Subsidiary hereafter added as a "Guarantor" hereto pursuant to a Joinder
Agreement (individually a "GUARANTOR" and collectively the "GUARANTORS"), hereby
irrevocably, unconditionally and jointly and severally guarantees to the
Administrative Agent and Lenders the full and prompt payment and performance of
the Guaranteed Indebtedness (hereinafter defined) upon the following terms:
1. The term "GUARANTEED INDEBTEDNESS", as used herein means all of the
"Obligations", as defined in the Credit Agreement and shall include any and all
post-petition interest and expenses (including reasonable attorneys' fees)
whether or not allowed under any bankruptcy, insolvency, or other similar law;
PROVIDED that, notwithstanding anything to the contrary contained in this
Guaranty, the Guaranteed Indebtedness shall be limited, with respect to each
Guarantor to an aggregate amount equal to the greatest amount that would not
render such Guarantor's indebtedness, liabilities or obligations hereunder
subject to avoidance under Sections 544, 548 or 550 of the United States
Bankruptcy Code or subject to being set aside or annulled under any applicable
state law relating to fraud on creditors; PROVIDED, FURTHER, that, for purposes
of the immediately preceding clauses, it shall be presumed that the Guaranteed
Indebtedness for each Guarantor hereunder does not equal or exceed any aggregate
amount which would render such Guarantor's indebtedness, liabilities or
obligations hereunder subject to being so avoided, set aside or annulled, and
the burden of proof to
EXHIBIT F - PAGE 1
the contrary shall be on the party asserting to the contrary. Subject to but
without limiting the generality of the foregoing sentence, the provisions of
this Guaranty are severable and, in any legally binding action or proceeding
involving any state corporate law or any bankruptcy, insolvency or other laws of
general application relating to the enforcement of creditors' rights and general
principles of equity, if the indebtedness, liabilities or obligations of any
Guarantor hereunder would otherwise be held or determined to be void, invalid or
unenforceable on account of the amount of its indebtedness, liabilities or
obligations hereunder, then, notwithstanding any other provision of this
Guaranty to the contrary, the amount of such indebtedness, liabilities or
obligations shall, for purposes of determining such Guarantor's obligations
under this Guaranty, without any further action by such Guarantor or any other
Person, be automatically limited and reduced to the greatest amount which is
valid and enforceable as determined in such action or proceeding.
2. This instrument shall be an absolute, continuing, irrevocable and
unconditional guaranty of payment and not a guaranty of collection, and each
Guarantor shall remain liable on its obligations hereunder until the payment and
performance in full of the Guaranteed Indebtedness. No set-off, counterclaim,
recoupment, reduction, or diminution of any obligation, or any defense of any
kind or nature which Borrower may have against Administrative Agent, any Lender
or any other party, or which any Guarantor may have against Borrower,
Administrative Agent, any Lender or any other party, shall, to the extent
permitted by applicable law, be available to, or asserted by, any Guarantor
against Administrative Agent, any Lender or any subsequent holder of the
Guaranteed Indebtedness or any part thereof or against payment of the Guaranteed
Indebtedness or any part thereof.
3. If a Guarantor becomes liable for any indebtedness owing by Borrower to
Administrative Agent or any Lender by endorsement or otherwise, other than under
this Guaranty, such liability shall not be in any manner impaired or affected
hereby, and the rights of Administrative Agent and Lenders hereunder shall be
cumulative of any and all other rights that Administrative Agent and Lenders may
ever have against such Guarantor. The exercise by Administrative Agent and
Lenders of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.
4. Upon the occurrence of an Event of Default by Borrower in payment or
performance of the Guaranteed Indebtedness, or any part thereof, when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration, or
otherwise, the Guarantors shall, jointly and severally, promptly pay the amount
due thereon to Administrative Agent and Lenders without notice or demand in
lawful currency of the United States of America and it shall not be necessary
for Administrative Agent or any Lender, in order to enforce such payment by any
Guarantor, first to institute suit or exhaust its remedies against Borrower or
others liable on such Guaranteed Indebtedness, or to enforce any rights against
any collateral which shall ever have been given to secure such Guaranteed
Indebtedness notwithstanding any applicable law to the contrary. In the event
such payment is made by a Guarantor, then such Guarantor shall be subrogated to
the rights then held by Administrative Agent and any Lender with respect to the
Guaranteed Indebtedness to the extent to which the Guaranteed Indebtedness was
discharged by such Guarantor and, in addition, upon payment by such Guarantor of
any sums to Administrative Agent and any Lender hereunder, all rights of such
Guarantor against Borrower, any other guarantor or any Collateral arising as a
result therefrom by way of right of subrogation, reimbursement, or otherwise
shall in all respects be
EXHIBIT F - PAGE 2
subordinate and junior in right of payment to the prior indefeasible payment in
full of the Guaranteed Indebtedness and no such right or remedy of subrogation,
reimbursement or otherwise shall be exercised or otherwise entered unless and
until the Guaranteed Indebtedness has been indefeasibly paid in full.
5. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall, to the extent
permitted by applicable law, nonetheless be payable by the Guarantors hereunder
forthwith on demand by Administrative Agent or any Lender.
6. Each Guarantor hereby agrees that its obligations under this Guaranty
shall, to the extent permitted by applicable law, not be released, discharged,
diminished, impaired, reduced, or affected for any reason or by the occurrence
of any event, including, without limitation, one or more of the following
occurrences or events, whether or not with notice to or the consent of any
Guarantor: (a) the taking or accepting of collateral as security for any or all
of the Guaranteed Indebtedness or the release, surrender, exchange, or
subordination of any collateral now or hereafter securing any or all of the
Guaranteed Indebtedness; (b) any partial release of the liability of any
Guarantor hereunder, or the full or partial release of any other guarantor from
liability for any or all of the Guaranteed Indebtedness; (c) any disability of
Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, any
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Administrative Agent or any Lender to Borrower, any Guarantor, or any other
party ever liable for any or all of the Guaranteed Indebtedness; (f) any
neglect, delay, omission, failure, or refusal of Administrative Agent or any
Lender to take or prosecute any action for the collection of any of the
Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
Borrower or any other party to Administrative Agent or any Lender is held to
constitute a preference under applicable bankruptcy or insolvency law or if for
any other reason Administrative Agent or any Lender is required to refund any
payment or pay the amount thereof to someone else; (i) the settlement or
compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any
security interest or lien securing any or all of the Guaranteed Indebtedness;
(k) any impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (l) the failure of Administrative Agent or any Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or any Guarantor.
7. Each Guarantor represents and warrants to Administrative Agent and
Lenders as follows:
EXHIBIT F - PAGE 3
(a) All representations and warranties in the Credit Agreement
relating to it are true and correct in all material respects as of the date
hereof and on each date the representations and warranties hereunder are
restated pursuant to any of the Loan Documents with the same force and effect as
if such representations and warranties had been made on and as of such date
except to the extent that such representations and warranties relate
specifically to another date or to the extent that a fact, event or circumstance
has occurred that makes such representation or warranty untrue but which is not
prohibited to occur or exist (or which does not cause an Event of Default) under
the Loan Documents.
(b) The value of the consideration received and to be received by it
as a result of Borrower, Administrative Agent and Lenders entering into the
Credit Agreement and its executing and delivering this Guaranty and the other
Loan Documents to which it is a party is reasonably worth at least as much as
its liability and obligation hereunder and thereunder, and such liability and
obligation and the Credit Agreement have benefited and may reasonably be
expected to benefit it directly or indirectly.
(c) It has, independently and without reliance upon Administrative
Agent or any Lender and based upon such documents and information as it has
deemed appropriate, made its own analysis and decision to enter into the Loan
Documents to which it is a party.
(d) It has adequate means to obtain from Borrower on a continuing
basis information concerning the financial condition and assets of Borrower and
it is not relying upon Administrative Agent or the Lenders to provide (and
neither the Administrative Agent nor any Lender shall have any duty to provide)
any such information to it either now or in the future.
8. Each Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Lender has any commitment
under the Credit Agreement, it will comply with all covenants set forth in the
Credit Agreement specifically applicable to it, the terms of which are
incorporated herein by reference.
9. When an Event of Default exists, Administrative Agent and Lenders shall
have the right to set-off and apply against this Guaranty or the Guaranteed
Indebtedness or both, at any time and without notice to any Guarantor, any and
all deposits (general or special, time or demand, provisional or final, but
excluding any account established by a Guarantor as a fiduciary for another
party) or other sums at any time credited by or owing from Administrative Agent
and Lenders to any Guarantor whether or not the Guaranteed Indebtedness is then
due and irrespective of whether or not Administrative Agent or any Lender shall
have made any demand under this Guaranty. Each Lender agrees promptly to notify
the Borrower (with a copy to the Administrative Agent) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of
Administrative Agent and the Lenders hereunder are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which
Administrative Agent or any Lender may have.
10. (a) Each Guarantor hereby agrees that the Subordinated Indebtedness
(as defined below) shall be subordinate and junior in right of payment to the
prior indefeasible payment in full
EXHIBIT F - PAGE 4
of all Guaranteed Indebtedness as herein provided. The Subordinated Indebtedness
shall not be payable, and no payment of principal, interest or other amounts on
account thereof, and no property or guarantee of any nature to secure or pay the
Subordinated Indebtedness or any part thereof shall be made or given, directly
or indirectly by or on behalf of any Debtor (hereafter defined) or received,
accepted, retained or applied by any Guarantor unless and until the Guaranteed
Indebtedness shall have been indefeasibly paid in full in cash; EXCEPT THAT
prior to occurrence of an Event of Default, a Guarantor shall have the right to
receive payments on the Subordinated Indebtedness made in the ordinary course of
business unless, and except to the extent that, the payment or receipt of such
payments is prohibited or otherwise restricted by the Credit Agreement or
another Loan Document other than this Guaranty. After the occurrence and during
the continuance of an Event of Default, no payments of principal or interest may
be made or given, directly or indirectly, by or on behalf of any Debtor or
received, accepted, retained or applied by any Guarantor unless and until the
Guaranteed Indebtedness shall have been indefeasibly paid in full in cash. If
any sums shall be paid to a Guarantor by any Debtor or any other Person on
account of the Subordinated Indebtedness when such payment is not permitted
hereunder, such sums shall be held in trust by such Guarantor for the benefit of
Administrative Agent and the Lenders and shall forthwith be paid to
Administrative Agent without affecting the liability of any Guarantor under this
Guaranty and may be applied by Administrative Agent against the Guaranteed
Indebtedness in accordance with the Credit Agreement. Upon the request of
Administrative Agent, a Guarantor shall execute, deliver, and endorse to
Administrative Agent such documentation as Administrative Agent may request to
perfect, preserve, and enforce its rights hereunder. For purposes of this
Guaranty and with respect to a Guarantor, the term "SUBORDINATED INDEBTEDNESS"
means all indebtedness, liabilities, and obligations of Borrower or any other
Loan Party other than such Guarantor (Borrower and such Loan Parties herein the
"DEBTORS") to such Guarantor, whether such indebtedness, liabilities, and
obligations now exist or are hereafter incurred or arise, or are direct,
indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
irrespective of the Person or Persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by such Guarantor.
(b) Each Guarantor agrees that any and all Liens (including any
judgment liens), upon any Debtor's assets securing payment of any Subordinated
Indebtedness shall be and remain inferior and subordinate to any and all Liens
upon any Debtor's assets securing payment of the Guaranteed Indebtedness or any
part thereof, regardless of whether such Liens in favor of a Guarantor,
Administrative Agent or any Lender presently exist or are hereafter created or
attached. Without the prior written consent of Administrative Agent, no
Guarantor shall (i) file suit against any Debtor or exercise or enforce any
other creditor's right it may have against any Debtor, or (ii) foreclose,
repossess, sequester, or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any obligations of any
Debtor to such Guarantor or any Liens held by such Guarantor on assets of any
Debtor.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving any
Debtor as debtor, Administrative Agent shall have the right to prove and vote
any claim under the Subordinated Indebtedness and to receive
EXHIBIT F - PAGE 5
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness
until the Guaranteed Indebtedness has been indefeasibly paid in full in cash.
Administrative Agent may apply any such dividends, distributions, and payments
against the Guaranteed Indebtedness in accordance with the Credit Agreement.
(d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty.
11. Except for modifications made pursuant to the execution and delivery
of a Joinder Agreement (which only needs to be signed by each Subsidiary party
thereto), no amendment or waiver of any provision of this Guaranty or consent to
any departure by any Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by Administrative Agent and Required
Lenders except as otherwise provided in the Credit Agreement. To the extent
permitted by applicable law, no failure on the part of Administrative Agent or
any Lender to exercise, and no delay in exercising, any right, power, or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power, or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
12. To the extent permitted by applicable law, any acknowledgment or new
promise, whether by payment of principal or interest or otherwise and whether by
Borrower or others (including any Guarantor), with respect to any of the
Guaranteed Indebtedness shall, if the statute of limitations in favor of a
Guarantor against Administrative Agent or any Lender shall have commenced to
run, toll the running of such statute of limitations and, if the period of such
statute of limitations shall have expired, prevent the operation of such statute
of limitations.
13. This Guaranty is for the benefit of Administrative Agent and the
Lenders and their successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding not only on each
Guarantor, but on each Guarantor's successors and assigns.
14. Each Guarantor recognizes that Administrative Agent and the Lenders
are relying upon this Guaranty and the undertakings of each Guarantor hereunder
and under the other Loan Documents to which each is a party in making extensions
of credit to Borrower under the Credit Agreement and further recognizes that the
execution and delivery of this Guaranty and the other Loan Documents to which
each Guarantor is a party is a material inducement to Administrative Agent and
the Lenders in entering into the Credit Agreement and continuing to extend
credit thereunder. Each Guarantor hereby acknowledges that there are no
conditions to the full effectiveness of this Guaranty or any other Loan Document
to which it is a party.
15. Any notice or demand to any Guarantor under or in connection with this
Guaranty or any other Loan Document to which it is a party shall be deemed
effective if given to the Guarantor, at the address of the Borrower and/or in
care of Borrower in accordance with the notice provisions in the Credit
Agreement.
EXHIBIT F - PAGE 6
16. The Guarantors shall, jointly and severally, pay on demand all
reasonable attorneys' fees and all other reasonable costs and expenses incurred
by Administrative Agent and Lenders in connection with the administration,
enforcement, or collection of this Guaranty.
17. Each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of this Guaranty, presentment, notice of protest, notice of dishonor,
notice of the incurring by Borrower of additional indebtedness, and all other
notices and demands with respect to the Guaranteed Indebtedness and this
Guaranty.
18. Each Guarantor agrees that Administrative Agent and the Lenders may
exercise any and all rights granted to any of them under the Credit Agreement
and the other Loan Documents without affecting the validity or enforceability of
this Guaranty.
19. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF EACH GUARANTOR,
ADMINISTRATIVE AGENT AND LENDERS WITH RESPECT TO EACH GUARANTOR'S GUARANTY OF
THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY EACH
GUARANTOR, ADMINISTRATIVE AGENT AND LENDERS AS A FINAL AND COMPLETE EXPRESSION
OF THE TERMS OF THIS GUARANTY, AND NO COURSE OF DEALING AMONG ANY GUARANTOR,
ADMINISTRATIVE AGENT AND THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY. THERE
ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR, ADMINISTRATIVE AGENT AND THE
LENDERS.
20. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
EXHIBIT F - PAGE 7
EXECUTED as of the 22nd day of December, 2000.
GUARANTORS:
FARRAGUT FINANCIAL CORPORATION,
a Delaware corporation
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
FIRST INVESTORS SERVICING
CORPORATION,
a Delaware corporation
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
EXHIBIT F - PAGE 8
EXHIBIT "G"
SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the "AGREEMENT") dated as of
____________, _________, is executed by the undersigned (the" DEBTOR") for the
benefit BANK OF AMERICA, N.A., in its capacity as administrative agent for the
lenders party to the hereafter identified Credit Agreement (in such capacity
herein the "AGENT") and for the benefit of such lenders in connection with that
certain Credit Agreement dated as of December 22, 2000 among First Investors
Financial Services, Inc., the Agent, Banc of America Securities LLC, as lead
arranger and sole book manager, and the Lenders from time to time party thereto
(as the same has been or may further be amended or modified, the "CREDIT
AGREEMENT" and capitalized terms not otherwise defined herein being used herein
as defined in the Credit Agreement).
RECITALS:
The Debtor is a newly formed or newly acquired Subsidiary and is required
to execute this Agreement pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Debtor hereby agrees as follows:
1. The Debtor assumes all the obligations of a "Debtor" under that certain
Security Agreement, dated as of December 22, 2000, by and among the Agent and
the Subsidiaries party thereto (as amended or modified, the "SUBSIDIARY SECURITY
AGREEMENT") and agrees that it is a "Debtor" and bound as a "Debtor" under the
terms of the Subsidiary Security Agreement as if it had been an original
signatory thereto. In furtherance of the foregoing, the Debtor hereby assigns,
pledges and grants to the Agent a security interest in all of its right, title
and interest in and to such Debtor's Collateral (as defined in the Subsidiary
Security Agreement) to secure the Obligations (as defined in the Subsidiary
Security Agreement) under the terms of the Subsidiary Security Agreement.
2. SCHEDULES 1.1, 3.1, 3.2, 3.3 and 3.5 of the Subsidiary Security
Agreement are hereby amended to add the information relating to the Debtor set
out on SCHEDULES 1.1, 3.1, 3.2, 3.3 and 3.5 hereof. The Debtor hereby confirms
that the representations and warranties set forth in Article III of the
Subsidiary Security Agreement applicable to it and its Collateral are true and
correct after giving effect to such amendment to the Schedules.
3. In furtherance of its obligations under SECTION 4.2 of the Subsidiary
Security Agreement but subject to SECTION 10.10 of the Credit Agreement, the
Debtor agrees to execute and deliver such UCC financing statements naming the
Debtor as debtor, the Agent as secured party, and describing its Collateral and
such other documentation (including, without limitation, intellectual property
security agreements in the forms attached to the Subsidiary Security Agreement)
as the
EXHIBIT G - PAGE 1
Agent may require to evidence, protect and perfect the Liens created by the
Subsidiary Security Agreement as modified hereby.
4. The Debtor hereby assumes all the obligations of a "Guarantor" under
that certain Guaranty Agreement dated as of December 22, 2000, by and among the
Agent and the Subsidiaries party thereto (as amended or modified, the
"SUBSIDIARY GUARANTY") and agrees that it is a "Guarantor" and bound as a
"Guarantor" under the terms of the Subsidiary Guaranty as if it had been an
original signatory thereto. In accordance with the foregoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Debtor irrevocably and unconditionally guarantees to the Agent and the Lenders
the full and prompt payment and performance of the Guaranteed Indebtedness (as
defined in the Subsidiary Guaranty) upon the terms and conditions set forth in
the Subsidiary Guaranty.
5. This Agreement shall be deemed to be part of, and a modification to,
the Subsidiary Security Agreement and the Subsidiary Guaranty and shall be
governed by all the terms and provisions of the Subsidiary Security Agreement
and Subsidiary Guaranty, which terms are incorporated herein by reference, are
ratified and confirmed and shall continue in full force and effect as a valid
and binding agreement of the Debtor enforceable against the Debtor to the extent
set forth herein. The Debtor hereby waives notice of the Agent's or any Lender's
acceptance of this Agreement.
[Remainder of page intentionally left blank.]
EXHIBIT G - PAGE 2
IN WITNESS WHEREOF, the Debtor has executed this Agreement as of the day
and year first written above.
DEBTOR:
[___________________________]
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
EXHIBIT G - PAGE 3
SCHEDULE 1.1
TO
SUBSIDIARY JOINDER AGREEMENT
PLEDGED SHARES
EXHIBIT G - PAGE 4
SCHEDULE 3.1
TO
SUBSIDIARY JOINDER AGREEMENT
LOCATIONS
I. PRINCIPAL PLACE OF BUSINESS
II. OTHER LOCATIONS
EXHIBIT G - PAGE 5
SCHEDULE 3.2
TO
SUBSIDIARY JOINDER AGREEMENT
DEPOSIT, COMMODITY, AND SECURITIES ACCOUNTS
EXHIBIT G - PAGE 6
SCHEDULE 3.3
TO
SUBSIDIARY JOINDER AGREEMENT
TRADE AND OTHER NAMES; TAX IDENTIFICATION NUMBER
EXHIBIT G - PAGE 7
SCHEDULE 3.5
TO
SUBSIDIARY JOINDER AGREEMENT
EXHIBIT G - PAGE 8
EXHIBIT "H"
BORROWING BASE COMPLIANCE CERTIFICATE
The undersigned, on behalf of First Investors Financial Services, Inc. (the
"Company"), hereby certifies that the following is a true and correct
calculation as of ____________, 2000, of the Borrowing Base referred to in
Section 2.5 of the Loan Agreement dated as of ____________, and in accordance
with the "Definitions" in Section 1.1, among the Company, Bank of America, N.A.
and Banc of America Securities, L.L.C.
TERM FACILITY
ADJUSTED ASSETS
ADJUSTED
TYPE OF ASSET ADVANCE RATE BOOK VALUE ASSET VALUE
Unrestricted Cash 100%
Loans - Current 94% (a)
Present Value of residuals
of Portfolio
Held for Investment (b) 50% ___________ ____________
TOTAL
ADJUSTED DEBT
OUTSTANDING ADJUSTED DEBT
TYPE OF DEBT CALCULATION RATE BALANCE OUTSTANDING
Derivative Exposure up to
$1,300,000 (d) 100%
Term Loan Advances 100% __________ ____________
TOTAL
Adjusted Asset Value to Adjusted Debt Outstanding
Minimum 1.10x
Compliance YES
REVOLVING FACILITY
ADJUSTED
ASSET ADVANCE RATE BOOK VALUE ASSET VALUE
Loans - Past Due 50% (c) __________ ___________
DEBT
Revolving Loan Advances 100% __________ ___________
Adjusted Asset Value to Adjusted Debt Outstanding
EXHIBIT H - PAGE 1
Minimum 1.10x
Compliance YES
(a) Limited to the lesser of 93% or the current weighted average advance rate
under committed warehouse financing or current loans.
(b) Calculated from time to time by Banc of America Securities LLC at its sole
discretion.
(c) Maximum to $2.0MM, net
(d) Provided by Banc of America Securities LLC.
Dated this ___ day of ___________, 2000,
First Investors Financial Services, Inc.
By: __________________________________________
Bennie H. Duck
Vice President and Chief Financial Officer
EXHIBIT H - PAGE 2
EXHIBT H - PAGE 3
EXHIBIT "I"
CHARGE-OFF POLICY
I. Non-Repossession Charge-offs
A. Description
An account must be considered as a potential "non-repossession"
charge-off if the account is either greater than 120 days past due
or if collections has determined that full principal repayment is
unlikely and the underlying collateral cannot be recovered in
partial satisfaction of the debt.
B. Identification Process
A monthly report will be made available each month to designated
members of management which shall contain (i) accounts which are
currently greater than 120 days past due; and, (ii) accounts which
will potentially be greater than 120 days past due as the end of the
current reporting period.
C. Charge-off Process
1. This listing of potential charge-off accounts will be
reviewed by either the Chief Operating Officer or Senior
Operations Officer prior to month end to determine whether
future principal collections are unlikely or if a principal
impairment exists and, if so, to what extent. Examples would
include accounts in which the underlying collateral cannot be
recovered due to mechanics liens, non-insured VSI claims,
non-insured skips, non-insured gap claims, etc.
2. Accounts greater thank 120 days, which are not
identified for a manual charge-off must be documented, in
appropriate detail in the Comments section of the collection
system, to justify continued active status.
3. Collections received on full-balance charge-offs shall
be recorded as a recoveries when received.
EXHIBIT I - PAGE 1
II. Repossessions
A. Description
An account must be considered for a partial or full charge-off
following the repossession of the underlying vehicle collateral.
B. Identification Process
Any account in which the underlying vehicle has been repossessed,
and the applicable redemption period has expired, shall be processed
in accordance with the following.
C. Charge-off Process
1. Following repossession, an estimate of liquidation
proceeds will be made by designated remarketing personnel
based on the current market value and condition of the
specific vehicle. The estimate will include any amounts
expected to be received from the sale of the vehicle,
refundable products and any damage insurance.
2. Once the estimate of total liquidation proceeds is made,
the difference between the outstanding principal balance as of
the repossession date and the total liquidation proceeds
expected to be received shall be processed as a charge-off.
Further, the remaining principal balance outstanding following
the charge-off shall be reclassified on the Company's balance
sheet as an asset held for sale.
3. Once all liquidation proceeds have been received, any
outstanding balance will be written off as an additional
charge-off or, in the event of a credit balance, be classified
as a recovery.
EXHIBIT I - PAGE 2
SCHEDULE 1.1
to
First Investors Financial Services, Inc.
Credit Agreement
EXEMPT SUBSIDIARIES
NAME
F.I.R.C., Inc.
First Investors Auto Receivables Corporation
First Investors Auto Capital Corporation
First Investors Auto Investment Corporation
First Investors Auto Owner Trust 2000-A
First Investors Insurance Company
FIALAC Holdings, Inc.
FIFS Acquisition Funding Corporation LLC
Project Brave LLP
ALAC Receivables Corporation
ALAC Automobile Receivables Trust 1998-1
ALAC LLC
SCHEDULE 1.1 - PAGE 1
Schedule 9.4
to
First Investors Financial Services, Inc.
Credit Agreement
OPERATION OF BUSINESS
None
SCHEDULE 9.4 - PAGE 1
Schedule 9.5
to
First Investors Financial Services, Inc.
Credit Agreement
LITIGATION AND JUDGMENTS
NONE
SCHEDULE 9.5 - PAGE 1
Schedule 9.6(A)
to
First Investors Financial Services, Inc.
Credit Agreement
REAL PROPERTY
None
SCHEDULE 9.6(A) - PAGE 1
Schedule 9.6(B)
to
First Investors Financial Services, Inc.
Credit Agreement
INTELLECTUAL PROPERTY
None
SCHEDULE 9.6(B) - PAGE 1
Schedule 9.6(C)
to
First Investors Financial Services, Inc.
Credit Agreement
LOCATIONS
FIRST INVESTORS FINANCIAL SERVICES GROUP, INC.
FIRST INVESTORS FINANCIAL SERVICES, INC.
FARRAGUT FINANCIAL CORPORATION
675 Bering Drive, Suite 710
Houston, Texas 77057
FIRST INVESTORS SERVING CORPORATION
(FORMERLY KNOWN AS AUTO LENDERS ACCEPTANCE CORPORATION)
380 Interstate North Parkway
Atlanta, Georgia 30339
FIRST INVESTORS (VERMONT) HOLDINGS, INC.
40 Main Street, Suite 210
Burlington, Vermont 05042
SCHEDULE3 9.6(C) - PAGE 1
Schedule 9.9
to
First Investors Financial Services, Inc.
Credit Agreement
DEBT
1. Obligations of the Borrower under that certain equipment lease agreement
dated May 14, 1998 between the Borrower and BSI Capital Funding Corporation
under which Schedules 1 and 2 are accounted for as operating leases by the
Borrower and Schedules 3, 4, 5 and 6 are accounted for as Capital Leases by the
Borrower.
SCHEDULE 9.9 - PAGE 1
Schedule 9.10
to
First Investors Financial Services, Inc.
Credit Agreement
TAX MATTERS
None
SCHEDULE 9.10 - PAGE 1
Schedule 9.12
to
First Investors Financial Services, Inc.
Credit Agreement
ERISA
None
SCHEDULE 9.12 - PAGE 1
Schedule 9.14
to
First Investors Financial Services, Inc.
Credit Agreement
SUBSIDIARIES; CAPITALIZATION
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
ENTITY JURISDICTION OF STOCKHOLDERS AND AUTHORIZED ISSUED AND OUTSTANDING
INCORPORATION PERCENTAGE OWNERSHIP SHARES SHARES
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Financial Texas First Investors (Vermont) 1,222,223 1,222,223 shares, par
Services, Inc. Holdings, Inc. - 100% value $0.001
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
F.I.R.C, Inc. Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Services, Inc. - 100% $1.00per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Auto Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Receivables Corp. Services, Inc. - 100% $1.00 per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Auto Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Capital Corporation Services, Inc. - 100% $1.00 per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
Farragut Financial Corporation Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Services, Inc. - 100% $1.00 per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Auto Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Investment Corporation Services, Inc. - 100% $1.00 per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Insurance Vermont First Investors Financial 1,000,000 shares 100,000 shares, par
Company Services, Inc. - 100% value $1.00
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
First Investors Servicing Delaware First Investors Financial 10,000 shares - 100 shares, par value $01
Corporation Services, Inc. - 100% common stock
10,000 shares -
preferred stock
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
FIALAC Holdings, Inc. Delaware First Investors Financial 1,000 shares 1,000 shares, par value
Services, Inc. - 100% $1.00 per share
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
FIFS Acquisition Funding Delaware FIALAC Holdings - 1% $1,000 in initial $1,000 in initial capital
Corporation LLC First Investors Financial capital
Services, Inc. - 99%
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
Project Brave Limited Partnership Delaware FIFS Acquisition Funding N/A N/A
Corporation LLC - 70%
First Union Securities - 30%
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
ALAC Receivables Corp. Delaware First Investors Servicing 1,000 shares 1,000 shares, par
Corporation - 100% value $1.00
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
ALAC LLC Delaware First Investors Servicing $1,000 in initial $1,000 in initial capital
Corporation - 99% capital
ALAC Receivables Corp - 1%
- --------------------------------- ---------------- ---------------------------- ------------------ ---------------------------
SCHEDULE 9.14 - Page 1
Schedule 9.15
to
First Investors Financial Services, Inc.
Credit Agreement
AGREEMENTS
None
SCHEDULE 9.15 - Page 1
Schedule 9.19
to
First Investors Financial Services, Inc.
Credit Agreement
ENVIRONMENTAL MATTERS
None
SCHEDULE 9.19 - Page 1
Schedule 9.21
to
First Investors Financial Services, Inc.
Credit Agreement
EMPLOYEE MATTERS
None
SCHEDULE 9.21 - Page 1
Schedule 11.2
to
First Investors Financial Services, Inc.
Credit Agreement
LIENS
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JURISDICTION DEBTOR SECURED PARTY ORIGINAL FILE NUMBER AND DATE
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SCHEDULE 11.2 - Page 1