THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT is entered
into as of the 30th day of September, 1997, by and among AMRESCO,
INC., a Delaware corporation, and AMRESCO UK Holdings Limited, a
corporation formed under the laws of the United Kingdom, as
borrowers, and NationsBank of Texas, N.A., a national banking
association, for itself and as agent, Bank One, Texas, N.A., a
national banking association, as co-agent, and the lending
institutions designated as "Lenders" on Schedule I hereto (as
modified from time to time).
PRELIMINARY STATEMENT
I. Agent, certain of the Lenders and the ABorrowers@ therein
named (the "Second Agreement Borrowers") executed that certain
Second Amended and Restated Loan Agreement (as modified and
amended, the "Second Loan Agreement") dated as of February 7,
1997, wherein certain of the Lenders agreed to make a revolving
credit facility and a term facility available to the Second
Agreement Borrowers in an aggregate amount not to exceed Three
Hundred Fifty Million and No/100 Dollars ($350,000,000).
II. The Second Loan Agreement was modified by (a) that certain
First Modification of Second Amended and Restated Loan Agreement
dated as of February 25, 1997, by and among the Second Agreement
Borrowers and Agent, (b) that certain Second Modification of
Second Amended and Restated Loan Agreement dated as of March 31,
1997, by and among Agent, the Lenders (as therein defined),
AMRESCO, INC. and the other entities designated as "Borrowers" in
Schedule I attached thereto, and (c) that certain Third
Modification of Second Amended and Restated Loan Agreement dated
as of May 30, 1997, by and among the Lenders (as therein
defined), Agent, AMRESCO, INC. and the other entities designated
as "Borrowers" in Schedule I attached thereto.
III. AMRESCO, INC. has requested that Agent and Lenders modify,
amend and restate the Second Loan Agreement in order to, in part,
(a) increase the revolving credit facility to an aggregate amount
not to exceed Four Hundred Ninety Million and No/100 Dollars
($490,000,000), (b) revise certain financial covenants set forth
in the Second Loan Agreement and (c) for AMRESCO INC.'s
convenience change the structure to cause AMRESCO, INC. and
AMRESCO UK Holdings Limited to be the borrowers thereunder and
the other subsidiaries of AMRESCO, INC. (other than certain
excluded subsidiaries) to be guarantors rather than borrowers
under the credit facilities. Upon and subject to the terms of
this Agreement and each of the other Loan Documents, Agent and
Lenders are willing to modify, amend and restate the Second Loan
Agreement. Accordingly, in consideration of the mutual covenants
contained herein, Borrower, Guarantors, Agent and Lenders (each
as herein defined) agree as follows:
ARTICLE I
TERMS DEFINED
Section 1.1. Definitions. The following terms, as used
herein, have the following meanings:
Account Debtor means, collectively, the "borrower" and each
other obligor, guarantor or other liable party under any Assigned
Loan.
Acquisition means any transaction pursuant to which Borrower
or any of its Subsidiaries, (a) whether by means of a capital
contribution or purchase or other acquisition of stock or other
securities or other equity participation or interest, (i)
acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by Borrower or such Subsidiary of
tenders of equity securities of such Person, or through one or
more negotiated block, market, private or other transactions, or
a combination of any of the foregoing, or (ii) makes any
corporation a Subsidiary of Borrower or such Subsidiary, or
causes any corporation, other than a Subsidiary of Borrower or
such Subsidiary, to be merged into Borrower or such Subsidiary
(or agrees to be merged into any other corporation other than a
wholly-owned Subsidiary (excluding directors' qualifying shares)
of Borrower or such Subsidiary), or (b) purchases all or
substantially all of the business or assets of any Person or of
any operating division of any Person.
Acquisition Consideration means consideration given or the
amount of the Investment made by Borrower or any Subsidiary of
Borrower in an Acquisition, including, without limitation, (a)
capital stock or other securities or equity so given or invested,
plus (b) the fair market value of any cash, property or services
given or invested, plus (c) the amount of any Debt assumed,
incurred or guaranteed by Borrower or any Subsidiary of Borrower
in connection with such Acquisition.
Additional Term Loans means any and all Term Loans funded
after the Closing Date pursuant to an increase in the Term
Facility as contemplated by Section 2.1(c).
Adjusted Asset Amount at any time of determination means the
sum of the value of Borrower=s assets on a consolidated basis as
shown on a consolidated balance sheet for Borrower prepared in
accordance with GAAP adjusted by the leverage advance rates
therefor as shown on Schedule III attached hereto, as such
schedule may be changed from time to time by Borrower and
Required Lenders; provided, that, any asset shown on Borrower's
balance sheet prepared in accordance with GAAP and not included
in Schedule III shall be deemed to have a leverage advance rate
of zero.
Adjusted EBITDA means the difference between (a)
Consolidated EBITDA and (b) any Net Gains.
Adjusted LIBOR Rate shall mean on the applicable Effective
Date, with respect to a LIBOR Rate Advance or LIBOR Rate Portion,
a rate per annum equal to the sum of (a) the quotient of (i) the
LIBOR Rate on the applicable Effective Date, divided by (ii) the
remainder of 1.00 minus the LIBOR Reserve Requirement, if any, on
the applicable Effective Date, plus (b) the FDIC Percentage in
effect on the applicable Effective Date, together with any
additional impositions, assessments, fees or surcharges that may
be imposed on Agent or any Lender (expressed as a percentage), to
the extent such impositions, assessments, fees or surcharges are
not reflected in the FDIC Percentage or the LIBOR Reserve
Requirement and are generally imposed on banks with
capitalization and supervisory risk factors comparable to Agent,
plus (c) the LIBOR Margin.
Adjusted Net Worth means the sum of Consolidated Tangible
Net Worth plus fifty percent (50%) of the outstanding principal
balance of Approved Subordinated Debt.
Administrative Fee means an aggregate annual fee to be paid
to Agent as set forth in a separate letter between Agent and
Borrower.
Advance means an Advance made by either the Revolving
Lenders (including Revolving Lenders advancing funds under
Competitive Bid Notes) or the Term Lenders, as applicable, to
Borrower under the applicable Credit Facility pursuant to the
terms and conditions of this Agreement.
Affiliate means, as to any Person, any Subsidiary of such
Person, or any Person which, directly or indirectly, controls, is
controlled by, or is under common control with such Person. For
the purposes of this definition, "control" means the possession
of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
Agent means NationsBank, in its capacity as agent for the
Lenders hereunder, or any successor agent pursuant to Section
10.12 or Section 10.13 or any agreement entered into pursuant to
Section 10.16.
Aggregate Loan Percentage means, with respect to each
Lender, the fraction, expressed as a percentage, obtained by
dividing (a) the sum of (i) the aggregate principal amount
outstanding on the date of determination under the Term Note
and/or Revolving Note and/or the Competitive Note payable to such
Lender, plus (ii) such Lender's portion of the Letter of Credit
Exposure, divided by (b) the aggregate principal amount
outstanding on the date of determination under the Notes plus the
Letter of Credit Exposure.
Agreement means this Third Amended and Restated Loan
Agreement and all renewals, extensions, modifications, amendments
and rearrangements thereof.
Alternate Currency means British pounds sterling, Canadian
dollars, French francs, Deutsche marks, Italian lira, Spanish
peseta, Japanese yen, Australian dollars and Dutch guilders and
the currency of any other foreign country agreed to by the
Revolving Lenders from time to time.
Alternate Currency Advance means an Advance which is funded
in Alternate Currency and bears interest at the Alternate
Currency Rate.
Alternate Currency Base Rate means for any Interest Period
for each Alternate Currency Advance, the rate of interest
determined by Agent at which deposits in the applicable Alternate
Currency (except for British pounds sterling or any other
Alternate Currency for which there is not a quote available on
the Telerate Screen) for the relevant Interest Period are offered
based on information presented on the Telerate Screen as of 11:00
A.M. (London time) on the day which is two (2) Business Days
prior to the first day of such Interest Period; provided, that if
at least two such offered rates appear on the Telerate Screen in
respect of such Interest Period, the arithmetic mean of all such
rates (as determined by Agent) will be the rate used; provided,
further, if (i) the Telerate System ceases to provide the
required quotation, or (ii) with respect to any Alternate
Currency Advance made in British pounds sterling or any other
Alternate Currency for which there is not a quote available on
the Telerate Screen, such rate shall be the per annum rate of
interest determined by the arithmetic average (rounded upward, if
necessary, to the nearest .01%) of the respective rates per annum
at which deposits in British pounds sterling or such other
Alternate Currency would be offered to each of the Reference
Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount approximately equal to the principal
amount in British pounds sterling or such other Alternate
Currency of the related Alternate Currency Advance to which such
Interest Period is to apply and for a period of time comparable
to such Interest Period.
Alternate Currency Loss has the meaning set forth in Section 3.6(f).
Alternate Currency Note has the meaning set forth in Section 3.14.
Alternate Currency Option has the meaning set forth in Section 2.2(c).
Alternate Currency Rate shall mean, on the applicable
Effective Date with respect to an Alternate Currency Advance, a
rate per annum equal to the sum of (a) the quotient of (i) the
Alternate Currency Base Rate on the applicable Effective Date,
divided by (ii) the remainder of 1.00 minus the LIBOR Reserve
Requirement, if any, on the applicable Effective Date, plus
(b) the FDIC Percentage in effect on the applicable Effective
Date, together with any additional impositions, assessments, fees
or surcharges that may be imposed on Agent or any Lender
(expressed as a percentage), to the extent such impositions,
assessments, fees or surcharges are not reflected in the FDIC
Percentage or the LIBOR Reserve Requirement and are generally
imposed on banks with capitalization and supervisory risk factors
comparable to Agent, plus (c) the LIBOR Margin.
AMRESCO means AMRESCO, INC., a Delaware corporation.
AMRESCO UK means AMRESCO UK Holdings Limited, a corporation
formed under the laws of the United Kingdom.
Applicable Environmental Laws has the meaning set forth in
Section 7.7.
Applicable Lending Office means with respect to each Lender,
such Lender's domestic lending office (as designated by such
Lender) for Variable Rate Advances or Variable Rate Portions, and
such Lender's Eurodollar lending office (as designated by such
Lender) for LIBOR Rate Advances, LIBOR Rate Portions, Alternate
Currency Advances and Competitive Bid Advances.
Applicable Rate means at any time, (a) with respect to a
Variable Rate Advance or a Variable Rate Portion, a rate per
annum equal to the Variable Rate, (b) with respect to a LIBOR
Rate Advance or LIBOR Rate Portion, a rate per annum equal to the
Adjusted LIBOR Rate, and (c) with respect to an Alternate
Currency Advance, a rate per annum equal to the Alternate
Currency Rate.
Approved Senior Debt means Debt issued by AMRESCO which is
unsecured and senior to other unsecured Debt of AMRESCO and the
terms of which have been approved in writing by the Required
Lenders and shall include, without limitation, the Debt evidenced
by promissory notes aggregating $57,500,000 issued pursuant to
the terms of the Senior Indenture as Series 1996-A due 1999, and
pursuant to that certain Officers' Certificate and Company Order
dated as of July 19, 1996.
Approved Subordinated Debt means Debt issued by AMRESCO
which is unsecured and subordinated to payment of the Credit
Facilities and the terms of which (including, without limitation,
the subordination provisions thereof) have been approved in
writing by the Required Lenders, and shall include, without
limitation, (a) the Debt evidenced by notes made pursuant to the
terms of that certain Indenture (the "January Indenture") dated
January 15, 1996, executed by and between AMRESCO and Bank One,
Columbus, N.A., as Trustee, and (b) any other promissory notes
evidencing subordinated debt issued on terms consistent with
those of the January Indenture, provided that (i) Agent has
received projections from AMRESCO showing financial covenant
compliance following issuance of such notes; (ii) no Default or
Event of Default has occurred and has not been cured; and (iii)
Agent has approved the terms for the issuance of such promissory
notes, including, without limitation, the terms regarding
subordination of such promissory notes to the Credit Facilities.
Arranger means NationsBanc Capital Markets, Inc.
Asset Portfolio Report means a report showing various
information concerning each Asset Portfolio which is included as
an Eligible Investment, such report being in form as attached to
the Borrowing Base Schedule as Annex A.
Asset Portfolios means one or more pools or portfolios of
(a) performing, non-performing or under-performing loans, and/or
(b) real estate or other assets acquired in connection with the
foreclosure, restructure or settlement of non-performing or
under-performing loans, together with all documents, instruments,
certificates and other information related thereto.
Assigned Loans means all Borrowing Base Loans and all other
loans owned or hereafter originated or acquired by Borrower or
any Guarantor which are not pledged to secure Debt other than the
Credit Facilities to the extent permitted by Section 8.7 hereof.
Assignment and Acceptance has the meaning set forth in
Section 11.10.
Authorized Officer means, as to Borrower or any other
Person, any of its Chairman, Vice-Chairman, President, Executive
Vice President(s), Chief Financial Officer, Chief Accounting
Officer, Treasurer or Assistant Treasurer, who is duly authorized
by the Board of Directors of such Person to execute the Loan
Documents or any other documents or certificates to be executed
by such Person hereunder or in connection with any Advance or
Letter of Credit.
Base Rate means, on any date of determination, the greater
of (a) the rate of interest per annum most recently announced by
Agent as its prime rate in effect at its principal office (which,
in the case of NationsBank shall mean its principal office in
Dallas, Texas), automatically fluctuating upward and downward
until and at the time specified in each such announcement without
special notice to Borrower or any other Person, which prime rate
may not necessarily represent the lowest or best rate actually
charged to a customer and (b) the sum of the Federal Funds Rate
plus .50%.
Borrower means, collectively, AMRESCO, AMRESCO UK and, with
respect to the Revolving Credit Facility, any other direct makers
on the Revolving Notes as designated by AMRESCO in accordance
with this Agreement, and their successors and assigns. In
connection with the Term Facility, the definition of "Borrower"
shall exclude AMRESCO UK, and AMRESCO UK shall not be a "Maker"
as that term is used in the Term Note. However, AMRESCO UK
agrees to guarantee the payment in full of all amounts
outstanding under the Term Notes (in the Dollar Equivalent of
such amounts). Lenders, AMRESCO and AMRESCO UK understand and
agree that whenever the term ABorrower A is used in the Loan
Documents, such term shall also refer to AMRESCO UK in its
capacity as guarantor of the Term Facility.
Borrower Due Diligence Reports means the various written
reports, information and other materials that Borrower or a
Guarantor prepared or assembled and has available at the offices
designated in Section 7.12 hereof containing descriptions and
evaluations of the Portfolio Loans and Mortgaged Properties
included in a particular Asset Portfolio, and Borrower's or the
applicable Guarantor=s assessments and projections regarding
same, or other information regarding such Portfolio Loans and the
Mortgaged Property, including copies of purchase agreements,
copies of any appraisals or environmental site assessments, and
the "Round Table" books for each such Asset Portfolio summarizing
Borrower's or the applicable Guarantor=s due diligence regarding
such Portfolio Loans and the Mortgaged Property.
Borrowing Base means an amount equal to the lesser of (a)
the sum of (i) the Revolving Commitment, plus (ii) the aggregate
amount outstanding under the Term Facility, or (b) the sum of (i)
the Portfolio Borrowing Base, plus (ii) EBITDA Availability.
Borrowing Base Loans means the Portfolio Loans which are
Eligible Investments.
Borrowing Base Schedule means the schedule which (a) lists
each Eligible Investment and the current Net Investment Value
thereof with any back-up schedule required by Section 7.1(f)
(including, without limitation, a completed Asset Portfolio
Report), (b) the aggregate Net Investment Values of the
Performing Borrowing Base Loans included in Eligible Investments,
(c) designates the number of months since each such Eligible
Investment was initially acquired by Borrower or any Guarantor,
(d) shows the net present value (discounted at nine percent (9%))
of the Projected Net Cash Flow from Eligible Investments for each
Eligible Investment, (e) shows the aggregate Net Investment Value
and aggregate net present values of Projected Net Cash Flow
related to any Wholly-Owned Real Estate Portfolios included in
the Borrowing Base, (f) calculates the Borrowing Base and shows
how such calculation was made, and (g) shows the calculation of
EBITDA Availability.
Borrowing Date means the date on which an Advance is made
under this Agreement.
Bridge Debt means Debt of AMRESCO to one or more of the
Lenders in an aggregate amount outstanding at any time not to
exceed Fifty Million and No/100 Dollars ($50,000,000.00), which
Debt may be included in the Obligations and secured by the
Collateral, but, if it is secured by the Collateral, shall be
subordinate to the Credit Facilities for certain purposes as set
forth in Section 10.6.
Business Day means (a) for all purposes other than as
covered by clause (b) of this definition, any day of the week,
other than Saturday, Sunday or other day Agent or any Lender is
required or authorized by law or executive order to close, and
(b) with respect to all requests, notices and determinations in
connection with LIBOR Rate Advances, LIBOR Rate Portions and
Alternate Currency Advances, a day which is a Business Day
described in clause (a) of this definition and which is a day
other than a day on which banks are required or authorized to
close in the London interbank market or other city in which an
Alternate Currency Advance is to be paid or advanced.
Cash Contributed Capital means any capital or intercompany
loan received by any Guarantor obligated to pay any Warehouse
Line or Permitted Secured Debt for the purpose of funding any
part of the Equity Portion.
Change in Control means (a) the acquisition by a person (as
such term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act) of the
beneficial ownership of issued and outstanding shares of the
voting stock of AMRESCO, the result of which acquisition is that
such person or such group possess in excess of 50% of the
combined voting power of all the issued and outstanding voting
stock of AMRESCO, or (b) during any period of twelve consecutive
calendar months, individuals who were directors of AMRESCO on the
first day of such period shall cease to constitute a majority of
the Board of Directors of AMRESCO.
Closing Date means the effective date of execution of this
Agreement as designated in the first paragraph of this Agreement.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means all property, assets and interests of any
kind securing the Credit Facilities (including, without
limitation, all Advances and the Letters of Credit) pursuant to
this Agreement or any of the other Loan Documents, which shall
include, without limitation, (a) all of the issued and
outstanding stock of each Guarantor and each of Borrower's and
Guarantors' Subsidiaries (except for the Foreign Obligors and the
Excluded Subsidiaries) and sixty-five percent (65%) of the issued
and outstanding stock of each Foreign Obligor, (b) all Borrowing
Base Loans, and (c) all other Assigned Loans and other assets not
otherwise described in this definition which are owned by
Borrower or any Guarantor and which are not pledged as collateral
(to the extent permitted by Section 8.7) for Debt other than the
Credit Facilities; provided, however, that assets of AMRESCO MBS
II, Inc. shall not be pledged as Collateral so long as such
entity is subject to a negative pledge under the terms of Debt
permitted by Section 8.5.
Collateral Assignment means, collectively, all collateral
assignments, debentures, charges and any other documents or
assignments of any kind assigning or creating liens on promissory
notes and liens, executed by Borrower or any Guarantor in favor
of Agent, on behalf and for the benefit of Lenders, as security
for the Credit Facilities, which collateral assignment,
debentures, charges or other documents or assignments are
intended to cover all of the Assigned Loans and all renewals,
modifications, amendments, supplements and restatements thereof,
including, without limitation, (a) that certain Collateral
Assignment of Promissory Notes and Liens dated as of September
29, 1995, executed by and between AMRESCO and certain of the
Guarantors and Agent and that certain Collateral Assignment of
Promissory Notes and Liens dated as of March 1, 1996, executed by
and between AMRESCO and certain of the Guarantors and Agent, as
modified by (i) that certain First Modification of Collateral
Assignment of Promissory Notes and Liens (herein so called) dated
as of April 25, 1996, executed by and between AMRESCO and certain
of the Guarantors and Agent, (ii) that certain Second
Modification of Collateral Assignment of Promissory Notes and
Liens (herein so called) dated as of February 7, 1997, executed
by and between AMRESCO, Guarantors and Agent, substantially in
the form agreed to by AMRESCO and Agent, and (iii) that certain
Third Modification of Collateral Assignment of Promissory Notes
and Liens (herein so called) dated the Closing Date, executed by
and between AMRESCO, Guarantors and Agent, substantially in the
form agreed to by AMRESCO and Agent, and (b) that certain
Composite Guarantee and Debenture, as amended from time to time,
by and among AMRESCO UK and others, and Agent.
Commitment Fee shall mean the non-refundable fee equal to
the product of (a) the applicable percentage in effect as
computed pursuant to Schedule II attached hereto, times (b) the
average daily unused portion of the Revolving Commitment after
adjustment for the Letter of Credit Exposure.
Competitive Bid Acceptance Notice is defined in Section 2.3.
Competitive Bid Advance means a borrowing hereunder
consisting of the aggregate amount of the several Competitive Bid
Loans made on the same Borrowing Date by some or all of the
Revolving Lenders to Borrower for the same Interest Period.
Competitive Bid Auction means a solicitation of Competitive
Bid Quotes setting forth Competitive Bid Margins pursuant to
Section 2.3.
Competitive Bid Loan meas a Loan made by a Revolving Lender
pursuant to Section 2.3, denominated in Dollars, which bears
interest at a Eurodollar Bid Rate.
Competitive Bid Margin means the margin above or below the
applicable LIBOR Rate offered for a Competitive Bid Loan,
expressed as a percentage (rounded to the nearest 1/100 of 1%) to
be added or subtracted from such LIBOR Rate.
Competitive Bid Note means a promissory note in
substantially the form of Exhibit A-3 hereto, with appropriate
insertions, duly executed and delivered by Borrower and payable
to the order of the applicable Revolving Lender, including,
without limitation, any amendment, modification, renewal or
replacement of such promissory note.
Competitive Bid Quote means a Competitive Bid Quote
substantially in the form of Exhibit E-2 hereto completed and
delivered by a Revolving Lender to Agent in accordance with
Section 2.3.
Competitive Bid Quote Request means a Competitive Bid Quote
Request substantially in the form of Exhibit E hereto completed
and delivered by Borrower to Agent in accordance with Section
2.3.
Consequential Loss has the meaning set forth in
Section 3.6(e).
Consolidated EBITDA means, for any period, determined in
accordance with GAAP on a consolidated basis for AMRESCO and its
Subsidiaries, the sum of consolidated net income before taxes and
non-recurring gains or losses, plus depreciation, plus
amortization, plus interest expense, each as deducted in
determining such consolidated net income before taxes.
Consolidated Interest Expense means, for any period, the
interest expense which is required to be shown as such on the
financial statements of AMRESCO and its Subsidiaries, on a
consolidated basis, prepared in accordance with GAAP.
Consolidated Lease Expense means, for any period, the lease
expense under all Operating Leases for AMRESCO and its
Subsidiaries on a consolidated basis.
Consolidated Net Income means, as of the first day of each
calendar quarter, the net income after taxes of AMRESCO and its
Subsidiaries, on a consolidated basis, determined in accordance
with GAAP, for the immediately preceding calendar quarter, which
amount shall be zero if there was a net loss for the immediately
preceding calendar quarter.
Consolidated Tangible Net Worth means, as of any date, (a)
the total shareholder's equity (including capital stock,
additional paid-in capital and retained earnings after deducting
treasury stock) which would appear on a consolidated balance
sheet of AMRESCO and its Subsidiaries prepared as of such date in
accordance with GAAP, less (b) the aggregate book value of
Intangible Assets shown on such balance sheet of such Person,
prepared in accordance with GAAP and less (c) unamortized debt
discount and expenses.
Contingent Obligation of any Person means any obligation,
contingent or otherwise, of such Person (a) directly or
indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions, by
"comfort letter" or other similar undertaking of support or
otherwise), or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) assuring any
creditor or purchaser from such Person against loss, including
without limitation, any recourse obligation with respect to loans
or other receivables sold with recourse to such Person, provided
that the term Contingent Obligation shall not include loan
commitments or loan take-out agreements which are typically
issued by providers of long-term debt, or endorsements for
collection or deposit in the ordinary course of business.
Credit Facilities means the Revolving Credit Facility
(including all Competitive Bid Loans) and the Term Facility.
Credit Period means the period commencing on the date of
this Agreement and ending on the Revolving Facility Termination
Date or Term Facility Termination Date, as applicable.
Custodial Agreement means each Custodial Agreement in form
approved by Agent by and between the Custodian, AMRESCO, for
itself and on behalf of AMRESCO UK and Guarantors, and Agent,
whereby Custodian agrees to act as bailee for the documents
evidencing certain of the Assigned Loans, as any such Custodial
Agreement may be amended or supplemented from time to time,
together with any replacement or substitution therefor.
Custodian means a financial institution or other Person
approved by the Required Lenders to act as a custodian under a
Custodial Agreement.
Debt of any Person means at any date, without duplication,
(a) all indebtedness, obligations and liabilities of such Person
for borrowed money, (b) all indebtedness, obligations and
liabilities of such Person evidenced by bonds, debentures, notes
or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, (c) all other indebtedness
(including capitalized lease obligations) of such Person on which
interest charges are customarily paid or accrued, (d) all other
indebtedness and obligations of such Person including, without
limitation, trade payables and obligations under Interest and
Foreign Exchange Hedge Agreements, (e) all obligations for
indebtedness in respect of Contingent Obligations of such
Person, (f) the unfunded or unreimbursed portion of all letters
of credit issued for the account of such Person, and (g) all
personal liability of such Person as a general partner or joint
venturer of a partnership or joint venture for obligations of
such partnership or joint venture of the nature described in
(a) through (f) preceding.
Default means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of
Default.
Default Rate means the fluctuating per annum rate of
interest equal to the lesser of (a) four percent (4.0%) plus the
Base Rate, or (b) the Maximum Lawful Rate.
Designated Countries means Canada, the United Kingdom and
such additional countries as approved from time to time by the
Required Lenders.
Designated Successor Agent means, at any given time, the
Lender other than Agent which has the largest Aggregate Loan
Percentage; provided, however, if two or more such Lenders have
the same Aggregate Loan Percentage at such time, then the
Designated Successor Agent shall be such of those Lenders having
the same Aggregate Loan Percentage which has the largest net
worth; and, provided further, that if the Required Lenders object
to the newly named Designated Successor Agent, or if any Lender
determined to be a Designated Successor Agent declines to serve
as successor Agent, in writing delivered to the outgoing Agent
within seven (7) Business Days after such Designated Successor
Agent is determined, then the Lender other than Agent or such
rejected or declining Designated Successor Agent which has the
next largest Aggregate Loan Percentage shall be the Designated
Successor Agent. For each such Lender that is a member of a bank
holding company, its net worth shall be deemed to be the
consolidated net worth of its bank holding company.
DIDMCA means the Depositary Institutions Deregulation and
Monetary Control Act of 1980, Public Law 96-221, as amended,
codified at 12 U.S.C. '1735f-7.
Distribution by any Person, means (a) with respect to any
stock issued by such Person or any partnership or joint venture
interest of such person, the retirement, redemption, repurchase,
or other acquisition for value of such stock, partnership or
joint venture interest, (b) the declaration or payment (without
duplication) of any dividend or other distribution, whether
monetary or in kind, on or with respect to any stock, partnership
or joint venture of any Person, and (c) any other payment or
distribution of assets of a similar nature or in respect of an
equity investment.
Dollar Equivalent means the equivalent in Dollars of any
Alternate Currency or with respect to Letters of Credit, other
currency approved by Agent and the Issuing Lender. For purposes
of this Agreement, Dollar Equivalent shall be determined by using
the quoted spot rate at which NationsBank or any affiliate of
NationsBank offers to exchange Dollars for such currency prior to
10:00 a.m. (Dallas, Texas time) two Business Days prior to the
date on which such equivalent is to be determined pursuant to the
provisions of this Agreement. Agent shall notify each affected
Lender of such determination on such date. The Dollar Equivalent
of each Alternate Currency Advance (or Letter of Credit
denominated in an Alternate Currency or other currency approved
by Agent and the Issuing Lender) shall be recalculated hereunder
on each date it is necessary to determine the unused portion of
each Lender's Revolving Loan Commitment Amount or any Advances
outstanding on such date.
Dollars and the "$" symbol shall refer to currency of the
United States of America.
Domestic Portfolio means an Asset Portfolio consisting of
Portfolio Loans secured by assets or payable by Persons located
in the United States of America and included in the Borrowing
Base.
EBITDA Availability shall be equal to the lesser of (a)
$450,000,000 (which amount shall be increased to $500,000,000 if
the aggregate Revolving Commitment and Term Loan Commitment
Amounts are increased to $550,000,000 as contemplated by Section
2.1(d)) or (b) the product of (i) 2.5 times (ii) Adjusted EBITDA
calculated for the immediately preceding twelve consecutive
months, provided, that, if Adjusted EBITDA declines for two (2)
consecutive fiscal quarters, then, as of the quarter end for the
second quarter of such decline and continuing thereafter,
Adjusted EBITDA shall be the lesser of (x) Adjusted EBITDA
calculated for the immediately preceding twelve (12) months or
(y) Adjusted EBITDA calculated for the immediately preceding
three (3) months and annualized.
Effective Date means the date selected by Borrower to be the
first day of the applicable Interest Period related to a LIBOR
Rate Advance, LIBOR Rate Portion or an Alternate Currency
Advance.
Eligible Assignee means (a) a Lender; (b) an Affiliate of a
Lender; or (c) any other Person approved by the Agent (such
approval not to be unreasonably withheld or delayed) and, unless
an Event of Default has occurred and is continuing at the time
any assignment is effected in accordance with Section 11.10,
AMRESCO, such approval not to be unreasonably withheld or delayed
by AMRESCO; provided, however, that none of Borrower, Guarantors
or any Affiliate of Borrower or any of the Guarantors shall
qualify as an Eligible Assignee.
Eligible Investments are investments in Asset Portfolios
(a) which are wholly-owned by Borrower or any Guarantor, (b) for
which Lenders have a perfected, first priority lien or security
interest in the related Portfolio Loans and other assets included
in such Asset Portfolios (except (i) for the net profits interest
granted by AMRESCO New Hampshire, Inc. to Xxxxxx Financial, Inc.
and referenced in Section 8.7(f) and (ii) that Lenders may not
have filed a Mortgage received with respect to any or all of the
Mortgaged Properties), and (c) with respect to which Borrower or
Guarantors have timely delivered all related documents and
agreements required to be delivered under the applicable
Custodial Agreements.
Employee Plan means at any time an employee benefit plan as
defined in Section 3(3) of ERISA that is now or was previously
maintained, sponsored or contributed to by Borrower or any
Guarantor or any ERISA Affiliate of Borrower or any Guarantor.
Equity Portion means the excess of (a) the balance sheet
value of assets securing Permitted Secured Debt and Warehouse
Lines outstanding on the date of determination, such value
determined in accordance with GAAP and marked to market no less
than quarter-annually, less (b) the related Permitted Secured
Debt and Warehouse Lines, respectively.
ERISA means the Employee Retirement Income Security Act of
1974, as amended from time to time, together with all regulations
issued pursuant thereto.
ERISA Affiliate means any person that is treated as a single
employer with Borrower or any Guarantor under Section 414 of the
Code.
Eurodollar Bid Rate means, with respect to a Competitive Bid
Loan made by a given Revolving Lender for the relevant Interest
Period, the sum of (a) the LIBOR Rate and (b) the Competitive Bid
Margin offered by such Revolving Lender and accepted by Borrower
pursuant to Section 2.3.
Event of Default has the meaning set forth in Section 9.1.
Exchange Act shall mean the Securities Exchange Act of 1934,
as amended.
Excluded Loans means those loans which are secured by bank
stock, time shares, property with significant environmental clean
up requirements (as determined by Agent), any assets which are
located outside of the United States (other than Designated
Countries), or other assets designated by Agent from time to time
in writing to AMRESCO.
Excluded Subsidiaries means, collectively, (a) AMRESCO
Advisors, Inc., a Texas corporation, and any other existing or
future Subsidiary of Borrower which is subject to the Investment
Advisors Act of 1940, as amended, and (b) all Subsidiaries
established as bankruptcy remote special purpose entities in
connection with asset securitizations.
Excluded Subsidiary Debt means Permitted Secured Debt of any
Excluded Subsidiary.
FDIC Percentage shall mean, on any day, the net assessment
rate (expressed as a percentage rounded to the next highest 1/100
of 1%) which is in effect on such day (under the regulations of
the Federal Deposit Insurance Corporation or any successor) for
determining the assessments paid by Agent to the Federal Deposit
Insurance Corporation (or any successor) for insuring
Eurocurrency deposits made in dollars at Agent's principal
offices (which for NationsBank shall be its offices in Dallas,
Texas, or, if applicable, the Applicable Lending Office). Each
determination of said percentage made by Agent shall, in the
absence of manifest error, be binding and conclusive.
Federal Funds Rate means, for any day, the rate per annum
(rounded upwards if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate
quoted to Agent on such day on such transactions from three
Federal funds brokers of recognized standing.
Fiscal Year means any fiscal year of Borrower or any
Guarantor commencing on January 1 and ending on December 31.
Fixed Charge Coverage Ratio means, for any date of
determination, the ratio of (a) the sum of (i) Adjusted EBITDA
plus (ii) Consolidated Lease Expense, both for the immediately
preceding twelve calendar months, to (b) the sum of
(i) Consolidated Interest Expense plus (ii) Consolidated Lease
Expense, both for the immediately preceding twelve calendar
months.
Foreign Obligors means AMRESCO UK and any Guarantor
incorporated or operating outside of the United States.
Foreign Portfolio means an Asset Portfolio consisting
primarily of Portfolio Loans secured by assets or payable by
Persons located in the Designated Countries and included in the
Borrowing Base.
GAAP means generally accepted accounting principles
consistently applied as in effect at the time of application of
the provisions hereof; provided, however, that wherever in this
Agreement principles of consolidation different from those
required by generally accepted accounting principles are
specified, the principles of consolidation specified in this
Agreement shall govern.
Governmental Authority means any government, any state or
other political subdivision thereof, or any Person exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
Guarantor means each Subsidiary of Borrower (other than
Excluded Subsidiaries), and its respective successors and
assigns.
Guaranty Agreement means the Subsidiary Guaranty executed by
each Guarantor in favor of Agent, for the ratable benefit of
Lenders, guaranteeing payment and performance of the Obligations,
as it may be amended or modified or in effect from time to time.
Impositions means all real estate and personal property
taxes; charges for any easement, license or agreement maintained
for the benefit of any of the real property of Borrower or any
Guarantor, or any part thereof; and all other taxes, charges and
assessments and any interest, costs or penalties with respect
thereto, general and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind and nature whatsoever, which
at any time prior to or after the execution hereof may be
assessed, levied or imposed upon any of the real property of
Borrower or any Guarantor, or any part thereof, or the ownership,
use, sale, occupancy or enjoyment thereof, in each case which, if
not timely paid or otherwise discharged, would materially and
adversely affect (a) such ownership, use, sale, occupancy or
enjoyment, or (b) the financial condition of Borrower or any
Guarantor.
Intangible Assets of any Person means those assets of such
Person which are (a) deferred assets, other than prepaid
insurance and prepaid taxes, (b) patents, copyrights, trademarks,
tradenames, franchises, goodwill, experimental expenses and other
similar assets which would be classified as intangible assets on
a balance sheet of such Person, prepared in accordance with GAAP,
and (c) unamortized discount and expenses.
Interest Adjustment Date shall mean the earlier of either
the last day of an Interest Period or, as applicable, the
Revolving Facility Termination Date or Term Facility Termination
Date.
Interest and Foreign Exchange Hedge Agreements shall mean
any and all agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations
of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions,
including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts
and warrants, as the same may be amended or modified and in
effect from time to time, and any and all cancellations, buy
backs, reversals, terminations or assignments of any of the
foregoing.
Interest Period shall mean, with respect to a LIBOR Rate
Advance, LIBOR Rate Portion, Alternate Currency Advance or
Competitive Bid Loan, a period selected by AMRESCO which is not
less than thirty (30) days and not in excess of one hundred
eighty (180) days, commencing on the Effective Date of such LIBOR
Rate Advance, LIBOR Rate Portion or Alternate Currency Advance,
or the Borrowing Date with respect to a Competitive Bid Loan;
provided that (a) any Interest Period ending on a date later than
the Revolving Facility Termination Date or the Term Facility
Termination Date, as applicable, shall be deemed to end on the
Revolving Facility Termination Date or the Term Facility
Termination Date, as applicable; (b) if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest
Period shall end on the next succeeding Business Day, except that
if the next Business Day would fall in the next calendar month,
the Interest Period shall end on the immediately preceding
Business Day; and (c) any Interest Period that begins on the last
day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month.
Interest Rate Exposure Report shall mean a report showing
the aggregate amount of Borrower=s and each Guarantor's potential
liability under each Interest and Foreign Exchange Hedge
Agreement and how such liability was calculated, together with
evidence satisfactory to Agent that the amount of such potential
liability has been confirmed by the bank counterparty to such
Interest and Foreign Exchange Hedge Agreement.
Investment Line of Credit means a line of credit to AMRESCO
made by NationsBank, such line of credit being in an amount not
to exceed Eighty Million and No/100 Dollars ($80,000,000.00) for
the purchase of liquid short-term investments, as the same may be
renewed, extended, modified, amended or replaced from time to
time.
Investments has the meaning set forth in Section 8.10
hereof.
Invitation for Competitive Bid Quotes means an Invitation
for Competitive Bid Quotes substantially in the form of Exhibit X-
0 hereto, completed and delivered by Agent to Revolving Lenders
in accordance with Section 2.3(c).
Issuing Lender means NationsBank in its capacity as issuer
of the Letters of Credit.
Legal Requirements means (a) any and all present and future
judicial decisions, statutes, laws, rulings, rules, orders,
regulations, permits, licenses, certificates, or ordinances of
any Governmental Authority in any way applicable to Borrower or
any Subsidiary of Borrower, (b) the presently or subsequently
effective bylaws and articles of incorporation and any other form
of business association agreement of Borrower or any Subsidiary
of Borrower, (c) any and all covenants, conditions or
restrictions applicable to the Collateral or the ownership, use
or occupancy thereof, and (d) any and all leases or contracts
(written or oral) of any nature that relate in any way to any
Collateral, or any portion thereof, or to which Borrower or any
Subsidiary of Borrower may be bound, and in each case which, if
violated, would materially and adversely affect (i) the present
or potential ownership, use, sale, occupancy or possession of the
Collateral or any part thereof, by Borrower or any such
Subsidiary, (ii) the Lenders' Liens or (iii) the financial
condition of Borrower or any such Subsidiary.
Lenders means each of the financial institutions listed as a
"Lender" on Schedule I attached hereto as the same may be
modified or amended from time to time, which term shall include
both the Revolving Lenders and the Term Lenders.
Lenders' Liens means all liens, security interests, charges,
pledges or encumbrances created by the Loan Documents.
Letter of Credit Exposure means the aggregate amount of the
unfunded portion of each Letter of Credit outstanding at any
time.
Letter of Credit Fee has the meaning set forth in
Section 2.4(c).
Letters of Credit means all letters of credit issued by the
Issuing Lender for the account of Borrower pursuant to this
Agreement.
LIBOR Margin means the applicable margins based on AMRESCO's
Qualified Investment Rating, as determined pursuant to Schedule
II attached hereto.
LIBOR Rate shall mean, with respect to a LIBOR Rate Advance
or LIBOR Rate Portion for the Interest Period applicable thereto,
the rate of interest determined by Agent at which deposits in
dollars for the relevant Interest Period are offered based on
information presented on the Telerate Screen as of 11:00 A.M.
(London time) on the day which is two (2) Business Days prior to
the first day of such Interest Period; provided, that if at least
two such offered rates appear on the Telerate Screen in respect
of such Interest Period, the arithmetic mean of all such rates
(as determined by Agent) will be the rate used; provided,
further, that if the Telerate System ceases to provide LIBOR
quotations, such rate shall be the average rate of interest
determined by Agent (rounded upward to the nearest .01%) at which
deposits in Dollars are offered for the relevant Interest Period
by Agent (or its successor) to banks with combined capital and
surplus in excess of $500,000,000 in the London interbank market
as of 11:00 A.M. (London time) on the applicable Effective Date.
LIBOR Rate Advance shall mean an Advance under the Revolving
Credit Facility which bears interest computed with reference to
the LIBOR Rate.
LIBOR Rate Portion shall mean any portion of the Term
Facility which bears interest computed with reference to the
LIBOR Rate.
LIBOR Reserve Requirement shall mean, on any day, that
percentage (expressed as a decimal fraction) which is in effect
on such date, as provided by the Federal Reserve System for
determining the maximum reserve requirements generally applicable
to financial institutions regulated by the Federal Reserve Board
comparable in size and type to Agent (including, without
limitation, basic supplemental, marginal and emergency reserves)
under Regulation D with respect to "Eurocurrency liabilities" as
currently defined in Regulation D, or under any similar or
successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding (or, if reserves for Eurocurrency
liabilities are not separately stated in such regulations, the
other applicable category of liabilities which includes deposits
by reference to which the interest rate on a LIBOR Rate Advance,
LIBOR Rate Portion or Alternate Currency Advance is determined).
Each determination by Agent of the LIBOR Reserve Requirement,
shall, in the absence of manifest error, be conclusive and
binding.
Lien means with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any asset which
it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or
other title retention agreement relating to such asset.
Loan Documents means this Agreement, the Notes, the Pledge
Agreements, the Letters of Credit, the LOC Applications, the
Collateral Assignment, the Lockbox Agreement, the Security
Agreement, all related financing statements, the Guaranty
Agreement and all other agreements, statements, certificates,
documents or instruments evidencing, securing or pertaining to
either or both of the Credit Facilities (including the Letters of
Credit) or otherwise executed and/or delivered from time to time
pursuant to or in connection with this Agreement, as the same may
be modified, amended, renewed, extended, rearranged, restated or
replaced from time to time.
LOC Application has the meaning set forth in Section 2.2(e).
Lockbox means a post office box, or collectively post office
boxes, established by Borrower and Guarantors and Lockbox Agent
pursuant to the provisions of Section 5.7 and the Lockbox
Agreement.
Lockbox Account means a cash collateral account or accounts
maintained with Lockbox Agent and styled "(name of Borrower or
particular Guarantor) Lockbox Account for the Benefit and Under
the Control of NationsBank of Texas, N.A., as Agent for Lenders,"
which accounts shall be (a) subject to the provisions of Section
5.7., and (b) pledged and assigned to Lenders as additional
security for the payment, performance and observance of the
Obligations.
Lockbox Agent means NationsBank.
Lockbox Agreement means (a) that certain Lockbox Agreement,
dated as of September 29, 1995, executed by and among Borrower
and certain of the Guarantors, Agent and Lockbox Agent, and all
amendments, modifications and replacements thereof, including,
without limitation, as modified by (i) that certain First
Modification of Lockbox Agreement (herein so called) dated as of
April 25, 1996, executed by and between Borrower and certain of
the Guarantors, Agent and Lockbox Agent, (ii) that certain Second
Modification of Lockbox Agreement (herein so called) dated as of
February 7, 1997, executed by and between Borrower and certain of
the Guarantors, Agent and Lockbox Agent, substantially in the
form agreed to by AMRESCO and Agent, and (iii) that certain Third
Modification of Lockbox Agreement (herein so called) dated the
Closing Date, executed by and among Borrower, Guarantors, Agent
and Lockbox Agent, substantially in the form agreed to by AMRESCO
and Agent, and (b) any other similar agreement or arrangement
which is created to cause the proceeds of Assigned Loans or other
Collateral to be placed under Agent=s (for the benefit of
Lenders) dominion and control.
Margin Regulations mean Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System, as in effect
from time to time.
Margin Stock means "margin stock" as defined in
Regulation U.
Maximum Lawful Rate means the maximum rate (or, if the
context so permits or requires, an amount calculated at such
rate) of interest which, at the time in question would not cause
the interest charged on either of the Credit Facilities at such
time to exceed the maximum amount which Lenders would be allowed
to contract for, charge, take, reserve, or receive under
applicable federal or state law after taking into account, to the
extent required by applicable law, any and all relevant payments,
fees or charges under the Loan Documents. If and to the extent
the laws of the State of Texas are applicable for purposes of
determining the "Maximum Lawful Rate", such term shall mean the
"weekly ceiling" from time to time in effect under Chapter 1D of
Article 5069, Title 79, Revised Civil Statutes of Texas, 1925, as
amended, or, if permitted by applicable law and effective upon
the giving of the notices required by such Article 5069 (or
effective upon any other date otherwise specified by applicable
law), the "quarterly ceiling" or "annualized ceiling" from time
to time in effect under such Article 5069, whichever Agent shall
elect to substitute for the "weekly ceiling," and vice versa,
each such substitution to have the effect provided in such
Article 5069, and Agent shall be entitled to make such election
from time to time and one or more times and, without notice to
any Borrower, to leave any such substitute rate in effect for
subsequent periods in accordance with such Article 5069. If
under applicable law there is no legal limitation on the amount
or rate of interest that may be charged on amounts outstanding
under either of the Credit Facilities, there shall be no Maximum
Lawful Rate under the applicable Credit Facility, notwithstanding
any reference thereto herein or in any of the Loan Documents.
Minimum Notice Requirement has the meaning set forth in
Section 3.5.
Modification Fee has the meaning set forth in Section 2.4
(f) hereof.
Mortgage means any deed of trust, mortgage, fixed or
floating charge or other lien document covering a Mortgaged
Property executed by Borrower or any Guarantor, granted to Agent,
for the benefit of the Lenders, to secure repayment of the Credit
Facilities and the other Obligations, substantially in the form
approved by Agent, and all renewals, extensions, modifications,
amendments or supplements thereto, and all mortgages, deeds of
trust, fixed or floating charges or other documents given in
renewal, extension, modification, restatement or replacement
thereof.
Mortgaged Property or Mortgaged Properties means any and all
lots or parcels of land which Borrower or any Guarantor owns on
the Closing Date or which it may hereafter acquire and which has
not been granted as collateral for Debt other than the Credit
Facilities as permitted by Section 8.7 hereof (including, without
limitation, land included in an Asset Portfolio or any Underlying
Real Estate which Borrower or any Guarantor may hereafter own as
a result of a foreclosure or deed-in-lieu of foreclosure or
otherwise), and improvements, fixtures and personal property
located thereon and all other property referenced in and subject
to the Mortgages. The Mortgaged Property is intended to include
all of the above-described real property whether or not a
Mortgage is actually granted or filed.
NationsBank means NationsBank of Texas, N.A., a national
banking association, and its successors.
Net Collections for any calendar month means an amount equal
to (a) any and all cash proceeds received by Borrower or any
Guarantor from its ownership, management and disposition of any
and all assets in any Asset Portfolio, including, without
limitation, interest and principal payments on the applicable
Borrowing Base Loan from any source, loan settlement payments,
any restructure or commitment or other loan fees, payments on any
judgments or settlement of litigation with respect to the
applicable Borrowing Base Loan, proceeds from the sale of the
applicable Borrowing Base Loan or Mortgaged Property, and income
from any Mortgaged Property, but excluding any escrow deposits
paid to Borrower or any Guarantor for tax or insurance escrows
under the applicable Borrowing Base Loan, minus (b) expenses
incurred and paid by Borrower or any Guarantor from, and any
normal and customary expenses reserved or accrued on a monthly
basis related to, its ownership, management and sale of assets in
the Asset Portfolio (including without limitation any advances of
committed principal that Borrower or any Guarantor is legally
required to make under the applicable Borrowing Base Loan) (such
expenses not to exceed in the aggregate 10% of the gross
collections from such assets); it being expressly understood and
agreed that there shall be no deduction for any disbursements by
Borrower or any Guarantor of any tax or insurance escrows held
for the applicable Borrowing Base Loan.
Net Gain means the difference between (a) any gain from the
sale of assets in connection with the creation of asset-backed
securities which would be required to be reported by Borrower or
any Guarantor on Borrower=s or any Guarantor=s financial
statements in accordance with GAAP for the period for which such
gain is being calculated, including, without limitation, any non-
cash revenues related to mortgage origination or mortgage
servicing, and (b) the sum of (i) the cash portion of the gain
included in clause (a) above, which consists of (x) the cash net
origination fees received in connection with the loans supporting
such asset-backed securities, and (y) the cash portion of the
gain realized from the sale of assets in connection with such
asset-backed securities plus (ii) any expenses incurred, directly
or indirectly, in connection with such creation of asset-backed
securities to the extent such expenses exceed the cash portion of
the gain calculated pursuant to clause (b) (i) above.
Net Investment Value means the Net Purchase Price less the
Net Collections actually received by Borrower or any Guarantor as
of the date of determination from the applicable Borrowing Base
Loans less any write down of the value of the applicable
Borrowing Base Loans required by GAAP or otherwise made by
Borrower or any Guarantor.
Net Investment Value Availability means the sum of all
amounts obtained by multiplying the Net Investment Value of each
Eligible Investment times the applicable "Borrowing Percentage"
set forth below (provided that (a) the "Borrowing Percentage" of
Performing Borrowing Base Loans shall be 80%, notwithstanding the
time elapsed since the initial purchase, and (b) the Net
Investment Value Availability attributable to Performing
Borrowing Base Loans shall not exceed the lesser of $20,000,000
or 25% of the Net Investment Value Availability attributable to
Non-Performing Borrowing Base Loans):
Time Elapsed Since Initial
Purchase By Borrower or any Guarantor Borrowing
of Eligible Investment Percentage
Less than 6 months 80%
Greater than or equal to 6 months, but less than 12 months 70%
Greater than or equal to 12 months, but less than 18 months 60%
Greater than or equal to 18 months, but less than 24 months 25%
Greater than or equal to 24 months 0%
Net Present Value Availability means the quotient of (a) the
net present value (discounted at 9%) of the Projected Net Cash
Flow from Eligible Investments (provided, that, with respect to
the Projected Net Cash Flow from any Eligible Investment in which
Xxxxxx Financial, Inc. has a profits interest as described in
Section 8.7(f), Borrower shall include only 75% of the net
present value of such Projected Net Cash Flow for the purposes of
this calculation), divided by (b) 1.70.
Net Purchase Price means the actual purchase price paid by
Borrower or the applicable Guarantor for a Borrowing Base Loan,
excluding (a) any costs or adjustments for legal fees, travel,
due diligence expenses or other "soft" costs, and (b) the portion
of the purchase price allocated to Excluded Loans.
NIM Trusts means net interest margin trusts created by any Subsidiary.
Non-Performing Borrowing Base Loan means any Borrowing Base
Loan that is not a Performing Borrowing Base Loan.
Notes means the Term Notes, the Revolving Notes, the
Alternate Currency Notes and the Competitive Bid Notes.
Obligations means all present and future indebtedness,
obligations and liabilities, or any part thereof, of Borrower or
any Guarantor now or hereafter existing or arising under or in
connection with this Agreement, the Notes or any other of the
Loan Documents (specifically including, without limitation, the
principal amount outstanding under the Notes), together with:
(a) all interest accrued thereon; (b) all reasonable costs,
expenses, and attorneys' fees of counsel to Agent and Lenders (as
a group) and of counsel to any Lender (subject to the limitations
set forth in Section 11.4) incurred in the documentation of any
amendments, waivers or extensions of the Loan Documents or
administration, enforcement or collection thereof (specifically
including, without limitation, any of the foregoing incurred in
connection with any bankruptcy or other insolvency proceedings of
Borrower or any Guarantor); (c) the reimbursement and payment of
all sums which might be advanced by Agent or any Lender to pay or
satisfy amounts required to be paid by Borrower or any Guarantor
under this Agreement or under any other Loan Document; (d) all
liability which Borrower or any Guarantor may incur with respect
to any Interest and Foreign Exchange Hedge Agreements between
Borrower or any Guarantor and any Lender or under any Bridge
Debt; and (e) all costs, charges, reasonable commissions,
reasonable attorneys' fees and expenses owing and to become owing
in connection with the documentation, administration, enforcement
and collection of the foregoing obligations and indebtedness, and
those owing or to become owing in connection with the
repossession, operation, maintenance, preservation or foreclosure
of any or all of the Collateral; regardless of whether such
indebtedness, obligations and liabilities are direct, indirect,
fixed, contingent, liquidated, unliquidated, joint, several or
joint and several. The Obligations shall include all renewals,
extensions, modifications, rearrangements and replacements of any
of the above-described obligations and indebtedness.
Operating Lease means any operating lease, as defined in the
Financial Accounting Standard Board Statement of Financial
Accounting Standards No. 13 dated November, 1976, or otherwise in
accordance with GAAP.
Participation Fee means the nonrefundable participation fee
to be paid by Borrower to each of the Lenders in accordance with
Section 2.4 hereof in the amounts shown for each such Lender on
Schedule I attached hereto, if any, or as otherwise agreed to
between Borrower and each Lender.
PBGC means the Pension Benefit Guaranty Corporation, or its
successors.
Pension Plan means any Employee Plan that is now or was
previously covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
Performing Borrowing Base Loan means each Borrowing Base
Loan (a) which, over the immediately preceding 90-day period, has
accrued and been paying interest and principal no less often than
quarterly (and with no less than two such payments having been
made) in an amount which is sufficient to amortize the legal
balance of the Borrowing Base Loan as of the time of its
acquisition by Borrower or a Guarantor (less any payments
received and applied to reduce such Borrowing Base Loan), and
interest thereon at a rate not less than the existing Base Rate,
in equal installments over fifteen years, and (b) which at no
time during the immediately preceding 90-day period has been 30
or more days past due.
Permitted Encumbrances means with respect to any asset in an
Asset Portfolio or any Mortgaged Property:
(a) Liens securing the Notes in favor of the Lenders;
(b) Exceptions affecting title which are shown in a
Title Policy included in Borrower's or any Guarantor's files or
are described with respect to a particular Portfolio Loan,
Mortgaged Property or parcel of the Underlying Real Estate in the
applicable Borrower Due Diligence Reports;
(c) In the case of any portion of the Mortgaged
Property that is not covered by a Title Policy, minor defects in
title or customary easements, platted building lines, restrictive
covenants, mineral reservations and similar exceptions affecting
title which do not secure the payment of money;
(d) Inchoate statutory or operators' liens securing
obligations for labor, services, materials and supplies furnished
to the Mortgaged Properties, which (i) are not delinquent, or
(ii) are being contested by Borrower or any Guarantor in good
faith and for which Borrower or such Guarantor has obtained a
proper payment and performance bond in the amount of the
contested claim;
(e) Mechanics', materialmen's, warehousemen's,
journeymen's and carriers' liens and other similar liens arising
by operation of law or statute in the ordinary course of business
if (i) the underlying claim is not delinquent and did not in any
event cover a billing period not exceeding sixty (60) days, or
(ii) unless the claim giving rise to such lien is being contested
by Borrower or any Guarantor in good faith and for which Borrower
or such Guarantor has obtained a proper payment and performance
bond in the amount of the contested claim; and
(f) Liens for Taxes or Impositions not yet due or not
yet delinquent, or, if delinquent, that are being contested by
Borrower or any Guarantor as permitted by and in accordance with
the terms and conditions set forth in Section 7.5.
Permitted Secured Debt means indebtedness of any Borrower,
Guarantor or, as applicable, Excluded Subsidiary (a) used to
finance the acquisition of, or refinance the costs of carrying,
assets by such Person which is secured solely by the assets
acquired or refinanced with such financing and (b) with respect
to which or to the portion of which such Person has no liability
for payment other than the assets pledged, or liability is
limited only to the Person who owns the assets; provided,
however, that the aggregate Cash Contributed Capital (which may
include the quantifiable Contingent Obligation of any guaranty
given in lieu of capital, so long as such Contingent Obligation
is included as Debt in calculating the covenants contained in
Sections 8.2 and 8.3) with respect to Permitted Secured Debt may
not exceed 35% of the balance sheet value of assets securing the
Permitted Secured Debt outstanding on the date of determination
(the balance sheet value of such loans and securities securing
such Debt shall be determined in accordance with GAAP and marked
to market no less than quarter-annually or, at Agent=s request,
more frequently).
Permitted Secured Debt and Warehouse Lines Report and
Certification means a report (a) showing such information
concerning the Permitted Secured Debt and Warehouse Lines as
required by Agent from time to time, including, without
limitation, the amount of each such Permitted Secured Debt and
Warehouse Lines and the entities obligated as borrowers
thereunder, and (b) certifying compliance by Borrower and
Guarantors with the limitations on Permitted Secured Debt,
Warehouse Lines and Cash Contributed Capital contained in this
Agreement, in detail satisfactory to Agent.
Person means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any
other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
Pledge Agreement shall mean the Stock Pledge Agreement or
Stock Pledge Agreements executed by and between Borrower or the
appropriate Guarantors and Agent, covering all of the issued and
outstanding stock of each Subsidiary of Borrower and Guarantors
which is incorporated in the United States (other than stock of
the Excluded Subsidiaries) and sixty-five percent (65%) of the
stock of each Foreign Obligor and all amendments, modifications
and replacements thereof, such amendments and modifications
substantially in the form previously agreed to by AMRESCO and
Agent.
Pledged Asset Schedule and Certification means a schedule of
all assets which are owned by Borrower and Guarantors and
required to be pledged to Agent for the benefit of the Lenders
pursuant to the Loan Documents, and a certification that such
assets have been so pledged; provided, that any assets listed
therein but not so pledged shall be pledged to Agent for the
benefit of the Lenders as soon as practical but in no case more
than sixty (60) days after the end of the immediately preceding
calendar quarter.
Portfolio Borrowing Base shall be equal to the lesser of (a)
$150,000,000, (b) the Net Investment Value Availability, or (c)
the Net Present Value Availability; provided that the portion of
the Portfolio Borrowing Base attributable to (i) Wholly-Owned
Real Estate Portfolios shall not exceed 33% of the Wholly-Owned
Non-Real Estate Portfolios, and (ii) the Foreign Portfolios shall
not exceed $75,000,000.
Portfolio Loans means the loans and mortgages included in
any Asset Portfolio acquired by Borrower or any of the
Guarantors, and which have not been disposed of by Borrower or
any such Guarantor, as contemplated and permitted by this
Agreement and the other Loan Documents.
Principal Debt means, at the time of any determination
thereof, the aggregate unpaid principal balance of all Advances.
Projected Net Cash Flow means the net cash flow which
Borrower and Guarantors reasonably expect to receive from an
Asset Portfolio (excluding net cash flow from Excluded Loans)
which has been determined in a manner consistent with Borrower=s
and Guarantors= past practices and not less comprehensive than
Standard Industry Practices, which cash flow projection has been
made or updated not later than six months from the date when it
is to be used under this Agreement.
Purchase Money Lien has the meaning set forth in Section 8.7.
Qualified Investment Rating means the highest currently
effective rating of the Credit Facilities, rated together, at the
time of determination, given by Standard & Poor's Ratings Group
(a Division of XxXxxx-Xxxx, Inc.) ("S&P"), Xxxxx'x Investors
Service, Inc. ("Moody's") or such other rating agency acceptable
to the Required Lenders; provided, that if both S&P and Moody's
give a rating for the Credit Facilities, the Qualified Investment
Rating shall be the higher of such ratings unless such ratings
are two or more classifications apart in which event the
Qualified Investment Rating shall be the rating which is half way
between such two ratings.
Real Estate Loans means Portfolio Loans (a) which have a
purchase price of greater than Two Million Five Hundred Thousand
and No/100 Dollars ($2,500,000.00), (b) which are secured by
land, office buildings, retail centers, hotels/motels,
multi-family properties, or industrial properties, (c) if
improved, which are secured by non-owner occupied facilities, and
(d) where the primary source of repayment is proceeds from the
operation or liquidation of the real estate. A loan must meet
all of the above tests to be deemed a Real Estate Loan.
Reference Banks means the Applicable Lending Office of
NationsBank, Xxxxx Fargo Bank (Texas), N.A. and Bank One, Texas,
NA, and such substitute bank or banks as may be mutually agreed
to by AMRESCO and Agent.
Register has the meaning set forth in Section 11.10 hereof.
Regulation U means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time and
shall include any successor or other regulation or official
interpretation of the Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or
carrying margin stocks that is applicable to member banks of the
Federal Reserve System.
Regulatory Change shall mean the adoption of any applicable
law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority charged with
the administration thereof.
Representatives has the meaning set forth in Section 10.4.
Request for Advance means a written request for an Advance
or a Letter of Credit, substantially in the form attached hereto
as Exhibit B, which shall (a) specify (i) the date of such
Advance or Letter of Credit, which shall be a Business Day, (ii)
which portion, if any, of such Advance is to be a LIBOR Rate
Advance or Variable Rate Advance or an Alternate Currency
Advance, and (iii) the aggregate amount of all outstanding
Advances or Letters of Credit before and after giving effect to
the requested Advance or Letter of Credit, as applicable; and (b)
contain a certification of an Authorized Officer of AMRESCO as of
the date of such Advance or Letter of Credit certifying (i) as to
the solvency of Borrower and Guarantors (determined in accordance
with Section 6.19), (ii) that the intended use of the proceeds of
such Advance or Letter of Credit does not violate the provisions
of this Agreement (including, without limitation, Sections 2.1,
6.15 and 7.10) or any other Loan Document, (iii) as to the
matters set forth in Section 4.2(b) and (c), in the case of an
Advance, or the matters set forth in Section 4.3(c) and (d), in
the case of a Letter of Credit, and (iv) with respect to an
Advance for the purchase of an Asset Portfolio which is included
in the then current Borrowing Base, that Borrower and Guarantors
possess or will possess on the funding date of such Advance, the
originals of the promissory notes evidencing the Portfolio Loans
included in such Asset Portfolio and will deliver such original
promissory notes to a Custodian on the Business Day following the
acquisition of such Asset Portfolio.
Required Lenders means:
(a) The approval of all Lenders will be required
to (i) change the definition of Aggregate Loan Percentage,
(ii) change subparagraphs (a), (e), (f), (g) or (h) of the
definition of Required Lenders, (iii) release any Lenders'
Liens on any Collateral after the occurrence of an Event of
Default, or, prior to the occurrence of an Event of Default,
release Lenders' Liens on all of the Collateral, thereby
causing the Credit Facilities to be unsecured, (iv) amend or
modify Section 3.9 of this Agreement, (v) after the
occurrence of an Event of Default, change the Applicable
Rate or any fees payable to any Lender (excluding Agent in
such capacity or the Arranger), (vi) increase the amount of
either Credit Facility, (vii) reinstate any of the Notes and
other indebtedness pursuant to the provisions in Section
9.2(a) hereof, (viii) increase the Applicable Rate related
to either Credit Facility other than an increase in the
interest rate after the occurrence of a Default as permitted
by the Loan Agreement, or (ix) change the consent of Lenders
required by Section 11.10(a) and (f) hereof.
(b) The approval of (1) all Revolving Lenders
will be required to (i) prior to the occurrence of an Event
of Default, change the Applicable Rate related to the
Revolving Credit Facility, (ii) prior to the occurrence of
an Event of Default, change the amount of any fees payable
to the Revolving Lenders (excluding the Agent in such
capacity or the Arranger), (iii) extend the Revolving
Facility Termination Date or the due date of any installment
of principal or interest or any fees applicable to the
Revolving Credit Facility, (iv) forgive any principal or
interest applicable to the Revolving Credit Facility, or (v)
change subparagraph (d) or this subparagraph (b) of the
definition of Required Lenders, and (2) each Lender holding
a Competitive Bid Loan will be required, with respect to the
interest rate, and payments of principal and interest with
respect to, the Competitive Bid Loan to which it is a party.
(c) The approval of all Term Lenders will be
required to (i) prior to the occurrence of an Event of
Default, change the Applicable Rate related to the Term
Facility, (ii) prior to the occurrence of an Event of
Default, change the amount of any fees payable to the Term
Lenders (excluding the Agent in such capacity or the
Arranger), (iii) extend the Term Facility Termination Date
or the due date of any installment of principal or interest
or any fees applicable to the Term Facility, (iv) forgive
any principal or interest applicable to the Term Facility,
or (v) change this subparagraph (c) of the definition of
Required Lenders.
(d) With respect to the determination of
additional currencies available for Alternate Currency
Advances, the Revolving Lenders holding at the time in
question a portion of the Revolving Credit Facility
(including participations in Letters of Credit) equal to or
greater than 75% of the sum of (i) the aggregate unpaid
principal amount of the Revolving Notes, plus (ii) the
Letter of Credit Exposure (or, if no Advances or Letters of
Credit are outstanding, then Revolving Lenders holding at
the time in question 75% of the Revolving Commitment).
(e) With respect to (i) modifying the schedule of
principal payments to be made under any of the Notes other
than as set forth in subparagraphs (b) and (c) of this
definition, (ii) modifying any provisions of Section 3.6
hereof, or (iii) the determination of additional Designated
Countries in connection with Foreign Portfolios the Lenders
holding at the time in question a portion of the Credit
Facilities (including participations in Letters of Credit)
equal to or greater than 75% of the sum of (1) the Revolving
Commitment, plus (2) the aggregate unpaid principal amount
of the Term Notes.
(f) With respect to changing any of the financial
covenants set forth in the provisions of Sections 8.1, 8.2,
8.3 and 8.4 hereof, the Lenders holding at the time in
question a portion of the Credit Facilities (including
participations in Letters of Credit) equal to or greater
than 66.67% of the sum of (i) the Revolving Commitment, plus
(ii) the aggregate unpaid principal amount of the Term
Notes.
(g) Prior to the occurrence of an Event of
Default, all other decisions, consents and votes required by
the Lenders will require the approval of the Lenders holding
at the time in question a portion of the Credit Facilities
(including participations in Letters of Credit) equal to or
greater than 51% of the sum of (i) the Revolving Commitment,
plus (ii) the aggregate unpaid principal amount of the Term
Notes (unless the approval or consent of only the Revolving
Lenders or the Term Lenders is specifically required by the
Loan Documents).
(h) After the occurrence of an Event of Default,
all other decisions, consents and votes required by the
Lenders will require the approval of the Lenders holding at
the time in question a portion of the Credit Facilities
(including participations in Letters of Credit) equal to or
greater than 51% of the sum of (i) the aggregate unpaid
principal amount of the Notes, plus (ii) the Letter of
Credit Exposure (unless the approval or consent of only the
Revolving Lenders or the Term Lenders is specifically
required by the Loan Documents); provided, that, after the
occurrence of an Event of Default which has been waived, the
approval of Revolving Lenders holding at the time in
question a portion of the Revolving Credit Facility equal to
or greater than 51% of the Revolving Commitment shall be
required prior to making the initial Advance under the
Revolving Credit Facility subsequent to such waiver.
Residual Interests Report shall mean a report satisfactory
to Agent listing the Retained Residential Residual Interests
owned by Borrower or any Subsidiary of Borrower.
Revolving Commitment means the aggregate Revolving Loan
Commitment Amounts committed to by Revolving Lenders under this
Agreement on the date of determination, evidenced by a promissory
note to be made by Borrower to each Revolving Lender in the
amount of such Revolving Lender's applicable Revolving Loan
Commitment Amount.
Revolving Credit Facility means the revolving line of credit
created pursuant to this Agreement in an amount equal to the
lesser of (a) $490,000,000 minus the original principal amount of
any Additional Term Loans, or (b) the Revolving Commitment.
Revolving Facility Termination Date means May 31, 1999.
Revolving Lenders means those Lenders designated as the
Revolving Lenders in Schedule I attached hereto, as modified or
amended from time to time pursuant to this Agreement, and their
permitted successors and assigns.
Revolving Loan Commitment Amount means, with respect to each
Revolving Lender, the amount indicated as such Revolving Lender's
Revolving Loan Commitment Amount opposite the name of such
Revolving Lender in Schedule I, as such amount (a) may be reduced
from time to time, as a result of a reduction in the Revolving
Commitment as provided herein, or (b) may be adjusted from time
to time to account for any assignment of a Revolving Lender's
interest as provided in Section 11.10 of this Agreement.
Revolving Loan Percentage means, with respect to the
Revolving Credit Facility and each Revolving Lender, the
percentage indicated as such Lender's Revolving Loan Percentage
opposite the name of such Lender on Schedule I, as such
percentage may be adjusted from time to time to account for any
assignments of a Revolving Lender's interest as provided in
Section 11.10.
Revolving Notes means those certain promissory notes
evidencing the Revolving Credit Facility, executed by Borrower
and payable to the order of each Revolving Lender in the amount
of such Revolving Lender's Revolving Loan Commitment Amount, and
in the form attached hereto as Exhibit A.
Rights means rights, remedies, powers, privileges and benefits.
SEC means the federal Securities and Exchange Commission,
and its successors.
Security Agreement means a Security Agreement dated as of
September 29, 1995, and any other security agreements, executed
by and between certain of the original borrowers under the Credit
Facilities and Agent, and all amendments, modifications and
replacements thereof, including, without limitation, as modified
by (a) that certain First Modification of Security Agreement
(herein so called) dated as of April 25, 1996, executed by and
between the original borrowers under the Credit Facilities (other
than AMRESCO Jersey Ventures Limited, AMRESCO UK, AMRESCO UK
Ventures Limited, AMRESCO UK Limited and Old Midland House
Limited) and Agent, and (b) that certain Second Modification of
Security Agreement (herein so called) dated February 7, 1997,
executed by and between AMRESCO, Guarantors (other than AMRESCO
Jersey Ventures Limited, AMRESCO UK Ventures Limited, AMRESCO UK
Limited and Old Midland House Limited) and Agent, and (c) that
certain Third Modification of Security Agreement (herein so
called) dated the Closing Date, executed by and between AMRESCO,
Guarantors (other than AMRESCO Jersey Ventures Limited, AMRESCO
UK Ventures Limited, AMRESCO UK Limited and Old Midland House
Limited) and Agent, substantially in the form agreed to by
AMRESCO and Agent.
Security Documents means the Collateral Assignment, the
Security Agreement, the Pledge Agreements, the Lockbox Agreement,
all Mortgages and all other documents or instruments granting a
Lien in favor of the Lenders (or Agent for the benefit or on
behalf of the Lenders) as collateral for the Credit Facilities,
and all financing statements related thereto, and all
modifications, renewals or extensions thereof and any documents
executed in modification, renewal, extension or replacement
thereof.
Senior Indenture means that certain Indenture dated July 1,
1996, executed by and between AMRESCO and Comerica Bank, as
Trustee, as amended.
Standard Industry Practices means such due diligence,
collateral control and collection procedures that are customarily
followed by Persons actively engaged in the business of acquiring
Asset Portfolios in a bulk transaction.
Structure Fee means the fee to be paid by AMRESCO to the
Arranger pursuant to a separate letter to be executed by AMRESCO
and Arranger effective on the Closing Date.
Subsidiary means, (a) for any Person other than AMRESCO, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions (including that of a general partner) are at
the time directly or indirectly owned, collectively, by such
Person and any Subsidiaries of such Person or (b) for AMRESCO,
any corporation wholly-owned by AMRESCO or any other entity of
which 100% of the securities or other ownership interests are at
the time directly or indirectly owned, collectively, by AMRESCO
and any Subsidiaries of AMRESCO. The term Subsidiary shall
include Subsidiaries of Subsidiaries (and so on).
Supplement to Schedule I means an addendum to this
Agreement, the other Loan Documents, Schedule I to the Collateral
Assignment, and Schedule I to the Security Agreement, in form as
previously agreed to between AMRESCO and Agent as contemplated by
Section 2.5.
Taxes means all taxes, assessments, filing or other fees,
levies, imposts, duties, deductions, withholdings, stamp taxes,
interest equalization taxes, capital transaction taxes, foreign
exchange taxes or other charges of any nature whatsoever, from
time to time or at any time imposed by law or any federal, state
or local governmental agency (foreign or domestic). "Tax" means
any one of the foregoing.
Telerate Screen means the display designated as Screen 3750
(as to Dollars, and any other applicable Alternate Currency shown
thereon) or Screen 3740 (as to Canadian dollars) on the Telerate
System or such other screen on the Telerate System as shall
display the London interbank offered rates for deposits in U.S.
dollars or the applicable Alternate Currency quoted by selected
banks.
Term Facility means the term facility created by this
Agreement in an amount not to exceed One Hundred Million and
No/100 Dollars ($100,000,000) (which amount includes any
Additional Term Loans) evidenced by the promissory notes to be
made by Borrower to each Term Lender in the amount of such Term
Lender's Term Loan Commitment Amount.
Term Facility Termination Date means May 31, 2001.
Term Lenders means, as to the Term Facility, such financial
institutions listed as Term Lenders on Schedule I attached
hereto, and their permitted successors or assigns, as the same
may be amended to include Term Lenders under Additional Term
Loans.
Term Loan Commitment Amount means, with respect to each Term
Lender, the amount indicated as such Term Lender's Term Loan
Commitment Amount opposite the name of such Term Lender in
Schedule I, as such amount may be adjusted from time to time to
account for any assignment of a Term Lender's interest, and as
Schedule I may be amended to include Term Lenders under
Additional Term Loans.
Term Loan Percentage means, with respect to the Term
Facility and each Term Lender, the percentage indicated as such
Lender's Term Loan Percentage opposite the name of such Term
Lender on Schedule I, as such percentage may be adjusted from
time to time to account for any assignments of a Term Lender's
interest as provided in Section 11.10, and as such percentage may
be changed to reflect the loan percentages of Term Lenders under
Additional Term Loans.
Term Notes means those certain promissory notes evidencing
the Term Facility, executed by Borrower and payable to the order
of each Term Lender in the amount of such Lender's Term Loan
Commitment Amount, and in the form as attached hereto as Exhibit
A-1.
Title Company means a title company or title companies
selected by Borrower or any Guarantor and not disapproved by
Agent, together with any issuing agent that issues all or any
part of a Title Policy.
Title Policy means a Mortgagee or Loan Policy of Title
Insurance issued and underwritten by a Title Company for the
benefit of (a) Agent, on behalf of the Lenders, covering that
portion of the Mortgaged Property therein described and insuring
the lien of the Mortgage which covers such portion of the
Mortgaged Property, or (b) Borrower or any Guarantor insuring a
lien on Underlying Real Estate securing an Assigned Loan.
Total Consolidated Debt at any date of determination means
the sum of (a) consolidated Debt of Borrower and its Subsidiaries
which would be reflected on the consolidated balance sheet of
Borrower and its Subsidiaries prepared in accordance with GAAP if
such balance sheet were prepared as of such date of
determination, plus (b) the unfunded obligations of Borrower or
any Guarantor under outstanding letters of credit, plus (c) the
amount of any Contingent Obligations which are reasonably
quantifiable by Borrower (as confirmed by Agent) and which do not
duplicate any amounts otherwise included under this definition of
Total Consolidated Debt.
Transfer of Lien means an absolute assignment of note and
liens (including, without limitation, all mortgages and any other
security for each of the Assigned Loans) or other similar
document transferring a lien or security interest, executed by
AMRESCO or any Guarantor to Agent, for the benefit of the
Lenders, in the form agreed to by Borrower and Agent (which
document may also be referred to as an "Assignment of Lien" in
certain states).
UCC means the Uniform Commercial Code in effect under the
laws of the State of Texas, as amended, or, if stated with
reference to another jurisdiction, the Uniform Commercial Code as
adopted in the relevant jurisdiction.
UK Subsidiaries means, collectively, all Subsidiaries of
AMRESCO formed under the laws of the United Kingdom.
Underlying Obligor means any obligor under any residential
or commercial mortgage loan originated or funded by Borrower or
any Guarantor, provided, that the primary business of Borrower or
such Guarantor is the origination or funding of such residential
or commercial mortgage loans.
Underlying Real Estate means the real property, together
with all improvements thereon, which secures any of the Assigned
Loans or any one of such parcels of real property.
Variable Rate means a fluctuating rate of interest equal to
the Base Rate.
Variable Rate Advance shall mean an Advance under the
Revolving Credit Facility which will bear interest computed with
reference to the Variable Rate.
Variable Rate Portion shall mean that portion of the Term
Facility which bears interest computed with reference to the
Variable Rate.
Warehouse Lines means any Debt of Borrower or any Guarantor
created for the purpose of acquiring or originating loans and
securities which are intended to be sold, repaid or otherwise
liquidated in order to make payments on such Debt and which are
related to the lines of business of Borrower and the Guarantors
permitted by Section 7.2 hereof, including, without limitation,
commercial and residential mortgages or mortgage backed
securities, loans to business franchises or securities backed by
loans to business franchises, builder loans and commercial
finance loans; provided that (a) any such Debt shall be fully
collateralized at its inception, (b) in no event shall the
aggregate amount of Cash Contributed Capital exceed 20% of the
balance sheet value of loans or securities securing the Warehouse
Lines outstanding on the date of determination (the balance sheet
value of such loans and securities securing such Debt shall be
determined in accordance with GAAP and marked to market no less
than quarter-annually), and (c) there shall exist at the
inception of such Debt a strategy for selling or otherwise
liquidating specific collateral securing such Debt in a
commercially reasonable manner within the time period typically
required in the industry and by AMRESCO and its Subsidiaries for
such specific collateral, but in no event more than twenty-four
(24) months following its inclusion as collateral for the
applicable Debt.
Wholly-Owned Non-Real Estate Portfolios means Asset
Portfolios that are 100% owned by Borrower or any Guarantor where
less than 50% of the Net Purchase Price is allocated to Real
Estate Loans.
Wholly-Owned Real Estate Portfolios means Asset Portfolios
that are 100% owned by Borrower or any Guarantor where 50% or
more of the Net Purchase Price is allocated to Real Estate Loans.
Section 1.2. Singular and Plural of Definitions. Each
term defined in the singular form in Section 1.1 shall mean the
plural thereof when the plural form of such term is used in this
Agreement, and each term defined in the plural form in
Section 1.1 shall mean the singular thereof when the singular
form of such term is used in this Agreement.
Section 1.3. Substantive Definitions. The terms,
provisions and agreements set forth in the definitions contained
in Section 1.1 shall be substantive terms of this Agreement and
fully binding on the parties hereto.
Section 1.4. Money. Unless stipulated otherwise, all
references herein or in any of the Loan Documents to "Dollars,"
"$," "money," "payments" or other similar financial or monetary
terms are references to lawful money of the United States of
America.
Section 1.5. Captions; References. The captions in this
Agreement and in the table of contents hereof are for convenience
of reference only and shall not define, affect or limit any of
the terms or provisions hereof. All references herein to
Articles and Sections are, unless specified otherwise, references
to articles and sections of this Agreement. Unless specifically
indicated otherwise, all references herein to an "Exhibit,"
"Annex" or "Schedule" are references to exhibits, annexes or
schedules attached hereto, all of which are incorporated herein
and made a part hereof for all purposes, the same as if set forth
fully herein, it being understood that if any exhibit, annex or
schedule attached hereto which is to be executed and delivered
contains blanks, the same shall be completed correctly and in
accordance with this Agreement prior to or at the time of the
execution and delivery thereof. The words "herein," "hereof,"
"hereunder" and other similar compounds of the word "here" when
used in this Agreement shall refer to the entire Agreement and
not to any particular provision or section unless specifically
indicated otherwise.
Section 1.6. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with GAAP.
ARTICLE II
COMMITMENT
Section 2.1. Commitment. Subject to and upon the terms,
covenants and conditions of this Agreement:
(a) Revolving Credit Facility Advances. Each
Revolving Lender severally agrees to make in the manner set forth
in Section 2.2, its pro rata part (based on its Revolving Loan
Percentage) of one or more Advances for general corporate
purposes, which, subject to the Loan Documents, Borrower may
borrow, repay, and reborrow under this Agreement; provided, that,
(i) each such Advance must occur on a Business Day and no later
than the Business Day immediately preceding the Revolving
Facility Termination Date, (ii) each such Advance must be in an
amount not less than the limitations provided in Section 2.2, and
(iii) on any date of determination, the outstanding principal
balance of the Revolving Credit Facility (including the
outstanding balance of all Competitive Bid Loans) shall never
exceed the lesser of (A) the difference between (1) the Borrowing
Base, minus (2) the aggregate amount outstanding under the Term
Facility, (B) the difference between (1) the Revolving
Commitment, minus (2) the Letter of Credit Exposure, or (C) the
difference between (1) $490,000,000, minus (2) the original
principal amount of the Additional Term Loans. Except as
provided in Section 2.3 hereof, in no event shall any Revolving
Lender be required to make any Advances in excess of such
Lender's Revolving Loan Percentage of the amount required to be
advanced by the Revolving Lenders under the above provisions of
this Section 2.1 or which would cause any Revolving Lender to
have made Advances in excess of such Lender's Revolving Loan
Commitment Amount.
(b) Letters of Credit. Each Revolving Lender agrees
to cause Letters of Credit to be issued by the Issuing Lender for
the account of Borrower (provided any such Letter of Credit can
be issued in the name of any Guarantor) for any of the purposes
for which Borrower can obtain an Advance; provided, that (i) each
such Letter of Credit shall be issued on a Business Day,
(ii) after the issuance of any such Letter of Credit, (A) the
Letter of Credit Exposure must be less than or equal to the
Revolving Commitment (as the same may be adjusted as herein
provided) less the sum of all outstanding Advances under the
Revolving Credit Facility, and (B) the Letter of Credit Exposure
shall not exceed ten percent (10%) of the Revolving Commitment,
and (iii) each such Letter of Credit must have an expiration date
no later than the Revolving Facility Termination Date. To the
extent that funds are ever drawn under any of the Letters of
Credit, each such draw will be paid by the Issuing Lender, and
each of the Revolving Lenders will make an Advance in the amount
of such Lender's Revolving Loan Percentage of the amount so paid
by the Issuing Lender to reimburse the Issuing Lender for such
draw.
(c) Term Facility Advances. Each Term Lender which is
a party to this Agreement on the Closing Date has funded or
acquired its Term Loan Commitment Amount prior to the Closing
Date. Any Term Lenders providing Additional Term Loans shall
advance the amounts thereof as and when agreed to by Borrower,
Agent and such Term Lenders.
(d) Increase in Aggregate Commitment. So long as no
Default or Event of Default shall have occurred and be
continuing, Borrower shall have the right from time to time upon
prior written notice to Agent to increase the Revolving
Commitment or the Term Facility; provided, that in no event shall
(i) the aggregate Revolving Commitment and aggregate Term Loan
Commitment Amounts be increased to an amount greater than
$550,000,000 and (ii) the aggregate Term Loan Commitment Amounts
exceed the maximum amount of the Term Facility; provided,
further, that:
(1) Any increase in the Revolving Commitment
which is accomplished by increasing the Revolving Loan
Commitment Amount of any Revolving Lender or Revolving
Lenders who are at the time of such increase party to this
Agreement (which Revolving Lender or Revolving Lenders shall
consent to such increase in their sole and absolute
discretion) shall be subject to the following terms: (i)
this Agreement will be amended by Borrower, the Agent and
those Revolving Lender(s) whose Commitment(s) is or are
being increased to reflect the revised Revolving Loan
Commitment Amounts of each such Revolving Lender, (ii) Agent
will deliver an updated Schedule I to Borrower and each of
the Revolving Lenders reflecting the revised Revolving Loan
Commitment Amounts and Revolving Loan Percentage of each of
the Revolving Lenders, (iii) the Advances under the
Revolving Credit Facility and Revolving Loan Percentages
will be reallocated on the effective date of such increase
among the Revolving Lenders in accordance with their revised
Revolving Loan Percentages (and Borrower shall pay any and
all costs required pursuant to Section 3.6 in connection
with such reallocation as if such reallocation were a
prepayment), and (iv) Borrower will deliver new Revolving
Note(s) to the Revolving Lender or Revolving Lenders whose
Revolving Loan Commitment Amount(s) is or are being
increased reflecting the revised Revolving Loan Commitment
Amount of such Revolving Lender(s).
(2) Any increase in the Revolving Commitment
which is accomplished by addition of a new Revolving Lender
under this Agreement shall be subject to the following
terms: (i) such new Revolving Lender shall be an Eligible
Assignee and shall be subject to the consent of Agent and,
prior to the occurrence and during the continuance of a
Default, Borrower , which consent shall not be unreasonably
withheld, (ii) this Agreement will be amended by Borrower,
the Agent and the party becoming an additional Revolving
Lender hereunder to reflect the addition of such party as a
Lender hereunder, (iii) Agent will deliver an updated
Schedule I to Borrower and each of the Lenders reflecting
the revised Revolving Loan Commitment Amounts and Revolving
Loan Percentages of each of the Revolving Lenders, (iv) the
outstanding Advances under the Revolving Credit Facility and
Revolving Loan Percentages will be reallocated on the
effective date of such increase among the Revolving Lenders
in accordance with their revised Revolving Loan Percentages
(and Borrower shall pay any and all costs required pursuant
to Section 3.6 in connection with such reallocation as if
such reallocation were a prepayment) and (v) Borrower will
deliver a Revolving Note to such party.
(3) Any increase in the Term Facility which is
accomplished by addition of a new Term Lender under this
Agreement shall be subject to the following terms: (i) such
new Term Lender shall be an Eligible Assignee and shall be
subject to the consent of Agent and, prior to the
occurrence and during the continuance of a Default,
Borrower, which consent shall not be unreasonably withheld,
(ii) this Agreement will be amended by Borrower, the Agent
and the party becoming an additional Term Lender hereunder
to reflect the addition of such party as a Lender hereunder,
(iii) Agent will deliver an updated Schedule I to Borrower,
and each of the Lenders reflecting the revised Term Loan
Commitment Amounts and Term Loan Percentages of each of the
Term Lenders, and (iv) Borrower will deliver a Term Note to
such party.
(4) Any increase in the Term Facility which is
accomplished by increasing the Term Loan Commitment Amount
of any Term Lender or Term Lenders who are at the time of
such increase party to this Agreement (which Term Lender or
Term Lenders shall consent to such increase in their sole
and absolute discretion) shall be subject to the following
terms: (i) this Agreement will be amended by Borrower, the
Agent and those Term Lender(s) whose Commitment(s) is or are
being increased to reflect the revised Term Loan Commitment
Amounts of each such Term Lender, (ii) Agent will deliver an
updated Schedule I to Borrower and each of the Lenders
reflecting the revised Term Loan Commitment Amounts and Term
Loan Percentages of each of the Term Lenders, and (iii)
Borrower will deliver new Term Note(s) to the Term Lender or
Term Lenders whose Term Loan Commitment Amount(s) is or are
being increased reflecting the revised Term Loan Commitment
Amount of such Term Lender(s).
Section 2.2. Method of Borrowing under Revolving Credit
Facility. Subject to the terms and conditions of this Agreement,
Borrower shall be entitled to obtain Advances and Letters of
Credit (which can be issued in the name of any Guarantor) from
Revolving Lenders under the Revolving Credit Facility pursuant to
Section 2.1 in the following manner:
(a) Variable Rate Advances. In the case of any
Variable Rate Advance, AMRESCO (acting for itself or on behalf of
each other Borrower), through an Authorized Officer, shall give
Agent prior to 10:00 a.m., Dallas, Texas time, on the date of any
such proposed Advance, an irrevocable written notice of its
intention to borrow or reborrow such Variable Rate Advance
hereunder. Such notice of borrowing shall specify the requested
funding date, which shall be a Business Day, the amount of the
proposed aggregate Variable Rate Advances to be made by Lenders
and shall be accompanied by the documents required to be
delivered pursuant to Article IV. The aggregate amount of
Variable Rate Advances to be made on any funding date shall not
be less than One Million and No/100 Dollars ($1,000,000.00) or
greater whole multiples of One Hundred Thousand and No/100
Dollars ($100,000.00).
(b) LIBOR Rate Advances. In the case of LIBOR Rate
Advances, AMRESCO (acting for itself or on behalf of each other
Borrower) an Authorized Officer, shall give Agent at least three
Business Days' irrevocable written notice of its intention to
borrow or reborrow such advance hereunder. Notice shall be given
to Agent prior to 10:00 a.m., Dallas, Texas time, in order for
such Business Day to count toward the minimum number of Business
Days required. LIBOR Rate Advances shall in all cases be subject
to availability and to Section 3.5 hereof. For LIBOR Rate
Advances, the notice of borrowing shall specify (i) the requested
funding date, which shall be a Business Day, (ii) the amount of
the proposed aggregate LIBOR Rate Advances to be made by the
Revolving Lenders, (iii) the Interest Period selected by AMRESCO
(provided that no such Interest Period shall extend past the
Revolving Facility Termination Date) and (iv) AMRESCO's election
of the Effective Date on which the LIBOR Rate Advances shall
begin. The aggregate amount of LIBOR Rate Advances to be made on
any funding date shall not be less than Five Million and No/100
Dollars ($5,000,000.00) or greater whole multiples of One Million
and No/100 Dollars ($1,000,000.00).
(c) Alternate Currency Option. In the case of any
Alternate Currency Advance, AMRESCO (acting for itself or on
behalf of each other Borrower), through an Authorized Officer,
shall give Agent at least three Business Days' irrevocable
written notice of its intention to borrow or reborrow such
advance hereunder (the "Alternate Currency Option"). Notice
shall be given to Agent prior to 10:00 a.m., Dallas, Texas time,
in order for such Business Day to count toward the minimum number
of Business Days required. Alternate Currency Advances shall in
all cases bear interest at the Alternate Currency Rate computed
with respect to the applicable Alternate Currency and be subject
to availability and to Section 3.5 hereof. Such notice of
borrowing shall specify (i) the requested funding date, which
shall be a Business Day, (ii) the Dollar Equivalent of the amount
of the proposed Alternate Currency Advance, (iii) the currency of
such proposed Alternate Currency Advance, (iv) the Interest
Period selected by AMRESCO (provided that no such Interest Period
shall extend past the Revolving Facility Termination Date) and
(v) AMRESCO's election of the Effective Date on which the
Alternate Currency Advance shall begin. The aggregate amount of
Alternate Currency Advances to be made on any funding date shall
not be less than Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000.00) (in its Dollar Equivalent), or greater
whole multiples of One Million and No/100 Dollars ($1,000,000.00)
(in its Dollar Equivalent).
(d) Notice To Revolving Lenders. Agent shall promptly
notify Revolving Lenders of each notice received from AMRESCO
pursuant to this Section 2.2. Each Revolving Lender shall, not
later than noon, Dallas, Texas time, on the date of any such
Advance, deliver to Agent, at its address set forth herein, such
Lender's Revolving Loan Percentage of such Advance in immediately
available funds in accordance with Agent's instructions. Prior
to 2:00 p.m., Dallas, Texas time, on the date of any Advance
hereunder Agent shall, subject to satisfaction of the conditions
set forth in Article IV, disburse the amounts made available to
Agent by the Revolving Lenders by (i) transferring such amounts
by wire transfer pursuant to AMRESCO's instructions, or (ii) in
the absence of such instructions, crediting such amounts to the
account of AMRESCO maintained with Agent. All Advances shall be
made by each Revolving Lender according to its Revolving Loan
Percentage.
(e) Method of Issuing Letters of Credit. Not less
than three (3) Business Days prior to the requested date of
issuance of any Letter of Credit, AMRESCO (for itself or on
behalf of each other Borrower) shall deliver to Agent a Request
For Advance and shall execute and deliver to the Issuing Lender
the customary letter of credit application and agreement used by
the Issuing Lender from time to time (the "LOC Application").
Nothing in this Agreement shall prohibit the Issuing Lender from
modifying the form of LOC Application in effect from time to time
in connection with the issuance of any Letter of Credit, provided
that, such modification does not substantially modify this
Agreement to the detriment of Borrower. In the event of a direct
conflict between the provisions of the LOC Application and this
Agreement, the provisions of this Agreement shall govern. In no
event shall a Letter of Credit have an expiration date which is
later than the Revolving Facility Termination Date. Letters of
Credit may be standby letters of credit only and may be issued on
behalf of either Borrower or any Guarantor. Upon satisfaction of
the applicable conditions precedent set forth in Article IV, and
subject to the other terms and conditions of this Agreement, the
Issuing Lender shall issue Letters of Credit for the account of
any Borrower or any Guarantor within three (3) Business Days from
receipt by the Issuing Lender of the fully-executed LOC
Application (so long as the requested terms of such Letter of
Credit are acceptable to the Issuing Lender in its reasonable
discretion).
Borrower shall be entitled to have issued under the
Revolving Credit Facility, subject to the terms of this
Agreement, Letters of Credit denominated in an Alternate Currency
or other currency as approved by Agent and the Issuing Lender,
provided, that, if drawn, each Lender shall be required to fund
its pro rata part of the Dollar Equivalent of such Advance. Each
such Advance shall be subject to the terms and conditions of this
Agreement related to Advances. The amount to be reserved under
the Revolving Credit Facility related to any such Letter of
Credit issued in an Alternate Currency or other currency approved
by Agent and the Issuing Lender, and therefore the Letter of
Credit Exposure related thereto, shall be an amount equal to 115%
of the amount remaining to be funded under any said Letter of
Credit from time to time (in Dollar Equivalent calculated from
time to time).
Immediately upon the issuance of each Letter of Credit, the
Issuing Lender shall be deemed to have sold and transferred to
each Revolving Lender, and each Revolving Lender shall be deemed
to have purchased and received from the Issuing Lender, in each
case irrevocably and without any further action by any party, an
undivided interest and participation in such Letter of Credit,
each drawing thereunder and the obligations of Borrower under
this Agreement in respect thereof in an amount equal to the
product of (x) such Lender's Revolving Loan Percentage times (y)
the maximum amount available to be drawn under such Letter of
Credit (assuming compliance with all conditions to drawing).
Subject to the limits referred to above, Borrower may request the
issuance of Letters of Credit under this Section 2.2(e), repay
any Advances under the Revolving Credit Facility resulting from
drawings thereunder pursuant to this Section 2.2(e) and request
the issuance of additional Letters of Credit under this Section
2.2(e).
The payment by the Issuing Lender of a draft drawn under any
Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Lender of an Advance under
the Revolving Credit Facility, which shall bear interest at the
Variable Rate, in the amount of such draft (but without any
requirement for compliance with the conditions set forth in
Article IV hereof). In the event that a drawing under any Letter
of Credit is not reimbursed by Borrower by 10:00 a.m. (Dallas
time) on the first Business Day after such drawing, the Issuing
Lender shall promptly notify Agent and each other Revolving
Lender. Each such Revolving Lender shall, on the first Business
Day following such notification, make an Advance, which shall
bear interest at the Variable Rate, and shall be used to repay
the applicable portion of the Issuing Lender's advance with
respect to such Letter of Credit, in an amount equal to the
amount of its participation in such drawing for application to
reimburse the Issuing Lender (but without any requirement for
compliance with the applicable conditions set forth in Article IV
hereof) and shall make available to Agent for the account of the
Issuing Lender, by deposit at Agent's office, in same day funds,
the amount of such Advance. In the event that any Revolving
Lender fails to make available to Agent for the account of the
Issuing Lender the amount of such Advance, the Issuing Lender
shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at a rate per
annum equal to the lesser of (i) the Maximum Lawful Rate or (ii)
the Federal Funds Rate.
Section 2.3 Competitive Bid Loans
(a) Competitive Bid Advances. In addition to Advances
pursuant to Sections 2.1 and 2.2, but subject to all of the terms
and conditions of this Agreement (including, without limitation,
the limitation set forth in Section 2.1 as to the maximum
aggregate principal amount of all outstanding Advances under the
Revolving Credit Facility), Borrower may, as set forth in this
Section 2.3, request the Revolving Lenders, prior to the
Revolving Facility Termination Date, to make offers to make
Competitive Bid Advances to Borrower. Each Revolving Lender may,
but shall have no obligation to, make such offers and Borrower
may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section 2.3. Competitive Bid
Advances shall be evidenced by the Competitive Bid Notes. Each
Competitive Bid Advance shall be repaid in full by Borrower on
the last day of the Interest Period applicable thereto.
(b) Competitive Bid Quote Request. When Borrower wishes to
request offers to make Competitive Bid Loans under this Section
2.3, Borrower shall transmit to Agent by telecopy a Competitive
Bid Quote Request to be received no later than 11:00 a.m., Dallas
time, at least five Business Days prior to the Borrowing Date
proposed therein, specifying in accordance with all of the terms
of this Agreement:
(i) the proposed Borrowing Date for the proposed
Competitive Bid Advance;
(ii) the aggregate principal amount of such Competitive
Bid Advance; and
(iii) the Interest Period applicable thereto.
Borrower may request offers to make Competitive Bid Loans for
more than one Interest Period in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given within
five Business Days (or upon reasonable prior notice to the
Revolving Lenders, such other number of days as Borrower and
Agent may agree) of any other Competitive Bid Quote Request.
Each Competitive Bid Quote Request shall be in a minimum amount
of $5,000,000 or a larger multiple of $1,000,000. Borrower shall
not be entitled to have more than four Competitive Bid Loans
outstanding at any time. A Competitive Bid Quote Request that
does not conform substantially to the format of Exhibit E hereto
shall be rejected, and Agent shall promptly notify Borrower of
such rejection by telecopy.
(c) Invitation for Competitive Bid Quotes. Promptly upon
receipt of a Competitive Bid Quote Request that is not rejected
pursuant to Section 2.3(b), Agent shall send to each of the
Revolving Lenders by telecopy an Invitation for Competitive Bid
Quotes which shall constitute an invitation by Borrower to each
Revolving Lender to submit Competitive Bid Quotes offering to
make the Competitive Bid Loans to which such Competitive Bid
Quote Request relates in accordance with this Section 2.3.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Revolving Lender may, in its sole discretion,
submit a Competitive Bid Quote containing an offer or offers
to make Competitive Bid Loans in response to any Invitation
for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.3 and must be
submitted to Agent by telecopy at its offices specified in
or pursuant to Section 11.2 not later than 1:00 p.m., Dallas
time, at least four Business Days prior to the proposed
Borrowing Date (or upon reasonable prior notice to the
Revolving Lenders, such other time and date as Borrower and
Agent may agree). Subject to Articles IV and IX, any
Competitive Bid Quote so made shall be irrevocable except
with the written consent of Borrower.
(ii) Each Competitive Bid Quote shall in any case
specify: (1) the proposed Borrowing Date, which shall be the
same as that set forth in the applicable Invitation for
Competitive Bid Quotes; (2) the principal amount of the
Competitive Bid Loan for which each such offer is being
made, (x) which principal amount may be greater than, less
than or equal to the Revolving Loan Commitment Amount of the
quoting Lender, but in no case greater than an amount which
would cause the then outstanding Advances under the
Revolving Credit Facility, plus the Letter of Credit
Exposure, plus the outstanding balances of all Competitive
Bid Loans to exceed the Revolving Commitment, (y) which
principal amount must be at least $2,000,000 and an integral
multiple of $500,000, and (z) which principal amount may not
exceed the principal amount of Competitive Bid Loans for
which offers were requested; (3) the Competitive Bid Margin
offered for each such Competitive Bid Loan; (4) the minimum
or maximum amount, if any, of the Competitive Bid Loan which
may be accepted by Borrower; (5) the applicable Interest
Period; and (6) the identity of the quoting Lender.
(iii) Agent shall reject any Competitive Bid Quote
that: (1) is not substantially in the form of Exhibit E-2
hereto or does not specify all of the information required
by Section 2.3(d)(ii); (2) contains qualifying, conditional
or similar language, other than any such language contained
in Exhibit E-2 hereto; (3) proposes terms other than or in
addition to those set forth in the applicable Invitation for
Competitive Bid Quotes, except as contemplated by Section
2.3(d)(ii); or (4) arrives after the time set forth in
Section 2.3(b).
(iv) If any Competitive Bid Quote shall be rejected
pursuant to Section 2.3(d)(iii), then Agent shall notify the
relevant Revolving Lender of such rejection as soon as
practicable.
(e) Notice to Borrower. Agent shall promptly notify
Borrower of (1) the terms of any Competitive Bid Quote submitted
by a Revolving Lender that is in accordance with this Section 2.3
and (2) if not disregarded by Agent in accordance with the
immediately succeeding sentence, of any Competitive Bid Quote
that is in accordance with this Section 2.3 which amends,
modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Revolving Lender with respect to the
same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by Agent unless such
subsequent Competitive Bid Quote specifically states that it is
submitted solely to correct a manifest error in such former
Competitive Bid Quote. Agent=s notice to Borrower shall specify
the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in
the related Competitive Bid Quote Request and the respective
principal amounts and Competitive Bid Margins so offered.
(f) Acceptance and Notice by Borrower. Subject to the
receipt of the notice from Agent referred to in this Section 2.3,
not later than 11:00 a.m. (Dallas time) at least three Business
Days prior to the proposed Borrowing Date, Borrower shall notify
Agent of Borrower=s acceptance or rejection of each offer
received by it pursuant to this Section 2.3; provided, however,
that the failure by Borrower to give such notice to Agent shall
be deemed to be a rejection by Borrower of all such offers. In
the case of acceptance, such notice (a ACompetitive Bid
Acceptance Notice@) shall specify the aggregate principal amount
of offers for each Interest Period that are accepted. Borrower
may accept or reject any Competitive Bid Quote in whole or in
part (subject to the terms of this Section 2.3); provided that:
(i) the aggregate principal amount of each Competitive
Bid Advance may not exceed the applicable amount set forth
in the related Competitive Bid Quote Request;
(ii) acceptance of offers may only be made on the basis
of ascending Competitive Bid Margins; and
(iii) Borrower may not accept any offer of the type
described in this Section 2.3 or that otherwise fails to
comply with the requirements of this Agreement for the
purpose of obtaining a Competitive Bid Loan under this
Agreement.
(g) Allocation by Agent. If offers are made by two or
more Revolving Lenders with the same Competitive Bid Margins for
a greater aggregate principal amount than the amount in respect
of which offers are permitted to be accepted for the related
Interest Period, the principal amount of Competitive Bid Loans in
respect of which such offers are accepted shall be allocated by
Agent among such Revolving Lenders as nearly as possible (in such
multiples as Agent may deem appropriate) in proportion to the
aggregate principal amount of such offers; provided, however,
that no Revolving Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount
which such Revolving Lender has indicated that it is willing to
accept. Allocations by Agent of the amounts of Competitive Bid
Loans shall be conclusive in the absence of manifest error.
Agent shall promptly, but in any event on the same Business Day,
notify each Revolving Lender of its receipt of a Competitive Bid
Acceptance Notice and the aggregate principal amount of each
Competitive Bid Advance allocated to each participating Revolving
Lender.
(h) Commitment to Lend Not Reduced and Other Agreements.
The agreement of a Revolving Lender to make a Competitive Bid
Loan hereunder shall not reduce such Revolving Lender's
obligation to fund other Advances under the Revolving Credit
Facility to the extent of such Revolving Lender's Revolving Loan
Commitment Amount, it being expressly acknowledged and agreed
that the agreement to make a Competitive Bid Loan is optional on
the part of such Revolving Lender and in addition to its
Revolving Loan Commitment Amount. The amount of Competitive Bid
Loans shall not reduce the Revolving Loan Commitment Amount of
any Lender for purposes of calculating the Commitment Fee.
Borrower shall pay to Agent an administrative fee of $1,000 for
each Competitive Bid Quote Request, payable on the date each such
Competitive Bid Request is transmitted to Agent. In no event
shall the aggregate amount of Competitive Bid Loans outstanding
at any time exceed $75,000,000.
Section 2.4. Fees.
(a) Participation Fee. In consideration for the commitment
of each Revolving Lender to make Advances under the Revolving
Credit Facility upon the terms and conditions set forth in this
Agreement and the reserving of sufficient funds by each Revolving
Lender from which to make disbursement of the Advances under the
Revolving Credit Facility, Borrower shall pay to each such
Revolving Lender on the Closing Date its Participation Fee. In
consideration for the commitment of each Term Lender to fund its
pro rata part of the Term Facility upon the terms and conditions
set forth in this Agreement and the reserving of sufficient funds
by each Term Lender from which to make such Advance under the
Term Facility, Borrower shall pay to each such Term Lender its
Participation Fee when such Term Lender funds its Term Loan
Commitment Amount.
(b) Commitment Fee. Throughout the Credit Period, Borrower
shall pay to Agent for the account of each Revolving Lender, such
Revolving Lender's Revolving Loan Percentage of the Commitment
Fee, such fee to be computed based on the number of actual days
elapsed assuming each calendar year consisted of 360 days, and
due and payable quarterly in arrears, commencing on January 1,
1998, and continuing on the first day of each calendar quarter
thereafter, with a final payment of such Commitment Fee being due
and payable upon the Revolving Facility Termination Date.
(c) Letter of Credit Fees. Borrower shall pay to Agent for
the account of each Revolving Lender a letter of credit fee (the
"Letter of Credit Fee") (which shall be payable quarterly in
arrears, commencing on January 1, 1998, and continuing on the
first day of each calendar quarter thereafter, with a final
payment of such Letter of Credit Fee being due and payable on the
Revolving Facility Termination Date) on the average daily amount
available for drawing under all outstanding Letters of Credit
(using the Dollar Equivalent for any Letters of Credit
denominated in an Alternate Currency) at the per annum
percentages determined in accordance with Schedule II hereof.
The fee payable in respect of the Letters of Credit shall be
subject to reduction or increase, as set forth in Schedule II.
Subject to Section 11.8 hereof, such fee shall be computed on the
basis of the actual number of days elapsed. In addition to the
Letter of Credit Fee, Borrower shall pay to Agent for the account
of the Issuing Lender an issuance fee (which shall be due and
payable on the date of issuance of each Letter of Credit) in an
amount equal to Three Hundred and No/100 Dollars ($300.00).
(d) Structure Fee. In consideration for the
Arranger's efforts in structuring the Credit Facilities and
arranging for such Credit Facilities, Borrower agrees to execute
on or before the Closing Date a letter reasonably satisfactory to
Agent and Arranger concerning the Structure Fee and to pay to
Arranger the Structure Fee in accordance with such letter.
(e) Administrative Fees. In consideration for Agent's
administration services under the Credit Facilities, Borrower
agrees to pay Agent the Administrative Fee in advance in equal
quarterly payments, commencing on January 1, 1998, and continuing
on the first day of each calendar quarter thereafter, until such
time the Notes are paid in full, all Letters of Credit have been
terminated, and Lenders' commitment to make Advances under this
Agreement have been terminated.
(f) Modification Fee. Borrower shall pay to Agent, in
addition to such other fees and charges which Lenders may
require, a fee (the "Modification Fee") of an amount not less
than either (i) the product of five one hundredths of one percent
(.05%) times the Revolving Commitment and the aggregate
outstanding unpaid principal amount under the Term Notes or (ii)
as otherwise agreed to by Borrower and Lenders, for each
material amendment to this Agreement initiated by Borrower and
entered into by Agent, the Lenders and Borrower after the date
hereof; provided, that, no such fee shall be required in
connection with any amendment to this Agreement the sole purpose
of which is to (x) add any Person as a Lender hereunder or to
amend Schedule I or (y) waive or amend Section 8.1 due to
Borrower=s non-compliance with such covenant due to any
Acquisition. Such Modification Fee shall be distributed by Agent
to each Lender in accordance with either its Revolving Loan
Percentage or Term Loan Percentage, as applicable.
Section 2.5. Additional Guarantors or Borrowers. Upon the
earlier to occur of (1) thirty (30) days after the filing of
articles of incorporation, certificates of limited partnership or
similar organizational documents with the appropriate
Governmental Authority of any future Subsidiary of Borrower or
(2) two (2) Business Days prior to the date that such Subsidiary
obtains from Borrower proceeds of an Advance under the Revolving
Credit Facility or includes any of its assets in the Borrowing
Base, Borrower shall cause to be delivered to Agent (a) a
Supplement to Schedule I properly executed by such future
Subsidiary (other than an Excluded Subsidiary), (b) a Guaranty
Agreement, executed by such future Subsidiary (other than an
Excluded Subsidiary), (c) a contribution and indemnification
agreement, in form and substance satisfactory to Agent, executed
by Borrower, Agent and all of the Guarantors, (d) a Pledge
Agreement and all financing statements related thereto, properly
executed by the appropriate Borrower or Guarantor pursuant to
which all of the outstanding shares of stock of such future
Subsidiary (other than the Excluded Subsidiaries) are pledged to
Agent (for the benefit of Lenders), together with the original
stock certificates accompanied by stock powers executed in blank
by the appropriate Borrower or Guarantor evidencing the shares of
stock required to be pledged under this Agreement, and (e) all
resolutions, certificates or documents Agent may reasonably
request relating to the formation, existence and good standing of
such future Subsidiary, corporate authority for the execution and
validity of the Loan Documents described in clauses (a), (b), (c)
and (d) immediately above and any other documents and matters
relevant to the formation of such future Subsidiary and its
status as a Guarantor hereunder (if applicable), all in form and
substance satisfactory to Agent, which resolutions, certificates
and documents shall include, without limitation, (i) the articles
of incorporation and bylaws of such future Subsidiary,
(ii) resolutions of the board of directors of such future
Subsidiary authorizing the execution of the Loan Documents
described in clauses (a), (b), (c) and (d) immediately above on
behalf of such future Subsidiary and the granting of all the
relevant Lenders' Liens as security for the Credit Facilities and
the Letters of Credit, (iii) certificates of incumbency for the
officers of such future Subsidiary, and (iv) certificates of
corporate existence and good standing issued by the state of
incorporation of such future Subsidiary and from the appropriate
Governmental Authority of each state in which such future
Subsidiary is required by applicable law to be qualified. In
lieu of causing a Subsidiary of Borrower to be a Guarantor under
this Agreement, Borrower may cause such Subsidiary to be a co-
Borrower under this Agreement if necessary for tax purposes
(provided that Foreign Obligors shall only be allowed to be
Guarantors, and not a Borrower, with respect to the Term
Facility).
ARTICLE III
TERMS OF THE CREDIT FACILITIES
Section 3.1. Notes. The Credit Facilities shall be
evidenced by the Notes. Each Revolving Lender shall receive an
originally executed Revolving Note in an amount equal to such
Lender's Revolving Loan Commitment Amount. Each Term Lender
shall receive an originally executed Term Note in an amount equal
to such Lender's Term Loan Commitment Amount. Each Revolving
Lender providing a Competitive Bid Loan shall receive an
appropriate, originally executed Competitive Bid Note.
Section 3.2. Maturity. All outstanding principal of the
Revolving Notes, together with all accrued but unpaid interest
and other amounts owed with respect thereto, shall be due and
payable in full on the Revolving Facility Termination Date. All
outstanding principal of the Term Notes, together with all
accrued but unpaid interest and other amounts owed with respect
thereto, shall be due and payable in full on the Term Facility
Termination Date. All outstanding principal of any Competitive
Bid Note shall be due and payable on the last day of the
applicable Interest Period.
Section 3.3. Interest Rate. Interest on the Notes (other
than Competitive Bid Notes) shall accrue at a rate per annum
equal to the lesser of (a) the Applicable Rate as selected by
AMRESCO pursuant to this Agreement, subject, however, to the
provisions of Section 11.8, or (b) the Maximum Lawful Rate;
provided, however, if at any time the Applicable Rate exceeds the
Maximum Lawful Rate, resulting in the charging of interest
hereunder to be limited to the Maximum Lawful Rate, then any
subsequent reduction in the Applicable Rate shall not reduce the
rate of interest below the Maximum Lawful Rate until the total
amount of interest accrued on the indebtedness evidenced hereby
equals the amount of interest which would have accrued on such
indebtedness if the Applicable Rate had at all times been in
effect.
Without notice to Borrower or anyone else, the Variable Rate
and the Maximum Lawful Rate shall each automatically fluctuate
upward and downward as and in the amount by which the Base Rate
and Maximum Lawful Rate, respectively, fluctuate, subject always
to limitations contained in this Agreement. In addition, the
Adjusted LIBOR Rate and the Alternate Currency Rate shall
fluctuate upward and downward as and in the amount by which the
LIBOR Margin fluctuates, subject always to limitations contained
in this Agreement, any such changes in the LIBOR Margin and,
therefore, the Adjusted LIBOR Rate or Alternate Currency Rate, as
applicable, to occur on the Business Day following the receipt by
Agent of evidence satisfactory to Agent of a change in the
Qualified Investment Rating.
Section 3.4. Interest Payments. Interest on the Notes,
computed as provided in Section 3.11, shall be due and payable as
it accrues on (a) the first day of each calendar quarter
commencing on October 1, 1997, and continuing on the first day of
each January, April, July and October thereafter until, as
applicable, either the Revolving Facility Termination Date or the
Term Facility Termination Date, and (b) at the end of each
Interest Period as to any LIBOR Rate Portion, LIBOR Rate Advance,
Alternate Currency Advance or Competitive Bid Note then expiring,
and on demand after, as applicable, the Revolving Facility
Termination Date or the Term Facility Termination Date so long as
any principal of any Note remains unpaid.
Section 3.5. Conversion of Revolving Credit Advances;
Interest Rate Elections under Term Facility; Regulatory Change.
(a) Upon at least three (3) Business Days' prior written
notice from AMRESCO to Agent ("Minimum Notice Requirement"),
Borrower may, on any Interest Adjustment Date (other than the
Revolving Facility Termination Date or Term Facility Termination
Date, as applicable), convert amounts of any LIBOR Rate Advances
or LIBOR Rate Portion, as applicable, into Variable Rate Advances
or a Variable Rate Portion, as applicable, with interest accruing
thereon with reference to the Variable Rate, as provided in
Section 3.3 above.
(b) Upon satisfaction by AMRESCO of the Minimum Notice
Requirement, and subject to the conditions provided in this
Agreement or the Notes, Borrower may, on any date prior to the
Revolving Facility Termination Date or Term Facility Termination
Date, as applicable, convert amounts of not less than Five
Million and No/100 Dollars ($5,000,000.00) in the aggregate on
the same date, or any whole multiple of One Million and No/100
Dollars ($1,000,000.00) in excess thereof of any Variable Rate
Advances or a Variable Rate Portion, as applicable, into LIBOR
Rate Advances or LIBOR Rate Portions, as applicable, with
interest accruing thereon with reference to the Adjusted LIBOR
Rate, as provided in Section 3.3 above, for the Interest Period
selected in such notice. AMRESCO may make a LIBOR Rate election
with respect to each Advance of the Term Facility by satisfying
the Minimum Notice Requirement prior to the related funding of
the Term Facility.
Each notice of Adjusted LIBOR Rate election by Borrower
shall include (i) the amount of the proposed aggregate LIBOR Rate
Advances or the LIBOR Rate Portions, as applicable, (ii) the
Interest Period selected by AMRESCO, and (iii) the Effective
Date, and is subject to the following conditions: (1) the
Interest Period shall be limited to a period commencing on the
Effective Date and ending on a date one, two, three, four or six
months later elected by AMRESCO in its notice to Agent; (2)
AMRESCO's written notice of an election shall be received by
Agent in time to satisfy the Minimum Notice Requirement; (3) the
last day of the Interest Period will not be subsequent in time to
the Revolving Facility Termination Date or Term Facility
Termination Date, as applicable; (4) in the case of a
continuation of a LIBOR Rate Advance or LIBOR Rate Portion, the
Interest Period applicable after such continuation shall commence
on the last day of the preceding Interest Period; (5) no LIBOR
Rate election shall be made if Agent determines by reason of
circumstances affecting the interbank Eurodollar market that
either adequate or reasonable means do not exist for ascertaining
the Adjusted LIBOR Rate for any Interest Period, or it becomes
impracticable for Agent or any Lender under the applicable Credit
Facility to obtain funds by purchasing U.S. dollars in the
interbank Eurodollar market, or if Agent or any Lender under the
applicable Credit Facility determines that the Adjusted LIBOR
Rate will not adequately or fairly reflect the costs to such
Lender of maintaining the applicable LIBOR Rate Advances or LIBOR
Rate Portion, as applicable, at such rate, or if as a result of
any Regulatory Change, it shall become unlawful or impossible for
Lenders under the applicable Credit Facility to maintain any such
LIBOR Rate election; (6) there shall never be more than fifteen
(15) LIBOR Rate Advances, in the aggregate, in effect at any one
time under the Revolving Credit Facility and no more than five
(5) LIBOR Rate Portions in effect at any one time under the Term
Facility; and (7) no LIBOR Rate election shall be made after the
occurrence and during the continuance of a Default or Event of
Default.
(c) As a condition to each Alternate Currency Advance,
Borrower shall select an Alternate Currency Rate (based on the
applicable Alternate Currency) to be applicable thereto;
provided, that each such Alternate Currency Advance must be in an
amount of not less than Two Million Five Hundred Thousand and
No/100 Dollars ($2,500,000.00) (in its Dollar Equivalent) in the
aggregate on the same date, or any whole multiple of One Million
and No/100 Dollars ($1,000,000.00) (in its Dollar Equivalent) in
excess thereof; and provided, further, that (1) no Alternate
Currency election shall be made if Agent or any Revolving Lender
determines that, as a result of any Regulatory Change, it shall
become unlawful, impracticable or impossible for Revolving
Lenders to maintain any such Alternate Currency election; (2)
there shall never be more than ten (10) Alternate Currency
Advances, in the aggregate, in effect at any one time under the
Revolving Credit Facility; (3) in no event shall the Dollar
Equivalent amount of the requested Alternate Currency Advance
plus the then current outstanding balance of all previous
Alternate Currency Advances based on the Dollar Equivalent
thereof (as of the Business Day immediately prior to the date of
such Advance) exceed $75,000,000 in the aggregate; (4) no
Alternate Currency election shall be made after the occurrence
and during the continuance of a Default or Event of Default; and
(5) Revolving Lenders shall not be required to make any Alternate
Currency Advance if the applicable Alternate Currency Rate would
be limited to the Maximum Lawful Rate pursuant to Section 3.3.
Upon the expiration of any Interest Period applicable to an
Alternate Currency Advance and provided that no Default has
occurred and Borrower is entitled to have outstanding such
Alternate Currency Advance under this Agreement, the Alternate
Currency Advance shall continue for an Interest Period having the
same duration as the Interest Period then ended (but not beyond
the Revolving Facility Termination Date) unless Borrower shall,
upon three (3) Business Days prior written notice, elect a
different Interest Period. Upon the occurrence of an Event of
Default, Agent may convert all Alternate Currency Advances into
the Dollar Equivalent at the end of the respective Interest
Periods therefor.
(d) To the extent Borrower has not made an effective
election under and in accordance with subparagraphs (a) or (b)
above (including, without limitation, at the expiration of an
Interest Period or, as of the Closing Date, with respect to the
Advance of the Term Facility), the Applicable Rate shall be the
Variable Rate. If Borrower has failed to make such election at
the end of an Interest Period under the Revolving Credit
Facility, the Revolving Lenders shall be deemed to have made a
Variable Rate Advance in Dollars and in the amount, and in
replacement, of the LIBOR Rate Advance then maturing. If
Borrower has failed to make such elections at the end of any
Interest Period under the Term Facility, the applicable LIBOR
Rate Portion shall expire and convert to a Variable Rate Portion.
To the extent Borrower has not made an effective election under
clause (c) above prior to the expiration of the applicable
Interest Period with respect to Alternate Currency Advances, then
Borrower shall be deemed to have elected an Interest Period in
accordance with the penultimate sentence of clause (c) above.
(e) If, on or after the Closing Date, any Regulatory Change
shall make it unlawful, impracticable or impossible for any
Lender (or its Eurodollar lending office) to make, maintain or
fund LIBOR Rate Advances, LIBOR Rate Portions, Alternate Currency
Advances or Competitive Bid Advances, as applicable, and such
Lender shall so notify Agent, Agent shall forthwith give notice
thereof to the other applicable Lenders and AMRESCO, whereupon
until such Lender notifies AMRESCO and Agent that the
circumstances giving rise to such suspension no longer exist, the
obligation of such Lender to maintain or fund LIBOR Rate Portions
or to make LIBOR Rate Advances or Alternate Currency Advances or
to maintain the funding under a Competitive Bid Note, as the case
may be, shall be suspended. If such Lender shall determine that
it may not lawfully continue to maintain and fund any of its
outstanding LIBOR Rate Advances, LIBOR Rate Portions, Alternate
Currency Advances or amounts under a Competitive Bid Note, to
maturity and shall so specify in such notice, Borrower shall
immediately prepay in full the then outstanding principal amount
of such Lender's portion of the LIBOR Rate Advances, Alternate
Currency Advances or Competitive Bid Notes, as the case may be,
together with accrued interest thereon, or, if applicable, any
LIBOR Rate Portion shall immediately convert to a Variable Rate
Portion. Concurrently with prepaying such portion of the LIBOR
Rate Advances or Alternate Currency Advances, as the case may be,
Borrower shall borrow a Variable Rate Advance and/or an Advance
in Dollars, as the case may be, in an equal principal amount from
such Lender (on which interest and principal shall be payable
contemporaneously with the related LIBOR Rate Advances or
Alternate Currency Advances, as the case may be, of the other
Lenders), and such Lender shall make such Variable Rate Advance
or Advance in Dollars, as the case may be. If a Lender shall be
unable to make, maintain or fund LIBOR Rate Advances, LIBOR Rate
Portions or Alternate Currency Advances as above provided for
more than sixty days, and the other Lenders are not similarly
restricted, Borrower shall be entitled to designate an Eligible
Assignee acceptable to Agent to purchase the interest of the
Lender which is unable to fund LIBOR Rate Advances, LIBOR Rate
Portions or Alternate Currency Advances, as the case may be, and
such Lender shall sell its interest to such Eligible Assignee
within ten Business Days of Borrower's request. Any such
purchase shall be in accordance with and subject to the
provisions of Section 11.10.
(f) Borrower shall promptly indemnify (i) Agent and Lenders
against any loss or expense which Agent or Lenders may, as a
consequence of Borrower's failure to make a payment on the date
such payment is due hereunder, or the payment, prepayment or
conversion of any LIBOR Rate Advances, LIBOR Rate Portions,
Alternate Currency Advances or amounts due under Competitive Bid
Notes hereunder on a day other than an Interest Adjustment Date
or, in the case of Competitive Bid Notes, the last day of the
applicable Interest Period, sustain or incur in liquidating or
employing deposits from third parties acquired to effect, fund or
maintain any such LIBOR Rate Advances, LIBOR Rate Portions,
Alternate Currency Advances or Competitive Bid Advances or any
part thereof, including, without limitation, any Consequential
Loss or Alternate Currency Loss; (ii) Lenders against and
reimburse Lenders for increased costs to Lenders, as a result of
any Regulatory Change, in the maintaining of any LIBOR Rate
Advances, LIBOR Rate Portions, Alternate Currency Advances or
Competitive Bid Advances; Agent shall give AMRESCO written notice
of such costs within ninety (90) days of its or any Lender's
implementation and/or compliance with any such Regulatory Change,
and such costs shall be reimbursed to such Lender prior to the
earlier of (A) the Revolving Facility Termination Date or the
Term Facility Termination Date, as applicable, or (B) ten (10)
days following written notice thereof from Agent to AMRESCO; and
(iii) Agent and Revolving Lenders against any loss which Agent or
Revolving Lenders may sustain or incur, as a consequence of
Borrower=s failure to (A) pay any Alternate Currency Advance on
the date due or in the Alternate Currency in which it was made or
(B) borrow Alternate Currency Advances on the date for such
borrowing specified in the relevant Request for Advance,
including without limitation, any loss (1) arising from any
change in the value of Dollars in relation to any such Alternate
Currency Advance which was not paid on the date due between the
date such payment was due and the date of payment, or which was
not paid in the Alternate Currency in which it was made, or (2)
incurred in liquidating or closing out any foreign currency
contract undertaken by such Revolving Lender in funding or
maintaining such Alternate Currency Advance, all as determined by
such Revolving Lender in its sole discretion. All payments made
pursuant to this paragraph shall be made free and clear, without
reduction for, or account of, any present or future taxes or
other levies of any nature, excluding net income and franchise
taxes.
Section 3.6. Payments of Advances; Reduction of Commitment
Amount.
(a) At any time prior to the occurrence of an Event of
Default, Borrower may by notice from AMRESCO to Agent prior to
10:00 a.m. (Dallas, Texas time) on the date on which prepayment
under this Section 3.6 is to be made, voluntarily prepay amounts
outstanding under the Revolving Credit Facility from time to time
and at any time, in whole or in part, without premium or penalty;
provided, that (i) each such partial payment must be in a minimum
amount of at least One Million and No/100 Dollars ($1,000,000.00)
(or, as to prepayment of portions thereof which are Alternate
Currency Advances, the Dollar Equivalent thereof), and (ii)
Borrower shall pay any related Consequential Losses or Alternate
Currency Losses within ten days after Agent's demand therefor.
Each such optional prepayment shall be applied to the Revolving
Credit Facility ratably in accordance with Section 3.9 to pay the
amounts owed to each Revolving Lender thereunder. At any time
subsequent to the Revolving Facility Termination Date or the
termination of the Revolving Credit Facility, but prior to the
occurrence of an Event of Default, Borrower may by notice from
AMRESCO to Agent prior to 10:00 a.m. (Dallas, Texas time) on the
date on which prepayment under this Section 3.6 is to be made,
voluntarily prepay amounts outstanding under the Term Facility
from time to time and at any time, in whole or in part, without
premium or penalty; provided, that Borrower shall pay any related
Consequential Losses within ten days after Agent's demand
therefor. Each such optional prepayment shall be applied to the
Term Facility ratably in accordance with Section 3.9 to pay the
amounts owed to each Term Lender thereunder. Borrower shall not
be entitled to prepay any Competitive Bid Note unless Borrower
simultaneously with such payment pays any Consequential Loss
resulting from such prepayment.
(b) Borrower shall make mandatory prepayments under the
Revolving Credit Facility prior to the occurrence of an Event of
Default in an amount equal to (a) the excess, if any, of the sum
of the outstanding principal balance of the Revolving Credit
Facility (including amounts outstanding under Competitive Bid
Notes), plus the Letter of Credit Exposure, at any time over the
lesser of (1) the Borrowing Base less the amount outstanding
under the Term Facility, and (2) the Revolving Commitment; and,
(b) the net sale proceeds received by Borrower from the sale of
any asset which has either a value at the time of the sale (as
shown on the books of Borrower), or an aggregate sales price and
all other consideration for such sale, in excess of $2,500,000.00
(excluding, however, the proceeds from the sale of any Borrowing
Base Loan, if, within five Business Days from the receipt by
Borrower of such sale proceeds, either such proceeds are used to
reduce the outstanding balance of the Revolving Credit Facility
or AMRESCO delivers to Agent an updated Borrowing Base Schedule
showing that the aggregate outstanding Advances under the
Revolving Credit Facility (including amounts outstanding under
Competitive Bid Notes) do not exceed an aggregate amount equal to
the Borrowing Base less the amount outstanding under the Term
Facility). Borrower shall pay on demand given by Agent any
Consequential Loss arising as a result of any such mandatory
prepayments.
(c) Borrower shall make mandatory prepayments under the
Revolving Credit Facility prior to the occurrence of an Event of
Default, and under both Credit Facilities pro rata after the
occurrence of an Event of Default, in the amount of the proceeds
received by any Subsidiary from the creation of the NIM Trusts.
(d) Borrower may, prior to the occurrence of an Event of
Default, fully or partially, reduce the Revolving Commitment,
provided that (i) notice of such reduction must be received by
Agent by 10:00 a.m. Dallas, Texas, time on the fifth Business Day
preceding the effective date of such reduction, (ii) each such
reduction in the Revolving Commitment must be in a minimum amount
of $10,000,000.00 or any whole multiple of $1,000,000.00 in
excess thereof (or, as to the reduction of portions thereof which
are Alternate Currency Advances, the Dollar Equivalent thereof),
(iii) Borrower shall not be entitled to an increase in the
Revolving Commitment once it has been so reduced, (iv) if the sum
of the aggregate outstanding principal balance of the Revolving
Credit Facility (including amounts outstanding under Competitive
Bid Notes), plus the Letter of Credit Exposure, exceeds the
Revolving Commitment as so reduced, Borrower shall make a
mandatory prepayment on the principal amount of the Revolving
Credit Facility in at least the amount of such excess, together
with any Consequential Loss or Alternate Currency Loss arising as
a result thereof, and (v) in no event shall Borrower be entitled
to so reduce the Revolving Commitment below $20,000,000.00,
unless Borrower has elected to terminate the Revolving Credit
Facility in full.
(e) If Borrower shall prepay any LIBOR Rate Advance, LIBOR
Rate Portion or Competitive Bid Loan prior to the expiration of
its applicable Interest Period, a prepayment fee shall be due to
Revolving Lenders, Term Lenders or the applicable holder of the
Competitive Bid Loan in an amount equal to the consequential loss
(the "Consequential Loss") incurred by such Revolving Lenders,
Term Lenders or the applicable holder of the Competitive Bid Loan
as a result of any such prepayment, such Consequential Loss to be
computed as the product of (i) the amount of the sum so prepaid
multiplied by (ii) the difference (but not less than 0.00) of
(A) the 360-day interest yield (as of the applicable Effective
Date or Borrowing Date, as applicable, and expressed as a
decimal) on a Treasury Obligation selected by Agent and having,
as of the applicable Effective Date or Borrowing Date, a
remaining term until its maturity approximately equal to the
original Interest Period, minus (B) the 360-day interest yield
(as of the Business Day immediately preceding the prepayment date
and expressed as a decimal) on a Treasury Obligation selected by
Agent and having, as of the Business Day preceding the prepayment
date, a remaining term until maturity approximately equal to the
unexpired portion of the Interest Period, multiplied by (iii) the
quotient of (A) the number of calendar days in the unexpired
portion of the Interest Period, divided by (B) 360. For purposes
of computing a prepayment fee, the Treasury Obligations selected
by Agent shall be from among those included in the over-the-
counter quotations supplied to The Wall Street Journal by the
Federal Reserve Bank of New York City based on transactions of
$1,000,000.00 or more. Any prepayment fee required to be paid by
Borrower pursuant to this Section 3.6 or any other provisions of
this Agreement or of the other Loan Documents in connection with
the prepayment of any LIBOR Rate Advances, LIBOR Rate Portions or
Competitive Bid Loans shall be due and payable whether such
prepayment is being made voluntarily or involuntarily, including,
without limitation, as a result of an acceleration of sums due
under LIBOR Rate Advances, LIBOR Rate Portions, Competitive Bid
Loans or any part thereof due to an Event of Default.
(f) If Borrower shall prepay any Alternate Currency Advance
or for whatever reason an Alternate Currency Advance is converted
to Dollars prior to the expiration of its applicable Interest
Period, a prepayment fee shall be due to Revolving Lenders for
any loss, cost, liability, or expense (an "Alternate Currency
Loss") which any Revolving Lender incurs as a result thereof,
including, without limitation, (i) any loss or reasonable expense
sustained or incurred in liquidating or employing deposits from
third Persons acquired to effect or maintain such Alternate
Currency Advance or any part thereof, (ii) an amount equal to the
excess, if any of (A) its cost of obtaining the funds for the
Alternate Currency Advance being prepaid or converted prior to
the expiration of its applicable Interest Period for the period
from the date of such prepayment or conversion to the last day of
the Interest Period for such Alternate Currency Advance, over (B)
the amount of interest (as reasonably determined by such
Revolving Lender) that would be realized by such Revolving Lender
in re-employing the funds so prepaid or converted for such
Interest Period, (iii) any loss incurred in liquidating or
closing out any foreign currency contract undertaken by such
Revolving Lender in funding or maintaining such Alternate
Currency Advance, and (iv) any loss arising from any change in
the value of Dollars in relation to any such Alternate Currency
Advance which was not paid on the date due between the date such
payment was due and the date of payment, or which was not paid in
the Alternate Currency in which it was made, all as determined by
such Revolving Lender in its good faith discretion, but otherwise
without penalty.
(g) As long as no Event of Default has occurred and is
continuing, Borrower shall make such regularly scheduled
principal payments under the Term Facility as are set forth in
the Term Notes; provided, that prior to the Revolving Facility
Termination Date or the termination of the Revolving Credit
Facility, the aggregate amount of such principal payments under
the Term Facility during the twelve (12) month period immediately
preceding any such payment shall not exceed one percent (1%) of
the aggregate outstanding balance under the Term Notes at the
beginning of such twelve (12) month period.
A Revolving Lender (through the Agent) must request compensation
under this Section 3.6 as promptly as practicable after it
obtains knowledge of the event which entitles it to such
compensation, but in any event within 180 days after it obtains
such knowledge and pursuant to a certificate which sets forth the
amount such Revolving Lender is entitled to receive pursuant to
this Section 3.6 and the basis for determining such amount, which
certificate shall be conclusive as to the matters set forth
therein in the absence of manifest error. Any amounts received
by Agent from Borrower pursuant hereto shall be disbursed by
Agent in immediately available funds to the Revolving Lenders
requesting such amounts.
Section 3.7. Schedules on Notes. Each Revolving Lender is
hereby authorized to record the date and amount of the initial
principal balance of its Revolving Note and the date and amount
of each advance and repayment of principal on such Revolving
Note, and to attach any such recording as a schedule to the
Revolving Note whereupon such schedule shall constitute a part of
such Revolving Note for all purposes. Any such recording shall
constitute prima facie evidence of the accuracy of the
information so recorded; provided that the absence or inaccuracy
of any such schedule or notation thereon shall not limit or
otherwise affect the liability of Borrower for the repayment of
all amounts outstanding under the Revolving Notes together with
interest thereon.
Section 3.8. General Provisions as to Payments. All
payments and indemnities required to be made by Borrower under
any of the Loan Documents shall be joint and several obligations
of Borrower. Borrower shall make each payment of principal and
interest on either of the Credit Facilities and all fees payable
hereunder or under any other Loan Document not later than
12:00 noon (Dallas time) on the date when due, in Federal or
other funds immediately available in Dallas, Texas, to Agent at
Agent's address for payments set forth in Schedule I. Agent will
promptly (and if such payment is received by Agent by 12:00 noon
(Dallas, Texas time), and otherwise if reasonably possible, on
the same Business Day, and in any event not later than the next
Business Day after receipt of such payment) distribute to each
Lender under the Credit Facility on which a payment is made a
payment on the applicable Note, in accordance with such Lender's
pro rata share of each such payment received by Agent. For
purposes of calculating accrued interest on either of the Credit
Facilities, any payment received by Agent as aforesaid by
12:00 noon (Dallas, Texas time) on any Business Day shall be
deemed made on such day; otherwise, such payment shall be deemed
made on the next Business Day after receipt by Agent. Whenever
any payment of principal or interest on either of the Credit
Facilities, or any fees under the Loan Documents, shall be due on
a day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day. If the
date for any payment of principal is extended by operation of law
or otherwise, interest thereon shall be payable for such extended
time.
Section 3.9. Application of Payments. Prior to the
occurrence of an Event of Default, all payments made on the
Revolving Credit Facility, the Term Facility or the Competitive
Bid Loans shall be applied against the Revolving Credit Facility,
the Term Facility or the Competitive Bid Loans as designated by
AMRESCO (other than any payments required under the Term Notes)
and shall be paid to each Revolving Lender or Term Lender, as
applicable, in accordance with its Revolving Loan Percentage or
Term Loan Percentage, respectively, or to the holder of the
applicable Competitive Bid Note, subject to the provisions of
Article X and any provision in the Loan Documents or agreements
among the applicable Lenders providing for the application of
such proceeds against expenses or other amounts. After the
occurrence of an Event of Default and for a period of thirty days
after notice of such Event of Default has been received and
acknowledged by, or delivered by, Agent, all payments made on the
Credit Facilities (other than scheduled payments on the Credit
Facilities and any provisions in the Loan Documents providing for
the application of such proceeds against expenses and other
amounts) shall be applied first against the Revolving Credit
Facility. If an Event of Default continues uncured or unwaived
after said thirty-day period, payments on the Credit Facilities
shall be ratably paid to each Lender in accordance with its
Aggregate Loan Percentage, subject to Article X and any provision
in the Loan Documents or agreements among the Lenders providing
for the application of such amounts. Revolving Lenders and
Borrower agree that in the event an Event of Default continues
uncured or unwaived after the above-referenced thirty day period,
the Revolving Lenders shall make an Advance to each of the Term
Lenders and holders of Competitive Bid Loans in an amount equal
to the net aggregate payments applied against the Revolving
Credit Facility during such thirty-day period times the Aggregate
Loan Percentage of such Term Lenders and holders of Competitive
Bid Loans. The Advance or Advances so made shall not require any
action on the part of Borrower and shall be made notwithstanding
Borrower=s failure to comply with the conditions for making
Advances under the Revolving Credit Facility. Except as (a) to
principal payments made pursuant to Section 3.6(a),(b),(c) or
(d)(iv), (b) provided in Section 9.10, and (c) otherwise
specifically provided in this Agreement or in any Loan Document,
all prepayments on the respective Credit Facilities (including
Competitive Bid Loans) shall be applied against accrued but
unpaid interest and then against the principal portion of the
applicable Credit Facility; provided, however, that, unless
otherwise designated by AMRESCO or required by law, prepayments
and involuntary payments received by the holder hereof and
applied to principal hereunder shall be applied first to the
Variable Rate Advances or Variable Rate Portion, as applicable,
in Dollars (or that portion of LIBOR Rate Advances or LIBOR Rate
Portions, as applicable, not subject to a prepayment penalty),
second to the LIBOR Rate Advances or LIBOR Rate Portions, as
applicable, in Dollars, third, to the Competitive Bid Loans and
fourth to the Alternate Currency Advances.
Section 3.10. Post-Default Interest; Past Due Principal and
Interest. After maturity of the Notes or the occurrence of an
Event of Default, the outstanding principal balance of the Notes
shall, at the option of the Required Lenders, bear interest at
the Default Rate. Any past due principal of and, to the extent
permitted by law, past due interest on the Notes shall bear
interest, payable as it accrues on demand, for each day until
paid at the Default Rate. Such interest shall continue to accrue
at the Default Rate notwithstanding the entry of a judgment with
respect to any of the Obligations or the foreclosure of any of
the Lenders' Liens, except as otherwise provided by applicable
law.
Section 3.11. Computation of Interest and Fees. All
interest payable on the Notes hereunder or the amount of any fees
hereunder shall be computed based on the number of days elapsed
and 360 days per year (or 365 days for Alternate Currency
Advances in British pounds sterling), subject to the provisions
hereof limiting interest to the maximum permitted by applicable
law.
Section 3.12. Capital Adequacy. If any present or future
law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) or the
interpretation thereof by a court or governmental authority with
appropriate jurisdiction affects the amount of capital required
or expected to be maintained by any Lender or any corporation
controlling such Lender and such Lender reasonably determines
that the amount of capital so required or expected to be
maintained is increased by or based upon the existence of the
Credit Facilities or the Letters of Credit, then such Lender may
notify AMRESCO of such fact, and commencing ninety (90) days
following such notice, Borrower shall pay to such Lender or Agent
(for such Lender) from time to time on demand, as an additional
fee payable hereunder, such amount as Lender shall determine in
good faith and certify in a notice to AMRESCO in reasonable
detail to be an amount that will adequately compensate such
Lender in light of these circumstances for its increased costs of
maintaining such capital. Each Lender shall allocate such cost
increases among its customers in good faith and on an equitable
basis.
Section 3.13. Deposit of Cash Collateral. Upon the
occurrence of any Event of Default, Borrower shall, on the next
succeeding Business Day, deposit in a segregated, interest
bearing account with Agent such funds as Agent may request, up to
a maximum amount equal to the aggregate existing Letter of Credit
Exposure. Any funds so deposited shall be held by Agent as
security for the Obligations (including the Letters of Credit)
and Borrower will, in connection therewith, execute and deliver
such assignments and security agreements in form and substance
satisfactory to Agent which Agent may, in its discretion,
require. As drafts or demands for payment are presented under
any Letter of Credit, Borrower hereby irrevocably directs Agent
to apply such funds to satisfy such drafts or demands. When all
Letters of Credit have expired and the Revolving Notes have been
repaid in full (and Lenders have no obligation to make further
Advances or issue Letters of Credit hereunder) or such Event of
Default has been cured to the satisfaction of Agent, Agent shall
release to AMRESCO any remaining funds deposited under this
Section 3.13. Whenever Borrower is required to make deposits
under this Section 3.13 and fail to do so on the day such deposit
is due, Revolving Lenders may make such deposit using any funds
of Borrower then available to any Revolving Lender.
Section 3.14. Alternate Currency Notes. In order to
satisfy various Legal Requirements applicable to certain Foreign
Portfolios or for any other purpose for which Borrower can obtain
an Alternate Currency Advance (including, without limitation,
Legal Requirements related to the deductibility of interest on
Alternate Currency Advances used to fund the acquisition of such
Foreign Portfolios or for such other purposes), Borrower has
requested that they be allowed to separately document the
fundings for, or refinancing of, the acquisition of any such
Foreign Portfolios or for such other purposes. Revolving Lenders
hereby approve such request subject to Agent being satisfied that
such additional documentation is appropriate. If approved by
Agent, Borrower which desires to acquire the applicable Foreign
Portfolio or to make a capital contribution to the Guarantor
making any such acquisition or to acquire or invest in any asset
or Person for the purpose for which Borrower can obtain an
Alternate Currency Advance may each execute and deliver to
NationsBank a promissory note or notes (the "Alternate Currency
Note") in an amount equal to the proceeds to be funded for such
acquisition. The terms of such Alternate Currency Note shall be
satisfactory to Agent in all respects. Agent, on behalf of
Lenders, shall then acquire the Alternate Currency Note from
NationsBank, and Borrower shall simultaneously with the delivery
of the Alternate Currency Note deliver to Agent a Request For
Advance for an Alternate Currency Advance in an amount sufficient
to enable Revolving Lenders to acquire the Alternate Currency
Note. Borrower and NationsBank understand and agree that
NationsBank shall not fund an Alternate Currency Note until such
time that Revolving Lenders have funded or are prepared to
simultaneously fund an Alternate Currency Advance to acquire such
Alternate Currency Note. The purchase price for each Alternate
Currency Note shall be equal to the outstanding principal balance
thereof, together will all accrued but unpaid interest thereon,
and, upon such payment, NationsBank shall endorse such Alternate
Currency Note to Agent, on behalf of Revolving Lenders, without
recourse or warranty. Payments of principal and interest made on
any Alternate Currency Note shall be applied against the
principal and interest on the Alternate Currency Advance made by
Revolving Lenders to acquire such Alternate Currency Note. In
addition, upon repayment by Borrower of all principal and accrued
but unpaid interest on any Alternate Currency Advance used to
acquire an Alternate Currency Note, than Agent, on behalf of
Revolving Lenders, shall return such Alternate Currency Note to
the maker thereof marked "Paid."
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1. Conditions To Closing. The obligation of the
Revolving Lenders to fund the first Advance under the Revolving
Credit Facility after the Closing Date, the Issuing Lender to
issue any Letter of Credit after the Closing Date, any Term
Lender to fund any additional Term Loan, or any Revolving Lender
to fund a Competitive Bid Loan, whichever is first, as provided
herein is subject to the satisfaction of the following conditions
and requirements:
(a) receipt by Agent of (i) this Agreement, properly
executed by Borrower, and (ii) evidence acceptable to Agent that
Borrower has paid all fees and expenses required to be paid by
Borrower as of the date of such Advance or issuance;
(b) receipt by each Lender of its Note, properly
executed by Borrower, together with its Participation Fee and
Modification Fee, if applicable;
(c) receipt by Agent of one or more Pledge Agreements,
and all financing statements related thereto, properly executed
by the appropriate Borrower or Guarantor, together with the
original stock certificates accompanied by stock powers executed
in blank by the appropriate Borrower or Guarantor evidencing all
of the outstanding shares of stock of each Subsidiary of Borrower
and Guarantors which is incorporated in the United States (other
than stock of the Excluded Subsidiaries and sixty-five percent
(65%) of the stock of the Foreign Obligors.
(d) receipt by Agent of each Third Modification of
Collateral Assignment and all financing statements related
thereto, properly executed by Borrower and the appropriate
Guarantors;
(e) receipt by Agent of the Third Modification of
Security Agreement and all financing statements related thereto,
properly executed by Borrower and the appropriate Guarantors;
(f) receipt by Agent of the Third Modification of
Lockbox Agreement and all financing statements related thereto,
properly executed by Borrower, Guarantors and the Lockbox Agent;
(g) receipt by the Custodians of the original
promissory notes evidencing the Assigned Loans owned by Borrower
or any Guarantor as of the Closing Date, together with allonge
endorsements attached thereto (in form acceptable to Agent)
executed in blank by Borrower or the appropriate Guarantor, and
all other documents required to be delivered to the Custodian
pursuant to the terms of the Custodial Agreement, the Collateral
Assignment or the other Loan Documents (including, without
limitation, as required by Sections 5.2 and 5.3 hereof);
(h) receipt by Agent from each Custodian of the
certificate required to be delivered under its respective
Custodial Agreement to reflect receipt by the Custodian of the
items referenced in (g) above;
(i) receipt by Agent of the Guaranty Agreement
executed by each Subsidiary of Borrower other than the Excluded
Subsidiaries;
(j) receipt by Agent of a contribution and
indemnification agreement in form and substance satisfactory to
Agent executed by Borrower and each Subsidiary of Borrower other
than the Excluded Subsidiaries;
(k) receipt by Agent of an opinion of general counsel
for Borrower and each Guarantor, opining as to the due
organization and existence of Borrower and each Guarantor, the
enforceability of each of the Loan Documents and such other
matters as Agent may reasonably request, in form and substance
satisfactory to Agent;
(l) receipt by Agent of all resolutions, certificates
or documents it may reasonably request relating to the formation,
existence and good standing of Borrower and each Guarantor on the
date hereof, corporate authority for the execution and validity
of this Agreement and the other Loan Documents, and any other
matters relevant to this Agreement, all in form and substance
satisfactory to Agent, which resolutions, certificates and
documents shall include, without limitation, (i) the articles of
incorporation and bylaws of Borrower and each Guarantor,
(ii) resolutions of the board of directors of Borrower and each
Guarantor authorizing the execution of the Loan Documents on
behalf of each such Borrower and Guarantor and the granting of
all the Lenders' Liens as security for the Credit Facilities and
the Letters of Credit, (iii) certificates of incumbency for the
officers of Borrower and each Guarantor, and (iv) certificates of
corporate existence and good standing issued by the state of
incorporation of Borrower and each Guarantor and, as requested by
Agent, from the appropriate governmental authority of each state
in which Borrower and each Guarantor is required by applicable
law to be qualified;
(m) receipt by Agent of filing officer certificates
(or commercial reports similar thereto, if satisfactory to Agent)
under Section 9-407(2) of the UCC, releases or partial releases
of liens or financing statements, and other evidence satisfactory
to Agent that there are no Liens on any assets of Borrower or any
Guarantor, except Liens permitted by Section 8.7 hereof;
(n) satisfaction of all conditions contained in
Section 4.2 if an Advance is being made, or satisfaction of all
conditions contained in Section 4.3 if a Letter of Credit is
being issued;
(o) receipt by Agent of copies of certificates of
insurance for each policy maintained by Borrower or any
Guarantor, together with evidence of payment of all premiums
thereon; and
(p) receipt by Agent and/or Lenders of all other
documents, instruments, certificates and information to be
delivered on or before the Closing Date pursuant to the terms of
this Agreement and the other Loan Documents.
All the documents, instruments, certificates, information,
evidences and opinions referred to in this Section 4.1 shall be
delivered to Agent no later than the Closing Date, and Lenders
shall not be bound by or obligated hereunder until Agent has
received all such items.
Section 4.2. Conditions To All Advances. The obligation
of Lenders to fund any Advance as provided herein is subject to
the satisfaction of the following conditions and requirements:
(a) timely receipt by Agent of a Request For Advance
(which shall be appropriately modified to Agent's satisfaction
with respect to the funding of the Term Facility);
(b) immediately before and after giving effect to such
Advance, no Default shall have occurred and be continuing and the
making of such Advance shall not cause a Default;
(c) the representations and warranties contained in
this Agreement and in the other Loan Documents shall be true and
correct in all material respects on and as of the date of such
Advance, except that all representations and warranties that
speak as of a particular date shall only be required on the date
of each such Advance to be true and correct in all material
respects as of the date to which such representation or warranty
speaks and not as of any subsequent date; and
(d) such other information and documentation as Agent
shall reasonably deem necessary or desirable in connection with
the funding of such Advance.
Section 4.3. Conditions to Letters of Credit. The
obligation of the Issuing Lender to issue any Letter of Credit as
provided herein is subject to the satisfaction by Borrower of the
following conditions and requirements:
(a) timely receipt by the Issuing Lender of a fully
completed LOC Application;
(b) timely receipt by Agent of a Request For Advance;
(c) immediately before and after the issuance of such
Letter of Credit, no Default shall have occurred and be
continuing and the issuance of any Letter of Credit shall not
cause a Default;
(d) the representations and warranties contained in
this Agreement and in the other Loan Documents shall be true in
all material respects on and as of the date of issuance of such
Letter of Credit, except that all representations and warranties
that speak as of a particular date shall only be required on the
date of issuance of each such Letter of Credit to be true and
correct in all material respects as of the date to which such
representation or warranty speaks and not as of any subsequent
date;
(e) timely receipt by Agent (on behalf of the Issuing
Lender) of the issuance fee required to be paid by the Issuing
Lender related to the issuance of such Letter of Credit; and
(f) such other information and documentation as Agent
or the Issuing Lender shall reasonably deem necessary or
desirable in connection with the issuance of such Letter of
Credit.
ARTICLE V
COLLATERAL AND GUARANTIES
Section 5.1. Security and Guaranties. The Credit
Facilities, the Letters of Credit, and the Obligations (as
modified and increased pursuant to this Agreement) shall all be
(a) secured by the liens and security interests created by the
Security Documents and any and all other Collateral described
herein, and all proceeds thereof, until the particular item of
Collateral is released or until the Letters of Credit have
expired and the Credit Facilities and all the Obligations are
paid and performed in full (and any obligation of Lenders to make
Advances has been terminated) and (b) guaranties by each
Subsidiary (other than an Excluded Subsidiary) pursuant to the
terms of the Guaranty Agreement. Borrower and Lenders understand
and agree that the term "Obligations" as used in the Security
Documents is intended to, and shall mean, the Obligations as
modified and increased by this Agreement, and therefore, the
liens and security interests created and evidenced by the
Security Documents secure, and the Guaranty Agreement guaranty,
all such Obligations.
Section 5.2. Requirements For Assigned Loans. With
respect to each of the Assigned Loans, Borrower or the applicable
Guarantor shall deliver to a Custodian the documents required by
the applicable Custodial Agreement which shall include, without
limitation, the following:
(a) Either (i) the original promissory note or notes
evidencing the Assigned Loan properly endorsed showing
endorsements thereof from the original holder thereof, and all
subsequent holders, to Borrower or the applicable Guarantor,
together with an endorsement thereof by Borrower or such
Guarantor to Agent, on behalf of Lenders (in form satisfactory
to Agent), which endorsement may be an allonge endorsement,
(ii) with respect to any Assigned Loan where the original
promissory note has been lost, an original lost note affidavit in
form which is sufficient under the UCC or the laws of any
applicable jurisdiction to enable the owner thereof to maintain
an action on the related promissory notes and recover from any
party liable thereon, and properly executed by the Person which
sold such promissory note to Borrower or the applicable
Guarantor, (iii) with respect to any Assigned Loan for which
Borrower or a Guarantor has a participation interest, the
original or a copy of the participation certificate or agreement
evidencing Borrower's or applicable Guarantor=s interest in such
Assigned Loan, or (iv) with respect to any Assigned Loan for
which a Borrower or a Guarantor has a judgment, an original
Assignment of Judgment (as defined in the Collateral Assignment);
(b) Copies of the mortgage, deed of trust or other
security documents by which a lien or security interest has been
granted to secure the Assigned Loan;
(c) An original Transfer of Liens properly executed
and acknowledged by Borrower or the appropriate Guarantor;
(d) To the extent in the possession of Borrower or a
Guarantor or an Affiliate of Borrower or a Guarantor, a Title
Policy and certificate of hazard and/or liability insurance with
respect to any Underlying Real Estate; and
(e) Such other information related to the Underlying
Real Estate, to the extent in the possession of Borrower, any
Guarantor or an Affiliate of Borrower or any Guarantor, as Agent
shall reasonably request.
Section 5.3. Requirements for Mortgaged Properties. With
respect to each of the Mortgaged Properties, Borrower or
Guarantor which owns such Mortgaged Property shall deliver to a
Custodian the documents required by the applicable Custodial
Agreement with respect thereto which shall include, without
limitation, the following:
(a) A copy of the deed or conveyance instrument by
which the applicable Borrower or the applicable Guarantor took
title to the Mortgaged Property;
(b) A Title Policy (which Title Policy may be a
mortgagee policy of title insurance which has converted to an
owner's policy of title insurance after foreclosure), for each
Mortgaged Property with a value in excess of One Hundred Thousand
and No/100 Dollars ($100,000.00) and, unless covered under an
umbrella policy approved by Agent, a certificate of hazard and/or
liability insurance covering the Mortgaged Property;
(c) An original, properly executed and acknowledged
Mortgage, together with a financing statement related thereto;
and
(d) Such other information as Agent shall reasonably
request.
Section 5.4. Recording. The Custodial Agreements shall
provide that the Custodian shall hold the original of each
Mortgage (and related financing statement) and Transfer of Liens
for recording in the appropriate real estate (or UCC, as
appropriate) records if and when (i) a Default occurs, or
(ii) Agent delivers ten (10) days prior written notice to the
Custodians and AMRESCO that the Required Lenders require the
recordation of such Mortgages (and related financing statements)
or Transfers of Liens. After the occurrence of any of the above
events, the Custodians or Agent shall record all Mortgages (and
related financing statements) and Transfers of Liens then held by
the Custodians, and Borrower shall be required to pay, or
reimburse the Lenders for the payment of, all filing fees,
mortgage and stamp taxes and other expenses incurred by Lenders,
Agent or Custodians in connection with the recordation of the
Mortgages (and related financing statements) and Transfers of
Liens.
Section 5.5. Timing of Deliveries. The items referenced
in Sections 5.2 and 5.3 must be delivered to a Custodian under a
Custodial Agreement within the time periods specified in such
Custodial Agreement, and Borrower or the appropriate Guarantor
must deliver to Agent a supplement to the Collateral Assignment
covering any Assigned Loans or Mortgaged Property acquired by
Borrower or any Guarantor after the Closing Date, no later than
the earlier to occur of (i) a Default, (ii) thirty (30) days
after the effective date of the acquisition by Borrower or the
applicable Guarantor of such Assigned Loans or Mortgaged
Property, or (iii) the date on which Borrower requests that such
Assigned Loans or Mortgaged Property be included in the Borrowing
Base.
Section 5.6. Agent's Discretion. All requirements for the
Collateral are imposed solely and exclusively for the benefit of
the Lenders but are to be enforced and monitored solely and
exclusively by Agent in accordance with the provisions of the
Loan Documents. No Person (including Borrower, any Guarantor or
any other Lender) other than Agent shall have any standing to
require satisfaction of any such requirements. Agent shall be
entitled to require delivery of the items referenced in Section
5.2 and Section 5.3 at any time and, from time to time (subject
to the limitation contained in Section 5.4), and the failure of
Agent to request any such items at any particular time shall not
constitute a waiver of the Lenders' rights to thereafter require
that such items be delivered.
Section 5.7. Lockbox; Lockbox Account.
(a) Notwithstanding any provision herein or in the
other Loan Documents to the contrary, Borrower and Guarantors
agree that they have instructed, or will cause instructions to be
given to, all Account Debtors, or contemporaneously with the
execution of this Agreement or within thirty (30) days after the
addition of an Asset Portfolio to the Borrowing Base will
instruct, or will cause instructions to be given to, all Account
Debtors, pursuant to a letter from Borrower or the appropriate
Guarantor or the seller of such Asset Portfolio in form approved
by Agent, to mail all payments and other remittances owing with
respect to the Assigned Loans directly to the Lockbox. Lockbox
Agent will have exclusive and unrestricted access to the Lockbox
and will have complete and exclusive authority to receive, pick
up and open all mail addressed to the Lockbox, whether
registered, certified, insured or otherwise. Neither Borrower
nor any Guarantors will have access to or control over the
Lockbox or any checks or monies received in the Lockbox. All
items received and monies collected in connection with the
Assigned Loans will be processed by the Lockbox Agent pursuant to
the terms of the Lockbox Agreement, and in the event any checks
or monies shall be submitted to Borrower or any Guarantor by any
Account Debtor under the Assigned Loans, or shall otherwise come
into the possession of Borrower or any Guarantor, the same shall
be deemed held by Borrower or such Guarantor in trust for
Lenders, and Borrower or such Guarantor shall deliver the same
to the Lockbox Agent within three (3) Business Days after
received by Borrower or such Guarantor, endorsed if appropriate,
for deposit into the Lockbox Account.
(b) Prior to the occurrence of a Default, on each
Business Day during each Credit Period, the Lockbox Agent shall,
and Borrower and each Guarantor hereby authorize and instruct the
Lockbox Agent to, withdraw all funds from the Lockbox Account, if
any, and deposit same into AMRESCO's operating account at
NationsBank as designated in writing from time to time by AMRESCO
to the Lockbox Agent. Upon the occurrence of a Default and
thereafter, all amounts in the Lockbox Account shall be disbursed
to and applied by Lockbox Agent and Agent to reduce the
outstanding obligations as provided in Section 9.10.
(c) Notwithstanding anything herein to the contrary,
Agent shall be entitled to establish, in lieu of the lock-box
arrangement otherwise described in this Section 5.7, a trust or
similar account arrangement in those countries where lock-box
arrangements are not commonly used. Without limiting the
generality of the previous sentence, Lenders, Borrower and
Guarantors agree that AMRESCO UK, AMRESCO UK Ventures Limited,
AMRESCO UK Limited and Old Midland House Limited shall not be
subject to the previous provisions of this Section 5.7, but shall
be subject to similar obligations with respect to any "Trust
Account" established by or for the benefit of such Persons in the
United Kingdom as set forth in Clause 6 of that certain Composite
Guarantee and Debenture dated June 7, 1996, executed by and among
each of such Persons and Agent.
Section 5.8. Release of Collateral. Prior to the
occurrence of a Default or an Event of Default, Borrower and
Guarantors shall be entitled to obtain a release of the Lenders'
Liens with respect to certain of the Collateral designated by
Borrower so long as (a) either (i) the Collateral being released
is not required to be pledged to the Lenders pursuant to the
terms of this Agreement, (ii) the Collateral being released is
being sold by Borrower or the applicable Guarantor (provided,
that, if the purchaser or transferee in connection with such sale
is an Excluded Subsidiary, the book value [determined in
accordance with GAAP] of any item of Collateral being released
does not exceed three percent (3%) of Adjusted Net Worth and the
aggregate book value [determined in accordance with GAAP] of all
items of Collateral so released over the immediately preceding
twelve month period does not exceed ten percent (10%) of Adjusted
Net Worth), or (iii) the Collateral being released is being
pledged by Borrower or such Guarantor to secure Debt which
Borrower or such Guarantor is entitled to incur under Section 8.5
and Borrower or such Guarantor is entitled under Section 8.7 to
xxxxx x xxxx on such Collateral being released in favor of the
Person for whom, and securing the Debt which, such lien is then
being created to secure, (b) Borrower and Guarantors shall
continue to be in compliance under this Agreement following the
release of such Lenders' Liens, and (c) Borrower has reduced the
amount outstanding under the Credit Facilities in an amount
deemed satisfactory by Agent, in its sole discretion, due to such
release of Collateral. If Collateral is released as part of an
asset exchange or capital contribution in connection with an
Investment permitted by this Agreement, then condition (c) above
can be satisfied by Borrower granting to Agent (for the benefit
of Lenders) liens or security interests in Collateral of the same
value as the Collateral being released as determined by Agent in
its sole discretion.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower and each Guarantor represent and warrant to Lenders
that:
Section 6.1. Existence and Power of Borrower and
Guarantors. Each Borrower and Guarantor (a) is a corporation or
partnership, as appropriate, duly created, validly existing and
in good standing under the laws of the state, province or country
under which it is organized, and is or will be qualified and in
good standing as a foreign corporation or partnership, as
appropriate, under the laws of each state where such
qualification is necessary for Borrower or such Guarantor to
conduct its business; and (b) has all corporate or partnership,
as appropriate, powers and all governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted and as contemplated to be conducted,
except where the failure to have any such item would not have a
material adverse effect on Borrower's or such Guarantor's
business and financial condition.
Section 6.2. Subsidiaries. Other than the Excluded
Subsidiaries, all direct and indirect Subsidiaries of AMRESCO are
Guarantors or a Borrower. All stock of each Subsidiary other
than Foreign Obligors and sixty-five percent (65%) of the stock
of each Foreign Obligor has been collaterally assigned to Agent
(on behalf of Lenders) pursuant to a Pledge Agreement, other than
stock of Excluded Subsidiaries. No Guarantor is an Excluded
Subsidiary.
Section 6.3. Authorization; Contravention. The execution,
delivery and performance of this Agreements, the Notes, the LOC
Applications, the Security Documents, the Guaranty Agreement and
the other Loan Documents by Borrower and each Guarantor as
appropriate, are within Borrower's or such Guarantor=s corporate
or partnership, as appropriate, powers, have been duly authorized
by all necessary corporate or partnership, as appropriate,
action, require no action by or in respect of, or filing with,
any governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation, bylaws or
partnership agreement, as appropriate, of Borrower or any such
Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon Borrower or any such
Guarantor or result in the creation or imposition of any Lien on
any asset of Borrower or any such Guarantor except Liens securing
the Notes.
Section 6.4. Enforceable Obligations. This Agreement, the
Notes, the LOC Applications and the other Loan Documents each
constitutes a valid and binding agreement of Borrower to the
extent Borrower is a party thereto, enforceable in accordance
with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting creditors rights generally, and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability. The Guaranty Agreement and
the other Loan Documents each constitutes a valid and binding
agreement of each Guarantor to the extent such Guarantor is a
party thereto, enforceable in accordance with its terms except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer or similar laws affecting
creditors rights generally, and (b) the availability of equitable
remedies may be limited by equitable principles of general
applicability.
Section 6.5. Financial Information.
(a) The current financial statements of Borrower and
each Guarantor and all of the other financial reports and
information of Borrower and each Guarantor that have been
delivered to Lenders are true and correct in all material
respects as of the date of such current financial statements and
other reports and information.
(b) Except as disclosed in writing to Lenders prior to
the execution and delivery of this Agreement, since June 30,
1997, there has been no material adverse change in the business,
financial position or results of operations of Borrower or any
Guarantor; and, there exists no condition, event or occurrence
that, individually or in the aggregate, could reasonably be
expected to result in a material adverse change in the business,
financial position or results of operations of Borrower or any
Guarantor.
Section 6.6. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of Borrower,
threatened against or affecting, Borrower or any Guarantor before
any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse
decision which could materially adversely affect the business,
financial position or results of operations of Borrower or any
Guarantor or which could in any manner draw into question the
validity of the Loan Documents.
Section 6.7. ERISA.
(a) Each Employee Plan has been maintained and
administered in substantial compliance with the applicable
requirements of the Code and ERISA. No circumstances exist with
respect to any Employee Plan that could have a material adverse
effect on Borrower or any Guarantor.
(b) With respect to each Pension Plan, (i) no
accumulated funding deficiency (within the meaning of
Section 412(a) of the Code), whether waived or unwaived, exists;
(ii) the present value of accrued benefits (based on the most
recent actuarial valuation prepared for each such plan, if any,
in accordance with ongoing assumptions) does not exceed the
current value of plan assets allocable to such benefits by a
material amount; (iii) no reportable event (within the meaning of
Section 4043 of ERISA) other than purchases and sales of
securities from a plan trustee as reported in the audited
financial statements of such plan has occurred; (iv) no
uncorrected prohibited transactions (within the meaning of
Section 4975 of the Code) exist which could have a material
adverse effect on Borrower or any Guarantor; (v) to the extent
such plan is covered by PBGC, no material liability to the PBGC
exists and no circumstances exist that could reasonably be
expected to result in any such liability; and (vi) no material
withdrawal liability (within the meaning of Section 4201(a) of
ERISA) exists and no circumstances exist that could reasonably be
expected to result in any such liability.
(c) As of the date hereof, neither Borrower nor any
Guarantor has any obligation under any Employee Plan to provide
post-employment health care benefits to any of its current or
former employees, except as may be required by Section 4980B of
the Code.
Section 6.8. Taxes and Filing of Tax Returns. Borrower
and each Guarantor have filed all material tax returns required
to have been filed and has paid all Taxes shown to be due and
payable on such returns, including interest and penalties, and
all other Taxes which are payable by such party, to the extent
the same have become due and payable other than Taxes with
respect to which a failure to pay would not have a material
adverse effect on Borrower or any Guarantor. Neither Borrower
nor any Guarantor has any knowledge of any proposed Tax
assessment against Borrower or any Guarantor other than customary
ad valorem taxes or other Taxes to become due in the normal
course of business, and all Tax liabilities of Borrower and each
Guarantor are adequately provided for. No income tax liability
of Borrower or any Guarantor has been asserted by the Internal
Revenue Service for Taxes in excess of those already paid, the
payment of which would have a material adverse affect on Borrower
or any Guarantor.
Section 6.9. Ownership of Assets. Borrower and each
Guarantor have good and indefeasible title to all of the
Collateral and all other assets reflected on its most current
financial statements delivered to Lenders. Except for Permitted
Encumbrances and liens permitted by Section 8.7 hereof, there is
no Lien on any property of Borrower or any Guarantor, and the
execution, delivery, performance or observance of the Loan
Documents will not require or result in the creation of any Lien
(except Lenders' Liens) on any such property. Borrower and each
Guarantor have properly granted to Lenders a perfected security
interest or lien in all Assigned Loans and other Collateral and a
valid first lien on all Mortgaged Properties owned by Borrower or
any Guarantor which have not been previously released pursuant to
the terms of the applicable Custodial Agreement (including,
without limitation, all Assigned Loans and Mortgaged Properties
included in the current Borrowing Base). Borrower and
Guarantors have requested as an accommodation to Borrower and
Guarantors because of the number of Assigned Loans and for ease
of administering the Credit Facilities that the Assigned Loans be
endorsed by using an allonge endorsement, and Borrower and
Guarantors acknowledge that, if an allonge endorsement is so used
in connection with an Assigned Loan, Borrower and Guarantors
intend such endorsement to be a part of the Assigned Loan as
fully as if such endorsement was made on the instrument itself.
Section 6.10. Business; Compliance. Borrower and each
Guarantor have performed and abided by all obligations required
to be performed by it under any license, permit, order,
authorization, grant, contract, agreement, or regulation to which
it is a party or by which it or any of its assets are bound and
which, if Borrower or such Guarantor were to fail to perform or
abide by, such failure would have a material adverse effect on
the business operations of Borrower or such Guarantor.
Section 6.11. Licenses, Permits. Borrower and each
Guarantor possess such valid franchises, licenses, permits,
consents, authorizations, exemptions and orders of Governmental
Authorities, as are necessary to carry on its business as now
being conducted, other than violations which would not (either
individually or collectively) have a material adverse effect on
the financial condition or operations of Borrower or any
Guarantor.
Section 6.12. Compliance with Law. The business and
operations of Borrower and each Guarantor have been and are being
conducted in accordance with all applicable laws, rules and
regulations of all Governmental Authorities, other than
violations which would not (either individually or collectively)
have a material adverse effect on the financial condition or
operations of Borrower or any Guarantor.
Section 6.13. Full Disclosure. All information heretofore
furnished by Borrower or any Guarantor (or any other party on
Borrower=s or any Guarantor's behalf) to Agent and Lenders for
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information
hereafter furnished by Borrower or any Guarantor to Agent and any
Lender will be, true and accurate in every material respect and
shall be, to the best of the knowledge and belief of the party
furnishing such information, without material omission. Borrower
and each Guarantor have, to the best of their knowledge,
disclosed to Agent in writing any and all facts which might
reasonably be expected to materially and adversely affect the
business, operations, prospects or condition, financial or
otherwise, of Borrower or any Guarantor, or the ability of
Borrower or any Guarantor to perform its obligations under this
Agreement or the other Loan Documents.
Section 6.14. Environmental Matters.
(a) With respect to assets of Borrower and Guarantors,
other than any Mortgaged Property, and except for conditions,
circumstances or violations that would not, individually or in
the aggregate, have a material adverse effect on the financial
condition, operation or business of Borrower or any Guarantor,
neither Borrower nor any Guarantor (i) knows of any environmental
condition or circumstance, such as the presence of any hazardous
substance (as defined in Section 7.7), adversely affecting the
properties or operation of Borrower or any Guarantor, (ii) has
received any report of a violation by Borrower or any Guarantor
of any Applicable Environmental Law, or (iii) knows that Borrower
or any Guarantor is under any obligation to remedy any violation
of any Applicable Environmental Laws.
(b) With respect to the Mortgaged Properties, (i) no
portion of any Mortgaged Property is contaminated by any
substance or material presently identified to be toxic or
hazardous according to any Applicable Environmental Law,
including, without limitation, any asbestos, polychlorinated
biphenyl, radioactive substance, methane, volatile hydrocarbons,
industrial solvents or any other material or substance which has
in the past or could foreseeably at the present time or at any
time in the future cause or constitute a material health, safety
or other environmental hazard to any Person or property, except
as otherwise disclosed in the Borrower Due Diligence Reports or
the applicable investment approval reports (ii) neither Borrower
nor any Guarantor nor, to the knowledge of Borrower or any
Guarantor, any other Person has caused or suffered to occur a
discharge, spillage, uncontrolled loss, seepage or filtration of
oil or petroleum or chemical liquids or solids, liquid or gaseous
products or hazardous waste, or hazardous substance at, upon,
under or within any portion of any Mortgaged Property or any
contiguous real estate which either (A) would be a violation of
Applicable Environmental Law or (B) has not been remediated so as
to cure any violation of Applicable Environmental Law (such
remediation having been accomplished without increasing the
potential environmental liability of Borrower or any Guarantor or
Lender), (iii) neither Borrower nor any Guarantor nor, to the
knowledge of Borrower or any Guarantor, any other Person has been
or is involved in operations at or near any portion of any
Mortgaged Property which could lead to the imposition on
Borrower, any Guarantor or any operator of such Mortgaged
Property of liability which could have a material adverse effect
on the financial condition or business operations of Borrower or
any Guarantor, or the creation of a lien on such property, under
any Applicable Environmental Law, (iv) neither Borrower, any
Guarantor nor any other Person has permitted any tenant or
occupant of any portion of any Mortgaged Property, to engage in
any activity that could lead to the imposition of liability on
such tenant or occupant, Borrower, any Guarantor or any operator
of any of such property which could have a material adverse
effect on the financial condition or business operations of
Borrower or any Guarantor, or could lead to the creation of a
lien on such property, under any Applicable Environmental Law, or
(v) to the knowledge of Borrower and Guarantors, no part of any
Mortgaged Property is contaminated by any substance or material
presently identified to be toxic or hazardous according to any
Applicable Environmental Law, except as otherwise disclosed in
the Borrower Due Diligence Reports or otherwise described in
writing to Agent.
(c) With respect to the Underlying Real Estate, to the
knowledge of Borrower and Guarantors, no part of any Underlying
Real Estate is contaminated by any substance or material
presently identified to be toxic or hazardous according to any
Applicable Environmental Law, or if any part of any Mortgaged
Property or any Underlying Real Estate is so contaminated the
holder of the related Assigned Loan is not subject to liability
resulting from such contamination because such party is a secured
lender, as opposed to an owner, of such property.
Section 6.15. Purpose of Credit. Borrower will use the
proceeds of the Credit Facilities for the purposes stated in
Section 2.1(a) hereof. No part of the proceeds of either of the
Credit Facilities will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation. Borrower
will not, directly or indirectly, use any of the proceeds of
either of the Credit Facilities for the purpose of purchasing or
carrying, or retiring any Debt which was originally incurred to
purchase or carry, any "margin stock" as defined in the Margin
Regulations, or to purchase or carry any "security that is
publicly-held" within the meaning of Regulation T of the Board of
Governors of the Federal Reserve System, or otherwise take or
permit any action which would involve a violation of such Margin
Regulations or any other regulation of such Board of Governors.
The Credit Facilities are not secured, directly or indirectly, in
whole or in part, by collateral that includes any "margin stock"
within the meaning of the Margin Regulations. Borrower will not
engage principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any "margin stock" within the meaning of the Margin
Regulations.
Section 6.16. Governmental Regulations. Neither Borrower
nor any Guarantor is subject to regulation under the Investment
Advisers Act of 1940, as amended. Neither Borrower nor any
Guarantor is subject to regulation under the Investment Company
Act of 1940, as amended, the Public Utility Holding Company Act
of 1935, as amended, any Margin Regulations or any other law,
rule or regulation which regulates the incurrence of Debt.
Section 6.17. Indebtedness. Neither Borrower nor any
Guarantor is an obligor on any Debt other than Debt permitted by
Section 8.5. Neither Borrower nor any Guarantor is (nor will
Borrower or any Guarantor ever become) an obligor on any Debt of
any Excluded Subsidiary, and none of the assets of Borrower or
any Guarantor have been pledged to secure, or otherwise given as
security for, any Debt of any Excluded Subsidiary.
Section 6.18. Insurance. Borrower and each Guarantor
maintains with financially sound, responsible and reputable
insurance companies or associations (or, as to workers'
compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it
operates) insurance concerning its properties and business
against such casualties and contingencies and of such types and
in such amounts (and with co-insurance and deductibles) as is
customary for the same or similar businesses.
Section 6.19. Solvency. On a consolidated basis as of the
Closing Date (a) the aggregate fair market value of Borrower=s
assets exceeds its liabilities (whether contingent, subordinated,
unmatured, unliquidated, or otherwise), (b) Borrower has
sufficient cash flow to enable it to pay its Debts as they
mature, and (c) Borrower has a reasonable amount of capital to
conduct its respective businesses as presently contemplated.
Section 6.20. Due Diligence Procedures. The due diligence,
collateral control and collection procedures used by Borrower and
Guarantors with respect to the Assigned Loans are no less
stringent than Standard Industry Practices. All Borrower Due
Diligence Reports have been prepared or reviewed by Borrower or a
Guarantor. The factual information contained in the Borrower Due
Diligence Reports, including without limitation, regarding title
to and the condition of each Borrowing Base Loan (but not
including valuation amounts and cash flow projections) has not
been intentionally misstated by Borrower or any Guarantor, and,
with respect to the Asset Portfolios taken as a whole, the
Borrower Due Diligence Reports accurately reflected the material
facts concerning each of the Borrowing Base Loans and Mortgaged
Properties included in such Asset Portfolios at the time the
Borrower Due Diligence Reports were prepared.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower and each Guarantor covenant and agree that, so long
as the Revolving Lenders' commitment to make Advances under the
Revolving Credit Facility remains in effect, any amounts remain
outstanding under the Term Facility, any Letters of Credit remain
outstanding or any of the Obligations remain unpaid:
Section 7.1. Information From AMRESCO. AMRESCO will
deliver, or cause to be delivered, to Agent on behalf of Lenders:
(a) As soon as available and in any event within one
hundred twenty (120) days after the end of each Fiscal Year of
AMRESCO, a consolidated balance sheet of AMRESCO and its
Subsidiaries as of the end of such Fiscal Year and the related
statements of income and cash flow for such Fiscal Year, setting
forth in each case in comparative form the figures for the
previous Fiscal Year, all reported by AMRESCO in accordance with
GAAP and audited by Deloitte & Touche (or its successors) or
other independent public accountants reasonably acceptable to
Agent.
(b) As soon as available and in any event within
forty-five (45) days after the end of each calendar quarter, a
consolidated cash flow statement and a consolidating and
consolidated balance sheet and related statement of income of
AMRESCO and its Subsidiaries as of the end of such quarter and
year-to-date, all certified by the chief financial officer, the
chief accounting officer or Treasurer of AMRESCO as to fairness
of presentation and as to whether such financial statements
fairly reflect the financial condition of AMRESCO and its
Subsidiaries as of the date of delivery thereof, subject to year-
end adjustments. Such financial statements shall be prepared in
conformity with GAAP, except that certain information and note
disclosures normally included in annual financial statements
prepared in accordance with GAAP may be condensed or omitted
provided that the disclosures made are adequate to make the
information presented not misleading, and GAAP shall be applied
on a basis consistent with the financial statements referred to
in Section 7.1(a).
(c) Simultaneously with the delivery of each set of
financial statements referred to in Sections 7.1(a) and (b), a
certificate of an Authorized Officer of AMRESCO, in the form as
attached hereto as Exhibit C, (i) setting forth in reasonable
detail the calculations required to establish whether Borrower
was in compliance with the requirements of Sections 8.1 through
and including Section 8.4 on the date of such financial
statements, and (ii) with respect to only the financial
statements delivered pursuant to Sections 7.1(a) and (b),
stating, to the best of such Authorized Officer's knowledge and
belief, whether or not such financial statements fairly reflect
the financial condition of AMRESCO and its Subsidiaries and
results of AMRESCO's and its Subsidiaries' operations as of the
date of the delivery of such financial statements.
(d) Promptly after the filing thereof, a true, correct
and complete copy of each Form 10-K and Form 10-Q and each other
report filed by or on behalf of AMRESCO with the SEC.
(e) Immediately upon the occurrence of any Default, a
certificate of an Authorized Officer of AMRESCO setting forth the
details thereof and the action which AMRESCO or any applicable
Guarantor is taking or proposes to take with respect thereto.
(f) Within fifteen (15) days after the end of each
calendar month, a current Borrowing Base Schedule, including an
Asset Portfolio Report (which, at the request of Agent, shall
include a detailed listing of each Assigned Loan included in the
Borrowing Base). If Agent disapproves a Borrowing Base Schedule,
the most recent Borrowing Base Schedule which has not been
disapproved by Agent shall be deemed to be the effective
Borrowing Base Schedule. AMRESCO shall also deliver a Borrowing
Base Schedule with each Request for Advance if, since the date of
the currently effective Borrowing Base Schedule, either Borrower
or any Guarantor has (A) sold or otherwise disposed of either
(x) an asset which contributed an amount equal to or greater than
Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00) to the Net Investment Value of its applicable
Asset Portfolio or (y) any Asset Portfolio included in the
currently effective Borrowing Base or (B) desires to include new
Eligible Investments in the Borrowing Base.
(g) Upon Agent's request from time to time, an
Interest Rate Exposure Report.
(h) Within forty-five (45) days after the end of each
calendar quarter, (i) a Residual Interests Report, (ii) an
organizational chart showing AMRESCO and its Subsidiaries, (iii)
a Permitted Secured Debt and Warehouse Lines Report and
Certification, (iv) a Pledged Asset Schedule and Certification,
and (v) a report in form satisfactory to Agent detailing any
loans which had been sold or securitized by Borrower or any
Subsidiary, but which were required to be repurchased by Borrower
or any Subsidiary if the amount of such loans which Borrower or
any Subsidiary were required to repurchase exceeds $2,000,000.00
in the aggregate during such quarter.
(i) Prompt notification of (i) any material adverse
change in the financial condition of Borrower or any Guarantor,
including, without limitation, the occurrence of any litigation
which could reasonably be expected to have a material adverse
effect on Borrower or any Guarantor, or (ii) the occurrence of
any acceleration of the maturity of any indebtedness owing by
Borrower or any Guarantor, or any default under any indenture,
mortgage, agreement, contract or other instrument to which
Borrower or any Guarantor is a party or by which Borrower or any
Guarantor or any properties of Borrower or any Guarantor are
bound, if such default or acceleration might have a material
adverse effect upon the financial condition of Borrower or any
Guarantor.
(j) From time to time such additional information
regarding the financial position or business of Borrower and/or
any of Borrower's Subsidiaries as Agent, at the request of any
Lender, may reasonably request, including, without limitation,
financial projections of Borrower or any Guarantor and
information concerning the insurance being maintained by Borrower
and Guarantors.
Section 7.2. Business of Borrower and Guarantors. The
primary business of Borrower and each Guarantor is, and Borrower
and each Guarantor covenant that it shall remain, a financial
services company which specializes in residential and commercial
mortgage banking, commercial finance, asset management and
related capital market activities.
Section 7.3. Right of Inspection; Confidentiality and Non-
Solicitation. Borrower and each Guarantor will permit Agent or
any Lender, or any officer, employee or agent of any such party,
to visit and inspect any of the assets of Borrower or any
Guarantor, examine the books of record and accounts of Borrower
or any Guarantor (including, without limitation, all Borrower Due
Diligence Reports), take copies and extracts therefrom, and
discuss the affairs, finances and accounts of Borrower or any
Guarantor with the respective officers, accountants and auditors
of Borrower or any Guarantor, all at such reasonable times and as
often as Agent or any Lender may reasonably require, all at the
expense of Borrower; provided, that, prior to the occurrence of a
Default, each Lender will make no more than two such visits or
inspections in any twelve month period. Each Lender covenants
and agrees to preserve the confidentiality of any financial data
concerning Borrower, any Subsidiary of Borrower or related to
Borrower's, or any Borrower's Subsidiaries' businesses or
operations or any information with respect to which Borrower or
any Subsidiary has (a) an obligation of confidentiality to a
third party (to the extent such obligation has been disclosed to
such Lender) or (b) informed such Lender of the confidential
nature of the specific information, except to the extent such
Lender is required to disclose such information pursuant to any
applicable law, rule, regulation or order of any Governmental
Authority; provided that (i) any information contained in any
annual report, or any Form 10-K, Form 10-Q or Form 8-K reports
(if any) which have been delivered to the SEC, or any other
annual or quarterly reports to the stockholders of Borrower
subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, proxy material delivered to the
stockholders of any Borrower or any report delivered to the SEC,
or any other information that is in the public domain or has
become publicly known, shall not in any event be deemed
confidential, and (ii) each Lender may make any information
received by it available (A) to a transferee of or participant in
any interest in either of the Credit Facilities or the Notes,
provided that such transferee or participant agrees in writing to
be bound by the provisions of this Section 7.3, (B) to any
accountants or other professionals engaged by such Lender,
provided that each such accountant or professional agrees to be
bound by the provisions of this Section 7.3, or (C) in connection
with the enforcement of any of the Loan Documents or any
litigation in connection therewith. Additionally, each Lender
covenants and agrees to preserve the confidentiality of this
Agreement and the transactions contemplated herein, except as set
forth in (ii)(A),(B) and (C) of the preceding sentence. Further
each Lender agrees that, during the term of the Credit
Facilities, it will not use the information provided by AMRESCO
and not otherwise generally known or obtainable through sources
other than AMRESCO to take any action to personally, by telephone
or mail, solicit any Underlying Obligor for any purpose which is
in conflict with the services and products which AMRESCO is
providing or can provide with AMRESCO's current products and
services to such Underlying Obligor, including to refinance loans
made by AMRESCO to such Underlying Obligor, without the prior
written consent of AMRESCO. It is understood and agreed that all
rights, title and interest in and to the list of such Underlying
Obligors and data relating to their mortgages are the property of
AMRESCO, and Lenders shall take no action to undermine these
rights and benefits.
Section 7.4. Maintenance of Insurance. Borrower and each
Guarantor will at all times maintain or cause to be maintained
insurance covering its respective risks as are customarily
carried by businesses similarly situated including, without
limitation, the following: (a) worker's compensation insurance;
(b) comprehensive general public liability and property damage
insurance in respect of all activities in which Borrower or such
Guarantor might incur personal liability for the death or injury
of an employee or third person, or damage to or destruction of
another's property; (c) insurance against loss or damage by fire,
lightning, hail, tornado, explosion and other similar risk; and
(d) comprehensive automobile liability insurance. Borrower and
each Guarantor shall maintain coverage with respect to the
foregoing risks in such coverage amounts as are customarily
carried by businesses similarly situated.
Section 7.5. Payment of Taxes, Impositions and Claims.
Borrower and each Guarantor shall pay (a) all Taxes imposed upon
it or any of its assets or with respect to any of its franchises,
business, income or profits, and all Impositions not later than
the due date thereof, or before any material penalty or interest
may accrue thereon and (b) all material claims (including,
without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by
law have or might become a Lien on any of its assets; provided,
however, payment of Taxes, Impositions or claims shall not be
required if and for so long as (i) the amount, applicability or
validity thereof is currently being contested in good faith by
appropriate action promptly initiated and diligently conducted in
accordance with good business practices and no material part of
the property or assets of Borrower or any Guarantor are subject
to levy or execution, (ii) Borrower or such Guarantor as required
in accordance with GAAP, shall have set aside on its books
reserves (segregated to the extent required by GAAP) deemed by it
to be adequate with respect thereto, and (iii) Borrower or such
Guarantor has notified Agent of such circumstances, in detail
satisfactory to Agent, and, provided further, that Borrower or
such Guarantor shall pay any such Tax, Imposition or claim if
such contest is not successful and in any event prior to the
commencement of any action to realize upon or foreclose any Lien
against any part of the Collateral.
Section 7.6. Compliance with Laws and Documents. Borrower
shall at all times comply, and cause each of its Subsidiaries to
comply, with all Legal Requirements, the articles of
incorporation and bylaws of Borrower, and each of Borrower's
Subsidiaries, and any other agreement to which Borrower, or any
Subsidiary of Borrower is a party, unless its failure to so
comply alone or in the aggregate would not have a material
adverse effect on the financial condition or operations of
Borrower, together with its Subsidiaries taken as a whole.
Section 7.7. Environmental Law Compliance and Indemnity.
Borrower and each Guarantor agree to promptly pay and discharge
when due all debts, claims, liabilities and obligations with
respect to any clean-up measures necessary for Borrower or any
Guarantor to comply with Applicable Environmental Laws affecting
Borrower or any Guarantor, provided that, with respect to any
single tract or parcel of real property, neither Borrower nor any
Guarantor shall be required to take such action if failure to
take such action would not have a material adverse effect on the
financial condition of Borrower or any Guarantor or would, in the
reasonable opinion of Agent, have the potential for creating any
liability or claim against Agent or any of the Lenders. Borrower
and Guarantors hereby, jointly and severally, indemnify and agree
to defend and hold Agent and each Lender and its successors and
assigns harmless from and against any and all claims, demands,
causes of action, loss, damage, liabilities, costs and expenses
(including reasonable attorneys' fees and court costs) of any and
every kind or character, known or unknown, fixed or contingent,
asserted against or incurred by Agent or any Lender at any time
and from time to time including, without limitation, those
asserted or arising subsequent to the payment or other
satisfaction of the Notes and expiration of the Letters of
Credit, by reason of, arising out of or related in any way to
Agent's and Lenders' entering into this Agreement and the
transactions herein contemplated, INCLUDING MATTERS WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE ORDINARY
NEGLIGENCE OF AGENT OR ANY LENDER OR FOR WHICH AGENT OR ANY
LENDER MAY HAVE STRICT LIABILITY, BUT EXCLUDING MATTERS ARISING
OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AGENT OR ANY
LENDER. It shall not be a defense to the covenant of Borrower
and Guarantors to indemnify that the act, omission, event or
circumstance did not constitute a violation of any Applicable
Environmental Law at the time of its existence or occurrence.
The terms "hazardous substance" and "release" shall have the
meanings specified in the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), and the terms "solid waste"
and "disposed" shall have the meanings specified in the Resource
Conservation and Recovery Act of 1976 ("RCRA"); provided, to the
extent that any other applicable laws of the United States of
America or political subdivision thereof establish a meaning for
"hazardous substance," "release," "solid waste," or "disposed"
which is broader than that specified in either XXXX or RCRA, such
broader meaning shall apply. As used in this Agreement,
"Applicable Environmental Law" shall mean and include the
singular, and "Applicable Environmental Laws" shall mean and
include the collective aggregate of the following: Any law,
statute, ordinance, rule, regulation, order or determination of
any governmental authority or any board of fire underwriters (or
other body exercising similar functions), or any restrictive
covenant or deed restriction (recorded or otherwise) affecting
Borrower or any Guarantor pertaining to health, safety or the
environment, including, without limitation, all applicable flood
disaster laws and health, safety and environmental laws and
regulations pertaining to health, safety or the environment,
including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, the Superfund Amendments
and Reauthorization Act of 1986, the Occupational Safety and
Health Act, the Texas Water Code, the Texas Solid Waste Disposal
Act, the Texas Workers' Compensation Laws, and any federal, state
or municipal laws, ordinances, regulations or law which may now
or hereafter require removal of asbestos or other hazardous
wastes from any property of Borrower or any Guarantor or impose
any liability on Agent or any Lender related to asbestos or other
hazardous wastes in any property of Borrower or any Guarantor.
The provisions of this Section 7.7 shall survive the repayment of
the Notes and expiration of the Letters of Credit. In the event
of the transfer of the Notes or any portion thereof, each Lender
or any prior holder of the Notes and any participants shall
continue to be benefitted by this indemnity and agreement with
respect to the period of such holding of the Notes.
Section 7.8. Covenant Compliance. Borrower and each
Guarantor shall perform and comply with all covenants,
obligations and agreements contained in this Agreement and in the
other Loan Documents.
Section 7.9. Quantity and Quality of Documents. All
certificates, opinions, reports and documents to be delivered
from time to time hereunder shall be in such number of
counterparts as Agent may reasonably request and in form
reasonably acceptable to Agent, and counterpart signature pages
to any such documents may be attached to and shall, together with
all counterparts, constitute one and the same document.
Section 7.10. Use of Proceeds. Borrower and each Guarantor
will use the proceeds of the Credit Facilities (including the
Letters of Credit) solely for the purposes represented in this
Agreement and shall not use such proceeds, directly or
indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock, and none of
such proceeds will be used in violation of applicable law
(including, without limitation, the Margin Regulations).
Section 7.11. Additional Documents. Within ten (10)
Business Days after request by Agent, Borrower and each Guarantor
agree that they will execute and deliver or cause to be executed
and delivered to Agent upon Agent's request such other and
further instruments, documents or certificates as in the judgment
of Agent may be required to better effectuate the transactions
contemplated herein or to conform, create, evidence, perfect,
preserve or maintain the Lenders' Liens (including, without
limitation, the Lenders' Liens with respect to the Securities (as
defined in the Pledge Agreement)) or the Lenders' rights
hereunder or under the other Loan Documents, and Borrower and
each Guarantor shall do all such additional acts, give such
assurances and execute such instruments as Agent may reasonably
require to vest more completely in and assure to Lenders their
rights under this Agreement.
Section 7.12. Compliance With Due Diligence Standards;
Offices and Files. Borrower and each Guarantor shall at all
times comply with Standard Industry Practices and Borrower=s and
each Guarantor=s past procedures related to due diligence,
collateral control, collection and reporting procedures with
respect to all Assigned Loans. Borrower's and each Guarantor's
chief executive office shall at all times be maintained at 000 X.
Xxxxx Xxxxxx, Xxxxx 0000, LB# 342, Xxxxxx, Xxxxx, 00000, and
Borrower's and each Guarantor's books, records and files related
to the Borrowing Base Loans (including, without limitation, the
Borrower Due Diligence Reports) shall at all times be maintained
at Borrower's chief executive office or Borrower's office at 10
Xxxxxxxx Street, Providence, Rhode Island, or Xxx Xxxxxxxxx Xxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, unless in either such
instance, AMRESCO gives Agent thirty (30) days prior written
notice of a change in address. Borrower and each Guarantor shall
maintain all files related to the Borrowing Base Loans in a
reasonably prudent manner.
Section 7.13. Appraisals. Agent may require, and Borrower
or the appropriate Guarantor shall deliver to Agent promptly upon
request therefor (but no more than once each twelve month period)
with respect to any given portion of the Mortgaged Property which
has a cost in excess of One Hundred Thousand and No/100 Dollars
($100,000.00) and for which the Lenders have requested the
recordation of a Mortgage under this Agreement, a new appraisal
for such portion of the Mortgaged Property. If required by
applicable regulations, Agent may order any such appraisal
directly, and Borrower or Guarantors shall reimburse Agent for
the reasonable cost of such appraisal upon request by Agent.
Agent shall provide AMRESCO with a copy of any such appraisal
ordered by Agent. Each such appraisal shall be in form and
substance satisfactory to Agent.
ARTICLE VIII
NEGATIVE COVENANTS
Borrower and each Guarantor covenant and agree that without
the prior written consent of the Required Lenders, so long as
Lenders' commitment to make Advances under the Revolving Credit
Facility remains in effect, any amounts remain outstanding under
the Term Facility, any Letters of Credit remain outstanding or
any of the Obligations remain unpaid:
Section 8.1. Minimum Consolidated Tangible Net Worth.
Borrower shall not permit Consolidated Tangible Net Worth to be
less than the sum of (a) One Hundred Eighty-Two Million and
No/100 Dollars ($182,000,000), plus (b) seventy-five percent
(75%) of the cumulative Consolidated Net Income for each calendar
quarter commencing on July 1, 1997, through the quarter ending
immediately prior to, or on, the date as of which compliance with
this covenant is being measured, plus (c) seventy-five percent
(75%) of the amount of any proceeds (less reasonable and
customary transaction costs) received by AMRESCO from the
issuance of any additional shares of stock or other equity
instruments.
Section 8.2. Leverage Ratios. Borrower shall not permit
(a) an amount equal to (i)Total Consolidated Debt less (ii)
Approved Subordinated Debt as a percentage of an amount equal to
(i) Consolidated Tangible Net Worth plus (ii) Approved
Subordinated Debt to be greater than 450%, and (b) an amount
equal to Total Consolidated Debt less fifty percent (50%) of the
face value of all Approved Subordinated Debt as of the last day
of any fiscal quarter of Borrower to exceed the Adjusted Asset
Amount at such time.
Section 8.3. Coverage Ratio. Borrower shall not permit
the Fixed Charge Coverage Ratio to be less than 1.35 to 1.00.
Section 8.4. Adjusted EBITDA Maintenance. As of the end
of any fiscal quarter of Borrower, Borrower shall not permit its
Adjusted EBITDA for the immediately preceding four (4) quarters
to be less than (a) $145,000,000 as of December 31, 1997, (b)
$175,000,000 as of March 31, 1998, (c) $205,000,000 as of June
30, 1998, (d) $240,000,000 as of September 30, 1998, and (e)
$295,000,000 as of the end of any fiscal quarter of Borrower
after October 1, 1998.
Section 8.5. Permitted Debt. Neither Borrower nor any
Subsidiary of Borrower shall incur any Debt, except
(a) the Credit Facilities (including the Letters of
Credit);
(b) Borrower or any Guarantor or any Excluded
Subsidiary may have liability under unsecured Interest and
Foreign Exchange Hedge Agreements, so long as (i) there is no
recourse to Borrower, any Guarantor or any Excluded Subsidiary
under any such Interest and Foreign Exchange Hedge Agreements
other than the Borrower, Guarantor or Excluded Subsidiary
entering into such Interest and Foreign Exchange Agreement, (ii)
each such Interest and Foreign Exchange Hedge Agreement has a
maturity of no more than seven years, (iii) the purpose of each
such Interest and Foreign Exchange Hedge Agreement is to hedge
the applicable Borrower's, Guarantor's or Excluded Subsidiary's
interest rate or foreign exchange or other business risk, and is
not speculative in nature, and (iv) neither Borrower, any
Guarantor nor any Excluded Subsidiary deviates from the current
practices and policies related to obtaining Interest and Foreign
Exchange Hedge Agreements in effect on the date hereof as such
practices and policies may be reasonably changed so long as such
changes are consistent with such practices and policies in effect
on the date hereof;
(c) obligations under secured Interest and Foreign
Exchange Hedge Agreements, so long as the provider of any such
Interest and Foreign Exchange Hedge Agreements is a Lender and
such Lender=s Liens are evidenced by the Security Documents
securing the Credit Facilities;
(d) the Investment Line of Credit, Warehouse Lines and
all Permitted Secured Debt;
(e) Debt of any Borrower or Guarantor to any other
Borrower, Guarantor or Excluded Subsidiary (subject to the
limitation contained in Section 8.10(c) or elsewhere in this
Agreement);
(f) Debt secured by purchase money security interests;
(g) Contingent Obligations in connection with Debt
which is otherwise permitted in this Section 8.5 (so long as any
such Contingent Obligation does not exceed the amount of the
related Debt), except (i) in connection with Debt which is
secured, other than the Debt set forth in Section 8.5(p), and
(ii) where such contingent obligations are specifically
prohibited by this Agreement;
(h) Contingent Obligations in the form of indemnity
obligations or typical repurchase obligations related to the sale
by Borrower or any Guarantor of assets in the ordinary course of
its business, including the securitization of loans;
(i) Leases of office space and office equipment used
by Borrower or any Guarantor in the ordinary course of its
business;
(j) Debt in respect of current accounts payable
incurred in the ordinary course of Borrower's or any Guarantor=s
business;
(k) Approved Subordinated Debt or Approved Senior
Debt; provided that neither Borrower nor any Subsidiary shall
make payments on or redeem, or approve by board of director
action or otherwise the payment of any amounts on, or redemption
of, the Approved Subordinated Debt or Approved Senior Debt after
the occurrence of a Default or, prior to the occurrence of a
Default, which would exceed the scheduled payments due under the
documents evidencing the Approved Subordinated Debt or the
Approved Senior Debt, such prohibited payments including any
payments made under Article 11 of that certain Indenture, dated
January 15, 1996, by and between AMRESCO and Bank One, Columbus,
N.A., as Trustee;
(l) Excluded Subsidiary Debt, provided, that neither
Borrower nor any Guarantor shall have any obligation (contingent
or otherwise) with respect to any such Excluded Subsidiary Debt;
(m) Contingent Obligations which are quantifiable and
included in the ratios computed pursuant to Section 8.2 and which
are given in lieu of an Investment permitted by Section 8.10
hereof;
(o) the Bridge Debt (Lenders hereby agreeing that
Agent shall be entitled to execute on behalf of Lenders any
documents or agreements approved by Agent acknowledging that the
Bridge Debt is included in the Obligations and secured by the
Collateral, subject, however, to the provisions of Section 10.6
hereof); and
(p) Debt of the UK Subsidiaries (or any of them),
provided that such Debt shall not exceed ,125,000,000 pounds
sterling in the aggregate and can be secured only by the assets
acquired with the proceeds of such Debt, all of which assets are
to be located outside, or payable by Persons located outside, the
United States other than a guaranty by AMRESCO.
Section 8.6. Limitation on Sale of Properties. Neither
Borrower nor any Guarantor shall sell, assign, convey, exchange,
lease or otherwise dispose of any of its properties, rights,
assets or business, whether now owned or hereafter acquired,
except in the ordinary course of its business.
Section 8.7. Permitted Liens. Borrower shall not , and
Borrower shall not permit any of its Subsidiaries to, create,
incur, assume or suffer to exist any Lien upon any of its assets
(including, without limitation, the stock of any Subsidiary
incorporated outside of the United States and not pledged to
Lenders) or to give a negative pledge to any Person with respect
to any of its assets, except for (a) the Lenders' Liens; (b) the
Permitted Encumbrances; (c) with respect to equipment or
inventory, (i) landlord's Liens arising in the ordinary course of
Borrower's or any Subsidiary=s business and (ii) Liens on
equipment or supplies hereafter acquired by Borrower or any
Subsidiary in the ordinary course of Borrower's or such
Subsidiary=s business to secure the purchase price of such
equipment or supplies and any such Lien existing on such
equipment or supplies at the time of acquisition by Borrower or
such Subsidiary (individually, a "Purchase Money Lien"), provided
that (1) no Purchase Money Lien shall cover any property other
than the equipment or supplies so acquired, and (2) the Debt
secured by such Purchase Money Lien shall not exceed one hundred
percent (100%) of the purchase price of such equipment or
supplies; (d) Liens on the Collateral to secure obligations under
Interest and Foreign Exchange Hedge Agreements, so long as the
provider of any such Interest and Foreign Exchange Hedge
Agreement is a Lender and such Liens are evidenced by the
Security Documents securing the Credit Facilities; (e) Liens to
secure permitted Excluded Subsidiary Debt, provided that (i) no
such Lien shall cover any property other than property purchased
or refinanced with proceeds of permitted Excluded Subsidiary
Debt, and (ii) the Excluded Subsidiary Debt secured by such Lien
shall not exceed one hundred percent (100%) of the purchase price
of such property; (f) the six percent (6%) net profits interest
granted by AMRESCO New Hampshire, Inc. to Xxxxxx Financial, Inc.
pursuant to Section 3.6 of that certain Term Loan Agreement,
dated as of December 31, 1993, among AMRESCO New Hampshire, Inc.,
AMRESCO Holdings, Inc. and Xxxxxx Financial, Inc.; (g) Liens
involuntarily filed against any asset of Borrower or any
Subsidiary, provided, that within fifteen (15) days after such
filing, Borrower or the applicable Subsidiary has obtained a
release of any such Lien or is contesting the filing of such Lien
in good faith and an adequate bond has been obtained to satisfy
in full any claim which such Lien secures; (h) Liens securing the
Investment Line of Credit or Permitted Secured Debt or Liens
securing any Warehouse Lines to the extent permitted by the
definition of Permitted Secured Debt or Warehouse Lines; and (i)
Liens securing the Debt of the UK Subsidiaries permitted by
Section 8.5(p).
Section 8.8. Limitation on Loans to Shareholders. Neither
Borrower nor any Subsidiary of Borrower shall advance any Debt to
Borrower's or any Guarantor's shareholders, except for Debt
advanced to Borrower or a shareholder which is also a Guarantor
or an employee (as permitted by Section 8.10), without the prior
written consent of the Required Lenders.
Section 8.9. Consolidations, Mergers, Sales of Assets, and
Maintenance. Borrower shall not, and Borrower shall not permit
any of its Subsidiaries to, (a) consolidate or merge with or into
any other Person except for (i) mergers of any Guarantor into
Borrower or another Guarantor or (ii) mergers of any Guarantor
with or into any other Person which also becomes a "Guarantor"
under this Agreement and delivers all Loan Documents required by
this Agreement and otherwise complies with Section 2.5, so long
as, if applicable, such merger would satisfy the conditions of
Section 8.10(a) or (b) if it were applicable, and in the case of
a consolidation or merger by any Subsidiary of AMRESCO with
another Person, AMRESCO will remain the direct or indirect owner
of all of the outstanding capital stock and other equity
securities of the continuing or surviving corporation, (b) sell,
lease, abandon or otherwise transfer all or any material part of
its assets to any Person, in one or a series of related
transactions, other than the sale of assets singly or in bulk in
the normal course of business, (c) other than in connection with
(i) a consolidation or merger permitted in clause (a) immediately
above or (ii) the dissolution of any Guarantor of which Agent has
been notified and the distribution of all of the assets of such
Guarantor to another Guarantor, terminate, or fail to maintain,
its corporate existence or qualification, as applicable, in the
state of its incorporation and any other applicable jurisdiction
where the business of such Guarantor requires such qualification
(provided that nothing herein shall permit the dissolution of
AMRESCO or the failure of AMRESCO to maintain its corporate
existence and qualification to do business as elsewhere required
in this Agreement), or (d) terminate, or fail to maintain, its
good standing and qualification to transact business in all
jurisdictions where the failure to maintain its good standing or
qualification to transact business could have a material adverse
effect on its financial condition or operations.
Section 8.10. Investments. Without the prior written
consent of Required Lenders, Borrower shall not, and Borrower
shall not permit any of its Subsidiaries to, directly or
indirectly, make any loans, advances, extensions of credit or
capital contributions to, make any investment in, or purchase any
stock or securities of, or interest in, any Person (collectively
"Investments"), except for
(a) Acquisitions involving a stock purchase approved
by the board of directors of the entity being acquired and
consistent with the business of AMRESCO as set forth in Section
7.2 hereof, so long as concurrently with such Investment such
entity becomes a Borrower or Guarantor;
(b) Investments with respect to any Acquisition in
which the board of directors of the entity being acquired has not
approved such Acquisition, provided that (i) the assets, property
or business acquired or invested in shall be consistent with the
business of AMRESCO as set forth in Section 7.2, and (ii) the
Acquisition Consideration does not exceed $10,000,000;
(c) Excluded Subsidiaries, provided, that the
aggregate Investment does not exceed 15% of Adjusted Net Worth;
(d) loans to any employee of Borrower or any
Subsidiary of Borrower (i) to facilitate relocations and (ii)
other loans to employees so long as the aggregate of such loans
does not exceed $1,500,000;
(e) Investments made by Borrower or any Subsidiary of
Borrower in the ordinary course of its business as contemplated
by Section 7.2 hereof; and
(f) any other Investments which would otherwise be
prohibited by this section so long as the aggregate amount (at
original cost) of all such Investments of Borrower and its
Subsidiaries at any time shall be less than 20% of Consolidated
Tangible Net Worth.
Notwithstanding the foregoing, in no event shall (x) any
Investment permitted pursuant to this Section 8.10 be permitted
if (i) there shall exist a Default or Event of Default, or (ii)
if after giving effect to any such Investment, Borrower or
Guarantors shall not be in compliance with any covenant set forth
in the Loan Documents, and (y) the aggregate amount of
Investments (at original cost) made by AMRESCO and Guarantors
incorporated or operating in the United States to Foreign
Obligors shall not exceed twenty percent (20%) of Adjusted Net
Worth.
Section 8.11. Distributions. Neither Borrower nor any
Guarantor shall make or declare any Distributions after the
occurrence of a Default. Prior to the occurrence of a Default,
(a) AMRESCO shall be entitled to make Distributions in an amount
not to exceed twenty-five percent (25%) of the net income of
AMRESCO (determined in accordance with GAAP) on a consolidated
basis for the twelve month period immediately preceding such
Distribution and (b) each Borrower (other than AMRESCO) and
Guarantor shall be entitled to make Distributions to Borrower or
another Guarantor.
Section 8.12. Limitation on Contingent Liabilities.
Neither Borrower nor any Guarantor shall create, incur, assume or
suffer to exist any contingent liabilities, except for Contingent
Obligations permitted by Section 8.5 and litigation claims which
do not result in a violation of Section 9.1(i).
Section 8.13. Transactions with Affiliates. Neither
Borrower nor any Guarantor shall engage in any transaction with
an Affiliate of Borrower or any Guarantor unless such transaction
is (a) between Borrower and any Guarantor or between Guarantors
or (b) is generally as favorable to Borrower or such Guarantor as
could be obtained in an arm's length transaction with an
unaffiliated Person in accordance with prevailing industry
customs and practices.
Section 8.14. Employee Plans.
(a) Neither Borrower nor any Guarantor shall, nor
shall any such Person cause any member of its Controlled Group
(as that term is defined in the Code) to, fail to maintain and
administer any Employee Plan in accordance with the applicable
requirements of the Code and ERISA. Neither Borrower nor any
Guarantor shall permit or suffer to exist any circumstances with
respect to any Employee Plan that could have a material adverse
effect on Borrower or such Guarantor.
(b) With respect to any Pension Plan, neither Borrower
nor any Guarantor shall (i) permit any accumulated funding
deficiency (within the meaning of Section 412(a) of the Code),
whether waived or unwaived, to exist; (ii) permit the present
value of accrued benefits (based on the most recent actuarial
valuation prepared for each such plan, if any, in accordance with
ongoing actuarial assumptions) to exceed the current value of
plan assets allocable to such benefits by a material amount;
(iii) permit any reportable event (within the meaning of
Section 4043 of ERISA) to occur, other than purchases and sales
of securities from a plan trustee as reported in the audited
financial statements of such plan; (iv) permit a prohibited
transaction (within the meaning of Section 4975 of the Code) to
occur which has or could have a material adverse effect on
Borrower or any Guarantor; (v) incur any material liability to
the PBGC; or (vi) incur any material withdrawal liability (within
the meaning of Section 4201(a) of ERISA).
(c) Neither Borrower nor any Guarantor shall incur a
material obligation to provide post-employment health care
benefits to any of its current or former employees, except as may
be required by Section 4980B of the Code or otherwise required by
law.
Section 8.15. Use Violations. Neither Borrower nor any
Guarantor shall use, maintain, operate or occupy, or allow the
use, maintenance, operation or occupancy of, any of its
properties in any manner which (a) violates any Legal Requirement
unless such violation would not have a material adverse effect on
the financial condition, operations or business of Borrower or
any Guarantor, (b) may be dangerous unless safeguarded as
required by law, (c) constitutes a public or private nuisance,
(d) makes void, voidable or cancelable any insurance then in
force with respect thereto or (e) makes void, voidable, or
cancelable any governmental permit.
Section 8.16. Exceptions to Covenants. Neither Borrower
nor any Guarantor shall take or permit to be taken any action or
fail to take any action which is permitted by any of the
covenants contained in this Agreement if such action or omission
would result in the breach of any other covenant contained in
this Agreement.
Section 8.17. Fiscal Year and Accounting Methods. Neither
Borrower nor any Guarantor will change its Fiscal Year or its
method of accounting (other than changes as are concurred with by
Borrower's or such Guarantor's independent public accountants as
being required by GAAP).
Section 8.18. Governmental Regulations. Neither Borrower
nor any Guarantor will conduct its business in such a way that it
will become subject to regulation under the Investment Advisers
Act of 1940, as amended. Neither Borrower nor any Guarantor will
conduct its business in such a way that it will become subject to
regulation under the Investment Company Act of 1940, as amended,
or the Public Utility Holding Company Act of 1935, as amended, or
any other laws, rules or regulations which regulate the
incurrence of Debt.
ARTICLE IX
DEFAULTS AND REMEDIES
Section 9.1. Events of Default. The term "Event of
Default" as used in this Agreement, shall mean any one of the
following:
(a) The failure of Borrower to pay when due any
principal of or interest on the Notes, or any fees, charges or
any other amounts payable to Agent, Arranger, or any Lender
hereunder or under any of the Notes or other Loan Documents,
including, without limitation, the Participation Fees, the
Commitment Fees, the Agent's Administrative Fee, the Structure
Fee and Letter of Credit Fees;
(b) The failure, refusal or neglect of Borrower or any
Guarantor to observe, perform or comply with any covenant or
agreement contained in Article VIII other than Sections 8.13 and
8.14;
(c) The failure, refusal or neglect of Borrower or any
Guarantor to properly observe, perform or comply with any
covenant, agreement or obligation contained in this Agreement, or
any of the other Loan Documents [other than those covered by
Sections 9.1(a) and (b)] and the continuation of such failure,
refusal or neglect for fifteen (15) days after written notice
thereof has been given to AMRESCO by Agent or a representative of
Agent;
(d) Any representation, warranty, certification or
statement made by Borrower or any Guarantor (either for itself or
for any other Person) in this Agreement or by Borrower, any
Guarantor or any other Person on behalf of Borrower or any
Guarantor in any certificate, financial statement or other
document delivered pursuant to this Agreement or any other Loan
Document shall prove to have been untrue in any material respect
when made or deemed to have been made;
(e) The occurrence of (1) any event or condition which
(i) results in the acceleration of the maturity of any Debt of
Borrower or any Guarantor, or (ii) constitutes a default under
any Debt of Borrower or any Guarantor, provided, that if notice
is required to be given under the documents evidencing or
securing such Debt prior to acceleration thereof, it shall not be
an Event of Default hereunder until Borrower has received written
notice of such default, (2) any event or condition which would
require Borrower, any Guarantor or any Excluded Subsidiary to
make a payment under any Interest and Foreign Exchange Hedge
Agreement, and the effect of making such payment, would cause
Borrower or any Guarantor to violate any provision of Article
VIII hereunder as tested on the date any such Interest or Foreign
Hedge Agreement payment became payable or (3) a default or event
of default under the documents evidencing or securing (i) the
Approved Subordinated Debt, (ii) the Approved Senior Debt, (iii)
the Permitted Secured Debt, (iv) the Warehouse Lines, or (v) any
Bridge Debt, or the payment by Borrower or any Guarantor, or the
approval of the board of directors of Borrower or any Guarantor
for the payment, of amounts under any of the preceding clauses
(2)(i) or (2)(ii) in excess of the regularly scheduled payments
thereunder, or which would otherwise cause a violation by
Borrower or any Guarantor of any covenant or condition contained
in any of the Loan Documents;
(f) The filing or commencement by Borrower or any
Subsidiary of Borrower of a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect, or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, or Borrower or any Subsidiary of Borrower shall consent
to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action to authorize
any of the foregoing; provided, however, that, with respect to
any violation of this Section 9.1(f) that pertains to a
Subsidiary of Borrower (which Subsidiary is not also a
Guarantor), it shall not be an Event of Default if such violation
does not (i) otherwise result in an Event of Default or (ii) have
a material adverse effect on the business, financial position or
results of operations of Borrower or any Guarantor;
(g) The filing or commencement of an involuntary case
or other proceeding against Borrower or any Subsidiary of
Borrower seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of sixty (60) days;
or an order for relief shall be entered against Borrower or any
Subsidiary of Borrower under the federal bankruptcy laws as now
or hereafter in effect; provided, however, that, with respect to
any violation of this Section 9.1(g) that pertains to a
Subsidiary of Borrower (which Subsidiary is not also a
Guarantor), it shall not be an Event of Default if such violation
does not (i) otherwise result in an Event of Default or (ii) have
a material adverse effect on the business, financial position or
results of operations of Borrower or any Guarantor;
(h) The liquidation or dissolution of Borrower or any
Guarantor, other than any liquidation or dissolution of any
Guarantor permitted by Section 8.9;
(i) One or more judgments or orders for the payment of
money aggregating in excess of $500,000.00 shall be rendered
against Borrower and/or any Subsidiary of Borrower and such
judgment or order (A) shall continue unsatisfied and unstayed
(unless bonded with a supersedeas bond at least equal to such
judgment or order) for a period of thirty (30) days, unless
Borrower or any such Subsidiary has obtained an indemnification
of the full amount of such judgment or order by a third party
approved by the Required Lenders [it being acknowledged that an
indemnification from any Lender or the Resolution Trust
Corporation shall be deemed an approved third party for purposes
of this subparagraph (i)] pursuant to a written indemnification
agreement approved by the Required Lenders, or (B) is not fully
paid and satisfied at least ten (10) days prior to the date on
which any of its assets may be lawfully sold to satisfy such
judgment or order;
(j) The Lenders' Liens with respect to the Collateral,
or any part thereof, shall not constitute first and prior liens
and/or security interests; or
(k) There shall occur a Change in Control.
It is understood and agreed by Borrower and each Guarantor
that any of the foregoing "Events of Default" shall constitute an
Event of Default under each of the Notes, and that such "Events
of Default" are cumulative and in addition to any default or
events of default contained in any of the other Loan Documents,
and that in the event of any discrepancy or inconsistency between
any Event of Default hereunder and any default or event of
default contained in any other Loan Document, the description of
the Event of Default stated herein shall control.
Section 9.2. Remedies. Upon the occurrence of an Event of
Default, Agent may, and at the direction and election of the
Required Lenders shall, acting by or through any of its agents,
trustees or other Persons, without notice (unless expressly
provided for herein), demand or presentment (including, without
limitation, notice of default, notice of intent to accelerate or
of acceleration) all of which are hereby waived, and in addition
to any other provision of this Agreement or any other Loan
Document, exercise any or all of the following rights, remedies
and recourses:
(a) Terminate Lenders= commitment to make Advances
hereunder and declare the unpaid principal balance of each of the
Notes, the accrued and unpaid interest thereon and any other
accrued but unpaid portion of the Obligations to be immediately
due and payable, without notice (expressly including, but not
limited to, notice of default, notice of intent to accelerate or
of acceleration), except any notice that is expressly required by
the terms of this Agreement, presentment, protest, demand or
action of any nature whatsoever, each of which hereby is
expressly waived by Borrower, whereupon the same shall become
immediately due and payable. Notwithstanding the foregoing or
anything to the contrary contained herein or in any other Loan
Document, upon the occurrence of an Event of Default described in
Section 9.1(f) or Section 9.1(g) by Borrower, the entire unpaid
principal balance of the Notes, and all accrued, unpaid interest
thereon shall automatically be accelerated and immediately be due
and payable in full, without notice (expressly including, but not
limited to, notice of default, intent to accelerate or of
acceleration), presentment, protest, demand or action of any
nature whatsoever, each of which hereby is expressly waived by
Borrower; provided, however, that if accelerated automatically
pursuant to this sentence, the Notes and all such indebtedness
may be reinstated at the option and upon the written approval of
the Required Lenders.
(b) Enter upon the Mortgaged Property or any other
Collateral or any part thereof and take exclusive possession
thereof and of all books, records and accounts relating thereto
(including, without limitation, all Borrower Due Diligence
Reports). If Borrower or any Guarantor remains in possession of
all or any part of the Collateral after an Event of Default
occurs and is continuing and without Agent's prior written
consent thereto, Agent may invoke any and all legal remedies to
dispossess Borrower or such Guarantor, including specifically one
or more actions for declaratory or injunctive relief, forcible
entry and detainer, trespass to try title and writ of
restriction. Nothing contained in the foregoing sentence shall,
however, be construed to impose any greater obligation or any
prerequisites to acquiring possession of the Collateral or any
part thereof after an Event of Default occurs than would have
existed in the absence of such sentence.
(c) Hold, lease, manage, operate or otherwise use or
permit the use of the Mortgaged Property, the Assigned Loans and
all other Collateral, or any part thereof, either by itself or by
other Persons, in such manner, for such time and upon such other
terms as Agent may deem to be prudent and reasonable under the
circumstances (making such repairs, alterations, additions and
improvements thereto and taking any and all other action with
reference thereto, from time to time, as Agent shall deem
necessary or desirable), and apply all proceeds from the
Mortgaged Property, the Assigned Loans and all other Collateral
in connection therewith in accordance with the provisions of
Section 9.10 hereof.
(d) Sell or offer for sale the Collateral, or any part
thereof, in such portions, order and parcels as Agent may
determine, with or without having first taken possession of same,
in accordance with the provisions of the applicable Loan
Documents and applicable Legal Requirements.
(e) Make application to a court of competent
jurisdiction, as a matter of strict right and, except as
otherwise provided by applicable law, without notice to Borrower
or without regard to the adequacy of the Collateral for the
payment of the Obligations, for the appointment of a receiver of
the Collateral, or any part thereof, and, to the extent permitted
by applicable law, Borrower does hereby irrevocably consent to
such appointment. Any such receiver shall have all the usual
powers and duties of receivers in similar cases, including the
full power to rent, maintain, sell, dispose and otherwise operate
the Collateral, or any part thereof, upon such terms that may be
approved by the court, and shall apply all proceeds from such
operation of the Collateral in accordance with the provisions of
Section 9.10 hereof.
(f) Exercise any and all other rights, remedies and
recourses granted hereunder or under the other Loan Documents or
otherwise now or hereafter existing in equity, at law, by virtue
of statute or otherwise.
Section 9.3. Rights of Set-Off.
(a) In addition to the Lender's Liens, Borrower and
each Guarantor hereby expressly grant to Lenders the right of
setoff against all deposits and other sums at any time held or
credited by or due from any Lender to Borrower or any Guarantor,
in accordance with the provisions of this Section 9.3. The
rights of each Lender under this Section 9.3 are in addition to
other rights and remedies (including, without limitation, other
rights of setoff under law or equity) which such Lender may have
under law or by agreement.
(b) Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by
law, at its option, without notice or demand and without
liability, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, excepting,
however, any fiduciary or escrow accounts established by Borrower
or any Guarantor into which only funds of unrelated third-parties
are deposited, and provided that Borrower or such Guarantor has
informed such Lender and Agent of the nature of such accounts) at
any time held, and other indebtedness at any time owing, by any
Lender to or for the credit or the account of Borrower or any
Guarantor against any and all of the Obligations now or hereafter
existing under this Agreement, the Notes and the other Loan
Documents, in such order and manner as such Lender may determine,
subject, however, to the agreements contained in Section 10.14
hereof, regardless of whether such Lender shall have made any
demand under this Agreement or the Notes and although such
obligations may be unmatured.
(c) Borrower and each Guarantor agree, to the fullest
extent it may effectively do so under applicable law, that each
Lender and any holder of a participation in any of the Notes
(with the appropriate consent of such Lender) may exercise rights
of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were
a direct creditor of Borrower or such Guarantor in the amount of
such participation.
Section 9.4. Remedies Cumulative, Concurrent and
Non-Exclusive. Lenders shall have all rights, remedies and
recourses granted in the Loan Documents, and available at law or
equity and same (a) shall be cumulative and concurrent, (b) may
be pursued separately, successively or concurrently against
Borrower or any Guarantor, or any others obligated under any of
the Notes, or against any one or more of them, at the sole
discretion of Lenders, (c) may be exercised as often as the
occasion therefor shall arise, it being agreed by Borrower and
each Guarantor that the exercise or failure to exercise any of
same shall in no event be construed as a waiver or release
thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, non-exclusive.
Section 9.5. No Conditions Precedent to Exercise Remedies.
Borrower and each other Person hereafter obligated for payment or
fulfillment of all or any part of the Obligations shall not,
except as otherwise provided by applicable law, be relieved of
such obligation by reason of (a) the failure of a trustee to
comply with any request of Borrower, or any other Person so
obligated to foreclose the Lenders' Liens or to enforce any
provisions of the Loan Documents, (b) the release, regardless of
consideration, of any Person obligated with respect to the
Obligations, or of the Collateral or any part thereof, or the
addition of any other property to the Collateral, (c) any
agreement or stipulation between any subsequent owner of the
Collateral and Agent or any Lender extending, renewing,
rearranging or in any other way modifying the terms of the Loan
Documents without first having obtained the consent of, given
notice to or paid any consideration to Borrower, or such other
Person, and in such event, Borrower and all such other Persons
shall continue to be liable to make payments in accordance with
the terms of any such extension or modification agreement unless
expressly released and discharged in writing by the Required
Lenders, and (d) any other act or occurrence, save and except the
complete payment of the Obligations. Borrower and each Guarantor
waive any right to require Lenders to proceed against any other
Person, exhaust any Collateral, or pursue any other remedy in
Lenders' power. All dealings between Borrower, any Guarantor and
any Lender, whether or not resulting in the creation of the
Obligations, shall conclusively be presumed to have been had or
consummated upon reliance upon this Agreement. Borrower and each
Guarantor authorize Lenders, without notice or demand and without
any reservation of rights against Borrower or any Guarantor and
without affecting liability hereunder or on the Obligations, from
time to time, to (i) renew, extend for any period, accelerate,
modify, compromise, settle, or release the obligation of any
other Person that may be obligated with respect to any or all of
the Obligations or Collateral; (ii) take and hold any other
property as collateral, other than the Collateral, for the
payment of any or all of the Obligations, and exchange, enforce,
waive, and release any or all of the Collateral or other
property; and (iii) after the occurrence of an Event of Default,
apply the Collateral or other property and direct the order or
manner of sale thereof in accordance with the terms of this
Agreement and the Security Documents.
Section 9.6. Release of and Resort to Collateral. The
release or substitution of all or any part of the Collateral,
regardless of consideration, shall not in any way impair, affect,
subordinate, or release the Lenders' Liens or their status as
first and prior Liens in and to any remaining Collateral. For
payment and performance of the Obligations, Lenders may resort to
any other security therefor held by a trustee in such order and
manner as Required Lenders may elect.
Section 9.7. Waivers. To the full extent permitted by
law, Borrower and each Guarantor hereby irrevocably and
unconditionally waive and release (a) all benefit that might
accrue to Borrower or any Guarantor by virtue of any present or
future law exempting the Collateral from attachment, levy or sale
on execution or providing for any appraisement, evaluation, stay
of execution, exemption from civil process, redemption or
extension of time for payment, (b) except as specifically
provided for herein, all notices of any Default or Event of
Default or of any trustee's or Lenders' election to exercise or
his or their actual exercise of any right, remedy or recourse
provided for under the Loan Documents, (c) any right to a
marshalling of assets with respect to the Notes or the Letters of
Credit or any of the Collateral or any Debt of Borrower or any
Guarantor, or a sale in inverse order of alienation and
(d) except as specifically provided for herein, any and all right
to receive demand, grace, notice, presentment for payment,
protest, notice of intention to accelerate the Obligations or
notice of acceleration of the Obligations.
Section 9.8. Discontinuance of Proceedings. In case Agent
shall have proceeded to invoke any right, remedy or recourse
permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon same for any reason, Agent shall have the
unqualified right to do so and, in such event, Borrower, each
Guarantor and Lenders shall be restored to their former positions
with respect to the Obligations, the Loan Documents, the
Collateral and otherwise, and the rights, remedies, recourses and
powers of Agent and Lenders shall continue as if same had never
been invoked.
Section 9.9. Power of Attorney. Borrower and each
Guarantor hereby irrevocably appoint Agent, acting for all the
Lenders, as the true and lawful attorney of Borrower or such
Guarantor with full power of substitution for, and on behalf of
Borrower and such Guarantor, and in its name, upon the request
and instruction of Borrower and such Guarantor and in any event
after the occurrence of an Event of Default (or prior to the
occurrence of any Event of Default if Agent otherwise reasonably
believes it is necessary to take such action), to take any action
to preserve, maintain, protect or enforce the rights and
interests of Borrower or such Guarantor with respect to the
Collateral, including, without limitation, to (i) endorse any
Assigned Loans to Agent, on behalf of Lenders, or to any other
Person, (ii) enforce, cure any default or otherwise act with
respect to any leases, sales contracts, management or marketing
contracts or any other agreements pertaining to or affecting any
of the Mortgaged Property, (iii) take all such action and to
execute all such documents as Agent deems necessary or desirable
to operate or preserve or protect the Assigned Loans and the
collateral therefor, the Mortgaged Property or any other
Collateral, (iv) xxx for, demand or collect any sums owing to
Borrower or any Guarantor under the Assigned Loans or under
leases or other agreements affecting the Mortgaged Property and
(v) exercise rights of Borrower or any Guarantor under any
purchase agreement related to any Assigned Loan. The power so
vested in Agent under this Section 9.9 is one coupled with an
interest and shall be irrevocable, except by written instrument
executed jointly by Borrower, each Guarantor and Agent and filed
for record in the Office of the County Clerk of Dallas County,
Texas. Notwithstanding the foregoing, Agent shall be under no
obligation to exercise any of the foregoing rights or take any
action necessary to preserve any right in any asset subject to
the Lenders' Liens against any other Person, and Agent, to the
extent permitted herein or by applicable law, may exercise any of
the foregoing rights without incurring any responsibility or
liability to Borrower or any other Person and without in any way
affecting the Obligations or any other obligations of Borrower or
any Guarantor to Lenders. Borrower and Guarantors, jointly and
severally, agree to reimburse Agent and Lenders upon demand for
any costs and expenses, including, without limitation, reasonable
attorneys' fees and collection costs, that Agent or any Lender
may incur while acting as the attorney-in-fact of Borrower and
Guarantors as provided hereunder (or pursuant to the
attorney-in-fact herein created), all of which costs and expenses
shall be included in the Obligations.
Section 9.10. Application of Proceeds. All payments on the
Notes or the Letters of Credit received by any Lender during the
existence of an Event of Default (unless otherwise elected by
Lenders), and the proceeds of any sale or disposition of, and all
proceeds generated by the holding, leasing, operation or other
use of, the Collateral, or any part thereof, during the existence
of an Event of Default and upon the exercise of Lenders' rights
and remedies hereunder or under any of the other Loan Documents,
shall be applied by Lenders, the applicable trustee or the
receiver, if one is appointed, to the extent that funds are so
available therefrom, as determined by the Required Lenders
(provided that, as among themselves, Lenders agree that any such
proceeds shall be applied as contemplated by Article X hereof).
ARTICLE X
AGENT AND THE LENDERS
Section 10.1. Appointment and Authorization of Agent.
(a) Each Lender hereby irrevocably appoints and authorizes
Agent as its nominee and agent, in its name and on its behalf:
(i) to act as nominee for and on behalf of such Lender in and
under all Loan Documents; (ii) to arrange the means whereby the
funds of the Lenders are to be made available to Borrower under
the Loan Documents; (iii) to take such action as may be requested
by any Lender under the Loan Documents (when such Lender is
entitled to make such request under the Loan Documents and after
such requesting Lender has obtained the concurrence of such other
Lenders as may be required under the Loan Documents); (iv) to
receive all documents and items to be furnished to Lenders under
the Loan Documents; (v) to promptly distribute to each Lender the
material information, requests, documents and items received from
Borrower or Guarantors under the Loan Documents; (vi) to promptly
distribute to each Lender such Lender's Aggregate Loan Percentage
of each payment or prepayment in accordance with the terms of the
Loan Documents; and (vii) to deliver to the appropriate Persons
requests, demands, approvals and consents received from Lenders.
(b) The obligations of Agent hereunder are only those
expressly set forth herein. Each Lender and Borrower and each
Guarantor agree that Agent is not a fiduciary for Lenders or for
Borrower or Guarantors but simply is acting in the capacity
described herein to alleviate administrative burdens for both
Borrower and Lenders and that Agent has no duties or
responsibilities to Lenders, Borrower or Guarantors except those
expressly set forth herein. Without limiting the generality of
the foregoing, Agent shall not be required to take any action or
exercise any right or remedy with respect to any Default or Event
of Default, except if requested by the Required Lenders.
Notwithstanding the administrative authority delegated to Agent,
Agent shall not cause or permit any modification of the Loan
Documents or take other action relating to either or both of the
Credit Facilities specifically requiring the consent or approval
of the Required Lenders without such consent or approval. Action
taken by Agent including, without limitation, any exercise of
remedies or initiation of suit or other legal proceedings made in
accordance with the instructions of the Required Lenders or as
otherwise permitted by this Article X, shall be binding upon each
of the Lenders. Each Lender specifically acknowledges that it
has reviewed and approved the voting and other provisions of this
Agreement and the other Loan Documents setting forth the relative
rights and obligations among the Lenders and agrees to be bound
by such provisions notwithstanding that such Lender is only a
Revolving Lender or only a Term Lender, and acknowledges that
Agent (and counsel for the Lenders, as a group) are acting on
behalf of all the Lenders and not the Revolving Lenders, as a
group, and Term Lenders, as a separate group.
(c) Agent, in its capacity as a Lender, shall have the same
Rights under the Loan Documents as any other Lender and may
exercise the same as though it were not acting as Agent, and any
resignation by Agent hereunder shall not impair or otherwise
affect any Rights which it has or may have in its capacity as an
individual Lender.
(d) Agent may now or hereafter be engaged in one or more
loan, letter of credit, leasing, or other financing transactions
with Borrower or any Guarantor, act as trustee or depositary for
Borrower or any Guarantor or otherwise be engaged in other
transactions with Borrower, any Guarantor and/or their Affiliates
(collectively, the "other activities") not the subject of the
Loan Documents. Without limiting the Rights of Lenders
specifically set forth in the Loan Documents, Agent shall not be
responsible to account to Lenders for such other activities, and
no Lender shall have any interest in any other activities, any
present or future guaranties by or for the account of Borrower or
any Guarantor which are not contemplated or included in the Loan
Documents (any present or future offset exercised by Agent in
respect of such other activities), any present or future property
taken as security for any such other activities, or any property
now or hereafter in the possession or control of Agent which may
be or become security for the Obligations by reason of the
general description of indebtedness secured or of property
contained in any other agreements, documents or instruments
related to any such other activities; provided that, if any
payments in respect of such guaranties, such property or the
proceeds thereof or any offset shall be applied to reduction of
the Obligations, then each Lender shall be entitled to share in
such application pursuant to the terms of this Agreement.
Section 10.2. Possession of Instruments by Agent.
Agent shall exercise all rights and remedies under the Loan
Documents and take all actions with respect thereto in accordance
with the request or direction of the Required Lenders, or
otherwise as and to the extent provided herein or in the other
Loan Documents; provided, however, that Agent may take such
actions in its name without the joinder of Lenders, and Borrower,
Guarantors and all third parties shall be entitled to rely on the
actions taken by Agent with respect to the execution by Agent of
any and all agreements, financing statements, affidavits, notices
or any other type of document or instrument pertaining thereto,
including, without limitation, in connection with the exercise of
any rights or remedies of Lenders under the Loan Documents (and
specifically including any foreclosure proceedings under any of
the Security Documents or other legal proceedings), and the same
shall be binding upon all Lenders as to any third party relying
on such actions of Agent. Agent shall also be the named secured
party or beneficiary under the Security Documents and shall take
and maintain possession of all the Security Documents, as agent
for and on behalf of all Lenders, and the grant to Agent of any
Lien under any Security Document shall be for the ratable benefit
of all Lenders.
Section 10.3. Expenses. Each Lender shall pay its
Aggregate Loan Percentage of any reasonable expenses (including,
without limitation, court costs, reasonable attorneys' fees and
other costs of collection) incurred by Agent in connection with
any of the Loan Documents if Agent does not receive reimbursement
therefor from other sources within thirty (30) days after
incurred; provided that, and subject to the terms and conditions
of Section 11.4, each Lender shall be entitled to receive its
Aggregate Loan Percentage of any reimbursement for such expenses,
or part thereof, which Agent subsequently receives from such
other sources.
Section 10.4. Delegation of Duties; Reliance;
Consultation. Lenders may perform any of their duties or
exercise any of their Rights under the Loan Documents by or
through Agent, and Lenders and Agent may perform any of their
duties or exercise any of their Rights under the Loan Documents
by or through their respective officers, directors, employees,
attorneys, agents, or other representatives (collectively,
"Representatives"). Agent, Lenders, and their respective
Representatives shall (a) be entitled to rely upon (and shall be
protected in relying upon) any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telecopy,
telegram, telex or teletype message, statement, order or other
documents or conversation believed by any of them to be genuine
and correct and to have been signed or made by the proper Person
and, with respect to legal matters, upon opinion of counsel
selected by Agent or such Lender, (b) be entitled to deem and
treat each Lender as the owner and holder of its Revolving Loan
Percentage or Term Loan Percentage, as applicable, for all
purposes until, subject to Section 11.10, written notice of the
assignment or transfer thereof shall have been given to and
received by Agent (and, any request, authorization, consent or
approval of any Lender shall be conclusive and binding on each
subsequent holder, assignee, or transferee of such Lender's
Revolving Loan Percentage or Term Loan Percentage, as applicable,
or Participant therein until such notice is given and received),
and (c) not be deemed to have notice of the occurrence of a
Default or an Event of Default unless notified thereof by another
Lender or AMRESCO. Agent may consult with legal counsel,
independent public accountants, consultants, appraisers and other
experts selected by Agent, and shall not be liable for any action
taken or omitted to be taken by Agent in good faith in accordance
with the advice of such counsel, accountants or experts. Any
such counsel, accountants or other experts shall be engaged to
represent and render services to all Lenders as a group, and not
the Revolving Lenders as a group, and the Term Lenders as a
separate group, unless otherwise specified by Agent.
Section 10.5. Limitation of Agent's Liability.
(a) Neither Agent nor any of its Representatives shall be
liable for any action taken or omitted to be taken by it or them
under the Loan Documents in good faith and believed by it or them
to be within the discretion or power conferred upon it or them by
the Loan Documents or be responsible for the consequences of any
error of judgment or negligence, except for gross negligence or
willful misconduct, and neither Agent nor any of its
Representatives has a fiduciary relationship with any Lender by
virtue of the Loan Documents (provided that nothing herein shall
negate the obligation of Agent to account for funds received by
it for the account of any Lender).
(b) Unless indemnified to its satisfaction against loss,
cost, liability, and expense, Agent shall not be compelled to do
any act under the Loan Documents or to take any action toward the
execution or enforcement of the powers thereby created or to
prosecute or defend any suit in respect of the Loan Documents.
If Agent requests instructions from Lenders with respect to any
act or action (including, but not limited to, any failure to act)
in connection with any Loan Document, Agent shall be entitled
(but shall not be required) to refrain (without incurring any
liability to any Person by so refraining) from such act or action
unless and until it has received such instructions. In no event,
however, shall Agent or any of its Representatives be required to
take any action which it or they reasonably determine could incur
for it or them criminal or civil liability.
(c) Agent (and its Representatives) shall not be
responsible in any manner to any Lender or any participant of a
Lender for, and each Lender represents and warrants that it has
not relied upon Agent in respect of, (i) the creditworthiness of
Borrower or any Guarantor and the risks involved to such Lender,
(ii) the effectiveness, enforceability, genuineness, validity, or
the due execution of any Loan Document, (iii) any representation,
warranty, document, certificate, report, or statement made
therein or furnished thereunder or in connection therewith, (iv)
the existence, priority, or perfection of any Lien granted or
purported to be granted under any Loan Document, (v) the
observation of or compliance with any of the terms, covenants, or
conditions of any Loan Document on the part of Borrower or any
Guarantor, or (vi) the relative Rights of the Lenders as among
themselves. Each Lender jointly and severally agrees to
indemnify Agent and hold it harmless from and against (but
limited to such Lender's Aggregate Loan Percentage of) any and
all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses, and
reasonable disbursements of any kind or nature whatsoever
(including counsel fees and disbursements) which may be imposed
on, asserted against, or incurred by Agent in any way relating to
or arising out of the Loan Documents or any action taken or
omitted by Agent under the Loan Documents (provided that,
although Agent shall have the right to be indemnified for its
ordinary negligence, Agent shall not have the right to be
indemnified hereunder for its own fraud, gross negligence, or
willful misconduct).
Section 10.6. Default; Collateral. Upon the
occurrence and continuance of a Default or an Event of Default,
Agent shall make a recommendation to Lenders of any actions to be
taken, and each Lender agrees to promptly confer with the other
Lenders in order that Lenders can consider such course of action
or any other actions to be taken for the enforcement of the
Rights of Lenders; provided that Agent shall be entitled (but not
obligated) to proceed to take any actions necessary in its
reasonable judgment to preserve Rights, pending agreement by
Lenders on the course of action to be taken. If the Required
Lenders cannot agree on a course of action to be taken within
sixty (60) days following Agent's initial recommendation, Agent
shall thereafter take such action as Agent deems advisable to
enforce the Rights of Lenders; provided, that if, after Agent has
begun taking such action, the Required Lenders agree on a course
of action contrary to that undertaken by Agent, then Agent shall
change its course of action so as to follow the course of action
agreed upon by the Required Lenders. Any action directed or
approved by the Required Lenders, including without limitation,
any exercise of remedies or initiation of suit or other legal
proceedings, shall be binding upon each Lender. In actions with
respect to any property of Borrower or any Guarantor, Agent is
acting for the account of each Lender to the extent of each
Lender's Aggregate Loan Percentage. Any and all agreements to
subordinate (whether made heretofore or hereafter) other indebted
ness or obligations of Borrower or any Guarantor to the
Obligations shall be construed as being for the benefit of each
Lender to the extent of its respective Aggregate Loan Percentage.
If Agent acquires any security for the Obligations or any
guaranty of the Obligations upon or in lieu of foreclosure, the
same shall be held for the benefit of each Lender in proportion
to such Lender's respective Aggregate Loan Percentage.
Lenders agree, among themselves, that unless otherwise
agreed to by Agent and the Required Lenders, all monies collected
or received by Agent after the occurrence of an Event of Default
in respect of the security for the Credit Facilities, directly or
indirectly, or by any other means shall be applied (a) to the
Administrative Fee and all costs of collection or maintenance of
the Collateral, and then to either interest or principal of the
Credit Facilities as recommended by Agent and approved by the
Required Lenders (except that any amounts to be applied to
interest or principal shall be distributed to Lenders based on
their Aggregate Loan Percentage) until the Credit Facilities
(including the Competitive Bid Loans) are paid in full, (b) to
the amounts owed to any Lender under any Interest and Foreign
Exchange Hedge Agreement, only after payment in full of the
outstanding principal and interest under the Credit Facilities,
and (c) to the amounts owed under the Bridge Debt, but only after
payment in full of the outstanding principal and interest under
the Credit Facilities and the amounts owed to all Lenders under
any Interest and Foreign Exchange Hedge Agreement.
Section 10.7. Lenders' Decision. Lenders agree as
among themselves that any decisions or elections to be made by
Lenders (and not Agent) under this Agreement and the other Loan
Documents shall be made by the Required Lenders, except in the
case, if any, where a specific different number or percentage of
Lenders is expressly required under this Agreement or any other
Loan Documents (use of the terms "Lenders" in any of the Loan
Documents, without an express provision for different voting
rights other than as set forth in the definition of Required
Lenders, does not imply that unanimous consent is thereby
required). Agent may, at its election, request any
determination, vote, consent or approval by Lenders in writing or
orally (by telephone or in person), and Agent shall be entitled
to take or refrain from taking any action if it has received the
oral or written approval of those Lenders which would satisfy the
requirements set forth in the definition of Required Lenders,
without having to contact or solicit the vote of any other
Lenders. In addition, if any request by Agent for Lenders'
determination or approval hereunder is made in writing and such
writing contains written notice to Lenders requesting a response
within five Business Days, or longer, from the date Lenders are
deemed to have received notice as herein provided (and setting
forth the actual date of the last day of the Lender reply
period), then Lenders shall use reasonable efforts to reply
within the applicable reply period, provided, that if any such
Lender does not reply within the applicable reply period, such
Lender shall be deemed not to have approved of or consented to or
concurred with such recommendation or determination.
Section 10.8. Limitation of Liability of Lenders. To
the extent permitted by law, (a) neither Agent nor any Lender or
participant of a Lender shall incur any liability to any other
Lender or participant of a Lender except for acts or omissions in
bad faith, and (b) neither Agent nor any Lender or participant of
a Lender shall incur any liability to Borrower, Guarantors or any
other Person for any act or omission of any other Lender or any
participant.
Section 10.9. Relationship of Lenders. Nothing herein
shall be construed as creating a partnership or venture among
Agent and Lenders or among Lenders.
Section 10.10. Debtor-Creditor Relationship. Each Lender
has and shall maintain a direct creditor-debtor relationship with
Borrower and will have direct recourse, singly or in the
aggregate, against Borrower and Guarantors, subject to the terms
and conditions of the Loan Documents. Notwithstanding the
foregoing, any right, remedy, action, omission or waiver
respecting this Agreement, the Notes, the Security Documents and
the other Loan Documents shall only be exercised, made, taken, or
permitted by Agent, acting upon the direction of the Required
Lenders, as the agent for all Lenders; provided, however, that if
the Required Lenders have elected and directed Agent to institute
suit against Borrower or any Guarantor for payment of any past
due amounts under the Notes or any other Obligations for which
Lenders have recourse against Borrower or any Guarantor, or in
the event of any bankruptcy proceedings or other legal
proceedings relating to this Agreement against Borrower or any
Guarantor, each Lender shall be entitled, at its option, to bring
or join in such proceedings in its own name.
Section 10.11. Credit Decisions. Each Lender acknowledges
that it has, independently and without reliance upon Agent or any
other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement and each of the other Loan Documents
to which it is a party or to which Agent is a party for its
benefit. Each Lender also acknowledges that it will,
independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking any action under this Agreement
or with respect to either Credit Facility.
Section 10.12. Removal of Agent. Lenders, acting by written
notice to Agent from and agreed to by all Lenders other than
Agent, may remove for cause the then current Agent, as Agent, and
appoint one of the other Lenders as the successor Agent. Upon
the appointment of a successor Agent, the removed Agent and the
successor Agent shall execute such documents as any Lender may
reasonably request to reflect such appointment of a successor
Agent and shall notify AMRESCO of such change in Agent. The
successor Agent shall be vested with all rights, powers and
privileges and be bound to all duties, obligations and
responsibilities of Agent in and under this Agreement and the
other Loan Documents; provided, however, that until such time as
AMRESCO is notified in writing signed by both the removed and
successor Agent as to the appointment of the successor Agent,
Borrower and Guarantors shall be entitled to rely on any
decision, approval or other act by the removed Agent as binding
on Lenders, and may pay to Agent any amounts due or owing by
Borrower under the Loan Documents.
Section 10.13. Resignation by Agent. An Agent's status as
Agent under this Agreement shall automatically terminate fifteen
(15) days after the closing or liquidation of such Agent or
fifteen (15) days after such Agent is adjudicated insolvent.
Additionally, Agent may resign its position as Agent at any time
by giving at least thirty (30) days written notice thereof to
AMRESCO and the other Lenders. Upon any such occurrence causing
a termination of Agent or the delivery of such notice of
resignation from Agent, the Required Lenders and AMRESCO shall
select a successor Agent. If the Required Lenders and AMRESCO
cannot agree upon the choice of the successor Agent within ten
(10) days after the occurrence causing a termination in the case
of a termination of Agent, or ten (10) days prior to the
effective resignation date set forth in Agent's resignation
notice in the case of a resignation by Agent, then the Designated
Successor Agent shall become the successor Agent. AMRESCO shall
be entitled to participate in the selection of the replacement
Agent only prior to the occurrence of a Default. Upon any such
termination or resignation, (a) the successor Agent shall
automatically be vested with all rights, powers and privileges
and be bound to all duties, obligations and responsibilities of
Agent in and under this Agreement and the other Loan Documents
and shall thereafter be deemed the "Agent" for all purposes under
the Loan Documents and (b) such terminating or resigning Agent
shall act only in a custodial capacity for the holding by it of
any funds theretofore received from Borrower and any such funds
shall be held in trust for the benefit of Lenders or Borrower, as
the case may be. Additionally, upon the successor Agent becoming
Agent as provided in this Section 10.13, the terminating or
resigning Agent and the new Agent shall execute such documents as
any Lender may reasonably request to reflect such succession.
All costs incurred in connection with the execution of such
documents shall be paid by Lenders in proportion to each Lender's
Aggregate Loan Percentage.
Section 10.14. Sharing of Payments and Setoffs. Each Lender
agrees that if it should receive any amount (whether by voluntary
payment, by realization upon any Collateral, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents
or otherwise) which is applicable to the payment of the principal
of or interest on either of the Credit Facilities, of a sum which
with respect to the related sum or sums received by the other
Lenders exceeds such Lender's Aggregate Loan Percentage, then
such Lender receiving such excess payment shall purchase without
recourse or warranty from the other Lenders an interest in the
indebtedness of Borrower to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in
such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase
shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest. This Section 10.14 shall
not impair the right of any Lender to exercise any right of
setoff or counterclaim it may have with respect to any funds in
an account pledged to such Lender to secure only indebtedness
other than the Obligations, and to apply the amount received or
subject to such exercise to the payment of such other
indebtedness, it being expressly agreed by all Lenders, however,
that until the Obligations are paid and satisfied in full, any
and all amounts received by any Lender from offset of any account
of Borrower or any Guarantor that either (a) constitutes
Collateral or (b) contains funds exclusively derived from or
related to the Collateral, shall be applied to the Obligations,
and not to any other indebtedness of Borrower or any Guarantor
to such Lender, except in the case of a certificate of deposit or
other designated account (but in no event any operating account
of Borrower or any Guarantor) that is specifically pledged or
assigned to a Lender as security for indebtedness other than the
Obligations.
Section 10.15. Non-Advancing Lenders. In the event that
Revolving Lender shall fail or refuse to advance its Revolving
Loan Percentage of any Advance under the Revolving Credit
Facility, or any Lender shall fail or refuse to advance its
Aggregate Loan Percentage of any payment or reimbursement by
Lenders as required hereunder, or of any amount to be funded
pursuant to Section 10.3, when it is obligated to do so, Agent
shall notify, in the case of the failure or refusal to make an
Advance under the Revolving Credit Facility, the Revolving
Lenders, and, in all other instances, the other Lenders, and such
remaining Revolving Lenders or all other Lenders, as applicable,
or any of them, may elect, at their sole option and discretion
(without any obligation whatsoever to do so), to advance such
non-advancing Lender's portion, pro rata in accordance with the
proportion that (i) in the case of the failure or refusal to make
an Advance under the Revolving Credit Facility, the Revolving
Loan Percentage of each Revolving Lender electing to make such
advance bears to the Revolving Loan Percentages of all Revolving
Lenders electing to make such advance, or (ii) in all other
instances, the Aggregate Loan Percentage of each Lender electing
to make such advance bears to the Aggregate Loan Percentage of
all Lenders electing to make such advance. Upon making any such
advance, and notwithstanding anything to the contrary expressed
or implied herein or in the Notes or any other Loan Document, all
subsequent payments made on the Revolving Credit Facility, or
both Credit Facilities, as applicable, and all proceeds realized
from the sale of any Collateral securing the Credit Facilities or
from the exercise of right of setoff or other remedies under this
Agreement or the other Loan Documents, shall be applied, in the
manner described below, only to Revolving Lenders, or all other
Lenders, as applicable, other than the non-advancing Lender (and
the non-advancing Lender shall not be entitled to receive the
same), until the amounts advanced by such advancing Revolving
Lenders, or all other Lenders, as applicable, on behalf of the
non-advancing Lender (together with the interest earned thereon
pursuant to this Agreement and the applicable Notes), have been
repaid in full. As among Lenders other than the non-advancing
Lender, Lenders that advanced funds on behalf of the
non-advancing Lender shall receive the portion the non-advancing
Lender would have been entitled to receive had it advanced
(together with the interest earned thereon pursuant to this
Agreement and the applicable Notes), to be applied pro rata in
accordance with the amounts advanced by each such advancing
Lender, until the amounts advanced by such Lenders on behalf of
the non-advancing Lender (together with the interest earned
thereon pursuant to this Agreement and the applicable Notes),
have been repaid in full; any Revolving Lender that advanced only
on its own behalf based on its Revolving Loan Percentage shall be
repaid based on such Revolving Loan Percentage or its Aggregate
Loan Percentage, as applicable. In addition, any Lenders that
advance funds on behalf of a non-advancing Lender pursuant to
this Section 10.15 shall (i) receive a proportionate share (based
on the amounts so advanced by such Lenders) of the amount the
non-advancing Lender would have been entitled to receive of any
distribution of any Collateral securing the Credit Facilities in
the event the same are distributed among Lenders, and (ii) have a
claim against such non-advancing Lender for the amounts so
advanced and shall be entitled to all rights and remedies at law
or in equity to recover any unpaid amounts. A non-advancing
Lender shall not be entitled to vote on any matters hereunder or
related to either or both of the Credit Facilities (and its
interest shall be excluded for purposes of determining the
requisite percentage or number of Lenders for a vote) so long as
such Lender remains a non-advancing Lender.
Section 10.16. Benefit of Lenders. All terms, conditions
and agreements set forth in this Article X, specifically
including, without limitation, the provisions of Section 10.14
are for the sole and exclusive benefit of Lenders, and neither
Borrower, Guarantors nor any other Person shall be entitled to
rely on or seek the benefit of such provisions; provided,
however, that Borrower and Guarantors shall be entitled to rely
on any decision, approval or other act by Agent as binding
Lenders.
Section 10.17. Duties and Rights of Co-Agent. Bank One,
Texas, N.A., as co-agent hereunder, shall have no duties under
this Agreement or the other Loan Documents, and shall have no
rights, in its capacity as co-agent hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Continuing Agreement. This is a
continuing Agreement and all the rights, powers and remedies of
Lenders hereunder and all agreements and obligations of Borrower,
Guarantors, and Lenders hereunder, shall continue to exist until
the Notes have been paid in full, the commitment of Lenders to
make Advances hereunder has been terminated, all Letters of
Credit have been terminated and all other Obligations have been
paid in full.
Section 11.2. Notices. All notices, requests and
other communications to any party hereunder shall be in writing
(including bank wire, telecopy or similar writing), except for
any telephone notices as specifically provided for herein, may be
personally served or sent by telecopier, mail or the express mail
service of the United States Postal Service, Federal Express or
other equivalent overnight or expedited delivery service, and
(a) if given by personal service or telecopier (confirmed by
telephone), it shall be deemed to have been given upon receipt;
(b) if sent by telecopier without telephone confirmation, it
shall be deemed to have been given twenty-four (24) hours after
being given; (c) if sent by mail, it shall be deemed to have been
given upon the earlier of (i) actual receipt, or (ii) three (3)
Business Days after deposit in a depository of the United States
Postal Service, first class mail, postage prepaid; (d) if sent by
Federal Express, the express mail service of the United States
Postal Service or other equivalent overnight or expedited
delivery service, it shall be deemed given upon the earlier of
(i) actual receipt or (ii) twenty-four (24) hours after delivery
to such overnight or expedited delivery service, delivery charges
prepaid, and properly addressed to Agent, Borrower, the
applicable Guarantor or the applicable Lender; provided that
notices to Agent under Article III and Article IV shall not be
effective until received. For purposes hereof, the address of
the parties to this Agreement shall be as set forth in Schedule I
attached hereto. Any party may, by proper written notice
hereunder to the other parties, change the address to which
notices shall thereafter be sent to it. Notwithstanding anything
to the contrary implied or expressed herein, the notice
requirements herein (including the method, timing or deemed
giving of any notice) is not intended to and shall not be deemed
to increase the number of days or to modify the method of notice
or to otherwise supplement or affect the requirements for any
notice required or sent pursuant to any Legal Requirement
(including, without limitation, any applicable statutory or law
requirement), or otherwise given hereunder, that is not required
under this Agreement or the other Loan Documents. The provisions
of this Section 11.2 shall control over any conflicting
contractual notice provisions contained in the Loan Documents.
Section 11.3. No Waivers. No failure or delay by
Agent or any Lender in exercising any right, power or privilege
hereunder or under the Notes or any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law or in any of
the other Loan Documents.
Section 11.4. Expenses; Documentary Taxes;
Indemnification. Borrower and Guarantors, jointly and severally,
agree to pay (a) all expenses of Agent and the reasonable fees
and disbursements of legal counsel for Lenders as a group, in
connection with the negotiation, documentation and closing of the
Credit Facilities, and thereafter all reasonable expenses of
Agent and Lenders in connection with any waiver or consent
hereunder or under the other Loan Documents or any amendment,
supplement or replacement of any of the Loan Documents, or any
Default or alleged Default hereunder; and (b) if a Default or an
Event of Default occurs, all out-of-pocket expenses incurred by
Agent or Lenders, including fees and disbursements of legal
counsel in connection with such Event of Default and collection
and other enforcement proceedings resulting therefrom (including,
without limitation, any bankruptcy or other insolvency
proceedings), fees of auditors and consultants incurred in
connection therewith and investigation expenses incurred by
Lenders in connection therewith. Borrower and Guarantors shall,
jointly and severally, indemnify Agent and each Lender against
any Taxes (other than Taxes on the income of any Lender) imposed
by reason of the execution, performance and delivery of this
Agreement or the Notes. Borrower and Guarantors further shall,
jointly and severally, indemnify Agent and each Lender and hold
Agent and each Lender harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and
disbursements of counsel for Agent and Lenders in connection with
any investigative, administrative or judicial proceeding, whether
or not Agent or Lenders shall be designated a party thereto)
which may be incurred by Agent or any Lender relating to or
arising out of this Agreement or any actual or proposed use of
proceeds of the Notes or the Letters of Credit; PROVIDED THAT
NEITHER AGENT NOR ANY LENDER SHALL HAVE THE RIGHT TO BE
INDEMNIFIED HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, IT BEING THE INTENTION HEREBY THAT AGENT AND EACH
LENDER SHALL BE INDEMNIFIED FOR THE CONSEQUENCES OF ITS
NEGLIGENCE WHETHER IN WHOLE OR IN PART.
Section 11.5. Amendments and Waivers; Consent to
Deviation. Any provision of this Agreement, the Notes or the
other Loan Documents may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by Borrower,
Agent and Required Lenders.
Section 11.6. Survival. All representations,
warranties and covenants made by Borrower or any Guarantor herein
or in any certificate or other instrument delivered by it or on
its behalf under the Loan Documents shall be considered to have
been relied upon by Lenders and shall survive the delivery to
Agent or Lenders of such Loan Documents or the extension of any
of the Notes or the issuance of any of the Letters of Credit (or
any part thereof), regardless of any investigation made by or on
behalf of Agent or any Lender.
Section 11.7. Prior Understandings; No Defenses;
Release; No Oral Agreements. This Agreement supersedes all other
prior understandings and agreements, whether written or not,
between the parties hereto relating specifically to the
transactions provided for herein. Borrower and each Guarantor
confirm that there are no existing defenses, claims,
counterclaims or rights of offset against any Lender in
connection with the negotiation, preparation, execution,
performance or any other matters related to this Agreement or any
of the other Loan Documents executed as of the date hereof and
any of the transactions contemplated thereby, and Borrower and
each Guarantor hereby expressly release and discharge each
Lender, and its Representatives, from any and all such claims,
known or unknown. Borrower and each Guarantor further confirm
that no Lender has made any agreements with, or commitments or
representations to, Borrower or any Guarantor (either in writing
or orally) other than as expressly stated herein or in the other
Loan Documents executed as of the date hereof.
THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER WRITTEN
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
To the fullest extent applicable, Borrower, each Guarantor and
Lender acknowledge and agree that this Agreement and each of the
other Loan Documents shall be subject to Section 26.02 of the
Texas Business and Commerce Code.
Section 11.8. Limitation on Interest. It is expressly
stipulated and agreed to be the intent of Borrower and Lenders at
all times to comply with the applicable law governing the maximum
rate or amount of interest payable on or in connection with the
Notes, the Credit Facilities and the Letters of Credit. If the
applicable law is ever judicially interpreted so as to render
usurious any amount called for under the Notes or under any of
the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to any of the Notes or the
Letters of Credit, or if acceleration of the maturity of the
Notes, any prepayment by Borrower, or any other circumstance
whatsoever, results in any Lender having been paid any interest
in excess of that permitted by applicable law, then it is the
express intent of Borrower and Lenders that all excess amounts
theretofore collected by Lenders be credited on the principal
balance of the Notes (or, if the Notes have been or would thereby
be paid in full, refunded to Borrower), and the provisions of the
Notes and the other applicable Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of
any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called
for hereunder and thereunder. The right to accelerate the
maturity of the Notes does not include the right to accelerate
any interest which has not otherwise accrued on the date of such
acceleration, and Lenders do not intend to collect any unearned
interest in the event of acceleration. All sums paid or agreed
to be paid to Lenders for the use, forbearance or detention of
the indebtedness evidenced hereby or by the Notes shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the
Maximum Lawful Rate or maximum amount of interest permitted under
applicable law. The term "applicable law" as used herein shall
mean the laws of the State of Texas, or DIDMCA or any other
applicable United States federal law to the extent that it
permits Lenders to contract for, charge, take, reserve or receive
a greater amount of interest than under Texas law. The
provisions of this Section 11.8 shall control all agreements
between Borrower and Lenders.
Section 11.9. Invalid Provisions. If any provision of
the Loan Documents is held to be illegal, invalid, or
unenforceable under present or future laws effective during the
term thereof, such provision shall be fully severable, the Loan
Documents shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part
thereof, and the remaining provisions thereof shall remain in
full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance
therefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a
part of the Loan Documents a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be
possible and be legal, valid and enforceable.
Section 11.10. Assignments and Participations. (a) The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and assigns; provided that (i) Borrower shall not, directly or
indirectly, assign or transfer, or attempt to assign or transfer,
any of its rights, duties or obligations under this Agreement
without the express prior written consent of all of the Lenders.
Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Note and
its Revolving Loan Commitment Amount or Term Loan Commitment
Amount, as applicable); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to
another Lender or an assignment of all of a Lender=s rights
and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to (1) as to
the Term Facility, Five Million and No/100 Dollars
($5,000,000.00), and (2) as to the Revolving Facility, the
lesser of Five Million and No/100 Dollars ($5,000,000.00) or
6% of the Revolving Commitment in effect from time to time;
(iii) each such assignment by a Lender shall be of
a constant, and not varying, percentage of all of its rights
and obligations under this Agreement and the applicable
Note; and
(iv) the parties to such assignment shall execute and
deliver to Agent for its acceptance an Assignment and
Acceptance in the form of Exhibit D hereto, together with
any Note subject to such assignment and a processing fee of
$3,500.
Upon execution, delivery, and acceptance of such Assignment
and Acceptance, the assignee thereunder shall be a party
hereto and, to the extent of such assignment, have the
obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the consummation of
any assignment pursuant to this Section, the assignor, Agent
and Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it
shall deliver to AMRESCO and Agent certification as to
exemption from deduction or withholding of Taxes in
accordance with Section 11.20.
(b) Agent shall maintain at its address referred to in
Schedule I a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Revolving Loan
Commitment Amount or Term Loan Commitment Amount, as applicable,
owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower, Agent and the
Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by
AMRESCO or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject
to such assignment and payment of the processing fee, Agent
shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit D hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the parties thereto.
(d) Each Lender may sell participations to one or more
Persons in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Loan
Commitment Amount or Term Loan Commitment Amount, as applicable,
and its Note); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) prior to an
Event of Default which has occurred and is continuing, such
participant shall be approved by AMRESCO, such approval not to be
unreasonably withheld or delayed by AMRESCO and such approval to
be deemed given by AMRESCO if no objection is received by the
selling Lender from AMRESCO within two (2) Business Days after
notice of such proposed participation has been provided by the
selling Lender to AMRESCO, (iv) the participant shall be
entitled to the benefit of the yield protection provisions
contained in Article III, and (v) AMRESCO shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such
Lender shall retain the sole right to enforce the obligations of
Borrower relating to its Note and to approve any amendment,
modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount
of principal of or the rate at which interest is payable on such
Note, extending any scheduled principal payment date or date
fixed for the payment of interest on such Note or extending the
Revolving Facility or Term Facility, as applicable).
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or
any portion of its Note or any amount outstanding thereunder to
any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning
Borrower or any of the Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 7.3 hereof; and provided, that until
AMRESCO has approved or disapproved a prospective assignee or
participant pursuant to this Agreement (if such approval is
permitted by this Agreement), any Lender may provide to such
prospective assignee or participant only information available to
the public.
Section 11.11. Senior Debt; Borrower Subordination. The
indebtedness of Borrower and Guarantors hereunder and under the
Notes and all of the Obligations is intended to be and shall be
senior to any subordinated indebtedness of Borrower or any
Guarantor or any other indebtedness of Borrower or any Guarantor
secured by a Lien on any portion of the Collateral (the foregoing
shall not in any way imply Lenders' consent to any such
subordinate debt or Liens which is not otherwise permitted by
this Agreement). The Notes and any other amounts advanced to or
on behalf of Borrower or any other Person pursuant to the terms
of this Agreement or any other Loan Document, shall never be in a
position subordinate to any Debt of Borrower or any Guarantor
owing to any other Person, except with the knowledge and written
consent of Lenders. If Borrower or any Guarantor is now or
hereafter becomes indebted to Borrower or any other Guarantor,
(a) such indebtedness and all interest thereon shall, at all
times, be subordinate in all respects to the Obligations and to
all liens, security interests and rights now or hereafter
existing to secure the Obligations; and (b) Borrower or any other
Guarantor holding such inter-company indebtedness shall not be
entitled after the occurrence of a Default to enforce or receive
payment, directly or indirectly, of any such indebtedness until
the Obligations have been fully and finally paid and performed.
Section 11.12. Revolving Loan. Borrower and Lenders hereby
agree that, except for Section 15.10(b) thereof, the provisions
of Art. 5069-15.01 et seq. of the Revised Civil Statues of Texas,
1925, as amended (regulating certain revolving credit loans and
revolving triparty accounts) shall not govern or in any manner
apply to the Notes, the Letters of Credit or the Loan Documents.
Section 11.13. Construction. The parties hereto acknowledge
and agree that neither this Agreement nor any other Loan Document
shall be construed more favorably in favor of one than the other
based upon which party drafted the same, it being acknowledged
that all parties hereto contributed substantially to the
negotiations and preparation of this Agreement and the other Loan
Documents.
Section 11.14. APPLICABLE LAW. THIS AGREEMENT, THE NOTES
AND ALL THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS, EXCEPT TO
THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION GOVERN THE
CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE
REMEDIES, RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT
THAT UNITED STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8
OR OTHERWISE.
Section 11.15. Submission To Jurisdiction; Service of
Process.
(a) Any legal action or proceeding with respect to this
Agreement or the Notes or any other Loan Document may be brought
in the courts of the State of Texas or of the United States of
America for the Northern District of Texas, and, by execution and
delivery of this Agreement, Borrower and each Guarantor hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The
parties hereto hereby irrevocably waive any objection, including,
without limitation, any objection to the laying of venue or based
on the grounds of forum non conveniens, which any of them may now
or hereafter have to the bringing of any such action or
proceeding in such respective jurisdictions.
(b) Borrower and each Guarantor irrevocably consent to the
service of process of any of the aforesaid courts in any such
action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to Borrower or
such Guarantor at its address provided herein.
(c) Nothing contained in this Section 11.15 shall affect
the right of Agent, any Lender or any holder of a Note to serve
process in any other manner permitted by law or commence legal
proceedings or otherwise proceed against Borrower in any other
jurisdiction.
Section 11.16. JURY TRIAL WAIVER. BORROWER, GUARANTORS AND
LENDERS EACH HEREBY WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT
TO ANY MATTER ARISING OR RELATING TO THIS AGREEMENT, THE NOTES OR
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
Section 11.17. Counterparts. This Agreement and all
amendments hereto, and all the other Loan Documents may be
executed in any number of original counterparts, each of which
when so executed and delivered shall be an original, and all of
which, collectively, shall constitute one and the same agreement,
it being understood and agreed that the signature pages may be
detached from one or more counterparts and combined with the
signature pages from any other counterpart in order that one or
more fully executed originals may be assembled.
Section 11.18. Inconsistent Provisions. In the event of any
conflict or inconsistency between the terms of this Agreement and
the terms of the other Loan Documents, the terms of this
Agreement shall control.
Section 11.19. Non-Waiver of Rights or Remedies. Except as
otherwise set forth herein, this Agreement shall not be deemed
(a) a waiver of, or consent by Agent or any Lender to any default
or event of default which may exist or hereafter occur under the
Second Loan Agreement or any of the Loan Documents, (b) a waiver
by Agent or any Lender of any of Borrower's or Guarantor's
obligations under the Second Loan Agreement or the Loan
Documents, or (c) a waiver by Agent or any Lender of any rights,
offsets, claims, or other causes of action that Agent or any
Lender may have against Borrower or any Guarantor.
Section 11.20. Taxes. Each Lender that is not a corporation
or partnership created or organized in or under the laws of the
United States, any estate that is subject to federal income
taxation regardless of the source of its income or any trust
which is subject to the supervision of a court within the United
States and the control of a United States fiduciary as described
in section 7701 (a) (30) of the Internal Revenue Code (a "Non-
U.S. Lender") shall deliver to AMRESCO and Agent (or, in the case
of a participant, to the Lender from which the related
participation shall have been purchased ) on or before the date
on which it becomes a party to this Agreement (or, in the case of
a participant, on or before the date on which such participant
purchases the related participation) either:
(a) (x) two duly completed and signed copies of either
Internal Revenue Service Form 1001 (relating to such Non-U.S.
Lender and entitling it to a complete exemption from withholding
of U.S. Taxes on all amounts to be received by such Non-U.S.
Lender pursuant to this Agreement and the other Loan Documents)
or Form 4224 (relating to all amounts to be received by such Non-
U.S. Lender pursuant to this Agreement and the other Loan
Documents), or successor and related applicable forms, as the
case may be, or (y) two duly completed and signed copies of
Internal Revenue Service Form W-8 or W-9, or successor and
related applicable forms, as the case may be; or
(b) in the case of a Non-U.S. Lender that is not a
"bank" within the meaning of Section 881 (c) (3) (A) of the Code
and that does not comply with the requirements of clause (a)
hereof, (x) a statement in a form as shall be reasonably
requested by AMRESCO from time to time to the effect that such
Non-U.S. Lender is eligible for a complete exemption from
withholding of U.S. Taxes under Code Section 87(b) or 881(c), and
(y) two duly completed and signed copies of Internal Revenue
Service Form W-8 or successor and related applicable forms.
Further, each Non-U.S. Lender agrees to deliver to AMRESCO and
Agent, and if applicable, the assigning Lender (or, in the case
of a participant, to the Lender from which the related
participation shall have been purchased) two further duly
completed and signed copies of such Forms 1001, 4224, W-8 or W-9,
as the case may be, or successor and related applicable forms, on
or before the date that any such form expires or becomes obsolete
and promptly after the occurrence of any event requiring a change
from the most recent form(s) previously delivered by it to
AMRESCO (or, in the case of a participant, to the Lender from
which the related participation shall have been purchased) in
accordance with applicable United States laws and regulations;
unless, in any such case, any change in law or regulations has
occurred subsequent to the date such Lender became a party to
this Agreement ( or in the case of a participant, the date on
which such participant purchased the related participation) which
renders all such forms inapplicable or which would prevent such
Lender (or participant) from properly completing and executing
any such form with respect to it and such Lender promptly
notifies AMRESCO and Agent (or, in the case of a participant, the
Lender from which the related participation shall have been
purchased) if it is no longer able to deliver, or if it is
required to withdraw or cancel, any form or statement previously
delivered by it pursuant to this Section 11.20. A Non-U.S. Lender
shall not be required to deliver any form or statement pursuant
to the immediately preceding sentences in this Section 11.20 that
such Non-U.S. Lender is not legally able to deliver it being
understood and agreed that AMRESCO shall withhold or deduct such
amount from any payments made to such Non-U.S. Lender that
AMRESCO reasonably determines are required by law that payments
resulting from a failure to comply with this Section 11.20 shall
not be subject to payment or indemnity by Borrower and Guarantors
pursuant to Section 11.4).
Section 11.21. Judgment Currency.
(a) If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or under
any other Loan Document in one currency into another currency,
the rate of exchange used shall be that at which in accordance
with normal banking procedures Agent could purchase the first
currency with such other currency on the Business Day preceding
that on which final judgment is given. The obligation of
Borrower and Guarantors in respect of any such sum due from it to
Agent, the Lenders, or any other Person hereunder (the "Judgment
Creditors") or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the
"Agreement Currency"), be discharged only to the extent that on
the Business Day following receipt by the Judgment Creditor(s) of
any sum adjudged to be so due in the Judgment Currency, Agent may
in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency. If the amount of
the Agreement Currency so purchased is less than the sum
originally due to the Judgment Creditor(s) in the Agreement
Currency, Borrower and each Guarantor jointly and severally
agree, as a separate obligation and notwithstanding any such
judgment, to indemnify the Judgment Creditor(s) against such
loss. If the amount of the Agreement Currency so purchased is
greater than the sum originally due to the Judgment Creditor(s)
in such currency, the Judgment Creditor receiving such
overpayment agrees to return the amount of any excess received by
such entity to Borrower (or to any other Person who may be
entitled thereto under applicable law).
(b) Borrower and each Guarantor jointly and severally
promise to indemnify each Judgment Creditor against and hold each
Judgment Creditor harmless from all loss and damage resulting
from any change in exchange rates between the date any claim is
reduced to judgment and the date of payment (or, in the case of
partial payments, the date of each partial payment) thereof by
Borrower or any Guarantor. This indemnity shall constitute an
obligation separate and independent from the other obligations
contained in this Agreement, shall give rise to a separate and
independent cause of action, shall apply irrespective of any
indulgence granted by Agent, the Required Lenders, or the Lenders
from time to time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in
respect of an amount due hereunder or under any judgment or
order.
Section 11.22. Consolidated Group. Borrower and Guarantors
are engaged in the businesses set forth in Section 7.2 of this
Agreement. These operations require financing on a basis such
that the credit supplied can be made available from time to time
to Borrower and Guarantors, as required for the continued
successful operation of Borrower and Guarantors. Borrower and
Guarantors have requested that Lenders make the Credit Facilities
available primarily for the purposes of financing the operations
of Borrower and Guarantors. Borrower and Guarantors expect to
derive benefit (and the boards of directors or other governing
body of each of Borrower and Guarantors may reasonably be
expected to derive benefit), directly or indirectly, from the
Credit Facilities established by Lenders, both in their separate
capacities and as members of the group of companies, since the
successful operation and condition of Borrower and each Guarantor
is dependent on the continued successful performance of the
functions of the group as a whole.
Section 11.23. Amendment and Restatement/Renewal and
Extension. The Credit Facilities are in renewal and extension of
(but do not extinguish) the Revolving Credit Facility and the
Term Facility, respectively. This Agreement renews and extends
and amends and restates in its entirety the Second Loan
Agreement. Borrower and Guarantors acknowledge and agree that
all liens and security interests securing the Credit Facilities
under the Second Loan Agreement are hereby renewed and extended
and continue to secure the Credit Facilities as renewed and
extended and amended and restated pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers effective as of the Closing Date.
BORROWER:
AMRESCO, INC., a Delaware corporation
By:
Xxxxxx X. Xxxxxx,
Treasurer
AMRESCO UK HOLDINGS LIMITED, a United
Kingdom corporation
By: AMRESCO, INC., a Delaware
corporation, as attorney-in-fact
By:
Xxxxxx X. Xxxxxx,
Treasurer
ACKNOWLEDGED AND AGREED TO as of the
30th day of September, 1997 by:
GUARANTORS:
AFC EQUITIES, INC.
AMRESCO ATLANTA INDUSTRIAL, INC.
AMRESCO BUILDERS GROUP, INC.
AMRESCO CANADA, INC.
AMRESCO CAPITAL CONDUIT CORPORATION
AMRESCO CAPITAL LIMITED, INC.
AMRESCO CAPITAL, L.P.
AMRESCO COMMERCIAL LENDING CORPORATION
AMRESCO CONSOLIDATION CORP. f/k/a
AMRESCO MORTGAGE CAPITAL, INC.
AMRESCO EQUITIES CANADA INC.
AMRESCO FINANCIAL I, INC.
AMRESCO FINANCIAL I, L.P.
AMRESCO FUNDING CORPORATION
AMRESCO FUNDING GEORGIA, L.P.
AMRESCO FUNDING INVESTORS, INC.
AMRESCO FUNDING MANAGEMENT, INC.
AMRESCO FUNDING MID-ATLANTIC, INC.
AMRESCO FUNDING PACIFIC, INC.
AMRESCO INSTITUTIONAL, INC.
AMRESCO INVESTMENTS, INC.
AMRESCO JERSEY VENTURES LIMITED
AMRESCO MANAGEMENT, INC.
AMRESCO MBS II, INC.
AMRESCO MORTGAGE CAPITAL LIMITED-1, INC.
AMRESCO MORTGAGE SERVICES LIMITED, INC.
AMRESCO NEW ENGLAND, L.P.
AMRESCO NEW ENGLAND II, L.P.
AMRESCO NEW ENGLAND, INC.
AMRESCO NEW ENGLAND II, INC.
AMRESCO NEW HAMPSHIRE, INC.
AMRESCO NEW HAMPSHIRE, L.P.
AMRESCO OVERSEAS, INC.
AMRESCO PORTFOLIO INVESTMENTS, INC.
AMRESCO PRINCIPAL MANAGERS I, INC.
AMRESCO PRINCIPAL MANAGERS II, INC.
AMRESCO RESIDENTIAL CAPITAL MARKETS, INC.
AMRESCO RESIDENTIAL CONDUIT, INC.
AMRESCO RESIDENTIAL CREDIT CORPORATION
AMRESCO RESIDENTIAL MORTGAGE CORPORATION
AMRESCO RESIDENTIAL PROPERTIES, INC.
AMRESCO RETAIL VENTURES, LTD
AMRESCO RETAIL VENTURES II, LTD.
AMRESCO RHODE ISLAND, INC.
AMRESCO SERVICES CANADA INC.
AMRESCO SERVICES, L.P.
AMRESCO UK LIMITED
AMRESCO UK VENTURES LIMITED
AMRESCO VENTURES, INC. f/k/a
AMRESCO GENERAL PARTNERS, INC.
AMRESCO 1994-N2, INC.
ASSET MANAGEMENT RESOLUTION COMPANY
BEI 1992 - N1, INC.
BEI 1993 - N3, INC.
BEI 1994 - N1, INC.
BEI MULTI-POOL, INC.
BEI PORTFOLIO INVESTMENTS, INC.
BEI PORTFOLIO MANAGERS, INC.
BEI REAL ESTATE SERVICES, INC.
BEI SANJAC, INC.
COMMONWEALTH TRUST DEED SERVICES, INC.
ENT MIDWEST, INC.
ENT NEW JERSEY, INC.
ENT SOUTHERN CALIFORNIA, INC.
EXPRESS FUNDING, INC.
GRANITE EQUITIES, INC.
LIFETIME HOMES, INC., f/k/a LIFETIME HOMES OF
NEW JERSEY, INC.
XXXXXXXX XXXXXXXX, X.X.
OAK CLIFF FINANCIAL, INC.
OLD MIDLAND HOUSE LIMITED
PRESTON HOLLOW ASSET HOLDINGS, INC.
QUALITY FUNDING, INC.
SAVE-MORE INSURANCE SERVICES INC.
WHITEROCK INVESTMENTS, INC.
By: AMRESCO, INC., a Delaware corporation,
as attorney-in-fact
By:
Xxxxxx X. Xxxxxx, as
Treasurer
AGENT:
NATIONSBANK OF TEXAS, N.A.,
a national banking association, as
Agent for Lenders
By:
Xxxxxxxxx Xxxxxxxx
Senior Vice President
REVOLVING LENDERS:
NATIONSBANK OF TEXAS, N.A., a
national banking association
By:_________________________________
Xxxxxxxxx Xxxxxxxx
Senior Vice President
BANK ONE, TEXAS, NA,
a national banking association
By:________________________________
Name:______________________________
Title:_____________________________
XXXXX FARGO BANK (TEXAS), N.A.,
a national banking association
By:________________________________
Name:______________________________
Title:_____________________________
COMERICA BANK - TEXAS,
a state banking association
By:________________________________
Name:______________________________
Title:_____________________________
BANK UNITED,
a federal savings bank
By:________________________________
Name:______________________________
Title:_____________________________
THE BANK OF NEW YORK,
a national banking association
By:________________________________
Name:______________________________
Title:_____________________________
FLEET BANK, N.A.,
a national banking association
By:________________________________
Name:______________________________
Title:_____________________________
THE SUMITOMO BANK, LIMITED
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
PNC BANK, KENTUCKY, INC.
By:________________________________
Name:______________________________
Title:_____________________________
IMPERIAL BANK
By:________________________________
Name:______________________________
Title:_____________________________
TERM LENDERS:
ALLSTATE INSURANCE COMPANY
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
INDOSUEZ CAPITAL FUNDING II, LIMITED
By: Indosuez Capital Luxembourg, SA, as
Collateral Manager
By:___________________________
Name:_________________________
Title:________________________
NATIONSBANK OF TEXAS, N.A., a
national banking association
By:
Xxxxxxxxx Xxxxxxxx
Senior Vice President
STRATA FUNDING LTD.
By:________________________________
Name:______________________________
Title:_____________________________
CERES FINANCE LTD.
By:________________________________
Name:______________________________
Title:_____________________________
AMARA-2 FINANCE LTD.
By:________________________________
Name:______________________________
Title:_____________________________
KZH HOLDING CORPORATION III
By:________________________________
Name:______________________________
Title:_____________________________
THIRD AMENDED AND RESTATED LOAN AGREEMENT
Dated as of
September 30, 1997
among
AMRESCO, INC.
and
AMRESCO UK HOLDINGS LIMITED
as Borrower
and
NATIONSBANK OF TEXAS, N.A.
as Agent,
BANK ONE, TEXAS, N.A., as co-agent,
and
NATIONSBANK OF TEXAS, N.A.
AND THE OTHER ENTITIES DESIGNATED HEREIN
as Lenders
TABLE OF CONTENTS
ARTICLE I
TERMS DEFINED 2
Section 1.1. Definitions 2
Section 1.2. Singular and Plural of Definitions 32
Section 1.3. Substantive Definitions 32
Section 1.4. Money 32
Section 1.5. Captions; References 32
Section 1.6. Accounting Terms and Determinations 33
ARTICLE II
COMMITMENT 33
Section 2.1. Commitment 33
Section 2.2. Method of Borrowing 35
Section 2.3 Competitive Bid Loans 38
Section 2.4. Fees 41
Section 2.5. Additional Guarantors or Borrowers 43
ARTICLE III
TERMS OF THE CREDIT FACILITIES 43
Section 3.1. Notes 43
Section 3.2. Maturity 44
Section 3.3. Interest Rate 44
Section 3.4. Interest Payments 44
Section 3.5. Conversion of Revolving Credit Advances;
Interest Rate Elections
under Term Facility; Regulatory Change 44
Section 3.6. Payments of Advances; Reduction of
Commitment Amount 48
Section 3.7. Schedules on Notes 51
Section 3.8. General Provisions as to Payments 51
Section 3.9. Application of Payments 51
Section 3.10. Post-Default Interest; Past Due
Principal and Interest 52
Section 3.11. Computation of Interest and Fees 52
Section 3.12. Capital Adequacy 52
Section 3.13. Deposit of Cash Collateral 53
Section 3.14. Alternate Currency Notes 53
ARTICLE IV
CONDITIONS TO CLOSING 54
Section 4.1. Conditions To Closing 54
Section 4.2. Conditions To All Advances 56
Section 4.3. Conditions to Letters of Credit 56
ARTICLE V
COLLATERAL AND GUARANTIES 57
Section 5.1. Security and Guaranties 57
Section 5.2. Requirements For Assigned Loans. 57
Section 5.3. Requirements for Mortgaged Properties 58
Section 5.4. Recording 59
Section 5.5. Timing of Deliveries 59
Section 5.6. Agent's Discretion 59
Section 5.7. Lockbox; Lockbox Account 59
Section 5.8. Release of Collateral. 60
ARTICLE VI
REPRESENTATIONS AND WARRANTIES 61
Section 6.1. Existence and Power of Borrower and Guarantors 61
Section 6.2. Subsidiaries 61
Section 6.3. Authorization; Contravention 61
Section 6.4. Enforceable Obligations 62
Section 6.5. Financial Information 62
Section 6.6. Litigation 62
Section 6.7. ERISA 62
Section 6.8. Taxes and Filing of Tax Returns 63
Section 6.9. Ownership of Assets 63
Section 6.10. Business; Compliance 64
Section 6.11. Licenses, Permits 64
Section 6.12. Compliance with Law 64
Section 6.13. Full Disclosure 64
Section 6.14. Environmental Matters 64
Section 6.15. Purpose of Credit 65
Section 6.16. Governmental Regulations 66
Section 6.17. Indebtedness 66
Section 6.18. Insurance 66
Section 6.19. Solvency 66
Section 6.20. Due Diligence Procedures 66
ARTICLE VII
AFFIRMATIVE COVENANTS 67
Section 7.1. Information From AMRESCO 67
Section 7.2. Business of Borrower and Guarantors 69
Section 7.3. Right of Inspection 69
Section 7.4. Maintenance of Insurance 70
Section 7.5. Payment of Taxes, Impositions and Claims 70
Section 7.6. Compliance with Laws and Documents 70
Section 7.7. Environmental Law Compliance and Indemnity 70
Section 7.8. Covenant Compliance 72
Section 7.9. Quantity and Quality of Documents 72
Section 7.10. Use of Proceeds 72
Section 7.11. Additional Documents 72
Section 7.12. Compliance With Due Diligence Standards;
Offices and Files 72
Section 7.13. Appraisal 73
ARTICLE VIII
NEGATIVE COVENANTS 73
Section 8.1. Minimum Consolidated Tangible Net Worth 73
Section 8.2. Leverage Ratios 73
Section 8.3. Coverage Ratio 73
Section 8.4. Adjusted EBITDA Maintenance. 73
Section 8.5. Permitted Debt 74
Section 8.6. Limitation on Sale of Properties 75
Section 8.7. Permitted Liens 75
Section 8.8. Limitation on Loans to Shareholders 76
Section 8.9. Consolidations, Mergers, Sales of Assets,
and Maintenance 76
Section 8.10. Investments 77
Section 8.11. Distributions 78
Section 8.12. Limitation on Contingent Liabilities 78
Section 8.13. Transactions with Affiliates 78
Section 8.14. Employee Plans 78
Section 8.15. Use Violations 79
Section 8.16. Exceptions to Covenants 79
Section 8.17. Fiscal Year and Accounting Methods 79
Section 8.18. Governmental Regulations 79
ARTICLE IX
DEFAULTS AND REMEDIES 79
Section 9.1. Events of Default 79
Section 9.2. Remedies 82
Section 9.3. Rights of Set-Off 83
Section 9.4. Remedies Cumulative, Concurrent and
Non-Exclusive 84
Section 9.5. No Conditions Precedent to Exercise Remedies 84
Section 9.6. Release of and Resort to Collateral 85
Section 9.7. Waivers 85
Section 9.8. Discontinuance of Proceedings 85
Section 9.9. Power of Attorney 85
Section 9.10. Application of Proceeds 86
ARTICLE X
AGENT AND THE LENDERS 86
Section 10.1. Appointment and Authorization of Agent 86
Section 10.2. Possession of Instruments by Agent 88
Section 10.3. Expenses 88
Section 10.4. Delegation of Duties; Reliance; Consultation 88
Section 10.5. Limitation of Agent's Liability 89
Section 10.6. Default; Collateral 90
Section 10.7. Lenders' Decision 90
Section 10.8. Limitation of Liability of Lenders 91
Section 10.9. Relationship of Lenders 91
Section 10.10. Debtor-Creditor Relationship 91
Section 10.11. Credit Decisions 91
Section 10.12. Removal of Agent 92
Section 10.13. Resignation by Agent 92
Section 10.14. Sharing of Payments and Setoffs. 92
Section 10.15. Non-Advancing Lenders. 93
Section 10.16. Benefit of Lenders 94
ARTICLE XI
MISCELLANEOUS 94
Section 11.1. Continuing Agreement 94
Section 11.2. Notices 94
Section 11.3. No Waivers 95
Section 11.4. Expenses; Documentary Taxes; Indemnification 95
Section 11.5. Amendments and Waivers; Consent to Deviation 96
Section 11.6. Survival 96
Section 11.7. Prior Understandings; No Defenses; Release;
No Oral Agreements 96
Section 11.8. Limitation on Interest 97
Section 11.9. Invalid Provisions 97
Section 11.10. Assignments and Participations 97
Section 11.11. Senior Debt; Borrower Subordination 99
Section 11.12. Revolving Loan 100
Section 11.13. Construction 100
Section 11.14. APPLICABLE LAW 100
Section 11.15. Submission To Jurisdiction; Service of
Process 100
Section 11.16. JURY TRIAL WAIVER 101
Section 11.17. Counterparts 101
Section 11.18. Inconsistent Provisions 101
Section 11.19. Non-Waiver of Rights or Remedies 101
Section 11.20. Taxes 101
Section 11.21. Judgment Currency. 102
Section 11.22. Consolidated Group 103
SCHEDULES AND EXHIBITS
SCHEDULE I - LENDERS AND BORROWER
SCHEDULE II - COMMITMENT FEE PERCENTAGE; LIBOR MARGIN
SCHEDULE III - CAPITAL ADEQUACY TEST
EXHIBIT A - REVOLVING NOTE
EXHIBIT A-1 - TERM NOTE
EXHIBIT A-3 - COMPETITIVE BID NOTE
EXHIBIT B - REQUEST FOR ADVANCE
EXHIBIT C - FORM OF COMPLIANCE LETTER
EXHIBIT D - ASSIGNMENT AND ACCEPTANCE
EXHIBIT E - REQUEST FOR COMPETITIVE BID QUOTE
EXHIBIT E-1 - INVITATION FOR COMPETITIVE BID QUOTE
EXHIBIT E-2 - COMPETITIVE BID QUOTE
SCHEDULE I
LENDER AND BORROWER
I. LENDERS, AGENT AND ARRANGER
A. AGENT:
NationsBank of Texas, N.A.
Commercial Banking Division
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Fax No.: (000) 000-0000
B. ARRANGER:
NationsBanc Capital Markets, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx, Xx.
Fax No.: (000) 000-0000
C. REVOLVING LENDERS:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank One, Texas, NA
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy of all notices to:
Bank One, Texas, NA
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Fargo Bank (Texas), N.A.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Comerica Bank - Texas
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank United
0000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. XxXxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
The Bank of New York
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Fleet Bank, N.A.
1185 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
The Sumitomo Bank, Limited
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
PNC Bank, Kentucky, Inc.
000 Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Imperial Bank
0000 X. XxXxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
D. TERM LENDERS:
Allstate Insurance Companies
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Indosuez Capital Funding II, Limited
x/x Xxxxxxxx Xxxxxxx
0000 Xxxxxx of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Strata Funding Ltd.
c/o Chancellor LGT Secured Management, Inc.
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Ceres Finance Ltd.
c/o Chancellor LGT Secured Management, Inc.
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Amara-2 Finance Ltd.
c/o Chancellor LGT Secured Management, Inc.
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
KZH Holding Corporation III
x/x Xxx Xxxxx Xxxxxxxxx Bank
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Revolving Loan Revolving Modification
Commitment Loan Fee Amount
Amount Percentage for this
Agreement
Revolving
Lenders:
NationsBank $55,000,000 18.644068% $37,500.00
Bank One $50,000,000 16.949153% $33,750.00
Xxxxx Fargo $35,000,000 11.864407% $26,250.00
Comerica $30,000,000 10.169491% $22,500.00
Bank United $30,000,000 10.169491% $22,500.00
Bank of New $30,000,000 10.169491% $22,500.00
York
Fleet $25,000,000 8.474576% $18,750.00
Sumitomo $15,000,000 5.084746% $11,250.00
PNC $15,000,000 5.084746% $11,250.00
Imperial $10,000,000 3.389831% $7,500.00
Total $290,000,000 100.00000% $213,750.00
Term Loan Term Loan Modification
Commitment Percentage Fee Amount for
Amount this Agreement
Term Lenders:
NationsBank $15,000,000 25.000000% $0
Indosuez $15,000,000 25.000000% $11,250.00
Allstate $10,000,000 16.66667% $7,500.00
KZH III $5,000,000 8.333334% $3,750.00
Strata $5,000,000 8.333334% $3,750.00
Ceres $5,000,000 8.333334% $3,750.00
Amara-2 $5,000,000 8.333334% $3,750.00
Total $60,000,000 100.00000% $ 33,750.00
II. BORROWER
AMRESCO, INC.
AMRESCO UK HOLDINGS LIMITED
000 X. Xxxxx Xxxxxx
Xxxxx 0000, XX 000
Xxxxxx, Xxxxx 00000-0000
Attn: Treasurer
Fax No.: (000) 000-0000
SCHEDULE II
COMMITMENT FEE PERCENTAGE; LIBOR MARGIN
Qualified Applicable Commitment Letter of
Investment LIBOR Fee Credit Fee
Rating Margin Percentages Percentage
s
B+/B1 or Lower (a) 175.0 b.p. 37.5 b.p. 150 b.p
(b) 225.0 b.p.
BB-/Ba3 (a) 150.0 b.p. 25.0 b.p. 100 b.p
(b) 225.0 b.p.
BB/Ba2 (a) 125.0 b.p. 25.0 b.p. 100 b.p
(b) 200.0 b.p.
BBB-/Baa3 (a) 100.0 b.p. 20.0 b.p. 100 b.p
(b) 175.0 b.p.
(a) - The Applicable LIBOR Margin for the Revolving Credit Facility.
(b) - The Applicable LIBOR Margin for the Term Facility.
SCHEDULE III
CAPITAL ADEQUACY TEST
LEVERAGE
ASSETS ADVANCE RATE
%
Cash and Equivalents 100%
Temporary Investments 100%
Accounts Receivable (net of reserves)
Management Contracts 85%
Loans held for sale, net
Residential Mortgage 100%
Commercial Mortgage - FNMA 99%
Commercial Mortgage - Other 95%
Commercial Finance 95%
Loans, Net
Residential Mortgage 100%
Commercial Mortgage - Servicing Advances 90%
Commercial Finance 85%
Corporate and other 85%
Investments in Purch. Loan and Other Asset Port.
Loan Portfolios
Foreign 80%
Domestic 80%
Real Estate
Foreign 80%
Domestic 80%
Partnerships and Joint Ventures 70%
Asset Backed and Other Securities
Available for Sale 75%
Retained Interests in Securitizations-Trading
Residential Mortgage 70%
Retained Interests in Securitizations-Trading
Commercial Lending 85%
Premises and equipment, Net of
Acc. Depreciation 50%
EXHIBIT A
REVOLVING NOTE
$________________ Dallas, Texas _________ __, 1997
FOR VALUE RECEIVED, AMRESCO, INC., a Delaware corporation, and
the other parties executing this Note or hereafter added hereto
as "Maker" (collectively "Makers"), hereby, jointly and
severally, promise to pay to the order of
_____________________________ ("Lender") in care of Agent, at its
banking house in the City of Dallas, Dallas County, Texas, or at
such other address in Dallas County, Texas, given to Makers by
Agent, the principal sum of ____________________________ Dollars
($______________), or so much thereof as may be advanced and
outstanding, together with interest, as hereinafter described.
This Note has been executed and delivered pursuant to the
terms of that certain Third Amended and Restated Loan Agreement
(as the same may be modified, amended, supplemented, extended or
restated from time to time, the "Loan Agreement") dated the date
hereof, executed by and among Makers, Agent and the Lenders
(which includes the payee of this Note) and is one of the notes
defined therein as a "Revolving Note", the terms and provisions
of the Loan Agreement related to this Note being incorporated
herein by reference for all purposes. Each capitalized term not
expressly defined herein shall have the meaning given to such
term under the Loan Agreement. The terms of the Loan Agreement
shall govern in the case of any inconsistency between such terms
and the terms hereof.
This Note is secured by the Collateral Assignment, the Pledge
Agreements, the Security Agreement, the Mortgages, the other
Security Documents and all the other Loan Documents, and all
liens and security interests created or evidenced thereby. Any
holder shall be entitled to all benefits and remedies and
security set forth in the Loan Agreement and all the other Loan
Documents. [This Note renews, extends and replaces that certain
Promissory Note dated ______________, in the amount of $________,
executed by Makers, payable to Lender.]
1.Interest and Payment.
(a) Maturity. The principal of this Note and all accrued
but unpaid interest hereon shall be due and payable in full on
the Revolving Facility Termination Date.
(b) Accrual of Interest. Subject to Paragraph 1(f) below,
interest on this Note shall accrue at a rate per annum equal to
the lesser of (i) at Makers' option, the Variable Rate or the
Adjusted LIBOR Rate, subject, however, to the provisions of the
Loan Agreement, or (ii) the Maximum Lawful Rate; provided,
however, that as to any portion of the outstanding principal
balance hereof that is not subject to an effective election of or
conversion to the Adjusted LIBOR Rate in accordance with the
terms of the Loan Agreement, interest on such portion of this
Note shall accrue interest at the lesser of (i) the Variable Rate
or (ii) the Maximum Lawful Rate. Interest on this Note shall be
calculated at a daily rate equal to 1/360 of the annual
percentage rate which this Note bears, subject to the provisions
hereof limiting interest to the Maximum Lawful Rate. Without
notice to any Maker or any other Person, the Variable Rate and
the Maximum Lawful Rate shall each automatically fluctuate upward
and downward as and in the amount by which the Base Rate and the
Maximum Lawful Rate, respectively, fluctuate, subject always to
limitations contained in this Note and the Loan Agreement.
(c) Agreements Concerning Pricing Election. Reference
should be made to the provisions of Section 3.5 of the Loan
Agreement concerning the terms, manner and agreements related to
the interest rate elections available to Makers under this Note.
(d) Principal and Interest Payments. Principal and interest
hereon shall be due and payable as is provided in Article III of
the Loan Agreement, which provides, in part, for quarterly
payments of interest on the first (1st) day of each calendar
quarter, commencing on October 1, 1997, and continuing on the
first (1st) day of each January, April, July and October during
the Credit Period.
(e) Costs Due to Regulatory Changes. Makers shall indemnify
Lender against and reimburse Lender for increased costs to
Lender, as a result of any Regulatory Change, in the maintaining
of any LIBOR Rate Advance or Alternate Currency Advance. All
payments made pursuant to this paragraph shall be made free and
clear, without reduction for, or account of, any present or
future taxes or other levies of any nature, excluding net income
and franchise taxes.
(f) Default Rate. After maturity of this Note or the
occurrence of an Event of Default, the outstanding principal
balance of this Note shall, at the option of the Required
Lenders, bear interest at the Default Rate. Any past due
principal, and to the extent permitted by law, past due interest
on this Note shall bear interest, payable as it accrues on
demand, for each day until paid at the Default Rate. Such
interest shall continue to accrue at the Default Rate
notwithstanding the entry of a judgment with respect to any of
the Obligations or the foreclosure of any of the Lenders' Liens,
unless otherwise provided by law.
(g) Maximum Lawful Rate Adjustments. If at any time the
Applicable Rate shall be limited to the Maximum Lawful Rate, any
subsequent reductions in the Applicable Rate shall not reduce the
rate of interest on this Note below the Maximum Lawful Rate until
the total amount of interest accrued equals the amount of
interest which would have accrued if the Applicable Rate had at
all times been in effect. In the event that at maturity (stated
or by acceleration), or at the final payment of the Revolving
Credit Facility, the total amount of interest paid or accrued on
the Revolving Credit Facility is less than the amount of interest
which would have accrued if the Applicable Rate had at all times
been in effect with respect thereto, then at such time, to the
extent permitted by law, Makers shall pay to Agent, for the
ratable benefit of the Lenders, an amount equal to the difference
between (a) the lesser of the amount of interest which would have
accrued if the Applicable Rate had at all times been in effect
and the amount of interest which would have accrued if the
Maximum Lawful Rate had at all times been in effect, and (b) the
amount of interest actually paid on the Revolving Credit
Facility.
2.Default. The occurrence of a Default or an Event of
Default, under and as defined in the Loan Agreement, shall
constitute, respectively, a Default or an Event of Default under
this Note.
3.Remedies.
(a) All Remedies Available. Upon the occurrence of an Event
of Default, the holder hereof, acting by and through Agent in
accordance with the terms of Articles IX and X of the Loan
Agreement, shall have the right to declare the entire unpaid
principal balance of, and all accrued unpaid interest on, this
Note at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any and all liens
and security interests securing payment hereof, to offset against
this Note any sum or sums owed by it to Maker, and to exercise
any of its other rights, powers and remedies under this Note,
under the Loan Agreement or any other Loan Document, or at law or
in equity.
(b) No Waiver. Neither the failure by the holder hereof to
exercise, nor delay by the holder hereof in exercising, the right
to accelerate the maturity of this Note or any other right, power
or remedy upon any Default or Event of Default shall be construed
as a waiver of such Default or Event of Default or as a waiver of
the right to exercise any such right, power or remedy at any
time. No single or partial exercise by the holder hereof of any
right, power or remedy shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right,
power or remedy may be exercised at any time and from time to
time. All rights and remedies provided for in this Note and in
any other Loan Document are cumulative of each other and of any
and all other rights and remedies existing at law or in equity,
and the holder hereof shall, in addition to the rights and
remedies provided herein or in any other Loan Document, be
entitled to avail itself of all such other rights and remedies as
may now or hereafter exist at law or in equity for the collection
of the indebtedness owing hereunder, and the resort to any right
or remedy provided for hereunder or under any such other Loan
Document or provided for by law or in equity shall not prevent
the concurrent or subsequent employment of any other appropriate
rights or remedies. Without limiting the generality of the
foregoing provisions, the acceptance by the holder hereof from
time to time of any payment under this Note which is past due or
which is less than the payment in full of all amounts due and
payable at the time of such payment, shall not (i) constitute a
waiver of or impair or extinguish the rights of the holder hereof
to accelerate the maturity of this Note or to exercise any other
right, power or remedy at the time or at any subsequent time, or
nullify any prior exercise of any such right, power or remedy, or
(ii) constitute a waiver of the requirement of punctual payment
and performance, or a novation in any respect.
4.Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or
in any other Loan Documents, expressed or implied, to the
contrary, in no event shall any interest rate charged hereunder
or under any of the other Loan Documents, or any interest
contracted for, collected or received by Lender or any holder
hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and
agreed to be the intent of Makers and Lender at all times to
comply with the applicable law governing the maximum rate or
amount of interest payable on or in connection with this Note.
If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under
any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to this Note, or if
acceleration of the maturity of this Note, any prepayment by
Makers, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by
applicable law, then it is the express intent of Makers and
Lender that all excess amounts theretofore collected by Lender be
credited on the principal balance of this Note (or, if this Note
has been or would thereby be paid in full, refunded to Makers),
and the provisions of this Note and the other applicable Loan
Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery
of the fullest amount otherwise called for hereunder and
thereunder. The right to accelerate the maturity of this Note
does not include the right to accelerate any interest which has
not otherwise accrued on the date of such acceleration, and
Lender does not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to
Lender for the use, forbearance or detention of the indebtedness
evidenced hereby or by any other Loan Document shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the
Maximum Lawful Rate. The term "applicable law" as used herein
shall mean the laws of the State of Texas, or DIDMCA or any other
applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, reserve or receive
a greater amount of interest than under Texas law. The
provisions of this paragraph shall control all agreements between
Makers and Lender.
5.General Provisions.
(a) Business Days. Whenever any payment shall be due under
this Note on a day which is not a Business Day, the date on which
such payment is due shall be extended to the next succeeding
Business Day, and such extension of time shall be included in the
computation of the amount of interest then payable.
(b) Manner of Payment. The manner in which payments are to
be made on this Note shall be governed by the provisions hereof
and the Loan Agreement, including, without limitation, Article
III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided
in Section 3.6 of the Loan Agreement are required to be made, on
this Note subject to and in accordance with Section 3.6 of the
Loan Agreement.
(d) Application of Payments. All payments made on this Note
shall be applied in accordance with Sections 3.6, 3.9 and 9.10 of
the Loan Agreement, as applicable. Nothing herein shall limit or
impair any rights of any holder hereof to apply as provided in
the Loan Documents any past due payments, any proceeds from the
disposition of any collateral by foreclosure or other collections
after default. Except to the extent specific provisions are set
forth in this Note or another Loan Document with respect to
application of payments, all payments received by the holder
hereof shall be applied, to the extent thereof, to the
indebtedness owing by Makers to the holder hereof in such order
and manner as the Required Lenders shall deem appropriate, any
instructions from Makers or anyone else to the contrary
notwithstanding.
(e) Costs of Collection. If any holder of this Note retains
an attorney in connection with any default or at maturity or to
collect, enforce or defend this Note or any other Loan Document
in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if any Maker sues any holder of this Note in
connection with this Note or any other Loan Document and does not
prevail, then Makers agree to pay to each such holder, in
addition to principal and interest, all costs and expenses
incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including reasonable attorneys' fees.
(f) Waivers and Acknowledgments. Each Maker and all
sureties, endorsers, guarantors and any other party now or
hereafter liable for the payment of this Note in whole or in
part, hereby severally (i) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all
other notice (except only for any notice that is specifically
required by the terms of the Loan Agreement or any other Loan
Document), filing of suit and diligence in collecting this Note
or enforcing any of the security herefor; (ii) agree to any
substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily
liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies against
any Maker or others liable or to become liable hereon or to
enforce its rights against them or any security herefor; (iv)
consent to any extension or postponement of time of payment of
this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences
with respect hereto, without notice thereof to any of them; and
(v) submit (and waive all rights to object) to personal
jurisdiction in the State of Texas, and venue in Dallas County,
Texas, for the enforcement of any and all obligations under the
Loan Documents.
(g) Amendments in Writing. This Note may not be changed,
amended or modified except in a writing expressly intended for
such purpose and executed by the party against whom enforcement
of the change, amendment or modification is sought.
(h) Purpose of Proceeds. The proceeds of this Note will be
used solely for business purposes and not for personal, family,
household or agricultural purposes.
(i) Notices. Any notice required or which any party desires
to give under this Note shall be given and effective as provided
in Section 11.2 of the Loan Agreement.
(j) Assignments/Participations. Makers acknowledge and
agree that the holder of this Note may, at any time and from time
to time, assign all or a portion of its interest in the Revolving
Credit Facility or transfer to any Person a participation
interest in the Revolving Credit Facility, subject to and in
accordance with the terms and conditions of the Loan Agreement,
including Section 11.10 thereof.
(k) Successors and Assigns. All of the covenants,
stipulations, promises and agreements contained in this Note by
or on behalf of Makers shall bind their successors and assigns
and shall be for the benefit of Lender and any holder hereof, and
their successors and assigns, whether so expressed or not,
subject, however, to the provisions of Section 11.10 of the Loan
Agreement.
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT
THAT THE LAWS OF ANOTHER JURISDICTION GOVERN THE CREATION,
PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE REMEDIES RELATED
TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED
STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8 OF THE LOAN
AGREEMENT OR OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in
this Note with respect to all of Makers' obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Maker has duly executed this Note as of
the date first above written.
MAKERS:
AMRESCO, INC., a Delaware
corporation
By:
Xxxxxx X. Xxxxxx,
Treasurer
(VARIOUS MAKERS)
By:
Name:
Title:
EXHIBIT A-1
TERM NOTE
$________________ Dallas, Texas __________ __, 1997
FOR VALUE RECEIVED, AMRESCO, INC., a Delaware corporation, and
the other parties executing this Note or hereafter added hereto
as "Maker" (collectively "Makers"), hereby, jointly and
severally, promise to pay to the order of
_____________________________ ("Lender") in care of Agent, at its
banking house in the City of Dallas, Dallas County, Texas, or at
such other address in Dallas County, Texas, given to Makers by
Agent, the principal sum of ____________________________ Dollars
($______________), or so much thereof as may be advanced and
outstanding, together with interest, as hereinafter described.
This Note has been executed and delivered pursuant to the
terms of that certain Third Amended and Restated Loan Agreement
(as the same may be modified, amended, supplemented, extended or
restated from time to time, the "Loan Agreement") dated the date
hereof, executed by and among Makers, Agent and the Lenders
(which includes the payee of this Note) and is one of the notes
defined therein as a "Term Note", the terms and provisions of the
Loan Agreement related to this Note being incorporated herein by
reference for all purposes. Each capitalized term not expressly
defined herein shall have the meaning given to such term under
the Loan Agreement. The terms of the Loan Agreement shall govern
in the case of any inconsistency between such terms and the terms
hereof.
This Note is secured by the Collateral Assignment, the Pledge
Agreements, the Security Agreement, the Mortgages, the other
Security Documents and all the other Loan Documents, and all
liens and security interests created or evidenced thereby. Any
holder shall be entitled to all benefits and remedies and
security set forth in the Loan Agreement and all the other Loan
Documents. [This Note renews, extends and replaces that certain
Promissory Note dated ______________, in the amount of $________,
executed by Makers, payable to Lender.]
1.Interest and Payment.
(a) Maturity. The principal of this Note and all accrued
but unpaid interest hereon shall be due and payable in full on
the Term Facility Termination Date.
(b) Accrual of Interest. Subject to Paragraph 1(f) below,
interest on this Note shall accrue at a rate per annum equal to
the lesser of (i) at Makers' option, the Variable Rate or the
Adjusted LIBOR Rate, subject, however, to the provisions of the
Loan Agreement, or (ii) the Maximum Lawful Rate; provided,
however, that as to any portion of the outstanding principal
balance hereof that is not subject to an effective election of or
conversion to the Adjusted LIBOR Rate in accordance with the
terms of the Loan Agreement, interest on such portion of this
Note shall accrue interest at the lesser of (i) the Variable Rate
or (ii) the Maximum Lawful Rate. Interest on this Note shall be
calculated at a daily rate equal to 1/360 of the annual
percentage rate which this Note bears, subject to the provisions
hereof limiting interest to the Maximum Lawful Rate. Without
notice to any Maker or any other Person, the Variable Rate and
the Maximum Lawful Rate shall each automatically fluctuate upward
and downward as and in the amount by which the Base Rate and the
Maximum Lawful Rate, respectively, fluctuate, subject always to
limitations contained in this Note and the Loan Agreement.
(c) Agreements Concerning Pricing Election. Reference
should be made to the provisions of Section 3.5 of the Loan
Agreement concerning the terms, manner and agreements related to
the interest rate elections available to Makers under this Note.
(d) Principal and Interest Payments. Principal and interest
hereon shall be due and payable as is provided in Article III of
the Loan Agreement, which provides, in part, for (i) quarterly
payments of interest on the first (1st) day of each calendar
quarter, commencing on October 1, 1997, and continuing on the
first (1st) day of each January, April, July and October during
the Credit Period, and (ii) an annual principal payment in an
amount equal to $_______[1% of the principal] on April 15 of each
year, commencing on April 15, 1998, and continuing on each April
15 thereafter during the Credit Period.
(e) Costs Due to Regulatory Changes. Makers shall indemnify
Lender against and reimburse Lender for increased costs to
Lender, as a result of any Regulatory Change, in the maintaining
of any LIBOR Rate Portion. All payments made pursuant to this
paragraph shall be made free and clear, without reduction for, or
account of, any present or future taxes or other levies of any
nature, excluding net income and franchise taxes.
(f) Default Rate. After maturity of this Note or the
occurrence of an Event of Default, the outstanding principal
balance of this Note shall, at the option of the Required
Lenders, bear interest at the Default Rate. Any past due
principal, and to the extent permitted by law, past due interest
on this Note shall bear interest, payable as it accrues on
demand, for each day until paid at the Default Rate. Such
interest shall continue to accrue at the Default Rate
notwithstanding the entry of a judgment with respect to any of
the Obligations or the foreclosure of any of the Lenders' Liens,
unless otherwise provided by law.
(g) Maximum Lawful Rate Adjustments. If at any time the
Applicable Rate shall be limited to the Maximum Lawful Rate, any
subsequent reductions in the Applicable Rate shall not reduce the
rate of interest on this Note below the Maximum Lawful Rate until
the total amount of interest accrued equals the amount of
interest which would have accrued if the Applicable Rate had at
all times been in effect. In the event that at maturity (stated
or by acceleration), or at the final payment of the Term
Facility, the total amount of interest paid or accrued on the
Term Facility is less than the amount of interest which would
have accrued if the Applicable Rate had at all times been in
effect with respect thereto, then at such time, to the extent
permitted by law, Makers shall pay to Agent, for the ratable
benefit of the Lenders, an amount equal to the difference between
(a) the lesser of the amount of interest which would have accrued
if the Applicable Rate had at all times been in effect and the
amount of interest which would have accrued if the Maximum Lawful
Rate had at all times been in effect, and (b) the amount of
interest actually paid on the Term Facility.
2.Default. The occurrence of a Default or an Event of
Default, under and as defined in the Loan Agreement, shall
constitute, respectively, a Default or an Event of Default under
this Note.
3.Remedies.
(a) All Remedies Available. Upon the occurrence of an Event
of Default, the holder hereof, acting by and through Agent in
accordance with the terms of Articles IX and X of the Loan
Agreement, shall have the right to declare the entire unpaid
principal balance of, and all accrued unpaid interest on, this
Note at once due and payable (and upon such declaration, the same
shall be at once due and payable), to foreclose any and all liens
and security interests securing payment hereof, to offset against
this Note any sum or sums owed by it to Maker, and to exercise
any of its other rights, powers and remedies under this Note,
under the Loan Agreement or any other Loan Document, or at law or
in equity.
(b) No Waiver. Neither the failure by the holder hereof to
exercise, nor delay by the holder hereof in exercising, the right
to accelerate the maturity of this Note or any other right, power
or remedy upon any Default or Event of Default shall be construed
as a waiver of such Default or Event of Default or as a waiver of
the right to exercise any such right, power or remedy at any
time. No single or partial exercise by the holder hereof of any
right, power or remedy shall exhaust the same or shall preclude
any other or further exercise thereof, and every such right,
power or remedy may be exercised at any time and from time to
time. All rights and remedies provided for in this Note and in
any other Loan Document are cumulative of each other and of any
and all other rights and remedies existing at law or in equity,
and the holder hereof shall, in addition to the rights and
remedies provided herein or in any other Loan Document, be
entitled to avail itself of all such other rights and remedies as
may now or hereafter exist at law or in equity for the collection
of the indebtedness owing hereunder, and the resort to any right
or remedy provided for hereunder or under any such other Loan
Document or provided for by law or in equity shall not prevent
the concurrent or subsequent employment of any other appropriate
rights or remedies. Without limiting the generality of the
foregoing provisions, the acceptance by the holder hereof from
time to time of any payment under this Note which is past due or
which is less than the payment in full of all amounts due and
payable at the time of such payment, shall not (i) constitute a
waiver of or impair or extinguish the rights of the holder hereof
to accelerate the maturity of this Note or to exercise any other
right, power or remedy at the time or at any subsequent time, or
nullify any prior exercise of any such right, power or remedy, or
(ii) constitute a waiver of the requirement of punctual payment
and performance, or a novation in any respect.
4.Usury Savings Provisions.
(a) General Limitation. Notwithstanding anything herein or
in any other Loan Documents, expressed or implied, to the
contrary, in no event shall any interest rate charged hereunder
or under any of the other Loan Documents, or any interest
contracted for, collected or received by Lender or any holder
hereof, exceed the Maximum Lawful Rate.
(b) Intent of Parties. It is expressly stipulated and
agreed to be the intent of Makers and Lender at all times to
comply with the applicable law governing the maximum rate or
amount of interest payable on or in connection with this Note.
If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under this Note or under
any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to this Note, or if
acceleration of the maturity of this Note, any prepayment by
Makers, or any other circumstance whatsoever, results in Lender
having been paid any interest in excess of that permitted by
applicable law, then it is the express intent of Makers and
Lender that all excess amounts theretofore collected by Lender be
credited on the principal balance of this Note (or, if this Note
has been or would thereby be paid in full, refunded to Makers),
and the provisions of this Note and the other applicable Loan
Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery
of the fullest amount otherwise called for hereunder and
thereunder. The right to accelerate the maturity of this Note
does not include the right to accelerate any interest which has
not otherwise accrued on the date of such acceleration, and
Lender does not intend to collect any unearned interest in the
event of acceleration. All sums paid or agreed to be paid to
Lender for the use, forbearance or detention of the indebtedness
evidenced hereby or by any other Loan Document shall, to the
extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the
Maximum Lawful Rate. The term "applicable law" as used herein
shall mean the laws of the State of Texas, or DIDMCA or any other
applicable United States federal law to the extent that it
permits Lender to contract for, charge, take, reserve or receive
a greater amount of interest than under Texas law. The
provisions of this paragraph shall control all agreements between
Makers and Lender.
5.General Provisions.
(a) Business Days. Whenever any payment shall be due under
this Note on a day which is not a Business Day, the date on which
such payment is due shall be extended to the next succeeding
Business Day, and such extension of time shall be included in the
computation of the amount of interest then payable.
(b) Manner of Payment. The manner in which payments are to
be made on this Note shall be governed by the provisions hereof
and the Loan Agreement, including, without limitation, Article
III of the Loan Agreement.
(c) Prepayments. Prepayments may be made, and as provided
in Section 3.6 of the Loan Agreement are required to be made, on
this Note subject to and in accordance with Section 3.6 of the
Loan Agreement.
(d) Application of Payments. All payments made on this Note
shall be applied in accordance with Sections 3.6, 3.9 and 9.10 of
the Loan Agreement, as applicable. Nothing herein shall limit or
impair any rights of any holder hereof to apply as provided in
the Loan Documents any past due payments, any proceeds from the
disposition of any collateral by foreclosure or other collections
after default. Except to the extent specific provisions are set
forth in this Note or another Loan Document with respect to
application of payments, all payments received by the holder
hereof shall be applied, to the extent thereof, to the
indebtedness owing by Makers to the holder hereof in such order
and manner as the Required Lenders shall deem appropriate, any
instructions from Makers or anyone else to the contrary
notwithstanding.
(e) Costs of Collection. If any holder of this Note retains
an attorney in connection with any default or at maturity or to
collect, enforce or defend this Note or any other Loan Document
in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if any Maker sues any holder of this Note in
connection with this Note or any other Loan Document and does not
prevail, then Makers agree to pay to each such holder, in
addition to principal and interest, all costs and expenses
incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including reasonable attorneys' fees.
(f) Waivers and Acknowledgments. Each Maker and all
sureties, endorsers, guarantors and any other party now or
hereafter liable for the payment of this Note in whole or in
part, hereby severally (i) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all
other notice (except only for any notice that is specifically
required by the terms of the Loan Agreement or any other Loan
Document), filing of suit and diligence in collecting this Note
or enforcing any of the security herefor; (ii) agree to any
substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily
liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies against
any Maker or others liable or to become liable hereon or to
enforce its rights against them or any security herefor; (iv)
consent to any extension or postponement of time of payment of
this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences
with respect hereto, without notice thereof to any of them; and
(v) submit (and waive all rights to object) to personal
jurisdiction in the State of Texas, and venue in Dallas County,
Texas, for the enforcement of any and all obligations under the
Loan Documents.
(g) Amendments in Writing. This Note may not be changed,
amended or modified except in a writing expressly intended for
such purpose and executed by the party against whom enforcement
of the change, amendment or modification is sought.
(h) Purpose of Proceeds. The proceeds of this Note will be
used solely for business purposes and not for personal, family,
household or agricultural purposes.
(i) Notices. Any notice required or which any party desires
to give under this Note shall be given and effective as provided
in Section 11.2 of the Loan Agreement.
(j) Assignments/Participations. Makers acknowledge and
agree that the holder of this Note may, at any time and from time
to time, assign all or a portion of its interest in the Term
Facility or transfer to any Person a participation interest in
the Term Facility, subject to and in accordance with the terms
and conditions of the Loan Agreement, including Section 11.10
thereof.
(k) Successors and Assigns. All of the covenants,
stipulations, promises and agreements contained in this Note by
or on behalf of Makers shall bind their successors and assigns
and shall be for the benefit of Lender and any holder hereof, and
their successors and assigns, whether so expressed or not,
subject, however, to the provisions of Section 11.10 of the Loan
Agreement.
(l) GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT
THAT THE LAWS OF ANOTHER JURISDICTION GOVERN THE CREATION,
PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE REMEDIES RELATED
TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED
STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 11.8 OF THE LOAN
AGREEMENT OR OTHERWISE.
(m) Time of the Essence. Time shall be of the essence in
this Note with respect to all of Makers' obligations hereunder.
(n) INTEGRATION. THIS NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Maker has duly executed this Note as of
the date first above written.
MAKERS:
AMRESCO, INC., a Delaware corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
(VARIOUS MAKERS)
By:
Name:
Title:
The undersigned (each a "Guarantor") hereby agree that (a)
each is jointly and severally liable for the payment in full of
the indebtedness evidenced by this Term Note, (b) each shall take
any and all actions necessary to insure Lender is paid such
amount in full, (c) each shall increase the amount payable to
such Lender to an amount which, after deduction from such
increased amount of the taxes required to be held or deducted
therefrom solely as a result of the payment by Guarantor of such
amount, will yield to the Lender the amount stated to be payable
with respect thereto, and (d) any and all amounts paid pursuant
to this guaranty shall be paid in U.S. Dollars without
consideration to any currency exchange rate.
TERM GUARANTORS:
[FOREIGN ENTITIES]
By: AMRESCO, INC., a Delaware
corporation, as attorney-in-fact
By:
Name:
Title:
