<PAGE>
Exhibit 10.1
RBS GREENWICH CAPITAL
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Telephone:
203.625.2700
www.gcm.com
January 21, 2005 (Revised)
American Business Financial Services,
Inc.
American Business Credit, Inc.
HomeAmerican Credit, Inc.
American Business Mortgage Services,
Inc.
ABFS Consolidated Holdings, Inc.
The Wannamaker Building
100 Penn Square East
Philadelphia, PA 19107
Attention: Anthony Santilli
Commitment Letter
-----------------
Dear Tony:
You have informed the undersigned that American Business
Financial
Services, Inc., a Delaware corporation
("ABFS"), American Business Credit, Inc.,
a Pennsylvania corporation ("ABC"),
HomeAmerican Credit, Inc., a Pennsylvania
corporation ("HAC"), American Business
Mortgage Services, Inc.; a New Jersey
corporation ("ABMS"), and ABFS Consolidated
Holdings, Inc., a Delaware
corporation ("ABFS CONSOLIDATED" and
together with ABFS, ABC, HAC and ABMS
individually a "BORROWER" and collectively,
the "BORROWERS"), are seeking
financing in connection with their
contemplated filing for reorganization under
Chapter 11 of the United States Bankruptcy
Code (the "BANKRUPTCY CODE") in the
United States Bankruptcy Court for the
District of Delaware (the "BANKRUPTCY
COURT").
We are pleased to confirm the commitment of Greenwich Capital
Financial
Products, Inc ("GREENWICH"), subject to the
terms and conditions in this letter
and in the Summary of Terms (as defined
below), to provide debtor-in-possession
financing through a revolving and
non-revolving credit facility in an amount not
to exceed $500,000,000 ($450,000,000 until
syndication of an additional
$50,000,000) ("DIP FACILITY"), to the
Borrowers as debtors and
debtors-in-possession, pursuant to one or
more cases to be filed under Chapter
11 of the Bankruptcy Code (the "CASE") in
the Bankruptcy Court. The Borrowers
will secure their respective obligations
with a security interest under Sections
364 (c) and (d) of the Bankruptcy Code as
set forth in detail in the Summary of
Terms (as defined below). Greenwich will
act as agent (the "AGENT") for itself
and such other lending institutions which
may become party from
<PAGE>
time to time to the DIP Facility through
assignments (the "LENDERS"). In order
to enable the Agent to bring relevant
expertise to bear on its engagement under
this Commitment Letter (as defined below)
from among its affiliates, you agree
that the Agent may perform the services
contemplated hereby in conjunction with
its affiliates, and that any of such
affiliates performing services hereunder
shall be entitled to the benefits and
subject to the terms of this Commitment
Letter (as defined below). Based on our
discussions and on the financial
statements, projections and other
information and documents previously furnished
to us, attached hereto as ANNEX I is the
debtor-in-possession financing term
sheet (the "SUMMARY OF TERMS") which sets
forth the terms on which the Lenders
would be willing to provide the proposed
DIP Facility (this letter and the
Summary of Terms are collectively referred
to as the "COMMITMENT LETTER").
Capitalized terms used herein but not
defined herein shall have the meanings
assigned thereto in the Summary of
Terms.
Although the Commitment Letter sets forth the principal terms of
the DIP
Facility, you should understand that Agent
and the Lenders reserve the right to
propose terms in addition to these terms
which will not substantially change or
alter the terms of this commitment.
Moreover, the Commitment Letter does not
purport to include all of the customary
representations, warranties, defaults,
definitions and other terms which will be
contained in the definitive documents
for the transaction, all of which must be
satisfactory in form and substance to
us and our counsel, you and your counsel,
and the other Lenders and their
counsel prior to proceeding with the
proposed DIP Facility.
This commitment is subject to (a) the Lenders' satisfaction with,
and
the approval by the Bankruptcy Court of,
(i) all aspects of the DIP Facility and
the transactions contemplated thereby,
including, without limitation, the
administrative expense priority of, and the
senior lien and other liens to be
granted to secure, such DIP Facility and
all definitive documentation in
connection therewith and (ii) all actions
to be taken, undertakings to be made
and obligations to be incurred by the
Borrowers in connection with the DIP
Facility (all such approvals to be
evidenced by the entry of one or more orders
of the Bankruptcy Court satisfactory in
form and substance to the Lenders, which
orders shall, among other things, approve
the payment by the Borrowers of all of
the fees described in the Summary of Terms
on the dates and in the amounts
provided in the Summary of Terms); (b) the
Lenders' direct first priority
security interest in the Residual
Interests, (c) the Lenders' satisfaction of
the arrangements with and/or treatment of
the Shared Collateral which is subject
to compliance with the limitation on liens
contained in Section 4.7(ii) of the
Indenture dated as of December 31, 2003
(the "COLLATERALIZED NOTE INDENTURE"),
by and between ABFS and U.S. Bank National
Association, as trustee, with respect
to any Shared Collateral that is
"Collateral" (as defined in the Collateralized
Note Indenture); (d) there not having
occurred or becoming known to any Lender,
any material disruption or material adverse
change in the business, condition
(financial or otherwise), operations,
assets or prospects of the Borrowers on a
consolidated basis from that shown in the
information made available to such
Lender on or prior to the date hereof
(other than the commencement of the Case
and the consequences that would normally
result therefrom); (e) the Lenders not
becoming aware of any information not
previously disclosed to the Lenders that
the Lenders reasonably believe to be
materially and adversely inconsistent with
their understanding, based on the
information provided to the Lenders prior to
the date hereof, of the business, condition
(financial or otherwise),
operations, assets or prospects of the
Borrowers on a consolidated basis; and
(f) the other conditions set forth or
referred to in the Summary of Terms.
-2-
<PAGE>
By your signature below, you agree to pay all reasonable
out-of-pocket
costs and expenses incurred by the Lenders
and their agents in connection with
this Commitment Letter, the transactions
contemplated hereby and the Lenders'
ongoing due diligence in connection
therewith (the "EXPENSES") (including,
without limitation, reasonable attorneys'
fees and expenses, appraisal fees and
expenses, asset evaluation fees and
expenses, accountant's fees and expenses and
financial advisors' fees and expenses and
other out-of-pocket costs and
expenses) whether or not such transactions
are consummated.
Further, in consideration of the commitment contained herein, you
agree
to pay the Agent for the accounts of itself
and the other Lenders, or certain of
them, as applicable, the fees described in
the Summary of Terms on the dates and
in the amounts provided in the Summary of
Terms.
By your signature below, you further agree to indemnify and
hold
harmless each Lender and each of its
officers, directors, employees, affiliates,
agents and controlling persons from and
against any and all losses, claims,
damages and liabilities to which any such
person may become subject arising out
of, or in connection with this Commitment
Letter, the transactions contemplated
hereby or any claim, litigation,
investigation or proceeding relating to any of
the foregoing, whether or not any of such
indemnified persons is a party
thereto, and to reimburse each of such
indemnified persons, from time to time
upon their demand, for any reasonable legal
or other expenses incurred in
connection with investigating or defending
any of the foregoing, whether or not
the transactions contemplated hereby are
consummated, PROVIDED that the
foregoing indemnity will not, as to any
indemnified person, apply to losses,
claims, damages, liabilities or related
expenses to the extent that they are
determined by the final judgment of a court
of competent jurisdiction to have
resulted from the willful misconduct or
gross negligence of such indemnified
person.
You agree that this Commitment Letter is for your confidential use
only
and that it will not be disclosed by you to
any person other than to (i) the
Lenders and their counsel, (ii) the
Bankruptcy Court in connection with the
Case, and (iii) your employees, officers,
directors, accountants, attorneys, and
other advisors, in each case in connection
with the transactions contemplated
hereby and subject to agreement to the
confidentiality provisions hereof, and to
any other person consented to by the Agent,
PROVIDED that nothing herein shall
prevent you from disclosing this letter (a)
upon the order of any applicable
court or administrative agency, (b) upon
the request or demand of any applicable
administrative or regulatory agency or
authority, (c) to the extent that such
information has been publicly disclosed
through no violation of this agreement,
or (d) otherwise as required by law
(including, without limitation, upon the
request or demand of any official
creditors' committee in the Case).
This Commitment Letter shall not be assignable by you without the
prior
written consent of the Lenders, and may not
be amended or any provision hereof
waived or modified except by an instrument
in writing signed by you and the
Lenders.
THE COMMITMENT LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
EACH OF THE UNDERSIGNED PARTIES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN
-3-
<PAGE>
RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF OR IN CONNECTION WITH
THIS COMMITMENT LETTER, AND ANY OTHER
COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY OF THE UNDERSIGNED
PARTIES IN CONNECTION WITH THIS COMMITMENT
LETTER. IN NO EVENT SHALL ANY PARTY
TO THIS COMMITMENT LETTER BE LIABLE FOR
CONSEQUENTIAL, SPECIAL, INDIRECT OR
PUNITIVE DAMAGES IN CONNECTION WITH THE
FINANCING, OR WITH OUR DELIVERY OF THIS
COMMITMENT LETTER.
The compensation, reimbursement, indemnification and
confidentiality
provisions contained herein shall remain in
full force and effect regardless of
whether definitive financing documentation
shall be executed and delivered and
notwithstanding the termination of this
Commitment Letter or the commitment of
the Lender hereunder.
The commitment set forth herein shall be considered withdrawn if
for any
reason you fail to deliver to the Agent's
office at 600 Steamboat Road,
Greenwich, Connecticut 06830, Attention:
John C. Anderson, the enclosed copy of
this letter signed by you, by 5:00 p.m. New
York time on Friday, January 22,
2005.
-4-
<PAGE>
This Commitment Letter may be executed in any number of
counterparts,
each of which will be an original and all
of which, when taken together, will
constitute one agreement.
Very truly yours,
GREENWICH CAPITAL
FINANCIAL PRODUCTS, INC., as
Agent and a Lender
By: /s/ John C. Anderson
--------------------
Name: John C. Anderson
Title: Managing Director
Accepted and agreed to as of
the date first above written:
AMERICAN BUSINESS FINANCIAL SERVICES,
INC.
AMERICAN BUSINESS CREDIT, INC.
HOMEAMERICAN CREDIT, INC.
AMERICAN BUSINESS MORTGAGE SERVICES,
INC.
ABFS CONSOLIDATED HOLDINGS, INC.
By: /s/ Anthony J. Santilli
-----------------------
Name: Anthony J. Santilli
Title: President, Chief Executive
Officer
and
Chief Operating Officer
-5-
<PAGE>
RBS GREENWICH CAPITAL
AMERICAN BUSINESS FINANCIAL SERVICES, INC.
SUMMARY OF TERMS
$500,000,000
DEBTOR-IN-POSSESSION FINANCING FACILITY
BORROWERS:
American Business Financial Services, Inc. ("ABFS"),
American Business Credit, Inc. ("ABC") and their
affiliates which are "debtors" under Chapter 11 of the
Bankruptcy Code (the "CASE") in the United States
Bankruptcy Court for the District of Delaware (the
"BANKRUPTCY COURT"). Each Borrower shall be joint and
several obligors with respect to the DIP Facility.
DEBTORS:
Same as Borrowers.
DIP FACILITY:
$500,000,000 credit facility (the "DIP FACILITY" or the
"FACILITY"), consisting of five tranches as follows:
o
TRANCHE A "DRY" MORTGAGE WAREHOUSE SUBFACILITY:
Revolving credit facility for the funding of
newly originated mortgage loans of the type and
quality eligible for funding (the "MORTGAGE
LOANS") under that certain Master Loan and
Security Agreement, dated as of October 14,
2003, by and between ABFS Warehouse Trust 2003-2
and Chrysalis Warehouse Funding, LLC (the
"EXISTING CMG FACILITY").
o
TRANCHE B "WET-INK" MORTGAGE WAREHOUSE
SUBFACILITY: Revolving credit facility for the
funding of newly originated Mortgage Loans for
which the Custodian has not received the
documentation required for funding such Mortgage
Loan under Tranche A of the Facility (a "WET-INK
MORTGAGE LOAN").
o
TRANCHE C WORKING CAPITAL SUBFACILITY: Revolving
credit facility for general corporate purposes.
o
TRANCHE D SERVICING ADVANCE SUBFACILITY:
Non-revolving credit facility secured by
existing and future Servicing Advances, Property
Preservation Expenses, Liquidation Expenses
(collectively "SERVICING ADVANCES"), monthly
out-of-pocket advances of delinquent principal
and interest ("PERIODIC ADVANCES"), Late Fees,
NSF Fees and other ancillary servicing fees
(collectively "ANCILLARY FEES") and fees for
early loan prepayment ("PREPAYMENT PENALTIES"),
in each case to which any Borrower is entitled
to reimbursement or collection under the related
securitization trust documents (together
"SERVICING REIMBURSEMENT RIGHTS").
-1-
<PAGE>
RBS GREENWICH CAPITAL
o
TRANCHE E PREPETITION MORTGAGE LOAN SUBFACILITY:
Non-revolving credit facility for the funding of
the repayment of the 10% subordinated interest
(the "SUBORDINATED INTEREST") in the mortgage
loan portfolio funded under the Existing CMG
Facility.
MAXIMUM CREDIT:
Outstanding Advances under the DIP Facility may not
exceed $500,000,000.
Outstanding Advances under each Subfacility are subject
to the following sublimits:
Subfacility
Sublimit
-----------
--------
Tranche A
$500,000,000(1)
Tranche B
$60,000,000 (2)
Tranche C
$55,000,000 (3)
Tranche D
$15,000,000 (3),(4)
Tranche E
$20,000,000
(1) Less amounts
outstanding under the Existing CMG
Facility. Limited to $450,000,000 until syndication of
at least $50,000,000.
(2) The greater of (a)
$40,000,000 and (b) 15% of
outstanding Tranche A advanc
