EXECUTION COPY
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Lender shall bind the Lender in respect of
anything done, omitted or suffered to be done by the Collateral Agent in
reliance thereon, whether or not notation of such action is made upon the
applicable Note.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Security Agreement to be executed by their duly authorized officers as
of the date first set forth above.
MF RECEIVABLES CORP. IV
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
Name:
Title:
Acknowledged as of this 29th
day of July, 1999
DAIWA FINANCE CORP.,
as Initial Lender
By:
Name:
Title:
MF RECEIVABLES CORP. III
(as Borrower),
MONACO FINANCE, INC.
and
DAIWA FINANCE CORPORATION
(as Initial Lender)
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 29, 1999
Doc #8K999.DOC
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
July 29, 1999, among MF Receivables Corp. III, a Delaware corporation (the
"Borrower"), Monaco Finance, Inc., a Colorado corporation ("Monaco") and Daiwa
Finance Corporation (the "Initial
Lender").
W I T N E S S E T H
WHEREAS, the parties hereto are parties to that certain Credit
Agreement (as heretofore amended, modified or supplemented, the "Existing Credit
Agreement"), dated as of December 4, 1997; and
WHEREAS, the parties acknowledge and agree that one or more Events of
Default, Funding Termination Events and Servicer Events of Default (as such
terms are defined in the Existing Credit Agreement) have occurred and are
continuing; and
WHEREAS, the parties wish to amend and restate their rights and
obligations under the Existing Credit Agreement as set forth herein.
NOW, THEREFORE, the parties agree that upon the fulfillment of the
conditions precedent set forth in Article IV hereof, the Existing Credit
Agreement shall no longer be in effect and the rights and obligations of the
parties thereunder shall be amended and restated as follows:
ARTICLE I
DEFINITIONS
Definitions. Except as the context shall otherwise require, the
following terms shall have the following meanings for all purposes of this
Agreement (the definitions to be applicable to both the singular and the plural
form of the terms defined, where either such form is used in this Agreement):
"Advances" means the advances provided for by Section 2.01
of the Existing Credit Agreement.
"Affiliate" means, with respect to any Person (hereinafter "such
Person"), any other Person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such Person or another Affiliate of such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract or otherwise.
"APR" means the annual percentage rate of an Auto Loan as determined
according to the related contractual documents with the Obligor thereof.
"Application for Certificate of Title" has the meaning set
forth in the Servicing Agreement.
v
Doc #8K999.DOC
"Assignee" has the meaning set forth in Section 9.01 hereof.
"Authorized Officer" means, with respect to Monaco or the Borrower,
any officer of Monaco or the Borrower, as the case may be, who is authorized to
act for Monaco or the Borrower, as the case may be, in matters relating to
transactions contemplated by this Agreement.
"Auto Loan" means a fixed-rate, fully amortizing, closed-end
installment loan (bearing interest calculable on a simple interest basis or
based upon the Rule of 78s) arising from the sale of a new or used Vehicle to a
consumer which includes, without limitation, (a) all security interests or liens
and property subject thereto from time to time purporting to secure payment by
the obligor thereunder, including, without limitation, Monaco's or the
Originator's rights under the related Dealer Agreement, (b) all guarantees,
indemnities and warranties, insurance policies, certificates of title and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such loan, (c) all collections and records with respect to
the foregoing and (d) all proceeds of any of the foregoing.
"Back-up Servicer" means the Person appointed by the Initial Lender
in accordance with Section 6.02(a) of the Servicing Agreement.
"Board" means, with respect to any Person, its board of directors or,
if it does not have a board of directors, its governing body which performs the
same duties as a board of directors.
"Business Day" means any day other than a Saturday or a Sunday, or
another day on which commercial banks in the State of New York or Colorado (or
in any other state as specified in writing by the Servicer in which the Servicer
is located) are required, or authorized by law, to close or, for purposes of
calculating the Interest Rate, on which commercial banks are not open for
domestic and foreign exchange business in New York, New York, and London,
England (as specified in writing from time to time by the Borrower).
"Calculation Date" means, with respect to any Collection Period, the
close of business on the last day of such Collection Period.
"Capital Lease" means any lease or other agreement for the use of
property which is required to be capitalized on a balance sheet of the lessee or
other user of property in accordance with generally accepted accounting
principles.
"Certificate of Title" has the meaning set forth in the
Servicing Agreement.
"Class A Interest Rate" means a rate equal to LIBOR plus 2.50% per
annum.
"Class A Note(s)" means the Class A Notes issued in accordance with
the provisions of Section 2.02(b) of the Existing Credit Agreement and shall
include any subdivision of the Class A Note issued in accordance with the
provisions of Section 2.02(c) hereof.
"Class B Interest Rate" means a rate equal to 12% per annum.
"Class B Note(s)" means the Class B Notes issued in accordance with
the provisions of Section 2.02(b) of of the Existing Credit Agreement and shall
include any subdivision of the Class B Note issued in accordance with the
provisions of Section 2.02(c) hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time and any successor statute, together with the rules and regulations
thereunder.
"Collateral" has the meaning set forth in the Security
Agreement.
"Collateral Account" has the meaning specified in the
Security Agreement.
"Collateral Agent" means The Chase Manhattan Bank and any permitted
successors and assignees thereof.
"Collection Period" means each calendar month.
"Computer Tape" means the diskette, or other computer readable
medium, acceptable to the Initial Lender containing descriptions and payment
information on each Designated Auto Loan.
"Dealer" means each automobile dealer with whom Monaco or an
Originator entered into a Dealer Agreement.
"Dealer Agreement" means each agreement between a Dealer and either
Monaco or an Originator, which provides for acquisition of the Auto Loans.
"Default" has the meaning set forth in Section 13.01 hereof.
"Defaulted Auto Loan" means a Designated Auto Loan (a) which by its
terms has more than 10% of any installment of principal or interest which is 120
or more days contractually past due as measured from the date such Scheduled
Payment is due in accordance with the provisions of the related Auto Loan or (b)
which the Servicer has determined to be uncollectible in accordance with the
Servicing Agreement and the Credit and Collection Policies.
"Delinquency Rate" means, as of any Calculation Date, the aggregate
Unpaid Principal Balance of the Designated Auto Loans (other than Defaulted Auto
Loans) as to which Obligors are 31 days or more contractually past due as
measured from the date such Scheduled Payment is due in accordance with the
provisions of the related Loan Contract in making any portion of the Scheduled
Payments, divided by the aggregate Unpaid Principal Balance of the Designated
Auto Loans as of such Calculation Date.
"Designated Auto Loan" means each Auto Loan pledged by the Borrower
to the Collateral Agent under the Security Agreement as security for its
obligations under the Existing Credit Agreement.
"Designated Financed Vehicle" means, with respect to a
Designated Auto Loan, the related Financed Vehicle.
"Determination Date" means the 10th day of each month (or the
immediately preceding Business Day if such day is not a Business Day).
"Dollars" or "$" means the lawful currency of the United States of
America, and in relation to any payment under this Agreement, same day or
immediately available funds.
"Eligible Dealer" means either an independent or a franchised Dealer
(a) duly licensed and authorized as a dealer in new or used Automobiles by
Governmental Authorities and (b) as to which Monaco or an Originator has entered
into a Dealer Agreement.
"Event of Default" has the meaning set forth in the
Existing Credit Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Executive Officer" with respect to a Person means the
Chief Executive Officer, Chief Operating Officer or Chief Financial
Officer of such Person.
"Fair Valuation" of the Properties of any Person shall be determined
on the basis of the amount which may be realized within a reasonable time,
either through collection or sale of such assets at the regular market value,
conceiving the latter as the amount which could be obtained for the property in
question within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling conditions.
"Financed Vehicle" means a Vehicle pledged to secure the obligations
of an Obligor under an Auto Loan.
"Funding Termination Event" has the meaning specified in
the Existing Credit Agreement.
"GAAP" means, as of the date of any determination with respect
thereto, generally accepted accounting principles as understood and applied in
the United States at the time in question.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" means, with respect to any Person, all obligations of such Person
guaranteeing or in effect guaranteeing any Indebtedness (including, without
limitation, liability in respect of a joint venture or a partnership), dividend
or other obligation or Investment of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including obligations incurred
through an agreement, contingent or otherwise, by such Person (a) to purchase
such Indebtedness, obligation or Investment or any property or assets
constituting security therefor, (b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness, obligation or Investment or (ii) to
maintain working capital or equity capital, or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness, obligation or
Investment, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, obligation or Investment of
the ability of the primary obligor to make payment of such Indebtedness,
obligation or Investment, or (d) otherwise to assure the owner of such
Indebtedness, obligation or Investment against loss in respect thereof.
"Guaranty Amounts" means, with respect to any Auto Loan, any and all
amounts paid by the individual guarantor indicated on the applicable Loan
Contract.
"Increased Cost" has the meaning set forth in
Section 2.06(d) hereof.
"Indebtedness" means, with respect to any Person, all items (other
than capital stock, capital surplus, retained earnings and deferred credits and
deferred income taxes), which in accordance with generally accepted accounting
principles would be included in determining total liabilities as shown on the
liability side of a balance sheet as at the date on which Indebtedness is to be
determined. The term "Indebtedness" shall also include, whether or not so
reflected, (a) indebtedness, obligations and liabilities secured by any Lien on
property of such Person, whether or not the indebtedness secured thereby shall
have been assumed by such Person, (b) all obligations of such Person in respect
of Capital Leases, and (c) all Guarantees.
"Indemnifying Party" has the meaning set forth in
Section 14.01 hereof.
"Independent Accountant" means ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ P.C. or such other certified public accountant as the
Borrower and the Initial Lender may agree.
"Initial Lender" means, subject to Section 7.03 hereof,
Daiwa Finance Corporation.
"Initial Reference Banks" means four major banks in the London
interbank market selected by the Initial Lender.
"Insurance Policy" means, with respect to a Financed Vehicle and a
Loan Contract, any insurance policy maintained by the Obligor pursuant to the
related Loan Contract that covers physical damage to the Financed Vehicle and
collision (including policies procured by the Servicer on behalf of the Obligor
or any VSI Policy), which policy shall name the Servicer as loss payee.
"Insurance Proceeds" means, with respect to any Auto Loan and the
related Financed Vehicle, any amount received during the related Collection
Period pursuant to an Insurance Policy issued with respect to the related
Financed Vehicle and such Auto Loan, net of any costs of collecting such amounts
not otherwise reimbursed.
"Interest Payment Date" means each Payment Date and each date upon
which Advances are repaid, either in whole or in part.
"Interest Period" means, with respect to any Advance, the period
commencing with the date of such Advance to and excluding the Payment Date
occurring in the month following the date of such Advance, and thereafter, the
period commencing with each Payment Date, to and excluding the following Payment
Date; provided that the final Interest Period in respect of an Advance shall end
on the date such Advance is repaid in full.
"Interest Rate" means, for any Interest Period, the Class A Interest
Rate with respect to the Class A Notes and the Class B Interest Rate with
respect to the Class B Notes.
"Investment" means any loan, advance, extension of credit (except for
accounts and notes receivable for merchandise sold or services furnished in the
ordinary course of business, and amounts paid in advance on account of the
purchase price of merchandise to be delivered to the payor within one year of
the date of the advance), or purchase of stock, notes, bonds or other securities
or capital contribution to any Person, whether in cash or other property. The
amount of any Investment shall be its cost (the amount of cash or the fair
market value of other property given in exchange therefor).
"Lender" means the Initial Lender and any Assignee thereof.
"LIBOR" means the per annum rate for deposits in United States
dollars for a period of one month which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the related LIBOR Determination Date. If such rate
does not appear on Telerate Page 3750 on such day, the rate will be determined
on the basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market for a period of one month commencing
on that day. The Initial Lender will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that day will be the arithmetic mean of the rates quoted by two or more
major banks in New York City, selected by the Initial Lender, in its sole
discretion at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a period of one
month.
"LIBOR Determination Date" means the second Business Day prior to the
commencement of each Interest Period.
"Lien" means any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, civil law, statute, civil code or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien, privilege, security interest or other
encumbrance arising from a mortgage, deed of trust, hypothecation, cession,
transfer, assignment, pledge, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment or bailment for security purposes. The
term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale agreement
or other arrangement (including a leasing arrangement) pursuant to which title
to the property shall have been retained by or vested in some other Person for
security purposes.
"Loan Acquisition Agreement" means the Loan Sale and Contribution
Agreement dated as of December 4, 1997, between the Borrower and Monaco,
pursuant to which Monaco agreed to sell or contribute and the Borrower agreed to
acquire, Eligible Auto Loans, as from time to time further amended, supplemented
or modified.
"Loan Acquisition Price" means, with respect to each Auto Loan, the
price for transfer at which such Auto Loan was acquired by Monaco from a Dealer
or an Originator in accordance with the Monaco Program Manual.
"Loan Documents" means, with respect to an Auto Loan, (a) a copy of
the retail installment loan contract and security agreement evidencing such Auto
Loan, (b) a copy of the credit application and (c) a copy of an executed
agreement to provide insurance signed by the Obligor or other written evidence
that such Auto Loan is covered by an Insurance Policy.
"Loan File" means, with respect to any Auto Loan, the original retail
installment loan contract and security agreement evidencing the Auto Loan and
originals or copies of such other documents and instruments relating to such
Auto Loan and the security interest on the selected Financed Vehicle as
specified in the Monaco Program Manual.
"Material Adverse Effect" means, with respect to any Person, any
event or circumstance that (a) would have a material adverse effect on the
business, results of operation, revenues or financial condition of such Person
and its consolidated Subsidiaries, taken as a whole, (b) would have a material
adverse effect on the ability of such Person to perform its obligations under
any Program Document to which it is a party or (c) would have a material adverse
effect on the value or enforceability of the Designated Auto Loans taken as a
whole.
"Merger" means the merger of the Borrower with and into MF4.
"MF4" means MF Receivables Corp. IV, a Delaware corporation.
"MF4 Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of July 29, 1999, among MF4, Monaco and the Initial Lender,
as such agreement may be amended, supplemented or modified from time to time.
"MF4 Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, MF4 and The Chase Manhattan
Bank, as Collateral Agent, as such agreement may be amended, supplemented or
modified from time to time.
"Minimum Assignment Denomination" means $500,000.
"Monaco" means Monaco Finance, Inc., a Colorado corporation.
"Monaco Program Manual" means the Monaco Program Manual (including
the Credit and Collection Policies with respect to the Qualifying Auto Loans,
without limitation) attached to the Existing Credit Agreement as Exhibit D, as
modified through February 1, 1999 in conformity with the terms of the Existing
Credit Agreement.
"Monthly Servicer Fee" has the meaning set forth in the
Supplementary Servicing Agreement.
"Monthly Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any
successor thereto.
"Net Payoff Balance" means, in respect of any Precomputed Auto Loans,
the net payoff less any accrued but unpaid late charges, as determined in
accordance with the Monaco Program Manual.
"Net Principal Balance" means, with respect to any Precomputed Auto
Loan, the Net Payoff Balance as of the due date of the last full Scheduled
Payment, or if more recent, the due date of the last periodic payment of
principal thereon.
"Net Unrealized Amount" means, (a) with respect to any Auto Loan
which is a Defaulted Auto Loan, the Unpaid Principal Balance of such Auto Loan
minus the amount of any Recoveries with respect thereto, and (b) with respect to
any Auto Loan where the related Obligor is in bankruptcy, the amount of losses
allocable to principal incurred thereon.
"Note(s)" means the Class A Notes and the Class B Notes.
"Obligor" means, with respect to any Auto Loan, the Person or Persons
primarily obligated to make payments in respect thereto.
"Officer's Certificate" means (a) with respect to the Collateral
Agent, any officer within the structured capital division (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers and (b) with
respect to Monaco, the Collateral Agent, the Servicer or the Borrower shall mean
a certificate executed on behalf of such party by the Chairman of the Board, the
President or any Vice President of the relevant entity.
"Originator" means any Person, other than Monaco, that acquired Auto
Loans directly from a Dealer.
"Payment Date" means the 15th day of each month (or, if such day is
not a Business Day, the next succeeding Business Day), commencing January 15,
1998.
"Permitted Investments" means with respect to amounts on deposit in
the Collateral Account, cash and cash equivalents, reasonably available to the
Collateral Agent in compliance with regulatory requirements and the terms of
this Agreement.
"Permitted Liens" means:
Liens created under the Security Agreement or under the MF3
Security Agreement;
Liens securing taxes, assessments, governmental charges or levies not
yet due or the payment of which is not then required by Section 10.6
hereof; or
any Lien which is a mechanics lien assessed against a Financed
Vehicle securing a Designated Auto Loan.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization or government (or any agency or political subsection thereof).
"Precomputed Auto Loan" means any Auto Loan under which earned
interest (which may be referred to in the Auto Loan as the add-on finance
charge) and principal is determined according to the sum of periodic balances or
the sum of monthly balances or the sum of the digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Program Documents" means this Agreement, the Security Agreement, the
Servicing Agreement, the Loan Acquisition Agreement, the Collateral Assignments,
the Notes and the Supplementary Servicing Agreement, and any document executed
or delivered by any party hereto in connection herewith or therewith, as any
such document may be amended, supplemented, restated or modified from time to
time. For purposes of Article XIV hereof, "Program Documents" shall also include
the Existing Credit Agreement and the "Program Documents" referred to therein.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualifying Auto Loan" means each Auto Loan which was acquired by
Monaco in accordance with the Existing Credit Agreement.
"Recoveries" means, with respect to a Defaulted Auto Loan and for any
Collection Period occurring after the date on which such Auto Loan becomes a
Defaulted Auto Loan, all payments that the Servicer received from or on behalf
of an Obligor regarding such Defaulted Auto Loan or from liquidation of the
related Financed Vehicle, including but not limited to Scheduled Payments,
Guaranty Amounts, any and all rebates and Insurance Proceeds, as reduced by any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Defaulted Auto Loan.
"Reference Banks" means four major banks in the London interbank
market selected by the Initial Lender.
"Repurchase Price" means, on any date of determination with respect
to any Designated Auto Loan, an amount equal to the sum of (a) the product of
(i) 0.9 and (ii) the total of (A) the Unpaid Principal Balance of such
Designated Auto Loan as of the end of the preceding Collection Period minus (B)
the amount of any principal deposited in the Collateral Account in respect of
such Designated Auto Loan since the end of such Collection Period and (b)
accrued and unpaid interest in respect thereof, calculated at the related APR
from the last day to which interest has been paid and credited to the Collateral
Account through the date of repurchase thereof.
"Requirement of Law" means, as to any Person, any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws, the federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Securities" means, with respect to any Person, any shares of any
class of such Person's capital stock, or any options or warrants to purchase its
capital stock or other security exchangeable for or convertible into its capital
stock.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, the Borrower and The Chase
Manhattan Bank, as Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Security Interest" means the security interest and rights created
under the Security Agreement in the Collateral in favor of the Collateral Agent.
"Selling Dealer" means, with respect to each Designated Auto Loan,
the Dealer that sold such Designated Auto Loan to Monaco or the Originator, as
the case may be.
"Servicer" means SST, or any other entity, in the capacity as
servicer under the Servicing Agreement.
"Servicer Event of Default" has the meaning set forth in
the Servicing Agreement.
"Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated as of
December 4, 1997, between the Borrower, Monaco, as the Servicer and the
Verification Agent, as amended, and as amended, restated, superseded and
modified by the Supplementary Servicing Agreement.
"Solvent" means, with respect to any Person, that:
the Properties of such Person, at a Fair Valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person;
based on current projections, which are based on underlying
assumptions which provide a reasonable basis for the projections and which
reflect such Person's judgment based on present circumstances of the most
likely set of conditions and such Person's most likely course of action
for the period projected, such Person believes it has sufficient cash flow
to enable it to pay its debts as they mature; and
such Person does not have an unreasonably small capital with which to
engage in its anticipated business.
"S&P" means Standard & Poor's Ratings Group, a division of the McGraw
Hill Companies and any successor thereto.
"SST" means Systems & Services Technologies, Inc., a
Delaware corporation.
"Subsidiary" means any corporation of which more than 50% (by number
of votes) of the Voting Stock shall be owned by such parent corporation and/or
one or more corporations which are themselves Subsidiaries of such parent
corporation.
"Successor Back-up Servicer" has the meaning set forth in
the Servicing Agreement.
"Successor Servicer" has the meaning set forth in the
Servicing Agreement.
"Supplementary Servicing Agreement" means the Supplementary Services
Agreement, dated as of April __, 1999, by and among the Initial Lender, the
Borrower, SST and the Collateral Agent, as the same may be amended, supplemented
or modified from time to time.
"Telerate Page 3750" means the display page so designated on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Unpaid Principal Balance" means, with respect to any Auto Loan as of
any date of determination, (a) for an Auto Loan bearing interest calculable on a
simple interest basis, the unpaid principal amount for such Auto Loan or (b) for
a Precomputed Auto Loan, the Net Principal Balance, in each case as of the
related Calculation Date; provided that, for any Auto Loan where the Net
Unrealized Amount equals the Unpaid Principal Balance, such unpaid Principal
Balance shall thereafter equal zero (other than for purposes of calculating the
Net Unrealized Amounts).
"Vehicle" means a new or used automobile or light truck.
"VSI Policy" means a vendors' single interest insurance policy,
including any endorsements thereto, issued by an insurance company and covering
physical damage and collision in respect of Vehicles or other similar policy.
General Information. (a) All accounting terms used herein that are
not otherwise expressly defined shall have the respective meanings given to them
in accordance with generally accepted accounting principles at the particular
time.
The terms "hereof," "herein," "hereunder" and other words of similar
import shall be construed to refer to this Agreement as a whole and not to any
particular Article, Section or other subsection.
Headings. The headings of the Articles, the Sections
and other subsections of this Agreement have been inserted for
convenience of reference only and shall not affect the meaning of
this Agreement.
Independence of Covenants, etc. Each representation and covenant
herein shall be given independent effect so that if any action or condition
would violate any of such covenants or would breach any of such representations,
the fact that such action or condition would not violate or breach, any other
covenant or representation shall not avoid the violation of such covenant or
representation.
ARTICLE II
ADVANCES
Advances. The Initial Lender has made the Advances to the Borrower
under the Existing Credit Agreement. Due to the occurrence of one or more Events
of Default, the Advances are now due and payable in full. Until the Advances are
paid in full, the Advances shall continue to (a) be allocated between the Class
A Notes and the Class B Notes as provided in Section 2.02 of the Existing Credit
Agreement and (b) bear interest until such Advances shall be paid in accordance
with their terms at the per annum rate with respect to each Interest Period at
the Class A Interest Rate, with respect to that part of the Advances allocated
to the Class A Notes, or the Class B Interest Rate, with respect to that part of
the Advances allocated to the Class B Notes, payable on each Interest Payment
Date in accordance with the provisions of the Security Agreement. Interest shall
be computed on the basis of the actual number of days in such Interest Period
and a 360-day year and on each Interest Payment Date shall equal all unpaid
interest accrued in respect of each prior Interest Period. Each Advance shall
continue to bear interest at the per annum rate with respect to each Interest
Period equal to the applicable Interest Rate plus 2.00 %. If the Borrower shall
have paid or agreed to pay any interest on any Advance in excess of that
permitted by law, then it is the express intent of the parties hereto with
respect thereto that (i) to the extent possible given the term of such Advance,
all excess amounts previously paid or to be paid by the Borrower be applied to
reduce the principal amount of such Advance and the provisions thereof
immediately be deemed reformed and the amounts thereafter collectable thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for thereunder and (ii) to the extent that the
reduction of the principal amount of, and the amounts collectible under, such
Advance and the reformation of the provisions thereof described in the
immediately preceding clause (i) are not possible given the term of such
Advance, such excess amount shall be deemed to have been paid with respect to
such Advance as a result of an error and upon the Lender obtaining actual
knowledge of such error, such amount shall be returned to the Borrower. Each
Advance shall continue to be secured by the Collateral as set forth in the
Security Agreement. Except as provided in Section 2.07 hereof, all sums payable
by the Borrower under this Credit Agreement and the Advances shall be paid
without counterclaim, set-off, deduction or defense and without abatement,
suspension, deferment, diminution or reduction.
Notes. (a) The Advances shall continue to be evidenced
by the Notes.
The date and amount of each Advance and each payment made on account
of the principal thereof, shall be recorded by the Initial Lender on its books
and, prior to any transfer of either the Class A Notes or the Class B Notes,
endorsed by the Initial Lender on the schedule attached to such Class A Notes,
Class B Notes or any continuation thereof, as the case may be.
The Initial Lender shall be entitled to have the Class A Note and the
Class B Note subdivided, by exchange for Notes of the same class of lesser
denominations or otherwise in connection with an assignment of all or any
portion of the Advances relating to such Class A Note or the Class B Note, as
the case may be, pursuant to the terms of this Agreement; provided that in no
event may the Class A Note or the Class B Note be subdivided into denominations
of less than $500,000.
Reserved.
Reserved.
Reserved.
Increased Costs. (a) In the event that any change after the date upon
which the Lender makes an Advance in any Requirement of Law (including any
change to the certificate of incorporation, articles of association, by-laws or
other organizational or governing documents of the Lender, but only to the
extent that such change is the result of the compliance by the Lender with any
request or directive reflecting a change in Requirement of Law from any central
bank or other Governmental Authority in the United States of America), or in the
interpretation or application thereof or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority in the United States of America made after
the date upon which the Initial Lender makes its Advances or acquires an
interest in an Advance:
shall subject the Lender to any tax of any kind whatsoever with
respect to this Agreement or the Notes, or change the basis of taxation of
payments in respect thereof (except for taxes referred to in Section
2.07(a) hereof and Section 14.01(a)(iii) hereof and changes in the rate of
tax on the overall net income of the Lender);
shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by the
Lender; or
shall impose on the Lender any other condition that
has the result of increasing the cost to such Lender of such
Advance;
and the result of any of the foregoing is to reduce the amount receivable
hereunder in respect of the Advance below that which such Lender would have
received but for such change or compliance, then after submission by the Lender
to the Borrower and the Collateral Agent of a written request therefor, the
Collateral Agent shall, subject to Section 2.06(c) hereof, on behalf of the
Borrower, pay to the Lender any additional amounts necessary to compensate the
Lender for such reduced amount receivable.
In the event that the Lender shall have determined that any change
after the date upon which the Lender makes an Advance or acquires an interest in
an Advance in any Requirement of Law (including any change to the certificate of
incorporation, articles of association, by-laws or other organizational or
governing document of the Lender, but only to the extent that such change is the
result of the compliance by the Lender with any request or directive reflecting
a change in Requirement of Law from any central bank or other Governmental
Authority in the United States of America) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender or any
corporation controlling the Lender with any request or directive regarding
capital adequacy (whether or not having the force of Law) from any Governmental
Authority in the United States of America made subsequent to the date upon which
such Lender makes its Advances or acquires its interest in an Advance does or
shall have the effect of reducing the rate of return on the Lender's or such
corporation's capital as a consequence of the transactions contemplated hereby
to a level below that which the Lender or such corporation would have achieved
but for such change or compliance (taking into consideration the Lender's or
such corporation's policies with respect to capital adequacy) by an amount
reasonably deemed thereby to be material, then, from time to time, after
submission by the Lender to the Borrower and the Collateral Agent of a written
request therefor, the Collateral Agent shall, subject to Section 2.06(c) hereof,
on behalf of the Borrower, pay to the Lender such additional amount or amounts
as will compensate the Lender for such reduction; provided that to the extent
that six months or more pass between the date upon which the Lender obtains
actual knowledge of the liability resulting in such reduction and the date upon
which the Lender provides notice of such reduction to the Borrower hereunder,
the Borrower shall not be liable for amounts relating to the period six months
or more prior to the date of such notice.
The Lender agrees that it shall use its best efforts to take any
actions that will avoid the need for, or reduce the amount of, any increased
amounts referred to in Section 2.06(a) or (b); hereof provided, that no Lender
shall be obligated to take any actions that would, in the sole opinion, of the
Lender, be disadvantageous to the Lender in any material respect.
If the Lender claims the increased amounts described in Section
2.06(a) or (b) hereof (such amount, an "Increased Cost"), the Lender will
furnish to the Borrower and the Collateral Agent a certificate setting forth the
basis and amount of each request by the Lender for any such Increased Cost.
Failure on the part of the Lender to demand compensation for any
Increased Cost or amount pursuant to Section 2.06(a) hereof with respect to any
period shall not constitute a waiver of the Lender's right to demand
compensation with respect to such period; provided that to the extent that six
months or more pass between the date upon which the Lender obtains actual
knowledge of the liability resulting in such reduction and the date upon which
the Lender provides notice of such reduction to the Borrower hereunder, the
Borrower shall not be liable for amounts relating to the period six months or
more prior to the date of such notice.
The Borrower shall have the right, and the Lender shall cooperate
fully, to replace any Lender which makes a claim pursuant to this Section 2.06
hereof with a new lender that will succeed to the rights of such Lender under
this Agreement; provided, that such Lender shall not be replaced hereunder with
a new lender until such Lender has been paid in full all amounts owed to it
pursuant to this Agreement; provided, further, that the Borrower shall provide
such Lender with an Officer's Certificate stating that such new lender is not
subject to, or has agreed not to seek, such increased costs.
The provisions of this Section 2.06 shall only apply to the Initial
Lender unless the Borrower has consented to the inclusion of one or more
additional Lenders in connection with the assignment by the Initial Lender (or
an additional Lender to which the Borrower has previously consented) of an
interest in an Advance in which case this Section 2.06 shall also apply to such
additional Lenders.
Taxes. (a) All payments made by the Collateral Agent on behalf of the
Borrower, under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority in the United States of America, excluding, in the case of the Lender,
net income taxes and franchise taxes imposed on the Lender as a result of a
present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Lender (excluding a connection
arising solely from the Lender having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement) or any
political subdivision or taxing authority thereof or therein, and also excluding
United States of America withholding taxes to the extent that a Lender
incorporated in or under the laws of a jurisdiction other than the United
States; any state thereof or the District of Columbia fails to provide to the
Collateral Agent at such times as are required by law a duly completed and
executed Internal Revenue Service Form 1001 or 4224, as applicable (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"), provided that the Lender is not
subject to backup withholding or provides the Collateral Agent with a duly
completed and executed Internal Revenue Service Form W-8 or W-9, as appropriate.
If any Taxes are required to be withheld from any amount payable to the Lender
hereunder, after submission by the Lender to the Borrower and the Collateral
Agent of a written request therefor, the amounts so payable to the Lender shall
be increased by the Collateral Agent, subject to Section 2.07(c) hereof, on
behalf of the Borrower to the extent necessary to yield to the Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement except that no increase
shall be made if the Lender is subject to backup withholding and fails to
provide the Collateral Agent with a duly completed and executed Internal Revenue
Service Form W-8 or W-9, as appropriate. Any Lender shall utilize available tax
credits to decrease amounts payable with respect to any such withholding which
the lender in its sole judgment believes are directly related to this Agreement,
except that no increase shall be made if the Lender is subject to backup
withholding and fails to provide the Collateral Agent with a duly completed and
executed Internal Revenue Service Form W-8 or W-9, as appropriate. Nothing in
the preceding sentence shall give the Borrower or any other third party rights
to inspect, audit or otherwise request information regarding Lender records,
including records relating to available tax credits. If the Borrower fails to
pay any Taxes when due to the appropriate taxing authority the Collateral Agent
shall, subject to Section 2.07(c), on behalf of the Borrower, pay the Lender for
any incremental taxes, interest or penalties that may become payable by the
Lender as a result of any such failure.
If the Lender claims the amounts for Taxes referred to in Section
2.07(a) hereof, the Lender will furnish to the Borrower and the Collateral Agent
an officer's certificate setting forth the basis and amount of each request by
the Lender for such Taxes. If the Borrower, within 30 days after receiving a
notice of the basis and amount of such Taxes disputes the basis or amount set
forth in such notice, the Lender and the Borrower shall consult in good faith to
resolve such dispute. If such consultation does not resolve such dispute within
45 days (or such longer period as the Lender and the Borrower may then agree)
after the Lender shall have provided the Borrower with such notice, the Borrower
may request that the Lender furnish to an Independent Accountant all information
reasonably necessary to permit the confirmation of the accuracy of the Lender's
computation of the Taxes described in such notice. Within 30 days of the receipt
of such information, the Independent Accountant either shall confirm the
accuracy of such computation or shall notify the Lender and the Borrower that
such computation proposed by the Lender is inaccurate. In the latter event, the
Lender shall consult with the Borrower and the Independent Accountant as to the
proper computation of the Taxes, whereupon the Lender shall recompute the Taxes
in such a manner as shall enable the Independent Accountant to confirm their
accuracy. The Borrower and the Lender agree that the sole responsibility of the
Independent Accountant shall be to verify the calculation of the Taxes and that
matters of interpretation of the Program Documents are not within the scope of
its responsibilities. All expenses incurred by the Lender and the Borrower in
connection with the verification procedures described in this Section 2.07
(including the fees and expenses of the Independent Accountant) shall be paid by
the Borrower unless the Independent Accountant reasonably concludes that
computation proposed by the Lender is inaccurate. Any information provided to
the Independent Accountant by the Lender shall be and remain the exclusive
property of the Lender and shall be deemed by the parties to be (and the
Independent Accountant shall confirm in writing that it will treat such
information as) the private, proprietary and confidential property of the
Lender, and no Person other than the Lender and the Independent Accountant shall
be entitled thereto or to any review thereof, and all such information shall be
returned to the Lender contemporaneously with the completion of the verification
procedure. Notwithstanding the foregoing, the Lender shall not be obligated to
disclose to any Person (other than the Independent Accountant, subject to the
agreement by the Independent Accountant to keep all information therein
confidential), or permit any Person (other than the Independent Accountant,
subject to the agreement by the Independent Accountant to keep all information
contained therein confidential) to examine, any federal, state or local income
tax returns of the Lender or any of its Affiliates.
The Lender agrees that it shall use its best efforts to take any
actions that will avoid the need for, or reduce the amount of, any increased
amounts referred to in Section 2.07(a); provided, that no Lender shall be
obligated to take any actions that would, in the sole reasonable opinion of the
Lender, be disadvantageous to the Lender in any material respect.
The Lender, by its making of an Advance or acceptance of any interest
in any Advance, agrees to treat the interests evidenced by the Advance as
indebtedness for all tax purposes, and further agrees that any Person acquiring
an interest in any Advance from or through it may do so only subject to the
obligation to comply with this Agreement as to the treatment of such Advance as
indebtedness for all tax purposes.
The provisions of this Section 2.07 shall only apply to the Initial
Lender unless the Borrower has consented to the inclusion of one or more
additional Lenders in connection with the assignment by the Initial Lender (or
an additional Lender to which the Borrower has previously consented) of an
interest in an Advance in which case this Section 2.07 shall also apply to such
additional Lenders.
Payment Instructions. The Initial Lender and the Borrower shall
provide written payment instructions (including the account number of the bank
account to which payments are to be directed and the name, address and ABA
number of the bank in which such account is maintained, if payments are to be
made to such party by the wire transfer of immediately available funds) to the
Collateral Agent. Failure to provide such notice shall not affect such party's
right to receive any funds to which it is otherwise entitled in accordance with
the Program Documents, but failure to deliver such notice may result in a delay
in the receipt of such funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
General Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Lender, as of the date
hereof, as follows:
(a) Organization and Authority. The Borrower:
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and each other State
where the nature of its business requires it to qualify, except to the
extent that the failure so to so qualify would not, in the aggregate,
materially and adversely affect the ability of the Borrower to perform its
obligations under the Program Documents to which it is a party;
has all requisite power, authority and legal right to own and
operate its properties and to conduct its business as currently conducted
and as proposed to be conducted by the Program Documents, to enter into
the Program Documents to which it is a party, to issue and deliver the
Notes and to perform its obligations under the Program Documents to which
it is a party and the Notes;
has made all filings and holds all franchises, licenses, permits
and registrations which are required under the laws of each jurisdiction
in which the properties owned (or held under lease) by it or the nature of
its activities makes such filings, franchises, licenses, permits or
registrations necessary, except to the extent that the failure to do so
would not, in the aggregate, materially and adversely affect the ability
of the Borrower to perform its obligations under any of the Program
Documents to which it is a party.
Place of Business. The address of the principal place of business and
chief executive office of the Borrower is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and there have been no other such locations during the four
months immediately preceding such Closing Date, except as may have been
previously disclosed in writing to the Initial Lender in accordance with the
provisions of Section 10.01 hereof.
Compliance with Other Instruments, etc. The Borrower is not in
violation of any term of its certificate of incorporation or by-laws. Neither
the execution, delivery or performance by the Borrower of the Program Documents
to which it is a party or the Note nor the borrowings hereunder does or will (i)
conflict with or violate the Certificate of Incorporation or by-laws of the
Borrower, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties of the Borrower pursuant to the terms of any instrument or
agreement to which the Borrower is a party or by which it is bound, or (iii)
require any consent of or other action by any Collateral Agent or any creditor
of, any lessor to or any investor in the Borrower.
No Materially Adverse Contracts, etc. The Borrower is not a party to
or bound by (nor are any of its Properties affected by) any contract or
agreement, or subject to any order, writ, injunction or decree or other action
of any court or any governmental department, commission, bureau, board or other
administrative agency or official, or any charter or other corporate or
contractual restriction, which materially and adversely affects, or in the
future will materially and adversely affect, the business, earnings, prospects,
properties or condition (financial or other) of the Borrower.
Compliance with Law.The Borrower is in compliance with all statutes,
laws and ordinances and all governmental rules and regulations to which it or
any of its Properties are subject except to the extent that noncompliance
therewith would not result in a Material Adverse Effect. Neither the execution,
delivery or performance of the Program Documents to which it is a party or the
Notes nor the borrowings hereunder does or will cause the Borrower to be to the
best of its knowledge in violation of any law or ordinance, or any order, rule
or regulation, of any federal, state, municipal or other governmental or public
authority or agency.
Pending Litigation, etc. There is no action at law, suit in equity or
other proceeding or investigation (whether or not purportedly on behalf of the
Borrower) in any court, tribunal or by or before any other governmental or
public authority or agency or any arbitration panel, pending or, to the best
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its respective Properties (i) an adverse determination of which is reasonably
likely to result in a Material Adverse Effect or (ii) that could question the
validity of any Program Document to which it is a party or the Notes or the
priority or perfection of any Liens created under the Security Agreement. The
Borrower is not in default with respect to any order, writ, injunction, judgment
or decree of any court or other governmental or public authority or agency or
arbitrator or arbitration panel, which default is reasonably likely to result in
a Material Adverse Effect.
Taxes. The Borrower and each entity which might have tax liabilities
for which the Borrower is or may be liable, has filed all tax returns and paid
all taxes required by law to be filed or paid, which are due pursuant to said
returns (or which to the knowledge of the Borrower are due and payable) and on
all assessments received by the Borrower or such entity, as the case may be,
other than taxes being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been established in
accordance with generally accepted accounting principles. There are no material
Liens on any Properties of the Borrower imposed or arising as a result of the
delinquent payment or the nonpayment of any tax, assessment, fee or other
governmental charge. There are no applicable taxes, fees or other governmental
charges due and payable by the Borrower in connection with the execution and
delivery by the Borrower of the Program Documents to which it is a party or the
Note or the borrowings hereunder.
Investment Company Act. The Borrower is not an "investment company",
or an "affiliated person" of an "investment company", or a company "controlled"
by an "investment company" as such terms are defined in the Investment, Company
Act of 1940, as amended, and the Borrower is not an "investment adviser" or an
"affiliated person" of an "investment adviser" as such terms are defined in the
Investment Advisers Act of 1940, as amended.
Margin Rules. Without limiting the foregoing, the application in
accordance with the Program Documents of any part of the proceeds from the
Advances by the Borrower pursuant to this Agreement will not violate or result
in a violation of Section 7 of the Securities Exchange Act or any regulations
issued pursuant thereto, including, without limitation, Regulation G (12 C.F.R.,
Part 207), as amended, Regulation T (12 C.F.R., Part 220), as amended, and
Regulation X (12 C.F.R., Part 224), as amended, of the Board of Governors of the
Federal Reserve System. The assets of the Borrower do not include any "margin
stock" within the meaning of such Regulation G, and the Borrower does not have
any intention of acquiring any such margin stock.
Proceedings. The Borrower has taken all action necessary to authorize
the execution and delivery of the Program Documents to which it is a party and
the Notes and the borrowings hereunder and the performance of all obligations to
be performed by it hereunder and thereunder.
Reserved.
No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is or
will be required for (i) the valid execution, delivery and performance by the
Borrower of the Program Documents to which it is a party, or the Notes, (ii) the
perfection or maintenance of the Liens intended to be created by the Security
Agreement (including the first priority status thereof) or (iii) the borrowings
hereunder, other than such UCC filings as have been provided to the Initial
Lender. The Borrower has obtained all consents, approvals or authorizations of,
made all declarations or filings with, or given all notices to, all federal,
state or local governmental or public authorities or agencies which are
necessary for the continued conduct by the Borrower of its business as now
conducted and as proposed to be conducted as contemplated by the Program
Documents, except to the extent that the failure to do so would not result in a
Material Adverse Effect.
Validity of Program Documents and Notes. The Program Documents to
which it is a party have each been duly executed and delivered by the Borrower
and constitute legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms. Upon receipt by the Borrower of the
proceeds of the initial Advance as provided in this Agreement, the Notes will
have been duly issued and will constitute the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, and entitled to the benefits of the Security Agreement.
Representations and Warranties in Program Documents. The
representations and warranties of the Borrower contained in each of the Program
Documents to which it is a party and in any document, certificate or instrument
delivered pursuant to any such Program Document are, true and correct and the
Lender may rely on such representations and warranties, if not made directly to
the Lender, as if such representations and warranties were made directly to the
Lender.
Solvency. On the date each Advance was made, after giving
effect to such Advance, the Borrower was Solvent.
Full Disclosure. The Program Documents to which it is a party and any
certificate, report, statement or other writing furnished to the Lender by or on
behalf of the Borrower in connection with the negotiation of any such Program
Document are accurate and complete in all material respects with respect to the
information purported to be set forth therein. There is no fact known to the
Borrower that has not been disclosed to the Initial Lender in writing that has,
or in the future may have, a Material Adverse Effect.
Non-Consolidation. The Borrower has been operated in such a manner
that it would not be substantively consolidated in the bankruptcy trust estate
of any Affiliate, such that the separate existence of the Borrower and any
Affiliate would be disregarded.
Transfer and Assignment. From and after the delivery to the
Collateral Agent of the Loan Contracts, the related Certificates of Title and
the Applications for Certificates of Title, the Collateral Agent for the benefit
of the Lender had a first priority perfected security interest in the Loan
Contracts, the Vehicles and the proceeds thereof, except for Permitted Liens and
limited with respect to proceeds to the extent set forth in Section 9-306 of the
UCC as in effect in the applicable jurisdiction. All filings (including, without
limitation, UCC filings) and other actions as are necessary in any jurisdiction
to perfect the ownership or other interest of the Collateral Agent in the
Collateral, including the transfer of the Certificates of Title and the
Applications for Certificates of Title and the Loan Contracts, and the payment
of any fees, have been made.
Parent of the Borrower. Monaco is the registered owner of all of the
issued and outstanding common stock of the Borrower, all of which common stock
has been validly issued, is fully paid and nonassessable.
Reserved.
Bulk Transfer Laws. The transfer, assignment and conveyance of the
Auto Loans by Monaco to the Borrower pursuant to the Loan Acquisition Agreement
was not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.
General Representations and Warranties of Monaco. Monaco
represents and warrants to the Lender, as of the date hereof, as
follows:
Organization and Authority. Monaco:
is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and each other State
where the nature of its business requires it to qualify, except to the
extent that the failure to so qualify would not, in the aggregate,
materially and adversely affect the ability of Monaco to perform its
duties under the Program Documents to which it is a party; and
has all requisite power and authority to own and operate its
properties and to conduct its business as currently conducted and as
proposed to be conducted as contemplated by the Program Documents to which
it is a party, to enter into the Program Documents to which it is a party
and to perform its obligations under the Program Documents to which it is
a party.
Compliance with Other Instruments, etc. Monaco is not in violation of
any term of its articles of incorporation or by-laws. The execution, delivery
and performance by Monaco of the Program Documents to which it is a party do not
and will not (i) conflict with or violate the articles of incorporation or
by-laws of Monaco, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties or assets of Monaco pursuant to the terms of any instrument or
agreement to which Monaco is a party or by which it is bound or (iii) require
any consent of or other action by any creditor of, any lessor to or any investor
in Monaco not already obtained.
Proceedings. Monaco has taken all action necessary to
authorize the execution and delivery by it of the Program Documents
to which it is a party and the performance of all obligations to be
performed by it under the Program Documents.
No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by
Monaco of the Program Documents to which it is a party. Monaco has obtained all
consents, approvals or authorizations of, made all declarations or filings with,
or given all notices to, all federal, state or local governmental or public
authorities or agencies which are necessary for the continued conduct by Monaco
of its respective businesses as now conducted, other than such consents,
approvals, authorizations, declarations, filings and notices which, neither
individually nor in the aggregate, materially and adversely affect, or in the
future will materially and adversely affect, the business, earnings, prospects,
properties or condition (financial or other) of Monaco.
Validity of Agreement. The Program Documents to which it is a party
have been duly executed and delivered by Monaco and constitute the legal, valid
and binding obligation of Monaco, enforceable in accordance with their terms,
subject as to the enforcement of bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting the rights
of creditors generally and to general principles of equity, regardless of
whether enforcement is sought in a court of equity or law. The execution and
delivery of the Supplementary Servicing Agreement do not require the consent or
signature of Monaco.
Representations and Warranties in Program Documents. Each acquisition
of a Designated Auto Loan by the Borrower was made in compliance with all
requirements specified in the Program Documents (as defined in the Existing
Credit Agreement); and Monaco performed all of its obligations with respect to
such Designated Auto Loan, including, without limitation, the payment to the
related Dealer of all amounts then owing to such Dealer by Monaco in respect of
such Designated Auto Loan.
ARTICLE IV
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT
This Agreement shall be effective on the date (the "Effective Date")
when each of the following conditions shall have been fulfilled:
Merger. The Merger shall have been consummated on such
terms and conditions as are reasonably acceptable to the Initial
Lender.
Other Amendments. The Security Agreement shall have been
executed by each of the parties thereto.
Releases. The Initial Lender, the Borrower, MF4 and Pacific USA,
Holdings Corp., a Texas corporation ("PUSA", and, together with the Borrower,
MF3 and Monaco, the "Monaco Parties") shall each have executed the release (the
"Release") in the form attached hereto as Exhibit A.
Subordinated Debt. All of the holders of the subordinated debt of
Monaco shall have entered into a comprehensive settlement agreement with the
Monaco Parties, in form reasonably acceptable to the Initial Lender.
Resolutions. The Borrower, Monaco and MF4 shall each have delivered
to the Initial Lender resolutions of their respective Boards of Directors
approving their execution, delivery and performance of this Agreement and each
document to which it is a party executed and delivered in connection herewith.
Monaco and the Borrower each agrees that (x) it will fulfill each of
the conditions precedent set forth in this Article IV to the extent it is
capable of fulfilling the same and (y) that remedies at law may be inadequate to
protect against a breach of this Agreement and agrees in advance to the granting
of injunctive relief for the performance of such agreements and obligations
without proof of actual damages.
ARTICLE V
[Reserved]
ARTICLE VI
[Reserved]
ARTICLE VII
CERTAIN SPECIAL RIGHTS
Home Office Payment.Notwithstanding any provision to the contrary in
the Program Documents, the Collateral Agent, on behalf of the Borrower, will
punctually pay in immediately available funds prior to noon, New York City time,
all amounts payable with respect to the Advances in accordance with the
provisions of this Agreement and the Security Agreement (without the necessity
for any presentation or surrender thereof or any notation of such payment
thereon) in the manner and at any address as the Lender may from time to time
direct in writing. The Initial Lender agrees that, as promptly as practicable
after the payment or prepayment of any Advance, the Initial Lender will record
such payment or prepayment on the Class A Notes and the Class B Notes ratably
such that 85% of any payment or prepayment of an Advance shall be applied and
recorded as a corresponding reduction of the outstanding principal amount of the
Class A Note and 15% of any payment or prepayment of an Advance shall be applied
and recorded as a corresponding reduction in the unpaid principal amount of the
Class B Notes. The Borrower will afford the benefits of this Section 7.01 to any
Assignee, each of which, by its receipt and acceptance of a Note, will be deemed
to have made the same agreement relating to the Advances as the Initial Lender
has made in this Section 7.01. The Borrower shall only be obligated to make
payments on any Advance to an Assignee in the manner provided in this Section
7.01 from and after the time such Assignee provides to the Borrower and the
Collateral Agent written notice of its election to receive payments in such
manner and the address to which payments are to be directed (including the
account number of Assignee's bank account to which payments are to be directed
and the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such Assignee by the wire transfer of
immediately available funds).
Certain Taxes. The Borrower will pay all taxes (other than income or
franchise taxes incurred by the Lender) in connection with the execution and
delivery of this Agreement and the Security Agreement, the issuance of the
Note(s) by the Borrower, the borrowings hereunder and any modification of the
Program Documents or the Note requested or required by the Borrower and will
save the Lender harmless, without limitation as to time, against any and all
liabilities (including, without limitation, any interest or penalty for
nonpayment or delay in payment, or any income taxes paid by the Lender or any
Assignee in connection with any reimbursement by the Borrower for the payment by
any other Person of any such taxes) with respect to all such taxes. The
obligations of the Borrower under this Section 7.02 shall survive the payment in
full of the Advances and the termination of the Program Documents.
Substitution of Initial Lender. The Initial Lender shall have the
right to substitute any of the Initial Lender's Affiliates as the maker of all
or any portion of the aggregate principal amount of Advances to be made by the
Initial Lender (so long as any such Affiliate is not engaged in any principal
line of business substantially similar to the general nature of the business
presently conducted by the Borrower), by written notice delivered to the
Borrower, which notice shall be signed by both the Initial Lender and such
Affiliate and shall contain such Affiliate's agreement to be bound by this
Agreement. The Borrower agrees that upon receipt of such notice (a) wherever the
word "the Initial Lender" is used in this Agreement (other than in this Section
7.03) such word shall be deemed to refer to such Affiliate in addition to or
instead of to the Initial Lender, as the case may be, and (b) the Initial Lender
shall, to the extent of the assumption by such Affiliate of the Initial Lender's
obligations hereunder, be released from its obligations under this Agreement.
The Borrower also agrees that if the Initial Lender, at any time, acquires from
any Affiliate all or any portion of such Affiliate's rights under this
Agreement, wherever the word "the Initial Lender" is used in this Agreement such
word shall thereafter be deemed to refer to the Initial Lender in addition to or
instead of to such Affiliate, as the case may be, and such Affiliate shall, to
the extent of the assumption by the Initial Lender of such Affiliate's
obligations hereunder, be released from all of its obligations under this
Agreement. Notwithstanding any other provision of this Section 7.03, neither the
Initial Lender nor any Affiliate thereof shall be entitled to substitute any
other party as the maker of any Advances if as a result of such substitution the
Borrower would be required to register as an "investment company" under the
Investment Company Act of 1940, as amended.
ARTICLE VIII
ADVANCE MATURITY; ADVANCE PREPAYMENTS
Subject to the provisions of the Security Agreement, all Advances
(together with interest thereon at the applicable Interest Rate plus 2.00%) are
currently due and payable in full. The Borrower may voluntarily prepay the
Advances, in whole or in part, at any time without premium or penalty. The
proceeds of any disposition of the Designated Auto Loans shall be distributed in
accordance with Section 6.04 of the Security Agreement.
ARTICLE IX
ASSIGNMENTS AND PARTICIPATIONS
Assignments. (a) The Borrower may not assign its rights or
obligations hereunder or under the Notes without the prior consent of the Lender
in its sole discretion (or, if multiple Lenders, the Lenders in respect of a
majority in aggregate principal amount of Advances outstanding with respect to
the Class A Notes or the Class B Notes, as the case may be).
The Lender may assign to any commercial lending or financial
institution familiar with the asset-backed securities market (each, an
"Assignee"), all or any portion of the Advances and the Notes; provided that any
assignment of a portion of the Advances and the Notes shall be in an amount not
less than the Minimum Assignment Denomination. Upon written notice to the
Borrower of an assignment in accordance with the preceding sentence (which
notice shall identify the Assignee and the amount and the identity of the
Advances and Notes assigned), the Assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment), the obligations,
rights and benefits of the Lender hereunder with respect to the Advances
assigned to it. For all purposes of this Agreement, the Assignee shall, so long
as the Advances assigned to such Assignee remain unpaid, be entitled to the
rights and benefits of this Agreement with respect to the Advances assigned to
it as if (and the Borrower shall be directly obligated to such Assignee under
this Agreement as if) such Assignee were the "Lender" for purposes of this
Agreement. Accordingly, unless otherwise provided, whenever any action, waiver,
notice or consent is to be provided to or by the Lender as herein specified,
such action, waiver, notice or consent shall (unless otherwise expressly
specified herein) also be provided to or by each Assignee.
The Lender shall provide notice of each assignment to the Collateral
Agent, the Borrower and the Servicer; provided that failure to provide such
notice shall not affect the validity of any assignment.
Notwithstanding the provisions of this Section 9.01, no assignment of
an interest in an Advance to an entity outside the United States of America
shall be effective unless the prospective Assignee thereof certifies to the
Borrower and Monaco that payments to it in respect of the Advances will not be
subject to withholding taxes imposed by any Governmental Authority in the United
States of America or any political subdivision or taxing authority thereof or
therein or that if it is subject to such withholding taxes it will not seek
reimbursement or grossup from the Borrower or Monaco.
Participations.The Lender may sell or agree to sell to any commercial
lending or financial institution familiar with the asset-backed securities
market a participation in all or any part of any Advance held by it or Advances
made or to be made by it, in which event each such participant shall be entitled
to the rights and benefits of the provisions of Sections 13.01(f) and 13.02(i)
hereof with respect to its participation in such Advance as if (and the Borrower
and Monaco shall be directly obligated to such participant under such provisions
as if) such participant were the "Lender" for purposes of said Sections, but
shall not have any other rights or benefits under this Agreement or any Note
(the participant's rights against the Lender in respect of such participation to
be those set forth in the agreement executed by the Lender in favor of the
participant). All amounts payable by the Borrower to the Lender under this
Agreement shall be determined as if the Lender had not sold or agreed to sell
any participations in such Advance and as if the Lender were funding all of such
Advance in the same way that it is funding the Advance in which no
participations have been sold.
Information. Subject to Section 15.11 hereof, the Lender may furnish
any information concerning the Designated Auto Loans, the Borrower, Monaco or
any of their other Affiliates in the possession of the Lender from time to time
to assignees and participants (including prospective assignees and
participants); provided, however, that, prior to receipt of any such
information, and prior to any inspection by a Lender, other than the Initial
Lender, such assignees and participants or prospective assignees and
participants, as the case may be, may be required by the Borrower to execute a
confidentiality agreement in form and substance reasonably acceptable to the
Borrower.
ARTICLE X
CERTAIN COVENANTS OF THE BORROWER
The Borrower covenants and agrees that so long as any Advance shall
remain unpaid:
Maintenance of Office. The Borrower will maintain at its office
located at its address specified in this Agreement an office where notices,
presentations and demands in respect of Designated Auto Loans and the Notes may
be given to and made upon it; provided, however, that it may, upon 15 Business
Days' prior written notice to the Lender, move such office to any other location
within the boundaries of the continental United States of America.
Existence. The Borrower will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to preserve and keep in full
force and effect its existence, rights and privileges as a corporation and will
not liquidate or dissolve, and it will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to qualify, and to preserve
and keep in full force and effect its qualification, to do business in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires such qualification except where the failure to do so
would not reasonably be expected to have a Materially Adverse Effect on the
Borrower.
General Maintenance of Business, etc. The Borrower will:
keep proper books of record and accounts in which entries will be
made of its business transactions in accordance with and to the extent required
by generally accepted accounting principles;
use its best efforts to enforce (or cause the Servicer or the
Collateral Agent, as the case may be, to enforce) all of its rights under each
of the Program Documents to which it is a party and each other agreement entered
into in connection with the transactions contemplated hereby.
Inspection. The Borrower will permit, upon reasonable notice to it,
the Lender, by its representatives, agents or attorneys: (a) to examine all
books of account, records, reports and other papers of the Borrower (including
the Loan Files), (b) to make copies and take extracts from any thereof, (c) to
discuss the affairs, finances and accounts of the Borrower with its respective
officers and independent certified public accountants (and by this provision the
Borrower hereby authorizes said accountants to discuss with the Lender the
finances and accounts of the Borrower) and (d) to visit and inspect, at
reasonable times during normal business hours, the properties of the Borrower.
It is understood and agreed by the parties hereto that all reasonable expenses
in connection with any such inspection or discussion incurred by the Lender or
any officers and employees thereof and the independent certified public
accountants therefor shall be expenses reimbursed to the Lender from the
proceeds of the Collateral under the Security Agreement.
Compliance with Law, etc. The Borrower will not (i) violate any laws,
ordinances, governmental rules or regulations to which it is or may become
subject, or (ii) fail to obtain or maintain any patents, trademarks, service
marks, trade names, copyrights, design patents, licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its property or
to the conduct of its business except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect on the Borrower.
Payment of Taxes and Claims. The Borrower will pay and discharge
promptly when due, all taxes, assessments and governmental charges and levies
imposed upon it, its income or profits or any of its properties.
Limitations on Indebtedness. The Borrower will not at any time incur,
create, assume or guarantee, or otherwise become or be liable in any manner with
respect to, any Indebtedness, except the Advances and other Indebtedness arising
under any of the Program Documents, and Indebtedness incurred pursuant to the
MF4 Credit Agreement.
Restricted Investments. With respect to amounts on deposit in the
Collateral Account, the Borrower will not make any Restricted Investments except
in accordance with the Program Documents.
Nature of Business. The Borrower will not engage in any business or
activity (whether or not pursued for gain or other pecuniary advantage) other
than financing, purchasing and disposing of Eligible Auto Loans and Permitted
Investments.
Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder and under the Notes,
the Borrower shall be required to observe the applicable legal requirements for
the recognition of the Borrower as a legal entity separate and apart from Monaco
and each other Affiliate of Monaco, provided, that the foregoing shall not
prohibit or restrict the consummation of the Merger. Without limiting the
generality of the foregoing, the Borrower shall assure that each of the
following is complied with:
the Borrower shall maintain separate records, books of account and
financial statements (each of which shall be sufficiently full and complete to
permit a determination of the Borrower's assets and liabilities separate and
apart from those of Monaco and each other Affiliate of Monaco and to permit a
determination of the obligees thereon and the time for performance of each of
the Borrower's obligations separate and apart from those of Monaco and each
other Affiliate of Monaco) from those of Monaco and each other Affiliate of
Monaco;
assets or funds of the Borrower shall be separately identified and
shall not be commingled with those of Monaco or any of the other Affiliates of
Monaco;
the Borrower shall maintain a separate board of directors (including
an "independent director" (as such term is defined in the Borrower's Certificate
of Incorporation)) and shall observe all separate corporate formalities, and all
decisions with respect to the Borrower's business and daily operations shall be
independently made by the officers of the Borrower pursuant to resolutions of
its board of directors;
other than payment of dividends and return of capital, no
transactions shall be entered into between the Borrower and Monaco or between
the Borrower and any of the other Affiliates of Monaco except such transactions
as are contemplated by the Loan Acquisition Agreement;
except for such origination, collection and servicing functions as
Monaco may perform on behalf of the Borrower pursuant to the Program Documents,
the Borrower shall act solely in its own name and through its own authorized
officers and agents and the Borrower will not act as agent of Monaco or any
other person in any capacity;
except for any funds received from Monaco as a capital contribution,
the Borrower shall not accept funds from Monaco or any of the other Affiliates
of Monaco; and the Borrower shall not allow Monaco or any of the other
Affiliates of Monaco otherwise to supply funds to, or guarantee any obligation
of, the Borrower;
the Borrower shall not guarantee, otherwise become liable with
respect to, or otherwise hold out its assets or credit as being available to
satisfy any obligation of Monaco or any of the other Affiliates of Monaco
including jointly or as co-obligor;
the Borrower shall at all times hold itself out to the public under
the Borrower's own name as a legal entity separate and distinct from Monaco and
the other Affiliates of Monaco and shall not hold itself out as a "department,"
"division" or "part of" Monaco or any of the other Affiliates of Monaco, and
shall correct any known misunderstanding regarding its separate identity from
Monaco;
the Borrower shall observe all corporate and other legal formalities,
including obtaining necessary authorization from its board of directors;
the Borrower shall hold all regular meetings appropriate to
authorize corporate action;
the Borrower shall maintain complete minutes of all board
of director and stockholder meetings;
the Borrower shall maintain its bank and other investment accounts
separate and distinct from those of any affiliate or other person; and
the Borrower shall pay from its own funds all obligations of any kind
incurred by it. Without limiting the generality of the foregoing, the Borrower
shall pay from its own funds the salaries or other compensation and benefits of
its own officers and employees, if any, and will employ a reasonable number of
employees in light of its purpose;
the Borrower shall use its own stationery, invoices and
checks (i.e., not such forms of another person); and
the Borrower shall take all appropriate action necessary to maintain
its own existence as separate and distinct from the existence of any of its
owners.
Other Agreements and Parties. The Borrower will comply with all terms
of the Program Documents to which it is a party. The Borrower (a) will not enter
into any agreements (other than the Program Documents to which it is a party and
agreements approved by the Initial Lender necessary to effectuate the Merger and
any dispositions of Collateral) without the prior consent of the Lender (or, if
multiple Lenders, the Lenders in respect of a majority in aggregate principal
amount of Advances outstanding), such consent not to be unreasonably withheld
and (b) except as otherwise expressly set forth herein, agree to any amendment,
supplement or modification to or waiver of the terms of the Program Documents to
which it is a party or any document related thereto without the consent of the
Lender (or, if multiple Lenders, the Lenders in respect of a majority in
aggregate principal amount of Advances outstanding), such consent not to be
unreasonably withheld.
Investment Company Act. The Borrower will not take any action which
would require it to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
Liens. The Borrower will not permit any Lien to exist on
any of its Properties, whether now owned or hereafter acquired, other
than Permitted Liens.
ARTICLE XI
CERTAIN COVENANTS OF MONACO
In order to induce the Initial Lender to enter into this Agreement,
Monaco covenants and agrees that so long as any Advances shall remain unpaid:
Loan Files, Etc. Monaco will, at its expense, (i) deliver (to the
extent not already delivered) all of the Loan Files to SST promptly upon
execution and delivery of this Agreement, (ii) deliver to the Collateral Agent
all proceeds of the Collateral, in the form received, within two Business Days
of its receipt thereof, (iii) deliver to SST all correspondence which it
receives in connection with the Designated Auto Loans within two Business Days
of its receipt thereof and (iv) not perform any collection activities with
respect to the Designated Auto Loans.
Further Assurances. Monaco will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary in order to give effect to the provisions of the Program Documents and
the transactions contemplated hereby.
Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder in respect of the
Advances, Monaco shall be required to (and shall assure that each other
Affiliate of Monaco shall) observe the applicable legal requirements for the
recognition of the Borrower as a legal entity separate and apart from Monaco and
each other Affiliate of Monaco, including, without limitation, assuring that
each of the following is complied with:
Monaco and each other Affiliate of Monaco shall maintain separate
bank and other investment accounts, records and books of account (each of
which shall be sufficiently full and complete to permit a determination of
the assets and liabilities of Monaco or such Affiliate, as the case may
be, separate and apart from those of the Borrower and to permit a
determination of the obligees thereon and the time for performance on each
of the obligations of Monaco or such Affiliate, as the case may be,
separate and apart from those of the Borrower) from those of the Borrower;
neither Monaco nor any of its other Affiliates shall commingle any of
its assets or funds with those of the Borrower, and such assets or funds
shall be separately identified from those of the Borrower;
the board of directors of Monaco shall not dictate decisions with
respect to the Borrower's business and daily operations and Monaco shall
maintain its own corporate formalities and shall otherwise respect the
separate corporate identity of the Borrower;
other than the making of capital contributions and the transactions
contemplated by the Loan Acquisition Agreement, neither Monaco nor any of
its other Affiliates shall enter into any transactions with the Borrower;
neither Monaco nor any of its other Affiliates shall advance funds to
the Borrower (except for the making of capital contributions); and neither
Monaco nor any of its other Affiliates will otherwise supply funds to, or
guarantee or otherwise hold out its assets or credit as being available to
satisfy any obligation of, the Borrower; and neither Monaco nor any of its
Affiliates shall pledge, mortgage or make similar arrangements with
respect to its assets for the benefit of the Borrower;
neither Monaco nor any of its other Affiliates shall pay from its own
funds obligations of any kind incurred by the Borrower, or otherwise
become liable with respect to, any obligation of the Borrower;
Monaco and each of its other Affiliates shall at all times hold
itself out to the public under its respective name as a legal entity
separate and distinct from the Borrower, and Monaco shall with respect to
the Borrower act solely in its own name and shall correct any known
misunderstandings regarding its separate identity from the Borrower;
all financial reports prepared by Monaco and each of its other
Affiliates shall comply with generally accepted accounting principles and
Monaco will not issue consolidated financial statements which include the
Borrower unless such consolidated financial statements clearly indicate
that they consolidate the financial statements of separate legal entities
including the Borrower with the Borrower identified by name;
with respect to its dealings with the Borrower, Monaco and its
Affiliates shall observe all corporate and other legal formalities and
shall not take (or omit to take) any action inconsistent with the
maintenance of the Borrower's existence as a corporation under the laws of
the State of Delaware separate and distinct from the existence of Monaco
or any of its other affiliates;
Monaco and its Affiliates shall allocate fairly and reasonably any
overhead for shared office space, personnel or other expenses used by the
Borrower; Monaco and its Affiliates shall not use the Borrower's
stationery, invoices or checks;
Monaco and its Affiliates shall not direct the business or
daily operations of the Borrower; and
Monaco and its Affiliates will not take, or omit to take, any action
that would cause the Borrower to fail to comply, or fail to cause the
compliance, with the provisions of Article X hereof.
Other Agreements and Parties. Monaco will comply with all terms of
the Program Documents to which it is a party. Monaco will not, except as
otherwise expressly set forth herein, agree to any amendment, supplement or
modification to or waiver of the terms of the Program Documents to which it is a
party or any document related thereto without the consent of the Lender (or, if
multiple Lenders, the Lenders in respect of a majority in aggregate principal
amount of Advances outstanding), such consent not to be unreasonably withheld.
ARTICLE XII
[Reserved]
ARTICLE XIII
DEFAULTS
Defaults. If any of the following conditions or events
(each, a "Default") shall occur and be continuing, it shall
constitute a Default hereunder:
(i) failure by the Borrower to make any deposit when due under the
Security Agreement or failure by Monaco remit to the Collateral Agent any
payment received by it directly or on behalf of the Borrower in respect of the
Collateral or (ii) failure of Monaco to repurchase any Auto Loans pursuant to
the Loan Acquisition Agreement or (iii) a "Default" shall occur under the MF4
Credit Agreement; or
the Borrower or Monaco shall default in the due and punctual
performance of or compliance with any covenant, condition or agreement to be
performed or observed by it under Sections 10.01, 10.02, 10.06, 10.07, 10.10,
10.13 or Article XI hereof; or
the Borrower shall institute proceedings for liquidation,
readjustment, arrangement or composition (or for any related or similar purpose)
under any law relating to financially distressed debtors, their creditors or
property, or shall consent to (or fail to object to in a timely manner) the
institution of any such proceedings against the Borrower; or
a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or other (i) for the appointment of a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Borrower or of any part of its property, or for the
winding-up or liquidation of its affairs; and such decree or order shall remain
in force undischarged and unstayed for a period of more than 60 days, or (ii)
for the sequestration or attachment of any material part of the property of the
Borrower without its unconditional return to the possession of the Borrower, or
its unconditional release from such sequestration or attachment, within 60 days
thereafter, or
a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or order approving or acknowledging as
properly filed, or any party commences against the Borrower, a petition or
proceedings from liquidation, rehabilitation, readjustment or composition (or
for any related or similar purpose) under any law relating to financially
distressed debtors, their creditors or property, and any such decree or order
shall remain in force undischarged and unstayed for a period of more than 60
days; or
the Borrower shall take action for the purpose or with the effect of
authorizing or confirming the taking or existence of any action or condition
specified in clause (d) or (e) above.
Default Remedies. Prior to the occurrence of a Default, all
collections on the Collateral shall be distributed solely as set forth in the
Security Agreement and the Collateral may be disposed of by the Initial Lender
only as and to the extent set forth in the Security Agreement. If a Default
shall occur and be continuing, the Lender may, notwithstanding any other
provision of this Agreement or any Program Document, instruct the Collateral
Agent to, exercise any right, power or remedy permitted to it by law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or agreement contained in the Program Documents or in the Notes or
for an injunction against a violation of any of the terms of the Program
Documents or such Advance or in aid of any exercise of any power granted to such
Lender or to the Collateral Agent in the Program Documents or in such Advance,
or may proceed to enforce payment of such Advance or to enforce any other legal
or equitable right of the Lender. No remedy herein or in the Security Agreement
conferred upon the Lender or the Collateral Agent is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, by statute or otherwise. No course of dealing on the part of the
Lender or the Collateral Agent, or any delay or failure on the part of the
Lender or the Collateral Agent to exercise any right or power, shall operate as
a waiver of such right or power or otherwise prejudice the rights, powers and
remedies of the Lender or the Collateral Agent or of any other Lender or the
Collateral Agent. No failure to insist upon strict compliance with any covenant,
term, condition or other provision of the Program Documents or the Note shall
constitute a waiver by the Lender or the Collateral Agent of any such covenant,
term, condition or other provision or of any Default in connection therewith. To
the extent effective under applicable law, the Borrower hereby agrees to waive,
and does hereby absolutely and irrevocably waive and relinquish, the benefit and
advantage of any valuation, stay, appraisement, extension or redemption laws now
existing or that may hereafter exist that, but for this provision, might be
applicable to any sale made under any judgment, order or decree of any court, or
otherwise, based on the Advance or on any claim for interest and fees in respect
of the Advance. If an Default shall occur, and be continuing, the Borrower will
pay to the Lender or the Collateral Agent, to the extent not prohibited by
applicable law and not paid in accordance with the Security Agreement, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection and of the taking of remedial actions and the maintenance of
enforcement proceedings, including, without limitation, reasonable and necessary
attorneys' fees and disbursements.
ARTICLE XIV
INDEMNIFICATION AND FUNDING LOSSES
Indemnification. (a The Borrower agrees to indemnify and hold
harmless the Lender, the directors, officers, employees and agents of the Lender
and each Person who controls the Lender within the meaning of the Securities Act
or the Exchange Act from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which any of them may become subject to the
extent that any such claims, damages, losses, liabilities costs or expenses are
attributable to the transactions contemplated herein, including, without
limitation, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise; provided, that the
Borrower shall not be liable to the Lender for any (i) credit losses incurred by
the Lender in its capacity as a Lender with respect to the Advances resulting
from the performance of this Agreement, (ii) losses incurred by the Lender as a
result of breaches by the Lender of any of its obligations hereunder or under
any of the other Program Documents, the fraudulent actions, misrepresentations,
negligence or willful misconduct of the Lender or (iii) losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Lender (including any liabilities,
costs or expenses with respect thereto) (collectively, the "Indemnified
Claims"). The foregoing is in addition to any rights (including, without
limitation, rights to indemnity) to which the Lender may otherwise be entitled.
Promptly after receipt by the Lender of notice of the commencement of
any action, the Lender shall, if a claim in respect thereof is to be made
against the Borrower (the "Indemnifying Party") under this Section 14.01, notify
the Indemnifying Party in writing of the commencement thereof; but the omission
so to notify the Indemnifying Party will not relieve it from any liability which
it may have to the Lender except to the extent such Indemnifying Party is
prejudiced thereby. In case any action is brought against the Lender, and it
notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to appoint counsel satisfactory to such Indemnifying
Party (who shall not, except with the consent of the Lender, be counsel to the
Borrower or Monaco) to represent the Lender in such action; provided, however,
that, if the defendants in any action include both the Lender and an
Indemnifying Party and the Lender shall have reasonably concluded that there may
be legal defenses available to it which are different from or additional to
those available to the Indemnifying Party, the Lender shall have the right to
select separate counsel to defend such action on behalf of it. Upon receipt of
notice from the Indemnifying Party to the Lender of its election so to appoint
counsel to defend such action and approval by the Lender of such counsel, the
Indemnifying Party will not be liable to the Lender under this Section 14.01 for
any legal or other expenses subsequently incurred by the Lender in connection
with the defense thereof unless (i) the Lender shall have employed separate
counsel in accordance with the proviso to the next preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel satisfactory to the Lender to
represent the Lender within a reasonable time after notice of commencement of
the action or (iii) the Indemnifying Party has authorized the employment of
counsel for the Lender at the expense of the Indemnifying Party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
If the indemnification provided for in this Section 14.01 is
unavailable or insufficient to hold harmless the Lender under subsection (a) or
(b) above, then the Indemnifying Party shall contribute to the amount paid or
payable by the Lender as a result of the Indemnified Claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Lender on the other from the
transactions contemplated by this Agreement or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Indemnifying Party on the one hand and
the Lender on the other in connection with the actions or omissions which
resulted in such Indemnified Claims or liabilities as well as any other relevant
equitable considerations. The Lender and the Indemnifying Party agree that it
would not be just and equitable if contributions pursuant to this subsection (c)
were to be determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the first sentence of this subsection (c). The amount payable by the
Indemnifying Party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (c) shall be deemed to
include any legal or other expenses reasonably incurred by the Lender in
connection with investigating or defending any action or claim which is the
subject of this subsection (c). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The obligations of the Indemnifying Party and the Lender under this
Section 14.01 shall be in addition to any liability which each of them may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Lender within the meaning of the Securities
Act; and, with respect to the obligation of the Indemnifying Party to the Lender
as indemnified party, shall extend, upon the same terms and conditions, to each
director of the Lender.
The Lender agrees to notify the Indemnifying Party in writing of the
commencement of any action with respect to which indemnification may be owed to
it pursuant to this Section 14.01 or Article V of the Servicing Agreement after
receipt by the Lender of notice of commencement thereof, but the omission so to
notify the Indemnifying Party will not relieve such Indemnifying Party from any
liability which it may have except to the extent the Indemnifying Party is
prejudiced thereby. For purposes of this Section 14.01(e), the Servicer shall be
a third party beneficiary of the agreements herein contained.
The agreement, indemnities and other statements of the parties hereto
in or made pursuant to this Section 14.01 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14.01. The provisions of this
Section 14.01 shall survive the termination or cancellation of this Agreement.
Indemnification with respect to the Designated Auto Loans. Without
limiting any other rights that the Collateral Agent or the Lenders (each an
"Indemnified Party") may have hereunder or under applicable law, Monaco hereby
agrees to pay on demand to each Indemnified Party any and all amounts necessary
to indemnify such Indemnified Party from and against any and all claims, losses,
damages and liabilities and related costs and expenses, including taxes and
reasonable attorneys' fees and disbursements ("Indemnified Amounts") which may
be imposed on, incurred by or asserted against an Indemnified Party in any way
arising out of or resulting from:
the use by Monaco of proceeds of any sale of or in respect
of any Auto Loan;
any representation or warranty made or deemed made by Monaco (or any
of its officers) under any Program Document, or any report delivered by
Monaco pursuant hereto, having been incorrect in any material respect when
made or deemed made or delivered in respect of a Designated Auto Loan (as
to which the remedies are set forth in Section 3.03(c) of the Loan
Acquisition Agreement);
the failure by Monaco to comply with any applicable law, rule or
regulation with respect to any Designated Auto Loan, or the nonconformity
of any Designated Auto Loan with any such applicable law, rule or
regulation;
[Reserved]; or
the assessment of any tax or governmental fee or charge (and all
interest or penalties with respect thereto) as the result of the purchase
or ownership by Monaco of any Auto Loan, other than taxes on or measured
by the gross income of any Person,
excluding, however, (i) recourse for any uncollectible Designated Auto Loan;
provided, that the foregoing shall not be deemed to limit the Borrower's or the
Collateral Agent's rights under Section 3.03(c) of the Loan Acquisition
Agreement and (ii) Indemnified Amounts to the extent resulting from the gross
negligence or willful misconduct on the part of any Indemnified Party. Monaco
acknowledges that the Borrower has assigned its rights of indemnity granted
hereunder to the Collateral Agent. Monaco agrees that, upon such assignment,
such assignee may enforce directly, without joinder of the Borrower, the
indemnities set forth in this Section 14.02. It is understood and agreed that
the indemnity obligations of Monaco hereunder shall survive the termination of
this Agreement or of any Designated Auto Loan.
Expenses. In connection with any obligation of Monaco or the Borrower
under this Article XIV or under any other provision of this Agreement or any
other Program Document with respect to the payment by Monaco or the Borrower of
any costs, fees or expenses, including, but not limited to, Sections 2.06 and
2.07 hereof, the Lender shall deliver to Monaco and the Borrower a statement (A)
itemizing all such cost and expense items for which reimbursement or
indemnification is sought and (B) detailing how the Lender calculated such
items.
ARTICLE XV
MISCELLANEOUS
Notices. (a All communications under this Agreement or the Notes
shall be in writing and shall be delivered or mailed or sent by facsimile
transmission and confirmed in writing (i) if to the Lender, to the Lender, at
such address as the Lender may have furnished to the Borrower in writing, and
(ii) if to the Borrower, at the address set forth in Section 3.01(b) or at such
other address or facsimile number as it shall have furnished in writing to the
Lender and (iii) if to Monaco to it at the address set forth in Section 3.02(b)
or at such other address or facsimile number as it shall have furnished in
writing to the Lender.
Any written communication so addressed and mailed by certified or
registered mail, return receipt requested, shall be deemed to have been given
when so mailed. All other written communications shall be deemed to have been
given upon receipt thereof.
Survival. All representations, warranties and covenants made by the
Borrower herein or by the Borrower in any certificate or other instrument
delivered under or in connection with this Agreement shall be considered to have
been relied upon by the Lender and shall survive regardless of any investigation
made by the Lender or on the Lender's behalf.
Successors and Assigns. This Agreement shall be binding upon the
parties hereof and their respective successors and assigns, and shall inure to
the benefit of and be enforceable by the parties hereof and their respective
successors and assigns permitted hereunder.
Amendment and Waiver. (a This Agreement and the Notes may be amended
or supplemented, and the observance of any term hereof or thereof may be waived,
with the written consent of the Borrower, Monaco and the Lender (or, if multiple
Lenders, Lenders with respect to at least a majority in aggregate unpaid
principal amount of the Advances); provided, however, that no such amendment,
supplement or waiver shall, without the written consent of all Lenders (a)
change, with respect to the Advances, the amount or time of any required
prepayment or payment of principal or premium or the rate or time of payment of
interest, or change the funds in which any prepayment or payment on the Advances
is required to be made; (b) reduce the percentage of the aggregate principal
amount of Advances required for any amendment, consent or waiver hereunder; or
(c) release any material Lien of the Collateral Agent, held for the benefit of
the Lender, on any of the Collateral or affect the priority thereof.
Any amendment, supplement or waiver effected in accordance with this
Section 15.04 shall be binding upon the Lender, each Assignee and the Borrower.
The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of the
Program Documents or the Notes unless the Initial Lender (irrespective of the
amount of Advances made by it) shall be informed thereof by the Borrower and
shall be afforded the opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
effected pursuant to the provisions of this Section 15.04 shall be delivered by
the Borrower to the Lender forthwith following the date on which the same shall
have been executed and delivered by the Lender of the requisite percentage of
Advances.
Counterparts. This Agreement may be executed and delivered
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument.
Reproduction of Documents. This Agreement and all documents relating
hereto (other than the Note), including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by the Initial Lender at the closing of the Initial ▇▇▇▇▇▇'s making of Advances,
and (c) financial statements, certificates and other information heretofore or
hereafter furnished to the Lender, may be reproduced by the Lender by any
photographic or other similar process and the Lender may destroy any original
document so reproduced. The Borrower agrees and stipulates that, to the extent
permitted by applicable law and court or agency rules, any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Lender in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall be admissible in evidence to the same extent.
Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LA\V OF THE STATE OF
NEW YORK.
Consent to Jurisdiction and Venue. The Borrower and Monaco each
hereby irrevocably (i) agrees that any suit, action or other legal proceeding
arising out of or relating to the Program Documents or any Note may be brought
in a court of record in the State of New York or in the courts of the United
States of America located in such State, (ii) consents to the jurisdiction of
each such court in any such suit, action or proceeding, and (iii) waives any
objection which it may have to the laying of venue of any such claim that any
such suit, action or proceeding has been brought in an inconvenient forum and
covenants that it will not seek to challenge the jurisdiction of any such court
or seek to oust the jurisdiction of any such court, whether on the basis of
inconvenient forum or otherwise. The Borrower and Monaco each irrevocably
consent to the service of any and all process in any such suit, action or
proceeding by mail copies of such process to the Borrower and Monaco at their
respective addressees for notices provided in Section 15.01 hereof. The Borrower
and Monaco each agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. All mailings under this Section
15.08 shall be by registered or certified mail, return receipt requested.
Nothing in this Section 15.08 shall affect the Lender's right to serve legal
process in any other manner permitted by law or affect the Lender's right to
bring any suit, action or proceeding against the Borrower or any of its
properties in the courts of any other jurisdiction.
No Petition. The Lender and each Assignee hereby covenant and agree
that, until the expiration of the date which is one year and one day after the
payment in full of all investor certificates or other securities outstanding and
issued pursuant to any disposition of Collateral, it will not institute against
the Borrower, or join in any institution against the Borrower of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any applicable bankruptcy or similar law in
connection with any obligations relating to the Advances or the Program
Documents.
Acts of Lender.(a Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be given
or taken by the Lender may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the Lender in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
is or are delivered to the Borrower. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 15.10.
The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Borrower deems
sufficient.
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Lender or any Assignee shall bind the Lender and
such Assignee in respect of anything done, omitted or suffered to be done by the
Borrower in reliance thereon, whether or not notation of such action is made
upon such Note.
Confidentiality. Each Lender agrees to take, and to cause its
Affiliates to take, normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" and provided to the Lender by Monaco or the Borrower or any subsidiary
of Monaco or the Borrower under this Agreement or any other Program Document,
and neither Lender nor any of its Affiliates shall use any such information
other than in connection with or in enforcement of this Agreement and the other
Program Documents or in connection with other business now or hereafter existing
or contemplated with Monaco, the Borrower or any subsidiary of Monaco or the
Borrower; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender, or
(ii) was or becomes available on a non-confidential basis from a source other
than Monaco or the Borrower, provided that such source is not bound by a
confidentiality agreement with Monaco or the Borrower known to the Lender;
provided, however, that the Lender may disclose such information (A) at the
request or pursuant to any requirement of any governmental authority to which
the Lender is subject or in connection with an examination of the Lender by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Lender may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Program Document; (F) to the Lender's independent auditors,
counsel and other professional advisors; or (G) to any participant or assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of Lender hereunder. Prior
to disclosing pursuant to clauses (B), (C) or (D) any information identified by
Monaco, the Borrower or any subsidiary of Monaco or the Borrower's
"confidential" or "secret," the Lender subject to such process, proceeding,
litigation or requirement of law shall provide Monaco and the Borrower with
notice thereof (so long as such notice does not violate any applicable
requirement of law) sufficient, if reasonable under the circumstances) to
provide Monaco or the Borrower with the opportunity to seek, at their expense, a
protective order or similar protections, and such Lender will reasonably
cooperate with Monaco and the Borrower, at their request and expense, to obtain
such protections.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed as of the day and year first above
written.
MF RECEIVABLE CORP. III
By: __________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
MONACO FINANCE, INC.
By: __________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
DAIWA FINANCE CORPORATION
By: __________________________________
Name:
Title:
EXHIBIT A
[Form of Release]
This Mutual Release (this "Release") is made as of the 29th day of
July, 1999, by andamong MF Receivables Corp. III, a Delaware corporation
("MF3"), MF Receivables Corp. IV, a Delaware corporation ("MF4"), Monaco
Finance, Inc., a Colorado corporation ("MFI") and Pacific USA Holdings Corp., a
_______ corporation ("PUSA" and, together with MF3, MF4, MFI and PUSA, the
"Monaco Parties"), and Daiwa Finance Corporation , a Delaware corporation
("DFC")
RECITALS
A. MF3, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF3 Credit Agreement"), dated as of July 29, 1999.
B. MF4, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF4 Credit Agreement" and, together with MF3 Credit
Agreement, the "Credit Agreements"), dated as of July 29, 1999. Unless otherwise
specified or defined herein, each term used herein has the meaning ascribed
thereto in the Credit Agreements.
AGREEMENTS
1. Release by Monaco Parties. For good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged) each of the
Monaco Parties does hereby release and discharge DFC, and each of its
shareholders, directors, officers, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively with
any purchaser of the Collateral, the "DFC Parties"), of and from all manner of
actions, choses and causes of action, claims, demands, damages, expenses,
liabilities, losses, judgments and executions (in each case of whatever kind or
nature, whether in law or in equity, and whether known or unknown)
(collectively, the "Claims") at any time arising out of or relating in any
manner to any action or inaction by any of the DFC Parties in connection with or
relating to any matter.
2. Release by DFC.For good and valuable consideration (the receipt
and sufficiency of which are hereby acknowledged) DFC does hereby release and
discharge each of the Monaco Parties, and each of their respective shareholders,
directors, officers, members, partners, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively, the
"Monaco Released Parties"), of and from all manner of Claims at any time arising
out of or relating in any manner to any action or inaction by any of the Monaco
Released Parties in connection with or relating to any matter.
3. Releases Generally. Notwithstanding paragraphs 1 and 2 above, (i)
DFC's release set forth in paragraph 2 above shall not apply to any moneys due
to DFC under any of the Program Documents and (ii) none of the releases set
forth in paragraphs 1 and 2 above shall apply to (x) any breach following the
Effective Date by any party of the agreements set forth herein or in any Program
Document or (y) any breach following the Effective Date by any party of any
Program Document or any agreement executed and delivered in connection with or
pursuant to this Agreement.
4. Non-Filing. The parties hereto acknowledge and agree that ▇▇▇▇ has
made certain advances to MFI which may be currently due and payable. From and
after the date hereof, ▇▇▇▇ agrees that, until the expiration of the date which
is one year and one day following the repayment in full of the Advances (or, if
earlier, a Collateral Disposition (as defined in the Security Agreement)), it
will not (i) bring any legal action against MFI to collect or enforce such
advances or (ii) institute against MFI, or join in any institution against MFI
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings. MFI and PUSA each represent and warrant to DFC that, as of the date
hereof, the Borrower has not incurred any Indebtedness to MFI or PUSA or any
Affiliate thereof.
5. MFI Servicing Responsibilities. MFI agrees that from and after
April 16, 1999, its rights and responsibilities under each of the Servicing
Agreements have been terminated (other than rights and responsibilities (a)
which, under such Servicing Agreements, survive MFI's replacement as Servicer
and (b) such rights and responsibilities as are specifically set forth in the
Supplementary Servicing Agreement). MFI further acknowledges and agrees that
neither the Collateral Agent nor DFC shall be required to deliver to MFI a
Servicer Termination Notice under such Servicing Agreements in order to
effectuate the agreements set forth in this Agreement.
6. Assignability. DFC's release under paragraph 2 hereof shall be
expressly assumed by any purchaser or assignee of the Notes. The Monaco Parties'
release under paragraph 1 hereof shall be expressly assumed by any purchaser or
assignee of any of the stock of MFI, MF3 or MF4 currently owned by a Monaco
Party. PUSA's and MFI's agreements under paragraph 4 hereof shall be expressly
assumed by any purchaser or assignee of MFI's debt to PUSA.
7. Counterparts. This Release may be executed in one or more
counterparts (including counterparts executed on facsimile copies or delivered
by facsimile), each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
8. Governing Law; Effectiveness. This Release shall be governed by
and construed in accordance with the laws of the State of New York. This Release
shall be effective concurrently with the effectiveness of the Credit Agreements.
9. Jurisdiction, Etc. Each of the parties hereto agrees that the
provisions of Section 15.08 of the Credit Agreements shall apply to them with
respect to this Release.
IN WITNESS WHEREOF, the parties have caused this Release to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DAIWA FINANCE CORPORATION MONACO FINANCE, INC.
By:_______________________________
By:_______________________________
Name:_____________________________
Name:_____________________________
Title:______________________________
Title:______________________________
MF RECEIVABLES CORP. III MF RECEIVABLES CORP. IV
By:_______________________________
By:_______________________________
Name:_____________________________
Name:_____________________________
Title:______________________________
Title:______________________________
PACIFIC USA HOLDINGS CORP.
By:_______________________________
Name:_____________________________
Title:______________________________
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................1
Section 1.01......................................Definitions
1
Section 1.02..............................General Information
18
Section 1.03.........................................Headings
18
Section 1.04..................Independence of Covenants, etc.
18
ARTICLE II COMMITMENT ......................................18
Section 2.01.........................................Advances
18
Section 2.02.............................Borrowings; Closings
19
Section 2.03..............................Notices of Advances
20
Section 2.04..................................Use of Proceeds
20
Section 2.05...............................Security Agreement
21
Section 2.06..................................Increased Costs
21
Section 2.07............................................Taxes
23
Section 2.08.............................................Term
25
Section 2.09.............................Payment Instructions
25
ARTICLE III .....................REPRESENTATIONS AND WARRANTIES
25
Section 3.01General Representations and Warranties of the Borrower
25
Section 3.02.General Representations and Warranties of Monaco
29
Section 3.03 Representations and Warranties with Respect to
the Designated
Auto Loans.......................................33
Section 3.04 Representations and Warranties Relating to
Additional
Qualified Auto Loans.............................38
ARTICLE IV CONDITIONS OF OBLIGATION TO MAKE.................39
Section 4.01.................................Other Agreements
39
Section 4.02Opinion with Respect to Certain Bankruptcy Matters
39
Section 4.03........................Opinions of Local Counsel
39
Section 4.04...........................Officer's Certificates
39
Section 4.05...............Organizational and Other Documents
39
Section 4.06.............................Financing Statements
40
Section 4.07...............................Necessary Consents
40
Section 4.08........................Payment of Commitment Fee
40
Section 4.09.........................................Searches
40
ARTICLE V CONDITIONS OF OBLIGATION TO MAKE.................40
Section 5.01......Performance of Obligations; No Old Advances
40
Section 5.02........Representations True; No Event of Default
40
Section 5.03............................................Taxes
40
Section 5.04...................No Merger or Change in Control
41
Section 5.05...........................Consents and Approvals
41
Section 5.06....................Proceedings, Instruments, etc
41
Section 5.07......Loan Acquisition Agreement; Use of Proceeds
41
Section 5.08..................................Other Documents
41
Section 5.09 Continuance of a Funding Termination Event or an
Event
of Default.......................................41
ARTICLE VI ....................COVENANTS OF MONACO AND THE BORROWER
42
Section 6.01.............................Additional Covenants
42
ARTICLE VII CERTAIN SPECIAL RIGHTS...........................42
Section 7.01..............................Home Office Payment
42
Section 7.02....................................Certain Taxes
43
Section 7.03...................Substitution of Initial Lender
43
ARTICLE VIII ADVANCE MATURITY; ADVANCE PREPAYMENTS............43
Section 8.01.................................Advance Maturity
43
Section 8.02............................Voluntary Prepayments
44
Section 8.03............................Mandatory Prepayments
44
Section 8.04................................Prepayment Notice
44
ARTICLE IX ASSIGNMENTS AND PARTICIPATIONS...................44
Section 9.01......................................Assignments
44
Section 9.02...................................Participations
45
ARTICLE X CERTAIN COVENANTS OF THE BORROWER................46
Section 10.01...........................Maintenance of Office
46
Section 10.02.......................................Existence
46
Section 10.03............General Maintenance of Business, etc
46
Section 10.04......................................Inspection
46
Section 10.05........................Compliance with Law, etc
47
Section 10.06.....................Payment of Taxes and Claims
47
Section 10.07.....................Limitations on Indebtedness
47
Section 10.08..........................Restricted Investments
47
Section 10.09..............................Nature of Business
47
Section 10.10....................................Independence
47
Section 10.11....................Other Agreements and Parties
49
Section 10.12..........................Investment Company Act
49
Section 10.13.........................Purchases of Auto Loans
49
Section 10.14...........................................Liens
50
ARTICLE XI CERTAIN COVENANTS OF MONACO......................50
Section 11.01.......................................Existence
50
Section 11.02........................Compliance with Law, etc
50
Section 11.03.....................Payment of Taxes and Claims
51
Section 11.04......................................Inspection
51
Section 11.05........................Consolidation and Merger
51
Section 11.06..............................Further Assurances
51
Section 11.07....................................Independence
51
Section 11.08....................Other Agreements and Parties
53
Section 11.09..........................Servicing Arrangements
53
Section 11.10...........Preservation of Quality of Auto Loans
54
ARTICLE XII INFORMATION TO BE FURNISHED TO LENDER............54
Section 12.01.....Information to Be Furnished by the Borrower
54
Section 12.02...........Information to Be Furnished by Monaco
54
ARTICLE XIII DEFAULTS.........................................55
Section 13.01....Events of Default; Acceleration of Advancess
55
Section 13.02................................Default Remedies
57
Section 13.03...............................Notice of Default
58
Section 13.04...........Annulment of Acceleration of Advances
58
ARTICLE XIV INDEMNIFICATION AND FUNDING LOSSES...............59
Section 14.01.................................Indemnification
59
Section 14.02Indemnification with respect to the Designated Auto Loans
61
Section 14.03...................................Funding Losse
62
ARTICLE XV MISCELLANEOUS.........................................63
Section 15.01.........................................Notices
63
Section 15.02........................................Survival
63
Section 15.03..........................Successors and Assigns
63
Section 15.04............................Amendment and Waiver
63
Section 15.05....................................Counterparts
64
Section 15.06.......................Reproduction of Documents
64
Section 15.07...................................Governing Law
64
Section 15.08...............Consent to Jurisdiction and Venue
65
Section 15.09.....................................No Petition
65
Section 15.10.................................Acts of Lender.
65
Section 15.11.................................Confidentiality
66
EXHIBITS
EXHIBIT A Form of Notes
EXHIBIT B Form of Borrowing Notice
EXHIBIT C Form of Security Agreement
EXHIBIT D Monaco Program Manual