Exhibit 10(f)
-------------
_________________________________________________________________
_________________________________________________________________
CREDIT AGREEMENT
Dated as of May 22, 1995
Between
GREEN TREE FINANCIAL CORPORATION
and
FIRST BANK NATIONAL ASSOCIATION
_________________________________________________________________
_________________________________________________________________
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 22, 1995, among GREEN TREE FINANCIAL
CORPORATION (the "Company"), a Minnesota corporation, and FIRST BANK NATIONAL
ASSOCIATION, a national banking association, (the "Bank").
The Company has requested that the Bank extend it a revolving credit
facility in the aggregate principal amount of $15,000,000, the proceeds of
borrowings under which facility are to be used by the Company to originate and
acquire Chattel Paper. The Bank is willing to extend such revolving credit
facility on the terms and subject to the conditions herein set forth.
Accordingly, the Company and the Bank hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.
--------------------------------
Section 1.01 Certain Defined Terms. As used herein and, unless otherwise
expressly defined herein, each exhibit and schedule hereto, the following
terms shall have the following respective meanings (such meanings to be
equally applicable to both the singular and plural form of the terms defined):
"Affiliate": with respect to any Person, any other entity that, directly
or indirectly, through one or more intermediaries, Controls, is Controlled by,
or is under common Control with, such Person.
"Agreement": this Credit Agreement, as amended, supplemented, restated
or otherwise modified and in effect from time to time.
"Balance Supported Rate": 0.375% per annum.
"Balance Supported Loans": any Loan which bears interest at the Balance
Supported Rate in accordance with the provisions of Sections 2.02 or 2.05
hereof.
"Board": the Board of Governors of the Federal Reserve System of the
United States.
"Borrowing Date": with respect to a Loan, the date specified as such in
the applicable Notice of Borrowing or Conversion.
"Business Day": any day (other than a day which is a Saturday, Sunday or
legal holiday in the State of Minnesota) on which commercial banks are
permitted to open for business in Minneapolis, Minnesota, and, with respect to
Eurodollar Advances, a day on which dealings in Dollars may be carried on by
the Bank in the interbank eurodollar market.
"Capitalized Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified
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and accounted for as a capital lease on a balance sheet of such Person under
GAAP (including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board) and, for purposes of this Agreement, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP (including such Statement No. 13). "Capital Lease"
shall have a correlative meaning.
"Change in Control": shall be deemed to have occurred if (a) any person
(as such term is used in Section 13(d) and 14(d) of the Exchange Act) or two
or more of such persons acting in concert shall beneficially own (within the
meaning of Rule 13d-3 under the Exchange Act) shares representing 25% or more
of the aggregate ordinary voting power of all securities of the Company
entitled to vote in the election of directors or (b) any such person or two or
more of such persons acting in concert shall acquire by contract or otherwise,
or shall enter into a contract or arrangement which upon consummation will
result in its or their acquisition of control over, securities of the Company
(or other securities convertible into such securities) representing 25% or
more of the aggregate ordinary voting power of all securities of the Company
entitled to vote in the election of directors.
"Chattel Paper": conditional sale contracts, chattel mortgages, retail
installment sale contracts or other chattel paper (including any promissory
note issued in connection therewith or pursuant thereto) and floor plan loan
receivables.
"Code": the Internal Revenue Code of 1986, as amended and in effect from
time to time.
"Collateralized Securities": any security (including, without
limitation, a participation certificate) that represents an interest in, or
that is secured by, a pool of Chattel Paper.
"Commitment": The obligation of the Bank to make Loans hereunder
pursuant to Section 2.01 hereof.
"Commitment Amount": $15,000,000 less the amount of any reduction under
Section 2.04(d).
"Compliance Certificate": the certificate of the Company, substantially
in the form of Exhibit B hereto.
"Consolidated Net Earnings": for a period of determination, the net
earnings or net loss (in which case it will be a negative number) of the
Company and the Subsidiaries as included in the Company's consolidated
financial statements referred to in Sections 3.05, 4.01(a) and 4.01(b) hereof.
"Consolidated Net Earnings Available for Restricted Payments": (a) 50%
of Consolidated Net Earnings for the most recently concluded four fiscal
quarter period (taken as one accounting period) of the Company and terminating
preceding the date of any proposed Restricted Payment less (b) the aggregate
amount of all Restricted Payments made during said four fiscal quarter period.
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"Consolidated Net Worth": at the time of any determination, the
consolidated stockholders' equity of the Company and the Subsidiaries, as
determined on a consolidated basis in conformity with GAAP consistently
applied.
"Control": the meaning given such term in Rule 12b-2 of the Exchange
Act. "Controls" and "Controlled" shall have correlative meanings.
"Designated Borrowing Subsidiary": each of Green Tree Financial
Corporation (Delaware), a Delaware corporation, Green Tree Financial Servicing
Corporation, a Delaware corporation, Green Tree Financial Corp. - Texas, a
Delaware corporation, Green Tree Credit Corp., a New York corporation, Green
Tree Consumer Discount Company a Pennsylvania corporation, Consolidated
Acceptance Corporation, a Nevada corporation and Green Tree Financial Corp. -
Alabama, a Delaware corporation.
"Designated Borrowing Subsidiary Notes": as such term is defined in
Section 2.03 hereof.
"Designated Borrowing Subsidiary Guaranty": a guaranty in the form of
Exhibit C hereto, duly executed by the Company.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
"ERISA Affiliate": trades or businesses (whether or not incorporated)
which are under common control with, or treated as a single employer with, the
Company within the meaning of Section 414 of the Code, including the
regulations promulgated thereunder.
"Effective Date": the date on or after the date of this Agreement on
which all of the conditions set forth in Section 5.01 hereof have been
satisfied or waived in writing by the Bank.
"Effective Period": the period from the Effective Date to the Business
Day preceding the Termination Date.
"Eurodollar Interbank Rate": The offered rate for deposits in United
States Dollars (rounded upwards, if necessary, to the nearest 1/16 of 1%), for
delivery of such deposits on the first day of an Interest Period of a
Eurodollar Loan, for the number of days comprised therein, which appears on
the Reuters Screen LIBO Page as of 11:00 a.m., London time, on the day that is
two Banking Days preceding the first day of the Interest Period of such
Eurodollar Loan. If at least two rates appear on the Reuters Screen LIBO
Page, the rate for such Interest Period shall be the arithmetic mean of such
rates (rounded as provided above). If fewer than two rates appear, the rate
for such Interest Period shall be determined by the Bank based on rates
offered to the Bank for United States Dollar deposits in the interbank
eurodollar market. "Reuters
20
Screen LIBO Page" means the display designated as page "LIBO" on the Reuter
Monitor Money Rates Service (or such other page as may replace the LIBO Page on
that service for the purpose of displaying London interbank offered rates of
major banks for Unites States Dollar deposits).
"Eurodollar Loan": Any Loan which bears interest at a rate determined by
reference to the Eurodollar Rate (Reserve Adjusted) in accordance with the
provisions of Sections 2.02 or 2.05 hereof.
"Eurodollar Rate (Reserve Adjusted)": A rate per annum (rounded upward, if
necessary, to the nearest 1/16th of 1%) calculated for the Interest Period of a
Eurodollar Loan in accordance with the following formula:
Eurodollar Interbank Rate
ERRA = -------------------------
1.00 - ERR
In such formula, "ERR" means "Eurodollar Reserve Rate" and "ERRA" means
"Eurodollar Rate (Reserve Adjusted)", in each instance determined by the Bank
for the applicable Interest Period. The Bank's determination of all such rates
for any Interest Period shall be conclusive in the absence of manifest error.
"Eurodollar Reserve Rate": A percentage equal to the daily average during
such Interest Period of the aggregate maximum reserve requirements (including
all basic, supplemental, marginal and other reserves), as specified under
Regulation D of the Federal Reserve Board, or any other applicable regulation
that prescribes reserve requirements applicable to Eurocurrency liabilities (as
presently defined in Regulation D) or applicable to extensions of credit by the
Bank the rate of interest on which is determined with regard to rates applicable
to Eurocurrency liabilities. Without limiting the generality of the foregoing,
the Eurocurrency Reserve Requirement shall reflect any reserves required to be
maintained by the Bank against (i) any category of liabilities that includes
deposits by reference to which the Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other assets that includes Eurodollar
Loans.
"Event of Default": as such term is defined in Section 6.01 hereof.
"Exchange Act": The Securities Exchange Act of 1934, as amended and in
effect from time to time.
"FHA": the Federal Housing Administration and any successor thereto.
"Facility Fee": as such term is defined in Section 2.06 hereof.
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"GAAP": generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination.
"Governmental Authority": any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
"Guarantee": any obligation, contingent or otherwise, of any Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness of
any other Person (the "primary obligor") in any manner, whether directly or
otherwise, and without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any direct or indirect security therefor, (b) to purchase property, securities,
or services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness, (c) to maintain working capital, equity capital,
or other financial statement condition of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or otherwise to protect the owner
thereof against loss in respect thereof, or (d) entered into for the purpose of
assuring in any manner the owner of such indebtedness of the payment of such
Indebtedness or to protect such owner against loss in respect thereof; provided,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business.
"Immediately Available Funds": funds with good value on the day and in
the city in which payment is received.
"Indebtedness": with respect to any Person at any time, without
duplication, all obligations of such Person which, in accordance with GAAP
consistently applied, should be classified as liabilities on a consolidated
balance sheet of such Person prepared in accordance with GAAP consistently
applied, but in any event shall include: (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid or accrued, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (e) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services, (f) all obligations of others secured by any lien, mortgage, security
interest or other encumbrance on property owned or acquired by such
22
Person, whether or not the obligations secured thereby have been assumed, (g)
all Capitalized Lease Obligations of such Person, (h) all obligations of any
partnership or joint venture as to which such Person is or may become personally
liable and (i) all Guarantees by such Person of Indebtedness of others.
"Interest Payment Date": with respect to interest accrued on (a) each
Reference Rate Loan and Balance Supported Loan, the first Business Day of each
calendar month, and (b) each Eurodollar Loan, the last day of each applicable
Interest Period for interest on principal subject to such Interest Period.
"Interest Period": For any Eurodollar Advance, the period commencing on
the borrowing date of such Eurodollar Advance or the date a Reference Rate
Advance is converted into such Eurodollar Advance, or the last day of the
preceding Interest Period for such Eurodollar Advance, as the case may be, and
ending on the numerically corresponding day one, two or three months thereafter,
as selected by the Borrower pursuant to Section 2.02 or Section 2.05; provided,
that:
(i) any Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day unless such next
succeeding Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period which begins on the last Business 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 the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Termination Date.
"Investment": as applied to any Person, any direct or indirect purchase or
other acquisition by that Person of, or a beneficial interest in, stock or other
securities of any other Person, or any direct or indirect loan, advance (other
than advances to employees for moving and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by that Person to any other Person, including all Indebtedness and accounts
receivable from that other Person which did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment. Chattel Paper held
by the Company or a Subsidiary in the ordinary course of its business shall not
constitute Investments if it is eligible for sale in asset-backed securitization
by the Company.
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"Leverage Ratio": at the time of any determination, the ratio of (a) Total
Indebtedness to (b) Consolidated Net Worth.
"Lien": any mortgage, pledge, lien, security interest, UCC-1 financing
statement filed for other than informational purposes, encumbrance, conditional
sale, title retention agreement or analogous instrument or arrangement, in, of,
or on any of the assets or properties, now owned or hereafter acquired, of the
Company or any Subsidiary, whether arising by agreement or operation of law.
"Loan": as such term is defined in Section 2.01(a) hereof.
"Loan Documents": this Agreement, the Note, the Designated Borrowing
Subsidiary Guaranty, each Designated Borrowing Subsidiary Note, and all other
agreements, instruments, certificates and other documents executed and delivered
pursuant to or in connection therewith, as the same may be supplemented, amended
or otherwise modified and in effect from time to time hereafter.
"Margin Stock": the meaning given such term under Regulation U.
"Material Adverse Effect": any occurrence, condition or circumstance which
(a) has a materially adverse effect on the business, assets, operations or
financial condition of the Company and the Subsidiaries taken as a whole, (b) is
a material impairment of the ability of the Company to perform any material
obligation under any Loan Document to which it now is or hereafter becomes a
party or (c) is a material impairment of any of the material rights of or
benefits available to the Bank under any Loan Document.
"Multiemployer Plan": any "multiemployer plan," as such term is defined in
Section 4001(a)(3) of ERISA, to which the Company or any of its ERISA Affiliates
contributes on behalf of employees of the Company or any of its ERISA
Affiliates.
"Note": as such term is defined in Section 2.03 hereof.
"Notes": the Note and each Designated Borrowing Subsidiary Note.
"Plan": each employee benefit plan (whether now in existence or hereafter
instituted), as such term is defined in Section 3(3) of ERISA, maintained for
the benefit of employees, officers or directors of the Company or any ERISA
Affiliate.
"Prohibited Transaction": as such term is defined in Section 4975 of the
Code or Section 406 of ERISA.
"Rate Options": the Balance Supported Rate, Eurodollar Rate
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and Reference Rate plus any applicable interest rate margin in the instance of
the Eurodollar Rate and Reference Rate.
"Reference Rate": at the time of any determination thereof, the rate per
annum which is most recently publicly announced by the Bank as its "reference
rate," which may be a rate at, above or below which the Bank lends to other
Persons.
"Reference Rate Loan": any Loan which bears interest at a rate determined
by reference to the Reference Rate in accordance with the provisions of Section
2.05(b) hereof.
"Regulation D": Regulation D of the Board as from time to time in effect
and all official rulings and interpretations thereunder and thereof.
"Regulation G": Regulation G of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulation U": Regulation U of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulatory Change": any change after the date of this Agreement in United
States Federal, state or foreign laws or regulations or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks including any bank under any United States Federal, state or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reportable Event": a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation has waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event.
"Restricted Payments": with respect to the Company, collectively, (a) all
dividends or other distributions of any nature (cash, securities (other than
common stock of the Company), assets or otherwise), and all payments on any
class of equity securities (including, without limitation, warrants, options or
rights therefor) issued by the Company, whether such securities are now or may
hereafter be authorized or outstanding; (b) all purchases, redemptions or other
retirements of any such class of
25
equity securities; (c) any other distribution in respect of any of the
foregoing, in each case, whether directly or indirectly through any Subsidiary
of the Company or otherwise; and (d) all direct or indirect voluntary
prepayments, defeasements, transactions which in substance constitute
defeasements, purchases, redemptions, retirements or other acquisitions of any
Subordinated Indebtedness.
"Subordinated Indebtedness": (a) the Company's existing subordinated
debentures as described in the audited financial statements referred to in
Section 3.05 hereof and any of the Company's Senior Subordinated Notes due June
1, 1999 issued in exchange therefor, and (b) Indebtedness of the Company created
after the date of this Agreement which is subordinated in right of payment to
the Note in a manner and to an extent which the Bank has approved in writing
prior to the creation of such Indebtedness.
"Subsidiary": at the time of any determination, any corporation or other
entity of which securities or other ownership interests which have ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time owned directly or indirectly by the
Company; such term shall include each Designated Borrowing Subsidiary.
"Termination Date": the earlier of the date on which the Commitments
terminate pursuant to Section 2.04(c) hereof or are terminated pursuant to
Section 6.02 hereof.
"Total Indebtedness": all obligations, liabilities and indebtedness (as
would appear on a balance sheet) of the Company and the Subsidiaries as
determined in accordance with GAAP consistently applied other than Subordinated
Indebtedness.
"Type": when used with respect to any Loan or any Borrowing comprised of
Loans, the Rate Option by reference to which interest on such Loan or Loans
comprising such Borrowing is determined.
"Unfunded Liabilities": (a) in the case of Plans subject to Title IV of
ERISA (other than Multiemployer Plans), the amount (if any) by which the present
value of all vested nonforfeitable benefits under such Plan exceeds the fair
market value of all Plan assets allocable to such benefits, all determined as of
the then most recent valuation report prepared by the actuary for such Plan, and
(b) in the case of Multiemployer Plans, the withdrawal liability of the Company
and its ERISA Affiliates.
"Unmatured Event of Default": any event which with the lapse of time or
with notice to the Company and lapse of time would constitute an Event of
Default.
Section 1.02 Accounting Terms and Calculations. Except as provided to the
contrary herein, all accounting terms used herein
26
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP. To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred unless the Company and the Bank agree in writing on an adjustment
to such computation or determination to account for such change in GAAP.
Section 1.03 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until"" each means "to but excluding".
Section 1.04 Other Definitional Terms. The words "hereof', "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and section, schedule, exhibit and like references are to this
Agreement unless otherwise specified. Unless the context in which used herein
otherwise clearly requires, "or" has the inclusive meaning represented by the
phrase "and/or."
ARTICLE II
THE CREDIT FACILITY.
--------------------
Section 2.01 Commitment. Upon the terms and subject to the conditions
hereof, the Bank agrees to make loans (each a "Loan" and, collectively, the
"Loans") to the Company and each of the Designated Borrowing Subsidiaries
pursuant to this Article II on a revolving basis at any time and from time to
time during the Effective Period, during which period the Company and each
Designated Borrowing Subsidiary may borrow, repay and reborrow and continue or
convert an outstanding Loan in accordance with the provisions hereof; provided,
that a Bank shall not be obligated to make a Loan: (i) that would cause the
Loans to any single Designated Borrowing Subsidiary to exceed $1,000,000; or
(ii) that would cause the aggregate amount of the Loans to the Company and all
Designated Borrowing Subsidiaries to exceed the Commitment Amount. The Loans
to the Company may be maintained, at the election of the Company as provided
herein, as Reference Rate Loans, Balance Supported Loans or Eurodollar Loans or
any combination thereof permitted hereunder. The Loans to any Designated
Borrowing Subsidiary shall be maintained as Balance Supported Loans or Reference
Rate Loans.
Section 2.02 Borrowing Procedure. In order to request a Borrowing
hereunder, the Company or the relevant Designated Borrowing Subsidiary shall
hand deliver, telex or telecopy to the Bank a Notice of Borrowing or Conversion
specifying: (i) the proposed Borrowing Date which shall be a Business Day, (ii)
the
27
aggregate principal amount of the Loans to be made on such date, which shall be
in the minimum amount of $500,000 or an integral multiple of $100,000 in excess
thereof in the instance of Loans to the Company or in the minimum amount of
$10,000 or an integral multiple of $1,000 in excess thereof in the instance of
Loans to a Designated Borrowing Subsidiary, and (iii) whether such Loans are to
be Balance Supported Loans, Reference Rate Loans or Eurodollar Loans. The
Notice of Borrowing or Conversion shall be given (i) in the case of Balance
Supported Loans and Reference Rate Loans, by 3:00 p.m. (Minneapolis time) on the
proposed Borrowing Date and (ii) in the case of Eurodollar Loans, by 10:00 a.m.
(Minneapolis time), two Business Days prior to the proposed Borrowing Date.
Notice of Borrowing or Conversion hereunder shall be irrevocable upon receipt
thereof by the Bank.
Section 2.03 The Notes. On or before the initial Borrowing Date, the
Company shall duly execute and deliver to the Bank its promissory notes in the
form of Exhibit A hereto (the "Note"), dated the day of delivery thereof and
appropriately completed, in the Commitment Amount as originally in effect. On
or before the date of any Loan to a Designated Borrowing Subsidiary, such
Designated Borrowing Subsidiary shall duly execute and deliver to the Bank its
promissory note in the form of Exhibit A-1 hereto (each, a "Designated Borrowing
Subsidiary Note"), dated not later than the day of such borrowing and
appropriately completed. The Company hereby authorizes the Bank to enter on a
schedule attached to the relevant Note the amount and Type of each Loan, each
conversion of each such Loan, each payment thereon and the other information
provided for on such schedule. The Bank shall enter such information on its
ledgers and computer records; provided, however, that the failure by the Bank to
make any such entry or any error in making such entry with respect to any Loan
or each conversion of a Loan or each payment on a Loan shall not limit or
otherwise affect the obligation of the Company or the Designated Borrowing
Subsidiary under the relevant Note, and, in all events, the principal amount
owing by the Company or the Designated Borrowing Subsidiary in respect of the
relevant Note shall be the aggregate amount of all Loans less all payments and
prepayments of principal thereof.
Section 2.04 Payments and Options and Mandatory Prepayments of Loans;
Reduction and Termination of Commitments.
(a) Payment of the Loans. Principal of the Loans, together with all
accrued, unpaid interest thereon, shall be due and payable on the
Termination Date.
(b) Optional Prepayments of the Loans. The Company shall have the right
at any time to prepay the Loans without penalty or premium but subject to
Section 2.09, in whole or in part; provided, that each partial prepayment
shall be in an amount equal to $500,000 or an integral multiple of $100,000
in
28
excess thereof, or in the instance of a Loan to a Designated Borrowing
Subsidiary, in an amount equal to $10,000 or an integral multiple of $1,000
in excess thereof.
(c) Termination of the Commitment. The Company and the Bank shall each
have the right, at any time prior to the termination of the Commitment
pursuant to Section 6.02, to terminate the Commitment by notice to the
other party (which may be given at the sole discretion of either party).
Each such notice (whether by the Bank or the Company) shall be effective 90
calendar days from the date on which the notice is given to the other
party. Any termination of the Commitment pursuant to Section 6.02 will
supersede any notice of termination given under this Section. Upon the
termination of the Commitment, the Bank shall have no obligations to make
any further Loans hereunder and all obligations and liabilities of the
Company to the Bank hereunder, including principal and interest and all
accrued facility fees accrued, shall be paid in full by the Company. Such
payment shall be subject to the provisions of Section 2.09.
(d) Optional Reduction of Commitment. The Company may, at any time, upon
no less than 10 Business Days' prior written notice to the Bank, reduce the
Commitment, with any such reduction in a minimum amount of $1,000,000 or an
integral multiple thereof. Upon any reduction in the Commitment pursuant
to this Section, the Company and the Designated Borrowing Subsidiaries
shall pay to the Bank the amount, if any, by which the aggregate unpaid
principal amount of outstanding Loans exceeds the Commitment as so reduced.
Amounts so paid cannot be reborrowed.
Section 2.05 Conversions of Outstanding Loans. Subject to the terms and
conditions of this Agreement, the Company shall have the option at any time to
convert all or any portion of the outstanding Loans (in minimum amounts, as to
the aggregate principal amount of the outstanding Loans so converted, of
$500,000 or aggregate integral multiple of $100,000 in excess thereof) into
Loans of the other type. The Company shall provide the Bank with a Notice of
Borrowing or Conversion (i) in the case of Balance Supported Loans or Reference
Rate Loans, by 3:00 p. m. (Minneapolis time) on the day of the proposed
conversion, and (ii) in the case of conversion to a Eurodollar Loan, by 10:00
a.m. (Minneapolis time) two Business Days prior to the proposed conversion which
notice shall set forth the proposed date for such conversion which shall be a
Business Day. Any notice given by the Company under this Section 2.05 shall be
irrevocable.
Section 2.06 Interest and Facility Fee
(a) Interest on Loans. The Company and each Designated Borrowing
Subsidiary will pay the Bank interest on the unpaid
29
principal amount of each outstanding Loan made to it by the Bank at the
following rates per annum:
(i) during such period as such Loan is a Balance Supported Loan, at
the Balance Supported Rate, subject to payment of further amounts as
provided in Section 2.13 hereof;
(ii) during such period as such Loan is a Reference Rate Loan, a
floating rate equal to the Reference Rate, and
(iii) during such period as such Loan is a Eurodollar Loan, a
floating rate equal to the Eurodollar Rate plus 0.25% per annum.
Interest on each Loan, accrued as aforesaid, shall be payable on each
applicable Interest Payment Date, on the Termination Date and on the date
such Loan is prepaid in full.
(b) Interest Rate After Maturity or Default. Any Loan not paid at
maturity, whether by acceleration or otherwise, shall bear interest until
paid at a rate per annum equal to the Reference Rate from time to time in
effect plus 2% per annum.
(c) Facility Fee. The Company agrees to pay to the Bank a facility fee
(the "Facility Fee") equal to 0.125% per annum on the average daily amount
of the Commitment (whether used or unused) for the period from the
Effective Date to and including the Termination Date.
Section 2.07 Payments; Computations.
(a) Payments. Payments and prepayments of principal of, and interest on,
the Obligations payable to the Bank shall be made without setoff or
counterclaim in Immediately Available Funds not later than 2:00 p.m.
(Minneapolis time) on the dates called for under this Agreement at the main
office of the Bank in Minneapolis. Funds received after such time shall be
deemed to have been received on the next Business Day. If any payment of
principal of, or interest on, the Notes, becomes due and payable on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall in such case be
included in the computation of any interest on such principal payment.
(b) Computations. Facility Fees and interest on the Loans shall be
computed on the basis of actual days elapsed and a year of 360 days.
Section 2.08 Right of Setoff. Whenever an Event of Default shall have
occurred and be continuing, the Company and each Designated Borrowing Subsidiary
hereby irrevocably authorizes the
30
Bank to set off and apply to the Obligations owed to it against all deposits
and credits of the Company or any Designated Borrowing Subsidiary with, and
any and all claims of the Company or any Designated Borrowing Subsidiary
against, the Bank, whether or not said Obligations, or any part thereof, shall
be then due. The Bank agrees promptly to notify the Company of any such
setoff and the application thereof made by the Bank.
Section 2.09 Funding Losses. The Company will indemnify the Bank upon
demand against any loss or expense which the Bank may sustain or incur
(including, without limitation, any loss or expense sustained or incurred in
obtaining, liquidating or employing deposits or other funds acquired to
effect, fund, or maintain any Loan) as a consequence of (i) any failure of the
Company to make any payment when due of any amount due hereunder or under the
Note, (ii) any failure of the Company to borrow, continue or convert a Loan on
a date specified therefor in a notice thereof, or (iii) any payment
(including, without limitation, any payment pursuant to Section 2.04(b),
2.04(c), 2.04(d) or 6.2), prepayment or conversion of any Eurodollar Loan on a
date other than the last day of the Interest Period for such Eurodollar Loan.
Determinations by the Bank for purposes of this Section 2.09 of the amount
required to indemnify the Bank shall be conclusive in the absence of manifest
error.
Section 2.10 Increased Capital Requirements. In the event that
compliance by the Bank with any present or future applicable law or
governmental rule, requirement, regulation, guideline or order (whether or not
having the force of law but with respect to which similarly situated banks
generally comply) regarding capital adequacy has the effect of reducing the
rate of return on the Bank's capital as a consequence of its commitments to
make, continue or convert any Loans to a level below that which the Bank would
have achieved but for such compliance (taking into consideration the Bank's
policies with respect to capital adequacy), then from time to time the Company
shall pay to the Bank such additional amount or amounts as will compensate the
Bank for such reduction. A certificate as to the amount of any such reduction
(including calculations in reasonable detail showing how the Bank computed
such reduction and a statement that the Bank has not allocated to its
Commitment or outstanding Loans a proportionately greater amount of such
reduction than is attributable to each of its other commitments to lend or to
each of its other outstanding credit extensions that are affected similarly by
such compliance by the Bank, whether or not the Bank allocates any portion of
such reduction to such other commitments or credit extensions) shall be
furnished promptly by the Bank to the Company.
Section 2.11 Increased Cost.
(a) Notwithstanding any other provision herein, if any Regulatory Change
shall change the basis of taxation of
31
payments to the Bank of the principal of or interest on any Eurodollar
Loan or any other fees or amounts payable hereunder (other than local,
state or federal taxes imposed on the overall net income of the Bank by
the jurisdiction in which the Bank has its principal office or by any
political subdivision or taxing authority therein), shall impose, modify
or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit or loan
commitments extended by, the Bank (except any such reserve requirement
which is reflected in the Eurodollar Rate), or shall impose on the Bank
any other condition affecting the Eurodollar Loans made by the Bank, and
the result of any of the foregoing shall be to increase the cost to the
Bank of maintaining any Eurodollar Loan or to reduce the amount of any
sum received or receivable by the Bank hereunder (whether of principal,
interest or otherwise) in respect thereof, then the Company shall pay to
the Bank, upon the Bank's demand, such additional amount or amounts as
will compensate the Bank for such additional costs or reduction.
(b) The Bank shall deliver to the Company a statement setting forth any
amount or amounts as the Bank has calculated in good faith shall be
necessary to compensate it as specified in Section 2.11 hereof and a
written explanation for the increased compensation, consisting of a
description of the event giving rise thereto and a calculation of the
basis for the amount or amounts requested, which statement shall be
conclusive absent manifest error. The Company shall pay the Bank the
amount shown as due on any such statement within ten days after its
receipt of the same.
(c) Failure on the part of the Bank to demand compensation for any
increased costs or reduction in amounts received or receivable with
respect to any Interest Period shall not constitute a waiver of the
Bank's rights to demand compensation for any increased costs or reduction
in amounts received or receivable in such Interest Period or in any other
Interest Period or otherwise. The protection under this Section 2.11
shall be available to the Bank regardless of any contention of the
invalidity or inapplicability of any law or regulation which shall give
rise to any demand by the Bank for compensation.
Section 2.12 Use of Proceeds of Loans. The Company will use the proceeds
of the Loans for the purpose of paying in full its obligations under the
Existing Credit Agreement and the balance for the purpose of originating or
acquiring Chattel Paper.
Section 2.13 Additional Terms and Conditions for Balance Supported
Loans.
(a) Maintenance of Balances. To induce the Bank to make and
32
maintain Balance Supported Loans, the Company and the Designated
Borrowing Subsidiaries shall maintain on deposit in a non-interest
bearing account with the Bank for each calendar month for which a Balance
Supported Loan is outstanding, Average Daily Available Deposits in an
amount (the "Required Available Deposit Amount") equal to the Average
Daily Balance Supported Balance for such month divided by the Average
Daily Reserve Factor for such month. The Bank shall determine for each
calendar month the amount of Average Daily Available Deposits and the
amount, if any, by which such Average Daily Available Deposits exceeds (a
"Deposit Surplus") or is less than (a "Deposit Deficiency") the Required
Available Deposit Amount of such month. Any Deposit Surplus or Deposit
Deficiency for any month will be carried forward and applied to increase
or reduce, as the case may be, Deposit Surpluses or Deposit Deficiencies
determined for subsequent calendar months in the same calendar quarter.
Unless the Bank shall otherwise agree with the Company, net Deposit
Surpluses shall not be carried forward to succeeding calendar years.
(b) Deficiency Fee. If a net Deposit Deficiency exists for a full
calendar quarter with respect to Balance Supported Loans, the Company
shall pay to the Bank a deficiency fee ("Deficiency Fee") equal to the
product of (a) such net Deposit Deficiency, times (b) the Average Daily
Reference Rate for such quarter, times (c) the quotient of (i) the actual
number of days in such quarter divided by 3, divided by (ii) 360. The
Bank shall notify the Company in writing of the amount of monthly Deposit
Surpluses or Deficiencies and of the amount of any Deficiency Fee as soon
as practicable after the end of each calendar quarter. The Bank's
written notice shall be presumed to be correct in the absence of manifest
error.
(c) Additional Defined Terms. For purposes of the foregoing the
capitalized terms not defined in Section 1.1 hereof shall have the
following meanings:
"Available Deposits": at the time of any determination, interest-
free collected deposit balances maintained by the Company with the
Bank, in excess of those which the Bank determines to be necessary
to support other banking services provided to the Company and to
compensate the Bank for costs of insurance of the Federal Deposit
Insurance Corporation (or any successor), which services and costs
are not covered by cash payments by the Company.
"Average Daily Available Deposits": with respect to a calendar
month, the average daily amount of Available Deposits on deposit
with the Bank during such calendar month.
33
"Average Daily Reference Rate": with respect to a calendar quarter,
the average daily Reference Rate in effect during such calendar
quarter.
"Average Daily Reserve Factor": with respect to any calendar month,
the average daily amount of the Reserve Factor in effect during such
month.
"Average Daily Balance Supported Balance": with respect to any
calendar month, the total average daily unpaid principal balance of
the Bank's Balance Supported Loans outstanding under the Credit
Agreement during such calendar month.
"Reserve Factor": as of any date, a number equal to the number one
(1) minus the percentage (expressed as a decimal rather than a
percentage) stipulated by Regulation D as the highest marginal
percentage of net demand deposits required to be maintained on
reserve by the Bank.
ARTICLE III
REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to the Bank that:
Section 3.01 Organization, Standing, etc. The Company and each
Designated Borrowing Subsidiary: (a) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation, (b) has all requisite power and authority to carry on its
business as now conducted and as proposed to be conducted, to execute and
deliver each of the Loan Documents and to perform all of its obligations under
each and all of the foregoing, (c) holds all state certificates of authority,
licenses and permits necessary to carry on its business as presently conducted
in each jurisdiction in which it is carrying on such business, except where
the failure to hold such certificates, licenses or permits would not have a
Material Adverse Effect and (d) is duly authorized and in good standing in all
of the jurisdictions in which the character of the properties owned or leased
by it or the business conducted by it makes such qualification necessary,
except where the failure to so qualify would not permanently preclude it from
enforcing its rights with respect to any material asset or expose it to any
material liability.
Section 3.02 Authorization and Enforceability. The execution, delivery
and performance by the Company and each Designated Borrowing Subsidiary of
each of the Loan Documents and the borrowing of moneys thereunder (a) are
within its corporate powers, have been duly authorized by all necessary
corporate action
34
(including any necessary shareholder approval), (b) do not and will not
contravene or conflict with any provisions of (i) its Articles of
Incorporation or by-laws, (ii) any provision of law, statute, rule or
regulation applicable to the Company or any Designated Borrowing Subsidiary,
(iii) any order of any Governmental Authority applicable to the Company or any
Designated Borrowing Subsidiary or (iv) any indenture, agreement or other
instrument to which it is a party or by which it or any of its property is
bound, (c) will not result in the breach or constitute a default under any
such indenture, agreement or other instrument or (d) result in the creation or
imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Company. Each of the Loan Documents
constitutes the legal, valid and binding obligation of the Company and any
relevant Designated Borrowing Subsidiary, enforceable against the Company or
such Designated Borrowing Subsidiary in accordance with its terms (subject to
limitations as to enforceability which might result from bankruptcy,
insolvency or other similar laws affecting creditors' rights generally).
Section 3.03 Subsidiaries. Schedule 3.03 hereto correctly sets forth as
of the date of this Agreement the name of each Subsidiary, the jurisdiction of
its incorporation, the name of its immediate parent, and the percentage of the
common stock of which is owned directly or indirectly by the Company. Each
such Subsidiary (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
all necessary corporate power and authority to carry on its business as now
conducted and proposed to be conducted, (c) holds all state certificates of
authority, licenses and permits necessary to carry on its business as
presently conducted in each jurisdiction in which it is carrying on such
business, except where the failure to hold such certificates, licenses or
permits would not have a Material Adverse Effect and (d) is duly qualified and
in good standing in all jurisdictions in which the character of the properties
owned or leased by it or the business conducted by it makes such qualification
necessary, except where the failure to so qualify would not permanently
preclude such Subsidiary from enforcing its rights with respect to any
material asset or expose such Subsidiary to any material liability.
Section 3.04 Governmental Approvals. No action, consent, approval,
authorization of, or registration, declaration or filing with, any
Governmental Authority is required on the part of the Company or any
Designated Borrowing Subsidiary in connection with the execution and delivery
of any Loan Document or the performance of or compliance with the terms,
provisions or conditions hereof and thereof, except such as have been obtained
and are in full force and effect.
Section 3.05 Financial Statements. The Company's annual audited
consolidated financial statements consisting of a
35
consolidated balance sheet as at December 31, 1994 and consolidated statements
of operations, stockholders' equity and cash flows for the period ending
December 31, 1994, copies of which have been furnished to the Bank, have been
prepared in accordance with GAAP consistently applied and fairly present the
financial condition and the results of operations of the Company and the
Subsidiaries as of such dates and for the periods covered and disclose all
material liabilities of the Company and the Subsidiaries.
Section 3.06 No Material Adverse Change. There has been no material
adverse change in the business, assets, operation, prospects or condition
(financial or other) of the Company and the Subsidiaries, taken as a whole,
since December 31, 1994.
Section 3.07 ERISA. As of the date of this Agreement, there are no
Unfunded Liabilities. Each Plan complies in all material respects with all
applicable requirements of law and regulations. Except for any event
described below where the additional liability to the Company and any of its
ERISA Affiliates would not have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole, no Reportable Event has occurred with
respect to any Plan subject to Title IV of ERISA (other than any Multiemployer
Plan), neither the Company nor any of its ERISA Affiliates has incurred any
withdrawal liability, whether or not assessed, which has not been paid in
full, and no steps have been taken to terminate any underfunded Plan subject
to Title IV of ERISA (other than any Multiemployer Plan).
Section 3.08 Title to Properties; Possession Under Leases.
(a) Each of the Company and each Subsidiary has (a) good and marketable
title to, or valid, subsisting and enforceable leasehold interests in,
all its real properties and (b) good and sufficient title or valid,
subsisting and enforceable leasehold interests to its other material
properties and assets, including all real properties, properties and
assets referred to as owned by it in the audited financial report as at
December 31, 1994 (except those assets disposed of since such date in the
ordinary course of business). None of such properties or assets is
subject to any Lien except Liens permitted by Section 4.10 hereof.
(b) Each of the Company and the Subsidiaries has complied with all
material obligations under all material leases to which it is a party and
all such leases are in full force and effect. Each of the Company and
the Subsidiaries enjoys peaceful and undisturbed possession under all
such material leases.
Section 3.09 Investment Company Act; Public Utility Holding Company Act.
Neither the Company nor any Subsidiary is (a) an "investment company" within the
meaning of the Investment Company
36
Act of 1940, as amended or (b) a "holding company" as defined in, or subject
to regulation under, the Public Utility Holding Company Act of 1935.
Section 3.10 Tax Returns. All appropriate federal, state and local
income tax returns which are required to have been filed by the Company and
the Subsidiaries for all of its taxable periods either have been filed or
timely extensions obtained. All taxes as shown on said returns or on any
assessments received by it have been paid when due except taxes that are being
contested in good faith by appropriate proceedings and for which the Company
shall have set aside on its books whatever reserves are required by GAAP
consistently applied. The Company knows of no proposed material tax
assessment against it or any Subsidiary or any basis therefor.
Section 3.11 Securities Act. Neither it nor any Subsidiary has issued
any unregistered securities in violation of the registration requirements of
Section 5 of the Securities Act of 1933, as amended, or any other law, and is
not violating any rule, regulation or requirement under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, in any
material respect.
Section 3.12 Federal Reserve Regulations.
(a) Neither the Company nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose, or (ii) for any purpose which
entails a violation of, or which is inconsistent with, the provisions of
the Regulations of the Board, including Regulation G, U or X.
Section 3.13 Material Agreements. The Company is not a party to any
agreement or instrument or subject to any charter or other corporate
restriction which could reasonably be expected to have a Material Adverse
Effect. The Company is not in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(a) any agreement to which it is a party, which could reasonably be expected
to have a Material Adverse Effect or (b) any agreement or instrument
evidencing or governing Indebtedness.
37
Section 3.14 Litigation.
(a) There is no action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary or any business, property or rights thereof (or any basis
therefor known to it) at law or in equity or by or before any
Governmental Authority which (i) questions the validity of any Loan
Document or any action taken or to be taken pursuant thereto, or (ii)
except as set forth in Schedule 3.14 hereto which could reasonably be
expected, either in any case or in the aggregate, to have a Material
Adverse Effect.
(b) Neither the Company nor any Subsidiary is in violation of any law,
rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority applicable to it,
where such violation or default could reasonable be expected to have a
Material Adverse Effect.
Section 3.15 Indebtedness. As of the date of this Agreement neither the
Company nor any Subsidiary has any outstanding Indebtedness except
Indebtedness described in Schedule 3.15 hereto.
Section 3.16 Environmental Matters. Each of the Company and the
Subsidiaries has complied in all material respects with all Federal, state,
local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental regulation
or control. Neither the Company nor any Subsidiary has received notice of any
failure so to comply which alone or together with any other such failure could
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any of the Subsidiaries manages any hazardous wastes, hazardous
substances, hazardous materials, toxic substances or toxic pollutants, as
those terms are used in the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control Act, the
Clean Air Act, the Clean Water Act or any other applicable law, in violation
of any such law or any regulations promulgated pursuant thereto or in any
other applicable law.
Section 3.17 No Material Misstatements.
(a) No report, financial statement, schedule or other information
relating to historical events or conditions furnished to the Bank or the
Bank by the Company, in connection with this Agreement contains (or will,
when furnished to the Bank, contain) any material misstatement of fact or
omitted or omits (or will, when furnished to the Bank or the Bank, omit)
to state any material fact necessary to make the statements therein, when
taken as a whole, not misleading.
38
(b) Based upon all information currently available to the Company, any
report, projection, schedule or other information relating to forecast of
future events or conditions furnished to the Bank or the Bank by the
Company in connection with this Agreement has been prepared on a
reasonable basis based upon reasonable assumptions.
ARTICLE IV
COVENANTS.
---------
From the date of this Agreement until the expiration or termination of
the Commitments and thereafter so long as any Loan remains outstanding or any
other Obligation remains unpaid, the Company will, unless the Bank shall
otherwise consent in writing:
Section 4.01 Financial Statements. Furnish to the Bank:
(a) as soon as available and in any event within 90 days after the end of
each fiscal year of the Company, the financial statements of the Company
and the Subsidiaries, prepared on a consolidated basis, consisting of at
least consolidated statements of operations, stockholders' equity and
cash flows for such year, and a consolidated balance sheet as of the end
of such year, setting forth in each case, in comparative form,
corresponding figures for the previous fiscal year and at the end of the
preceding fiscal year, certified by KMPG Peat Marwick L.L.P. or other
independent certified public accountants of recognized standing selected
by the Company, whose certificate shall be satisfactory to the Bank;
(b) as soon as available and in any event within 45 days after the end of
each quarter of the Company's fiscal year, a copy of the unaudited
financial statements of the Company and the Subsidiaries, prepared on a
consolidated basis in a manner similar to its annual audited report,
consisting of at least statements of income, retained earnings and
changes in the consolidated financial condition of the Company for such
quarter and for the period from the beginning of the then current fiscal
year to the end of such quarter, setting forth, in each case, in
comparative form, figures for the corresponding periods in the preceding
fiscal year and as of a date one year earlier, certified as accurate by
the principal financial officer of the Company, subject to changes
resulting from normal year-end adjustments;
(c) as soon as available and in any event within 45 days after the end of
each quarter of each fiscal year of the Company, a properly completed
Compliance Certificate signed by the chief financial officer of the
Company or his deputy;
39
(d) promptly upon their becoming publicly available, copies of all
financial statements, reports, notices and proxy statements sent by the
Company to its shareholders and copies of all of its reports on Form 10-
Q, Form 10-K, registration statements under the Securities Act of 1933
and other periodic reports filed pursuant to the Securities Exchange Act
of 1934; and
(e) from time to time such other information regarding the business,
affairs and financial condition of the Company as the Bank may reasonably
request.
Section 4.02 Corporate Existence; Businesses and Properties. Maintain,
and, except as provided in Section 4.11 hereof, cause each Subsidiary to
maintain, (a) its corporate existence in good standing under the laws of the
jurisdiction of its incorporation and (b) its right to transact business in
each jurisdiction in which the character of the properties owned or leased by
it or the business conducted by it makes such qualification necessary except
where the failure to so qualify would not permanently preclude the Company
from enforcing its rights with respect to any material assets or expose the
Company to any material liability, do or cause to be done all things necessary
to obtain, preserve, renew, extend and keep in full force and effect the
rights, licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its business and the
business of the Subsidiaries, and maintain and preserve at all times all
property material to the conduct of such business and keep such property in
good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
Section 4.03 Compliance with Laws, etc. Comply in all material respects
with all applicable laws, rules, regulations and orders of any Governmental
Authority applicable to the Company, whether now in effect or hereafter
enacted, the failure to comply with which could reasonably be expected to have
a Material Adverse Effect.
Section 4.04 ERISA. At all times maintain, and cause each Subsidiary to
maintain, each of its Plans in compliance with all material applicable
requirements of ERISA and of the Code and with all material applicable rulings
and regulations issued under the provisions of ERISA and the Code and will not
and not permit any of its ERISA Affiliates to (a) engage in any transaction in
connection with which the Company or any of its ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, in either case in an amount
exceeding $50,000, (b) fail to make full
40
payment when due of all amounts which, under the provisions of any Plan, the
Company or any of its ERISA Affiliates is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency (as such.-term
is defined in Section 302 of ERISA and Section 412 of the Code), whether or
not waived, with respect to any Plan in an aggregate amount exceeding $50,000
or (c) fail to make any payments in an aggregate amount exceeding $100,000 to
any Multiemployer Plan that the Company or any of its ERISA Affiliates may be
required to make under any agreement relating to such Multiemployer Plan or
any law pertaining thereto.
Section 4.05 Insurance. Keep, and cause each Subsidiary to keep, its
insurable properties adequately insured at all times by financially sound and
reputable insurers; maintain, and cause each Subsidiary to maintain, such
other insurance, to such extent and against such risks, including errors and
omission coverage, fidelity coverage and fire and other risks insured against
by extended coverage, as is customary with companies in the same or similar
businesses, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by it; and
maintain such other insurance as may be required by law or the Pledge and
Security Agreement.
Section 4.06 Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
the Company shall have set aside on its books whatever reserves are required
in accordance with GAAP and cause each Subsidiary to do likewise.
Section 4.07 Litigation and Other Notices. Furnish to the Bank prompt
written notice of the following promptly after any officer of the Company who
is charged with the responsibility of administering this Agreement becomes
aware of the same:
(a) any Event of Default or Unmatured Event of Default, specifying the
nature and extent thereof and the corrective action (if any) proposed to
be taken with respect thereto;
(b) the filing or commencement of, or receipt of notice of intention of
any person to file or commence, any action, suit or proceeding, whether
at law or in equity or by or before any
41
Governmental Authority, against the Company or any Affiliate thereof
which could reasonably be expected to have a Material Adverse Effect;
(c) any development affecting or relating to the Company or any
Subsidiary, including without limitation any development in the
litigation referred to in Schedule 3.14 hereto, that in the reasonable
judgment of the Company has had, or could reasonably be expected to have,
a Material Adverse Effect;
(d) the issuance by any Governmental Authority of any injunction, order,
decision or other restraint prohibiting, or having the effect of
prohibiting the Loans or the initiation of any litigation or similar
proceeding seeking any such injunction, order or other restraint.
Section 4.08 Books and Records; Inspections. Keep, and cause each of the
Subsidiaries to keep, proper books and records of account in which full, true
and correct entries will be made of all its dealings, business and affairs in
accordance with GAAP consistently applied and consistent with the principles
applied in the preparation of the financial statements referred to in Section
3.05 hereof and permit any Person designated by the Bank in writing, at the
expense of the Bank, to visit and inspect any of the properties, corporate
books and financial records of the Company and to copy and make extracts
therefrom and to discuss its affairs and finances with the principal officers
of the Company and its independent certified public accountants, all at such
times as the Bank shall reasonably request.
Section 4.09 Liens. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to be created, incurred or exist any Lien with respect
to property now owned or hereafter acquired by the Company or such Subsidiary,
except:
(a) Liens in connection with the acquisition of property after the date
hereof by way of purchase money mortgage, conditional sale or other title
retention agreement, Capitalized Lease Obligations or other deferred
payment contract, and attaching only to the property being acquired,
(b) Liens existing on the date of this Agreement and described in
Schedule 4.09 hereto,
(c) deposits or pledges to secure payment of workers' compensation,
unemployment insurance, old age pensions or other social security
obligations, incurred in the ordinary course of business of the Company,
(d) Liens for taxes, fees, assessments and governmental charges not
delinquent or which are being contested in good faith by appropriate
proceedings and for which whatever reserves required by GAAP have been
established,
42
(e) Liens incurred or deposits or pledges made or given in the ordinary
course of business in connection with, or to secure payment of,
indemnity, performance or other similar bonds,
(f) Liens consisting of easements, rights-of-way, zoning restrictions,
restrictions on the use of real property, and defects and irregularities
in the title thereto, landlords' liens and other similar liens and
encumbrances none of which interfere materially with the use of the
property covered thereby in the ordinary course of the business of the
Company or such Subsidiary and which do not materially detract from the
value of such properties,
(g) Liens on Collateralized Securities or Chattel Paper which secure the
repurchase obligations of the Company or any Subsidiary to brokers,
(h) Liens incurred in connection with the issuance, sale or maintenance
of the credit rating of Collateralized Securities, and
(i) other Liens which secure obligations and liabilities not exceeding
$25,000,000 in the aggregate at any time.
Section 4.10 Investments. Not, and not permit any Subsidiary to, make or
maintain any Investments, except:
(a) Investments existing on the date of this Agreement as described in
Schedule 4.11 hereto,
(b) Investments in readily marketable direct obligations issued or
unconditionally guaranteed by the United States government or any agency
thereof and supported by the full faith and credit of the United States,
(c) certificates of time deposit, Eurodollar time deposits or bankers'
acceptances issued by commercial banks organized under the laws of the
United States or any State thereof and having a combined capital and
surplus of at least $100,000,000, by United States offices of foreign
banks rated "A" or better by a nationally recognized rating agency, in
each case maturing within six months of the acquisition thereof,
(d) commercial paper given the highest rating by Xxxxx'x Investors
Service, Inc. or Standard & Poor's Ratings Group, in each: case maturing
within six months of the acquisition thereof,
43
(e) existing Investments by the Company in any Subsidiary existing on the
date of this Agreement,
(f) increases after the date of this Agreement in Investments in
Subsidiaries existing on the date of this Agreement, new Investments
after the date of this Agreement in Subsidiaries acquired after the date
of this Agreement, provided that the aggregate amount of such increases
in Investments and Investments at any time outstanding does not exceed
$100,000,000, and
(g) investments in corporate notes or other corporate obligations not
included under Id) above, not to exceed $15,000,000 in the aggregate.
Section 4.11 Restrictions on Dissolution and Transfer of Assets. Not,
and not permit any Subsidiary to:
(a) enter into any transaction of merger or consolidation or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution), or
(b) convey, sell, lease, transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any substantial part of its business
or property, whether now owned or hereafter acquired,
provided, however, that notwithstanding the foregoing:
(i) any Subsidiary may be merged or consolidated with or into the
Company or any wholly-owned Subsidiary, or be liquidated, wound up or
dissolved, or all or substantially all of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to the Company or any
wholly-owned Subsidiary; provided, that in the case of such a merger or
consolidation with or into the Company, the Company shall be the
continuing or surviving corporation;
(ii) the Company or any of the Subsidiaries may sell or otherwise
dispose of obsolete or worn out property in the ordinary course of
business;
(iii) the Company or any of the Subsidiaries may sell or otherwise
dispose of property in the ordinary course of business for not less than
fair market value; and
(iv) the Company may merge into a Delaware corporation which shall have
the same assets and liabilities as the Company had prior to such merger,
provided that the Bank shall be satisfied that such Delaware corporation
shall have assumed all of the Company's obligations hereunder and shall
be
44
subject to no material restrictions not applicable to the Company prior
to such merger, and provided, further, that the Bank shall promptly
receive copies of the articles of incorporation and by-laws of such
Delaware corporation, and, if requested by the Bank, a legal opinion
similar to that delivered hereunder.
Section 4.12 Limitation on Transactions with Affiliates; Management Fees.
Not, and not permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company on terms that are not at least as favorable to the
Company or such Subsidiary as could be obtained from an unaffiliated Person.
Section 4.13 Restricted Payments. Not make any Restricted Payments, in
an amount greater than Consolidated Net Earnings Available for Restricted
Payments.
Section 4.14 Subordinated Indebtedness. Not, and not permit any
Subsidiary to, directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness except to the extent permitted by Section 4.13
hereof; make any payment of principal or interest on any Subordinated
Indebtedness if an Event of Default or Unmatured Event of Default exists;
amend or cancel the subordination provisions thereof, take or omit to take any
action whereby the subordination of such indebtedness or any part thereof to
the Obligations might be terminated, impaired or adversely affected; or omit
to give the Bank prompt written notice of any notice received from any holder
of Subordinated Indebtedness or of any default under any agreement or
instrument relating to any Subordinated Indebtedness by reason whereof such
Indebtedness might become or be declared to be due or payable.
Section 4.15 Leverage Ratio. Not permit the Leverage Ratio at any time
to be greater than 5.0 to 1.0.
Section 4.16 Capital Base. Not permit the sum of Consolidated Net Worth
and the outstanding principal balance of Subordinated Indebtedness to be less
than $750,000,000.
Section 4.17 Regulations U, G and X. Not, and not permit any Subsidiary
to, use any part of the proceeds of the Loans to extend credit to others for
the purpose of purchasing or carrying any margin stock (within the meaning of
Regulation G) in violation of any provision of Regulations U, G or X. If
requested by any Bank, the Company will furnish the Bank with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U.
45
ARTICLE V
CONDITIONS OF LENDING.
----------------------
Section 5.01 Conditions Precedent to Initial Loans. The obligations of the
Bank to make the initial Loans hereunder are subject to the satisfaction of each
of the following conditions:
(a) The Bank shall have received the Note, duly executed by the Company,
complying with the requirements of Section 2.03 hereof.
(b) The Bank shall have received:
(i) a certificate of the Secretary or Assistant Secretary of the
Company dated the Effective Date and certifying (A) that attached
thereto is a true and complete copy of the articles of incorporation
and by-laws of the Company as in effect on the Effective Date and at
all times since a date prior to the date of the resolutions described
in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of the
Company or the Executive Committee of the Board of Directors of the
Company authorizing the execution, delivery and performance of the
Loan Documents and the borrowings hereunder, and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect, and (C) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered in
connection herewith on behalf of the Company; and
(ii) such other documents as the Bank may reasonably request.
(c) The Bank shall have received the favorable written opinion of Xxxx X.
Xxxxxxxxxx, Esq., counsel to the Company, addressed to the Bank, as to the
matters and to the effect set forth in Exhibit D hereto.
(d) The Bank shall have received all Fees and other amounts due and
payable by the Company on or prior to the Effective Date.
Section 5.02 Conditions Precedent to Loans to Designated Borrowing
Subsidiaries. The obligations of the Bank to make the initial Loan to a
Designated Borrowing Subsidiary hereunder are subject to the satisfaction of
each of the following conditions:
(a) The Bank shall have received the Designated Borrowing Subsidiary Note
of such Designated Borrowing Subsidiary, duly
46
executed and complying with the requirements of Section 2.03 hereof.
(b) The Bank shall have received the Designated Borrowing Subsidiary
Guaranty, duly executed.
(c) The Bank shall have received:
(i) a certificate of the Secretary or Assistant Secretary of such
Designated Borrowing Subsidiary dated the Effective Date and
certifying (A) that attached thereto is a true and complete copy of
the articles of incorporation and by-laws of such Designated Borrowing
Subsidiary as in effect on the Effective Date and at all times since a
date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Designated
Borrowing Subsidiary or the Executive Committee of the Board of
Directors of the Company authorizing the execution, delivery and
performance of the Loan Documents and the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and
are in full force and effect, and (C) as to the incumbency and
specimen signature of each officer executing any Loan Document or any
other document delivered in connection herewith on behalf of the
Company; and
(ii) such other documents as the Bank may reasonably request.
Section 5.03 Conditions to Each Loan. The obligation of the Bank to make,
continue or convert any Loan (including the initial Loan) shall be subject to
the following conditions:
(a) the Bank shall have received the relevant Notice of Borrowing,
Continuation or Conversion;
(b) the principal amount of all Loans shall not exceed the Commitment
Amount and the principal amount of all Loans to any Designated Borrowing
Subsidiary shall not exceed $1,000,000; or
(c) no Event of Default or Unmatured Event of Default shall have occurred
and be continuing or will exist upon making of the requested Loan; and
(d) the representations and warranties contained in: Article III hereof
shall be true and correct with the same force and effect as if made on and
as of the relevant Borrowing Date (except that to the extent that any such
representations and warranties are made only at or as of a specified date,
the same shall have been true at and as of such specified date).
47
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES.
----------------------------
Section 6.01 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) The Company or any Designated Borrowing Subsidiary, as applicable,
shall fail to make when due, whether by acceleration of maturity or
otherwise, any payment of principal of the Notes; or
(b) The Company or any Designated Borrowing Subsidiary, as applicable,
shall fail to make within five days after the same comes due, whether by
acceleration or otherwise, any payment of interest on the Notes or any Fee
or other amount required to be paid to the Bank pursuant to this Agreement;
or
(c) Any representation or warranty made by the Company in any Loan
Document or in any certificate, statement, report or document furnished to
the Bank pursuant to or in connection with any Loan Document shall be
untrue or misleading in any material respect on the date as of which the
facts set forth are stated or certified; or
(d) The Company shall fail to comply with any agreement, covenant,
condition, provision or term contained in Sections 4.02 or any of Sections
4.09 through 4.16 hereof; or
(e) The Company shall fail to comply with any other agreement, covenant,
condition, provision or term contained in this Agreement (other than those
set forth elsewhere in this Section 6.01) or in any other Loan Document and
such failure to comply is not remedied within 30 calendar days; or
(f) Any creditor or representative of any creditor of the Company or any
Subsidiary shall become entitled to declare any Indebtedness aggregating
$250,000 or more owing on any bonds, debentures, notes or other evidences
of indebtedness for borrowed money to be due and payable prior to their
expressed maturity, whether or not such Indebtedness is actually declared
to be immediately due and payable, or any such Indebtedness becomes due and
payable prior to its expressed maturity by reason of any default by the
Company or any Subsidiary in the performance or observance of any
obligation or condition and such default shall not have been cured within
any grace period allowed therefor or shall not have been effectively
waived, or any such Indebtedness shall have become due by its terms and
shall not have been promptly paid or extended; or
48
(g) The Company or any Subsidiary shall become insolvent or shall fail
generally to pay its debts as they mature or shall apply for, shall consent
to, or shall acquiesce in the appointment of a custodian, trustee or
receiver thereof or for a substantial part of the property thereof, or, in
the absence of such application, consent or acquiescence, a custodian,
trustee or receiver shall be appointed for the Company or any Subsidiary or
for a substantial part of the property thereof, or the Company or any
Subsidiary shall make an assignment for the benefit of creditors; or
(h) The Company or any Subsidiary shall be voluntarily or involuntarily
dissolved or shall be the subject of any bankruptcy, reorganization, debt
arrangement or other proceedings under any bankruptcy or insolvency law; or
any dissolution or liquidation proceeding shall be instituted by or against
the Company or any Subsidiary and, if instituted against the Company or any
Subsidiary, shall be consented to or acquiesced in by the Company or such
Subsidiary, shall not have been dismissed within 60 days or an order for
relief shall have been entered against the Company or such Subsidiary; or
(j) There shall be entered against the Company or any Subsidiary one or
more judgments or decrees in an aggregate amount as to the Company and all
the Subsidiaries at any one time outstanding in excess of $250,000,
excluding those judgments or decrees that shall have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry
thereof or with respect to which (and to the extent that) the Person
against which any such judgment or decree shall have been entered is fully
insured (excluding reasonable deductibles) and with respect to which the
insurer has admitted in writing its liability for the full amount thereof;
or
(j) Any execution or attachment shall be issued whereby any substantial
part of the property of the Company or any Subsidiary shall be taken or
attempted to be taken and the same shall not have been vacated or stayed
within 30 days after the issuance thereof; or
(k) (i) A Reportable Event as defined in Section 4043(b), subdivision
(5), of ERISA shall have occurred with respect to any Plan subject to
Title IV of ERISA (other than any Multiemployer Plan) unless a waiver
of the failure to meet minimum funding standards under Section 412 of
the Code shall have been timely applied for and shall not have been
denied; or
(ii) A Reportable Event as defined in Section 4043(b), subdivision
(6), of ERISA shall have occurred with respect
49
to any Plan subject to Title IV of ERISA (other than any Multiemployer
Plan); or
(iii) The Company or any of its Subsidiaries shall have engaged in
any Prohibited Transaction and either (1) the Prohibited Transaction
shall not have been corrected within the correction period applicable
to it under Section 502(i) of ERISA or Section 4975(b) of the Code, or
(2) an exemption shall not be applicable or have been obtained under
Section 408 of ERISA or Section 4975 of the Code; or
(iv) The PBGC shall have terminated any Plan other than any
Multiemployer Plan under Title IV of ERISA or the Company or any of
its ERISA Affiliates shall have received notice from the PBGC of the
intention of the PBGC to terminate any such Plan or to appoint a
Trustee to administer any such Plan, which notice shall not have been
withdrawn within 14 days of the date thereof; or
(v) The Company or any of its ERISA Affiliates shall have voluntarily
terminated any Plan subject to Title IV of ERISA (other than a
Multiemployer Plan), pursuant to a distress termination under Title IV
of ERISA; or
(vi) The Company or any of its ERISA Affiliates, as an employer under
a Multiemployer Plan, shall have made a complete or partial withdrawal
from such Multiemployer Plan;
and, upon the occurrence of any of the foregoing, the aggregate amount
of the Unfunded liabilities of all Plans subject to Title IV of ERISA
shall exceed in the aggregate $1,000,000 or the Company shall incur
liability in excess of $100,000 in the aggregate; or
(m) A Change in Control shall have occurred.
Section 6.02 Remedies. If (x) any Event of Default described in Sections
6.01(g) or (h) hereof shall occur, the Commitment shall automatically terminate
and the Obligations shall automatically become immediately due and payable or
(y) any other Event of Default shall occur and be continuing, then, the Bank may
at any time and from time to time do any or all of the following: (i) declare
the Commitment terminated, whereupon the Commitment shall be terminated, (ii)
declare the Obligations to be forthwith due and payable, whereupon the
Obligations shall immediately become due and payable, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything in this Agreement or in the Notes to the
contrary notwithstanding. In the event any Eurodollar Loan is paid prior to the
last day of the Interest Period applicable thereto by reason of the acceleration
of the Notes pursuant to this Section 6.02, the
50
Company shall indemnify the Bank as provided in Section 2.12 hereof.
ARTICLE VII
MISCELLANEOUS.
--------------
Section 7.01 No Waiver; Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein and in the other Loan
Documents are cumulative and not exclusive of any remedies provided by law.
Section 7.02 Notices. Except as otherwise specifically provided for
herein, all notices and other communications provided for herein shall be in
writing (including teletransmission communication) and (unless otherwise
required by applicable law) shall be teletransmitted, mailed or delivered to the
intended recipient, to the address specified on the signature pages hereof; or,
as to any party, at such other address as shall be designated by such party in a
notice to the other parties. All notices and other communications shall be
effective when transmitted by telex or telecopier, delivered to the telegraph or
cable office or personally delivered or, in the case of a mailed notice or
notice sent by overnight courier, upon receipt thereof as conclusively evidenced
by the signed receipt therefor, in each case given or addressed as aforesaid,
except that notices to the Bank, under the provisions of Article II hereof shall
not be effective until received by the Bank.
Section 7.03 Costs and Expenses. The Company agrees to pay on demand: (a)
all out-of-pocket costs, expenses and fees incurred by the Bank in connection
with the negotiation, preparation, approval and execution and delivery of the
Loan Documents, and the commitments relating thereto and the transactions
contemplated hereby and thereby and the satisfaction and attempted satisfaction
of conditions precedent hereunder, (b) the reasonable fees and expenses of
counsel for the Bank in connection with any amendment, modification or waiver of
any of the terms of this Agreement, the Notes or any of the other Loan Documents
and (c) all reasonable costs and expenses of the Bank (including reasonable
counsels' fees) in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise), of this Agreement, the Notes and
the other Loan Documents.
Section 7.04 Indemnification. The Company hereby agrees to defend,
protect, indemnify and hold harmless the Bank and its
51
Affiliates and the directors, officers, employees, attorneys and agents
(including, without limitation, those incurred in connection with the
satisfaction or attempted satisfaction of any of the conditions precedent set
forth in Section 5.01 hereof) of the Bank and Affiliates (each of the foregoing
being an "Indemnitee" and all of the foregoing being collectively the
"Indemnities") from and against any and all claims, actions, damages,
liabilities, judgments, costs and expenses (including, without limitation, all
reasonable fees and disbursements of counsel which may be incurred in the
investigation or defense of any matter) imposed upon, incurred by or asserted
against any Indemnitee, whether direct, indirect or consequential and whether
based on any federal, state, local or foreign laws or regulations (including,
without limitation, securities laws, commercial laws and regulations), under
common law or on equitable cause, or on contract or otherwise:
(a) by reason of, relating to or in connection with any inaccuracy in any
material respect, or any untrue statement or alleged untrue statement of
any material fact, made in any Loan Document or any amendment or supplement
thereto or in any other report, exhibit or publication in connection
therewith, or by reason of the omission or alleged omission to state
therein a material fact necessary to make such statements, in the light of
the circumstances under which they were made, not misleading; or
(b) by reason of, relating to or in connection with the execution,
delivery, performance or enforcement of any Loan Document, any commitments
relating thereto, or any transaction contemplated by any Loan Document; or
(c) in connection with any investigation, litigation, proceeding or other
action relating to any Loan Document (whether or not any Indemnitee is a
party thereto); or
(d) by reason of, relating to or in connection with any credit extended or
used under the Loan Documents or any act done or omitted by any Person, or
any event occurring, in connection therewith, or the exercise of any rights
or remedies thereunder;
provided, however, that the Company shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee's negligence or willful misconduct. In the event this indemnity
is unenforceable as a matter of law as to a particular matter or consequence
referred to herein, it shall be enforceable to the full extent permitted by law.
This indemnification applies, without limitation, to any act, omission,
event or circumstance existing or occurring on or prior
52
to the later of the Termination Date or the date of payment in full of the
Obligations, including specifically, but without limitation, Obligations
arising under clause (d) of this Section 7.04. The indemnification provisions
set forth above shall be in addition to any liability the Company may
otherwise have. Without prejudice to the survival of any other obligation of
the Company hereunder, the indemnities and obligations of the Company
contained in this Section 7.04 shall survive the payment in full of the
Obligations.
Section 7.05 Confidentiality. Any information which the Bank receives
from the Company which is designated proprietary or confidential or has a
reasonable basis to believe is proprietary or confidential at the time of
receipt thereof by the Bank shall not be disclosed by the Bank to any other
Person (other than its employees, attorneys or other agents), if such
information is not otherwise in the public domain, other than (a) to its
independent accountants and legal counsel, (b) pursuant to statutory or
regulatory requirements, (c) pursuant to any mandatory court order or (d) to
any participant in or assignee of, or prospective participant in or assignee
of, this Agreement, or the Notes.
Section 7.06 Amendments, Waivers, etc. Any provision of this Agreement
or any other Loan Document may be amended or modified only by an instrument or
instruments in writing signed by the Bank and the Company. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Company therefrom shall in any event be effective unless the
same shall be in writing and signed by the Bank and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.
Section 7.07 Binding Effect; Assignments and Participations. This
Agreement shall be binding upon and inure to the benefit of each party hereto
and the respective successors and assigns of each of them, except that the
Company may not assign its rights or delegate its obligations hereunder or
under any other Loan Document without the prior written consent of the Bank.
Section 7.08 Survival. The obligations of the Company under Sections
2.09, 2.10, 2.11, 7.03 and 7.04 hereof shall be deemed continuing for the
benefit of the Bank and any successors and assigns of the Bank and shall
survive the repayment of the Obligations and the termination of the
Commitments. The obligations of the Bank under Section 7.05 hereof shall
survive the repayment of the Obligations and the termination of the
Commitments.
Section 7.09 Severability of Provisions. Whenever possible, each
provision of this Agreement, the Notes and the other Loan Documents and any
other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto shall be interpreted in such manner as to be
effective and valid under
53
applicable law, but, if any provision of this Agreement, the Notes, the other
Loan Documents or any other statement, instrument or transaction contemplated
hereby or thereby or relating hereto or thereto shall be held to be prohibited
or invalid in any jurisdiction under such applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement, the Notes, the other Loan Documents and any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto and shall not be effective to affect the enforceability of such
provision in any other jurisdiction.
Section 7.10 Execution Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, all of which taken together shall constitute one and the same
instrument.
Section 7.11 Governing Law: Waiver of Trial by Jury. THIS AGREEMENT, THE
NOTES, AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE
OF MINNESOTA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
EACH OF THE PARTIES HERETO HEREBY, TO THE FULLEST EXTENT PERMITTED BY LAW,
WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT UNDER OR IN CONNECTION WITH ANY OF
THE LOAN DOCUMENTS.
Section 7.12 Headings. Section headings in the Loan Documents are for
convenience of reference only and shall not govern the interpretation of any
of the provisions of the Loan Documents.
Section 7.13 Nonliability of Bank. The relationship between the Company,
on the one hand, and the Bank, on the other hand, shall be solely that of
borrower and lender. The Bank shall have no fiduciary responsibilities to the
Company. The Bank undertakes no responsibility to the Company to review or
inform the Company of any matter in connection with any phase of the business
or operations of the Company or any of them. The Company shall rely entirely
upon its own judgment with respect to its business, and any review, inspection
or supervision of, or information supplied to the Company by the Bank is for
the protection of the Bank and neither the Company nor any third party is
entitled to rely thereon.
54
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed as of the day and year first above written.
GREEN TREE FINANCIAL CORPORATION
By__________________________________
Title______________________________
1100 Landmark Towers
000 Xx. Xxxxx Xx.
Xx. Xxxx, XX 00000
Attention: Xxxx X. Xxxxx
Executive Vice President,
Chief Financial Officer
and Treasurer
Fax: (000) 000-0000
FIRST BANK NATIONAL ASSOCIATION
By__________________________________
Title______________________________
Address for Notices:
Mortgage Banking
Services Division MPFP0801
Minneapolis, Minnesota 55402
Attention: Xxxxx X. Xxxxxxx
Vice President
Fax: (000) 000-0000
55
List of Exhibits
Exhibit
A Note
A-1 Designated Borrowing Subsidiary Note
B Compliance Certificate
C Designated Borrowing Subsidiary Guaranty
D Legal Opinion
56
EXHIBIT A
PROMISSORY NOTE
---------------
$15,000,000 May 22, 1995
Minneapolis, Minnesota
FOR VALUE RECEIVED, GREEN TREE FINANCIAL CORPORATION, a Minnesota corporation,
hereby promises to pay to the order of FIRST BANK NATIONAL ASSOCIATION (the
"Bank") at the main office of the Bank (as such term and each other
capitalized term used herein are defined in the Credit Agreement hereinafter
referred to) at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, in
lawful money of the United States of America in Immediately Available Funds,
the principal sum of Fifteen Million Dollars ($15,000,000) or the aggregate
unpaid principal amount of all Loans made by the Bank hereunder, whichever is
less, and to pay interest in like funds from the date hereof on the unpaid
balance thereof at the rates per annum and at such times specified in the
Credit Agreement.
This note is the Note referred to in the Credit Agreement dated as of May 22,
1995, between the undersigned and the Bank (as the same may be amended,
modified or restated from time to time, the "Credit Agreement"). This note is
subject to prepayment and its maturity is subject to acceleration, in each
case upon the terms provided in the Credit Agreement.
The undersigned hereby waives diligence, presentment, demand, protest, and
notice of any kind whatsoever. The nonexercise by the Bank of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in any subsequent instance.
This note shall be construed in accordance with the law of the State of
Minnesota, without giving effect to choice of law principles thereof but
giving effect to federal laws applicable to national banks. In the event of
default hereunder, the undersigned agrees to pay all costs and expenses of
collection, including reasonable attorneys' fees.
GREEN TREE FINANCIAL CORPORATION
By_____________________________________
Title____________________________________
57
EXHIBIT A-1
PROMISSORY NOTE
---------------
(Designated Borrowing Subsidiary Note)
$1,000,000 ______ ___, 19__
Minneapolis, Minnesota
FOR VALUE RECEIVED, ____________, a _________ corporation, hereby
promises to pay to the order of FIRST BANK NATIONAL ASSOCIATION (the "Bank")
at the main office of the Bank (as such term and each other capitalized term
used herein are defined in the Credit Agreement hereinafter referred to) at
000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, in lawful money of
the United States of America in Immediately Available Funds, the principal sum
of One Million Dollars ($1,000,000) or the aggregate unpaid principal amount
of all Loans made by the Bank to the undersigned hereunder, whichever is less,
and to pay interest in like funds from the date hereof on the unpaid balance
thereof at the rates per annum and at such times specified in the Credit
Agreement.
This note is one of the Designated Borrowing Subsidiary Notes referred to
in the Credit Agreement dated as of May 22, 1995, between Green Tree Financial
Corporation and the Bank (as the same may be amended, modified or restated
from time to time, the "Credit Agreement"). This note is subject to
prepayment and its maturity is subject to acceleration, in each case upon the
terms provided in the Credit Agreement.
Payment of this note is guaranteed by Green Tree Financial Corporation
pursuant to the Designated Borrowing Subsidiary Guaranty, as defined in the
Credit Agreement.
The undersigned hereby waives diligence, presentment, demand, protest,
and notice of any kind whatsoever. The nonexercise by the Bank of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in any subsequent instance.
This note shall be construed in accordance with the law of the State of
Minnesota, without giving effect to choice of law principles thereof but
giving effect to federal laws applicable to national banks. In the event of
default hereunder, the undersigned agrees to pay all costs and expenses of
collection, including reasonable attorneys' fees.
[Designated Borrowing Subsidiary]
By_____________________________________
Title_________________________________________
58
Exhibit B
Form of Compliance Certificate
_________, 199_
First Bank National Association
000 0xx Xxx. S.
Minneapolis, MN 55402-4302
Attention: Xxxxx Xxxxxxx
Ladies/Gentlemen:
Reference is made to that certain Credit Agreement, dated as of May 22,
1995 (as amended from time to time, the "Credit Agreement"), between GREEN
TREE FINANCIAL CORPORATION (the "Borrower") and FIRST BANK NATIONAL
ASSOCIATION (the "Bank"). Terms not otherwise expressly defined herein shall
have the meanings set forth in the Credit Agreement.
As required pursuant to Section 4.01 of the Credit Agreement, the
Borrower hereby certifies that as of _____________, 19__, the following is
true, correct and accurate in all respects:
1. The financial statements submitted herewith are true, correct and
complete.
2. No Unmatured Event of Default and no Event of Default, has occurred
and continued;
3. All representations and warranties of the Borrower contained in
Article III of the Credit Agreement are true and correct, as though made on
such date;
4. Covenant compliance is demonstrated as follows:
(a) Investments after 5/22/95: $______________
(Section 4.10(f))
(b) Leverage Ratio
(Section 4.15)
Total Indebtedness: $__________
Consolidated Net Worth: $__________
Ratio: _____ to _____
(required: not greater than 5.0 to 1.0)
59
(c) Capital Base
(Section 4.16)
Consolidated Net Worth: $_________
Subordinated Indebtedness: $_________
Total: $___________
(required: not less than $750,000,000)
GREEN TREE FINANCIAL CORPORATION
By:_______________________________
Title:______________________________
60
Exhibit C
---------
GUARANTY
--------
(Designated Borrowing Subsidiary Guaranty)
THIS GUARANTY dated as of May 22, 1995, by GREEN TREE FINANCIAL CORPORATION
(the "Guarantor"), a Minnesota corporation, for the benefit of FIRST BANK
NATIONAL ASSOCIATION ("Bank"), a national banking association.
WITNESSETH, THAT:
WHEREAS, the Guarantor owns all of the outstanding common stock of Green
Tree Financial Corporation (Delaware), a Delaware corporation, Green Tree
Financial Servicing Corporation, a Delaware corporation, Green Tree Financial
Corp. - Texas, a Delaware corporation, Green Tree Credit Corp., a New York
corporation, Green Tree Consumer Discount Company a Pennsylvania corporation,
Consolidated Acceptance Corporation, a Nevada corporation and Green Tree
Financial Corp. - Alabama, a Delaware corporation (individually, a "Designated
Borrowing Subsidiary" and, collectively, the "Designated Borrowing
Subsidiaries"); and
WHEREAS, the Guarantor has entered into that certain Credit Agreement,
dated as of May 22, 1995 (as amended, extended, modified, renewed or replaced
from time to time, the "Credit Agreement," terms defined therein being used
herein as therein defined unless otherwise defined herein), with First Bank
National Association (the "Bank"), which permits each Designated Borrowing
Subsidiary to borrow $1,000,000 under the Commitment; and
WHEREAS, one of the conditions set forth in the Credit Agreement to the
obligation of the Bank to make Loans to the Designated Borrowing Subsidiaries is
that the Guarantor execute and deliver this Guaranty to the Bank; and
WHEREAS, the Guarantor finds it advantageous, desirable and in its best
interests to comply with the condition precedent that it execute and deliver
this Guaranty;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor makes the following representations, warranties and
agreements to and for the benefit of Bank:
1. The Guarantor hereby absolutely, irrevocable and unconditionally
guarantees that each Designated Borrowing Subsidiary will completely and
faithfully keep, perform and pay in full when due (whether at maturity or by
acceleration or otherwise) (a) all of the obligations of the Designated
Borrowing Subsidiaries, and each of them, under the Designated Borrowing
Subsidiary Notes, and each of said notes, (including, but not limited to
principal, interest, collection costs, (including reasonably attorneys' fees and
expenses and all other liabilities and obligations of the Designated
61
Borrowing Subsidiaries and each of them to the Bank thereunder); and (b) all
costs of collection of amounts due under this Guaranty, including reasonable
attorneys' fees and expenses, all of the foregoing hereinafter referred to as
the "Guarantied Obligations."
2. The Guarantor waives notice of acceptance of this Guaranty and notice
of any liability to which it may apply, and waives presentment, demand of
payment or performance, protest, notice of dishonor, nonpayment or
nonperformance of any such liabilities, and all other notices and demands of any
kind and description relating other Guarantied Obligations now or hereafter
provided for by any statute, law, rule or regulation. The Guarantor agrees that
this Guaranty shall be effective and binding as to it notwithstanding that it
shall not be signed by any other person or persons.
3. Bank may at any time and from time to time without the consent of, or
notice to, the Guarantor, without incurring responsibility to the Guarantor,
without affecting, impairing or releasing any of the obligations of the
Guarantor hereunder:
(a) alter, change, modify, extend, release, renew, cancel, supplement
or amend in any manner of any of the Guarantied Obligations, and the guaranty
and agrees herein made shall continue to apply to the Guarantied Obligations
after giving effect to any such alteration, change, modification, extension,
release, renewal, cancellation, supplement or amendment;
(b) sell, exchange, surrender, realize upon, release (with or without
consideration) or otherwise deal with any manner an din any order any property
of any person or entity mortgaged to Bank or otherwise securing the Guarantied
Obligations or otherwise providing recourse to Bank with respect thereto;
(c) exercise or refrain from exercising any rights against any
Designated Borrowing Subsidiary or others (including the Guarantor) or otherwise
act or refrain from actin
(d) settle or compromise any of the Guarantied Obligations, any
security therefor or other recourse with respect thereto or subordinate the
payment or performance of all or any part thereof to the payment of any
liability (whether due or not) of any Designated Borrowing Subsidiary to
creditors of any Designated Borrowing Subsidiary other than Bank and the
Guarantor;
(e) apply any sums by whomsoever paid or howsoever re to an liability
or liabilities of any Designated Borrowing Subsidiary to Bank regardless of what
liability or liabilities of such Designated Borrowing Subsidiary or any other
Designated Borrowing Subsidiary remain unpaid;
(f) fail to set off and/or release, in whole or in part, any balance
of any account or any credit on its books in favor of any Designated Borrowing
Subsidiary, or any of any other person, and extend credit in any manner
whatsoever to any Designated Borrowing
62
Subsidiary, and generally deal with any Designated Borrowing Subsidiary and any
security for the Guarantied Obligations or any recourse with respect thereto as
Bank may see fit; and or
(g) consent to or waive any breach of, or any act, omission or default
under, an Designated Borrowing Subsidiary Note.
4. No invalidity, irregularity or unenforceability of all or any part of
the Guarantied Obligations or of any security therefor or other recourse with
respect thereto shall affect, impair or be a defense to this Guaranty and this
Guaranty is a direct and primary obligation of the Guarantor.
5. If and to the extent that the Guarantor makes any payment to Bank or
to any other person pursuant to or in Respect of this Guaranty, any claim which
the Guarantor may have against any Designated Borrowing Subsidiary by reason
thereof, whether by right of subrogation (whether contractual, under Section 509
of the Bankruptcy Code, under common law or otherwise), and all contractual,
statutory or common law rights of reimbursement, contribution, indemnity or an
similar right against any Designated Borrowing Subsidiary shall be subject and
subordinate as to lien, time of payment and in all other respects to the prior
payment in full of all of the Guarantied Obligations.
6. Notwithstanding any other term or provision hereof, if claim is ever
made upon Bank for repayment or recovery of any amount or amounts received by
Bank from any Designated Borrowing Subsidiary or any other claimant (excluding
the Guarantor) in payment of or on account of any of the Guarantied Obligations
and Bank is required to repay all or any part of said amount by reason of (i)
any judgment, decree or order of any court or administrative body having
jurisdiction over Bank or any of its property, whether pursuant to bankruptcy,
insolvency, reorganization or liquidation proceedings of any Designated
Borrowing Subsidiary or otherwise or (ii) any settlement or compromise of any
such claim effected by Bank with any such claimant (including any Designated
Borrowing Subsidiary), then and in such event the Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Guarantor, and the Guarantor shall be and remain liable to Bank hereunder for
the amount so repaid or recovered to the same extent as if such amount had never
originally been received by Bank.
7. Any acknowledgment or new promise, whether supported by payment of
principal or interest or otherwise and whether made by any Designated Borrowing
Subsidiary or the Guarantor with Respect to any of the Guarantied Obligations
shall, if the statute of limitations in favor of the Guarantor against Bank
shall have commenced to run, toll the running of such statute of limitations
and, if the period of such statute of limitations shall have expired, prevent
the operation of such statute of limitations with respect to such promise.
8. Until each and every one of the covenants and agreements
63
of the Designated Borrowing Subsidiary Notes and this Guaranty are fully
performed, the Guarantor's obligations hereunder shall not be released, in whole
or in part, by any action or thing which might, but for this provision of this
Guaranty, be deemed a legal or equitable discharge of a surety or guarantor, or
by reason of any waiver, extension, modification, forbearance or delay or other
act or omission of Bank or its failure to proceed promptly or otherwise, or by
reason of any action taken or omitted by Bank whether or not such action or
failure to act varies or increases the risk of, or affects the rights or
remedies of the Guarantor, nor shall any modification of any of the obligations
of any Designated Borrowing Subsidiary or release of any security therefor by
operation of law or by the action of any third party affect in any way the
Guarantor's obligations hereunder, the Guarantor hereby expressly waives and
surrenders any defense to its liability hereunder based upon any of the
foregoing acts, omissions, things, agreements or waivers of any of them, it
being the purpose and intent of the parties hereto that the Guarantied
Obligations of any Designated Borrowing Subsidiary constitute the direct and
primary obligations of the Guarantor and that the covenants, agreements and all
obligations of the Guarantor hereunder be absolute unconditional and
irrevocable.
9. Any notice, demand or request by Bank to the Guarantor shall be in
writing, and shall either be manually delivered to the Guarantor or mailed in a
sealed wrapper by United States registered or certified mail, postage prepaid,
return receipt requested, properly addressed to the Guarantor at the address of
the Guarantor specified on the signature page hereof. Any notice or
communications shall be deemed effective when manually delivered to the
Guarantor, or, if mailed when received at the specified address of the Guarantor
and the registered or certified receipt shall be conclusive evidence of the date
of such receipt. The Guarantor may change the address to which mailed notice is
to be sent to it by giving Bank not less than thirty (30) days' advance written
notice thereof given a such address as Bank may from time to time provide to
Guarantor.
10. This Guaranty shall inure to the benefit of Bank, its successors and
assigns, and shall bind the Guarantor and its successors and assigns.
11. Subject to Paragraph 6 hereof, this Guaranty shall terminate when,
an only when all of the agreements and undertakings of the Designated Borrowing
Subsidiary have been fully performed, all in accordance with the provisions of
the Designated Borrowing Subsidiary Notes. When such conditions have been met,
Bank will, at the request of the Guarantor, furnish the Guarantor written
cancellation of this Guaranty. Bank shall be entitled to retain the original
copy of this Guaranty.
12. All remedies afforded to Bank by reason of this Guaranty are separate
and cumulative remedies and it is agreed that no one of such remedies, whether
exercised by Bank or not, shall be deemed
64
to be in exclusion of any of the other remedies available to Bank and shall in
no way limit or prejudice any other legal or equitable remedy which Bank may
have hereunder and with respect to the Guarantied Obligations. The Guarantor
agrees that included within the equitable remedies available to Bank hereunder
is the right of Bank to elect to have any and all of the obligations and
agreements of the Guarantor hereunder specifically performed.
13. The Guarantor hereby waives any and all right to cause a marshaling
of the Designated Borrowing Subsidiary's assets or any other action of any court
or other governmental body with respect thereto or to cause Bank to proceed
against any security for the Guarantied Obligations or any other recourse which
Bank may have with respect thereto and further waives any and all requirements
that Bank institute any action or proceeding at law or in equity against any
Designated Borrowing Subsidiary or anyone else, or with respect to the
Designated Borrowing Subsidiary Notes, or any collateral security therefor, as a
condition precedent to making demand on, or bringing an action or obtaining
and/or enforcing a judgment against, the Guarantor upon this Guaranty, it being
agreed that upon failure of any Designated Borrowing Subsidiary to perform its
duties under the Designated Borrowing Subsidiary Notes made by it or to pay any
or all of the Guarantied Obligations, the Guarantor's obligations hereunder
shall without further act mature immediately and automatically, without notice
or demand or any other action by Bank. The Guarantor further acknowledges that
time is of the essence with respect to its obligations under this Guaranty. The
Guarantor shall not have any right of setoff against Bank with respect to any of
its obligations hereunder. Any remedy or right hereby granted which shall be
found to be unenforceable as to any person or under an circumstance, for any
reason, shall in no way limit or prevent the enforcement of such remedy or right
as to any other person or circumstance, nor shall such unenforceability limit or
prevent enforcement of any other remedy or right hereby granted.
14. The Guarantor specifically agrees that in the event of a foreclosure
of any mortgage held by Bank which secures any part or all of the Guarantied
Obligations and in the event of a deficiency resulting therefrom, the Guarantor
shall be, and is hereby expressly made, liable to Bank for the full amount of
such deficiency notwithstanding any other provision of this Guaranty or
provision of such mortgage, any document or documents evidencing the
indebtedness secured by such mortgage or any other document or any provision of
applicable law, which might otherwise prevent Bank from enforcing and/or
collecting such deficiency.
15. The Guarantor hereby agrees to indemnify Bank against any and all
loss, costs, damage or expense of any nature whatsoever (including, without
limitation, reasonable attorneys'' fees) arising out of or in connection with
the enforcement of the Designated Borrowing Subsidiary Notes or arising out of
or in connection with any failure of the Guarantor to fully and timely perform
its obligations under this Guaranty.
65
16. The Guarantor expressly agrees that its liability and obligations
under this Guaranty shall not in any way be affected by the institution by or
against any Designated Borrowing Subsidiary or any other person or entity of any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or any other similar proceedings for relief under any bankruptcy law or similar
law for the relief of debtors and that any discharge of any of the Guarantied
Obligations pursuant to any such bankruptcy or similar law or other law shall
not discharge or otherwise affect in any way the obligations of the Guarantor
under this Guaranty, and that upon the institution of any of the above actions,
at Bank's sole discretion, the Guarantor's obligations shall be enforceable
against the Guarantor.
17. This Guaranty (a) constitutes the entire agreement of the Guarantor
and Bank for whose benefit this Guaranty is made, with respect thereto and
supersedes any and all written or oral agreements with respect thereto, (b) may
not be amended or supplemented except by a writing signed by the Guarantor and
Bank and (c) shall be construed and enforced in accordance with the internal
law, and not the law of conflicts, of the State of Minnesota. In addition, no
waiver of any right of Bank hereunder shall be effective unless given in a
writing signed by Bank which specifically refers to this Paragraph 17 of this
Guaranty and no such waiver shall imply 1 the giving of, or obligate Bank to
give, any other waiver hereunder.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
date and year first above written.
GREEN TREE FINANCIAL CORPORATION
By____________________________________
Its____________________________________
Address: 0000 Xxxxxxxx Xxxxxx
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, XX 00000-1639
66
EXHIBIT D
Opinion of Counsel
First Bank National Association
000 0xx Xxx. S.
First Bank Place East
Minneapolis, MN 55402-4302
Attention: Xxxxx X. Xxxxxxx
Ladies/Gentlemen:
We have acted as counsel for Green Tree Financial Corporation, (the
"Borrower"), and we are delivering to you this opinion of counsel upon which
you may rely, in connection with a Credit Agreement, dated as of May 22, 1995,
entered into between the Borrower and your Bank (the "Credit Agreement"), and
the transactions and other Loan Documents described therein (including without
limitation the Designated Borrowing Subsidiary Guaranty). Unless otherwise
defined herein, capitalized terms used herein shall have the respective
meanings assigned to such terms in the Credit Agreement.
In so acting, we, as counsel for the Borrower, have made such factual
inquiries, and have examined or caused to be examined such questions of law,
as we have considered necessary or appropriate for the purposes of this
opinion and, upon the basis of such inquiries and examinations, advise you
that, in our opinion:
(1) The Borrower and each of its Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of the state
of their respective incorporation, and each is duly qualified and in good
standing as a foreign corporation in all other jurisdictions in which its
respective present operations or properties require such qualification.
(2) The Borrower has full corporate power and authority to own and
operate its properties and assets, carry on its business as presently
conducted, and enter into and perform its obligations under the Loan Documents
to which it is a party.
(3) The execution and delivery of the Loan Documents to which the
Borrower is a party, the performance by the Borrower of its obligations
thereunder, and the borrowing by the Borrower under the Credit Agreement, have
been duly authorized by all necessary corporate action, and all of said Loan
Documents have been duly executed and delivered on behalf of the Borrower and
constitute valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms.
(4) There is no provision in the Borrower's Articles of Incorporation or
By-Laws, nor any provision in any indenture, mortgage, contract or agreement
to which the Borrower is a party or by which it or its properties may be
bound, nor any law, statute,
rule or regulation, nor any writ, order or decision of any court or
governmental instrumentality binding on the Borrower which would be
contravened by the execution and delivery of the Loan Documents to which the
Borrower is a party, nor do any of the foregoing prohibit the Borrower's
performance of any term, provision, condition, covenant or any other
obligation of the Borrower contained therein.
(5) There are no actions, suits or proceedings pending or, to the best
of our knowledge after due inquiry, threatened against or affecting the
Borrower before any court or arbitrator or by or before any administrative
agency or government authority, which, if adversely determined, would have a
material adverse effect on the Borrower.
(6) Neither the making nor performance of the Loan Documents, nor the
borrowing(s) under the Credit Agreement, requires the consent or approval of
any governmental instrumentality.
(7) The Borrower is not a "holding company", a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
(8) The Borrower is not an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
(9) The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and, to
the best of our knowledge after due inquiry, no part of the proceeds of any
loan under the Credit Agreement will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock.
Very truly yours,
[Suggested Form of Board of Directors' Resolutions--
Revolving Credit Agreement]
CERTIFICATE
I, _______________________, do hereby certify that I am the duly elected
and qualified Secretary and the keeper of the records and corporate seal of
GREEN TREE FINANCIAL CORPORATION, a corporation organized and existing under
the laws of the State of Minnesota and that the following is a true and
correct copy of certain resolutions duly adopted at a meeting of the Board of
Directors thereof, convened and held in accordance with law and the by-laws of
said corporation on the _____ day of ____________, 19__, and that such
resolutions are now in full force and effect, unamended, unaltered and
unrepealed:
WHEREAS, there has been presented to this meeting a form of Credit
Agreement (the "Credit Agreement") between this Corporation and First Bank
National Association (the "Bank") providing for, among other things, loans
from time to time to this Corporation up to the amount of $15,000,000, and
providing for the entry by this Corporation into a guaranty (the "Subsidiary
Guaranty") as a conditions to the making of loans to certain subsidiaries of
this Corporation;
NOW, THEREFORE, BE IT RESOLVED, that the [insert officers and the number
necessary to act] of this Corporation is/are authorized to execute and deliver
a Credit Agreement and a Subsidiary Guaranty between this Corporation and the
Bank, substantially in the form of the Credit Agreement and Subsidiary
Guaranty presented to this meeting, except such changes of the terms and
provisions thereof as the officer(s) executing such Credit Agreement and
Subsidiary Guaranty on behalf of this Corporation shall deem proper, such
execution to be conclusive evidence that such officer(s) deem(s) all of the
terms and provisions thereof to be proper;
FURTHER RESOLVED, that the [insert officers and the number necessary to
act]of this Corporation is/are authorized to borrower from time to time on
behalf of this Corporation amounts permitted to be borrowed by this
Corporation under the Credit Agreement and to designate officers, agents or
employees to borrow such amounts and to set rates of interest if applicable,
to execute and deliver on behalf of this Corporation a promissory note or
notes, substantially in the form provided for in the Credit Agreement, and to
execute all amendments, waivers, modifications, supplements to, and
restatements of, the Credit Agreement or Subsidiary Guaranty from time to time
as such officers shall deem proper, such execution by such officer(s) to be
conclusive evidence that such officer(s) deem(s) all of the terms and
provisions thereof to be proper;
FURTHER RESOLVED, that each and every officer of this Corporation is
authorized to take such action from time to time on behalf of this Corporation
as he may deem necessary, advisable or proper in order to carry out and
perform the obligations of this
Corporation under the Credit Agreement, the Subsidiary Guaranty, and other
agreements and documents executed and delivered by this Corporation pursuant
to or in connection with the Credit Agreement.
FURTHER RESOLVED, that the Secretary or any other officer of this
Corporation is authorized to certify to the Bank a copy of these resolutions
and the names and signatures of this Corporation's officers or employees
hereby authorized to act hereunder, and the Bank is hereby authorized to rely
upon such certificate until formally advised by a like certificate of any
change therein, and is hereby authorized to rely on any such additional
certificates.
I FURTHER CERTIFY THAT the following persons have been appointed or
elected and are now acting as officers or employees of said corporation in the
capacity set before their respective names:
NAME TITLE SIGNATURE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I FURTHER CERTIFY THAT the Articles of Incorporation attached hereto as
Exhibit A and the Bylaws attached hereto as Exhibit B are, respectively, true,
complete and correct copies of this Corporation's Articles of Incorporation,
duly filed with the Secretary of State of the state of Minnesota, and the
Bylaws of this Corporation, which Articles and Bylaws have been duly adopted
by this Corporation and are presently in full force and effect.
IN WITNESS WHEREOF, I have subscribed my name as Secretary this __day of
___________, 1995.
______________________________
Secretary
GREEN TREE FINANCIAL CORPORATION
PROMISSORY NOTE
---------------
$15,000,000 May 22, 1995
Minneapolis, Minnesota
FOR VALUE RECEIVED, GREEN TREE FINANCIAL CORPORATION, a Minnesota
corporation, hereby promises to pay to the order of FIRST BANK NATIONAL
ASSOCIATION (the "Bank") at the main office of the Bank (as such term and each
other capitalized term used herein are defined in the Credit Agreement
hereinafter referred to) at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, in lawful money of the United States of America in Immediately
Available Funds, the principal sum of Fifteen Million Dollars ($15,000,000) or
the aggregate unpaid principal amount of all Loans made by the Bank hereunder,
whichever is less, and to pay interest in like funds from the date hereof on
the unpaid balance thereof at the rates per annum and at such times specified
in the Credit Agreement.
This note is the Note referred to in the Credit Agreement dated as of May
22, 1995, between the undersigned and the Bank (as the same may be amended,
modified or restated from time to time, the "Credit Agreement"). This note is
subject to prepayment and its maturity is subject to acceleration, in each
case upon the terms provided in the Credit Agreement.
The undersigned hereby waives diligence, presentment, demand, protest,
and notice of any kind whatsoever. The nonexercise by the Bank of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in any subsequent instance.
This note shall be construed in accordance with the law of the State of
Minnesota, without giving effect to choice of law principles thereof but
giving effect to federal laws applicable to national banks. In the event of
default hereunder, the undersigned agrees to pay all costs and expenses of
collection, including reasonable attorneys fees.
GREEN TREE FINANCIAL CORPORATION
By_____________________________________
Title____________________________________
