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UAFC-2 CORPORATION,
as Borrower,
UNION ACCEPTANCE CORPORATION,
as Servicer,
the INVESTORS named herein,
VARIABLE FUNDING CAPITAL CORPORATION,
FIRST UNION SECURITIES, INC.,
as Deal Agent,
ASSET GUARANTY INSURANCE COMPANY,
as Insurer,
and
FIRST UNION NATIONAL BANK,
as Collateral Agent and Liquidity Agent
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$200,000,000
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LOAN AND SECURITY AGREEMENT
Dated as of August 1, 2000
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TABLE OF CONTENTS
Page
ARTICLE One
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions..................................................... 1
Section 1.02. Accounting Terms and Determinations.............................24
Section 1.03. Computation of Time Periods.....................................24
ARTICLE Two
PREFUNDINGS
Section 2.01. Prefunding; Procedures for Prefundings..........................25
Section 2.02. Withdrawals from the Prefunding Account.........................26
Section 2.03. Optional Changes in Facility Amount; Extension
of Commitment Termination Date........................26
Section 2.04. The Note........................................................27
Section 2.05. Optional Principal Repayments...................................27
Section 2.06. Interest Payments...............................................28
Section 2.07. Mandatory Payments and Prepayments..............................29
Section 2.08. Payments, Computations, Etc.....................................29
Section 2.09. Breakage Costs..................................................29
Section 2.10. Increased Costs; Capital Adequacy; Illegality...................30
Section 2.11. Taxes...........................................................31
ARTICLE Three
SECURITY
Section 3.01. Collateral......................................................33
Section 3.02. Release of Collateral; No Legal Title...........................33
Section 3.03. Protection of Security Interest; Deal Agent as
Attorney-in-Fact......................................33
Section 3.04. Payments on Receivables; Application of Payments................34
ARTICLE Four
ADMINISTRATION AND ACCOUNTS
Section 4.01. Servicer........................................................36
Section 4.02. Books and Records...............................................38
Section 4.03. Appointment to Act as Borrower's Agent..........................38
Section 4.04. Delivery of Certain Reports.....................................38
Section 4.05. Establishment of Accounts; Investment of Funds..................38
Section 4.06. Collections; Collection Account; Allocation of
Available Funds; Draws on Policy..............................39
Section 4.07. Prefunding Interest Reserve Account; Prefunding Interest
Reserve Deposits; Interest Reserve Advances;
Reimbursements................................................41
Section 4.08. Yield Supplement Account, Deposits; Withdrawals.................42
Section 4.09. Reserve Account; Releases.......................................43
ARTICLE Five
CONDITIONS OF CLOSING AND PREFUNDINGS
Section 5.01. Conditions to Closing...........................................44
Section 5.02. Conditions Precedent to Prefundings.............................46
Section 5.03. Conditions Precedent to Withdrawals from the Prefunding Account.47
ARTICLE Six
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of the Borrower..................48
ARTICLE Seven
GENERAL COVENANTS OF THE BORROWER
Section 7.01. Covenants of Borrower and UAC...................................53
Section 7.02. Hedging Agreement...............................................60
ARTICLE Eight
TERMINATION EVENTS
Section 8.01. Termination Events..............................................61
Section 8.02. Actions Upon Termination Date...................................63
Section 8.03. Exercise of Remedies............................................64
Section 8.04. Waiver of Certain Laws..........................................65
Section 8.05. Power of Attorney...............................................65
ARTICLE Nine
INDEMNIFICATION
Section 9.01. Indemnities by the Borrower.....................................66
ARTICLE Ten
THE DEAL AGENT, THE COLLATERAL AGENT AND THE LIQUIDITY AGENT
Section 10.01. Authorization and Action.......................................68
Section 10.02. Delegation of Duties...........................................68
Section 10.03. Exculpatory Provisions.........................................69
Section 10.04. Reliance.......................................................69
Section 10.05. Non-Reliance on Deal Agent, Liquidity Agent and Other Lenders..69
Section 10.06. Reimbursement and Indemnification..............................70
Section 10.07. Deal Agent, the Collateral Agent and Liquidity
Agent in their Individual Capacities..................70
Section 10.08. Successor Deal Agent, Collateral Agent or Liquidity Agent......70
ARTICLE Eleven
ASSIGNMENTS; PARTICIPATIONS
Section 11.01. Assignments and Participations.................................72
ARTICLE Twelve
MISCELLANEOUS
Section 12.01. Amendments and Waivers.........................................75
Section 12.02. Notices, Etc...................................................75
Section 12.03. No Waiver, Rights and Remedies.................................75
Section 12.04. Binding Effect.................................................75
Section 12.05. Term of this Agreement.........................................75
Section 12.06. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF OBJECTION TO VENUE..........................76
Section 12.07. WAIVER OF JURY TRIAL...........................................76
Section 12.08. Costs, Expenses and Taxes......................................76
Section 12.09. No Proceedings.................................................77
Section 12.10. Recourse Against Certain Parties...............................77
Section 12.11. Confidentiality................................................77
Section 12.12. Execution in Counterparts; Severability; Integration...........78
Section 12.13. No Recourse....................................................78
EXHIBITS
Exhibit A - Forms of Prefunding Request...................................A-1
Exhibit B - Form of Note..................................................B-1
Exhibit C - Form of Assignment and Acceptance.............................C-1
Exhibit D - Credit and Collection Policy..................................D-1
Exhibit E - Form of Hedging Agreement.....................................E-1
Exhibit F - Form of Policy................................................F-1
Exhibit G - List of Lock-Box Banks and Lock-Box Accounts..................G-1
Exhibit H - List of Actions and Suits.....................................H-1
Exhibit I - Schedule of Location of Records...............................I-1
Exhibit J - Form of Withdrawal Notice.....................................J-1
Exhibit K - Form of Purchase Agreement....................................K-1
Exhibit L - Form of Repurchase Agreement..................................L-1
Exhibit M - Form of Settlement Statement..................................M-1
Exhibit N - Form of Warehouse Transfer Agreement..........................N-1
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement, dated as of July 1, 2000, is among
UAFC-2 Corporation, a Delaware corporation, as borrower (the "Borrower"), Union
Acceptance Corporation, an Indiana corporation, as servicer (the "Servicer"),
the investors named herein (the "Investors"), Variable Funding Capital
Corporation ("VFCC"), a Delaware corporation, First Union Securities, Inc., a
Delaware corporation, as deal agent (in such capacity, the "Deal Agent") for the
Secured Parties (as defined herein), Asset Guaranty Insurance Company, a New
York stock insurance company, as insurer (the "Insurer"), and First Union
National Bank, a national banking association, as collateral agent (in such
capacity, the "Collateral Agent") and as liquidity agent (in such capacity, the
"Liquidity Agent").
W I T N E S S E T H:
WHEREAS, VFCC has agreed to advance funds to the Borrower upon the
terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE One
DEFINITIONS; CONSTRUCTION
Section 1.01. Definitions. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Servicing Agreement.
Whenever used herein, unless the context otherwise requires, the following words
and phrases shall have the following meanings:
"Accounts" mean the Collection Account, the Prefunding Account, the
Prefunding Interest Reserve Account, the Reserve Account and the Yield
Supplement Account.
"Additional Amount" has the meaning set forth in Section 2.11(a).
"Adjusted LIBOR Rate" means, on any day, an interest rate per annum
equal to the sum of (i) the quotient, expressed as a percentage and rounded
upwards, if necessary, to the nearest 1/100 of 1%, obtained by dividing (a) the
LIBOR Rate by (b) 100% minus the Eurodollar Reserve Percentage and (ii) the
LIBOR Margin.
"Adjusted Prefunding Account Amount" means an amount equal to the
quotient of (i) the Prefunding Account Amount and (ii) 100% less the quotient of
(a) the Required Reserve Account Percentage and (b) the Noteholder's Percentage.
"Adverse Claim" means a lien, security interest, charge or encumbrance
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person.
"Affected Party" has the meaning set forth in Section 2.10(a).
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Outstanding Balance" means the sum of the Outstanding
Balances of all Receivables.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Carrying Costs at such time, (ii) an amount
equal to the Lender's existing obligations which comprise Carrying Costs
thereafter and (iii) all other amounts due and owing (exclusive of Net
Investment but including Breakage Costs) by the Borrower to VFCC or the
Investors hereunder and under the other Transaction Documents at such time.
"Agreement" means this Loan and Security Agreement, as amended,
restated or supplemented from time to time.
"Alternative Rate" means, with respect to the Net Investment and any
day, an interest rate per annum equal to the Adjusted LIBOR Rate or the Base
Rate, as the Deal Agent shall select in accordance with this Agreement;
provided, however, that the "Alternative Rate" shall be the Base Rate if at the
time such rate is selected the relevant Lender has notified the Deal Agent that
a Eurodollar Disruption Event has occurred.
"Amortization Period" means the period beginning on the Termination
Date and ending on the Facility Termination Date.
"APR" means annualized percentage rate.
"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by an Investor and an Eligible Assignee, and accepted by
the Deal Agent, in substantially the form of Exhibit C hereto.
"Available Funds" means, with respect to each Remittance Date and the
related Settlement Period, the sum of (i) all Collections (other than Principal
Receipts) received during such Settlement Period along with all earnings on the
Collection Account, (ii) all earnings during the related Settlement Period on
amounts on deposit in the Prefunding Account to the extent not required to be
distributed to the Servicer in reimbursement for previously advanced Interest
Reserve Advances, (iii) all amounts deposited in the Prefunding Interest Reserve
Account with respect to the related Settlement Period (together with any
earnings thereon during such Settlement Period), (iv) any Interest Reserve
Advance made by the Servicer on such Remittance Date pursuant to Section 4.07
and (v) any payments to the Borrower under a Hedging Agreement made during such
Settlement Period exclusive of amounts related to hedge payments received
pursuant to a Hedging Agreement in conjunction with Warehouse Transfers and
Securitizations.
"Bankruptcy Code" means the Federal Bankruptcy Code, as amended (Title
11 of the United States Code).
"Base Rate" means, a rate per annum equal to the greater of (i) the
prime rate of interest announced by the Liquidity Agent from time to time,
changing when and as said prime rate changes (such rate not necessarily being
the lowest or best rate charged by the Liquidity Agent) and (ii) the Federal
Funds Rate plus 1.0%.
"Borrower" has the meaning set forth in the Preamble.
"Borrower's Account" means the bank account of the Borrower, as
notified to the Deal Agent from time to time in writing by the Borrower, into
which all amounts withdrawn from the Prefunding Account pursuant to Section
2.02(a) and all other amounts distributable to the Borrower shall be deposited,
which account, as of the Closing Date, is in the name UAFC-2, Account Number
▇▇-▇▇▇▇▇▇▇ with an ABA Routing No. of ▇▇▇▇▇▇▇▇▇.
"Breakage Costs" has the meaning set forth in Section 2.09.
"Business Day" means any day other than a Saturday or a Sunday on which
(i) commercial banking institutions are not required or authorized to be closed
in New York, New York, Bonita Springs, Florida, Indianapolis, Indiana or
Charlotte, North Carolina and (ii) if the term "Business Day" is used in
connection with the Adjusted LIBOR Rate, such day must also be a LIBOR Business
Day.
"Capped Costs" means, with respect to any Remittance Date, the lesser
of (i) sum of the Increased Costs and the Additional Amounts and (ii) the
product of (A) 1/12, (B) 1.00% and (C) the average daily Net Investment during
the related Settlement Period.
"Carrying Costs" means for any Settlement Period the sum of:
(i) the sum of the following costs for such Settlement Period
determined on an accrual basis in accordance with GAAP consistently
applied:
(a) Interest with respect to the Net Investment;
(b) reimbursement owed to any successor Servicer
for any unreimbursed Interest Reserve
Advances made by such successor Servicer;
(c) any past due amounts not paid in clauses (i)
and (ii) with respect to prior Settlement
Periods; and
(d) the Increased Costs and Additional Amounts;
and
(ii) the Program Fee and the Facility Fee accrued from the
first day through the last day of such Settlement Period whether or not
such amount is payable during such Settlement Period.
"Closing Date" means August 8, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all right, title and interest of the Borrower
whether now existing or hereafter acquired, in, to and under any and all of the
following:
(i) the Receivables and all collections due (including any
payments made under any guarantee or similar credit enhancement with
respect to the Contracts), to become due or received by any Person in
payment of any of the foregoing;
(ii) each security interest in the Financed Vehicles securing
the Receivables, including all proceeds from any sale or other
disposition of such Financed Vehicles;
(iii) the Accounts and all funds held in such accounts;
(iv) all rights of the Borrower in and to all Hedging
Agreements, Hedging Transactions and all amounts payable by all Hedging
Counterparties to the Borrower under or in connection with such Hedging
Agreements and Hedging Transactions;
(v) all Contract Documents and all interest of the Borrower in
the documents included in the Contract Documents, including, without
limitation, rights of recourse of the Borrower against the Seller
and/or any Dealer under the Contract Documents or any Dealer Agreement;
(vi) all rights of the Borrower in all Insurance Policies,
whether now existing or hereafter acquired, and all proceeds thereof;
(vii) all security interests, Liens, guaranties and other
encumbrances in favor of or assigned or transferred to the Borrower in
and to the Contracts and Financed Vehicles;
(viii) all deposit accounts, monies, deposits, funds, accounts
and instruments relating to the foregoing;
(ix) the Transaction Documents and any Warehouse Transfer
Agreement;
(x) the Policy; and
(xi) all income and proceeds of the foregoing.
"Collateral Agent" has the meaning set forth in the Preamble.
"Collection Account" has the meaning set forth in Section 4.05.
"Collections" means, with respect to the related Settlement Period and
the Receivables, all cash collections and other cash proceeds of the Receivables
during such Settlement Period, including, without limitation, all Principal
Receipts, all Finance Charges, any amount received by the Borrower pursuant to
Section 7.01 of the Sale and Purchase Agreement II and any refunded portion of
extended warranty protection plan costs or of insurance costs (for example,
physical damage, credit life or disability) included in the original amount
financed under the Receivables and cash proceeds of Related Security with
respect to the Receivable; provided that amounts received in respect of any
Receivable which constitutes, in accordance with the Credit and Collection
Policy, a payment of a late payment charge, an insufficient funds charge or a
prepayment charge will not be considered a Collection and shall be retained by
the Servicer and not deposited into the Collection Account.
"Commercial Paper" means any short-term promissory notes issued by VFCC
with respect to financing the Net Investment.
"Commitment" means, with respect to any Investor, the commitment of
such Investor to fund the Net Investment in an aggregate amount not to exceed
the amount set forth opposite such Investor's name on the signature pages of
this Agreement, as such amount may be modified in accordance with the terms
hereof.
"Commitment Termination Date" means August 7, 2001 or such later date
to which the Commitment Termination Date may be extended in accordance with
Section 2.03(b).
"Contract" means any retail installment sales contract or installment
loan and security agreement executed by an Obligor that has been originated or
acquired by the Seller, UAC or UAC Finance in the ordinary course of business,
is secured by the related Financed Vehicle and in which the Borrower acquires
from the Seller or a Warehouse Transferor all right, title and interest of the
Seller or such Warehouse Transferor pursuant to the Sale and Purchase Agreement
II or a Warehouse Transfer Agreement, as applicable.
"Contract Documents" means, with respect to each Contract, (i) the
Contract; (ii) the Title Documents, together with evidence of perfection of the
security interest in the related Financed Vehicle granted by such Contract, as
determined by the Servicer to be permitted or required to perfect such security
interest under the laws of the applicable jurisdiction; (iii) the related
assignments; and (iv) all other papers and computerized records customarily kept
by the Servicer in servicing contracts and loans comparable to the Contracts.
"CP Rate" means, with respect to any Settlement Period, the weighted
average of the per annum rates paid or payable by VFCC from time to time as
interest on or otherwise (by means of interest rate ▇▇▇▇▇▇ or otherwise) in
respect of the promissory notes issued by VFCC that are allocated, in whole or
in part, by the Deal Agent (on behalf of VFCC) to fund or maintain its portion
of the Net Investment during such Settlement Period, as determined by the Deal
Agent (on behalf of VFCC) and reported to the Borrower, which rates shall
include the commissions of placement agents and dealers in respect of such
promissory notes, to the extent such commissions are allocated, in whole or in
part, to such promissory notes by the Deal Agent (on behalf of VFCC); provided,
however, that if any component of such rate is a discount rate, for purposes of
this definition, the Deal Agent shall for such component use the rate resulting
from converting such discount rate to an interest-bearing equivalent rate per
annum.
"Credit and Collection Policy" means the credit and collection policy
of UAC as in effect on the date hereof relating to the Contracts and related
Financed Vehicles, set forth in Exhibit D, as the same may be amended or
modified from time to time in accordance with Section 7.01(n).
"Daily Interest Amount" means, for any day, the product of (i) the Net
Investment and (ii) the Interest Rate divided by 360.
"Deal Agent" has the meaning set forth in the Preamble.
"Deal Agent's Account" means an account specified by the Deal Agent or,
so long as VFCC is the sole Lender hereunder, in the name of VFCC, at Bankers
Trust (account number 01 41 96 47 and ABA Routing No. 021 001 033).
"Dealer" means a motor vehicle dealer that is a party to a Dealer
Agreement.
"Dealer Agreement" means an agreement between a Dealer and UAC or UAC
Finance, which sets forth the respective rights and obligations of the parties
with respect to the origination of Contracts by the Dealer.
"Defaulted Receivable" means, for any Settlement Period, a Receivable:
(i) as to which any payment, or part thereof (in excess of $10.00), remains
unpaid for 120 days or more as of the last day of such Settlement Period, (ii)
which has been or should have been identified by the Servicer as uncollectible
in accordance with the Servicer's customary practices on or before the last day
of such Settlement Period or (iii) as to which the related Financed Vehicle has
been repossessed from the Obligor during such Settlement Period.
"Deferral" has the meaning set forth in the Credit and Collection
Policy.
"Delinquent Receivable" means a Receivable: (i) as to which any
payment, or part thereof (provided that such amount is in excess of $10.00),
remains unpaid for more than thirty (30) days from the due date for such payment
and (ii) which is not a Defaulted Receivable.
"Determination Date" means, with respect to each Remittance Date, the
second Business Day preceding such Remittance Date.
"Derivatives" means (i) any exchange-traded or over-the-counter
forward, future, option, swap, cap, collar, floor or foreign exchange contract
or any combination of the foregoing, whether for physical delivery or cash
settlement, relating to any interest rate, interest rate index, currency,
currency exchange rate, currency exchange rate index, debt instrument, debt
price, debt index, depository instrument, depository price, depository index,
equity instrument, equity price, equity index, commodity, commodity price or
commodity index, (ii) any similar transaction, contract, instrument, undertaking
or security or (iii) any transaction, contract, instrument, undertaking or
security containing any of the foregoing.
"Dollars" or "$" means the lawful currency of the United States.
"Duff & ▇▇▇▇▇▇" means Duff & ▇▇▇▇▇▇ Credit Rating Co.
"Eligible Assignee" means a Person either (i) whose short-term rating
is at least "A-1" from Standard & Poor's and "P-1" from Moody's, or whose
obligations under this Agreement are guaranteed by a Person whose short-term
rating is at least "A-1" from Standard & Poor's and "P-1" from Moody's or (ii)
who is satisfactory to VFCC, the Deal Agent, Standard & Poor's and Moody's,
subject, in the case of any Person chosen pursuant to clause (ii), to the prior
written consent of the Borrower.
"Eligible Institution" means the Collateral Agent or any other
depository institution organized under the laws of the United States or any
state thereof or the District of Columbia, the deposits in which are insured by
the FDIC and whose short-term unsecured debt at all times shall satisfy the
Short-Term Rating Requirement.
"Eligible Investment" means (i) negotiable instruments or securities
represented by instruments in bearer or registered or in book-entry form which
evidence (A) obligations fully guaranteed by the United States or (B) time
deposits in, or bankers acceptances issued by, any depository institution or
trust company incorporated under the laws of the United States or any state
thereof (or any domestic branch or agency of any foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however, that at the time of the investment
or contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, or long-term unsecured debt obligations (other than
any such obligation whose rating is based on collateral or on the credit of a
Person other than such institution or trust company) of such depository
institution or trust company, in the case of (1) certificates of deposit or
short-term deposits, shall have a rating not lower than one of the two highest
investment categories granted by Moody's and Standard & Poor's or Duff & ▇▇▇▇▇▇,
if such investment is rated by Duff & ▇▇▇▇▇▇, or Fitch, if such investment is
rated by Fitch; (2) certificates of deposit, at the time of the investment or
contractual commitment to invest therein, shall satisfy the Short-Term Rating
Requirement; or (3) investments in money market funds, shall be rated in the
highest investment category, (ii) demand deposits in the name of the Secured
Parties or the Deal Agent on behalf of the Secured Parties in any depository
institution or trust company referred to in clause (i) (B) above, (iii)
commercial paper (having original or remaining maturities of no more than 30
days) which, at the time of the investment or contractual commitment to invest
therein, the Short-Term Rating Requirement; (iv) Eurodollar time deposits which
satisfy the Short-Term Rating Requirement; and (v) repurchase agreements
involving any of the Eligible Investments described in clauses (i)(A), (i)(B)
and (iv) hereof so long as the other part to the repurchase agreement satisfies
at the time of the investment therein the Short-Term Rating Requirement.
"Eligible Receivable" means a Receivable:
(i) that (a) has been either originated by or through a
factory authorized Dealer, a nationally recognized rental car outlet or a
nationally recognized used car superstore, in each case located in the United
States and which, together with the Contract related thereto, has been validly
assigned by such Dealer or other entity to UAC or UAC Finance, has been fully
and properly executed by the parties thereto, and has been advanced directly to
or for the benefit of the Obligor for the purchase of the related Financed
Vehicle, (b) has been sold by UAC to the Seller, or, if applicable, by UAC
Finance to UAC then to the Seller, and by the Seller to the Borrower pursuant to
the Sale and Purchase Agreement II or has been acquired pursuant to a Warehouse
Transfer Agreement, and to which the Borrower has good title thereto, free and
clear of all Adverse Claims and (c) the Contract related to which shall contain
customary and enforceable provisions such that the rights and remedies of the
holder thereof shall be adequate for the realization against the collateral of
the benefits of the security provided thereby;
(ii) the Obligor of which is recorded in the Servicer's
records as having a United States billing address, is a natural person and is
not a government or a governmental subdivision or agency;
(iii) which is not a Defaulted Receivable at the time of the
initial creation of an interest of the Deal Agent therein;
(iv) which is not a Delinquent Receivable at the time of the
initial creation of an interest of the Deal Agent therein; provided, however,
that if a Receivable is a Delinquent Receivable at the time of initial creation
of an interest of the Deal Agent and at any time subsequently is not a
Delinquent Receivable, such Receivable may become an Eligible Receivable from
such time going forward subject to other eligibility requirements described
herein;
(v) for which there have been no modifications to the related
Contract other than pursuant to a Deferral or as otherwise required by law;
(vi) which, according to the related Contract, shall provide
for level monthly payments (provided that the payment in the first or last month
in the life of the Receivable may be minimally different from such level
payment) that fully amortize the amount financed over the original term;
(vii) for which the related Contract has provided for the
calculation of interest payable thereunder under either the "simple interest" or
"Rule of 78's" or the "sum of the periodic time balances" method;
(viii) for which the related Contract provides for no more
than 84 monthly payments;
(ix) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act;
(x) which is "chattel paper" within the meaning of Article 9
of the Relevant UCC, and which is secured by a first priority perfected lien on
the related Financed Vehicle, free and clear of any Adverse Claim or for which
all necessary steps to result in such a first priority perfected lien shall have
been taken;
(xi) which is denominated and payable only in Dollars in the
United States;
(xii) which arises under a Contract that, together with the
Receivable, is in full force and effect and constitutes the legal, valid and
binding obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to any offset, counterclaim or
other defense at such time;
(xiii) which, together with the related Contract, does not
contravene in any material respect any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, Regulations B and
Z of the Federal Reserve Board, various state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and other consumer credit
laws and equal credit opportunity and disclosure laws) and with respect to which
no part of such Contract is in violation of any such law, rule or regulation in
any material respect;
(xiv) with respect to any Receivables originated after the
date hereof, is a Tier I Receivable, and, regardless of the date of origination
of such Receivables, was not originated as a Non-Prime Receivable;
(xv) which (a) satisfies all applicable requirements of the
Credit and Collection Policy, (b) arises under a Contract which does not require
the related Obligor to consent to the transfer of the rights and duties of the
Borrower under such Contract, and which does not contain a confidentiality
provision that purports to restrict the ability of the Deal Agent to exercise
its rights under the Transaction Documents and any Warehouse Transfer Agreement,
including, without limitation, its right to review the Contract, (c) arises
under a Contract with respect to which UAC, UAC Finance, the Seller and the
Borrower have each performed all obligations required to be performed by them
thereunder, and delivery of the Financed Vehicle to the related Obligor has
occurred and (d) complies with such other criteria and requirements as VFCC may
from time to time reasonably specify to the Borrower following 60 days' notice;
(xvi) the Obligor of which has been directed to make all
payments to a specified account of the Servicer; and
(xvii) with respect to any Undocumented Receivable, for which
the Undocumented Receivable Date has not passed.
"Entitlement Orders" has the meaning set forth in Section 8-102 of the
1994 Official Text of the Uniform Commercial Code.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Borrower, (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with the Borrower or (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as the Borrower, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Disruption Event" means with respect to the portion of the
Net Investment as to which Interest accrues or is to accrue at a rate based upon
the Adjusted LIBOR Rate, any of the following: (i) a determination by a Lender
that it would be contrary to law or to the directive of any central bank or
other governmental authority (whether or not having the force of law) to obtain
United States Dollars in the London interbank market to make, fund or maintain
such portion of the Net Investment; (ii) the inability of a Lender to obtain
timely information for purposes of determining the Adjusted LIBOR Rate; (iii) a
determination by a Lender that the rate at which deposits of United States
Dollars are being offered to such Lender in the London interbank market does not
accurately reflect the cost to such Lender of making, funding or maintaining
such portion of the Net Investment; or (iv) the inability of a Lender to obtain
United States Dollars in the London interbank market to make, fund or maintain
such portion of the Net Investment.
"Eurodollar Reserve Percentage" means, on any day, the applicable
reserve percentage (expressed as a decimal) prescribed by the Federal Reserve
Board for determining reserve requirements for "Eurocurrency Liabilities"
pursuant to Regulation D or any other applicable regulation of the Federal
Reserve Board that prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.
"Excess Carry Costs and Aggregate Unpaids" means an amount equal to the
excess of the sum of (i) all Carrying Costs accrued through but not yet paid
through the date of a prepayment made pursuant to Section 2.05 and (ii) all
Aggregate Unpaids payable under this Agreement to any party through such date,
including any fees or other amounts payable pursuant to Section 9.01, over the
amount on deposit in the Collection Account exclusive of Principal Receipts.
"Excess Delinquent Receivables Balance" means an amount, calculated on
the day a Take-Out occurs and for each day until the next Take-Out occurs, equal
to the excess, if any, of (i) the Outstanding Balance of all Delinquent
Receivables which are Eligible Receivables at any time of determination over
(ii) the product of 2.5% and the Net Receivables Balance (calculated without
giving effect to clause (iii) of the definition thereof) at any time of
determination; provided, that if the Excess Delinquent Receivables Balance
shall, at any time since the most recent Take-Out, be less than or equal to
zero, the Excess Delinquent Receivables Balance shall be deemed to be zero from
such time until the next Take-Out shall occur.
"Facility Amount" means (i) prior to the Termination Date, $200,000,000
and (ii) on and after the Termination Date, $0.00.
"Facility Fee" means, for any Settlement Period, a fee payable by the
Borrower on the related Remittance Date in an amount equal to the product of (i)
the Facility Fee Rate, (ii) the Facility Amount as of the first day of such
Settlement Period and (iii) a fraction the numerator of which is equal to the
actual number of days comprising such Settlement Period and the denominator of
which is equal to 360.
"Facility Fee Cap" means the product of (i) 0.125%, (ii) the average
daily balance of the Net Investment during the related Settlement Period and
(iii) a fraction the numerator of which is equal to the actual number of days
comprising such Settlement Period and the denominator of which is equal to 360.
"Facility Fee Rate" has the meaning set forth in the Fee Letter.
"Facility Termination Date" means the date following the Termination
Date on which the Aggregate Unpaids, amounts owed to the Insurer, and the Net
Investment have been indefeasibly paid in full.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal for
each day during such period to the weighted average of the federal funds rates
as quoted by First Union and confirmed in Federal Reserve Board Statistical
Release H.15(519) or any successor or substitute publication selected by First
Union (or, if such day is not a Business Day, for the preceding Business Day),
or, if for any reason such rate is not available on any day, the rate
determined, in the sole opinion of First Union, to be the rate at which federal
funds are being offered for sale in the national federal funds market at 9:00
a.m. (Charlotte, North Carolina time) on such day.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, and its successors.
"Fee Letter" means the letter, dated as of the Closing Date, among the
Borrower, the Deal Agent and First Union setting forth, among other things, the
Facility Fee Rate, the Program Fee Rate, the Structuring Fee and the LIBOR
Margin, as amended, modified, restated or replaced from time to time.
"Final Scheduled Remittance Date" means the Remittance Date occurring
96 months following the Commitment Termination Date.
"Finance Charges" means, with respect to a Contract, any finance,
interest or similar charges owing by an Obligor or another Person pursuant to
such Contract.
"Financed Vehicle" means, with respect to any Contract, any new or used
automobile, van or light-duty truck, together with all accessions thereto,
securing the related Obligor's indebtedness thereunder.
"First Union" means First Union National Bank, a national banking
association, and its successors or assigns.
"Fitch" means Fitch IBCA, Inc.
"FSI" means First Union Securities, Inc., a Delaware corporation, and
its successors.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States.
"Governmental Authority" means, with respect to any Person, any nation
or government, any state or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person.
"Hedging Agreement" means each agreement between the Borrower and a
Hedging Counterparty that complies with the requirements of Section 7.02 and
that is in the form of Exhibit E hereto. The form of Hedging Agreement in
Exhibit E hereto and such form of agreement shall not be modified without the
written consent of the Deal Agent and the Insurer if such modification would
adversely affect in a material manner the rights or benefits of any Secured
Party under this Agreement.
"Hedging Breakage Costs" means, with respect to any Hedging
Transaction, any amount payable by the Borrower to the related Hedging
Counterparty for the early termination of such Hedging Transaction or any
portion thereof.
"Hedging Collateral" means all of the rights of the Borrower, whether
now existing or hereafter acquired, in and to, all Hedging Agreements, Hedging
Transactions and all present and future amounts payable by all Hedging
Counterparties to the Borrower under or in connection with such Hedging
Agreements and Hedging Transactions with such Hedging Counterparties.
"Hedging Counterparty" means any entity which (A) (i) on the date of
entering into any Hedging Transaction is an interest rate swap dealer whose debt
obligations satisfy the Short-Term Rating Requirement and the Long-Term Rating
Requirement, and (ii) in a Hedging Agreement (a) consents to the assignment of
the Borrower's rights under the Hedging Agreement to the Deal Agent on behalf of
the Secured Parties pursuant to Section 7.02(a) and (b) agrees that in the event
that its debt obligations no longer satisfy the Short-Term Rating Requirement or
the Long-Term Rating Requirement, it shall transfer its rights and obligations
under each Hedging Transaction to another entity that meets the requirements of
this definition and has entered into a Hedging Agreement with the Borrower on or
prior to the date of such transfer or (B) is otherwise acceptable to the Insurer
and the Deal Agent.
"Hedging Transaction" means each transaction between the Borrower and a
Hedging Counterparty which is entered into pursuant to Section 7.02 and is
governed by a Hedging Agreement.
"Increased Costs" means amounts required to be paid to an Affected
Party pursuant to Section 2.10.
"Indebtedness" means, with respect to any Person and any day, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current liabilities
incurred in the ordinary course of business and payable in accordance with
customary trade practices) or which is evidenced by a note, bond, debenture or
similar instrument, (ii) all obligations of such Person under capital leases,
(iii) all obligations of such Person in respect of acceptances issued or created
for the account of such Person, (iv) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof and (v) all indebtedness,
obligations or liabilities of that Person in respect of Derivatives.
"Indemnified Amounts" has the meaning set forth in Section 9.01.
"Indemnified Parties" has the meaning set forth in Section 9.01.
"Insolvency Proceeding" means, with respect to any Person, any
bankruptcy, insolvency, readjustment of debt, reorganization, marshaling of
assets and liabilities or similar proceeding of or relating to such Person.
"Insurance Agreement" means the insurance and indemnity agreement dated
August 4, 2000 among the Servicer, the Borrower, the Insurer and accepted by the
Deal Agent.
"Insurance Policy" means, with respect to a Financed Vehicle, the
policies of comprehensive and collision insurance policy or credit life,
disability or other applicable policies covering such Financed Vehicles or the
related Obligors.
"Insurance Proceeds" means, with respect to any Financed Vehicle,
Receivable or Obligor, recoveries paid to the Servicer or the Borrower under an
Insurance Policy and any rights thereunder or proceeds therefrom (including any
self-insurance).
"Insurer" means Asset Guaranty Insurance Company, a member of the
Enhance Financial Services Group, and its successors.
"Insurer Default" means the occurrence and continuance of any of the
following:
(i) the Insurer shall fail to pay when, as and in the amounts
required, any amount payable under the Policy;
(ii) the Superintendent of Insurance of the State of New York
(or any Person succeeding to the duties of such Superintendent) (for
the purpose of this paragraph (ii), the "Superintendent") shall apply
for an order (A) pursuant to Section 7402 of the New York Insurance Law
(or any successor provision thereto), directing him to rehabilitate the
Insurer, (B) pursuant to Section 7404 of the New York Insurance Law (or
any successor provision thereto), directing him to liquidate the
business of the Insurer or (C) pursuant to Section 7416 of the New York
Insurance Law (or any successor provision thereto), dissolving the
corporate existence of the Insurer and such application shall not be
dismissed or withdrawn during a period of 60 consecutive days or a
court of competent jurisdiction enters an order granting the relief
sought;
(iii) the Superintendent shall determine that the Insurer is
insolvent within the meaning of Section 1309 of the New York Insurance
Law or any successor section; or
(iv) the Insurer shall commence a voluntary case or other
proceeding seeking rehabilitation, liquidation, reorganization or other
relief with respect to itself or its debts under any insolvency or
similar law.
"Interest" means, with respect to a Settlement Period, the sum of the
Daily Interest Amounts for each day in such Settlement Period; provided,
however, that (i) no provision of this Agreement shall require or permit the
collection of Interest in excess of the maximum permitted by applicable law and
(ii) Interest shall not be considered paid by any distribution if at any time
such distribution is rescinded or must otherwise be returned for any reason.
"Interest Rate" means, with respect to any day, to the extent the Net
Investment (i) was funded through the issuance of Commercial Paper, a rate equal
to the CP Rate, and (ii) was not funded through the issuance of Commercial
Paper, a rate equal to the Alternative Rate provided, however, that in no event
shall the Interest Rate exceed 25% or the Maximum Lawful Rate.
"Interest Reserve Advance" means, with respect to any Remittance Date,
the amount, if any (which shall not be less than zero), equal to (i) the product
of (a) the daily weighted average amount on deposit in the Prefunding Account
during the related Settlement Period, (b) the Targeted Interest Rate and (c) a
fraction the numerator of which is the number of days in such Settlement Period
and the denominator of which is 360 minus (ii) the amount earned during such
Settlement Period on amounts on deposit in the Prefunding Account.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investor" means each Person named herein who commits to fund or
purchase pursuant to the Liquidity Agreement all or a portion of the Net
Investment and each Person that becomes an Investor hereunder pursuant to an
Assignment and Acceptance.
"Investor Register" has the meaning set forth in Section 11.01(c).
"Issuer" means VFCC and any other Lender whose principal business
consists primarily of issuing Commercial Paper or other securities to fund its
acquisition and maintenance of receivables, accounts, instruments, chattel
paper, general intangibles and other similar collateral.
"Lenders" means VFCC and the Investors.
"LIBOR Business Day" means any day of the year other than a Saturday,
Sunday or any day on which banking institutions in New York, New ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, North Carolina or London, England generally are required or
authorized to be closed.
"LIBOR Margin" has the meaning set forth in the Fee Letter.
"LIBOR Rate" means for any day or Settlement Period, an interest rate
per annum equal to:
(i) the posted rate for 30-day deposits in United States
Dollars appearing on Telerate page 3750 as of 11:00 a.m. (London,
England time) on the first day of such Settlement Period or, if such
day is not a LIBOR Business Day, the posted rate that appeared on the
immediately preceding LIBOR Business Day; or
(ii) if no such rate appears on Telerate page 3750 at such
time and day, then the LIBOR Rate shall be determined by First Union at
its principal office in Charlotte, North Carolina as its rate (each
such determination, absent manifest error, to be conclusive and binding
on all parties hereto and their assignees) at which 30-day deposits in
United States Dollars are being, have been, or would be offered or
quoted by First Union to major banks in the applicable interbank market
for Eurodollar deposits at or about 11:00 a.m. (Charlotte, North
Carolina time) on such day.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to any property by operation of law.
"Liquidity Agent" means First Union in its capacity as Liquidity Agent
pursuant to the Liquidity Agreement, and its successors and assigns.
"Liquidity Agreement" means the liquidity purchase agreement, dated as
of the Closing Date, among VFCC, the Deal Agent, the Liquidity Agent, First
Union, as an investor, and each other liquidity bank that is a party thereto, as
amended or supplemented from time to time.
"Liquidation Proceeds" means gross amounts received by the Servicer in
connection with the attempted realization of the full amounts due or to become
due for any Receivable which has become a Defaulted Receivable, whether from the
sale or other disposition of the related Financed Vehicle, the proceeds of
repossession or any collection effort, the proceeds of recourse or similar
payments payable under the related Contract, receipt of Insurance Proceeds or
otherwise, net of any expenses reasonably incurred in such sale, repossession,
collection effort recourse or other disposition.
"Lock-Box Accounts" means an account or accounts maintained by the
Servicer at a Lock-Box Bank for the purpose of receiving Collections from
Receivables.
"Lock-Box Banks" means each of the banks set forth in Exhibit G hereto
and such banks as may be added thereto or deleted therefrom pursuant to Section
4.06(a).
"Long-Term Rating Requirement" means a long-term unsecured debt rating
of not less than "A" by Standard & Poor's and not less than "A-2" by Moody's.
"Maximum Lawful Rate" means the highest rate of interest permissible
under applicable law.
"Minimum Required APR" means, as of any date of determination, the
greater of (i) the money market yield of the rate quoted on a discount basis for
commercial paper having a 30 day maturity, as made available and subsequently
published by the Board of Governors of the Federal Reserve System in H.15(519)
under the heading "commercial paper" plus 1.425% per annum and (ii) the current
yield to maturity of the United States Treasury Security having a maturity of
two years (or if there is more than one such security, the average of the yields
to maturity thereof) plus 1.425% per annum.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Borrower or any ERISA
Affiliate on behalf of its employees.
"Negative Carry" means, with respect to any Prefunding Date, a
percentage equal to (i) for the amounts in the Prefunding Account deposited by
VFCC, (a) the money market yield of the rate quoted on a discount basis for
commercial paper having a 30 day maturity, as made available and subsequently
published by the Board of Governors of the Federal Reserve System in H.15(519)
under the heading "commercial paper," plus (b) 1.425%, minus (c) the Targeted
Interest Rate and (ii) for the amounts in the Prefunding Account funded by the
Investors, (a) the Adjusted LIBOR Rate, (b) plus 1.425%, minus (c) the Targeted
Interest Rate.
"Net Asset Test" means a test that is satisfied if the product of the
Net Receivables Balance and the Noteholder's Percentage is more than or equal to
the Net Investment less the Adjusted Prefunding Account Amount.
"Net Investment" means the sum of the cumulative amount of Prefunding
Deposits made since the Closing Date minus the sum of:
(i) the aggregate amount released from the Prefunding Account
and applied to reduce the Net Investment;
(ii) the aggregate amount released from the Prefunding
Interest Reserve Account and applied to reduce the Net Investment;
(iii) the aggregate amount of Principal Receipts remitted to
the Deal Agent to reduce the Net Investment pursuant to Section
4.06(d);
(iv) amounts distributed to the Deal Agent pursuant to Section
4.06(c) to bring the Net Asset Test into compliance;
(v) draws on the Policy distributed and applied in reduction
of the Net Investment;
(vi) miscellaneous funds received and applied to reduce the
Net Investment pursuant to the Transaction Documents and any Warehouse
Transfer Agreement; provided that the Net Investment shall be restored
in the amount of any Collections so received and applied if at any time
the distribution of such Collections is rescinded or must otherwise be
returned for any reason; provided further, that as to the Insurer,
draws made under the Policy will not reduce the principal amount due
under the Note.
"Net Receivables Balance" means at any time the sum of the Outstanding
Balances of the Eligible Receivables at such time reduced by the sum of (i) the
amount by which the Outstanding Balances of all Undocumented Receivables exceeds
the lesser of (a) 20% of the Outstanding Balances of all Eligible Receivables
and (b) $15,000,000, (ii) the Outstanding Balances of all Eligible Receivables
which are Defaulted Receivables and (iii) the Excess Delinquent Receivables
Balance.
"Net Yield" means, as calculated on each Determination Date for the
related Settlement Period, the product, expressed as a percentage, of (i) 12 and
(ii) a fraction, the numerator of which is (a) Available Funds less the sum of
(1) the aggregate amount of Carrying Costs (exclusive of Increased Costs and
Additional Amounts in excess of Capped Costs) accrued during such Settlement
Period and (2) the aggregate Outstanding Balance of all Receivables which became
Defaulted Receivables during such Settlement Period net of the aggregate amount
of Liquidation Proceeds received during such Settlement Period, and the
denominator of which is (b) the average daily Net Investment for such Settlement
Period.
"Non-Prime Receivable" means (i) receivables originated by Performance
Acceptance Corporation, (ii) receivables originated by UAC doing business as
Performance Acceptance Corporation, (iii) receivables originated by UAC under
its "Tier II" underwriting policy, all of such receivables identified in (i) -
(iii) above having been exclusively identified on the records of the Servicer as
types 54, 55, 14 or 15.
"Note" has the meaning set forth in Section 2.04(a).
"Noteholder's Percentage" means an amount equal to 100% less the
product of (i) 2 and (ii) the amount, if any, by which the Target Net Yield
exceeds the Net Yield as of the most recent Determination Date. The Noteholder's
Percentage shall initially equal 100%. For the purpose of calculating the
Noteholder's Percentage, the Net Yield will equal the Target Net Yield for any
Settlement Period during which the Net Investment equals zero on any day.
"Obligations" means all loans, advances, debts, liabilities and
obligations for monetary amounts owing by the Borrower to the Secured Parties,
the Liquidity Agent or any of their respective assigns, as the case may be,
whether due or to become due, matured or unmatured, liquidated or unliquidated,
contingent or non-contingent, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, arising under or in respect
of Net Investment or any Hedging Agreement, as amended or supplemented from time
to time, whether or not evidenced by any separate note, agreement or other
instrument, including, without limitation, all principal, interest (including
interest that accrues after the commencement against the Borrower of any action
under the Bankruptcy Code), Breakage Costs, Hedging Breakage Costs, fees,
including, without limitation, any and all arrangement fees, loan fees, Program
Fees, Facility Fees and any and all other fees, expenses, costs or other sums
(including attorney costs) chargeable to the Borrower under the Transaction
Documents.
"Obligor" means a Person obligated to make payments pursuant to a
Contract, including any guarantor thereof.
"Officer's Certificate" means a certificate signed by any officer of
the Borrower or the Servicer, as the case may be, and delivered to the Deal
Agent.
"Outstanding Balance" means, with respect to a Receivable, the amount
advanced under the related Contract toward the purchase price of the related
Financed Vehicle and related costs minus all receipts of principal with respect
to such Receivable.
"Permitted Liens" means Liens in favor of the Deal Agent as agent for
the Secured Parties created pursuant to this Agreement.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Policy" means the financial guaranty insurance policy issued by the
Insurer with respect to the Note, including any endorsements thereto,
substantially in the form of Exhibit F hereto.
"Potential Servicer Default" means an event which but for the lapse of
time, the giving of notice or both, would constitute a Servicer Default.
"Potential Termination Event" means an event which but for the lapse of
time, the giving of notice or both, would constitute a Termination Event.
"Prefunding" means the deposit by VFCC or an Investor of a Prefunding
Deposit into the Prefunding Account pursuant to Section 2.01.
"Prefunding Account" has the meaning set forth in Section 4.05.
"Prefunding Account Amount" means the amount on deposit in the
Prefunding Account.
"Prefunding Date" means the first calendar day of each month (or if
such day is not a Business Day, the next succeeding Business Day) and such other
dates which are agreed upon by the Borrower and the Deal Agent at least one
Business Day in advance on which deposits to, or releases from, the Prefunding
Account may be effected; provided, that there shall in no event be more than
three additional Prefunding Dates in any period between any two Remittance Dates
(without Deal Agent approval) and provided, further, that no Prefunding Date
shall occur on and after the Termination Date.
"Prefunding Deposit" means, with respect to a Prefunding Date, the
deposit of funds into the Prefunding Account by VFCC or the Investors pursuant
to Section 2.01 in an amount not to exceed the product of the Noteholder's
Percentage and the aggregate principal amount of Eligible Receivables projected
by the Borrower to be acquired or originated through the day preceding the next
Prefunding Date.
"Prefunding Interest Reserve Account" has the meaning set forth in
Section 4.05.
"Prefunding Interest Reserve Deposit" has the meaning set forth in
Section 4.07(a).
"Prefunding Request" means a written notice from the Borrower
requesting a Prefunding and including the items required by Section 2.01,
substantially in the form of Exhibit A hereto.
"Premium" has the meaning set forth in the Premium Letter.
"Premium Letter" has the meaning set forth in the Insurance Agreement.
"Principal Receipts" means amounts designated as Principal Receipts
pursuant to Sections 2.05 and 3.04 and all Collections other than (i) that
portion of Collections which are properly designated as Finance Charges in
accordance with the Credit and Collection Policy and (ii) any Liquidation
Proceeds in respect of Defaulted Receivables and Related Security with respect
thereto.
"Program Fee" means, for any Settlement Period, the fee payable by the
Borrower pursuant to the Fee Letter equal to the sum of the product, for each
day during such Settlement Period, of (i) the Program Fee Rate, (ii) the Net
Investment on such day and (iii) a fraction, the numerator of which is one and
the denominator of which is 360.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
"Pro Rata Share" means with respect to any Investor on any date of
determination, the percentage equivalent of a fraction the numerator of which is
such Investor's Commitment and the denominator of which is the Facility Amount.
"Rating Agency" means Standard & Poor's, Moody's and any other rating
agency that has been requested to issue a rating with respect to the Commercial
Paper issued by the Issuer.
"Receivable" means indebtedness owed to the Borrower by an Obligor
(without giving effect to any transfer hereunder) under a Contract, whether
constituting an account, chattel paper, instrument or general intangible,
arising out of or in connection with the sale of new or used automobiles, vans
or light-duty trucks or the rendering of services by the originating Dealer in
connection therewith, and includes the right of payment of any finance charges
and other obligations of the Obligor with respect thereto. A Receivable shall be
identified with an account type 26 on the Servicer's master servicing records
(so long as UAC is the Servicer). Notwithstanding the foregoing, once the Deal
Agent has released its security interest in a Receivable, it shall no longer
constitute a Receivable.
"Registrar of Titles" means the agency, department or office having the
responsibility for maintaining records of titles to motor vehicles and issuing
documents evidencing such titles in the jurisdiction in which a particular
Financed Vehicle is registered.
"Related Security" means with respect to any Receivable:
(i) all of the Borrower's interest in the Financed Vehicles
(including repossessed vehicles) or in any document or writing
evidencing any security interest in any Financed Vehicle and all of the
Borrower's interest in all rights to payment under all insurance
contracts with respect to a Financed Vehicle, including, without
limitation, any monies collected from whatever source in connection
with any default of an Obligor with respect to a Financed Vehicle and
any proceeds from claims or refunds of premiums on any physical damage,
lender's single interest, credit life, disability and hospitalization
insurance policies covering Financed Vehicles or Obligors;
(ii) all of the Borrower's interest in all other security
interests or Liens and property subject thereto from time to time, if
any, purporting to secure payment of the Contract related thereto,
whether pursuant to such Contract or otherwise, together with all
financing statements signed by an Obligor and security agreements
describing any collateral securing such Contract;
(iii) all of the Borrower's interest in all guaranties,
insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable,
whether pursuant to the Contract related to such Receivable or
otherwise;
(iv) all of the Borrower's interest in all rights to payment
under all service contracts and other contracts and agreements
associated with the Receivable and all of the Borrower's interest in
all recourse rights against the related Dealer (excluding any rights in
any dealer reserve);
(v) all of the Borrower's interest in all records, documents
and writings evidencing or related to such Receivables or the
Contracts; and
(vi) all proceeds of the foregoing.
"Relevant UCC" means the Uniform Commercial Code as from time to time
in effect in all applicable jurisdictions.
"Remittance Date" means, for each Settlement Period, the tenth day of
the next succeeding calendar month or, if such day is not a Business Day, the
next succeeding Business Day.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA for which the 30 day notice provision has not been waived.
"Required Investors" means at a particular time, Investors with
aggregate Commitments in excess of 66-2/3% of the Facility Amount.
"Required Reserve Account Amount" means on any day the product of (i)
the Required Reserve Account Percentage and (ii) the Net Investment divided by
the Noteholder's Percentage.
"Required Reserve Account Percentage" means 2.75%.
"Required Yield Deposit Amount" has the meaning set forth in Section
4.08(a).
"Requirements of Law" means for any Person the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or
order 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 Regulations B, U, T, X and Z of the Federal
Reserve Board).
"Reserve Account" has the meaning set forth in Section 4.05.
"Reserve Account Guaranty" means the amount available pursuant to any
guaranty of the amount required to be kept in the Reserve Account pursuant to
this Agreement and the other Transaction Documents. Any Reserve Account Guaranty
shall be approved by VFCC and the Insurer and shall satisfy the Short-Term
Rating Requirement and the Long-Term Rating Requirement.
"Responsible Officer" means, when used with respect to the Servicer or
the Borrower, any officer of the Servicer or the Borrower, including any
president, vice president, assistant vice president, secretary, assistant
secretary or any other officer thereof customarily performing functions similar
to those performed by the individuals who at the time shall be such officers,
respectively, or to whom any matter is referred because of his or her knowledge
of or familiarity with the particular subject.
"Sale and Purchase Agreement I" means the sale and purchase agreement
dated as of August 1, 2000 between the Seller and UAC, as amended or
supplemented from time to time.
"Sale and Purchase Agreement II" means the sale and purchase agreement
dated as of August 1, 2000 between the Seller and the Borrower, as amended or
supplemented from time to time.
"Schedule of Contracts" means a listing by account number of the
Contracts as requested and amended from time to time by the Deal Agent pursuant
to Section 3.03(a).
"Secured Parties" means (i) each Lender, (ii) each Hedging Counterparty
that is either a Lender or any Affiliate of a Lender if such Affiliate executes
a counterparty to the Agreement agreeing to be bound by the terms of this
Agreement applicable to a Secured Party and (iii) the Insurer.
"Securities Intermediary" means First Union, and any other entity
acting in the capacity of a "securities intermediary" as defined in Section
8-102(14) of the Relevant UCC.
"Securitization" means a structured finance transaction established by
or on behalf of the Borrower or an Affiliate thereof in which the released
Receivables and the related Contracts will be subject and which satisfies the
optional repayment conditions set forth in Section 2.05.
"Seller" means Union Acceptance Funding Corporation, an Indiana
corporation, and its successors.
"Servicer" has the meaning set forth in the Preamble.
"Servicer Default" has the meaning set forth in Section 4.01(c).
"Servicing Agreement" means the servicing agreement, dated as of August
1 2000, between UAC, as servicer, and UAFC-2, as amended or supplemented from
time to time.
"Servicing Audits" means certain procedures determined by the Insurer,
agreed upon by the Borrower and performed at the expense of the Servicer by a
nationally recognized firm of independent public accountants acceptable to the
Insurer or other third party acceptable to both the Insurer and the Borrower,
including, but not limited to: verification of the accuracy monthly reports, and
related reviews of the Servicer's accounts, records and files, and cash
routines.
"Servicing Fee" means, for any Settlement Period, the fee payable
pursuant to Section 4.06 on the related Remittance Date to the Servicer, in an
amount equal to 1.0% per annum on the amount of the Aggregate Outstanding
Balance as of the first day of such Settlement Period.
"Settlement Period" means any calendar month; provided, however, that
(i) the initial Settlement Period shall commence on the Closing Date and (ii)
any Settlement Period that commences before the Termination Date that would
otherwise end after the Termination Date shall end on the Termination Date.
"Settlement Statement" means a monthly statement setting forth as of
the last day of the related Settlement Period, among other things, (i) the
outstanding principal balance of the Receivables, (ii) collections,
delinquencies, defaults, yield, and certain other information including
calculations necessary to determine compliance with the covenants contained in
the Transaction Documents for the most recently ended fiscal month; provided
however that if such information is not available for the most recently ended
fiscal month, such information shall be provided as of the next preceding fiscal
month and (iii) other reporting as reasonably required by VFCC and/or the
Insurer per Exhibit M hereto, as such Exhibit may be modified as reasonably
requested by VFCC and the Insurer.
"Short-Term Rating Requirement" means a short-term unsecured debt
rating of not less than (i) "A-1+" from Standard & Poor's, (ii) "P-1" from
Moody's, (iii) "D-1+" from Duff & ▇▇▇▇▇▇ (if the related institution, instrument
or security is rated by Duff & ▇▇▇▇▇▇) and (iv) "F-1+' from Fitch (if the
related institution, instrument or security is rated by Fitch).
"Solvent" means, as to any Person at any time, having a state of
affairs such that all of the following conditions are met: (i) the fair value of
the property owned by such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code; (ii) the present fair salable value of the
property owned by such Person in an orderly liquidation of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (iii) such Person is
able to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business; (iv) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; and (v) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Structured Financing" any release of Receivables to the Borrower
pursuant to Section 2.05 being effected in connection with an underwritten
transaction (i) in which an underwriter agrees to purchase the related
securities pursuant to an underwriting agreement and (ii) for which the closing
date of such transaction is within 10 Business Days of the date of pricing and
within the requirements of the Securities and Exchange Commission or (b) a
securitization transaction in which Special Purpose Accounts Receivable
Cooperative Corporation, a special purpose commercial paper conduit sponsored by
CIBC, has agreed to in writing a price for which it will purchase asset-backed
securities from the UACSC 1999 Master Owner Trust, subject to conditions
customarily contained in an underwriting agreement and subject to such
transaction closing within 5 Business Days of the date the purchase price was
established.
"Structuring Fee" has the meaning set forth in the Fee Letter.
"Take-Out" means (i) a Securitization, (ii) a Warehouse Transfer or
(iii) other release by the Deal Agent of Receivables and the related Contracts
from the Collateral pursuant to Section 2.05; provided, however, any such
Securitization, Warehouse Transfer or release shall constitute a "Take-Out" only
if the related Take-Out Percentage is not greater than 25%.
"Take-Out Percentage" means, with respect to any Securitization,
Warehouse Transfer or release pursuant to Section 2.05, the percentage equal to
(i) 100% minus (B) a fraction (expressed as a percentage) equal to (A) the
aggregate Outstanding Balance of the Receivables being released by such
Securitization, Warehouse Transfer or release divided by (B) the Net Receivables
Balance as of the cut-off date of such Securitization, Warehouse Transfer or
release.
"Target Net Yield" means 5.0%.
"Targeted Interest Rate" means, for any Settlement Period, 2.5% per
annum or such lower per annum rate set forth in a written notice by the Deal
Agent to the Borrower and the Servicer, such other rate to be effective three
Business Days after the date of such notice.
"Taxes" means any present or future taxes, levies, imposts, duties,
charges, assessments or fees of any nature (including interest, penalties and
additions thereto) that are imposed by any Government Authority.
"Termination Date" means the earliest to occur of (i) the date that the
Liquidity Agreement shall cease to be in full force and effect; (ii) the
Commitment Termination Date; (iii) the Business Day designated by the Borrower
to VFCC as the Termination Date at any time following 60 days' prior written
notice; and (iv) the occurrence of a Termination Date pursuant to Section 8.01.
"Termination Event" has the meaning set forth in Section 8.01(a).
"Tier I Receivable" means a Receivable originated in accordance with
the Tier I underwriting policy contained in the Credit and Collection Policy.
"Title Documents" means, with respect to any Financed Vehicle, the
certificate of title for, or other evidence of ownership of (as the Servicer or
Borrower maintains in accordance with its customary procedures), such Financed
Vehicle, (which may include written evidence from the Dealer selling such
Financed Vehicle that such certificate, or evidence of ownership, showing the
Seller or the appropriate Affiliate of UAC as first lienholder, has been applied
for).
"Transaction Documents" means this Agreement, the Note, the Sale and
Purchase Agreement I, the Sale and Purchase Agreement II, the Servicing
Agreement, the Insurance Agreement, the Liquidity Agreement, the Fee Letter, all
Hedging Agreements and any other document, certificate, opinion, agreement or
writing the execution of which is necessary or incidental to carrying out the
transactions contemplated by this Agreement or any of the other foregoing
documents.
"UAC" means Union Acceptance Corporation, an Indiana corporation, and
its successors and assigns.
"UAC Entities" means each of UAC, UAC Finance, the Seller, UARC and
UAFC-2.
"UAC Finance" means UAC Finance Corporation, an Indiana corporation,
and its successors and assigns.
"UAFC-2" means UAFC-2 Corporation, a Delaware corporation, and its
successors and assigns.
"UARC" means Union Acceptance Receivables Corporation, a Delaware
corporation, or any other bankruptcy remote Affiliate of UAC, and its successors
and assigns.
"United States" means the United States of America.
"Undocumented Receivable" means any Receivable as to which, at the time
of the assignment of such Receivable, and the Contract related thereto, to UAC
or UAC Finance by the Dealer which originated such Receivable or, at the time of
the origination of such Receivable by UAC, the Servicer has not received all
required Obligor-related documentation.
"Undocumented Receivable Date" means, with respect to an Undocumented
Receivable, the date 20 days following the date of the initial draft drawn by
the originating Dealer on UAC or UAC Finance in connection with the origination
of such Receivable.
"Unrestricted Cash" has the meaning set forth in the Insurance
Agreement.
"VFCC" means Variable Funding Capital Corporation, and its successors.
"VFCC Administration Agreement" means the Amended and Restated
Administration Agreement, dated as of July 1, 1998, between VFCC and FSI, as
amended, restated or supplemented from time to time.
"Withdrawal Notice" has the meaning set forth in Section 2.02(a).
"Warehouse Transfer" means the transfer of Receivables pursuant to a
Warehouse Transfer Agreement.
"Warehouse Transfer Agreement" means an agreement substantially in the
form of Exhibit N hereto pursuant to which the Borrower purchases Receivables
from, or sells Receivables to, an Affiliate of UAC in connection with a
warehouse or securitized financing. The form of agreement in Exhibit N shall not
be modified without the written consent of the Deal Agent and the Insurer if
such modification would adversely affect in a material manner the rights of any
Secured Party under this Agreement.
"Warehouse Transferor" means a transferor of a Receivable to the
Borrower pursuant to a Warehouse Transfer Agreement.
"Year-End Purchase Agreement" means an agreement substantially in the
form of Exhibit K hereto which form of agreement shall not be modified without
the written consent of the Deal Agent and the Insurer if such modification would
adversely affect in a material manner the rights of any Secured Party under this
Agreement.
"Year-End Repurchase Agreement" means an agreement substantially in the
form of Exhibit L hereto which form of agreement shall not be modified without
the written consent of the Deal Agent and the Insurer if such modification would
adversely affect in a material manner the rights of any Secured Party under this
Agreement.
"Year-End Transfer" means either a purchase of all Receivables by UARC
from UAFC-2 pursuant to a Year-End Purchase Agreement or the repurchase of the
Receivables from UARC by UAFC-2 pursuant to a Year-End Repurchase Agreement.
"Yield Supplement Account" has the meaning set forth in Section 4.05.
Section 1.02. Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, all financial statements required to be
delivered hereunder shall be prepared and all financial records shall be
maintained in accordance with GAAP.
Section 1.03. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
ARTICLE Two
PREFUNDINGS
Section 2.01. Prefunding; Procedures for Prefundings. On the terms and
conditions hereinafter set forth, the Borrower may, prior to each Prefunding
Date on which the Borrower intends to request funds for deposit into the
Prefunding Account, request that the Lenders make an advance of such funds. No
later than 4:00 p.m. (Charlotte, North Carolina time) one Business Day prior to
a proposed Prefunding Date, the Borrower shall notify the Deal Agent and the
Insurer of such proposed Prefunding Date and Prefunding by delivering to the
Deal Agent and the Insurer (i) a duly executed and completed Prefunding Request,
which will include, among other things, the proposed Prefunding Date, a
calculation of the Net Investment and the Net Asset Test (after giving effect to
such Prefunding), the Prefunding Deposit requested (which amount shall be at
least equal to $1,000,000 or integral multiples of $10,000 in excess thereof and
shall be no greater than the Borrower's reasonable best estimate of the
aggregate amount of Eligible Receivables projected to be acquired from the
Seller by the Borrower pursuant to the Sale and Purchase Agreement II or
acquired pursuant to a Warehouse Transfer Agreement during the period from the
Prefunding Date to but not including the next succeeding Prefunding Date) and a
representation that the conditions precedent contained in Section 5.02 have been
satisfied and (ii) an updated Schedule of Contracts (if reasonably requested by
the Deal Agent at least one Business Day prior to the Prefunding Date). If any
such Prefunding Request is delivered to the Deal Agent after 4:00 p.m.
(Charlotte, North Carolina time) one Business Day prior to the proposed
Prefunding Date, such Prefunding Request shall be deemed to be received prior to
4:00 p.m. (Charlotte, North Carolina time) on the next succeeding Business Day
and the proposed Prefunding Date of such proposed Prefunding shall be deemed to
be the Business Day following such deemed receipt. Any Prefunding Request shall
be irrevocable.
Following receipt of a Prefunding Request, the Deal Agent shall
determine whether the Prefunding will be made by VFCC or by the Investors. If
the Deal Agent determines, at its sole discretion, that VFCC has adequate access
to the commercial paper market to fund the Prefunding Deposit, VFCC shall make
the Prefunding. Upon a determination by the Deal Agent, made at its sole
discretion, that VFCC does not have adequate access to the commercial paper
market to fund the Prefunding Deposit, (i) the Deal Agent shall promptly notify
the Liquidity Agent, the Investors, the Insurer and the Borrower in writing of
such inadequacy and (ii) the Investors shall fund such Prefunding Deposit.
Notwithstanding the foregoing, under no circumstances shall a Prefunding be made
unless the conditions of Section 5.02 are satisfied.
Under no circumstances shall the Prefunding Deposit cause (i) the Net
Investment to exceed the Facility Amount and (ii) any Investor to make any
Prefunding on any Prefunding Date in excess of the lesser of (a) such Investor's
Pro Rata Share of the portion of the Prefunding Deposit not funded by VFCC and
(b) the amount by which such Investor's Commitment exceeds such Investor's share
of the Net Investment prior to such Prefunding Date.
Subject to the terms and conditions set forth herein, no later than
4:30 p.m. (Charlotte, North Carolina time) on the Prefunding Date on which the
Prefunding Deposit is to be made, VFCC or the Investors, as the case may be,
shall deposit into the Prefunding Account the Prefunding Deposit. On each
Prefunding Date, the Borrower shall deposit (or cause to be withheld from the
Prefunding Deposit) to the credit of the Reserve Account an amount equal to an
amount necessary to fund the Reserve Account to the Required Reserve Account
Amount.
Section 2.02. Withdrawals from the Prefunding Account.
(a) On any Business Day, upon receipt by the Deal Agent, the Insurer and the
Collateral Agent not later than 11:00 a.m., Charlotte, North Carolina time of
written certification substantially in the form of Exhibit J (a "Withdrawal
Notice"), from the Borrower setting forth, among other things, the amount
requested to be released from the Prefunding Account and certifying that (i)
after giving effect to the withdrawal from the Prefunding Account, the Net Asset
Test will be satisfied, (ii) the amount on deposit in the Reserve Account will
not be less than the Required Reserve Account Amount (calculated (A) immediately
prior to the proposed withdrawal and (B) as if such withdrawal has been made),
(iii) the Borrower will have made any deposit into the Yield Supplement Account
required pursuant to Section 4.08, if any, and (iv) the Servicer is and will be
in compliance with the requirements of this Agreement with respect of such date
of withdrawal, the Collateral Agent, at the written direction of the Servicer,
shall make the amount requested to be released from the Prefunding Account
available to the Borrower at the Borrower's Account via wire transfer in same
day funds not later than 4:00 p.m., Charlotte, North Carolina time on such date
of withdrawal.
(b) On each Prefunding Date, all amounts on deposit in the Prefunding Account
(exclusive of earnings thereon) shall be, at the Borrower's option, either (i)
released to the Deal Agent for the account of VFCC and the Investors to be
applied in reduction of the Net Investment, or (ii) retained in the Prefunding
Account and applied to reduce the amount of the Prefunding Deposit otherwise
required to be made by VFCC or the Investors, as applicable, on the succeeding
Prefunding Date. Notwithstanding the foregoing, however, on the first Remittance
Date to occur on or after the Termination Date, all amounts on deposit,
exclusive of earnings thereon, in the Prefunding Account shall be released to
the Deal Agent, for the account of VFCC and the Investors, as applicable, and
applied in reduction of the Net Investment and earnings thereon shall be
deposited in the Collection Account for application as Available Funds.
Section 2.03. Optional Changes in Facility Amount; Extension of Commitment
Termination Date.
(a) The Borrower shall be entitled at its option, at any time prior to the
occurrence of a Termination Date, to reduce the Facility Amount in whole or in
part; provided that the Borrower shall give prior written notice of such
reduction to the Deal Agent and the Insurer and that any partial reduction of
the Facility Amount shall be a minimum of $5,000,000 or integral multiples of
$1,000,000 in excess thereof. Any request for a reduction in the Facility Amount
shall be irrevocable and the Borrower shall deliver no more than four such
requests in any 12-month period.
(b) Provided no Termination Date has occurred, the Borrower may by written
notice to the Deal Agent and the Insurer make written request for VFCC and the
Investors to extend the Commitment Termination Date for an additional period of
up to 364 days. The Deal Agent will give prompt notice to VFCC and each Investor
of its receipt of such request for extension of the Commitment Termination Date.
VFCC and each Investor shall make a determination, in their sole discretion and
after a full credit review, within 30 days following receipt of any such request
as to whether or not they will agree to extend the Commitment Termination Date;
provided, however, that the failure of VFCC or any Investor to make a timely
response to the Borrower's request for extension of the Commitment Termination
Date shall be deemed to constitute a refusal by VFCC or such Investor, as the
case may be, to extend the Commitment Termination Date. The Commitment
Termination Date shall only be extended upon the consent of VFCC, the Insurer
and all of the Investors.
Section 2.04. The Note.
(a) The Net Investment of the Lenders hereunder shall be evidenced by a duly
executed promissory note payable to the order of the Deal Agent as agent for the
Lenders in substantially the form of Exhibit B hereto (the "Note"). The Note
shall be dated the Closing Date and shall be in a principal amount equal to the
Facility Amount and shall otherwise be duly completed.
(b) The Deal Agent is hereby authorized to enter on a schedule attached to the
Note notations (which may be computer generated) with respect to each Prefunding
Deposit made by each Lender hereunder: (i) the date and principal amount thereof
and (ii) each payment and repayment of principal thereof and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. The failure of the Deal Agent to make any such notation
on the schedule attached to the Note shall not limit or otherwise affect the
obligation of the Borrower to repay the Net Investment in accordance with its
terms as set forth herein.
Section 2.05. Optional Principal Repayments. On any Business Day before the
Termination Date (but not more frequently than once per calendar week), the
Borrower shall have the right to prepay all or any portion of the Net
Investment, in conjunction with a Warehouse Transfer, a Securitization or other
release of Receivables by the Deal Agent pursuant to this Section, and to
require the release of the security interest in and lien on the related
Contracts and Receivables in conjunction with such prepayment. It shall be a
condition precedent to any such prepayment of the Net Investment that: (i) the
amount prepaid is at least $5,000,000 or integral multiples of $100,000 in
excess thereof (unless otherwise agreed to in writing by the Deal Agent); (ii)
in addition to any other amount paid pursuant to this Section, the Borrower
shall pay to VFCC and the Investors, as applicable, an additional amount equal
to the amount necessary to cause the Net Asset Test to be satisfied after giving
effect to the proposed release; (iii) the Borrower shall deposit an amount equal
to Excess Carrying Costs and Aggregate Unpaids into the Collection Account; (iv)
the Borrower shall have given the Deal Agent and the Insurer at least seven
days' prior written notice of its intention to request release with respect to
such Contracts and Receivables which shall be irrevocable; (v) after giving
effect to such release the amount on deposit in the Reserve Account shall be at
least equal to the Required Reserve Account Amount; (vi) the Borrower certifies
that following such prepayment, the Borrower will be in compliance with the
provisions of this Agreement; (vii) no such reduction shall take effect unless
the Borrower has complied with the terms of any Hedging Agreement requiring one
or more Hedging Transactions be terminated in whole or in part as a result of
any such reduction and provisions for the payment of Hedging Breakage Costs
shall have been made; (viii) with respect to any Receivables released by a
partial prepayment, the Borrower certifies that, in identifying and/or selecting
such Receivables, the procedures utilized by it were consistent with standard
selection criteria and prior practice and were not adverse to the interests of
the Secured Parties; and (ix) all amounts due and owing to the Insurer shall
have been paid in full. The Net Investment will be reduced by the sum of (i) the
amount deposited into the Collection Account pursuant to clause (ii) of the
preceding sentence and (ii) any other amounts remitted to the Collection Account
by the Borrower in excess of the amounts required to be remitted by it pursuant
to this Section and such amounts will be treated as Principal Receipts.
The Deal Agent shall provide prompt notice to the Lenders and the
Liquidity Agent following receipt of any notice of intent to prepay. Upon the
deposit to the Collection Account and the payment by the Borrower of the amounts
described in this Section, the Deal Agent shall execute and deliver to the
Borrower, at the Borrower's expense, such documents or instruments as are
necessary to terminate the Deal Agent's interest in the Receivables and the
Contracts related thereto. Any such documents shall be prepared by or on behalf
of the Borrower.
Section 2.06. Interest Payments.
(a) Interest shall accrue on the Net Investment during each Settlement Period at
the applicable Interest Rate. The Borrower shall pay Interest on the Net
Investment until the date that the Net Investment is reduced to zero. Interest
shall accrue during each Settlement Period and be payable on each Remittance
Date as described in Section 4.06, unless earlier paid pursuant to (i) a
prepayment in accordance with Section 2.05 or (ii) a repayment in accordance
with Section 2.07.
(b) The Deal Agent shall determine the CP Rate and Interest (including unpaid
Interest and fees, if any, due and payable on a prior Remittance Date) to be due
on each Remittance Date in respect of the Borrower for each Settlement Period
and shall advise the Borrower of the Interest by the second Business Day
preceding the Determination Date relating to such Settlement Period.
(c) Notwithstanding any other provision of this Agreement or the other
Transaction Documents, if at any time the rate of interest payable by any Person
under the Transaction Documents exceeds the Maximum Lawful Rate, then, so long
as the Maximum Lawful Rate would be exceeded, such rate of interest shall be
equal to the Maximum Lawful Rate. If at any time thereafter the rate of interest
so payable is less than the Maximum Lawful Rate, such Person shall continue to
pay interest at the Maximum Lawful Rate until such time as the total interest
received from such Person is equal to the total interest that would have been
received had applicable law not limited the interest rate so payable. In no
event shall the total interest received by a Lender under this Agreement and the
other Transaction Documents exceed the amount which such Lender could lawfully
have received, had the interest due been calculated since the Closing Date at
the Maximum Lawful Rate.
(d) The Deal Agent agrees to exercise its discretion in choosing the Alternative
Rate such that any time Interest is calculated based upon the Alternative Rate,
such rate shall be the lesser of the Adjusted LIBOR Rate and the Base Rate to
the extent available pursuant to the terms of this Agreement.
Section 2.07. Mandatory Payments and Prepayments. The Borrower, subject to
Section 12.13, promises to pay to:
(a) the Deal Agent, for the respective accounts of the Secured Parties:
(i) on the Termination Date, the Net Investment in full in the manner and
priorities provided in Section 4.06;
(ii) all payments and prepayments made pursuant to clause (i) shall be
accompanied by payment of amounts that may be due pursuant to Sections
2.09 or 9.01;
(b) all other amounts required to be paid by the Borrower on any Remittance
Date in the manner and priorities set forth in Section 4.06.
Section 2.08. Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid or
deposited by the Borrower hereunder shall be paid or deposited in accordance
with the terms hereof no later than 2:30 p.m. (Charlotte, North Carolina time)
on the day when due in lawful money of the United States in immediately
available funds to the Deal Agent's Account. Except as otherwise provided in the
definition of the term "Interest Rate," the Borrower shall, to the extent
permitted by law, pay to each Lender interest on all amounts not paid or
deposited when due hereunder at 1% per annum above the Base Rate, payable on
demand; provided, however, that such interest rate shall not at any time exceed
the Maximum Lawful Rate. All computations of interest and all computations of
the Interest Rate and other fees hereunder shall be made on the basis of a year
of 360 days for the actual number of days (including the first but excluding the
last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day other than
a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
payment of Interest, other interest or any fee payable hereunder, as the case
may be.
(c) All payments hereunder shall be made without set-off or counterclaim and in
such amounts as may be necessary in order that all such payments shall not be
less than the amounts otherwise specified to be paid under this Agreement.
Promptly following the Facility Termination Date, the Deal Agent shall ▇▇▇▇ the
Note "Paid" and return it to the Borrower.
Section 2.09. Breakage Costs. The Borrower shall pay to the Deal Agent for the
account of each Lender, upon the written request of the Liquidity Agent or Deal
Agent, such amount or amounts as shall compensate any Lender for any loss, cost
or expense (but excluding lost profits) incurred by such Lender (as reasonably
determined by such Lender) as a result of failure of the Borrower to give the
Deal Agent at least seven days notice of any prepayment of the Net Investment
(and interest thereon) (collectively, the "Breakage Costs"). The determination
by a Lender of the amount of any such loss or expense shall be set forth in a
written notice to the Borrower and shall be conclusive absent manifest error.
Section 2.10. Increased Costs; Capital Adequacy; Illegality.
(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation or (ii) the compliance by a
Lender or any affiliate thereof (each, an "Affected Party") with any guideline
or request from any central bank or other governmental agency or authority
(whether or not having the force of law), shall (A) subject an Affected Party to
any Tax (except for Taxes on the overall net income of such Affected Party),
duty or other charge with respect to the Net Investment, or on any payment made
hereunder, (B) impose, modify or deem applicable any reserve requirement
(including, without limitation, any reserve requirement imposed by the Federal
Reserve Board, but excluding any reserve requirement, if any, included in the
determination of Interest), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Affected Party or (C) impose any other condition affecting the Net Investment or
a Lender's rights hereunder, the result of which is to increase the cost to any
Affected Party or to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, then within 30 days after demand by such
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Borrower shall pay directly to such Affected
Party such additional amount or amounts as will compensate such Affected Party
for such additional or increased cost incurred or such reduction suffered.
(b) If either (i) the introduction of or any change in or in the interpretation
of any law, guideline, rule, regulation, directive or request or (ii) compliance
by any Affected Party with any law, guideline, rule, regulation, directive or
request from any central bank or other governmental authority or agency (whether
or not having the force of law), including, without limitation, compliance by an
Affected Party with any request or directive regarding capital adequacy, has or
would have the effect of reducing the rate of return on the capital of any
Affected Party as a consequence of its obligations hereunder or arising in
connection herewith to a level below that which any such Affected Party could
have achieved but for such introduction, change or compliance (taking into
consideration the policies of such Affected Party with respect to capital
adequacy) by an amount deemed by such Affected Party to be material, then from
time to time, within 30 days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis for such demand),
the Borrower shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such reduction.
(c) If as a result of any event or circumstance similar to those described in
Section 2.10(a) or 2.10(b), any Affected Party is required to compensate a bank
or other financial institution providing liquidity support, credit enhancement
or other similar support to such Affected Party in connection with this
Agreement or the funding or maintenance of the Net Investment, then within 30
days after demand by such Affected Party, the Borrower shall pay to such
Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any such amounts paid by it.
(d) In determining any amount provided for in this Section, an Affected Party
may use any reasonable averaging and attribution methods. Any Affected Party
making a claim under this Section shall submit to the Borrower a certificate as
to such additional or increased cost or reduction, which certificate shall be
conclusive absent manifest error.
(e) If a Lender shall notify the Deal Agent that a Eurodollar Disruption Event
as described in clause (i) of the definition of "Eurodollar Disruption Event"
has occurred, the Deal Agent shall in turn so notify the Borrower, whereupon the
portion of the Net Investment in respect of which Interest accrues at a rate
based upon the LIBOR Rate shall immediately begin to accrue Interest at the Base
Rate.
Section 2.11. Taxes.
(a) All payments made by the Borrower in respect of the Net Investment and all
payments made by the Borrower under this Agreement will be made free and clear
of and without deduction or withholding for or on account of any Taxes, unless
such withholding or deduction is required by law. In such event, the Borrower
shall pay to the appropriate taxing authority any such Taxes required to be
deducted or withheld and the amount payable to each Lender or the Deal Agent (as
the case may be) will be increased (such increase, the "Additional Amount") such
that every net payment made under this Agreement after deduction or withholding
for or on account of any Taxes (including, without limitation, any Taxes on such
increase) is not less than the amount that would have been paid had no such
deduction or withholding been deducted or withheld. The foregoing obligation to
pay Additional Amounts, however, will not apply with respect to Taxes related to
the net income or franchise taxes imposed on a Lender or the Deal Agent,
respectively, with respect to payments required to be made by the Borrower or
Deal Agent under this Agreement, by a taxing jurisdiction in which such Lender
or Deal Agent is organized or is paying taxes as of the Closing Date (as the
case may be). If a Lender or the Deal Agent pays any Taxes in respect of which
the Borrower is obligated to pay Additional Amounts under this Section, the
Borrower shall promptly reimburse such Lender or Deal Agent in full.
(b) The Borrower will indemnify each Lender and the Deal Agent for the full
amount of Taxes in respect of which the Borrower is required to pay Additional
Amounts (including, without limitation, any Taxes imposed by any jurisdiction on
such Additional Amounts) paid by such Lender or the Deal Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; provided, however, that the Lender or Deal
Agent making a demand for indemnity payment hereunder shall provide the
Borrower, with a certificate from the relevant taxing authority or from a
Responsible Officer of such Lender or the Deal Agent stating or otherwise
evidencing that such Lender or the Deal Agent has made payment of such Taxes and
will provide a copy of or extract from documentation, if available, furnished by
such taxing authority evidencing assertion or payment of such Taxes. This
indemnification shall be made within ten days from the date the Lender or the
Deal Agent (as the case may be) makes written demand therefor.
(c) Within 30 days after the date of any payment by the Borrower of any Taxes
pursuant to this Section, the Borrower will furnish to the Deal Agent, at its
address set forth under its name on the signature pages hereof, appropriate
evidence of payment thereof.
(d) If a Lender is not created or organized under the laws of the United States
or a political subdivision thereof, such Lender shall, to the extent that it may
then do so under applicable laws and regulations, deliver to the Borrower, with
a copy to the Deal Agent, (i) within 15 days after the date hereof, or, if
later, the date on which such Lender becomes a Lender hereof two (or such other
number as may from time to time be prescribed by applicable laws or regulations)
duly completed copies of IRS Form W-8ECI or Form W-8BEN (or any successor forms
or other certificates or statements which may be required from time to time by
the relevant United States taxing authorities or applicable laws or
regulations), as appropriate, to permit the Borrower to make payments hereunder
for the account of such Lender, as the case may be, without deduction or
withholding of United States federal income or similar Taxes and (ii) upon the
obsolescence of or after the occurrence of any event requiring a change in, any
form or certificate previously delivered pursuant to this Section, two copies
(or such other number as may from time to time be prescribed by applicable laws
or regulations) of such additional, amended or successor forms, certificates or
statements as may be required under applicable laws or regulations to permit the
Borrower to make payments hereunder for the account of such Lender, without
deduction or withholding of United States federal income or similar Taxes.
(e) For any period with respect to which a Lender or the Deal Agent has failed
to provide the Borrower with the appropriate form, certificate or statement
described in Section 2.11(d) (other than if such failure is due to a change in
law occurring after the date of this Agreement), the Deal Agent or such Lender,
as the case may be, shall not be entitled to indemnification under Sections
2.11(a) or 2.11(b) with respect to any Taxes.
(f) Within 30 days of the written request of the Borrower therefor, the Deal
Agent and the applicable Lender, as appropriate, shall execute and deliver to
the Borrower such certificates, forms or other documents which can be furnished
consistent with the facts and which are reasonably necessary to assist the
Borrower in applying for refunds of Taxes remitted hereunder; provided, however,
that the Deal Agent and such Lender shall not be required to deliver such
certificates, forms or other documents if in their respective sole discretion it
is determined that the deliverance of such certificate, form or other document
would have a material adverse affect on the Deal Agent or Lender and provided
further, however, that the Borrower shall reimburse the Deal Agent or Lender for
any reasonable expenses incurred in the delivery of such certificate, form or
other document.
(g) If, in connection with an agreement or other document providing liquidity
support, credit enhancement or other similar support to the Lenders in
connection with this Agreement or the funding or maintenance of the Net
Investment, the Lenders are required to compensate a bank or other financial
institution in respect of Taxes under circumstances similar to those described
in this Section, then within ten days after demand by the Lenders, the Borrower
shall pay to the Lenders such additional amount or amounts as may be necessary
to reimburse the Lenders for any amounts paid by them.
ARTICLE Three
SECURITY
Section 3.01. Collateral.
(a) As security for the prompt, complete and indefeasible payment and
performance in full when due, whether by lapse of time, acceleration or
otherwise, of the Obligations, the Borrower hereby grants to the Deal Agent, on
behalf of the Secured Parties, a first priority perfected security interest in
the Collateral.
(b) The provisions of Section 3.01(a) do not constitute and are not intended to
result in a creation or an assumption by the Deal Agent, the Liquidity Agent or
any Secured Party of any obligation of the Borrower or any other Person in
connection with any or all of the Collateral or under any agreement or
instrument relating thereto. Anything herein to the contrary notwithstanding,
(i) the exercise by the Deal Agent, as agent for the Secured Parties, of any of
its rights in the Collateral shall not release the Borrower from any of its
duties or obligations under the Collateral and (ii) none of the Deal Agent, the
Liquidity Agent or any Secured Party shall have any obligations or liability
under the Collateral by reason of this Agreement, nor shall the Deal Agent, the
Liquidity Agent or any Secured Party be obligated to perform any of the
obligations or duties of the Borrower thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
Section 3.02. Release of Collateral; No Legal Title.
(a) The lien created by this Agreement in favor of the Deal Agent, as agent for
the Secured Parties, with respect to the Collateral shall terminate with respect
to all of the Collateral, on the Facility Termination Date. In each case, upon
the request of, and at the expense of the Borrower, the Deal Agent shall execute
and deliver proper documents acknowledging such release, including, without
limitation, executing and delivering to the Borrower such UCC termination
statements as may be required to terminate the financing statements filed
pursuant to the Transaction Documents.
(b) The Deal Agent on behalf of the Secured Parties will not, except as may
result from the exercise of its remedies hereunder, have legal title to any part
of the Collateral on the Facility Termination Date and will have no further
interest in or rights with respect to the Collateral.
Section 3.03. Protection of Security Interest; Deal Agent as Attorney-in-Fact.
(a) The Borrower agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may reasonably be necessary or desirable, or that the Deal Agent may deem
necessary, to perfect, protect or more fully evidence the security interest
granted to the Deal Agent, as agent for the Secured Parties, in the Collateral,
or to enable the Deal Agent or the Secured Parties to exercise and enforce their
rights and remedies hereunder. Without limiting the foregoing, the Borrower
will, upon the reasonable request of the Deal Agent, in order to accurately
reflect the security interest of the Deal Agent in the Collateral, execute and
file such financing or continuation statements or amendments thereto or
assignments as may be requested by the Deal Agent and ▇▇▇▇ its records so as to
indicate the Deal Agent's security interest in the Receivables, the related
Contracts, the Collections and the Related Security with respect thereto. At the
Deal Agent's reasonable request, the Borrower agrees that it shall take all
actions necessary to cause UAC and the Seller to similarly ▇▇▇▇ its records to
reflect the sale of the Receivables and the Contracts to the Borrower and the
Deal Agent's security interest in the Receivables, the related Contracts, the
Collections and the Related Security with respect thereto. The Borrower shall,
at its own expense obtain such additional search reports as the Deal Agent shall
reasonably request. To the fullest extent permitted by applicable law, the Deal
Agent shall be permitted to sign and file continuation statements and amendments
thereto and assignments thereof without the Borrower's signature. Carbon,
photographic or other reproduction of this Agreement or any financing statement
shall be sufficient as a financing statement. The Borrower shall neither change
its name, identity or corporate structure (within the meaning of Section
9-402(7) of the Relevant UCC) nor relocate its chief executive office or any
office where records are kept unless it shall have: (i) given the Deal Agent and
the Insurer at least 30 days prior notice thereof and (ii) prepared at the
Borrower's expense and delivered to the Deal Agent all financing statements,
instruments and other documents necessary to preserve and protect the Collateral
or requested by the Deal Agent or the Insurer in connection with such change or
relocation. Any filings under the Relevant UCC or otherwise that are occasioned
by such change in name or location shall be made at the expense of the Borrower.
On the second Business Day after the end of each Settlement Period, if requested
by the Deal Agent by the last Business Day of such Settlement Period, the
Borrower shall deliver to the Deal Agent an updated Schedule of Contracts as of
the last day of such Settlement Period (giving effect to any releases by the
Deal Agent pursuant to Sections 2.05 and 3.04).
(b) If the Borrower fails to perform any of its obligations hereunder after five
Business Days' notice from the Deal Agent, the Deal Agent or any Secured Party
may (but shall not be required to) perform, or cause performance of, such
obligation; and the Deal Agent's or such Secured Party's reasonable costs and
expenses incurred in connection therewith shall be payable by the Borrower as
provided in Article Nine. The Borrower irrevocably authorizes the Deal Agent and
appoints the Deal Agent as its attorney-in-fact to act on behalf of the
Borrower, (i) to execute on behalf of the Borrower and to file financing
statements necessary or desirable in the Deal Agent's sole discretion to perfect
and to maintain the perfection and priority of the interest of the Secured
Parties in the Collateral, and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Collateral, as a financing statement in such offices as the Deal Agent in its
sole discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Secured Parties in the
Collateral. This appointment is coupled with an interest and is irrevocable.
Section 3.04. Payments on Receivables; Application of Payments. If, on any day:
(a) the Outstanding Balance of a Receivable is either (i) reduced as a
result of any defective, rejected or returned goods or services, any
cash discount, credit, rebate, allowance or other dilution factor, any
billing adjustment or other adjustment, or (ii) reduced or canceled as
a result of a setoff or offset in respect of any claim by any Person
(whether such claim arises out of the same or a related transaction or
an unrelated transaction);
(b) any of the representations or warranties in Sale and Purchase Agreement
I, Sale and Purchase Agreement II or Article Six is no longer true with
respect to a Receivable;
(c) a Receivable becomes a Defaulted Receivable;
then, in any such event, the Deal Agent shall, at the direction of the Borrower,
release its security interest in, and Lien on, such Receivable and the related
Contract; provided, that if immediately after such release the Net Asset Test
would not be satisfied, then as a condition precedent to such release the
Borrower shall deposit into the Collection Account an amount equal to the amount
which, if applied to the reduction of the Net Investment, would cause the Net
Asset Test to be satisfied immediately after such release. All amounts deposited
into the Collection Account pursuant to the foregoing sentence will be treated
as Principal Receipts and shall be applied pursuant to Section 4.06.
ARTICLE Four
ADMINISTRATION AND ACCOUNTS
Section 4.01. Servicer.
(a) The administration and servicing of the Receivables, Contracts and Financed
Vehicles shall be conducted by the Servicer under the Servicing Agreement. UAC
shall serve as initial Servicer under the Servicing Agreement and agrees to
perform the duties and obligations of the Servicer contained therein and in the
other Transaction Documents until such time as a successor Servicer has accepted
an appointment under the Servicing Agreement in accordance with the terms
thereof. UAC hereby makes, as of the Closing Date, to the Deal Agent, as agent
for the Secured Parties, each representation and warranty made by it (in its
individual capacity or as Servicer) in the Servicing Agreement, and each such
representation and warranty is hereby incorporated herein by this reference.
(b) The Servicer will administer and service, or cause to be administered and
serviced, the Receivables, Contracts and Financed Vehicles upon the terms and
conditions set forth in the Servicing Agreement.
(c) The occurrence of any of the following events shall constitute a Servicer
Default unless waived in writing by the Insurer, or, if an Insurer Default has
occurred, the Deal Agent:
(i) (A) failure by the Servicer to deliver to the Deal Agent or the Insurer
the Settlement Statement for the related Settlement Period, that
continues unremedied for a period of one Business Day after the earlier
to occur of (1) discovery by a responsible senior officer of the
Servicer, or (2) the date on which written notice has been received by
a senior officer of the Servicer or (B) any failure by the Servicer to
make a payment, transfer or deposit, or deliver to the Deal Agent any
proceeds or payment required to be so delivered under the terms of the
Note, this Agreement, the Servicing Agreement or any of the other
Transaction Documents to which it is a party within one Business Day of
the due date;
(ii) failure on the part of the Servicer to duly observe or perform any
other covenants or agreements of the Servicer set forth in any of the
Transaction Documents to which the Servicer is a party, which failure
(A)would have an adverse effect on the rights or interests of the
Insurer, the Lenders, the Deal Agent or the Collateral and (B)
continues unremedied for a period of 30 days after the Servicer has
actual knowledge of such failure;
(iii) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver, or liquidator for the Servicer in any
insolvency, readjustment of debt, marshaling of assets and liabilities,
or similar proceedings, or for the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days;
(iv) consent by the Servicer to the appointment of a Trustee in bankruptcy,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Servicer of or relating to
substantially all of its property, or the Servicer shall admit in
writing its inability to pay its debts generally as they become due,
filing by the Servicer of a petition to take advantage of any
applicable insolvency or reorganization statute, making by the Servicer
of an assignment for the benefit of its creditors, or the voluntarily
suspension by the Servicer of payment of its obligations;
(v) any representation, warranty or certification made by the Servicer in
any Transaction Document to which it is a party in its capacity as
Servicer, or in any certificate delivered pursuant to any Transaction
Document to which it is a party in its capacity as Servicer, proves to
have been incorrect when made, which (i) would have a material adverse
effect on the rights of the Lenders, the Insurer or the Collateral,
respectively, and (ii) if capable of cure, continues uncured for a
period of 30 days;
(vi) the occurrence of a material exception in any Servicing Audit which may
have a material adverse effect on the Lenders or the Insurer or the
Collateral, in the reasonable opinion of the Insurer;
(vii) the Net Yield as of any Determination Date is less than 2.00% during a
Settlement Period in which the Net Investment is greater than zero each
day of such Settlement Period; or
(viii) the failure to pay by the Servicer trade payables within 45 days of the
date due or the default and failure to cure within 10 days by the
Servicer in the payment of any other amount due of any obligation,
collectively in excess of $1 million outstanding at any one time, other
than any items in dispute; or
(ix) an "Event of Default" under the Servicing Agreement.
The Servicer shall provide to the Insurer and the Deal Agent prompt
notice of any Servicer Default or Potential Servicer Default. If a Servicer
Default shall not have been remedied, the Insurer, or upon the occurrence of an
Insurer Default, the Deal Agent, by notice then given in writing to the
Servicer, may terminate all (but not less than all) of the rights and
obligations of the Servicer in and to the Receivables and proceeds thereof. As
promptly as possible after the Insurer gives such notice (i) the Insurer shall,
in its sole and absolute discretion, appoint a successor Servicer or (ii) at the
direction of the Insurer and in consideration of reasonable market-based
compensation not to exceed $50,000, the Deal Agent shall use its best efforts to
secure a successor Servicer satisfactory to the Insurer to service the
Receivables in accordance with the Transaction Documents. Any obligation of the
Deal Agent to assist in securing a successor Servicer hereunder shall not be
construed as an obligation of the Deal Agent to assume any of the obligations or
responsibilities of the Servicer with regard to the Receivables. Upon the
occurrence of a Insurer Default, if the Deal Agent gives the Servicer a notice
of termination pursuant to this Section, the Deal Agent shall, in its sole and
absolute discretion, appoint a successor Servicer.
Upon the occurrence of a Servicer Default and the termination of the
Servicer, the Servicer shall continue to perform its functions as Servicer until
the date specified in the termination notice or, if no such date is specified
therein, the date of the Servicer's receipt of such notice, at which time all
rights, powers, duties, obligations and responsibilities of the Servicer under
this Agreement so terminated with respect to the Receivables shall, as
applicable, vest in and be assumed by the successor Servicer appointed
hereunder. During the continuance of a Servicer Default, at the request of the
Insurer, or after an Insurer Default, at the request of the Deal Agent, the
Servicer shall promptly deliver to the Insurer or a backup servicer designated
by the Insurer or the Deal Agent, as applicable, all material, data, backup
files, software (non exclusive right to limited use) and other information on
the Receivables that the Servicer possesses that is necessary to the collection
of the Receivables by any successor Servicer without the participation of the
Servicer and, upon termination of the Servicer, shall promptly deliver all such
material, data, backup fines, software and other information to the successor
Servicer appointed as provided herein.
Section 4.02. Books and Records. The Servicer shall maintain accurate and
complete accounts, records and computer systems pertaining to the Collateral.
Such accounts, records and computer systems shall be maintained in accordance
with the requirements of the Servicing Agreement and this Agreement.
Section 4.03. Appointment to Act as Borrower's Agent. The Borrower hereby
appoints the Servicer as its agent for the purpose of causing the repayment and
prepayment of the Net Investment as required or permitted pursuant Section 4.06.
The Borrower irrevocably agrees that (i) the Borrower shall be bound by all
actions of the Servicer taken pursuant to the preceding sentence, (ii) the Deal
Agent is authorized to accept submissions, determinations, selections,
specifications, transfers, notices, requests, demands and payments from the
Servicer on behalf of the Borrower and (iii) the execution and delivery by the
Servicer to the Deal Agent of any notice, request, demand or similar item or the
taking by the Servicer of any other action described in this Section shall be
deemed conclusive evidence, as between the Borrower and the Deal Agent, of the
Servicer's authority to execute and deliver such notice, request, demand or
similar item or take such other action on behalf of the Borrower hereunder.
Section 4.04. Delivery of Certain Reports. On or before each Determination Date,
the Servicer shall prepare and provide to the Deal Agent and the Insurer, (i) a
Settlement Statement as of the end of the preceding Settlement Period, (ii) if
reasonably requested by the Deal Agent or the Insurer with one Business Day's
prior notice, a computer tape listing by Obligor all Receivables, together with
an aging of such Receivables and (iii) such other information as the Deal Agent
or the Insurer may reasonably request. The Deal Agent shall provide to the
Borrower, two Business Days prior to each Determination Date, a monthly
settlement statement containing information relating to the amount of each
obligation of the Borrower which comprises Interest and fees due and payable for
the most recent Settlement Period and the amount of earnings in all related
accounts for such Settlement Period.
Section 4.05. Establishment of Accounts; Investment of Funds.
(a) There shall be established at First Union as Collateral Agent on the Closing
Date and maintained, for the benefit of the Deal Agent on behalf of the Secured
Parties, in each case bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Deal Agent on behalf of the
Secured Parties, the following segregated accounts in the name of the Collateral
Agent for the benefit of Deal Agent on behalf of the Secured Parties, a
collection account (the "Collection Account"), prefunding account (the
"Prefunding Account"), a prefunding interest reserve account (the "Prefunding
Interest Reserve Account"), a yield supplement account (the "Yield Supplement
Account") and a reserve account (the "Reserve Account"). Subject to the terms
hereof, the entity at which each Account is located shall possess all right,
title and interest in and to all funds deposited from time to time in the
related Account and such Account will be maintained at an Eligible Institution.
If the Eligible Institution holding an Account shall cease to be an Eligible
Institution, the Deal Agent shall have the right to direct the transfer of the
Account to an Eligible Institution.
(b) Funds on deposit in the Collection Account and Prefunding Account shall be
invested in overnight Eligible Investments and funds on deposit in the
Prefunding Interest Reserve Account, Reserve Account and Yield Supplement
Account shall be invested in Eligible Investments, in each case by or at the
written direction of the Borrower; provided, that if a Termination Event shall
have occurred, such investments shall be made as directed by the Deal Agent. Any
such written directions shall specify the particular investment to be made and
shall certify that such investment is an Eligible Investment and is permitted to
be made under this Agreement.
(c) Each entity at which an Account is located agrees that it shall not accept
for credit to such Account any investment as to which it has knowledge of any
Adverse Claim thereto. Each entity at which an Account is located hereby agrees
(and any other Securities Intermediary holding an Account shall so agree) to
comply with all Entitlement Orders received by it with respect to the related
Account from the Deal Agent.
(d) Without the prior consent of the Borrower, no Eligible Investment may be
liquidated or disposed of prior to its maturity. All proceeds of any such
Eligible Investment shall be deposited in the related Account. Investments may
be made in each Account on any date (provided such investments mature in
accordance herewith), only after giving effect to deposits to and withdrawals
from such Account on such date. Realized losses, if any, on amounts invested in
such Eligible Investments shall be charged against investment earnings on
amounts on deposit in the related Account. The Borrower shall provide the Deal
Agent and the Collateral Agent on the Closing Date and from time to time an
incumbency certificate or the substantial equivalent with respect to each
officer of the Borrower that is authorized to provide instructions relating to
investments in Eligible Investments in the Accounts.
(e) Eligible Investments shall be maintained in the Accounts in such manner as
may be necessary to maintain the first priority perfected security interest in
favor of the Deal Agent on behalf of the Secured Parties. Each entity at which
an Account is located agrees (and any other Securities Intermediary holding an
Account shall so agree) that it shall not agree to comply with Entitlement
Orders with respect to such Account given to it by any Person other than the
Deal Agent.
Section 4.06. Collections; Collection Account; Allocation of Available Funds;
Draws on Policy.
(a) The Servicer shall instruct all Obligors to cause all Collections to be
deposited directly with a Lock-Box Bank. The Servicer shall not add any bank as
a Lock-Box Bank to those listed on Exhibit G without the consent of the Deal
Agent and the Insurer, which consent shall not be unreasonably withheld. The
Servicer shall not terminate any bank as a Lock-Box Bank unless the Deal Agent
and the Insurer shall have received 30 days' prior notice of such termination.
If the Borrower or the Servicer receives any Collections, the Borrower or the
Servicer, as applicable, shall immediately, but in any event within two Business
Days of receipt, remit such Collections to a Lock-Box Account.
(b) The Servicer shall remit daily from the Lock-Box Account, within two
Business Days of receipt, to the Collection Account all Collections. On each
Remittance Date, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be considered to
be Collections and shall be distributed hereunder as such.
(c) On each Remittance Date, the Servicer shall allocate all Available Funds on
deposit in the Collection Account and, if the Net Investment equals zero, any
Principal Receipts allocable hereunder pursuant to Section 4.06(d), in the
following amounts and order of priority:
(i) to repay any amounts due under a Hedging Agreement or Hedging
Transaction pro rata in accordance with amounts due thereunder;
(ii) to the Servicer, (if the Servicer is not UAC) the fees, expenses and
other Carrying Costs due to such Servicer;
(iii) to the Collateral Agent, the fees and other expenses due to such
Collateral Agent;
(iv) to the Deal Agent, for the Lenders, accrued but unpaid Interest;
(v) to the Deal Agent, Program Fees;
(vi) to the Deal Agent, Facility Fees not to exceed the Facility Fee Cap;
(vii) to the Deal Agent, for the ratable payment to each Affected Party, the
Capped Costs;
(viii) to the Deal Agent, for the Lenders, to be applied in reduction of the
Net Investment, to bring the Net Asset Test into compliance;
(ix) to the Insurer, the aggregate amount of any previously unreimbursed
draws on the Policy, plus accrued interest thereon at the rate provided
in the Insurance Agreement;
(x) to the Insurer, the Premium, including any overdue Premium, accrued
interest thereon plus any amounts owed under the Policy or the
Insurance Agreement (other than those described in clause (ix) above);
(xi) to the Reserve Account, to the extent necessary to cause the amount on
deposit therein to equal the Required Reserve Account Amount;
(xii) to the Yield Supplement Account, to the extent of any amounts
previously withdrawn therefrom and not previously reimbursed to the
credit of the Yield Supplement Account (to the extent the Deal Agent
maintains an interest in the related Receivables);
(xiii) to the Servicer (if the Servicer is UAC), the Servicing Fee;
(xiv) after the Termination Date, to the Deal Agent, for the ratable payment
to the Lenders on an equal basis of priority, an amount necessary to
reduce the Net Investment to zero;
(xv) to the Deal Agent, (i) the excess of (A) the Facility Fees over (B) the
Facility Fee Cap and, (ii) for the ratable payment to each Affected
Party, the excess of (A) the sum of Increased Costs and the Additional
Amounts over (B) the Capped Costs;
(xvi) any remaining Available Funds and Principal Receipts on deposit in the
Collection Account shall be paid to the Borrower.
(d) On each Business Day on which there are Principal Receipts on deposit in the
Collection Account, the Deal Agent shall direct the Collateral Agent to, and the
Collateral Agent shall, apply and remit all such Principal Receipts on deposit
in the Collection Account to the Deal Agent in reduction of the Net Investment
until the Net Investment is reduced to zero. On any Remittance Date on which the
Net Investment is zero any Principal Receipts on deposit in the Collection
Account shall be allocated in the manner and priority set forth in Section
4.06(c).
(e) In the event that Available Funds with respect to any Remittance Date and
any withdrawals from the Yield Supplement Account are insufficient to provide
for the payment of the amounts described in items (i) though (viii) above, the
Collateral Agent at the direction of the Servicer shall make a withdrawal from
the Reserve Account in the amount of such deficiency and the proceeds from such
withdrawal shall be applied to the required distributions and payments. To the
extent that amounts available in the Reserve Account are insufficient to provide
for payment of items (iv) through (viii) above and the Borrower fails to make a
deposit to the Reserve Account in the amount of such shortfall, the Deal Agent
shall make a demand for payment of such amount under the Policy in accordance
with its terms. Amounts received under the Policy pursuant to the foregoing
sentence shall be applied by the Collateral Agent at the direction of the
Servicer to items (iv) through (viii) above. Notwithstanding the foregoing,
under no circumstances will the payment on any Remittance Date under the Policy
for item (vi) above exceed the Facility Fee Cap. On the Final Scheduled
Remittance Date, the Deal Agent shall make a demand under the Policy in
accordance with its terms for payment of any unpaid Interest, Program Fees,
Facility Fees not to exceed the Facility Fee Cap, Capped Costs and Net
Investment.
Section 4.07. Prefunding Interest Reserve Account; Prefunding Interest Reserve
Deposits; Interest Reserve Advances; Reimbursements.
(a) On the Business Day preceding each Prefunding Date, the Borrower shall
deposit in the Prefunding Interest Reserve Account an amount equal to the
product of (i) the Negative Carry for such Prefunding Date, (ii) the principal
amount of the Prefunding Deposit to be made on the Prefunding Date and (iii) a
fraction, the numerator of which is the number of days from the Prefunding Date
through the end of the Settlement Period during which such Prefunding Date
occurs and the denominator of which is 360 (such amount with respect to a
Prefunding Date, the "Prefunding Interest Reserve Deposit").
(b) On each Remittance Date, the Servicer shall deposit to the Collection
Account an amount equal to the Interest Reserve Advance, if any, for such
Remittance Date. In the event that, on any Remittance Date, the amount earned
over the related Settlement Period on amounts on deposit in the Prefunding
Account shall exceed an amount equal to the product of (i) the daily weighted
average amount on deposit in the Prefunding Account during the related
Settlement Period, (A) the Targeted Interest Rate and (B) a fraction, the
numerator of which is the number of days in the related Settlement Period and
the denominator of which is 360, the Collateral Agent, at the written direction
of the Servicer, shall release such excess amount from the Prefunding Interest
Reserve Account to the Servicer in reimbursement for previously advanced
Interest Reserve Advances or, to the extent no such unreimbursed advances exist,
the Servicer shall apply such excess amount as part of Available Funds under
Section 4.06.
(c) On each Remittance Date, all amounts deposited in the Prefunding Interest
Reserve Account with respect to the related Settlement Period (together with any
earnings on amounts on deposit in the Prefunding Interest Reserve Account during
such Settlement Period) shall be deposited in the Collection Account.
Section 4.08. Yield Supplement Account, Deposits; Withdrawals.
(a) On the day of the initial Prefunding with respect to all Receivables
recorded on the Servicer's master servicing records as of such day and on any
Business Day thereafter on which a Receivable is recorded on the Servicer's
master servicing records, the Borrower shall deposit into the Yield Supplement
Account for each such Receivable with respect to which the related Contract
provides for interest to accrue thereunder at a rate less than the Minimum
Required APR (determined as of the date of such recordation on the Servicer's
master servicing records) an amount (each such amount, a "Required Yield Deposit
Amount") equal to the product of (i) the number of monthly payments originally
required under such Contract and (ii) an amount equal to (A) the scheduled
monthly payment on such Contract which would be required to be made by the
Obligor there under if such Contract had a rate per annum equal to the Minimum
Required APR minus (B) the scheduled monthly payment on such Contract which
would be required to be made by the Obligor thereunder if such Contract had a
rate per annum equal to the rate set forth in such Contract. Notwithstanding the
foregoing, no Required Yield Deposit Amount need be deposited to the Yield
Supplement Account until the total amount of all undeposited Required Yield
Deposit Amounts equals or exceeds $10,000.
(b) In the event that Available Funds with respect to any Remittance Date are
insufficient to provide for the payment of the amounts described in Section
4.06(c)(i) through (viii), the Collateral Agent, at the direction of the
Servicer, shall make a withdrawal from the Yield Supplement Account in the
amount of such deficiency and the proceeds from such withdrawal shall be applied
by the Collateral Agent, at the direction of the Servicer, to the required
distributions and payments. On any day on which the Deal Agent, pursuant to
Section 2.05, Section 3.02 or Section 3.04, releases to the Borrower its
security interest in a Contract and related Receivable with respect to which the
Borrower deposited funds in the Yield Supplement Account pursuant to Section
4.08(a), the amount of such deposit (together with any earnings thereon) less
any amounts released from the Yield Supplement Account in accordance with
Section 4.08 shall be released to the Borrower. Upon the occurrence of a
Termination Event, all amounts on deposit in the Yield Supplement Account shall
be applied by the Servicer as part of Available Funds pursuant to Section 4.06.
Section 4.09. Reserve Account; Releases.
(a) On each Prefunding Date, the Borrower shall deposit (or cause to be withheld
from the Prefunding Deposit) to the credit of the Reserve Account an amount
equal to an amount necessary to fund the Reserve Account to the Required Reserve
Account Amount. The amount of any Reserve Account Guaranty shall be counted
toward the amount of funds available in the Reserve Account.
(b) In the event that on any Remittance Date or day on which a Securitization or
Warehouse Transfer occurs after giving effect to Section 4.06(e), the amount on
deposit in the Reserve Account (calculated as of the related Determination Date
or the date of the Securitization or Warehouse Transfer, as applicable) exceeds
the Required Reserve Account Amount, (i) the Collateral Agent, at the written
direction of the Servicer provided that no Termination Event shall have
occurred, shall release to the Borrower an amount equal to the excess of the
amount on deposit in the Reserve Account over the Required Reserve Account
Amount and (ii) the Deal Agent shall, if a Termination Event shall have
occurred, apply as part of Available Funds pursuant to Section 4.06 the amount
on deposit in the Reserve Account.
(c) After the occurrence of the Termination Date, upon the earlier of (i) the
day on which the Net Investment is zero, the Secured Parties shall have received
all Aggregate Unpaids and all amounts due and owing the Insurer shall have been
paid in full and (ii) the day on which the aggregate Outstanding Balance of the
Receivables shall be zero, the Deal Agent shall release to the Borrower all
amounts on deposit in the Reserve Account.
ARTICLE Five
CONDITIONS OF CLOSING AND PREFUNDINGS
Section 5.01. Conditions to Closing. No Lender shall be obligated to make the
initial Prefunding, nor shall any Secured Party, the Deal Agent or the Liquidity
Agent be obligated to take, fulfill or perform any other action hereunder, until
the following conditions have been satisfied, in the sole discretion of, or
waived in writing by the Insurer, or the Deal Agent with the consent of the
Insurer:
(a) The Deal Agent shall have received each of the following documents,
each of which is dated (unless otherwise indicated) as of the Closing
Date, in form and substance satisfactory to the Deal Agent:
(i) this Agreement, executed and delivered by the parties
hereto;
(ii) the Note, executed and delivered by the Borrower;
(iii) the Insurance Agreement, executed and delivered by the
parties thereto;
(iv) the Sale and Purchase Agreement I and the Sale and
Purchase Agreement II executed and delivered by the parties thereto;
(v) the Servicing Agreement executed and delivered by the
parties thereto;
(vi) certificate of the Secretary or an Assistant Secretary of
each of UAC and the Borrower, in each case certifying:
(A) that attached thereto are true and correct
copies of the following, each of which is
true, correct and complete as of the Closing
Date:
(1) articles of incorporation,
including all amendments
thereto, certified as of a
recent date, in the case
of UAC, by the Secretary
of State of the State of
Indiana, and, in the case
of the Borrower, by the
Secretary of State of the
State of Delaware;
(2) bylaws, including all
amendments thereto; and
(3) resolutions of the Board
of Directors authorizing,
among other things, the
execution, delivery and
performance of each
Transaction Document to
which UAC or the Borrower,
as the case may be, is a
party; and
(B) the names and the signatures of its officers
authorized to sign the Transaction Documents
to which UAC or the Borrower, as the case
may be, is a party;
(vii) Officer's Certificate from each of UAC and the Borrower,
certifying that (A) each of the representations and warranties of such party
contained in the Transaction Documents to which it is a party are true and
correct on and as of the Closing Date as if made on such date, (B) no
Termination Event, Potential Termination Event, Servicer Default or Potential
Servicer Default exists on the Closing Date and (C) no material adverse change
in its condition, financial or otherwise, business, operations, results of
operations or properties has occurred which has not been disclosed to the Deal
Agent;
(viii) UCC, judgment and tax lien search reports for UAC and
the Borrower satisfactory to the Deal Agent;
(ix) opinions of counsel, addressed to the Lenders and the
Insurer, satisfactory to the Deal Agent, as to the following matters:
(A) non-consolidation in bankruptcy of the
Borrower and the Seller with UAC;
(B) true sale of the Receivables from UAC to the
Seller and from the Seller to the Borrower;
(C) perfection and priority of security interest
of the Deal Agent in the Collateral; and
(D) authorization, execution, delivery and
enforceability of the Transaction Documents
to which the UAC Entities are parties;
(x) the Fee Letter, executed and delivered by the parties
thereto;
(xi) a Hedging Agreement, executed and delivered by the
parties thereto;
(xii) such documents, certificates and opinions as to the
Servicer as the Deal Agent may reasonably request; and
(xiii) such other documents, certificates and opinions as the
Deal Agent may reasonably request.
(b) As of the Closing Date, the Deal Agent shall have received (i)
satisfactory evidence that each UAC Entity has obtained all
required consents and approvals of all Persons, including all
requisite Governmental Authorities, to the execution, delivery
and performance of this Agreement and the other Transaction
Documents to which it is a party and the consummation of the
transactions contemplated hereby or thereby or (ii) an
Officer's Certificate from any such entity in form and
substance satisfactory to the Deal Agent affirming that no
such consents or approvals are required.
(c) As of the Closing Date, the Borrower shall be in compliance in
all material respects with all applicable Requirements of Law.
(d) The Borrower shall have paid, or cause to have been paid, all
fees required to be paid by it on the Closing Date, including
all fees required hereunder and under the Fee Letter to be
paid as of the Closing Date, and, subject to any prior
agreement among UAC, the Borrower and the Deal Agent, shall
have reimbursed each Lender and the Deal Agent for all fees,
costs and expenses of closing the transactions contemplated
hereunder and under the other Transaction Documents, including
the legal and other document preparation costs incurred by the
Deal Agent and any Lender.
Section 5.02. Conditions Precedent to Prefundings. Each Prefunding (including
the initial Prefunding) made pursuant to Section 2.01 shall be subject to the
further conditions precedent that:
(a) the Net Investment after giving effect to such Prefunding does
not exceed the Facility Amount;
(b) after giving effect to such Prefunding, the Net Asset Test is
satisfied;
(c) the Borrower shall have deposited any Required Yield Deposit
Amount into the Yield Supplement Account required pursuant to
Section 4.08;
(d) the Borrower will have made any deposit into the Prefunding
Interest Reserve Account required pursuant to Section 4.07;
(e) the Policy is in full force and effect and no Insurer Default
shall have occurred and the Insurer is not rated below "AA" by
Standard & Poors;
(f) the amount on deposit in the Reserve Account is not less than
the Required Reserve Account Amount (calculated (i)
immediately prior to such Prefunding Date and (ii) as if such
Prefunding and related Reserve Account deposit shall have been
made);
(g) a Potential Termination Event, a Termination Event or the
Termination Date has not occurred and is not continuing;
(h) on the related Prefunding Date, a Responsible Officer of the
Borrower shall have certified in the related Prefunding
Request that:
(i) the representations and warranties of the Borrower set
forth in Section 6.01 are true and correct on and as of such date, before and
after giving effect to such Prefunding and to the application of the proceeds
therefrom, as though made on and as of such date;
(ii) no event has occurred which constitutes a Termination
Event or a Potential Termination Event; and
(iii) the Borrower is in material compliance with each of its
covenants set forth herein;
(i) there has been no change in the condition, financial or
otherwise, business, operations, results of operations or
properties of the Borrower since the most recent Prefunding
Date or, in the case of the initial Prefunding, since the
Closing Date;
(j) the making of the Prefunding on such Prefunding Date will not
violate any Requirement of Law applicable to any Lender or
Investor;
(k) as of the related Prefunding Date, the information contained
in the Prefunding Request delivered pursuant to Section 2.01
are true, accurate, complete and correct in all material
respects;
(l) a Hedging Agreement shall be in effect;
(m) the Borrower shall have taken such other action, including
delivery of approvals, consents, opinions, documents and
instruments to VFCC, the Deal Agent and the Insurer as each
may reasonably request; and
(n) UAC shall not have adopted any change to its Credit and
Collection Policy that has been disapproved by the Insurer
pursuant to Section 7.01(a)(v).
Section 5.03. Conditions Precedent to Withdrawals from the Prefunding Account.
Each withdrawal from the Prefunding Account made pursuant to Section 2.02 shall
be subject to the further conditions precedent that:
(a) each of the conditions precedent to the acquisition by the
Borrower of each related Receivable under the Sale and
Purchase Agreement II shall have been fulfilled in all
respects and not waived; and
(b) no event has occurred which constitutes a Termination Event or
Potential Termination Event and such withdrawal will not cause
a Termination Event or Potential Termination Event.
ARTICLE Six
REPRESENTATIONS AND WARRANTIES
Section 6.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows to the Deal Agent, each Secured Party and the
Liquidity Agent that:
(a) Corporate Existence and Power. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power, legal right
and all material governmental licenses, authorizations, consents and
approvals required to own or lease its properties and to carry on its
business in each jurisdiction in which its business is now conducted.
(b) Due Qualification. The Borrower is duly qualified to do business and is
in good standing as a corporation, and has obtained or will obtain all
necessary licenses and approvals, in each jurisdiction in which failure
to so qualify would have a material adverse effect on its ability to
perform its obligations hereunder.
(c) Corporate and Governmental Authorization; Contravention. The execution,
delivery and performance by the Borrower of this Agreement and the
other Transaction Documents are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body,
agency or official (except as contemplated by Section 3.03), and do not
contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or bylaws of
the Borrower or of any indenture, contract, agreement, mortgage, deed
of trust, judgment, injunction, order, decree or other instrument
binding upon the Borrower or under which it or any of its property is
bound, or result in the creation or imposition of any lien on assets of
the Borrower (except as contemplated by Section 3.03), or require the
consent or approval of, or the filing of any notice or other
documentation with, any Governmental Authority or other Person (except
as contemplated by Section 3.03).
(d) No Violation. The execution and delivery of this Agreement and each
other Transaction Document to which the Borrower is a party, the
performance of the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not conflict with or
violate, in any material respect, any Requirements of Law applicable to
the Borrower.
(e) Binding Effect. Each of this Agreement and the other Transaction
Documents and any Warehouse Transfer Agreement to which the Borrower is
a party constitutes the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors.
(f) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority
required in connection with the execution and delivery by the Borrower
of this Agreement and each other Transaction Document to which it is a
party, the performance by the Borrower of the transactions contemplated
by this Agreement and each such other Transaction Document, and the
fulfillment of the terms hereof and thereof by the Borrower, have been
obtained, unless the failure to obtain such shall not materially and
adversely affect the Borrower's performance of its obligations under
this Agreement and each other Transaction Document to which it is a
party.
(g) Perfection. Immediately preceding each Prefunding, the Borrower shall
be the owner of all of the Receivables, free and clear of all liens,
encumbrances, security interests, preferences or other security
arrangement of any kind or nature whatsoever, except as permitted by
this Agreement and the other Transaction Documents. On or prior to each
Prefunding and each day on which a Receivable is sold to the Borrower
by the Seller pursuant to the Sale and Purchase Agreement II or a
Warehouse Transfer Agreement, all financing statements and other
documents required to be recorded or filed in order to perfect and
protect (i) the Borrower's interest in the Receivables, the Contracts
related thereto, the Related Security with respect thereto and all
proceeds thereof against all creditors of and purchasers from UAC, the
Seller or UAC Finance, and (ii) the Deal Agent's interest in the
Collateral against all creditors of and purchasers from the Borrower,
and all filing fees and taxes, if any, payable in connection with such
filings shall have been paid in full.
(h) Accuracy of Information. All information heretofore furnished by the
Borrower (including without limitation, the Settlement Statements, any
reports delivered pursuant to Section 4.04 and UAC's financial
statements) to and relied upon by the Deal Agent, the Secured Parties
or any of the other Persons party hereto for purposes of or in
connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to any
such Person will be, true and accurate in every material respect, on
the date such information is stated or so furnished. All the financial
statements have been prepared in accordance with GAAP, consistently
applied, but in the case of quarterly financial statements, without
footnotes.
(i) Accuracy of Representations and Warranties. Each representation or
warranty by the Borrower contained herein or in any certificate or
other document furnished by the Borrower pursuant hereto or in
connection herewith is true and correct in all material respects on and
as of the Prefunding Date, before and after giving effect to the
Prefunding to be made on such date and the application of proceeds
therefrom, as though made on and as of such date.
(j) Tax Status. All tax returns (federal, state and local) required to be
filed with respect to the Borrower have been filed (which filings may
be made by an Affiliate of the Borrower on a consolidated basis
covering the Borrower and other Persons) and there has been paid or
adequate provision made for the payment of all taxes, assessments and
other governmental charges in respect of the Borrower (or in the event
consolidated returns have been filed, with respect to the Persons
subject to such returns).
(k) Action, Suits. Except as set forth in Exhibit H, there are no
proceedings or investigations pending or, to the best knowledge of the
Borrower, threatened against the Borrower, before any Governmental
Authority (i) asserting the invalidity of this Agreement or any other
Transaction Document to which it is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or any such other Transaction Document or (iii) seeking any
determination or ruling that could reasonably be expected to be
adversely determined, and if adversely determined, would materially and
adversely affect the performance by the Borrower of its obligations
under this Agreement or any other Transaction Document to which it is a
party.
(l) Use of Proceeds. The proceeds of any Prefunding will be used by the
Borrower to (i) acquire the Receivables, the Contracts related thereto
and the Related Security with respect thereto pursuant to a Warehouse
Transfer Agreement or from the Seller pursuant to the Sale and Purchase
Agreement II, (ii) to pay down debt in connection with the purchase of
the Receivables and Contracts pursuant to the Sale and Purchase
Agreement II or Warehouse Transfer Agreement, or (iii) to make
distributions constituting a return of capital.
(m) Place of Business. The chief place of business and chief executive
office of the Borrower are located at the address of the Borrower
indicated in Section 12.02 hereof and the offices where the Borrower
keeps all its records, are located at the address(es) described on
Exhibit I or such other locations in respect of which the Borrower has
given the Deal Agent and VFCC notice in accordance with this Agreement.
(n) Good Title. On each day on which a Receivable and related Contract is
sold to the Borrower pursuant to a Warehouse Transfer Agreement or by
the Seller pursuant to the Sale and Purchase Agreement II, the Deal
Agent shall acquire a valid and perfected first priority security
interest in each Receivable and related Contract that exists on the
date of such sale and in the Related Security and Collections with
respect thereto free and clear of any Adverse Claim.
(o) Tradenames, Etc. As of the date hereof: (i) the Borrower has no
subsidiaries or divisions; (ii) the Borrower has no trade names,
fictitious names, assumed names or "doing business as" names or other
names under which it has done or is doing business; and (iii) within
the last five years, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any
proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy).
(p) Nature of Receivables. Each Receivable represented by the Borrower as
an Eligible Receivable hereunder or in any report, document or
instrument delivered hereunder or in connection with the other
Transaction Documents and any Warehouse Transfer Agreement is an
Eligible Receivable at the time of such representation.
(q) No Termination Event. No event has occurred and is continuing and no
condition exists which constitutes a Termination Event or a Potential
Termination Event.
(r) Not an Investment Company. The Borrower is not an "investment company"
or a company "controlled" by an "investment company" or a "principal
underwriter" or "promoter" for an "investment company" within the
meaning of the Investment Company Act. With respect to the Borrower,
the consummation of the transactions contemplated by the Transaction
Documents and any Warehouse Transfer Agreement to which the Borrower is
a party do not violate any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission
thereunder.
(s) ERISA. Each of the Borrower and its ERISA Affiliates is in compliance
in all material respects with ERISA and has not incurred and does not
expect to incur any liabilities (except for premium payments arising in
the ordinary course of business) under ERISA and no lien in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables will
exist.
(t) Lock-Box Accounts. The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts at such
Lock-Box Banks, are specified in Exhibit G hereto (or at such other
Lock-Box Banks and/or with such other Lock-Box Accounts as have been
notified to the Deal Agent). All Obligors have been instructed to make
payment to a Lock-Box Account.
(u) Insurance Policies. At the time of the sale of each Receivable and
related Contract by Seller to the Borrower pursuant to the Sale and
Purchase Agreement II, each Financed Vehicle is required to be covered
by physical damage and liability insurance obtained by the related
Obligor at least in the amount required by the related Contract, and
each such required insurance policy is required to name UAC as loss
payee and is required to be in full force and effect.
(v) Consents; Receivable. With respect to each Receivable referenced in
clause (p) above, all consents, licenses, approvals, authorizations,
registrations or declarations with any Governmental Authority required
to be obtained, effected or given by the Borrower in connection with
the acquisition of such Receivable by the Borrower have been duly
obtained, effected or given and are in full force and effect.
(w) Solvency. At all relevant times prior to, and immediately following the
consummation of the transactions contemplated under this Agreement and
each other Transaction Document to which it is a party, the Borrower
was, is and will be, Solvent.
(x) Selection Procedures. No procedures that could be adverse to the
interests of the Secured Parties were utilized by the Borrower in
identifying and/or selecting the Receivables that were funded by a
Prefunding except to the extent resulting from the Eligible Receivable
criteria.
(y) Exchange Act Compliance. No proceeds of any Prefunding will be used by
the Borrower to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(z) Separate Entity. The Borrower is operated as an entity with assets and
liabilities distinct from those of UAC and any affiliate thereof (other
than the Borrower), and the Borrower hereby acknowledges that the
Secured Parties are entering into the transactions contemplated by this
Agreement in reliance upon the Borrower's identity as a separate legal
entity from UAC and from each such other affiliate of UAC.
(aa) Security Interest; True Sale. The provisions of Section 3.01 are
effective to grant a first priority security interest in the Collateral
to the Deal Agent, as agent for the Secured Parties, to secure payment
and performance of the Obligations. On or before the Closing Date, the
Deal Agent, as agent for the Secured Parties, will have a first
priority perfected security interest in the Collateral. The Borrower
accounts for the transfer to it from the Seller of the Receivables and
all proceeds thereof as a sale thereof in its books, records and
financial statements, consistent with GAAP and with the requirements
set forth herein.
(bb) No Prohibition On Transfer. The Borrower has not entered into any
agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the Receivables.
(cc) All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be
taken or performed by any Person in any jurisdiction to give the Deal
Agent, as agent for the Secured Parties, a first priority perfected
security interest in the Collateral and the proceeds thereof have been
made, taken or performed.
(dd) No Impairment. Except as otherwise contemplated by the Transaction
Documents, it has not done anything to convey any right to any Person
that would result in such Person having a right to payments due under
any portion or all of the Collateral or otherwise to impair the rights
of any Secured Party or the Deal Agent in any of the Collateral or the
proceeds thereof.
(ee) No Subsidiaries. The Borrower has no subsidiaries.
The representations and warranties set forth in this Section shall
survive the pledge of the Collateral to the Deal Agent as agent for the Secured
Parties. Upon discovery by the Borrower, the Deal Agent, any Secured Party, the
Liquidity Agent or VFCC of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the others.
ARTICLE Seven
GENERAL COVENANTS OF THE BORROWER
Section 7.01. Covenants of Borrower and UAC. The Borrower and UAC, as
applicable, hereby covenants that until the date on which all Obligations have
been indefeasibly paid in full:
(a) Financial Reporting. The Borrower and UAC each will maintain, for
itself and each subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles, and UAC (or, in the case of clauses (iii) and (iv), the
Borrower) will furnish to the Deal Agent and the Insurer:
(i) Annual Reporting. Within 90 days after the close of each of
its fiscal years, audited financial statements, prepared in
accordance with GAAP on a consolidated basis for itself and
its subsidiaries, including balance sheets as of the end of
such period, related statements of operations, shareholder's
equity and cash flows, accompanied by an audit report of a
nationally recognized firm of independent certified public
accountants (or such other firm of independent certified
public accountants acceptable to the Deal Agent and the
Insurer) which report shall be unqualified as to going concern
and scope of audit and shall state that such consolidated
financial statements present fairly the financial position of
UAC and its Affiliates at the dates indicated and the results
of their operations and their cash flow for the periods
indicated is in conformity with GAAP and that the examination
had been made in accordance with generally accepted auditing
standards.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three quarterly periods of each of its fiscal years, for
itself and its Affiliates, consolidated unaudited balance
sheets as of the close of each such period and consolidated
related statements of operations, shareholder's equity and
cash flows for the period from the beginning of such fiscal
year to the end of such quarter, all certified by its chief
financial officer.
(iii) Compliance Certificate. Concurrently with the delivery by UAC
of the financial statements required hereunder, a compliance
certificate signed by its president or vice president stating
that no Termination Event or Potential Termination Event
exists, or if any Termination Event or Potential Termination
Event exists, stating the nature and status thereof.
(iv) Notice of Termination Events or Potential Termination Events.
As soon as possible and in any event within two days after the
occurrence of each Termination Event or each Potential
Termination Event, a statement of the president or vice
president of the Borrower setting forth details of such
Termination Event or Potential Termination Event and the
action which the Borrower proposes to take with respect
thereto.
(v) Change in Credit and Collection Policy. Within three days
after the date any material change in or amendment to the
Credit and Collection Policy is made, a copy of the Credit and
Collection Policy then in effect indicating such change or
amendment. Any material change in the Credit and Collection
Policy shall be deemed disapproved by the Insurer as of the
time and date that (i) the Insurer gives notice of such
disapproval or (ii) the Insurer has not approved such change
and ten days have passed since the date on which UAC is
required to provide the Insurer with notice of such change.
Any approval by the Insurer shall be final.
(vi) Credit and Collection Policy. Upon request by the Deal Agent
or any Secured Party, a complete copy of the Credit and
Collection Policy then in effect.
(vii) Blue Book. Within 45 days after the close of the quarterly
period of each of its fiscal years, a copy of the UAC
Quarterly Statistical Update (a/k/a/UAC's "blue book").
(viii) ERISA. Promptly after the filing or receiving thereof, copies
of all reports and notices with respect to any Reportable
Event (as defined in Article IV of ERISA) which the Borrower,
UAC or any ERISA Affiliate of the Borrower or UAC files under
ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or which
the Borrower, UAC or any ERISA Affiliates of the Borrower or
UAC receives from the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor.
(ix) Other Information. Such other information (including
non-financial information) as the Deal Agent, the Collateral
Agent or any Secured Party may from time to time reasonably
request.
(b) Conduct of Business. The Borrower will and UAC will (i) carry on and
conduct its business in substantially the same manner and in
substantially the same or related fields of enterprise (including, in
the case of UAC, consumer finance activities) as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and (ii) maintain all requisite authority
to conduct its business in each jurisdiction in which its business is
conducted.
(c) Compliance with Laws. The Borrower will and UAC will comply in all
material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject.
(d) Furnishing of Information and Inspection of Contract Documents. The
Borrower will furnish to the Deal Agent and the Secured Parties from
time to time such information with respect to the Receivables as the
Deal Agent or any Secured Party may reasonably request, including,
without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. Upon at least two Business
Days' prior notice, the Borrower and UAC will during regular business
hours permit the Deal Agent or any Secured Party, or their agents or
representatives, (i) to examine and make copies of and abstracts from
all Contract Documents and (ii) to visit the offices and properties of
the Borrower and UAC for the purpose of examining such Contract
Documents, and to discuss matters relating to Receivables or the
Borrower's or UAC's performance hereunder or under the Sale and
Purchase Agreement I, the Sale and Purchase Agreement II, or the
Servicing Agreement with any of the officers, employees or independent
public accountants of the Borrower or UAC having knowledge of such
matters.
(e) Keeping of Records and Books of Account. The Borrower and UAC
(consistent with its role as Servicer) will maintain and implement
administrative and operating procedures (including, without limitation,
an ability to recreate records evidencing Receivables in the event of
the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the daily identification of each
new Receivable and all Collections of and adjustments to each existing
Receivable). The Borrower and UAC will give the Deal Agent, the Insurer
and Standard & Poor's notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(f) Performance and Compliance with Receivables and Contracts. The Borrower
and UAC will at their expense timely and fully perform and comply with
all material provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables.
(g) Credit and Collection Policies. UAC will comply in all material
respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) Collections. The Borrower and UAC shall instruct all Obligors to cause
all Collections to be deposited directly to a Lock-Box Account.
(i) Collections Received. The Borrower and UAC shall hold in trust, and
deposit, immediately, but in any event not later than two Business Days
of its receipt thereof, to a Lock-Box Account all Collections received
from time to time by them.
(j) Corporate Documents. The Borrower shall only amend, alter, change or
repeal Articles III, IV, V, VI and XI of its certificate of
incorporation as in effect on the date hereof with the prior written
consent of the Deal Agent.
(k) No Sales, Liens, Etc. Except in conjunction with a Year-End Transfer or
as otherwise provided herein, neither the Borrower nor UAC will sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (or the filing of any
financing statement) or with respect to, any Receivable or related
Contract, or upon or with respect to any account which concentrates in
a Lock-Box Bank to which any Collections of any Receivable are sent, or
assign any right to receive income in respect thereof.
(l) No Extension or Amendment of Receivables. Except as otherwise permitted
in the Servicing Agreement, Credit and Collection Policy or as required
by law, neither the Borrower nor UAC will extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any term
or condition of any Contract related thereto.
(m) No Change in Business, Credit and Collection Policy or Servicing
Agreement. Neither the Borrower nor UAC shall, without the prior
written consent of the Deal Agent and the Insurer, make any change in
the character of its business, in the Credit and Collection Policy or
in the Servicing Agreement, which change would, in either case (i)
impair the collectibility of any Receivable or (ii) change the
write-off policy in effect as of the Closing Date with respect to the
Receivables and the Contracts.
(n) Sale of Assets, Etc. Neither the Borrower nor UAC will sell, lease or
transfer all or substantially all of its assets to any other person;
provided, however, that no such sale shall be deemed to occur solely as
a result of a Year-End Transfer, a Take-Out or solely as a result of
the sale of Contracts and related Receivables which are released to the
Borrower pursuant to Section 2.05.
(o) Change in Payment Instructions to Obligors. Neither the Borrower nor
UAC nor the Servicer will add or terminate any bank as a Lock-Box Bank
or any account as a Lock-Box Account to or from those listed in Exhibit
G hereto or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless (i) such
instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Deal Agent shall have received written notice of
such addition, termination or change at least 30 days prior thereto.
(p) Change of Name, Etc. The Borrower will not move, or consent to the
Servicer moving, the Contract Documents without 30 days' prior written
notice to the Deal Agent and the Insurer and will not change its name,
identity or structure or its chief executive office, unless at least 30
days prior to the effective date of any such change the Borrower
delivers to the Deal Agent UCC financing statements, executed by the
Borrower necessary to reflect such change and to continue the
perfection of the Deal Agent's security interest in the Receivables.
(q) No Mergers, Etc. Neither the Borrower nor UAC will (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other person, unless (A)
the Borrower or UAC, respectively, is the surviving entity or (B) such
sale or transfer constitutes a Year-End Transfer.
(r) Sale Treatment. Neither the Borrower, UAC nor the Seller will account
for (including for accounting and tax purposes), or otherwise treat,
the transactions contemplated by the Sale and Purchase Agreement I and
Sale and Purchase Agreement II in any manner other than as a sale of
Receivables by the Seller to the Borrower.
(s) Indebtedness. The Borrower shall not create, incur, assume or suffer to
exist any indebtedness, whether current or funded, or other liability
whatsoever other than (i) indebtedness of the Borrower representing
fees, expenses and indemnities arising hereunder or under the Sale and
Purchase Agreement II for the purchase price of the Receivables under
the Sale and Purchase Agreement II, (ii) obligations incurred under
this Agreement, (iii) liabilities incident to the maintenance of its
corporate existence in good standing, (iv) as contemplated in the
Transaction Documents and any Warehouse Transfer Agreement and (v)
other Indebtedness incurred in the ordinary course of its business in
an amount not to exceed $9,500 at any time outstanding.
(t) Security Interests. Except as contemplated in this Agreement and the
other Transaction Documents, the Borrower will not sell, pledge, assign
or otherwise transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on, or any portion or all of the
Collateral hereunder without the prior written consent of the Deal
Agent. The Borrower shall, or shall cause the Deal Agent to, in the
normal course of its or the Deal Agent's business, cause any such Lien
to be removed or released. The Borrower will promptly notify the Deal
Agent of the existence of any Lien on the Collateral upon the
Borrower's knowledge of the same and the Borrower shall defend the
right, title and interest of the Deal Agent, as agent for the Secured
Parties, in to and under any part of the Collateral, against all claims
of third parties; provided, however, that nothing in this Section
7.01(u) shall prevent or be deemed to prohibit the Borrower from
suffering to exist Permitted Liens upon any portion or all of the
Collateral.
(u) Agreements; Modifications. The Borrower shall not become a party to, or
permit any of its properties to be bound by, any indenture, mortgage,
instrument, contract, agreement or other undertaking, except this
Agreement and the other Transaction Documents and any Warehouse
Transfer Agreement to which it is a party, or amend or modify the
provisions of its articles of incorporation, bylaws or any Transaction
Documents and any Warehouse Transfer Agreement, without the prior
written consent of the Deal Agent and the Insurer, or issue any power
of attorney except to the Servicer in connection with the duties of the
Servicer under this Agreement and to the Deal Agent.
(v) Amendments; Modifications. The Borrower shall not agree to permit to
occur or execute any amendment, modification, waiver or restatement to
any Transaction Documents or to any provision thereof without the prior
written consent of the Deal Agent and the Insurer which, for any such
modification or amendment made to cure any ambiguity, correct or
supplement any provision in such Transaction Document that may be
inconsistent with other provisions therein, or to make any other
provisions with respect to matters or questions arising under such
agreement that are not inconsistent with the provisions of the
agreement, shall not be unreasonably withheld.
(w) Activities; Separate Corporate Existence and Business. The Borrower
shall:
(i) not engage in any business or activity of any kind, or enter
into any transaction or indenture, mortgage, instrument,
agreement, contract, lease or other undertaking, which is not
incidental to the transactions contemplated and authorized by
the Transaction Documents and any Warehouse Agreement, except
for any subsequent securitizations or financings for which the
Borrower has received the prior written approval of the Deal
Agent;
(ii) at all times (A) to the extent the Borrower's office is
located in the offices of UAC or any Affiliate of UAC, pay
fair market rent for its executive office space located in the
offices of UAC or any Affiliate of UAC, (B) maintain the
Borrower's books, financial statements, accounting records and
other corporate documents and records separate from those of
UAC or any other entity, (C) not commingle the Borrower's
assets with those of UAC or any other entity (it being
understood that certain Collections on Receivables owned by
the Borrower may be temporarily commingled with collections on
other receivables serviced by UAC), (D) act solely in its
corporate name and through its own authorized officers and
agents, (E) make investments directly or by brokers engaged
and paid by the Borrower or its agents (provided that if any
such Agent is an Affiliate of the Borrower it shall be
compensated at a fair market rate for its services), (F)
separately manage the Borrower's liabilities from those of UAC
or any Affiliates of UAC and pay its own liabilities,
including all administrative expenses, from its own separate
assets, and (G) pay from the Borrower's assets all obligations
and indebtedness of any kind incurred by the Borrower. The
Borrower shall (i) pay all its liabilities, (ii) not assume
the liabilities of UAC or any Affiliate of UAC, and (iii) not
guarantee the liabilities of UAC or any Affiliate of UAC. The
officers and directors of the Borrower (as appropriate) shall
make decisions with respect to the business and daily
operations of the Borrower independent of and not dictated by
any controlling entity;
(iii) conduct its affairs strictly in accordance with its articles
of incorporation and observe all necessary, appropriate and
customary corporate formalities, including, but not limited
to, holding all regular and special shareholders, and
directors' meetings appropriate to authorize all corporate
action, keeping separate and accurate minutes of its meetings,
passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and
separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts; and
(iv) take or refrain from taking, as applicable, each of the
activities specified in the "non-substantive consolidation"
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ delivered on the Closing Date,
upon which the conclusions expressed therein are based.
(x) Collateral; Further Assurances. With respect to the
Collateral, the Borrower will (i) acquire Receivables only
pursuant to and in accordance with the terms of the Sale and
Purchase Agreement II and any Warehouse Transfer Agreement,
(ii) take all action necessary to perfect, protect and more
fully evidence the Deal Agent's interest, on behalf of the
Secured Parties in the Collateral, including, without
limitation, (A) filing and maintaining (or causing to be filed
and maintained), effective financing statements (Form UCC-1)
naming (1) UAC as seller/debtor and the Borrower as
purchaser/creditor and (2) the Borrower as seller/debtor and
the Deal Agent on behalf of the Secured Parties as
purchaser/creditor in all necessary or appropriate filing
offices, and filing continuation statements, amendments or
assignments with respect thereto in such filing offices and
(B) executing or causing to be executed such other instruments
or notices as may be necessary or appropriate and (iii) take
all additional actions that the Deal Agent may reasonably
request to perfect, protect and more fully evidence the
respective interests of the Deal Agent and the Secured Parties
in the Collateral.
(y) Payment of Principal, Interest and Other Amounts Due. The Borrower will
pay when due all amounts payable by it hereunder in accordance with the
terms hereof.
(z) Settlement Statement. The Borrower shall deliver or cause to be
delivered to the Deal Agent no later than 12:00 p.m. (Charlotte, North
Carolina time) on each Determination Date, a Settlement Statement with
respect to the most recently ended Settlement Period.
(aa) Payment of Taxes. The Borrower will pay or cause to be paid when due
all Taxes (after giving effect to any extensions), assessments,
governmental charges or levies imposed upon it or its income, profits,
payroll or any property belonging to it, including without limitation
all withholding taxes, and all claims for labor, materials and supplies
which, if unpaid, might become a material Lien or charge upon any of
its properties or assets; provided, that it shall not be required to
pay any such Tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate
proceedings promptly initiated and diligently conducted by it, and
neither execution nor foreclosure sale or similar proceedings shall
have been commenced in respect thereof (or such proceedings shall have
been stayed pending the disposition of such contest of validity), and
it shall have set aside on its books, adequate reserves with respect
thereto.
Section 7.02. Hedging Agreement.
(a) On or prior to each Prefunding Date, the Borrower shall have (i) entered
into one or more Hedging Transactions for the Receivables funded on such
Prefunding Date and (ii) prior to such Prefunding Date, certify to the Deal
Agent and the Insurer on the Prefunding Request that the Servicer or the
Borrower, as the case may be, has entered into Hedging Transactions satisfying
the conditions of this Agreement. Each such Hedging Transaction shall (i) be
entered into with a Hedging Counterparty and governed by a Hedging Agreement,
(ii) require the Hedging Counterparty to make all payments owed to the Borrower
under the related Hedging Agreement to the Collection Account; provided,
however, any such payments which relate to Receivables to be released in a
Securitization or a Warehouse Transfer may be made to the Borrower after the
pricing of such Securitization or the release of Collateral pursuant to a
Warehouse Transfer, (iii) in the case of a Hedging Transaction which is an
interest rate cap, have a cap rate such that the excess of the weighted average
APR of the Receivables over the cap rate is equal to or greater than 600 basis
points, (iv) in the case of a Hedging Transaction which is an interest rate
swap, have a fixed rate such that the excess of the weighted average APR of the
Receivables over the fixed rate is equal to or greater than 600 basis points and
(v) in the case of any other type of Hedging Transaction, be consented to in
writing by the Deal Agent and the Insurer. The aggregate amount of all Hedging
Transactions shall have an aggregate notional amount at least equal to the Net
Investment; provided, however, such notional amount shall not be required to
exceed the Facility Amount; provided, further, such required amount may be
reduced, for the period of time between the pricing and the funding of a
Structured Financing, by the aggregate Outstanding Balance of the Receivables to
be released in such Structured Financing, or as otherwise consented to by the
Insurer. In connection with any Settlement Statement provided hereunder, the
Servicer shall provide a copy of all Hedging Transactions not previously
delivered.
(b) As additional security hereunder, the Borrower has assigned to the Deal
Agent, as agent for the Secured Parties, all right, title and interest of
Borrower in the Hedging Collateral. The Borrower acknowledges that, as a result
of that assignment, the Borrower may not exercise any rights under any Hedging
Agreement, except for the Borrower's right under any Hedging Agreement to enter
into Hedging Transactions in order to meet the Borrower's obligations hereunder.
Nothing herein shall have the effect of releasing the Borrower from any of its
obligations under any Hedging Agreement or any Hedging Transaction, nor be
construed as requiring the consent of the Deal Agent, the Insurer or any Secured
Party for the performance by the Borrower of any such obligations.
ARTICLE Eight
TERMINATION EVENTS
Section 8.01. Termination Events.
(a) Each of the following events shall constitute an "Termination Event":
(i) any representation, warranty, certification or statement made
by the Borrower, the Seller or UAC in this Agreement, the Sale
and Purchase Agreement I, the Sale and Purchase Agreement II,
the Insurance Agreement, any Warehouse Transfer Agreement or
in any other Transaction Document shall prove to have been
incorrect in any material respect when made or deemed made,
which, in the case of a violation of a representation or
warranty with respect to a Receivable under the Sale and
Purchase Agreement I and the Sale and Purchase Agreement II,
will not constitute a Termination Event if (i) the Borrower
remains in compliance with the Net Asset Test or (ii) UAC or
the Seller indemnifies the Borrower by depositing into the
Collection Account an amount equal to the lesser of (A) the
principal amount of, and accrued interest on, the related
Receivable or (B) the amount necessary to bring the Net Asset
Test into compliance;
(ii) the Borrower, the Seller or UAC shall default in the
performance of (A) any payment obligation under this
Agreement, the Sale and Purchase Agreement I, the Sale and
Purchase Agreement II, any Warehouse Transfer Agreement or in
any other Transaction Document or (B) any other covenant or
undertaking under the Transaction Documents and any Warehouse
Transfer Agreement which in the case of this clause (B) shall
remain unremedied for five days;
(iii) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, or liquidator for
the Borrower, the Seller or UAC in any insolvency,
readjustment of debt, marshaling of assets and liabilities, or
similar proceedings, or for the winding up or liquidation of
its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
(iv) the consent by the Borrower, the Seller or UAC to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings of or relating to the
Borrower, the Seller or UAC of or relating to substantially
all of its property; or the admission by the Borrower, the
Seller or UAC in writing of its inability to pay its debts
generally as they become due, the filing by the Borrower, the
Seller or UAC of a petition to take advantage of any
applicable insolvency or reorganization statute, the making by
the Borrower, the Seller or UAC of an assignment for the
benefit of its creditors, or the voluntary suspension by the
Borrower, the Seller or UAC of payment of its obligations;
(v) a Servicer Default shall have occurred or for any reason UAC
is not the Servicer;
(vi) either of the Borrower, the Seller or the Servicer shall
consolidate or merge with or into any other person whereby it
is not the surviving entity;
(vii) there shall have occurred any material adverse change in the
operations of the Borrower, the Seller or the Servicer since
the Closing Date, or any other event shall have occurred which
materially affects the Borrower's, the Seller's or the
Servicer's ability to either collect the Receivables or to
perform under the Transaction Documents;
(viii) the Liquidity Agent shall have given notice that an event of
default has occurred and is continuing under its agreements
with VFCC;
(ix) the Commercial Paper issued by VFCC shall not be rated at
least "A-2" by S&P and at least "P-2" by ▇▇▇▇▇'▇;
(x) the Net Investment minus amounts on deposit in the Prefunding
Account shall at any time exceed the Net Receivables Balance,
or (ii) the Net Asset Test is not satisfied;
(xi) a Take-Out shall not occur at least once in any period of six
consecutive calendar months, provided, however, no Termination
Event will have occurred if the Net Investment has been zero
at any time during the prior six months;
(xii) the Net Yield as of any Determination Date is less than 2.00%
during a Settlement Period in which the Net Investment is
greater than zero each day of such Settlement Period;
(xiii) a draw is made under the Policy;
(xiv) an Insurer Default has occurred and is continuing;
(xv) the term of the Policy is not of the term required by VFCC
(which term shall be at least equal to the term of the latest
maturing Receivable in the facility plus one year and one
day);
(xvi) the sum of (A) the amount on deposit in the Reserve Account
and (B) the amount available pursuant to any Reserve Account
Guaranty is less than the Required Reserve Account Amount for
two consecutive Business Days;
(xvii) the Borrower shall fail to make any payment of any amount
required to be made under the terms of this Agreement and such
failure continues unremedied for a period of two Business Days
after the due date set forth herein for such payment, or if no
due date is specified, such failure continues for a period of
ten days after written request for such payment has been made;
(xviii) the Deal Agent, as agent for the Secured Parties, shall fail
for any reason to have a valid perfected first priority
security interest in any of the Collateral free and clear of
any Adverse Claim; provided, however, such failure shall
constitute a Termination Event only if it is materially
adverse to any of the Secured Parties;
(xix) failure of the Hedging Counterparty to make any payment under
the Hedging Agreement when due and failure of the Borrower to
replace the Hedging Counterparty within 30 days of such
failure; and
(xx) the failure of the Borrower to replace the Hedging
Counterparty within 45 days in the event the Hedging
Counterparty no longer satisfies the Short-Term Rating
Requirement or the Long-Term Rating Requirement.
then, and in any such event, the Deal Agent shall at the written direction of
the Insurer or the Required Investors with the consent of the Insurer or, if an
Insurer Default has occurred, at the request of the Required Investors, by
notice to the Borrower declare the Termination Date to have occurred, without
demand, protest or future notice of any kind, all of which are hereby expressly
waived by the Borrower, and the Net Investment and all other amounts owing by
the Borrower under this Agreement shall be accelerated and become payable in
accordance with Section 4.06; provided, that in the event that Termination Event
described in subsection (iii) herein has occurred, the Termination Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
Section 8.02. Actions Upon Termination Date. Upon the declaration and
continuance of a Termination Date, the Deal Agent shall, at the written
direction of the Insurer, or the Deal Agent may, with consent of the Insurer, in
respect of the Collateral, in addition to any and all other rights and remedies
otherwise available to it and subject to Section 12.13, pursue all of the rights
and remedies of a secured party upon default under the UCC (such rights and
remedies to be cumulative and nonexclusive). In addition to the foregoing, upon
the occurrence and continuance of a Termination Event, the Insurer may request
that the Deal Agent intervene in judicial proceedings that affect the Note or
the security therefor and the Deal Agent may at the direction of the Insurer
(provided that no such direction shall be required if an Insurer Default has
occurred) take the following remedial actions:
(a) if UAC is the Servicer, terminate UAC as Servicer;
(b) the Deal Agent may, without notice to the Borrower except as required
by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Net Investment, any Interest
accrued thereon and or any other amount due and owing to any Secured
Party against amounts payable to the Borrower from the Accounts or any
part of such Accounts in accordance with the priorities required by
Section 4.06;
(c) consistent with the rights and remedies of a secured party under the
UCC (and except as otherwise required by the UCC), the Deal Agent may,
without notice except as specified below, solicit and accept bids for
and sell the Collateral or any part of the Collateral in one or more
parcels at public or private sale, at any exchange, broker's board or
at the Deal Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Deal Agent may deem
commercially reasonable; the Borrower agrees that, to the extent notice
of sale shall be required by law, at least ten Business Days' notice to
the Borrower of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification; the Deal Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given; the Deal
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed for such sale, and such sale
may, without further notice, be made at the time and place to which it
was so adjourned; which such sale shall operate to divest all right,
title, interest, claim and demand whatsoever of the Borrower in and to
the Collateral so sold, and shall be a perpetual bar, both at law and
in equity, against the Borrower or any Person claiming the Collateral
sold through the Borrower and its successors or assigns; any proceeds
from the sale of Collateral by the Deal Agent pursuant to this Section
shall be promptly distributed by the Deal Agent in payment of amounts
owed by the Borrower hereunder in accordance with the priorities
required by Section 4.06(c);
(d) upon the completion of any sale under Section 8.02(c), the Borrower
will deliver or cause to be delivered all of the Collateral sold to the
purchaser or purchasers at such sale on the date of sale, or within a
reasonable time thereafter if it shall be impractical to make immediate
delivery, but in any event full title and right of possession to such
property shall pass to such purchaser or purchasers forthwith upon the
completion of such sale; nevertheless, if so requested by the Deal
Agent or by any purchaser, the Borrower shall confirm any such sale or
transfer by executing and delivering to such purchaser all proper
instruments of conveyance and transfer and releases as may be
designated in any such request;
(e) at any sale under Section 8.02(c), UAC, the Deal Agent or any Secured
Party may bid for and purchase the property offered for sale and, upon
compliance with the terms of sale, may hold, retain and dispose of such
property without further accountability therefor; any Secured Party
purchasing property at a sale under subsection (c) above may set off
the purchase price of such property against amounts owing to such
Secured Party in full payment of such purchase price; and
(f) the Deal Agent may exercise at the Borrower's sole expense any and all
rights and remedies of the Borrower under or in connection with the
Collateral.
Section 8.03. Exercise of Remedies. No waiver of any Termination Event or
Potential Termination Event shall be effective without the prior written consent
of the Insurer. No failure or delay on the part of the Deal Agent to exercise
any right, power or privilege under this Agreement and no course of dealing
between the Borrower, the Secured Parties, the Liquidity Agent or the Deal Agent
shall operate as a waiver of such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies
expressly provided in this Agreement are cumulative and not exclusive of any
rights or remedies which the Deal Agent or the Secured Parties would otherwise
have pursuant to law or equity. No notice to or demand on any party in any case
shall entitle such party to any other or further notice or demand in similar or
other circumstances, or constitute a waiver of the right of the other party to
any other or further action in any circumstances without notice or demand.
Section 8.04. Waiver of Certain Laws. The Borrower agrees, to the full extent
that it may lawfully so agree, that neither it nor anyone claiming through or
under it will set up, claim or seek to take advantage of any appraisal,
valuation, stay, extension or redemption law now or hereafter in force in any
locality where any Collateral may be situated in order to prevent, hinder or
delay the enforcement or foreclosure of this Agreement, or the absolute sale of
any of the Collateral or any part thereof, or the final and absolute putting
into possession thereof, immediately after such sale, of the purchasers thereof,
and the Borrower, for itself and all who may at any time claim through or under
it, hereby waives, to the full extent that it may be lawful so to do, the
benefit of all such laws, and any and all right to have any of the properties or
assets constituting the Collateral marshaled upon any such sale, and agrees that
the Deal Agent or any court having jurisdiction to foreclose the security
interests granted in this Agreement may sell the Collateral as an entirety or in
such parcels as the Deal Agent or such court may determine.
Section 8.05. Power of Attorney. The Borrower hereby irrevocably appoints the
Deal Agent its true and lawful attorney (with full power of substitution) in its
name, place and stead and at its expense, in connection with the enforcement of
the rights and remedies provided for in this Article, including with the
following powers: (i) to give any necessary receipts or acquittance for amounts
collected or received hereunder, (ii) to make all necessary transfers of the
Collateral in connection with any sale or other disposition made pursuant
hereto, (iii) to execute and deliver for value all necessary or appropriate
bills of sale, assignments and other instruments in connection with any such
sale or other disposition, the Borrower thereby ratifying and confirming all
that such attorney (or any substitute) shall lawfully do hereunder and pursuant
hereto, and (iv) to sign any agreements, orders or other documents in connection
with or pursuant to any Transaction Document. Nevertheless, if so requested by
the Deal Agent or a purchaser of any of the Collateral, the Borrower shall
ratify and confirm any such sale or other disposition by executing and
delivering to the Deal Agent or such purchaser all proper bills of sale,
assignments, releases and other instruments as may be designated in any such
request.
ARTICLE Nine
INDEMNIFICATION
Section 9.01. Indemnities by the Borrower. Without limiting any other rights
which the Deal Agent, the Collateral Agent, the Liquidity Agent, any Secured
Party or its assignee, or any of their respective affiliates may have hereunder
or under applicable law, the Borrower hereby agrees to indemnify the Deal Agent,
the Collateral Agent, the Liquidity Agent, any Secured Party or its assignee and
each of their respective affiliates and officers, directors, employees and
agents thereof (collectively, the "Indemnified Parties") from and against any
and all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Amounts") awarded against or incurred by, any such Indemnified
Party or other non-monetary damages of any such Indemnified Party arising out of
or as a result of this Agreement, excluding, however, Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of any
Indemnified Party. Without limiting the foregoing, the Borrower shall indemnify
the Indemnified Parties for Indemnified Amounts relating to or resulting from:
(a) any Receivable represented by the Borrower to be an Eligible Receivable
which is not at the applicable time an Eligible Receivable;
(b) reliance on any representation or warranty made or deemed made by the
Borrower, the Servicer (or one of its affiliates) or any of their
respective officers under or in connection with this Agreement or the
other Transaction Documents or any Warehouse Transfer Agreement, which
shall have been false or incorrect in any material respect when made or
deemed made or delivered;
(c) the failure by the Borrower or the Servicer to comply with any term,
provision or covenant contained in this Agreement, the other
Transaction Documents or any Warehouse Transfer Agreement or a failure
by the Borrower or the Servicer to comply with any term, provision or
covenant contained in any agreement executed in connection with this
Agreement, the other Transaction Documents or any Warehouse Transfer
Agreement, or with any applicable law, rule or regulation with respect
to any Receivable;
(d) the failure to vest and maintain vested in the Servicer, as agent for
the Secured Parties, a valid and enforceable first priority perfected
security interest in any or all of the Collateral;
(e) the failure to file, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to the Collateral,
whether at the time of a Prefunding or at any subsequent time and as
required by the Transaction Documents or any Warehouse Transfer
Agreement;
(f) any dispute, claim, offset or defense (other than the discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable funded by a Prefunding which is, or is purported to be, an
Eligible Receivable (including, without limitation, a defense based on
the Receivable not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms);
(g) any failure by the Borrower to perform its duties or obligations in
accordance with the provisions of this Agreement;
(h) any products liability claim or personal injury or property damage suit
or other similar or related claim or action of whatever sort arising
out of or in connection with any Receivable and the related Financed
Vehicle;
(i) the failure by the Borrower to pay when due any Taxes for which the
Borrower is liable, including without limitation, sales, excise,
franchise or personal property taxes payable in connection with the
Collateral;
(j) any repayment by the Deal Agent, the Liquidity Agent or a Secured Party
of any amount previously distributed in reduction of the Net Investment
or payment of Interest, any obligation or any other amount due
hereunder or under any Hedging Agreement, in each case which amount
such entity believes in good faith is required to be repaid;
(k) any proceeding (i) in respect of any Receivable, (ii) relating to the
use of the proceeds of any Prefunding or (iii) related to this
Agreement that is not commenced by the Indemnified Party or if so
commenced, in which such Indemnified Party is not the prevailing party;
provided, that no Indemnified Party shall be entitled to any
indemnification for any item described in this clause resulting from
such Indemnified Party's gross negligence or willful misconduct;
(l) the use of the proceeds of any Prefunding;
(m) any failure by the Borrower to give reasonably equivalent value to UAC
in consideration for the transfer by UAC to the Borrower of a
Receivable or any attempt by any Person to void or otherwise avoid any
such transfer under any statutory provision or common law or equitable
action, including, without limitation, any provision of the Bankruptcy
Code; and
(n) the failure of the Borrower to remit to the Collection Account,
Collections remitted to the Borrower in accordance with the terms
hereof.
Notwithstanding the foregoing, in no event shall any Indemnified Party
be indemnified against any damages, losses or claims to the extent such
Indemnified Amounts are or result from taxes asserted with respect to taxes on,
or measured by, the net income of the applicable Indemnified Party.
Any amounts subject to the indemnification provisions of this Section
shall be paid by the Borrower solely pursuant to the provisions of Section 4.06
in the order and priority set forth therein.
ARTICLE Ten
THE DEAL AGENT, THE COLLATERAL AGENT AND THE LIQUIDITY AGENT
Section 10.01. Authorization and Action.
(a) Each Secured Party hereby designates and appoints FSI as Deal Agent and
First Union as Collateral Agent hereunder, and authorizes each of the Deal Agent
and the Collateral Agent to take such actions as agent on its behalf and to
exercise such powers as are delegated to it by the terms of this Agreement
together with such powers as are reasonably incidental thereto. Neither the Deal
Agent nor the Collateral Agent shall have any duties or responsibilities except
those expressly set forth herein, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Deal Agent or the Collateral Agent shall be read
into this Agreement or otherwise exist for the Deal Agent or the Collateral
Agent. In performing its functions and duties hereunder, each of the Deal Agent
and the Collateral Agent shall act solely as agent for the Secured Parties and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Borrower or any of its
successors or assigns. Neither the Deal Agent nor the Collateral Agent shall be
required to take any action which exposes it to personal liability or which is
contrary to this Agreement or applicable law. Except as otherwise provided in
this Agreement, appointment and authority of the Deal Agent hereunder shall
terminate at the indefeasible payment in full of the Obligations. Subject to the
foregoing, the Insurer may request the Deal Agent to intervene in any proceeding
that effects the Note or the Collateral and the Borrower, Servicer and Investors
consent to such intervention.
(b) Each Investor hereby designates and appoints First Union as Liquidity Agent
hereunder, and authorizes the Liquidity Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Liquidity Agent
by the terms of this Agreement together with such powers as are reasonably
incidental thereto. The Liquidity Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, the Liquidity
Agent shall act solely as agent for the Investors and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Borrower or any of its successors or assigns. The Liquidity Agent
shall not be required to take any action which exposes the Liquidity Agent to
personal liability or which is contrary to this Agreement or applicable law. The
appointment and authority of the Liquidity Agent hereunder shall terminate at
the indefeasible payment in full of the Obligations.
Section 10.02. Delegation of Duties. Each of the Deal Agent, the Collateral
Agent and the Liquidity Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Neither the Deal
Agent, the Collateral nor the Liquidity Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 10.03. Exculpatory Provisions.
(a) Neither the Deal Agent, Collateral Agent, the Liquidity Agent nor any of
their directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement (except for its, their or such Person's own gross
negligence or willful misconduct or, in the case of each of the Deal Agent,
Collateral Agent and the Liquidity Agent, the breach of its obligations
expressly set forth in this Agreement), or (ii) responsible in any manner to the
Deal Agent or any of the Secured Parties, as applicable, for any recitals,
statements, representations or warranties made by the Borrower contained in this
Agreement or in any certificate, report, statement or other document referred to
or provided for in, or received under or in connection with, this Agreement, any
other Transaction Document or any Warehouse Transfer Agreement to which it is a
party for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other document furnished in connection
herewith, or for any failure of the Borrower to perform its obligations
hereunder, or for the satisfaction of any condition specified in Article Five.
Each of the Deal Agent, Collateral Agent and the Liquidity Agent shall not be
under any obligation to any Secured Party or, in the case of the Liquidity
Agent, the Deal Agent to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower. Each of the Deal Agent, Collateral Agent and the Liquidity Agent shall
not be deemed to have knowledge of Termination Event unless it has received
written notice thereof from the Borrower, the Deal Agent, the Liquidity Agent,
Collateral Agent or a Secured Party, as applicable.
Section 10.04. Reliance.
(a) Each of the Deal Agent, Collateral Agent and the Liquidity Agent shall in
all cases be entitled to rely, and shall be fully protected in relying, upon any
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Deal Agent,
the Collateral Agent or the Liquidity Agent, as the case may be. Each of the
Deal Agent, the Collateral Agent and the Liquidity Agent shall in all cases be
fully justified in failing or refusing to take any action under this Agreement
or any other document furnished in connection herewith unless it shall first
receive such advice or concurrence of VFCC or the Required Investors or all of
the Secured Parties, as applicable, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders; provided, that, unless and until
the Deal Agent, the Collateral Agent or the Liquidity Agent, as the case may be,
shall have received such advice, it may take or refrain from taking any action,
as it shall deem advisable and in the best interests of the Lenders. Each of the
Deal Agent, Collateral Agent and the Liquidity Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request
of VFCC or the Required Investors or all of the Secured Parties, as applicable,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders.
Section 10.05. Non-Reliance on Deal Agent, Liquidity Agent and Other Lenders.
Each Secured Party expressly acknowledges that neither the Deal Agent, the
Collateral Agent, the Liquidity Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Deal Agent, the
Collateral Agent or the Liquidity Agent hereafter taken, including, without
limitation, any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Deal Agent, the Collateral
Agent or the Liquidity Agent. Each Secured Party represents and warrants to the
Deal Agent, the Collateral Agent and to the Liquidity Agent that it has and
will, independently and without reliance upon the Deal Agent, the Collateral
Agent, the Liquidity Agent or any other Secured Party and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Borrower and made its
own decision to enter into this Agreement.
Section 10.06. Reimbursement and Indemnification. The Investors agree to
reimburse and indemnify VFCC, the Deal Agent, the Collateral Agent, the
Liquidity Agent and each of their respective officers, directors, employees,
representatives and agents ratably according to their pro rata shares, to the
extent not paid or reimbursed by the Borrower (i) for any amounts for which
VFCC, the Liquidity Agent, acting in its capacity as Liquidity Agent, the Deal
Agent, acting in its capacity as Deal Agent, or the Collateral Agent, acting in
its capacity as Collateral Agent is entitled to reimbursement by the Borrower
hereunder and (ii) for any other expenses incurred by VFCC, the Liquidity Agent,
acting in its capacity as Liquidity Agent, or the Deal Agent, in its capacity as
Deal Agent and acting on behalf of the Secured Parties, or the Collateral Agent,
acting in its capacity as Collateral Agent, in connection with the
administration and enforcement of this Agreement.
Section 10.07. Deal Agent, the Collateral Agent and Liquidity Agent in their
Individual Capacities. The Deal Agent, the Collateral Agent, the Liquidity Agent
and each of their respective affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any affiliate
of the Borrower as though the Deal Agent, the Collateral Agent or the Liquidity
Agent, as the case may be, were not the Deal Agent, the Collateral Agent or the
Liquidity Agent, as the case may be, hereunder. With respect to the Prefunding
Deposits made pursuant to this Agreement, the Deal Agent, the Collateral Agent,
the Liquidity Agent and each of their respective affiliates shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though it were not the Deal Agent, the Collateral Agent or the Liquidity
Agent, as the case may be, and the terms "Investor," "Lender," "Investors" and
"Lenders" shall include the Deal Agent, the Collateral Agent or the Liquidity
Agent, as the case may be, in its individual capacity.
Section 10.08. Successor Deal Agent, Collateral Agent or Liquidity Agent.
(a) Each of the Deal Agent and the Collateral Agent may, upon five days' notice
to the Borrower and the Lenders, the Insurer, the Deal Agent and the Collateral
Agent, as applicable, will, upon the direction of all of the Lenders (other than
the Deal Agent and the Collateral Agent, as applicable, in its individual
capacity) and the Insurer resign as Deal Agent or the Collateral Agent, as the
case may be. If either the Deal Agent or the Collateral Agent shall resign, then
the Required Investors with the consent of the Insurer during such five day
period shall appoint from among the Lenders a successor agent. If for any reason
no successor Deal Agent or Collateral Agent is appointed by the Required
Investors during such five day period, then effective upon the expiration of
such five day period, the Lenders shall perform all of the duties of the Deal
Agent or the Collateral Agent, as the case may be, hereunder and the Borrower
shall make all payments in respect of the Obligations or under any fee letter
delivered by the Borrower to the Deal Agent and the Secured Parties directly to
the applicable Secured Parties and for all purposes shall deal directly with the
Secured Parties. After any retiring Deal Agent's or Collateral Agent's
resignation hereunder as Deal Agent or Collateral Agent, as the case may be, the
provisions of Articles Ten and Eleven shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Deal Agent or Collateral
Agent, as the case may be, under this Agreement.
(b) The Liquidity Agent may, upon five days' notice to the Borrower, the Deal
Agent and the Investors, and the Liquidity Agent will, upon the direction of all
of the Investors (other than the Liquidity Agent, in its individual capacity)
resign as Liquidity Agent. If the Liquidity Agent shall resign, then the
Required Investors during such five-day period shall appoint from among the
Investors a successor Liquidity Agent. If for any reason no successor Liquidity
Agent is appointed by the Required Investors during such five day period, then
effective upon the expiration of such five-day period, the Investors shall
perform all of the duties of the Liquidity Agent hereunder and all payments in
respect of the Net Investment. After any retiring Liquidity Agent's resignation
hereunder as Liquidity Agent, the provisions of Articles Ten and Eleven shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Liquidity Agent under this Agreement.
ARTICLE Eleven
ASSIGNMENTS; PARTICIPATIONS
Section 11.01. Assignments and Participations.
(a) Each Investor may upon at least 30 days' notice to VFCC, the Deal Agent, the
Insurer and the Liquidity Agent, assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement; provided,
however, that (i) each such assignment shall be of a constant, and not a varying
percentage of all of the assigning Investor's rights and obligations under this
Agreement, (ii) the amount of the Commitment of the assigning Investor being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than the lesser of (A) $15,000,000 or an integral multiple of $1,000,000 in
excess of that amount and (B) the full amount of the assigning Investor's
Commitment, (iii) each such assignment shall be to an Eligible Assignee, (iv)
the parties to each such assignment shall execute and deliver to the Deal Agent,
for its acceptance and recording in the Investor Register, an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 or such
lesser amount as shall be approved by the Deal Agent, (v) the parties to each
such assignment shall have agreed to reimburse the Deal Agent, the Liquidity
Agent and VFCC for all reasonable fees, costs and expenses (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for each
of the Deal Agent, the Liquidity Agent and VFCC) incurred by the Deal Agent, the
Liquidity Agent and VFCC, respectively, in connection with such assignment, (vi)
each Person that becomes an Investor under an Assignment and Acceptance shall
agree to be bound by the confidentiality provisions of Section 12.11 and (vii)
there shall be no increased costs, expenses or taxes incurred by the Deal Agent,
the Liquidity Agent or VFCC upon such assignment or participation; and provided,
further, that upon the effective date of such assignment the provisions of
Section 3.03(f) of the VFCC Administration Agreement shall be satisfied. Upon
such execution, delivery and acceptance by the Deal Agent and the Liquidity
Agent and the recording by the Deal Agent, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be the
date of acceptance thereof by the Deal Agent and the Liquidity Agent, unless a
later date is specified therein, (i) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of an Investor hereunder and (ii) the Investor assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Investor's rights and obligations under this Agreement, such Investor shall
cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Investor
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Investor makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Investor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of VFCC or the
performance or observance by VFCC of any of its obligations under this Agreement
or any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of such financial statements and other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Deal Agent or the Liquidity Agent, such assigning
Investor or any other Investor and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assigning Investor
and such assignee confirm that such assignee is an Eligible Assignee; (vi) such
assignee appoints and authorizes each of the Deal Agent and the Liquidity Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to such agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as an
Investor.
(c) The Deal Agent shall maintain at its address referred to herein a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names, addresses and Commitment of each Investor and
the amount of the Net Investment made by each Investor from time to time (the
"Investor Register"). The entries in the Investor Register shall be conclusive
and binding for all purposes, absent manifest error, and VFCC, the Borrower and
the Investors may treat each Person whose name is recorded in the Investor
Register as an Investor hereunder for all purposes of this Agreement. The
Investor Register shall be available for inspection by VFCC, the Liquidity Agent
or any Investor at any reasonable time and from time to time upon reasonable
prior notice.
(d) Subject to the provisions of Section 11.01(a), upon its receipt of an
Assignment and Acceptance executed by an assigning Investor and an assignee, the
Deal Agent and the Liquidity Agent shall each, if such Assignment and Acceptance
has been completed, accept such Assignment and Acceptance, and the Deal Agent
shall then (i) record the information contained therein in the Investor Register
and (ii) give prompt notice thereof to VFCC.
(e) Each Investor may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and each
Prefunding made by it); provided, however, that (i) such Investor's obligations
under this Agreement (including, without limitation, its Commitment hereunder)
shall remain unchanged, (ii) such Investor shall remain solely responsible to
the other parties hereto for the performance of such obligations and (iii) the
Deal Agent and the other Investors shall continue to deal solely and directly
with such Investor in connection with such Investor's rights and obligations
under this Agreement; and provided, further, that the Deal Agent shall have
confirmed that upon the effective date of such participation the provisions of
Section 3.03(f) of the VFCC Administration Agreement shall be satisfied.
Notwithstanding anything herein to the contrary, each participant shall have the
rights of an Investor (including any right to receive payment) under Sections
2.10 and 2.11; provided, however, that no participant shall be entitled to
receive payment under either such Section in excess of the amount that would
have been payable under such Section by the Borrower to the Investor granting
its participation had such participation not been granted, and no Investor
granting a participation shall be entitled to receive payment under either such
Section in an amount which exceeds the sum of (i) the amount to which such
Investor is entitled under such Section with respect to any portion of any
Prefunding owned by such Investor which is not subject to any participation plus
(ii) the aggregate amount to which its participants are entitled under such
Sections with respect to the amounts of their respective participations. With
respect to any participation described in this Section, the participant's rights
as set forth in the agreement between such participant and the applicable
Investor to agree to or to restrict such Investor's ability to agree to any
modification, waiver or release of any of the terms of this Agreement or to
exercise or refrain from exercising any powers or rights which such Investor may
have under or in respect of this Agreement shall be limited to the right to
consent to any of the matters set forth in Section 12.01.
(f) Each Investor may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, disclose to the
assignee or participant or proposed assignee or participant any information
relating to the Borrower or VFCC furnished to such Investor by or on behalf of
the Borrower or VFCC.
(g) Nothing herein shall prohibit any Investor from pledging or assigning as
Collateral any of its rights under this Agreement to any Federal Reserve Bank in
accordance with applicable law and any such pledge or Collateral assignment may
be made without compliance with Section 11.01(a) or 11.01(b).
ARTICLE Twelve
MISCELLANEOUS
Section 12.01. Amendments and Waivers. Except as provided in this Section and
7.01(n), no amendment, waiver or other modification of any provision of this
Agreement or any schedule or exhibit hereto shall be effective without the
written agreement of the Borrower, the Deal Agent, VFCC, the Insurer and the
Required Investors; provided, however, this Agreement may be modified or amended
without the written agreement of the Required Investors to cure any ambiguity,
correct or supplement any provision in such Transaction Document that may be
inconsistent with other provisions therein, or to make any other provisions with
respect to matters or questions arising under such agreement that are not
inconsistent with the provisions of the agreement.
No amendment, waiver or other modification affecting the rights or
obligations of any Hedging Counterparty shall be effective against such Hedging
Counterparty without the written agreement of such Hedging Counterparty.
Section 12.02. Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including telex
communication and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or specified in such party's
Assignment and Acceptance or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of notice by (i)
mail, five days after being deposited in the United States mail, first class
postage prepaid, (ii) telex, when telexed against receipt of answer back or
(iii) facsimile copy, when verbal communication of receipt is obtained, except
that notices and communications pursuant to Article Two shall not be effective
until received with respect to any notice sent by mail or telex.
Section 12.03. No Waiver, Rights and Remedies. No failure on the part of the
Deal Agent, the Liquidity Agent or any Secured Party or any assignee of any
Secured Party to exercise, and no delay in exercising, any right or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies herein
provided are cumulative and not exclusive of any rights and remedies provided by
law.
Section 12.04. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Deal Agent, the Collateral Agent, the Liquidity
Agent, the Secured Parties and their respective successors and permitted assigns
and, in addition, the provisions of Section 4.06 shall inure to the benefit of
each Hedging Counterparty, whether or not that Hedging Counterparty is a Secured
Party.
Section 12.05. Term of this Agreement. This Agreement, including, without
limitation, the Borrower's obligation to observe its covenants set forth in
Article Seven shall remain in full force and effect until the Facility
Termination Date; provided, however, that the rights and remedies with respect
to any breach of any representation and warranty made or deemed made by the
Borrower pursuant to Articles Five and Six and the indemnification and payment
provisions of Article Nine and the provisions of Sections 12.10 and 12.11 shall
be continuing and shall survive any termination of this Agreement.
Section 12.06. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO
VENUE. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO
THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF
NEW YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM
NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN
ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 12.07. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN
THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 12.08. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Deal Agent, the
Liquidity Agent, the Secured Parties and its or their respective affiliates and
officers, directors, employees and agents thereof under Article Nine, the
Borrower agrees to pay on demand all reasonable costs and expenses of the Deal
Agent, the Liquidity Agent and the Secured Parties incurred in connection with
the administration (including periodic auditing), amendment or modification of,
or any waiver or consent issued in connection with, this Agreement and the other
documents to be delivered hereunder or in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Deal Agent, the Liquidity Agent and Secured Parties with respect thereto
and with respect to advising the Deal Agent, the Liquidity Agent and the Secured
Parties as to their respective rights and remedies under this Agreement and the
other documents to be delivered hereunder or in connection herewith, and all
costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Deal Agent, the Liquidity Agent and/or the Secured Parties in
connection with the enforcement of this Agreement and the other documents to be
delivered hereunder or in connection herewith.
(b) The Borrower shall pay on demand any and all stamp, sales, excise and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement, the other documents
to be delivered hereunder or any agreement or other document providing liquidity
support, credit enhancement or other similar support to a Lender in connection
with this Agreement or the funding or maintenance of Prefundings hereunder.
Section 12.09. No Proceedings.
(a) Each of the parties hereto (other than VFCC) hereby agrees that it will not
institute against, or join any other Person in instituting against VFCC any
Insolvency Proceeding so long as any commercial paper issued by VFCC shall be
outstanding and there shall not have elapsed one year and one day since the last
day on which any such commercial paper shall have been outstanding.
(b) Each of the parties hereto (other than the Deal Agent and the Secured
Parties) hereby agrees that it will not institute against, or join any other
Person in instituting against the Borrower any Insolvency Proceeding so long as
there shall not have elapsed one year and one day since the Facility Termination
Date.
Section 12.10. Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other
obligations) of the Deal Agent, the Liquidity Agent or any Secured Party as
contained in this Agreement or any other agreement, instrument or document
entered into by it pursuant hereto or in connection herewith shall be had
against any such Person or any manager or administrator of such Person or any
incorporator, affiliate, stockholder, officer, employee or director of such
Person or of the Borrower or of any such manager or administrator, as such, by
the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise.
(b) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary, VFCC shall have no obligation to pay any amount required to be
paid by it hereunder or thereunder in excess of any amount available to VFCC
after paying or making provision for the payment of its Commercial Paper. All
payment obligations of VFCC hereunder are contingent upon the availability of
funds in excess of the amounts necessary to pay Commercial Paper; and each of
the Borrower, the Deal Agent, the Collateral Agent, the Liquidity Agent and the
Secured Parties agrees that they shall not have a claim under Section 101(5) of
the Bankruptcy Code if and to the extent that any such payment obligation
exceeds the amount available to VFCC to pay such amounts after paying or making
provision for the payment of its Commercial Paper.
(c) The provisions of this Section shall survive the termination of this
Agreement.
Section 12.11. Confidentiality.
(a) Each of the parties hereto shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of the Agreement and the
other confidential proprietary information with respect to the other parties
hereto and their respective businesses obtained by it or them in connection with
the structuring, negotiating and execution of the transactions contemplated
herein, except that each such party and its officers and employees may (i)
disclose such information to its external accountants and attorneys and as
required by an applicable law or order of any judicial or administrative
proceeding, (ii) disclose the existence of this Agreement, but not the financial
terms thereof and (iii) disclose the Agreement and such information in any suit,
action, proceeding or investigation (whether in law or in equity or pursuant to
arbitration) involving any of the Receivables or the related Receivables or
related Financed Vehicles or any Hedging Agreement for the purpose of defending
itself, reducing its liability, or protecting or exercising any of its claims,
rights, remedies, or interests under or in connection with any of the
Receivables or the related Receivables or related Financed Vehicles or any
Hedging Agreement.
(b) Anything herein to the contrary notwithstanding, the Borrower hereby
consents to the disclosure of any nonpublic information with respect to it (i)
by and among the Deal Agent, the Liquidity Agent or the Secured Parties, (ii) by
the Liquidity Agent, the Deal Agent or a Secured Party to any prospective or
actual Eligible Assignee or participant of any of them or (iii) by the Deal
Agent, the Liquidity Agent or a Secured Party to any Rating Agency, commercial
paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to such Person and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing; provided, that each such
Person is informed of the confidential nature of such information and agreed to
be bound hereby. In addition, the Secured Party, the Liquidity Agent and the
Deal Agent may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings.
Section 12.12. Execution in Counterparts; Severability; Integration. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings other than any fee letter contemplated hereby.
Section 12.13 No Recourse. Except as otherwise provided in the Transaction
Documents and any Warehouse Transfer Agreement, the Borrower's obligations under
the Note and this Agreement are payable solely from the Borrower; provided,
however, such recourse shall not constitute recourse against UAC or its
Affiliates (other than the Borrower) and shall be limited only to assets of the
Borrower which constitute (i) Collateral and proceeds therefrom and (ii)
Unrestricted Cash held by the Borrower pursuant to Section 4.6(f) of the
Insurance Agreement.
82
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER: UAFC-2 CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE SERVICER: UNION ACCEPTANCE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
Union Acceptance Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE INVESTORS: FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Commitment: $200,000,000
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No: (▇▇▇) ▇▇▇-▇▇▇▇
VFCC: VARIABLE FUNDING CAPITAL CORPORATION
By: FIRST UNION SECURITIES INC.,
as attorney-in-fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Variable Funding Capital Corporation
c/o First Union Securities Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Lord Securities Corp.
▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE DEAL AGENT: FIRST UNION SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
First Union Securities Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE COLLATERAL AGENT: FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE INSURER: ASSET GUARANTY INSURANCE COMPANY
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Asset Guaranty Insurance Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Risk Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE LIQUIDITY AGENT: FIRST UNION NATIONAL BANK
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇