< Exhibit 10.1(a)
AMENDED FINANCE AGREEMENT
by and among
WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC.,
AND
COASTAL CREDIT, L.L.C.
Dated April 16, 2001
$60,000,000
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS..........................................................1
Section 1.1 Certain Definitions.....................................1
Section 1.2 Rules of Construction...................................9
ARTICLE 2 THE REVOLVING CREDIT FACILITY........................................9
Section 2.1 The Loan................................................9
Section 2.2 The Note...............................................10
Section 2.3 Method of Payment......................................10
Section 2.4 Extension and Adjustment of Termination Date...........10
Section 2.5 Use of Proceeds........................................10
Section 2.6 Interest...............................................11
Section 2.7 Advances...............................................12
Section 2.8 Prepay.................................................13
Section 2.9 Fees...................................................13
ARTICLE 3 SECURITY............................................................14
Section 3.1 Security Interest......................................14
Section 3.2 Financing Statements...................................14
Section 3.3 Documents to be Delivered to WFFPC.....................14
Section 3.4 Collections............................................15
Section 3.5 Additional Rights of WFFPC; Power of Attorney..........15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES......................................16
Section 4.1 Representations and Warranties as to Receivables.......17
Section 4.2 Organization and Good Standing.........................18
Section 4.3 Perfection of Security Interest........................18
Section 4.4 No Violations..........................................18
Section 4.5 Power and Authority....................................19
Section 4.6 Validity of Agreements.................................19
Section 4.7 Litigation.............................................19
Section 4.8 Compliance.............................................19
Section 4.9 Accuracy of Information; Full Disclosure...............19
Section 4.10 Taxes..................................................20
Section 4.11 Indebtedness...........................................20
Section 4.12 Investments............................................20
Section 4.13 ERISA..................................................20
Section 4.14 Hazardous Wastes.......................................20
Section 4.15 Solvency...............................................21
Section 4.16 Business Location......................................21
Section 4.17 Membership Units.......................................21
Section 4.18 No Extension of Credit for Securities..................21
Section 4.19 Year 2000 Compliance...................................22
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ARTICLE 5 CONDITIONS TO LOAN..................................................22
Section 5.1 Documents to be Delivered to WFFPC
Prior to First Advance................................22
Section 5.2 Conditions to all Advances.............................24
ARTICLE 6 BORROWER'S AFFIRMATIVE COVENANTS....................................24
Section 6.1 Borrower's Place of Business and Books and Records.....24
Section 6.2 Reporting-Requirements.................................24
Section 6.3 Borrower's Books and Records...........................25
Section 6.4 Financial Covenants....................................26
Section 6.5 Compliance With Applicable Law.........................26
Section 6.6 Notice of Default......................................27
Section 6.7 Corporate Existence....................................27
Section 6.8 Payment of Indebtedness; Taxes.........................27
Section 6.9 Notice Regarding Any Plan..............................28
Section 6.10 Other Information......................................28
Section 6.11 Litigation.............................................28
Section 6.12 Business Location......................................28
Section 6.13 Operations.............................................28
ARTICLE 7 NEGATIVE COVENANTS..................................................29
Section 7.1 Payments to and Transactions with Affiliates...........29
Section 7.2 Restricted Payments....................................29
Section 7.3 Indebtedness...........................................29
Section 7.4 Guaranties.............................................29
Section 7.5 Nature of Business.....................................30
Section 7.6 Negative Pledge........................................30
Section 7.7 Investments and Acquisitions...........................30
Section 7.8 Compliance with Formula................................30
Section 7.9 Mergers, Sales, Divestitures...........................30
Section 7.10 Use of Proceeds........................................30
Section 7.11 Ownership and Management...............................30
Section 7.12 Amendment to Subordinated Debt.........................30
ARTICLE 8 EVENTS OF DEFAULT...................................................31
Section 8.1 Failure to Make Payments...............................31
Section 8.2 Information............................................31
Section 8.3 Financial and Negative Covenants.......................31
Section 8.4 Covenants and Agreements...............................31
Section 8.5 Collateral.............................................31
Section 8.6 Defaults Under Other Agreements........................32
Section 8.7 Certain Events.........................................32
Section 8.8 Possession of Collateral...............................33
Section 8.9 Credit Documents.......................................33
ARTICLE 9 REMEDIES OF WFFPC AND WAIVER........................................33
Section 9.1 WFFPC's Remedies.......................................33
Section 9.2 Waiver and Release by the Borrower.....................34
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Section 9.3 No Waiver..............................................34
ARTICLE 10 MISCELLANEOUS......................................................34
Section 10.1 Indemnification and Release Provisions.................34
Section 10.2 Amendments and Applicable Law..........................35
Section 10.3 Notices................................................35
Section 10.4 Termination and Release................................35
Section 10.5 Counterparts...........................................36
Section 10.6 Costs, Expenses and Taxes..............................36
Section 10.7 Successors and Assigns.................................36
Section 10.8 Effectiveness of Agreement.............................36
Section 10.9 JURISDICTION AND VENUE.................................36
Section 10.10 WAIVER OF JURY TRIAL...................................37
Section 10.11 REVIEW BY COUNSEL......................................37
Section 10.12 [Intentionally Omitted]................................37
Section 10.13 Acknowledgment of Receipt..............................37
Section 10.14 Rule of Construction...................................37
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AMENDED FINANCE AGREEMENT
This AMENDED FINANCE AGREEMENT is made as of the ___ day of March, 2001, by
and among COASTAL CREDIT, L.L.C. ("Borrower"), a Virginia limited liability with
its principal office located at 3852 Virginia Beach Boulevard, Virginia Beach,
Virginia 23452, and WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC. ("WFFPC"), an
Iowa corporation with its principal office located at 206 Eighth Street, Des
Moines, Iowa 50309.
BACKGROUND
WFFPC and the Borrower have entered into a certain Finance Agreement, dated
as of September 14, 1998, pursuant to which WFFPC established a revolving credit
facility in favor of the Borrower on and subject to the terms and conditions set
forth therein. The Borrower has requested that WFFPC extend the Termination Date
as defined in the Finance Agreement from September 30, 2001 until December 31,
2004. The Lender has agreed to so extend the Termination Date, by amending the
Finance Agreement on and subject to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Certain Definitions. The terms defined in this Section 1.1,
whenever used and capitalized in this Finance Agreement shall, unless the
context otherwise requires, have the respective meanings herein specified.
"Advance" means each advance of the Loan made to the Borrower pursuant to
Section 2.1 hereof.
"Affiliate" means (i) any person who or entity which directly or indirectly
owns, controls or holds 5% or more of the outstanding beneficial interest in
Borrower; (ii) any entity of which 5% or more of the outstanding beneficial
interest is directly or indirectly owned, controlled, or held by Borrower; (iii)
any entity which directly or indirectly is under common control with Borrower;
(iv) any officer, director, partner or employee of Borrower or any Affiliate; or
(v) any immediate family member of any person who is an Affiliate. For purposes
of this definition, "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of an
entity, whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Finance Agreement and all exhibits and schedules
hereto, as the same may be amended, modified or supplemented from time to time.
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"Availability Statement" means the certificate in substantially the form of
Exhibit B hereto to be submitted by the Borrower to WFFPC in accordance with the
provisions of Section 2.1 and Section 3.3 hereof.
"Bankruptcy Code" means the United States Bankruptcy Code as now
constituted or hereafter amended and any similar statute or law affecting the
rights of debtors.
"Base Rate" means for any date of determination the LIBOR Rate for such
date.
"Books and Records" means all of the Borrower's original ledger cards,
payment schedules, credit applications, contracts, lien and security
instruments, guarantees relating in any way to the Collateral and other books
and records or transcribed information of any type, whether expressed in
electronic form in tapes, discs, tabulating runs, programs and similar materials
now or hereafter in existence relating to the Collateral.
"Borrower" means Coastal Credit, L.L.C., a Virginia limited liability
company, and its respective successors and assigns.
"Borrower's Loan Account" has the meaning assigned to that term in Section
2.1 of this Agreement.
"Borrowing Base" means, as of the date of determination, an amount up to
84% of the aggregate balance of outstanding Eligible Receivables net of unearned
interest, fees, commissions and discounts.
"Business Day" means any day except a Saturday, Sunday or other day on
which national banks are authorized by law to close including, without
limitation, United States federal government holidays.
"Capital Base" means the sum of the Borrower's Tangible Net Worth, net of
the amount required as Allowance for Loan Losses under Section 6.4(c) hereof or
to be charged-off under Section 6.4(e) hereof, plus Subordinated Debt.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and regulations with respect thereto in effect from time to time.
"Collateral" means
(i) All of the Borrower's Receivables, now owned or existing or hereafter
arising or acquired;
(ii) All collateral, security and guaranties now or hereafter in existence
for any Receivables;
(iii)All insurance related to any Receivables, to any collateral or
security for any Receivables or to any obligor in respect of any
Receivables and all proceeds of such insurance (including, without
limitation, all non-filing insurance, credit insurance and credit life
insurance related to any Receivables, to any collateral or
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security for any Receivables, or to any obligor in respect of any
Receivables and all proceeds of such insurance);
(iv) All of the Borrower's Books and Records related to any Receivables
including all computers and computer related equipment, tapes and
software;
(v) All notes, drafts, deposit accounts, acceptances, documents of title,
deeds, policies and policies or certificates of insurance (including
without limitation credit insurance, credit life insurance, non-filing
insurance and title insurance) and securities (domestic and foreign)
now or hereafter owned by the Borrower or in which Borrower has or at
any time acquires an interest in connection with any Receivables;
(vi) All of the Borrower's Accounts, Documents, Instruments, General
Intangibles and Chattel Paper as defined in Section 1.2(b) of this
Agreement, now owned or existing or hereafter arising or acquired, and
all payment obligations owed to the Borrower, now owned or existing or
hereafter arising or acquired; together with all collateral, security
and guaranties now or hereafter in existence for any of the foregoing;
and
(vii) All cash and non-cash proceeds of all the foregoing.
"Collections" means payment of principal, interest and fees on Receivables,
the cash and non-cash proceeds realized from the enforcement of such Receivables
and any security therefor, or the Collateral, proceeds of credit, group life or
non-filing insurance, or proceeds of insurance on any real or personal property
which is part of the collateral for the Receivables.
"Commitment" means the maximum principal amount which WFFPC has agreed may
be loaned to the Borrower, jointly and severally, pursuant to Article 2 hereof,
being, on the date hereof, $60,000,000.00.
"Consumer Finance Laws" means all applicable laws and regulations, federal,
state and local, relating to the extension of consumer credit, and the creation
of a security interest in personal property or a mortgage in real property in
connection therewith, as the case may be, and laws with respect to protection of
consumers' interests in connection with such transactions, including without
limitation, any usury laws, the Federal Consumer Credit Protection Act, the
Federal Fair Credit Reporting Act, RESPA, the Magnuson-Moss Warranty Act, the
Federal Trade Commission's Rules and Regulations and Regulations B and Z of the
Federal Reserve Board, as any of the foregoing may be amended from time to time.
"Consumer Purpose Loans" means loans to one or more individuals the
proceeds of which are used to purchase goods, services or merchandise for
personal, household or family use.
"Credit Documents" means this Agreement, the Note, the Subordination
Agreement(s), the Custodian Agreement(s) and any and all additional documents,
instruments, agreements and other writings executed and delivered pursuant to or
in connection with this Agreement.
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"Custodian Agreement" means that certain Custodian Agreement dated of even
date herewith by and between WFFPC, the Borrower, and an individual custodian,
substantially in the form attached hereto as Exhibit C, as the same may be
amended, modified, restated or extended from time to time.
"Debt" means, as of the date of determination, all outstanding indebtedness
(other than deferred loan origination fees of the Borrower) including without
limitation (a) all loans made by WFFPC to the Borrower; (b) accounts payable as
of the date of determination; (c) income tax liabilities; (d) mortgages; (e)
deposits and debenture instruments; and (f) Subordinated Debt.
"Default" means an event, condition or circumstance which, with the giving
of notice or the passage of time, or both, would constitute an Event of Default.
"EBITDA Ratio" means Borrower's earnings before payments of interest,
taxes, depreciation and amortization expense for the twelve month period ending
on the date of determination as a percent of interest expense during such twelve
month period in accordance with GAAP principles pursuant to Section 6.4 of this
Agreement.
"Eligible Receivables" means, as of the date of determination, Receivables
(net of unearned interest and unearned discount or insurance premiums and
commissions thereon) which are Chattel Paper, which conform to the warranties
set forth in Section 4.1 hereof, in which WFFPC has a validly perfected first
priority Lien, and which are not any of the following: (i) Receivables for which
a payment is 90 or more days past due on a contractual basis; (ii) Receivables
which have been deferred more than two times during any rolling 12-month period
based on the origination date of the contract, or more than six times over the
contract term; (iii) Receivables subject to foreclosure, repossession or
bankruptcy proceedings or the account debtor with respect to which is a debtor
under the Bankruptcy Code; (iv) Receivables from officers, employees or
shareholders of the Borrower or any Affiliate; (v) Interest Only Accounts; (vi)
Receivables missing titles after 120 days from their origination date; and (vii)
Receivables which, in WFFPC's reasonable discretion, do not constitute
acceptable collateral.
"Environmental Control Statutes" means any federal, state, county, regional
or local laws governing the control, storage, removal, spill, release or
discharge of Hazardous Substances, including without limitation CERCLA, the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1976, the
Hazardous Materials Transportation Act, the Emergency Planning and Community
Right to Know Act of 1986, the National Environmental Policy Act of 1975, the
Oil Pollution Act of 1990, any similar or implementing state law, and in each
case including all amendments thereto and all rules and regulations promulgated
thereunder and permits issued in connection therewith.
"EPA" means the United States Environmental Protection Agency, or any
successor thereto.
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"ERISA" means the Employee Retirement Income Security Act of 1974, all
amendments thereto, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to refer to any successor sections.
"Event of Default" has the meaning assigned to that term in Article 8 of
this Agreement.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, in accordance with the Statement of Auditing Standards No. 69,
"The Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles in the Independent Auditor's Report" (SAS 69) or superseding
pronouncements, issued by the Auditing Standards Board of the American Institute
of Certified Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or in such other statements by such other entity as WFFPC
may reasonably approve, which are applicable in the circumstances as of the date
in question. The requirement that such principles be applied on a consistent
basis shall mean that the accounting principles observed in a current period are
comparable in all material respects to those applied in a preceding period, or,
in the event of a material change in any accounting principle from that observed
in any previous period (i) financial reports covering preceding periods during
the term of this Agreement are restated to reflect such change and provide a
consistent basis for comparison among periods and (ii) the financial covenants
set forth in Section 6.4 shall be adjusted as determined by WFFPC to reflect
similar performance standards as those measured by the existing covenants using
the previously observed accounting principles.
"Hazardous Substance" means any toxic, reactive, corrosive, carcinogenic,
flammable or hazardous pollutant or other substance, including without
limitation petroleum and items defined in Environmental Control Statutes as
"hazardous substances," "hazardous wastes," "pollutants" or "contaminants."
"Intangible Assets" means all assets of any person or entity which would be
classified in accordance with GAAP as intangible assets, including without
limitation (a) all franchises, licenses, permits, patents, applications,
copyrights, trademarks, trade names, goodwill, experimental or organization
expenses and other like intangibles, and (b) unamortized debt discount and
expense and unamortized stock discount and expense.
"Interest-Only Accounts" means those Receivables on which collections are
applied entirely to interest and expense charges, with no portion thereof being
required to reduce the principal balance on the loan prior to the stated
maturity of such accounts.
"LIBOR Rate" means the one-month "LIBOR" rate for any day as found in the
Wall Street Journal, Interactive Edition, or any successor edition or
publication.
"Lien" means any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
including without limitation any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
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"Loan" means the aggregate principal amount advanced by WFFPC to the
Borrower pursuant to Section 2.1 of this Agreement, together with interest
accrued thereon and fees and costs incurred in connection therewith.
"Loan Availability" means the amount available for Advances under this
Agreement on any date as determined in accordance with the Availability
Statement submitted to WFFPC on such date in accordance with Section 3.3.
"Local Authorities" means individually and collectively the state and local
governmental authorities which govern the business and operations owned or
conducted by the Borrower or any of them.
"Note" means the promissory note to this Agreement of the Borrower in favor
of WFFPC in substantially the form of Exhibit D to this Agreement, evidencing
the obligation of the Borrower to repay the Loan, and any and all amendments,
renewals, replacements or substitutions therefor.
"Obligations" means each and every debt, liability and obligation of every
type and description which the Borrower may now or at any time hereafter owe to
WFFPC (whether such debt, liability or obligation now exists or is hereafter
created or incurred, whether it arises in a transaction involving WFFPC alone or
in a transaction involving other creditors of the Borrower, and whether it is
direct or indirect, due or to become due, absolute or contingent, primary or
secondary, liquidated or unliquidated, or sole, joint, several or joint and
several), and including specifically, but not limited to, all indebtedness of
the Borrower arising under this Agreement, the Note, or any other loan or credit
agreement between the Borrower and WFFPC, whether now in effect or hereafter
entered into and including, without limitation, all Loans and Reimbursement
Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Plan" means any employee benefit plan subject to the provisions of Title
IV of ERISA which is maintained in whole or in part for employees of Borrower or
any affiliate of Borrower.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Receivables" means all lien, title retention and security agreements,
chattel mortgages, chattel paper, bailment leases, installment sale agreements,
instruments, consumer finance paper and/or promissory notes securing and
evidencing loans made, and/or time sale transactions acquired, by the Borrower.
"Reportable Event" has the meaning assigned to that term in Section 4.13 of
this Agreement.
"Request for Advance" means the certificate in the form attached hereto as
Exhibit A to be delivered by Borrower to WFFPC as a condition of each Advance
pursuant to Section 2.7 hereof.
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"Restricted Payments" means payments by the Borrower which constitute (a)
redemptions, repurchases, dividends or distributions of any kind with respect to
Borrower's membership interest or any warrants, rights or options to purchase or
otherwise acquire any shares of Borrower's membership interest or (b) payments
of principal or interest on Subordinated Debt.
"Schedule of Receivables and Assignment" means a schedule in the form of
Exhibit E to this Agreement to be submitted by the Borrower to WFFPC pursuant to
Section 2.1 and Section 3.3 hereof, describing the Receivables assigned and
pledged to WFFPC, for the benefit of WFFPC, on the date hereof and thereafter
for the period to which such schedule relates and confirming the assignment and
pledge of such Receivables.
"Senior Debt" means all indebtedness of the Borrower not expressly
subordinated or junior to any other indebtedness of Borrower.
"Senior Debt to Capital Base Ratio" means the ratio of Senior Debt to
Capital Base.
"Subordinated Debt" means any indebtedness of the Borrower for borrowed
money which has a maturity beyond 1 year after the date hereof and has an
initial term of at least 1 year and which shall contain provisions subordinating
the payment of such indebtedness and the liens and security interests securing
such indebtedness to Senior Debt, in form, substance and extent acceptable to
WFFPC, in its sole discretion.
"Subordination Agreement" means, individually, and "Subordination
Agreements" means, collectively, the Subordination Agreements substantially in
the from of Exhibit F to this Agreement, that were executed and delivered to
WFFPC by each holder of Subordinated Debt pursuant to Section 5.1(i) of the
Finance Agreement dated as of September 14, 1998, as the same may be amended,
modified, restated or extended from time to time.
"Subsidiary" of any entity means any corporation of which such entity
directly or indirectly owns or controls at least a majority of the outstanding
stock having general voting power. For purposes of this definition, "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract, or otherwise.
"Tangible Net Worth" means, at any date, the amount of the membership
equity of the Borrower on a consolidated basis (but excluding the effect of
intercompany transactions) minus, to the extent not otherwise excluded (i) the
cost of membership units purchased or redeemed by the Borrower; (ii) the amount
equal to the value shown on its books of Intangible Assets, including the excess
paid for assets acquired over their respective book values on the books of the
corporation from which acquired; and (iii) investments in and loans to members,
directors, officers, employees, Subsidiaries and affiliated entities; and (iv)
accounts and Receivables 180 days or more contractually delinquent.
"Termination Date" means the earlier of (a) December 31, 2004, as such date
may be extended from time to time in accordance with the provisions of Section
2.4 of this Agreement; or (b) the date on which the Commitment is terminated and
the Loan becomes due and payable pursuant to Section 9.1.
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"Total Liabilities" means all liabilities of Borrower, as determined in
accordance with GAAP.
"WFFPC" means Wells Fargo Financial Preferred Capital, Inc., an Iowa
corporation, and its respective successors and assigns.
Section 1.2 Rules of Construction.
(a) Accounting Term. Except as otherwise provided herein, financial and
accounting terms used in the foregoing definitions or elsewhere in this
Agreement shall be defined in accordance with GAAP.
(b) Uniform Commercial Code. Except as otherwise provided herein, terms
used in the foregoing definitions or elsewhere in this Agreement that are
defined in the Uniform Commercial Code, including without limitation,
"Accounts", "Documents", "Instruments", "General Intangibles", and "Chattel
Paper" shall have the respective meanings described to such terms in the Uniform
Commercial Code as in effect in the State of Iowa from time to time.
ARTICLE 2
THE REVOLVING CREDIT FACILITY
Section 2.1 The Loan. Until the Termination Date and subject to the terms
and conditions of this Agreement, WFFPC shall, upon the prior application of the
Borrower, from time to time, make Advances to the Borrower on or after the date
of this Agreement, which the Borrower may repay and reborrow from time to time,
in the maximum principal amount at any one time outstanding not to exceed the
lesser of the amount of the Commitment or the Borrowing Base in effect as of the
date of determination, as follows:
(a) WFFPC shall establish on its books an account in the name of Borrower
(the "Borrower's Loan Account"). A debit balance in the Borrower's Loan Account
shall reflect the amount of the Borrower's indebtedness to WFFPC from time to
time by reason of Advances and other appropriate charges (including, without
limitation, interest charges) hereunder. At least once each month, WFFPC shall
provide to the Borrower a statement of the Borrower's Loan Account which
statement shall be considered correct except in the case of malfeasant error and
accepted by the Borrower and conclusively binding upon the Borrower unless the
Borrower notifies WFFPC to the contrary within 60 days of WFFPC's providing such
statement to the Borrower.
(b) The Borrower shall prepare a completed Availability Statement as of
each month end and forward such statement to WFFPC by the 15th day of the
following month.
(c) Each Advance made hereunder shall, in accordance with GAAP, be entered
as a debit to the Borrower's Loan Account, and shall be in a principal amount
which, when aggregated with all other Advances then outstanding, shall not
exceed the lesser of the then effective Borrowing Base or Commitment.
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(d) The Loan shall be due and payable to WFFPC on the Termination Date.
Upon the occurrence of an Event of Default, WFFPC shall have rights and remedies
available to it under Article 9 of this Agreement.
Section 2.2 The Note. The indebtedness of the Borrower to WFFPC hereunder
shall be evidenced by a Note executed by the Borrower in favor of WFFPC, which
shall be substantially in the form of Exhibit D of this Agreement, dated the
same date as this Agreement. Said Note shall be executed and delivered in
substitution for and replacement of, but not in payment or satisfaction of, the
Borrower's Secured Promissory Note, dated as of September 14, 1998, payable to
the order of the Lender, in the stated principal amount of $60,000,000. The
principal amount of the Note will be $60,000,000.00; provided, however, that
notwithstanding the face amount of the Note, Borrower's liability under the Note
shall be limited at all times to its actual indebtedness (principal, interest
and fees) then outstanding and owing to WFFPC hereunder.
Section 2.3 Method of Payment. The Borrower shall make all payments of
principal and interest on the Note in lawful money of the United States; of
America and in funds immediately available by wire transfer, to WFFPC at its
address referred to in Section 10.3 of this Agreement or at such other address
as WFFPC otherwise directs. Whenever any payment is due on a day, which is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and interest shall be paid for such extended time.
Section 2.4 Extension and Adjustment of Termination Date. Upon the mutual
agreement of all parties to this agreement, the Termination Date may be
extended. Any extension to the Termination Date shall be in writing and executed
by the authorized representatives of each party.
Section 2.5 Use of Proceeds. Advances shall be used to finance the
Borrower's portfolios of Consumer Purpose Loans which constitute Eligible
Receivables.
Section 2.6 Interest.
(a) In the absence of an Event of Default or Default hereunder, and prior
to maturity, the outstanding balance of the Loan will bear interest at an annual
rate determined in accordance with the following formula:
(i) Interest shall accrue at the Base Rate plus 2.85% during any
calendar quarter immediately following the end of a quarter in which the
Borrower's Senior Debt to Capital Base Ratio is less than 2.
(ii) Interest shall accrue at the Base Rate plus 3.10% during any
calendar quarter immediately following the end of a quarter in which the
Borrower's Senior Debt to Capital Base Ratio equals or exceeds 2 but is
3.25 or less.
(iii) Interest shall accrue at the Base Rate plus 3.35% during any
calendar quarter immediately following the end of a quarter in which the
Borrower's Senior Debt to Capital Base Ratio exceeds 3.25.
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Interest shall be payable monthly in arrears on the first day of each month
commencing on the first such date after the first Advance under the Loan and
continuing until the Commitment is terminated and Borrower's indebtedness
thereunder is paid in full. Interest as provided hereunder will be calculated on
the basis of a 360 day year and the actual number of days elapsed.
The rate of interest provided for hereunder is subject to increase or
decrease when and as the Base Rate increases or decreases in an amount
corresponding to the change in the Base Rate. Any such change in interest rate
hereunder shall take effect the first day of the month following a change in the
Base Rate.
(b) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default or Default hereunder, including after
maturity and before and after judgment, Borrower hereby agrees to pay to WFFPC
interest on the outstanding principal balance of the Loan and, to the extent
permitted by law, overdue interest with respect thereto, at the rate of 2.50%
per annum above the rate otherwise applicable to the Loan.
Section 2.7 Advances.
(a) Borrower shall notify WFFPC in writing not later than 10:00 a.m., Des
Moines, Iowa, time, on the date of each requested Advance under the Commitment,
specifying the date, amount and purpose of the Advance. Such notice shall be in
the form of the Request for Advance attached as Exhibit A, shall be certified by
the President or Treasurer (or such other authorized person as Borrower directs
from time to time) of Borrower and shall contain the following information and
representations, which shall be deemed affirmed and true and correct as of the
date of the requested Advance:
(i) the aggregate amount of the requested Advance, which shall be in
multiples of $25,000.00 but not less than the lesser of $25,000.00 or the
unborrowed balance of the Commitment;
(ii) confirmation of Borrower's compliance with Sections 2.1(c), 6.4
and 7.1 through 7.12 both immediately prior to and after making such
Advance; and
(iii) statements that the representations and warranties set forth in
Article 4 are true and correct as of the date of the Advance; no Event of
Default or Default has occurred and is then continuing; and that there has
been no material adverse change in Borrower's financial condition,
operations or business since the date of the monthly and audited annual
financial statements most recently delivered by Borrower to WFFPC pursuant
to Sections 5.1(k) or 6.2 of this Agreement.
(b) Subject to the satisfaction of the conditions set forth in Section
2.7(a) and 5.2, and the other terms of this Agreement, WFFPC shall make the
requested Advance available to Borrower by wiring such amount to an account
designated by Borrower and in Borrower's name, or as otherwise instructed by
Borrower, not later than 5:00 p.m., Des Moines, Iowa, time on the day of the
requested Advance.
(c) Each request for an Advance pursuant to this Section 2.7 shall be
irrevocable and binding on Borrower.
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Section 2.8 Prepay.
(a) Optional Prepayments. Borrower may prepay the Loan from time to time,
in full or in part not to exceed $100,000 without notice, and, in part, in
excess of $100,000 upon 7 Business Day's prior notice to WFFPC without premium
or penalty, provided that (i) in the event Borrower repays the Loan in full
prior to the first anniversary of this Agreement, the Borrower shall pay a sum
equal to 1% of the Commitment as a prepayment penalty; (ii) in the event
Borrower repays the Loan in full after the first anniversary of the date of this
Agreement and prior to the second anniversary of the date of this Agreement, the
Borrower shall pay a sum equal to .25% of the Commitment as a prepayment
penalty; (iii) if the Loan is prepaid in full at any time after the second
anniversary of the date of this Agreement, the Borrower shall not incur a
penalty for prepayment; (iv) prepayments shall be in a minimum amount of $10,000
and $10,000 increments in excess thereof; and (v) partial prepayments prior to
the Termination Date shall not reduce WFFPC's Commitment under this Agreement
and may be reborrowed, subject to the terms and conditions hereof for borrowing,
and partial prepayments will be applied first to accrued interest and fees and
then to outstanding Advances.
(b) Mandatory Prepayments. In the event that amounts outstanding hereunder
at any time exceed the Borrowing Base (whether established by an Availability
Statement or otherwise) Borrower shall pay to WFFPC immediately and without
demand or notice of any kind required, the amount by which Borrower's
indebtedness hereunder exceeds the Borrowing Base then applicable, together with
all accrued interest on the amount so paid and any fees and costs incurred in
connection therewith.
Section 2.9 Fees. Borrower shall pay to WFFPC, at WFFPC's offices, the
following:
(a) Administrative Fee. An administrative fee of $2,500.00 shall be due and
payable monthly in arrears on the first day of each month during the term of
this Agreement and continuing until the Commitment is terminated and Borrower's
indebtedness thereunder is paid in full, in which event a monthly installment of
the administrative fee shall be paid on the date of such termination.
(b) Unused Line Fee. Borrower shall pay an unused line fee at the rate of
1/8th of 1% per annum (computed on the basis of a 360 day year and the actual
number of days elapsed) on the average daily unused Commitment. Such fee shall
be payable monthly in arrears on the first day of each month, and on the
Termination Date, unless the Commitment is terminated on an earlier date, in
which event the unused line fee shall be paid on the date of such termination.
ARTICLE 3
SECURITY
Section 3.1 Security Interest. To secure the payment and performance of the
Obligations, the Borrower hereby grants to WFFPC a continuing general Lien on
and a continuing security interest in all of the Collateral, wherever located,
whether now owned or hereafter acquired, existing or created, together with all
replacements and substitutions therefor, and the cash and non-cash proceeds
thereof. The Liens and security interests of WFFPC in the
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Collateral shall be first and prior perfected Liens and security interests and
may be retained by WFFPC until all of the Borrower's liabilities and obligations
to WFFPC have been indefeasibly satisfied in full and the Commitment has expired
or otherwise has been terminated.
Section 3.2 Financing Statements. Before the execution of this Agreement,
Borrower will have executed and delivered financing statements to WFFPC in form
satisfactory to WFFPC sufficient to perfect WFFPC's security interest in the
Collateral which can be perfected by filing a financing statement.
Section 3.3 Documents to be Delivered to WFFPC. Concurrently with the
execution and delivery of this Agreement and, thereafter, by the 15th day of
each month for the prior month and at any other time as WFFPC may require,
Borrower shall deliver to WFFPC an Availability Statement, a Schedule of
Receivables and Assignment, an aging of Receivables and such other documentation
as WFFPC may require; however, the security interest of WFFPC in the Collateral
shall attach immediately upon the creation or acquisition thereof by Borrower,
regardless of whether the same be then or thereafter delivered to WFFPC. All
Receivables of Borrower shall be stamped and assigned to WFFPC as follows to
evidence the assignment to WFFPC:
The within instrument or agreement is pledged as collateral to Wells Fargo
Financial Preferred Capital, Inc.
Borrower shall: (a) deliver to the custodian under the Custodian Agreement,
as the bailee and designee of WFFPC, or, upon the request of WFFPC, to WFFPC,
the Collateral and all Documents, General Intangibles and Instruments relating
to Collateral and, upon request of WFFPC, deliver to WFFPC or its designee any
other property in which Borrower has granted WFFPC a security interest
hereunder, including, but not limited to, all of Borrower's Books and Records
including all computers, computer related equipment, tapes and software; and (b)
execute and deliver to WFFPC, for the benefit of WFFPC, such assignments,
mortgages, financing statements, amendments thereto and continuation statements
thereof, in form satisfactory to WFFPC, and such additional agreements,
documents or instruments as WFFPC may, from time to time, require to evidence,
perfect and continue to perfect WFFPC's liens and security interests granted
hereunder. For purposes of this Article 3, the parties hereto agree that, until
the occurrence of a default or event of default under this agreement, WFFPC
shall otherwise direct or designate, the custodian(s) under the Custodian
Agreement or Agreements as from time to time in effect, shall be deemed to be
the designee of WFFPC. WFFPC shall have the right, at any time following an
event of default hereunder, to direct or redirect the delivery of all or any of
the foregoing items to any other designee. WFFPC may in its sole discretion
record or file any such document, instrument or agreement, including, without
limitation, this Agreement, as it may from time to time deem desirable.
Section 3.4 Collections. Notwithstanding the assignment (but not in any way
to be deemed or construed to impair or affect the security interest granted
hereunder) of the Receivables by Borrower to WFFPC, until notice to the contrary
is provided to Borrower by WFFPC and after the occurrence of a Default or an
Event of Default, Borrower may service, manage, enforce and receive Collections
on Receivables for the account of WFFPC. The
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Borrower shall have no power to make any unusual allowance or credit to any
obligor without WFFPC's prior written consent.
Upon notice by WFFPC at any time after the occurrence of a Default or Event
of Default, WFFPC may require the Borrower to endorse and deposit all
Collections within one Business Day of receipt thereof and in the original form
received (except for the endorsement of Borrower, if necessary, to enable the
collection of instruments for the payment of money, which endorsements Borrower
hereby agrees to make) in such account maintained with such depository as WFFPC
may from time to time specify, such account to limit withdrawals by the Borrower
therefrom only to the order of WFFPC, but to permit withdrawals by WFFPC
therefrom without the co-signature of Borrower. Any time after the occurrence of
a Default or Event of Default WFFPC may also require Borrower to enter into an
appropriate lock box agreement with WFFPC or another financial institution
acceptable to WFFPC, in form and content acceptable to WFFPC, with respect to
opening and maintaining a lock box arrangement for the Collections. Such lock
box agreements shall be irrevocable so long as Borrower is indebted to WFFPC
under this Agreement.
Section 3.5 Additional Rights of WFFPC; Power of Attorney.
(a) In addition to all the rights granted to WFFPC hereunder, WFFPC shall
have the right, at any time following the occurrence and during the continuance
of a Default or an Event of Default, to notify the obligors and account debtors
of all Collateral to make payment thereon directly to WFFPC, and to take control
of the cash and non-cash proceeds of such Collateral; provided, however, that
once such notification is given to such obligors, it shall not be vitiated by a
subsequent cure of such default without the prior written consent of WFFPC. When
Collections received by WFFPC have been converted into cash form, WFFPC shall
forthwith apply the same first in discharge of all expenses, fees, costs and
charges including attorneys' fees and costs of Collections; second to pay all
interest accrued under the Note and this Agreement; third to pay principal due
under the Note and this Agreement; and then to pay any other sums due to WFFPC
under the terms of this Agreement.
(b) Borrower irrevocably appoints WFFPC its true and lawful attorney, with
power of substitution, to act in the name of Borrower or in the name of WFFPC or
otherwise, for the use and benefit of WFFPC, but at the cost and expense of
Borrower, without notice to Borrower: to demand, collect, receipt for and give
renewals, extensions, discharges and releases of any Receivables; to institute
and to prosecute legal and equitable proceedings to realize upon any
Receivables; to settle, compromise, or adjust claims; to take possession and
control in any manner and in any place of any cash or non-cash items of payment
or proceeds thereof; to endorse the name of Borrower upon any notes, checks,
drafts, money orders, or other evidences of payment of Receivables; to sign
Borrower's name on any instruments or documents relating to any of the
Collateral or on drafts against account debtors; to do all other acts and things
necessary, in WFFPC's sole judgment, to effect collection of the Receivables or
protect its security interest in the Collateral; and generally to sell in whole
or in part for cash, credit or property to others or to itself at any public or
private sale, assign, make any agreement with respect to or otherwise deal with
the Receivables as fully and completely as though WFFPC were the absolute owner
thereof for all purposes, except to the extent limited by any applicable
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laws and subject to any requirement of notice to Borrower or other persons under
applicable laws.
(c) Borrower hereby agrees to indemnify and hold WFFPC harmless from and
against any and all expenses, costs, liabilities or damages (including
reasonable attorneys fees) sustained by WFFPC by reason of any
misrepresentation, breach of warranty or breach of covenant by Borrower whether
caused by Borrower or any obligor, or whether caused by any other person if
Borrower knew of or reasonably should have known that facts, circumstances or
information on which Borrower relied were false, incorrect or incomplete in any
material respect, and also all court costs and all other expenses WFFPC incurs
in enforcing or attempting to enforce payment of the Loan or any Receivables, in
supervising the records and proper management and disposition of the Collection
of Receivables or in prosecuting or defending any of WFFPC's rights under this
Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants and shall continue to represent and
warrant to WFFPC until the Borrower's obligations to WFFPC hereunder have been
satisfied in full and the Commitment has expired or otherwise has been
terminated as follows:
Section 4.1 Representations and Warranties as to Receivables.
(a) As to the Receivables generally:
(i) The Borrower or, where the Borrower was not the original lender,
to the best of Borrower's knowledge, the original lender or seller had full
power and authority to make the loans (or other extensions of credit)
evidenced by the Receivables and all such Receivables and all Books and
Records related thereto are genuine, based on enforceable contracts and are
in all respects what they purport to be;
(ii) All Receivables have been duly authorized, executed, delivered by
the parties whose names appear thereon and are valid and enforceable in
accordance with their terms; constitute Chattel Paper; any chattels
described in any Receivable are and will be accurately described and are
and will be in the possession of the parties granting the security interest
therein; and (A) any applicable filing, recording or lien notation law with
respect to any collateral securing a Receivable will have been complied
with to the extent such filing or recording is necessary under applicable
law to create or perfect Borrower's security interest in such collateral
consistent with its present policy; or (B) Borrower shall have procured
non-filing insurance from a reputable insurer in an amount not less than
the value of the collateral securing such Receivables;
(iii) The form and content of all Receivables and the security related
thereto and the transactions from which they arose comply in all material
respects (and in any event in all respects necessary to maintain and ensure
the validity and enforceability of
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the Receivables) with any and all applicable laws, rules and regulations,
including without limitation, the Consumer Finance Laws;
(iv) The original amount and unpaid balance of each Receivable on the
Borrower's Books and Records and on any statement or schedule delivered to
WFFPC, including without limitation the Schedule of Receivables, is and
will be the true and correct amount actually owing to Borrower as of the
date each Receivable is pledged to WFFPC, is not subject to any claim of
reduction, counterclaim, set-off, recoupment or any other claim, allowance
or adjustment; and Borrower does not have any knowledge of any fact which
would impair the validity or collectibility of any Receivables;
(v) All security agreements, title retention instruments, mortgages
and other documents and instruments which are security for Receivables
contain a correct and sufficient description of the real or personal
property covered thereby, and, subject to the rights of WFFPC hereunder and
the interests of Borrower as holder of such security agreements, title
retention instruments or mortgages or other documents or instruments, are
or create first and prior perfected security interests and Liens;
(vi) The Borrower has made an adequate credit investigation of the
obligor of each Receivable and has determined that his or her credit is
satisfactory and meets the standards generally observed by prudent finance
companies and is in conformity in all material respects with Borrower's
policies and standards; and
(vii) The Borrower has good and valid indefeasible title to the
Receivables, free and clear of all prior assignments, claims, liens,
encumbrances and security interests, and has the right to pledge and grant
WFFPC a first priority security interest in the same, in the manner
provided in this Agreement.
Section 4.2 Organization and Good Standing. Borrower is a limited liability
company duly organized and validly existing under the laws of its state of
organization and has the power and authority to engage in the business it
conducts and is qualified and in good standing in those states wherein the
nature of business or property owned by it requires such qualification, is not
required to be qualified in any other state; or if not so qualified, no adverse
effect would result therefrom.
Section 4.3 Perfection of Security Interest. Upon filing of duly executed
financing statements in all places as, in the opinion of counsel for the
Borrower, are necessary to perfect the security interests granted in Article 3
of this Agreement, describing the Collateral and disclosing the Borrower as
"Debtor" and WFFPC as "Secured Party," and stamping the legend required under
Section 3.3 of this Agreement on such Collateral, WFFPC will have a first
perfected security interest in the Collateral superior in right of interest to
purchasers from, or creditors or receivers or a trustee in Bankruptcy of,
Borrower.
Section 4.4 No Violations. The making and performance of the Credit
Documents do not and will not violate any provisions of any law, rule,
regulation, judgment, order, writ, decree, determination or award or breach any
provisions of the articles of organization or other organizational documents of
Borrower, or constitute a default or result in the creation or
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imposition of any security interest in, or lien or encumbrance upon, any assets
of Borrower (immediately or with the passage of time or with the giving of
notice and passage of time, or both) under any other contract, agreement,
indenture or instrument to which Borrower is a party or by which Borrower or its
property is bound and no failure of it to comply with any suit, law, rule,
regulation, judgment, order, writ, decree, determination or award would have an
adverse effect.
Section 4.5 Power and Authority.
(a) Borrower has full power and authority under the law of the state of its
organization and under its articles of organization, management agreement and
other organizational documents to enter into, execute and deliver and perform
the Credit Documents; to borrow monies hereunder, to incur the obligations
herein provided for and to pledge and grant to WFFPC a security interest in the
Collateral; and
(b) All actions (organizational or otherwise) necessary or appropriate for
Borrower's execution, delivery and performance of the Credit Documents have been
taken.
Section 4.6 Validity of Agreements. Each of the Credit Documents is, or
when delivered to WFFPC will be, duly executed and constitute valid and legally
binding obligations of Borrower enforceable against Borrower in accordance with
their respective terms.
Section 4.7 Litigation. There is no order, notice, claim, action, suit,
litigation, proceeding or investigation pending or, threatened against or
affecting Borrower, whether or not fully covered by insurance, except as
identified and described on Exhibit G of this Agreement.
Section 4.8 Compliance. Borrower is in compliance in all material respects
with all applicable laws and regulations, federal, state and local (including
all Consumer Finance Laws and those administered by the Local Authorities),
material to the conduct of its business and operations; Borrower possesses all
the franchises, permits, licenses, certificates of compliance and approval and
grants of authority necessary or required in the conduct of its business and,
except as may be described on Exhibit G, the same are valid, binding,
enforceable and subsisting without any defaults thereunder or enforceable
adverse limitations thereon, and are not subject to any proceedings or claims
opposing the issuance, development or use thereof or contesting the validity
thereof; and no approvals, waivers or consents, governmental (federal, state or
local) or non-governmental, under the terms of contracts or otherwise, are
required by reason of or in connection with Borrower's execution and performance
of the Credit Documents.
Section 4.9 Accuracy of Information; Full Disclosure.
(a) All financial statements, including any related schedules and notes
appended thereto, delivered and to be delivered to WFFPC pursuant to this
Agreement have been or will be prepared in accordance with GAAP and do and will
fairly present the financial condition of Borrower and its consolidated
Subsidiaries, if any, on the dates thereof and results of operations for the
periods covered thereby and discloses all liabilities (including contingent
liabilities) of any kind of the Borrower. WFFPC acknowledges receipt of the
annual financial statements with respect to the fiscal year ended December 31,
2000.
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(b) Since the date of the most recent financial statements furnished to
WFFPC, there has not been any adverse change in the financial condition,
business or operations of the Borrower.
(c) All financial statements and other statements, documents and
information furnished by the Borrower to WFFPC in connection with this Agreement
and the Note and the transactions contemplated hereunder do not and will not
contain any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading.
Borrower has disclosed to WFFPC in writing any and all facts which materially
and adversely affect the business, properties, operations or condition,
financial or otherwise, of the Borrower, or the Borrower's ability to perform
its obligations under this Agreement and the Note.
Section 4.10 Taxes. Borrower has filed and will file all tax returns which
are required to be filed and has paid or will pay when due all taxes, license
and other fees with respect to the Collateral and the business of Borrower
except taxes contested in good faith for which adequate reserves have been
established by Borrower on its Books and Records.
Section 4.11 Indebtedness. Borrower has no presently outstanding
indebtedness or obligations including contingent obligations and obligations
under leases of property from others, except the indebtedness and obligations
described in Exhibit G of this Agreement and in Borrower's financial statements
which have been furnished to WFFPC from time to time pursuant to Section 6.2 of
this Agreement.
Section 4.12 Investments. Borrower has no direct or indirect Subsidiaries
or Affiliates, or investments in or loans to any other individuals or business
entities (other than Consumer Purpose Loans), except as described in Exhibit G
of this Agreement.
Section 4.13 ERISA. Borrower and any Subsidiary, and each member of the
controlled group of corporations (as such term "controlled group of
corporations" is defined in Section 1563 of the Internal Revenue Code of 1986,
as amended) of which Borrower is a member, is in compliance in all material
respects with all applicable provisions of ERISA and the regulations promulgated
thereunder. No reportable event, as such term (hereinafter called a "Reportable
Event") is defined in Title IV of ERISA, has occurred with respect to, nor has
there been terminated, any Plan maintained for employees of Borrower or any
Subsidiary or any member of the controlled group of corporations of which
Borrower is a member.
Section 4.14 Hazardous Wastes. Substances and Petroleum Products.
(a) Borrower (i) has received all permits and filed all notifications
necessary to carry on its respective business; and (ii) is in compliance in all
respects with all Environmental Control Statutes.
(b) Borrower has not given any written or oral notice to the Environmental
Protection Agency ("EPA") or any state or local agency with regard to any actual
or imminently threatened removal, spill, release or discharge of hazardous or
toxic wastes, substances or petroleum products or properties owned or leased by
Borrower or in connection with the conduct of its business and operations.
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(c) Borrower has not received notice that it is potentially responsible for
costs of clean-up of any actual or imminently threatened spill, release or
discharge of hazardous or toxic wastes or substances or petroleum products
pursuant to any Environmental Control Statute.
Section 4.15 Solvency. Borrower is, and after receipt and application of
the first Advance will be, solvent such that (a) the fair value of its assets
(including without limitation the fair salable value of Borrower's Intangible
Assets) is greater than the total amount of its liabilities, including without
limitation, contingent liabilities, (b) the present fair salable value of its
assets (including without limitation the fair salable value of its Intangible
Asset) is not less than the amount that will be required to pay the probable
liability on its debts as they become absolute and matured, and (c) it 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. Borrower does not intend to, or believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and
is not engaged in a business or transaction, or about to engage in a business or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice and industry in which
it is engaged. For purposes of this Section 4.15, in computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that reasonably can be expected to
become an actual matured liability.
Section 4.16 Business Location. Borrower's address set forth in Section
10.3 hereof is the location of Borrower's principal place of business and such
address, together with the addresses set forth on Exhibit H of this Agreement,
is the only location where Borrower keeps its records concerning the Collateral.
The location of all other places of business of the Borrower and the names in
which Borrower conducts business at each such location are set forth in Exhibit
I to this Agreement.
Section 4.17 Membership Units. All of the units of membership of Borrower
are owned as described on Exhibit G to this Agreement, and all such membership
units are fully paid and non-assessable.
Section 4.18 No Extension of Credit for Securities. Borrower is not, nor
will it be, engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying or
trading in any margin stocks or margin securities (within the meaning of
Regulations G, U and X of the Board of Governors of the Federal Reserve System)
or other securities, and no part of the proceeds of the Loan hereunder has been
or will be applied for the purpose of purchasing or carrying or trading in any
such stock or securities or of refinancing any credit previously extended, or of
extending credit to others, for the purpose of purchasing or carrying any such
margin stock, margin securities or other securities in contravention of such
Regulations.
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ARTICLE 5
CONDITIONS TO LOAN
Section 5.1 Documents to be Delivered to WFFPC Prior to First Advance.
Prior to the first Advance, Borrower shall deliver or caused to be delivered to
WFFPC:
(a) Credit Documents. This Agreement, the Note and all other Credit
Documents duly and properly executed by the parties thereto;
(b) Uniform Commercial Code Termination Statements by Existing Lender.
Borrower's existing lenders (other than WFFPC) shall have executed and delivered
(a) Uniform Commercial Code termination statements and other documentation
evidencing the termination of its Liens and security interests in the
Collateral, (b) written agreements that upon receipt of proceeds of the Advances
such lender will deliver Uniform Commercial Code termination statements and
other documentation evidencing the termination of the Liens and security
interests in the Collateral or (c) Subordination Agreements with respect to
existing indebtedness which is to continue in existence as Subordinated Debt,
all in a form and substance satisfactory to WFFPC in its sole discretion;
(c) Organizational Documents. A copy of Borrower's (i) organizational
documents, certified as of a recent date by the secretary of state of the state
of organization of the Borrower, and (ii) operating agreement and all amendments
thereto, certified as of a recent date by Borrower's secretary; together with
certificates of good standing, existence or fact in Borrower's state of
organization and in each jurisdiction in which Borrower is qualified to do
business;
(d) Authorization Documents. A certified copy of resolutions of Borrower's
Managers authorizing the execution, delivery and performance of the Note, this
Agreement and all other Credit Documents, the pledge of the Collateral to WFFPC
as security for the Loan made hereunder and the borrowing evidenced by the Note
and designating the appropriate officers to execute and deliver the Credit
Documents;
(e) Incumbency Certificates. A certificate of Borrower's secretary (or
other appropriate officer) as to the incumbency and signatures of officers of
Borrower signing this Agreement, the Note and other Credit Documents;
(f) Opinion of Counsel. WFFPC shall have received a written opinion of
Borrower's counsel addressed to WFFPC in form and substance satisfactory to
WFFPC in its sole discretion;
(g) Officer's Certificate. A certificate, dated the date of this Agreement,
signed by the President of Borrower, to the effect that (i) all representations
and warranties set forth in this Agreement are true and correct as of the date
hereof in all material respects and (ii) no Default or Event of Default
hereunder has occurred, Borrower's seal, if any, being affixed to such
certificate and Borrower's secretary attesting thereto;
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(h) Financing Statements and Collateral Documents.
(i) the financing statements, amendments thereto, and other documents
required by Sections 3.2 and 3.3; and
(ii) the Custodian Agreement(s) referenced in Section 3.3.
(i) Subordination Documents. The Subordination Agreement(s) duly executed
by each holder of Subordinated Debt, together with copies of the documents,
instruments and writings evidencing such Subordinated Debt;
(j) Due Diligence. Completion of WFFPC's due diligence, including a
collateral audit, with results satisfactory to WFFPC;
(k) Financial Information. A copy of each of the reports required pursuant
to Section 6.2 of this Agreement for the period most recently ended prior to the
date hereof;
(l) Availability Statement. A completed Availability Statement required
under Section 2.1(b) of this Agreement;
(m) Request for Advance. A completed Request for Advance required under
Section 2.7(a) of this Agreement;
(n) Insurance. Evidence of insurance issued by a reputable carrier with
respect to Borrower's fire, casualty, liability, and other insurance covering
its Property, and any key owner/operator insurance.
(o) Searches. Uniform Commercial Code, tax, judgment, PBGC and EPA searches
against Borrower in those offices and jurisdictions as WFFPC shall reasonably
request which shall show that no financing statement, liens, or assignments or
other filings have been filed or remain in effect against the Borrower or any
Collateral except for those Liens, financing statements, assignments or other
filings with respect to which the secured party or existing lender (i) has
delivered to WFFPC Uniform Commercial Code termination statements or other
documentation evidencing the termination of its Liens and security interests in
Collateral, (ii) has agreed in writing to release or terminate its Lien and
security interest in Collateral upon receipt of proceeds of the Advances or
(iii) has delivered a Subordination Agreement to WFFPC with respect to its Lien
and security interest in the Collateral, all in a form and substance
satisfactory to WFFPC in its sole discretion.
(p) Other Documents. Such additional documents as WFFPC reasonably may
request.
Section 5.2 Conditions to all Advances. The obligation of WFFPC to make
each subsequent Advance hereunder pursuant to Section 2.1 is conditioned upon
(a) the Borrower's satisfaction of each of the conditions specified in Sections
2.1, 3.2, 3.3 and 5.1, (b) the continuing accuracy of the representations and
warranties made by the Borrower under this Agreement, (c) the absence, after
giving effect to such Advance and the receipt of the proceeds thereof and the
retirement of any indebtedness then being retired out of the proceeds of such
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Advance, of any Default or Event of Default; and (d) Borrower's continued
compliance with the requirements of Section 6.3 (with respect to audit of
Collateral).
ARTICLE 6
BORROWER'S AFFIRMATIVE COVENANTS
In addition to the covenants contained in Article 3 and 4 of this Agreement
relating to the Collateral, until all Obligations have been satisfied in full
and the Commitment has expired or otherwise has been terminated, Borrower
covenants and agrees as follows:
Section 6.1 Borrower's Place of Business and Books and Records. Borrower
will promptly advise WFFPC in writing of (a) the establishment of any new places
of business by Borrower and of the discontinuance of any existing places of
business of Borrower; (b) the creation of any new Subsidiaries or affiliated
entities and (c) the acquisition and or use of any trade name or trade style.
Section 6.2 Reporting-Requirements. Borrower will deliver to WFFPC:
(a) within 18 days after the end of each month, company prepared financial
statements of Borrower's business for such previous month, consisting of a
balance sheet, income statement, and consolidating schedules as of the end of
such month, all in reasonable detail, prepared in accordance with GAAP
consistently applied, subject to year-end adjustments;
(b) within 90 days after the close of each fiscal year, commencing with the
fiscal year ending December 31, 2000, consolidated financial statements of
Borrower and its consolidated Subsidiaries for the fiscal year then ended
consisting of a balance sheet, income statement and statement of cash flow of
Borrower and its consolidated Subsidiaries as of the end of such fiscal year,
all in reasonable detail, including all supporting schedules and footnotes,
prepared in accordance with GAAP consistently applied, and shall be certified
without qualification by an independent certified public accountant selected by
Borrower and acceptable to WFFPC and accompanied by the unqualified opinion of
such accountant; and cause WFFPC to be furnished (i) at the time of the
completion of the annual audit, a certificate signed by such accountants to the
effect that to the best of their knowledge there exists no violation of any of
the financial covenants contained in Section 6.4 hereof and that nothing has
come to their attention in the performance of the audit process that would lead
such accountants to conclude that there exists a breach or violation of any
other provision of this Agreement or the happening of any Event of Default or
Default hereunder; and (ii) at the time of completion thereof, a copy of any
management letter for Borrower and its consolidated Subsidiaries prepared by
such certified public accounting firm.
(c) the documents required to be furnished pursuant to Section 3.3 of this
Agreement;
(d) within 18 days after the end of each month, for the month then ending,
reports in form and substance satisfactory to WFFPC, as required pursuant to
Section 3.3, setting forth an aging of Receivables, Schedule of Receivables and
Assignment and an Availability Statement;
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(e) within 90 days after the end of each calendar year, financial
statements for each Guarantor, in form and substance satisfactory to WFFPC;
(f) upon request of WFFPC, copies of Borrower's income tax returns,
including any schedules attached thereto, filed with the Internal Revenue
Service; and
(g) books and records consisting of data tape information promptly after
request therefor by WFFPC.
Section 6.3 Borrower's Books and Records. The Borrower will keep accurate
and complete Books and Records concerning the Collateral and all transactions
with respect thereto consistent with sound business practices and will comply
with WFFPC's reasonable requirements, from time to time in effect, including
those concerning the submission of reports on all items of Collateral including
those which are deemed to be delinquent. The form of delinquency reports, the
frequency with which such reports shall be submitted to WFFPC (which in any case
shall be no less frequently than monthly) and the standards for determining
which Collateral transactions are deemed delinquent for this purpose, shall at
all times be satisfactory to WFFPC. WFFPC shall have the right at any time and
from time to time during regular business hours to inspect, audit, and copy the
Books and Records of Borrower and inspect and audit any Collateral.
Section 6.4 Financial Covenants. At all times Borrower shall maintain the
following financial covenants (based on consolidated financial statements of
Borrower and its consolidated Subsidiaries unless otherwise indicated):
(a) EBITDA Ratio. Maintain, as of the end of each fiscal year, an EBITDA
Ratio of not less than 1.25 to 1.0.
(b) Senior Debt to Capital Base. Maintain at all times a Senior Debt to
Capital Base Ratio of not more than 4.75 to 1.0.
(c) Allowance for Loan Losses. Maintain at all times the aggregate value of
its Allowance for Loan Losses, as calculated in accordance with GAAP, in an
amount not less than the greater of (a) 7% of the total net outstanding
Receivables or (b) net outstanding Receivables multiplied by the rolling twelve
month ratio of net charge-offs to average net Receivables outstanding during
such twelve month period or (c) an amount pursuant to the recommendation of the
independent certified public accountant auditing the Borrower's financial
statements.
(d) Minimum Tangible Net Worth. Maintain a Minimum Tangible Net Worth of
$5,500,000.00 from the date of this Agreement until December 3l, 2001, a Minimum
Tangible Net Worth of $6,000,000.00 from January 1, 2002 until December 31, 2002
and a Minimum Tangible Net Worth of $6,500,000.00 from January l, 2003 until
December 31, 2003.
(e) Charge-off Policy. Accounts must be charged-off when they become 180
days or more delinquent on a contractual aging basis and 60 days or more
recently delinquent.
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Section 6.5 Compliance With Applicable Law.
(a) All Receivables shall comply in all material respects with all
applicable federal, state and local laws, rules, regulations, proclamations,
statutes, orders and interpretations at the time when WFFPC obtains any interest
therein pursuant to this Agreement.
(b) Borrower shall comply in all respects with all local, state and federal
laws and regulations applicable to its business including without limitation the
Consumer Finance Laws, Environmental Control Statutes, and all laws and
regulations of the Local Authorities, and the provisions and requirements of all
franchises, permits, certificates of compliance and approval issued by
regulatory authorities and other like grants of authority held by Borrower; and
notify WFFPC immediately (and in detail) of any actual or alleged failure to
comply with or perform, breach, violation or default under any such laws or
regulations or under the terms of any of such franchises or licenses, grants of
authority, or of the occurrence or existence of any facts or circumstances which
with the passage of time, the giving of notice or otherwise could create such a
breach, violation or default or could occasion the termination of any of such
franchises or grants of authority.
(c) With respect to the Environmental Control Statutes, Borrower shall
notify WFFPC when, in connection with the conduct of Borrower's business or
operations, any person (including, without limitation, EPA or any state or local
agency) provides oral or written notification to Borrower or any Subsidiary with
regard to an actual or imminently threatened removal, spill, release or
discharge of hazardous or toxic wastes, substances or petroleum products; and
notify WFFPC immediately (and in detail) upon the receipt by Borrower of an
assertion of liability under the Environmental Control Statutes, of any actual
or alleged failure to comply with or perform, breach, violation or default under
any such statutes or regulations or of the occurrence or existence of any facts,
events or circumstances which with the passage of time, the giving of notice, or
both, could create such a breach, violation or default.
Section 6.6 Notice of Default. Borrower will promptly notify WFFPC of the
occurrence of any Default or Event of Default hereunder or under the Note or of
any fact, condition or event which, with the giving of notice, passage of time,
or both, would become a Default or an Event of Default.
Section 6.7 Corporate Existence. Properties. Borrower will (a) do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence, rights and franchises and comply with all laws
applicable to it; (b) maintain, preserve and protect all franchises, licenses
and trade names and preserve all the remainder of its property used or useful in
the conduct of its business; and (c) maintain in effect insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as shall be consistent with prudent business practices
in the industry and furnish to WFFPC from time to time, upon their request
therefor, evidence of same.
Section 6.8 Payment of Indebtedness; Taxes. Borrower will (a) pay all of
its indebtedness and obligations promptly and in accordance with normal terms;
and (b) pay and discharge or cause to be paid and discharged promptly all taxes,
assessments, and governmental charges or levies imposed upon it or upon its
income and profits, or upon any of its property,
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real, personal or mixed, or upon any part thereof, before the same shall become
in default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might become a lien or charge upon such properties
or any part thereof; provided, however, that the Borrower shall not be required
to pay and discharge or to cause to be paid and discharged any such
indebtedness, tax, assessment, charge, levy or claim so long as the validity
thereof shall be contested in good faith by appropriate proceedings and the
Borrower shall have set aside on its books adequate reserves (as may be required
in accordance with GAAP) with respect to any such indebtedness, tax, assessment,
charge, levy or claim, so contested.
Section 6.9 Notice Regarding Any Plan. Borrower shall furnish to WFFPC:
(a) as soon as possible, and in any event within 10 days after any senior
officer of Borrower knows or has reason to know that any Reportable Event has
occurred with respect to any Plan maintained in whole or in part for the
employees of Borrower or any of its Subsidiaries, a statement of the President
or Treasurer of Borrower setting forth details as to such Reportable Event and
the action which is proposed to be taken with respect thereto, together with a
copy of the notice of such Reportable Event given to the Pension Benefit
Guaranty Corporation; and
(b) promptly after receipt thereof, a copy of any notice which Borrower may
receive from the Pension Benefit Guaranty Corporation relating to the intention
of Borrower to terminate any Plan maintained in whole or in part for the benefit
of employees of any Borrower or any of its Subsidiaries or to appoint a trustee
to administer any such Plan.
Section 6.10 Other Information. From time to time upon request of WFFPC,
Borrower will furnish to WFFPC such additional information and reports regarding
the Collateral and the operations, businesses, affairs, prospects and financial
condition of Borrower and its Subsidiaries as WFFPC may request.
Section 6.11 Litigation. Borrower will promptly notify WFFPC of any
litigation or action instituted or, to Borrower's knowledge, threatened against
Borrower or any of its Subsidiaries and of the entry of any judgment or lien
against any property of Borrower in an amount of $50,000 or more as to any
separate action, litigation, judgment or lien instituted, threatened or entered
or in an aggregate amount of $200,000 or more as to all actions, litigation,
judgment, or liens instituted, threatened or entered.
Section 6.12 Business Location. Borrower shall notify WFFPC: (a) at least
30 days prior to: (i) any proposed change in its principal place of business;
(ii) any additional places of business of Borrower or any Subsidiaries; and
(iii) the names in which Borrower or any Subsidiary conducts business at each
such location; and (b) at least one Business Day prior to any proposed change in
or additional custodians under any Custodian Agreement (which change in or
additional custodian shall be acceptable to WFFPC in its sole discretion). Upon
request of WFFPC, Borrower will execute and deliver such additional financing
statements, amendments thereto, Custodian Agreement(s) or amendments thereto and
such other additional documents, instruments and writings, and take such other
action as WFFPC shall request to obtain, maintain or continue its perfected and
first priority Lien on and security interest in the Collateral.
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Section 6.13 Operations. Borrower shall maintain satisfactory credit
underwriting and operating standards, including, with respect to each obligor of
each Receivable, the completion of an adequate investigation of such obligor and
a determination that the credit history and anticipated performance of such
obligor is and will be satisfactory and meets the standards generally observed
by prudent finance companies.
ARTICLE 7
NEGATIVE COVENANTS
Borrower covenants and agrees with WFFPC that until all Obligations have
been satisfied in full and the Commitment has expired or otherwise has been
terminated, Borrower will not do any of the following without the prior written
consent of WFFPC, which consent shall not be unreasonably withheld:
Section 7.1 Payments to and Transactions with Affiliates. (a) Make any
loan, advance, extension of credit or payment to any Affiliate, officer,
employee, member or manager of Borrower or any Affiliate or (b) enter into any
other transaction, including, without limitation, the purchase, sale, lease or
exchange of property, or the rendering or any service, to or with any Affiliate
or any member, officer, or employee of Borrower or any Affiliate except for
other transactions with or services rendered to any Affiliate of the Borrower in
the ordinary course of business and pursuant to the reasonable requirements of
the business of such Affiliate and upon terms found by the managers of the
Borrower to be fair and reasonable and no Less favorable to the Borrower than
would obtain in a comparable arms' length transaction with a person or entity
not affiliated with or employed by the Borrower; provided, however, that
Borrower may in any event pay reasonable compensation and reimbursement of
expenses to any such employee or officer in the ordinary course of Borrower's
business consistent and commensurate with industry custom and practice for the
services provided by such person.
Section 7.2 Restricted Payments. Make any Restricted Payment, except that
the Borrower may (a) make distributions to its members in amounts equal to the
state and federal income taxes owed by such member in respect of taxable income
of the Borrower and (b) make payments of principal of and interest on
Subordinated Debt, provided immediately prior to and after giving effect to any
distribution or payment no Default or Event of Default shall exist.
Section 7.3 Indebtedness. Borrow any monies or create any Debt except: (a)
borrowings from WFFPC hereunder; (b) Subordinated Debt; (c) trade indebtedness
in the normal and ordinary course of business for value received; and (d)
indebtedness and obligations incurred to purchase or lease fixed or capital
assets.
Section 7.4 Guaranties. Guarantee or assume or agree to become liable in
any way, either directly or indirectly, for any additional indebtedness or
liability of others except to endorse checks or drafts in the ordinary course of
business.
Section 7.5 Nature of Business. Engage in any business other than the
business in which Borrower currently is engaged or make any material change in
the nature of the financings
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which Borrower extends, including without limiting the generality of the
foregoing, matters relating to size, type, term, nature and dollar amount.
Section 7.6 Negative Pledge. Assign, discount, pledge, sell, grant a Lien
in or otherwise dispose of or encumber any Receivables or the Collateral except
as contemplated by this Agreement.
Section 7.7 Investments and Acquisitions. Make any investments in any other
firm, entity or corporation; or enter into any new business activities or
ventures not related to Borrower's business existing as of the date of this
Agreement; or create or form any Subsidiary of the Borrower.
Section 7.8 Compliance with Formula. Permit the aggregate amount of all
Advances outstanding at any time to exceed the Borrowing Base.
Section 7.9 Mergers, Sales, Divestitures. Acquire all or substantially all
of the assets or shares of stock of or other equity interest in any entity, be a
party to any consolidation or merger or sell, transfer or otherwise dispose of
any Collateral or all or any substantial part of its Property.
Section 7.10 Use of Proceeds. Use the proceeds of any loan or advance made
by WFFPC hereunder for purposes other than in connection with the Borrower's
consumer lending activities.
Section 7.11 Ownership and Management. Allow Borrower to be owned and
controlled directly or indirectly by any person or entity other than the members
and senior management that own and control Borrower as of the date of this
Agreement.
Section 7.12 Amendment to Subordinated Debt. Amend or permit the amendment
of the documents and instruments evidencing Subordinated Debt or make any
prepayment on account of such Subordinated Debt which is not otherwise allowed
to be made under the subordination provisions applicable to such Subordinated
Debt.
ARTICLE 8
EVENTS OF DEFAULT
Each of the following events shall constitute an Event of Default under
this Agreement:
Section 8.1 Failure to Make Payments. The failure of Borrower to make any
payment of principal or interest under the Note or this Agreement or any other
payment hereunder or in respect of any other Obligation within 10 days of the
date when due.
Section 8.2 Information. Representations and Warranties. Any financial
statement, written information furnished or representation or warranty,
certificates, document or instrument made or given by Borrower herein or
furnished in connection herewith shall be false, misleading or incorrect;
provided, however, that with respect to clerical or administrative errors in,
Borrower shall have 10 days following the earlier of (a) the date on which
Borrower had or should have
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had actual knowledge of such error, or (b) the date on which Borrower was
required to report the same to WFFPC pursuant to the applicable provisions of
this Agreement, in which to correct such error to WFFPC's reasonable
satisfaction.
Section 8.3 Financial and Negative Covenants. The failure of the Borrower
to observe, perform or comply with any of the covenants set forth in Sections
6.4 or 7.1 through 7.12 of this Agreement, which failure has not been cured to
WFFPC's reasonable satisfaction within 5 days after the earlier of (a) the date
on which Borrower had or should have had actual knowledge of such failure or (b)
the date on which Borrower was required to report the same to WFFPC pursuant to
the applicable provisions of this Agreement or (c) the date on which WFFPC gave
notice to Borrower of such failure.
Section 8.4 Covenants and Agreements. The failure of the Borrower to
observe, perform or comply with any other covenant, warranty, agreement or
provision of the Note or this Agreement or any other Credit Document, which
failure has not been cured to WFFPC's reasonable satisfaction within 15 days
after the earlier of (a) the date on which Borrower had or should have had
knowledge of such failure, or (b) the date on which WFFPC gave notice to the
Borrower of such default.
Section 8.5 Collateral. At any time after the grant to WFFPC of a security
interest in or Lien upon any Collateral, WFFPC's interest therein shall for any
reason cease to be a valid and subsisting first priority Lien in favor of WFFPC
and/or a valid and perfected first priority security interest in and to the
Collateral purported to be covered thereby having the priority set forth
therein.
Section 8.6 Defaults Under Other Agreements. Any default by the Borrower
under any other agreement to which Borrower is a party and with respect to which
the amount claimed exceeds $50,000, singly or in the aggregate, not cured to
WFFPC's reasonable satisfaction on or before the earlier of (a) the date 5 days
after Borrower had or should have had knowledge of such default, or (b) the date
on which the applicable indebtedness in excess of $100,000, singly or in the
aggregate, of Borrower is accelerated or rights of Borrower are terminated.
Section 8.7 Certain Events. The occurrence of any of the following with
respect to Borrower:
(a) Voluntary Proceedings. It shall (i) apply for or consent to the
appointment of a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due as defined in the United States Bankruptcy Code, (iii)
make a general assignment for the benefit of its creditors, (iv) commence a
voluntary case under the Bankruptcy Code, (v) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
any involuntary case under the Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing.
(b) Involuntary Proceeding. A proceeding or case shall be commenced against
it without its application or consent in any court of competent jurisdiction,
seeking (i) the liquidation, reorganization, dissolution, winding up, or
composition or readjustment of debts, of
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it, (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like for it or of all or any substantial part of its assets, or (iii) similar
relief in respect of it under any law providing for the relief of debtors, and
such proceeding or case shall continue undismissed or unstayed and in effect,
for a period of 45 days, or an order for relief against it shall be entered in
an involuntary case under the Bankruptcy Code.
(c) Reportable and Other Events. (i) The occurrence of any Reportable Event
which either WFFPC determines in good faith constitutes ground for the
termination of any Plan by the Pension Benefit Guaranty Corporation ("PBGC") or
for the appointment by the United States District Court of a trustee to
administer any Plan; (ii) the institution by the PBGC of proceedings to
terminate any Plan; or (iii) the failure of Borrower, or any Subsidiary to meet
the minimum funding standards established in Section 412 of the Internal Revenue
Code of 1986, as amended.
(d) Change in Ownership or Control. Borrower shall be owned or controlled
directly or indirectly by any person or entity other than the members that own
or control Borrower as of the date of this Agreement or senior management of
Borrower as of the date of this Agreement.
Section 8.8 Possession of Collateral. A judgment creditor of Borrower shall
take possession or file proceedings to attempt to take possession of any of the
Collateral by any means including without limitation, by levy, distraint,
replevin, self-help, seizure or attachment.
Section 8.9 Credit Documents. An event of default (however defined) shall
occur under any Credit Document or under any other security agreement, mortgage,
deed of trust, assignment or other instrument or agreement securing or
supporting any obligation of the Borrower under this Agreement or under the
Note.
ARTICLE 9
REMEDIES OF WFFPC AND WAIVER
Section 9.1 WFFPC's Remedies. Immediately upon the occurrence of any Event
of Default specified in this Agreement, the obligation of WFFPC to make Advances
shall terminate and WFFPC may declare the Loan made pursuant to this Agreement
and any other Obligation, together with all accrued interest, immediately due
and payable without presentment, notice of dishonor, protest or further notice
of any kind, all of which Borrower hereby expressly waives. Upon such occurrence
and/or declaration, WFFPC shall have, in addition to the rights and remedies
given to it by the Note and this Agreement and the other Credit Documents, all
the rights and remedies of a secured party as provided in the Iowa Uniform
Commercial Code (regardless of whether such Code has been adopted in the
jurisdiction where such rights and remedies are asserted) and without limiting
the generality of the foregoing, and without demand of performance and without
other notice (except as specifically required by the Note or this Agreement or
the documents executed in connection herewith) or demand whatever to the
Borrower all of which are hereby expressly waived, WFFPC may, in addition to all
the rights conferred upon it by law, exercise one or more of the following
rights successively or concurrently: (a) to take possession of the Collateral,
or any evidence thereof, proceeding without judicial process or by judicial
process (without a prior hearing or notice thereof, which the Borrower hereby
expressly waives), (b) to lawfully dispose of the whole or any part of the
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Receivables or any Collateral, or any other Property, instrument or document
pledged as security for any Obligation at public or private sale, without
advertisement or demand upon the Borrower, or upon any obligor of Receivables,
the Collateral, or any other security, the same being hereby waived, except to
the extent otherwise required by law, with the right on the part of WFFPC or
their respective nominees to become the purchaser thereof as provided by law
absolutely freed and discharged from any equity of redemption, and all trusts
and other claims whatsoever; (c) after deduction of all reasonable legal and
other costs and expenses permitted by law, including attorneys' fees, to apply
the Collateral or all or any portion of proceeds thereof on account of, or to
hold as a reserve against, all Borrower's Obligations; and (d) to exercise any
other rights and remedies available to it by law or agreement. Any remainder of
the proceeds after satisfaction in full of the Borrower's Obligations shall be
distributed as required by applicable law. Notice of any sale or disposition of
Collateral shall be given to Borrower at least 10 Business Days before any
intended public sale or the time after which any intended private sale or other
disposition of the Collateral is to be made, which Borrower agrees shall be
reasonable notice of such sale or other disposition. Notwithstanding the
foregoing, upon the occurrence of an Event of Default described in Section
8.7(a) or (b) hereof, the Loan made pursuant to this Agreement and all other
Obligations, together with all accrued interest, shall be immediately due and
payable in full without presentment, demand, or protest or notice of any kind,
all of which Borrower hereby expressly waives.
Section 9.2 Waiver and Release by the Borrower. To the extent permitted by
applicable law, Borrower: (a) waives (i) presentment and protest of the Notes
and this Agreement or any Receivables held by WFFPC on which Borrower is any way
liable and (ii) notice and opportunity to be heard, after acceleration in the
manner provided in Article 9 of this Agreement, before exercise by WFFPC of the
remedies of self-help or set-off permitted by law or by any agreement with
Borrower, and except where required hereby or by law, notice of any other action
taken by WFFPC; and (b) releases WFFPC and its respective officers, attorneys,
agents and employees from all claims for loss or damage caused by any act or
omission on the part of WFFPC or its respective officers, attorneys, agents and
employees, except willful misconduct or gross negligence.
Section 9.3 No Waiver. Neither the failure nor any delay on the part of
WFFPC to exercise any right, power or privilege under the Note or this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege preclude any other further exercise of any right,
power or privilege.
ARTICLE 10
MISCELLANEOUS
Section 10.1 Indemnification and Release Provisions. Borrower hereby agrees
to defend WFFPC and its directors, officers, agents, employees and attorneys
from, and hold each of them harmless against, any and all losses, liabilities
(including without limitation settlement costs and amounts, transfer taxes,
documentary taxes, or assessments or charges made by any governmental
authority), claims, damages, interests, judgments, costs, or expenses, including
without limitation fees and disbursements of attorneys, incurred by any of them
arising out of or in connection with or by reason of this Agreement, the making
of the Loan or any Collateral, or
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any other Credit Document, including without limitation, any and all losses,
liabilities, claims, damages, interests, judgments, costs or expenses relating
to or arising under any Consumer Finance Laws or Environmental Control Statute
or the application of any such statute to Borrower's properties or assets.
Borrower hereby releases WFFPC and its respective directors, officers, agents,
employees and attorneys from any and all claims for loss, damages, costs or
expenses caused or alleged to be caused by any act or omission on the part of
any of them, other than such loss, damage cost or expense which has been
determined by a court of competent jurisdiction to have been caused by the gross
negligence or willful misconduct of WFFPC. All obligations provided for in this
Section 10.1 shall survive any termination of this Agreement or the Commitment
and the repayment of the Loan.
Section 10.2 Amendments and Applicable Law. Unless otherwise set forth in
this Agreement, no amendment or waiver of any provision of this Agreement nor
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be in writing and signed by WFFPC. This
Agreement and all documents given in connection herewith shall be construed in
accordance with the laws of the State of Iowa.
Section 10.3 Notices. All communications provided for hereunder shall be in
writing and shall be deemed to have been delivered, when delivered in person, or
3 days after having been sent by certified mail, postage pre-paid, return
receipt requested, by 1 day after having been sent by reliable overnight courier
or by telecopier, as follows:
If to WFFPC:
Wells Fargo Financial Preferred Capital, Inc.
206 Eighth Street
Des Moines, Iowa 50309
(515) 557-7416
(800) 569-5016
FAX (515) 557-8215
If to the Borrower:
Coastal Credit Company, L.L.C.
Att. William E. McKnight, President
3852 Virginia Beach Blvd.
Virginia Beach, VA 23452
(757) 340-6000
FAX (757) 340-3716
or to such other address as any party shall specify to the other party in
writing in accordance with this Section 10.3.
Section 10.4 Termination and Release. This Agreement shall not terminate
until all amounts due under the Note, this Agreement and any other Credit
Document and other Obligations, together with all interest and costs due, shall
have been indefeasible paid in full and the Commitment has expired or otherwise
has been terminated. Upon such termination and
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payment, the Collateral securing the Loan, the Note, this Agreement and the
other Obligations shall be released from the provisions of this Agreement and
any right, title and interest of WFFPC in or to the same shall cease.
Thereafter, WFFPC agrees to deliver to the Borrower such documents as the
Borrower may reasonably request to release of record any security interest or
lien of WFFPC in the Collateral.
Section 10.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
Section 10.6 Costs, Expenses and Taxes. Borrower agrees to pay immediately
upon demand therefor, all legal fees and out-of-pocket expenses of WFFPC related
to the preparation, negotiation, documentation, execution, filing or delivery of
this Agreement or any other Credit Document and any and all waivers, amendments
or modifications of any of the Credit Documents or any of the terms and
provisions thereof and, following any Default or Event of Default hereunder, any
and all audits and required inspections permitted under this Agreement or any
other Credit Document. Borrower shall also pay immediately upon demand therefor
all fees (including without limitation, legal fees), costs and other expenses
incurred in connection with collection of the Loan, the maintenance or
preservation of the security interest in the Collateral, the sale, disposition
or other realization on the Collateral, or the enforcement of WFFPC's rights
hereunder or under any Credit Document. In addition, Borrower agrees to pay any
and all stamp and other taxes or filing fees payable or determined to be payable
in connection with the execution and delivery of the Note and this Agreement,
the Collateral and other documents to be delivered hereunder, and agrees to save
WFFPC harmless from and against any and all liabilities with respect to or
resulting from any delay in payment or omission to pay such taxes.
Section 10.7 Successors and Assigns. This Agreement shall bind and inure to
the benefit of each signatory, its successors and assigns, provided, however,
that Borrower may not make an assignment of this Agreement without the prior
written consent of WFFPC.
Section 10.8 Effectiveness of Agreement. Anything to the contrary in this
Agreement notwithstanding, the provisions hereof shall not be effective until
this Agreement is: (a) duly executed, and delivered by authorized officers of
Borrower to WFFPC office in Des Moines, Iowa; and (b) duly signed by an
authorized officer of WFFPC.
Section 10.9 JURISDICTION AND VENUE. IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR ANY CREDIT DOCUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN ANY COUNTY IN THE STATE OF IOWA WHERE WFFPC MAINTAINS
AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE
LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY.
BORROWER AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY
EFFECTED UPON IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID,
TO BORROWER.
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Section 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR ANY CREDIT DOCUMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR WFFPC TO ENTER INTO THIS
AGREEMENT.
Section 10.11 REVIEW BY COUNSEL. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE
ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, SECTIONS 10.9 AND 10.10 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE
MEANING AND EFFECT OF THE FOREGOING WAIVER OF JURISDICTION AND VENUE OBJECTION
AND JURY TRIAL HAVE BEEN FULLY EXPLAINED TO BORROWER BY ITS COUNSEL.
Section 10.12 [Intentionally Omitted]
Section 10.13 Acknowledgment of Receipt. The Borrower acknowledges receipt
of a copy of this Agreement, the Note, each Credit Document and each other
document and agreement executed by the Borrower in connection with the Agreement
or the Obligations.
Section 10.14 Rule of Construction. This Agreement merely amends, and does
not supersede, the Finance Agreement dated as of September 14, 1998. This
Agreement and the Finance Agreement dated as of September 14, 1998 shall be
construed together, and the Finance agreement dated as of September 14, 1998
shall remain in full force and effect except to the extent that its terms are
inconsistent with the express terms of this Agreement, in which instances the
Finance Agreement dated as of September 14, 1998 shall be deemed amended so as
to conform with the terms of this Agreement.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER
TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their proper and duly authorized officers, upon the
date first above written.
COASTAL CREDIT, L.L.C.
By: /s/ William E. McKnight
------------------------------------
Name: William E. McKnight
Title: President
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ATTEST: WELLS FARGO FINANCIAL
PREFERRED CAPITAL, INC.
By: /s/ Tom Murphy By: /s/ Russ Cross
------------------------------- --------------------------------
Name: Tom Murphy Name: Russ Cross
Title: Vice President Title: President
EXHIBITS
Exhibit A: Form of Advance Request
Exhibit B: Form of Availability Statement
Exhibit C: Form of Custodian Agreement
Exhibit D: Form of Promissory Note
Exhibit E: Form of Schedule of Receivables and Assignment
Exhibit F: Form of Subordination Agreement
Exhibit G: Form of Disclosure Pursuant to Representations and Warranties
Exhibit H: Locations of Borrower's Collateral Records
Exhibit I: All other locations of Borrower and Borrower's names
