Common use of Retention Requirements Clause in Contracts

Retention Requirements. (a) Holdings covenants on the Closing Date, and for as long as any Class A Obligations (other than inchoate indemnification obligations for which a claim has not been made) remain outstanding, for the benefit of the Administrative Agent and each Lender, that in order to comply with the Retention Requirements, in its capacity as "originator" for the purposes of the Securitisation Regulations, it: (i) will acquire and retain, on an ongoing basis, a material net economic interest in the securitisation constituted by the Credit Documents in an amount of not less than 5% of the nominal value of the securitized exposures represented by the Pledged Receivables owned by the Company, in the form of a first loss tranche as referred to in option (d) of Article 6(3) of the Securitisation Regulations, by virtue of its ownership of 100% of the membership interests in the Company (the “Retention Interest”); (ii) will not transfer, hedge or otherwise mitigate the credit risk of the Retention Interest, except to the extent permitted in accordance with the Securitisation Regulations; and (iii) it will not change the manner in which the Retention Interest is held, except to the extent permitted by the Securitisation Regulations. (b) Holdings represents and warrants: (i) on the Closing Date, it is not an entity that has been established or that operates for the sole purpose of securitizing exposures for the purposes of the Securitisation Regulations; (ii) in relation to every originated Receivable at the time such receivable in acquired by the Company: (A) it has applied the same sound and well-defined criteria for credit-granting which it applies to non-securitized exposures, (B) it has clearly established processes for approving, amending, renewing and financing those Receivables; and (C) it has effective systems in place to ensure that such credit granting is based on a thorough assessment of the obligor's credit worthiness including taking appropriate account of factors relevant to verifying the prospect of the obligor meeting its obligations under the credit agreement; or (D) it reasonably believes based on its own verification of information available to it that the entity directly or indirectly involved in the original agreement which created such Receivable, has applied to such Receivable the same sound and well-defined criteria for credit-granting that such entity applies to its non-securitized exposures. (c) Holdings shall confirm to the Company, the Administrative Agent and the Lenders its compliance with the covenant set out in Section 10.1(a) in writing (which may be via email): (i) on a monthly basis (concurrent with the delivery of each Monthly Servicing Report); and (ii) from time to time promptly upon written request by the Company, the Administrative Agent or any Class A Lender in connection with any material change in the performance of the Receivables or any Event of Default. (d) Holdings hereby agrees that if, at any time, it fails to comply its obligations in this Section 10.1 (Retention Requirements), or if the representations made by it in Section 10.1(b) cease to be true and correct on any date upon which it is expressed to be given, it shall promptly provide notice thereof in writing to the Company and the Lenders.