Exhibit 10.101(c)
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NOTE PURCHASE AGREEMENT
between
FIRST INVESTORS RESIDUAL FUNDING LP
as Issuer,
FIRST UNION SECURITIES, INC.,
as Deal Agent and as Collateral Agent
the LIQUIDITY BANKS
named herein
FIRST UNION NATIONAL BANK,
as Liquidity Agent
and
VARIABLE FUNDING CAPITAL CORPORATION,
as an Initial Note Investor,
Dated as of December 6, 2001
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TABLE OF CONTENTS
PAGE
Article I Definitions...........................................................................2
SECTION 1.1 DEFINITIONS..................................................................2
Article II Sale and Delivery of the Notes.......................................................4
SECTION 2.1 SALE AND DELIVERY OF THE NOTES. .............................................4
SECTION 2.2 THE NOTE....................................................................12
SECTION 2.3 FUNDINGS UNDER THE NOTE.....................................................12
SECTION 2.4 CONDITIONS TO FUNDINGS. ....................................................13
SECTION 2.5 FEES........................................................................14
SECTION 2.6 REPURCHASE OPTION. .........................................................14
Article III Representations, Warranties and Covenants of the Issuer............................15
SECTION 3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER. ...................15
Article IV Indemnification....................................................................17
SECTION 4.1 INDEMNITIES BY THE ISSUER. .................................................17
Article V The Deal Agent, the Collateral Agent and the Liquidity Agent ........................20
SECTION 5.1 AUTHORIZATION AND ACTION. ..................................................20
SECTION 5.2 DELEGATION OF DUTIES........................................................21
SECTION 5.3 EXCULPATORY PROVISIONS......................................................21
SECTION 5.4 RELIANCE....................................................................22
SECTION 5.5 NON-RELIANCE ON DEAL AGENT, COLLATERAL AGENT, LIQUIDITY AGENT AND OTHER
NOTE INVESTORS...............................................................................23
SECTION 5.6 REIMBURSEMENT AND INDEMNIFICATION. .........................................24
SECTION 5.7 DEAL AGENT, COLLATERAL AGENT AND LIQUIDITY AGENT IN THEIR INDIVIDUAL
CAPACITIES. 24
SECTION 5.8 SUCCESSOR DEAL AGENT, COLLATERAL AGENT OR LIQUIDITY AGENT...................24
Article VI Assignments; Participations.........................................................25
SECTION 6.1 ASSIGNMENTS AND PARTICIPATIONS. ............................................25
Article VII Miscellaneous .....................................................................28
SECTION 7.1 NOTICES, ETC................................................................28
SECTION 7.2 SUCCESSORS AND ASSIGNS......................................................28
SECTION 7.3 [RESERVED]..................................................................28
SECTION 7.4 AMENDMENTS..................................................................28
SECTION 7.5 NO BANKRUPTCY PETITION AGAINST VFCC. .......................................29
SECTION 7.6 COSTS, EXPENSES AND TAXES...................................................29
SECTION 7.7 SETOFF......................................................................30
SECTION 7.8 RECOURSE AGAINST CERTAIN PARTIES. ..........................................30
SECTION 7.9 FURTHER ASSURANCES..........................................................31
SECTION 7.10 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE........31
SECTION 7.11 WAIVER OF JURY TRIAL........................................................31
SECTION 7.12 EXECUTION IN COUNTERPARTS; SEVERABILITY; INTEGRATION. ......................31
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SECTION 7.13 HEADINGS....................................................................32
EXHIBITS
EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B FORM OF NOTE
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NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT (this "AGREEMENT"), dated as of December 6, 2001,
by and among:
(1) FIRST INVESTORS RESIDUAL FUNDING LP, a Delaware limited partnership, as
Issuer (together with its successors and assigns, the "ISSUER").
(2) the financial institutions listed on the signature pages of this
Agreement under the heading "NOTE INVESTORS" and their respective permitted
successors and assigns (but excluding participants under Section 6.1) (the "NOTE
INVESTORS");
(3) VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation ("VFCC");
(4) FIRST UNION SECURITIES, INC. ("FUSI"), as the deal agent (the "DEAL
AGENt") and as collateral agent (the "COLLATERAL AGENt"); and
(5) FIRST UNION NATIONAL BANK, with its main office located in Charlotte,
North Carolina ("FIRST UNION"), as the liquidity agent (the "LIQUIDITY AGENT").
RECITALS
WHEREAS, subject to the terms and conditions of this Agreement and the
Security Agreement, the Issuer desires to obtain funds from the Note Investor or
the Liquidity Banks, as applicable;
WHEREAS, the Issuer's obligation to repay such amounts is evidenced through
the issuance of the Note and to secure the repayment of the Note, the Issuer has
pledged to the Collateral Agent for the benefit of the Secured Parties all of
its right, title and interest in the Collateral;
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless otherwise defined herein, all capitalized terms used herein shall
have the meanings given to such terms in the Security Agreement. The following
terms shall have the following meanings:
AGREEMENT: This
Note Purchase Agreement, as it may from time to time be amended,
supplemented or otherwise modified in accordance with the terms hereof.
Administration Agreement: The Amended and Restated Administration Agreement,
dated as of July 1, 1998, by and between VFCC and FUSI, as the Administrator, as
the same may be amended, supplemented or otherwise modified from time to time.
ALLOCATED PRINCIPAL AMOUNT: With respect to the Approved Sub Note, on any day,
the lesser of: (a) the Amortization Date Allocated Principal Amount and (b) the
Amortized Allocated Principal Amount; PROVIDED, however, if a termination event,
liquidation event, event of default, or other similar event occurs under the
documents relating to the Approved Sub Note and the transactions contemplated
thereby, the Allocated Principal Amount shall be zero ($0).
AMORTIZATION DATE: The earlier to occur of: (a) the date on which the Collateral
Agent receives a first priority perfected security interest (as evidenced by an
opinion of counsel to the Debtor, which opinion is in form and substance, and
which is rendered by counsel satisfactory to the Deal Agent) in the Approved Sub
Note and all proceeds thereof and (b) the Termination Date.
AMORTIZATION DATE ALLOCATED PRINCIPAL AMOUNT: On the Amortization Date with
respect to the Approved Sub Note, the principal amount of such Approved Sub
Note, as approved in writing by the Deal Agent on or before the Amortization
Date; PROVIDED, however, if the Amortization Date occurs as a result of the
occurrence of the Termination Date, the Amortization Date Allocated Principal
Amount shall be zero ($0).
AMORTIZED ALLOCATED PRINCIPAL AMOUNT: On any day after the Amortization Date,
the Amortization Date Allocated Principal Amount MINUS the sum of (a) all
distributions made in respect of the Approved Sub Note in reduction of the
principal balance thereof and (b) all other reductions, whether by cash
distribution or otherwise, in the principal balance of the Approved Sub Note.
AMORTIZING FACILITY SUB LIMIT: On any day (a) prior to the Amortization Date,
$4,500,000, (b) from and after the Amortization Date, but prior to the Paydown
Date, the Allocated Principal Amount and (c) from and after the Paydown Date,
zero ($0).
APPROVED SUB NOTE: One or more subordinated notes or certificates issued by one
or more affiliates of FIFS in connection with a term Securitization of auto and
light truck receivables, which notes or certificates are acceptable to the Deal
Agent in its sole discretion
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ASSIGNMENT AND ACCEPTANCE: An assignment and acceptance entered into by a Note
Investor and an Eligible Assignee, and accepted by the Deal Agent, in
substantially the form of EXHIBIT A hereto.
AUTHORIZED OFFICER: With respect to any Person, the president, any vice
president, the secretary, the treasurer, any assistant Secretary, any assistant
treasurer and each other officer or director of such Person authorized to sign
agreements, instruments or other documents on behalf of such Person.
CLOSING DATE: December 6, 2001.
ELIGIBLE ASSIGNEE: (i) A Person whose short-term rating is at least A-1 from S&P
and P-1 from ▇▇▇▇▇'▇, or whose obligations under this Agreement are guaranteed
by a Person whose short-term rating is at least A-1 from S&P and P-1 from
▇▇▇▇▇'▇, or (ii) such other Person satisfactory to VFCC, the Deal Agent and each
of the rating agencies rating the Commercial Paper Notes.
ERISA: The United States Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
ERISA AFFILIATE: (i) Any corporation that is a member of the same controlled
group of corporations (within the meaning of SECTION 414(b) of the Code) as the
Issuer, (ii) a trade or business (whether or not incorporated) under common
control (within the meaning of SECTION 414(c) of the Code) with the Issuer, or
(iii) a member of the same affiliated service group (within the meaning of
SECTION 414(m) of the Code) as the Issuer, any corporation described in clause
(i) above or any trade or business described in CLAUSE (ii) above.
FACILITY LIMIT: On any day (a) prior to the Paydown Date, the sum of the
Revolving Facility Sub Limit and the Amortizing Facility Sub Limit and (b) from
and after the Paydown Date, the Revolving Facility Sub Limit.
FUNDING: As defined in SECTION 2.3.
FUNDING DATE: The date on which any Funding is made pursuant to the terms
hereof.
INDEMNIFIED AMOUNTS: As defined in SECTION 4.1.
INDEMNIFIED PARTIES: As defined in SECTION 4.1.
INITIAL NOTEHOLDER: VFCC and its permitted successors and assigns.
INITIAL PRINCIPAL AMOUNT: $13,500,000.
ISSUER: First Investors Residual Funding LP, a Delaware limited partnership.
NOTE: As defined in SECTION 2.2.
ORIGINAL SELLERS: The sellers under the Asset Purchase Agreement.
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PAYDOWN DATE: The earlier of (a) the first day following the Closing Date on
which the Net Investment is reduced to an amount less than or equal to the
Revolving Facility Sub Limit and (b) the Termination Date.
REGISTER: As defined in SECTION 6.1(c).
REGISTRAR: As defined in SECTION 6.1(c).
REPURCHASE DATE: The date on which the Issuer acquires the Note from any Holder
thereof pursuant to SECTION 2.6.
REPURCHASE PRICE: The principal amount of any Note outstanding on the Repurchase
Date to be purchased by the Issuer pursuant to SECTION 2.6(b), plus all Hedge
Breakage Costs, Breakage Costs and all accrued and unpaid interest thereon to
the Repurchase Date.
REVOLVING FACILITY SUB LIMIT: On any day, $9,000,000.
SECURITY AGREEMENT: The Security Agreement, dated as of December 6, 2001, among
the Issuer as the debtor, FUSI, as the deal agent and the collateral agent and
FIFS as the debtor, as the same may be amended, supplemented or otherwise
modified from time to time.
SUBORDINATED INVESTORS: Certain individuals chosen by FIFS and approved in
writing by the Deal Agent, such approval to not be unreasonably withheld.
SUBORDINATED NOTES: The subordinated notes issued by FIFS to the Subordinated
Investors on or prior to the Closing Date as provided for herein, in form and
substance satisfactory to the Deal Agent in its sole discretion.
TRANSFEROR: First Investors Financial Services Inc., a Texas corporation.
ARTICLE II
SALE AND DELIVERY OF THE NOTES
SECTION 2.1 SALE AND DELIVERY OF THE NOTES.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Issuer agrees to deliver to the
Initial Noteholder and the Initial Noteholder agrees to purchase on the Closing
Date the Note in an aggregate Principal Amount equal to the Initial Principal
Amount.
(b) The Note purchased under this Agreement shall be enforceable only to
the extent of the amount of the Net Investment.
(c) The obligations of VFCC, the Liquidity Agent and the Note Investors
under this Agreement are subject to the accuracy of the representations and
warranties on the part of the Issuer contained herein and in the Security
Agreement and the other Transaction Documents and to the satisfaction of the
following further conditions on the Closing Date, as indicated below:
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(i) The Deal Agent shall have received opinions, dated the Closing Date, of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel to the Original Sellers, the Issuer and the
Transferor, as to "true sale" (from the Original Sellers to the Transferor and
from the Transferor to the Issuer) and substantive nonconsolidation issues under
the Bankruptcy Code (each such opinion referred to herein as a "BANKRUPTCY
OPINION").
(ii) The Deal Agent shall have received an opinion, dated the Closing Date,
from ▇▇▇▇▇▇▇▇ & Knight, special counsel for the Issuer, with respect to:
(A) Each of the Note, this Agreement, the Sale Agreement and the
Security Agreement have been duly authorized, executed and delivered by the
Issuer and is a valid and binding agreement, enforceable against the Issuer
in accordance with its respective terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (2) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity) and (3) the qualification that certain remedial provisions of
the Security Agreement may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of the Security
Agreement, and the Security Agreement, together with applicable law,
contains adequate remedial provisions for the practical realization of the
benefits of the security created thereby;
(B) The pledges of the Collateral pledged by the Issuer to the
Collateral Agent, for the benefit of the Secured Parties, the compliance by
the Issuer with all of the provisions of the Security Agreement, this
Agreement, the Sale Agreement and the Note and the consummation of the
transactions therein or herein contemplated will not (1) conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any security agreement, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
the Issuer is a party or by which the Issuer is bound or to which any of
the property or assets of the Issuer is subject, (2) result in any
violation of the provisions of any order known to such counsel of any court
or governmental agency or body having jurisdiction over the Issuer or any
of its properties or (3) result in any violation of the provisions of the
limited partnership agreement of the Issuer or any Applicable Law;
(C) No authorization, approval, consent or order of, or filing with,
any court or governmental authority or agency is required by the Issuer in
connection with the consummation of the transactions contemplated in the
Security Agreement and this Agreement, except such as have been obtained;
(D) To the best of such counsel's knowledge and information, there are
no actions, proceedings or investigations pending before any court or
governmental authority against the Issuer (1) asserting the invalidity of
the Notes or any of the Transaction Documents to which it is a party, (2)
seeking to prevent the consummation by the Issuer of any of the
transactions contemplated by the Security
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Agreement or this Agreement or (3) which might materially and
adversely affect the performance by the Issuer of its obligations
under the Security Agreement or this Agreement;
(E) The provisions of the Security Agreement are effective to create
valid security interests in the Collateral in favor of the Collateral
Agent, for the benefit of the Secured Parties, and such security interests
are perfected and prior to all other creditors of and purchasers from the
Issuer; and
(F) The Issuer is not required to be registered as an "investment
company" under the Investment Company Act of 1940, as amended.
(iii) The Deal Agent shall have received an opinion, dated the Closing
Date, from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Transferor, to the effect that:
(A) The Transferor is a corporation organized, existing and in good
standing under the laws of the State of Texas, with corporate power and
authority to own its properties and conduct its business as currently
conducted;
(B) The Transferor has or had at all relevant times full power,
authority and legal right to exercise, deliver and perform its obligations
under the Asset Purchase Agreement and the Sale Agreement; and has or had
at all relevant times full power, authority and legal right to acquire, own
and transfer the Collateral and the other property transferred to it from
the Original Sellers pursuant to the Asset Purchase Agreement and the
transfer by it to the Issuer pursuant to the Sale Agreement;
(C) Each of the Asset Purchase Agreement and the Sale Agreement has
been duly authorized, executed and delivered by the Transferor and is a
valid and binding agreement, enforceable against the Transferor in
accordance with its terms, except to the extent that enforcement thereof
may be limited by (1) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (2) general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law);
(D) The transfer of the Collateral and the other property transferred
by the Transferor to the Issuer pursuant to the Sale Agreement, the
compliance by the Transferor with all of the provisions of the Sale
Agreement, the Security Agreement and this Agreement and the consummation
of the transactions therein or herein contemplated will not (1) conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any security agreement, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Transferor is a party or by which the Transferor is
bound or to which any of the property or assets of the Transferor is
subject, (2) result in any violation of the provisions of any order known
to such counsel of any court or governmental agency or body having
jurisdiction over the Transferor or any of its properties or
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(3) result in any violation of the provisions of the articles of
incorporation or by-laws of the Transferor or any statute or any Applicable
Law;
(E) No authorization, approval, consent or order of, or filing with,
any court or governmental authority or agency is required by the Transferor
in connection with the consummation of the transactions contemplated in the
Asset Purchase Agreement, the Sale Agreement, Security Agreement and this
Agreement, except such as have been obtained;
(F) To the best of such counsel's knowledge and information, there are
no actions, proceedings or investigations pending before any court or
governmental authority against the Issuer (1) asserting the invalidity of
the Notes or any of the Transaction Documents to which it is a party, (2)
seeking to prevent the consummation by the Transferor of any of the
transactions contemplated by the Asset Purchase Agreement, the Sale
Agreement, the Security Agreement or this Agreement or (3) which might
materially and adversely affect the performance by the Transferor of its
obligations under the Asset Purchase Agreement, the Sale Agreement, the
Security Agreement or this Agreement; and
(G) The provisions of the Asset Purchase Agreement, the Sale Agreement
are effective to create a valid security interest in the Collateral in
favor of the Issuer and such security interest is perfected and prior to
all other creditors of and purchasers from the Transferor.
(iv) The Deal Agent shall have received an opinion, dated the Closing Date,
from ▇▇▇▇▇▇▇▇ & Knight, counsel to the Original Sellers, to the effect that:
(A) Each Original Seller is an entity duly organized, existing and in
good standing under the laws of the State of its incorporation or formation
as applicable, with corporate power and authority to own its properties and
conduct its business as currently conducted; and each Original Seller is
qualified to do business as a foreign corporation in good standing in each
jurisdiction where such qualification is required;
(B) Each Original Seller has or had at all relevant times full power,
authority and legal right to exercise, deliver and perform its obligations
under the Asset Purchase Agreement and each other Transaction Document to
which it is a party; and has or had at all relevant times full power,
authority and legal right to acquire, own and transfer the Collateral and
the other property pursuant to the Asset Purchase Agreement;
(C) The Asset Purchase Agreement has been duly authorized, executed
and delivered by each Original Seller and is a valid and binding agreement,
enforceable against such Original Seller in accordance with its terms,
except to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating
7
to creditors' rights generally and (2) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law);
(D) The transfer of the Collateral and the other property transferred
by each Original Seller to the Transferor pursuant to the Asset Purchase
Agreement, the compliance by each Original Seller with all of the
provisions of the Asset Purchase Agreement, the Sale Agreement, the
Security Agreement and this Agreement and the consummation of the
transactions therein or herein contemplated will not (1) conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any security agreement, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which
any Original Seller is a party or by which any Original Seller is bound or
to which any of the property or assets of any Original Seller is subject,
(2) result in any violation of the provisions of any order known to such
counsel of any court or governmental agency or body having jurisdiction
over any Original Seller or any of its properties or (3) result in any
violation of the provisions of the articles of incorporation, by-laws,
certificate of formation, operating agreement or partnership agreement as
applicable, of any Original Seller or any statute or any Applicable Law;
(E) No authorization, approval, consent or order of, or filing with,
any court or governmental authority or agency is required by any Original
Seller in connection with the consummation of the transactions contemplated
in the Asset Purchase Agreement, the Sale Agreement, Security Agreement and
this Agreement, except such as have been obtained;
(F) To the best of such counsel's knowledge and information, there are
no actions, proceedings or investigations pending before any court or
governmental authority against the Issuer (1) asserting the invalidity of
the Notes or the Transaction Documents to which it is a party, (2) seeking
to prevent the consummation by any Original Seller of any of the
transactions contemplated by the Asset Purchase Agreement, the Sale
Agreement, the Security Agreement or this Agreement or (3) which might
materially and adversely affect the performance by any Original Seller of
its obligations under the Asset Purchase Agreement, the Sale Agreement, the
Security Agreement or this Agreement; and
(G) The provisions of the Asset Purchase Agreement are effective to
create a valid security interest in the Collateral in favor of the
Transferor and such security interest is perfected and prior to all other
creditors of and purchasers of any Original Seller.
(v) The Deal Agent shall have received certificates of each of the Issuer,
the Transferor, the Original Sellers and the Servicer, dated the Closing Date,
stating that (A) its representations and warranties made herein, in the Security
Agreement, the Sale Agreement and the Asset Purchase Agreement are true and
correct as of the Closing Date, and (B) it has complied with all agreements and
satisfied all conditions to be satisfied on its part pursuant to this Agreement,
the Security Agreement, the Sale Agreement and the Asset Purchase Agreement at
or prior to the Closing Date.
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(vi) FIFS shall have issued to the Subordinated Investors the Subordinated
Notes in an aggregate principal amount of $2 million, which Subordinated Notes
contain terms and provisions, satisfactory to the Deal Agent in its sole
discretion, subordinating the payments and remedies of the Subordinated
Investors to the rights of the Secured Parties, agreeing not to cause or join in
any bankruptcy, insolvency or similar proceeding of FIFS, agreeing to not take
any action, or cause any action to be taken, to challenge the enforceability of
the transactions contemplated by the Transaction Documents or seek to have any
sale or contribution recharacterized as a pledge or otherwise.
(vii) All conditions precedent to the authentication and delivery of the
Note under this Agreement and the Security Agreement shall have been satisfied
on or before the Closing Date.
(viii) Each party shall have performed and complied with all agreements and
conditions contained herein and in the Security Agreement and all other
Transaction Documents which are required to be performed or complied with by
such party on or before the Closing Date.
(ix) This Agreement, the Asset Purchase Agreement, the Sale Agreement, the
Security Agreement and all other Transaction Documents shall have been duly
authorized, executed and delivered by the respective parties thereto, shall be
in full force and effect on the Closing Date and shall be in form and substance
satisfactory to the Deal Agent.
(x) The Deal Agent shall have received the following, in each case in form
and substance satisfactory to it:
(A) a copy of the resolutions of the Issuer, certified by the general
partner of the Issuer as of the Closing Date, duly authorizing the
execution, delivery and performance by the Issuer of the documents executed
by or on behalf of the Issuer in connection with the transactions
contemplated by this Agreement, the Sale Agreement and the Security
Agreement; and attesting to the names and true signatures of the person or
persons executing and delivering each such document;
(B) a copy of the resolutions of the Transferor, certified by an
Authorized Officer as of the Closing Date, duly authorizing the execution,
delivery and performance by the Transferor of the Sale Agreement and any
other documents executed by or on behalf of the Transferor in connection
with the transactions contemplated hereby; and an incumbency certificate of
the Transferor as to the person or persons executing and delivering each
such document;
(C) a copy of the resolutions of each Original Seller certified by an
Authorized Officer of each Original Seller as of the Closing Date, duly
authorizing the execution, performance and delivery by each Original Seller
of the Asset Purchase Agreement and any other documents executed by or on
behalf of such Original Seller in connection with the transactions
contemplated by the Transaction Documents; and an incumbency certificate of
each Original Seller as to the person or persons executing or delivery each
such document;
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(D) certified completed copies of requests for information or copies
(or a similar search report certified by a party acceptable to the Deal
Agent), dated not more than thirty (30) days prior to the Closing Date,
listing all effective financing statements that name the Issuer, the
Original Sellers or the Transferor as debtor and that are filed in the
jurisdictions in which the financing statements described in clause (xii)
of this SECTION 2.1(c) were filed, together with copies of such financing
statements, and similar search reports with respect to federal tax liens in
all appropriate jurisdictions (none of which, other than the financing
statements in clause (xii), shall cover any of the Collateral);
(E) a copy of an officially certified document dated not more than
thirty (30) days prior to the Closing Date evidencing good standing of each
of the Issuer, the Servicer, the Transferor and the Original Sellers;
(F) evidence that the Issuer has complied with the provisions of
SECTION 3.8 of the Security Agreement relating to the Hedging Agreements;
(G) the Asset Purchase Agreement and the Sale Agreement, duly executed
by the parties thereto;
(H) the Security Agreement, duly executed by the parties thereto;
(I) the Liquidity Purchase Agreement for the Note, duly executed by
the parties thereto; and
(J) such other documents and evidence with respect to the Issuer, the
Original Sellers and the Transferor as the Deal Agent may request.
(xi) No fact or condition shall exist as of either the Closing Date under
Applicable Law which in the Deal Agent's reasonable opinion would make it
unlawful to issue the Note or for the Issuer or any of the other parties thereto
to perform their respective obligations under this Agreement, the Security
Agreement, the Sale Agreement, the Asset Purchase Agreement or any other
Transaction Document.
(xii) On or prior to the Closing Date, the Transferor and the Issuer shall
have filed any financing statements, termination statements or amendments
thereto, wherever necessary or advisable, in order to perfect the transfers and
assignments of the Collateral to the Issuer and the grant of the security
interest therein to the Collateral Agent and shall have delivered file-stamped
copies of such financing statements or other evidence of the filing thereof to
the Deal Agent.
(xiii) All taxes and fees due in connection with the filing of the
financing statements referred to in CLAUSE (xii) of this SECTION 2.1(c) shall
have been paid in full or duly provided for.
(xiv) Each Original Seller shall certify to the Deal Agent that no Servicer
Termination Event, Insurer Default or Insurance Agreement Event of Default shall
have
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occurred on or prior to the Closing Date as such terms are defined under the
documents for the related Securitization;
(xv) As of the Closing Date, no action or proceeding shall have been
instituted nor shall any governmental action be threatened before any court or
governmental agency nor shall any order, judgment or decree have been issued or
proposed to be issued by any court or governmental agency to set aside,
restrain, enjoin or prevent the performance of this Agreement or any of the
other agreements or the transactions contemplated hereby.
(xvi) The Deal Agent shall, as of the Closing Date, have been furnished
with such other documents and opinions (including executed copies, addressed to
it or otherwise expressly allowing it to rely thereon of such documents or
opinions) delivered to any other person in connection with this Agreement and
the transactions contemplated hereby as it may reasonably require, and all
documents and opinions as well as actions and proceedings taken by the Issuer in
connection with the issuance of the Note shall be satisfactory in form and
substance to the Deal Agent and its counsel.
(xvii) There has been no material adverse change in the condition
(financial or otherwise), business operations, results of operations or
properties of the Transferor, any Original Seller or the Issuer since October 2,
1998.
(xviii) The Fee Letter, duly executed by the parties thereto.
(xix) The Reserve Account and the Collection Account shall have been
established at First Union National Bank.
(xx) The Issuer shall pay the Structuring Fee and all legal fees and
out-of-pocket expenses incurred by the Deal Agent, the Note Investor and the
Liquidity Banks.
SECTION 2.2 THE NOTE.
(a) The Issuer's obligation to pay the principal of and interest on all
amounts advanced by the Note Investor or any Liquidity Bank pursuant to any
Funding shall be evidenced by one or more notes of the Issuer (each, a "NOTE"
and collectively, the "NOTES" ) registered in the name of the Initial Noteholder
which shall (i) be dated the Closing Date; (ii) be in the stated principal
amount equal to the Initial Principal Amount; (iii) bear interest as provided
therein; (iv) be payable to the order of the Deal Agent for the account of the
Initial Note Investor or the Liquidity Banks; (v) be entitled to the benefit of
the Security Agreement; and (vi) be substantially in the form of EXHIBIT B, with
blanks appropriately completed in conformity herewith. The Deal Agent shall, and
is hereby authorized to, make a notation on the schedule attached to the Note of
the date and the amount of each Funding and the date and amount of the payment
of principal thereon, and prior to any transfer of the Note, the Deal Agent
shall endorse the outstanding principal amount of the Note on the schedule
attached thereto; PROVIDED, HOWEVER, that failure to make such notation shall
not adversely affect the Initial Note Investor's or any Liquidity Bank's rights
with respect to the Note.
(b) Although the Note shall be dated the Closing Date, interest in respect
thereof shall be payable only for the periods during which amounts are
outstanding thereunder. In addition, although the stated principal amount of the
Note shall be equal to the Initial Principal Amount, the
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Note shall be enforceable with respect to the Issuer's obligation to pay
the principal thereof only to the extent of the unpaid principal amount of the
Fundings outstanding thereunder at the time such enforcement shall be sought.
SECTION 2.3 FUNDINGS UNDER THE NOTE.
(a) FUNDINGS. Subject to the terms and conditions hereof, the Issuer may
from time to time during the Revolving Period, request advances of principal
under the Note. Upon the terms and subject to the conditions herein set forth,
VFCC may, in its sole and absolute discretion, make advances and, if VFCC does
not make any such Advances, the Liquidity Banks shall, make advances (any such
advance, whether made by VFCC or the Liquidity Banks, a "FUNDING") to the
Issuer.
In connection with each Funding, the Issuer shall, by notice to the Deal
Agent (a "FUNDING REQUEST"), request such Funding by 5:00 p.m. (Eastern Standard
Time), at least three (3) Business Days prior to the proposed date of such
Funding. Such Funding Request shall specify the proposed date of such Funding,
the amount of such proposed Funding (which shall be at least $750,000 or
integral multiples of $100,000 in excess thereof, except in the case of the
initial Funding which shall be in an amount equal to the Original Net
Investment). The Funding Request shall be accompanied by a report containing
various items related to the Collateral as requested by the Deal Agent
including, without limitation, (i) a calculation of the Borrowing Base and the
Maximum Net Investment, (ii) a report relating to collections, delinquencies,
defaults, yield and any other information requested by the Deal Agent.
(b) FUNDING REQUEST IRREVOCABLE. Each Funding Request shall be irrevocable
and binding on the Issuer and the Issuer shall indemnify the Note Investor, the
Liquidity Banks, the Deal Agent and the Liquidity Agent against any loss or
expense by any of them, either directly or indirectly (including through the
Liquidity Agreement) as a result of a failure by the Issuer to complete a
requested Funding, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by any of them, either directly or
indirectly (including pursuant to the Liquidity Agreement), by reason of the
liquidation or re-employment of funds acquired by any of them (including,
without limitation, funds obtained by issuing commercial paper or promissory
notes or obtaining deposits or loans from third parties) to complete the
requested Funding.
(c) DISBURSEMENT OF FUNDS. On the date of each Funding, the Deal Agent
shall make available to the Issuer the amount of such Funding by remitting or
causing the remittance of the amount thereof, in same day funds, to an account
of the Issuer as designated in the related Funding Request.
(d) FUNDINGS BY VFCC. Notwithstanding anything herein, including without
limitation SECTION 2.3(a) hereof, VFCC shall not make any Advances unless and
until the Deal Agent shall have notified the Issuer in writing that the Deal
Agent has determined that the structure of this facility is, in the sole opinion
of the Deal Agent, the equivalent of an investment grade-rated structured
transaction.
SECTION 2.4 CONDITIONS TO FUNDINGS.
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The obligations of VFCC or the Liquidity Banks to make Fundings under this
Agreement are subject to the accuracy of the representations and warranties on
the part of the Issuer contained herein, in the Security Agreement and the other
Transaction Documents and to the satisfaction of the following additional
conditions on the Funding Date:
(a) On the related Funding Date, the Issuer shall have certified in the
related Funding Request that:
(i) for any Funding other than the initial Funding, the three (3)
month average (or if the Funding occurs prior to the end of the third
Collection Period after the Closing Date, for the one (1) or two (2) month
average, as applicable) Cash Flow Ratio is greater than 25%;
(ii) no event has occurred which constitutes a Termination Event under
the Transaction Documents or a Servicer Event of Default under the
Securitization Facility Documents;
(iii) no event has occurred which constitutes a Cash Flow Event;
(iv) [reserved];
(v) the representations and warranties of the Issuer set forth herein
and in the Security Agreement and the Transaction Documents are true and
correct as through made on and as of such date; and
(vi) The Issuer is in material compliance with each of its covenants
set forth herein, in the Security Agreement and each of the Transaction
Documents.
(b) Before and after giving effect to such Funding and to the application
of proceeds therefrom the Net Investment does not exceed the Maximum Net
Investment.
(c) The amount on deposit in the Reserve Account is equal to the Required
Reserve Account Amount.
(d) Before and after giving effect to such Funding, no Termination Event
shall exist.
(e) The Servicer shall have delivered to the Deal Agent the most recent
Servicer Report on the date required pursuant to the Sale Agreement.
SECTION 2.5 FEES.
The Issuer shall pay in accordance with the Fee Letter, such fees as are
described therein, all of which shall be non-refundable.
SECTION 2.6 REPURCHASE OPTION.
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(a) The Holders of the Notes understand and agree that the Note is subject
to repurchase in whole, but not in part, on any Business Day in accordance with
the provisions of SECTION 2.6.
(b) The Issuer has the right to require the Holders of the Notes to sell
all and not a part of such Notes to the Issuer on any day that such Notes remain
outstanding, any such purchase to be subject to the following:
(i) the Issuer shall have provided the relevant Holder with at least
thirty (30) and not more than sixty (60) days prior written notice of such
intent to purchase (the "PURCHASE NOTICE");
(ii) the Purchase Notice shall state the date proposed for such
purchase, which day shall be a Business Day;
(iii) prior to the Closing Date, the Issuer shall have complied with
all of the requirements set forth in the Security Agreement for a transfer
of the related Note;
(iv) prior to 10:00 a.m. (
New York City time) on the Repurchase Date,
the Issuer shall pay the Repurchase Price for each Note to be purchased to
the Holder thereof in immediately available funds by wire transfer to such
account or accounts as the Holder of such Note shall have instructed the
Issuer; PROVIDED however, if the full amount of the Repurchase Price is
received later than 10:00 a.m. on the Repurchase Date, such Holder may, in
its sole discretion, either (A) rescind the purchase, (B) set a new
Repurchase Date, in which case, the Issuer shall pay all interest on the
relevant Note on such Repurchase Date in accordance with the foregoing or
(C) proceed with the sale of such Note on such date; and, in each case, the
Issuer shall pay all costs and expenses incurred by the relevant Holder in
connection with such delay, including, without limitation, all Breakage
Costs; and
(v) the Issuer shall, by the close of business on the Repurchase Date,
pay to the relevant Holder all costs and expenses incurred by such Holder
in connection with such purchase (including, without limitation, all
reasonable costs and expenses of counsel to, and accountants for, such
Holder), all such costs and expenses to be paid by wire transfer in
immediately available funds by the close of business on such Repurchase
Date, or, if later, within ten (10) days after receipt by the Purchaser of
a written invoice therefor.
All Purchase Notices shall be irrevocable.
(c) If the Issuer exercises its rights under clause (b) above, the Issuer
agrees that it will not amend, modify, waive or restate any provision of or all
of the Security Agreement or any Note without the prior written consent of the
Deal Agent, which consent may be withheld for any reason or no reason. This
provision shall survive the sale to the Issuer of any Notes and the termination
of this Agreement.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER
SECTION 3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.
The Issuer represents and warrants to and covenants with the Note
Investors, the Deal Agent and the Liquidity Agent as follows:
(a) ORGANIZATION AND GOOD STANDING. The Issuer is a limited partnership
duly organized and validly existing in good standing under the laws of the State
of Delaware, and has full corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement and each other Transaction Document and to
execute, deliver and perform its obligations under the Notes.
(b) DUE QUALIFICATION. The Issuer is duly qualified to do business and is
in good standing as a foreign partnership in any state required in order to
conduct its business, and has obtained all necessary licenses and approvals, in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the conduct of the Issuer's
business.
(c) DUE AUTHORIZATION. The Issuer has the power and authority to execute
and deliver this Agreement, the Security Agreement, the Sale Agreement, the
Notes and each other Transaction Document. The execution and delivery of this
Agreement, the Security Agreement, each other Transaction Document and the Notes
by the Issuer and the consummation of the transactions provided for in this
Agreement and the Security Agreement have been duly authorized by the Issuer by
all necessary corporate action on the part of the Issuer.
(d) NO CONFLICT. The execution and delivery of this Agreement, the Security
Agreement, the Sale Agreement, the Notes and each other Transaction Document,
the performance of the transactions contemplated by this Agreement, the Sale
Agreement, the Security Agreement and each other Transaction Document and the
fulfillment of the terms hereof will not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, any Applicable Law or any Security
Agreement, contract, agreement, mortgage, deed of trust, or other material
instrument to which the Issuer is a party or by which it or any of its
properties are bound.
(e) NO PROCEEDINGS. There are no proceedings or investigations pending or,
to the best knowledge of the Issuer, threatened, before any court, regulatory
body, administrative agency, arbitrator or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, the Security
Agreement, the Sale Agreement, any other Transaction Document or the Notes, (ii)
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement, the Security Agreement, the Sale
Agreement, the Notes or any other Transaction Document, (iii) seeking any
determination or ruling that, individually or in the aggregate, in the
reasonable judgment of the Issuer, would materially and adversely affect the
performance by the Issuer of its obligations under this Agreement, the Security
15
Agreement, the Sale Agreement, the Notes or any other Transaction Document,
or (iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement, the Security Agreement,
the Sale Agreement, the Notes or any other Transaction Document.
(f) ALL CONSENTS REQUIRED. All approvals, authorizations, consents, orders
or other actions of any Person or of any governmental body or official required
to be obtained on or prior to the Closing Date hereof in connection with the
execution and delivery of this Agreement, the Security Agreement, the Sale
Agreement and the Notes, the performance by the Issuer of the transactions
contemplated by this Agreement, the Security Agreement, the Sale Agreement, any
other Transaction Document and the fulfillment by the Issuer of the terms
hereof, have been obtained.
(g) SOLVENCY. The Issuer is not insolvent and will not be rendered
insolvent immediately following the consummation on the Closing Date of the
transactions contemplated by this Agreement, the Sale Agreement, the Security
Agreement and any other Transaction Document, including the pledges by the
Issuer to the Collateral Agent of the Collateral specified in the Granting
Clause of the Security Agreement.
(h) NO EVENT OF DEFAULT. After giving effect to the issuance of the Notes
and the transactions contemplated by the Transaction Documents, no Event of
Default or Servicer Termination Event, Insurer Default or Insurance Agreement
Event of Default under any Securitization exists.
(i) INFORMATION FURNISHED TO THE DEAL AGENT AND THE COLLATERAL AGENT. All
information furnished by or on behalf of the Issuer to the Deal Agent or the
Collateral Agent will be true and complete in all material respects.
(j) TAXES. The Issuer has filed all tax returns required to be filed and
has paid or made adequate provision for the payment of all its taxes,
assessments and other governmental charges.
(k) COMPLIANCE. The Issuer has complied in all material respects with all
Applicable Laws in respect of the conduct of its business and ownership of its
property.
(l) INVESTMENT COMPANY. The Issuer is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(m) ERISA. The present value of all benefits vested under all "employee
pension benefit plans," as such term is defined in Section 3 of ERISA,
maintained by the Issuer, or in which employees of the Issuer are entitled to
participate, as from time to time in effect (herein called the "PENSION PLANS"),
does not exceed the value of the assets of the Pension Plan allocable to such
vested benefits (based on the value of such assets as of the last annual
violation date). No prohibited transactions, accumulated funding deficiencies,
withdrawals or reportable events have occurred with respect to any Pension Plans
that, in the aggregate, could subject the Issuer to any material tax, penalty or
other liability. No notice of intent to terminate a Pension Plan has been
billed, nor has any Pension Plan been terminated under SECTION 4041(f) of ERISA,
nor has the Pension Benefit Guaranty Corporation instituted proceedings to
terminate, or appoint a trustee to
16
administer a Pension Plan and no event has occurred or condition exists
that might constitute grounds under section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan.
(n) HEDGING. The Issuer will not enter into Hedging Agreements or other
agreements or mechanisms for hedging except as set forth in SECTION 3.8 of the
Security Agreement.
(o) SUBORDINATED NOTES. The Issuer will not repay, prior to its stated
maturity, any Subordinated Note without providing the Deal Agent at least
ninety(90) days prior written notice.
The representations and warranties set forth in this SECTION 3.1 shall
survive the pledges and grants of liens in the respective Collateral to the
Collateral Agent, for the benefit of the Secured Parties. Upon discovery by the
Issuer, the Note Investors, the Deal Agent or the Liquidity Agent 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 IV
INDEMNIFICATION
SECTION 4.1 INDEMNITIES BY THE ISSUER.
Without limiting any other rights which the Deal Agent, the Liquidity
Agent, the Secured Parties or any of their respective Affiliates may have
hereunder or under applicable law, the Issuer hereby agrees to indemnify and
hold harmless, and agrees to defend, the Deal Agent, the Liquidity Agent, the
Secured Parties, and each of their respective Affiliates and officers,
directors, employees and agents thereof (each of the foregoing Persons being
referred to as an "INDEMNIFIED PARTY") from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of
them, arising out of or as a result of this Agreement, any other Transaction
Document or the Grants of the Collateral or in respect of any Contract, or any
other item of the Collateral, excluding, however, Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of the
Deal Agent, the Liquidity Agent, such Secured Parties or such Affiliate. If the
Issuer has made any indemnity payment pursuant to this SECTION 4.1 and such
payment fully indemnified the recipient thereof and the recipient thereafter
collects any payments from others in respect of such Indemnified Amounts then,
the recipient shall repay to the Issuer an amount equal to the amount it has
collected from others in respect of such indemnified amounts. Without limiting
the foregoing, the Issuer shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:
(a) reliance on any representation or warranty made or deemed made by the
Issuer, the Transferor, the Servicer, the Original Sellers or any of their
respective officers under or in connection with this Agreement, any other
Transaction Document or the Sale Agreements, which shall have been false or
incorrect in any material respect when made or deemed made or delivered;
17
(b) the failure by the Issuer, Servicer or the Original Sellers to comply
with any term, provision or covenant contained in this Agreement or any
agreement executed in connection with this Agreement or any other Transaction
Document, or with any applicable law, rule or regulation with respect to any
Contract or any other item of the Collateral or the nonconformity of any of the
Collateral with any such applicable law, rule or regulation;
(c) the failure to vest and maintain vested in the Collateral Agent, for
the benefit of the Secured Parties first priority perfected security interests
in the related Collateral, together with all related Collections, free and clear
of any adverse claim whether existing as of the Closing Date or at any time
thereafter;
(d) 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 any assets which are, or
are purported to be, Collateral, whether at the time of any Grant or at any
subsequent time;
(e) any dispute, claim, offset or defense of any obligor to the payment of
any asset which is, or is purported to be, Collateral (including, without
limitation, a defense based on such asset not being a legal, valid and binding
obligation of such obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise or services
related to such asset or the furnishing or failure to furnish such merchandise
or services;
(f) any failure of the Issuer, the Transferor or the Servicer to perform
its duties or obligations in accordance with the provisions of this Agreement
and the Sale Agreement;
(g) 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 merchandise or services which are the subject of any
Collateral;
(h) the failure by the Issuer, the Transferor, the Servicer or the Original
Seller to pay when due any Taxes for which such party is liable, including
without limitation, sales, excise or personal property taxes payable in
connection with the Collateral;
(i) any repayment by the Deal Agent, the Liquidity Agent or a Secured Party
of any amount previously distributed in reduction of outstanding principal
amount of any Note or payment of interest or any other amount due hereunder or
under any Hedging Agreement, in each case which amount the Deal Agent, the
Liquidity Agent or a Secured Party believes in good faith is required to be
repaid;
(j) the commingling of Collections by any Person at any time with other
funds;
(k) any investigation, litigation or proceeding related to this Agreement
or any other Transaction Document or the use of proceeds of the Notes or the
ownership of the Collateral or in respect of any of the Collateral;
(l) any failure by the Issuer to give reasonably equivalent value to the
Transferor in consideration for the transfer by the Transferor to the Issuer of
any assets under the Sale Agreement or any other Transaction Document or any
attempt by any Person to void or otherwise
18
avoid any such transfer under any statutory provision or common law or
equitable action, including, without limitation, any provision of the Bankruptcy
Code; or
(m) the failure of the Issuer, the Transferor, the Servicer, the Original
Seller or any of their respective agents or representatives to remit Collections
to the Collateral Agent or the Deal Agent.
Any amounts subject to the indemnification provisions of this SECTION 4.1 shall
be paid by the Issuer to the Deal Agent within two Business Days following the
Deal Agent's demand therefor. If for any reason the indemnification provided
above in this SECTION 4.1 is unavailable to the Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Issuer shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by such Indemnified Party on the
one hand and the Issuer on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
ARTICLE V
THE DEAL AGENT, THE COLLATERAL AGENT AND THE LIQUIDITY AGENT
SECTION 5.1 AUTHORIZATION AND ACTION.
(a) Each Note Investor hereby designates and appoints First Union
Securities, Inc. as Deal Agent hereunder, and authorizes the Deal Agent to take
such actions as agent on its behalf and to exercise such powers as are delegated
to the Deal Agent by the terms of this Agreement together with such powers as
are reasonably incidental thereto. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein or the other
Transaction Documents, or any fiduciary relationship with any Note Investor, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Deal Agent shall be read into this Agreement or
the other Transaction Documents or otherwise exist for the Deal Agent. In
performing its functions and duties hereunder, the Deal Agent shall act solely
as agent for the Note Investors and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for the Issuer
or any of its successors or assigns. The Deal Agent shall not be required to
take any action which exposes the Deal Agent to personal liability or which is
contrary to this Agreement, the other Transaction Documents or applicable law.
The appointment and authority of the Deal Agent hereunder shall terminate upon
the Termination Date and the indefeasible payment in full of any other amount
due under this Agreement, the Notes, the Security Agreement, the Sale Agreement
or the Fee Letter.
(b) Each Note Investor hereby designates and appoints First Union National
Bank 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 the other
Transaction Documents, or any fiduciary relationship with any Note 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 the other Transaction Documents or otherwise exist for
19
the Liquidity Agent. In performing its functions and duties hereunder, the
Liquidity Agent shall act solely as agent for the Note Investors and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Issuer 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,
the other Transaction Documents or applicable law. The appointment and authority
of the Liquidity Agent hereunder shall terminate upon the Termination Date and
the indefeasible payment in full of all of any other amount due under this
Agreement, the Notes, the Security Agreement, the Sale Agreement or the Fee
Letter.
(c) The Deal Agent hereby designates and appoints First Union Securities,
Inc. as Collateral Agent hereunder, and authorizes the Collateral Agent to take
such actions as agent on its behalf and to exercise such powers as are delegated
to the Collateral Agent by the terms of this Agreement together with such powers
as are reasonably incidental thereto. The Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein and in the
other Transaction Documents, or any fiduciary relationship with any Note
Investor, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Collateral Agent shall be read
into this Agreement or the other Transaction Documents or otherwise exist for
the Collateral Agent. In performing its functions and duties hereunder, the
Collateral Agent shall act solely as agent for the Deal Agent on behalf of 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 Issuer or any of
its successors or assigns. The Collateral Agent shall not be required to take
any action which exposes the Collateral Agent to personal liability or which is
contrary to this Agreement, the other Transaction Documents or applicable law.
The appointment and authority of the Collateral Agent hereunder shall terminate
upon the Termination Date and the indefeasible payment in full of all of any
other amount due under this Agreement, the Notes, the Security Agreement, the
Sale Agreement or the Fee Letter.
SECTION 5.2 DELEGATION OF DUTIES.
(a) The Deal 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. The Deal Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
(b) 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. The Liquidity Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(c) The Collateral 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. The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 5.3 EXCULPATORY PROVISIONS.
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(a) Neither the Deal Agent nor any of its 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 (ii)
responsible in any manner to any of the Note Investors for any recitals,
statements, representations or warranties made by the Issuer 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 or
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 Issuer to perform its obligations hereunder,
or for the satisfaction of any condition specified in SECTION 2.1. The Deal
Agent shall not be under any obligation to any Note Investor 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 Issuer. The Deal Agent shall not be deemed
to have knowledge of any Termination Event or Unmatured Termination Event unless
the Deal Agent has received notice from the Issuer, the Collateral Agent or any
Note Investor.
(b) Neither the Liquidity Agent nor any of its 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 (ii)
responsible in any manner to the Deal Agent or any of the Note Investors for any
recitals, statements, representations or warranties made by the Issuer 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 or 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 Issuer to perform its obligations hereunder,
or for the satisfaction of any condition specified in SECTION 2.1. The Liquidity
Agent shall not be under any obligation to the Deal Agent or any Note Investor
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 Issuer. The Liquidity Agent
shall not be deemed to have knowledge of any Termination Event or Unmatured
Termination Event unless the Liquidity Agent has received notice from the
Issuer, the Deal Agent or a Note Investor.
(c) Neither the Collateral Agent nor any of its 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 (ii)
responsible in any manner to the Deal Agent or any of the Note Investors for any
recitals, statements, representations or warranties made by the Issuer 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 or 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 Issuer to perform its obligations hereunder,
or for the satisfaction of any condition specified in SECTION 2.1. The
Collateral Agent shall not be under any obligation to the Deal Agent or any Note
Investor 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 Issuer. The Collateral
Agent shall not be deemed to have knowledge of any Termination Event or
Unmatured
21
Termination Event unless the Collateral Agent has received notice from the
Issuer, the Deal Agent or a Note Investor.
SECTION 5.4 RELIANCE.
(a) The Deal Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, upon any document 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 Issuer), independent accountants and other experts selected by
the Deal Agent. The Deal 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 the Collateral Agent, the Holders of 51% of the Outstanding
Amount of the Notes or all of the Note Investors, as applicable, as it deems
appropriate or it shall first be indemnified to its satisfaction by the Note
Investors, PROVIDED that unless and until the Deal Agent shall have received
such advice, the Deal Agent may take or refrain from taking any action, as the
Deal Agent shall deem advisable and in the best interests of the Note Investors.
The Deal Agent shall in all cases be fully protected in acting, or in refraining
from acting, in accordance with a request of the Collateral Agent and the
Holders of 51% of the Outstanding Amount of the Notes or all of the Note
Investors, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Note Investors.
(b) 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 Issuer), independent accountants and other
experts selected by the Liquidity Agent. 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 the Liquidity Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the
Liquidity Banks, PROVIDED that unless and until the Liquidity Agent shall have
received such advice, the Liquidity Agent may take or refrain from taking any
action, as the Liquidity Agent shall deem advisable and in the best interests of
the Liquidity Banks. The Liquidity Agent shall in all cases be fully protected
in acting, or in refraining from acting, in accordance with a request of the
Liquidity Banks and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Note Investors.
(c) The Collateral Agent shall in all cases be entitled to rely, and shall
be fully protected in relying, upon any document 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 Issuer), independent accountants and other experts
selected by the Collateral Agent. The Collateral 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 the Deal Agent, the Holders of 51% of the
Outstanding Amount of the Notes or all of the Note Investors, as applicable, as
it deems appropriate or it shall first be indemnified to its satisfaction by the
Note Investors, PROVIDED that unless and until the Collateral Agent shall have
received such advice, the Collateral
22
Agent may take or refrain from taking any action, as the Collateral Agent
shall deem advisable and in the best interests of the Note Investors. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of the Deal Agent and the
Holders of 51% of the Outstanding Amount of the Notes or all of the Note
Investors, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Note Investors.
SECTION 5.5 NON-RELIANCE ON DEAL AGENT, COLLATERAL AGENT, LIQUIDITY AGENT
AND OTHER NOTE INVESTORS.
Each Note Investor expressly acknowledges that none of the Deal Agent, the
Collateral Agent or the Liquidity Agent nor any of its 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 Issuer, shall be deemed to constitute any representation
or warranty by the Deal Agent, Collateral Agent or the Liquidity Agent. Each
Note Investor represents and warrants to the Deal Agent, the Collateral Agent
and 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 Note
Investor 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 Issuer and made its own decision to enter into this
Agreement.
SECTION 5.6 REIMBURSEMENT AND INDEMNIFICATION.
Each of the Liquidity Banks agree to reimburse and indemnify 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 share of the Outstanding Amount, to the extent not paid or
reimbursed by the Issuer (a) for any amounts for which 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 Issuer hereunder and (b)
for any other expenses incurred by the Liquidity Agent, acting in its capacity
as Liquidity Agent, the Deal Agent, in its capacity as Deal Agent or the
Collateral Agent, in its capacity as Collateral Agent and acting on behalf of
the Note Investors, in connection with the administration and enforcement of
this Agreement.
SECTION 5.7 DEAL AGENT, 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 Issuer or any Affiliate of the Issuer 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 issuance of Notes 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 Note Investor and may exercise the same as though it were
not the Deal Agent, the Collateral Agent or the Liquidity
23
Agent, as the case may be, and the terms "Note Investor," "Note Investors",
"Noteholder" and "Noteholders" shall include the Deal Agent, the Collateral
Agent or the Liquidity Agent, as the case may be, in its individual capacity.
SECTION 5.8 SUCCESSOR DEAL AGENT, COLLATERAL AGENT OR LIQUIDITY AGENT.
(a) The Deal Agent may, upon five (5) Business Days' written notice to the
Issuer and the Note Investors, resign as Deal Agent. If the Deal Agent shall
resign, then the Collateral Agent and the Holders of 51% of the Outstanding
Amount of the Notes during such five (5) day period shall appoint from among the
Note Investors a successor agent. If for any reason no successor Deal Agent is
appointed the Collateral Agent and the Holders of 51% of the Outstanding Amount
of the Notes during such five (5) day period, then effective upon the
termination of such five day period, the Note Investors shall perform all of the
duties of the Deal Agent hereunder and the Issuer shall make all payments in
respect of the Notes and all other amounts due under any Transaction Document or
under any fee letter directly to the applicable Note Investor and for all
purposes shall deal directly with the Note Investors. After any retiring Deal
Agent's resignation hereunder as Deal Agent, the provisions of this ARTICLE V
and ARTICLE IV shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Deal Agent under this Agreement.
(b) The Liquidity Agent may, upon five (5) days' notice to the Issuer, the
Deal Agent and the Note Investors, and the Liquidity Agent will, upon the
direction of all of the Note Investors (other than the Liquidity Agent, in its
individual capacity) resign as Liquidity Agent. If the Liquidity Agent shall
resign, then the Deal Agent and the Holders of 51% of the Outstanding Amount of
the Notes during such five (5) day period shall appoint from among the Note
Investors a successor Liquidity Agent. If for any reason no successor Liquidity
Agent is appointed by the Deal Agent and the Holders of 51% of the Outstanding
Amount of the Notes during such five (5) day period, then effective upon the
termination of such five day period, the Note Investors shall perform all of the
duties of the Liquidity Agent hereunder and all payments in respect of the
principal and interest and any amount due at any time hereunder or under any fee
letter directly to the applicable Note Investor and for all purposes shall deal
directly with the Note Investors. After any retiring Liquidity Agent's
resignation hereunder as Liquidity Agent, the provisions of this ARTICLE V and
ARTICLE IV 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.
(c) The Collateral Agent may, upon five (5) Business Days' written notice
to the Issuer and the Note Investors, resign as Collateral Agent. If the
Collateral Agent shall resign, then the Deal Agent and the Holders of 51% of the
Outstanding Amount of the Notes during such five (5) day period shall appoint
from among the Note Investors a successor agent. If for any reason no successor
Collateral Agent is appointed by the Deal Agent and the Holders of 51% of the
Outstanding Amount of the Notes during such five (5) day period, then effective
upon the termination of such five day period, the Note Investors shall perform
all of the duties of the Collateral Agent hereunder and the Issuer shall make
all payments in respect of the Notes and all other amounts due under any
Transaction Document or under any fee letter directly to the applicable Note
Investor and for all purposes shall deal directly with the Note Investors. After
any retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this ARTICLE V and ARTICLE IV shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement.
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ARTICLE VI
ASSIGNMENTS; PARTICIPATIONS
SECTION 6.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Note Investor may upon at least thirty (30) days' written notice
to the Initial Noteholders, the Deal Agent 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 Note
Investor's rights and obligations under this Agreement, (ii) the portion of the
Outstanding Amount of the assigning Note 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) $1,000,000 or an integral multiple of $500,000 in excess of that amount and
(B) the full Outstanding Amount of the assigning Note Investor's Note, (iii)
each such assignment shall be to an Eligible Assignee, (iv) the assigning Note
Investor and the assignee with respect to each such assignment shall execute and
deliver to the Deal Agent, for its acceptance and recording in the 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 and (v) the
parties to each such assignment shall have agreed to reimburse the Deal Agent,
the Liquidity Agent and VFCC for all 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, and PROVIDED FURTHER that upon the effective date of such assignment
the provisions of SECTION 3.03(f) of the 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 a Note Investor hereunder and (ii) the Note 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 Note Investor's rights and obligations under this Agreement,
such Note Investor shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Note
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 Note 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 Note 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;
25
(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 Note Investor or any other Note 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 Note 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 a Note Investor.
(c) The Deal Agent shall be the Note registrar (the "REGISTRAR") and 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 and addresses of the Note Investors and the Outstanding
Amount of, and the amount of each Note of each Note Investor from time to time
(the "REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and VFCC, the Issuer and the Note
Investors may treat each Person whose name is recorded in the Register as a Note
Investor hereunder for all purposes of this Agreement. The Register shall be
available for inspection by VFCC, the Liquidity Agent or any Note Investor at
any reasonable time and from time to time upon reasonable prior notice.
(d) Subject to the provisions of SECTION 6.1(a), upon its receipt of an
Assignment and Acceptance executed by an assigning Note Investor and an
assignee, the Deal Agent and the Liquidity Agent shall each, if such Assignment
and Acceptance has been completed and is in substantially the form of EXHIBIT A
hereto, accept such Assignment and Acceptance, and the Deal Agent shall then (i)
record the information contained therein in the Register and (ii) give prompt
notice thereof to VFCC.
(e) Each Note 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 the
Outstanding Amount of its Note); PROVIDED, HOWEVER, that (i) the Deal Agent
shall have confirmed that upon the effective date of such participation the
provisions of SECTION 3.03(f) of the Amended and Restated Administration
Agreement shall be satisfied and (ii) the Issuer shall have reasonably approved
such participant. Notwithstanding anything herein to the contrary, each
participant shall have the rights of a Note Investor (including any right to
receive payment) under ARTICLE IV. With respect to any participation described
in this SECTION 6.1, the participant's rights, as set forth in the agreement
between such participant and the applicable Note Investor, to agree to or to
restrict such Note Investor's ability to agree to any modification, waiver or
release of any of the terms of this Agreement or any other document or to
exercise or refrain from exercising any powers or rights which such Note
Investor may have under or in respect of this Agreement or any other document
shall be limited to the right specifically given to participants in SECTION 7.4
of this Agreement.
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(f) Each Note Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this SECTION
6.1, disclose to the assignee or participant or proposed assignee or participant
any information relating to the transactions contemplated hereby, the Issuer,
the Transferor, the Servicer, the Original Sellers or VFCC furnished to such
Note Investor by or on behalf of the Issuer or VFCC.
(g) Nothing herein shall prohibit any Note 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 6.1(a) or SECTION 6.1(b).
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 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 (a) notice by mail, five (5) days
after being deposited in the United States mails, first class postage prepaid,
(b) notice by telex, when telexed against receipt of answer back, or (c) notice
by facsimile copy, when verbal communication of receipt is obtained, except that
notices and communications pursuant to ARTICLE II shall not be effective until
received with respect to any notice sent by mail or telex.
SECTION 7.2 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the Issuer and each Initial Noteholder
and their respective successors and assigns and shall inure to the benefit of
the Issuer, and the Noteholders and their respective successors and assigns
including the Liquidity Banks; PROVIDED that the Issuer shall not assign any of
its rights or obligations hereunder without the prior written consent of the
Deal Agent. The Issuer hereby acknowledges that each VFCC has assigned and
granted a security interest in all of its rights hereunder and under the Notes
to the Liquidity Banks. In addition, the Issuer hereby acknowledges that VFCC
may at any time and from time to time assign all or a portion of its rights
hereunder to any Liquidity Bank.
SECTION 7.3 [RESERVED].
SECTION 7.4 AMENDMENTS.
(a) Except as provided in this SECTION 7.4, no amendment or modification of
any provision of this Agreement shall be effective without the written agreement
of the Issuer, the Deal Agent and the Holders of 51% of the Outstanding Amount
of the Notes, and no termination or
27
waiver of any provision of this Agreement or consent to any departure
therefrom by the Issuer shall be effective without the written concurrence of
the Deal Agent and the Holders of 51% of the Outstanding Amount of the Notes.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this SECTION
7.4(b). The Issuer at the direction of the Holders of 51% of the Outstanding
Amount of the Notes and with the prior written consent of the Deal Agent, may
enter into written modifications or waivers of any provisions of this Agreement,
PROVIDED, HOWEVER, that no such modification or waiver shall:
(i) without the consent of each affected Note Investor, (A) extend the
Termination Date or the date of any payment or deposit of Collections by
the Issuer or the Servicer, (B) reduce any fee payable to the Deal Agent
for the benefit of the Note Investors, (C) amend, modify or waive any
provision of this SECTION 7.4(b),(D) consent to or permit the assignment
or transfer by the Issuer of any of its rights and obligations under this
Agreement, the Note, the Sale Agreement, the Security Agreement or any
other Transaction Document or (E) amend or modify any defined term (or any
defined term used directly or indirectly in such defined term) used in
clauses (A) through (E) above in a manner which would circumvent the
intention of the restrictions set forth in such clauses;
(ii) without the written consent of the Deal Agent, amend, modify or
waive any provision of this Agreement or any other Transaction Document if
the effect thereof is to affect the rights or duties of such Deal Agent; or
(iii) without the written consent of the Liquidity Agent, amend,
modify or waive any provision of this Agreement or any other Transaction
Document if the effect thereof is to affect the rights or duties of such
Liquidity Agent.
Notwithstanding the foregoing, without the consent of the Note Investors, the
Deal Agent may, with the consent of the Issuer amend this Agreement solely to
add additional Persons as Note Investors hereunder. Any modification or waiver
shall apply to each of the Note Investors equally and shall be binding upon the
Issuer, the Note Investors and the Deal Agent.
SECTION 7.5 NO BANKRUPTCY PETITION AGAINST VFCC.
Each of the parties hereto (other than VFCC) covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
Commercial Paper Notes issued by VFCC, it will not institute against, or join
any other Person in instituting against, VFCC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any federal or state bankruptcy or similar law.
SECTION 7.6 COSTS, EXPENSES AND TAXES.
In addition to the rights of indemnification granted to the Deal Agent, the
Note Investors and their respective Affiliates under ARTICLE IV hereof, the
Issuer agrees to pay on demand all costs and expenses of the Note Investors and
the Deal Agent, and their respective Affiliates, successors or assigns, if any
(including reasonable counsel fees and expenses), incurred in connection with
28
the enforcement, administration (including periodic auditing), amendment or
modification of, or any waiver or consent issued in connection with, this
Agreement, the Notes, any other Transaction Document and the other documents to
be delivered hereunder or thereunder, or in connection herewith or therewith.
Any amounts subject to the provisions of this section shall be paid by the
Issuer to the Deal Agent within ten (10) Business Days following the Deal
Agent's demand therefor.
SECTION 7.7 SETOFF.
The Issuer hereby irrevocably and unconditionally waives all right of
setoff that it may have under contract (including this Agreement and any other
Transaction Document), applicable law or otherwise with respect to any funds or
monies of any Note Investor at any time held by or in the possession of the
Issuer.
SECTION 7.8 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 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 administrator of such Secured Party
or any incorporator, affiliate, stockholder, officer, employee or director of
such Secured Party or of any such administrator, as such, by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; IT BEING EXPRESSLY AGREED AND UNDERSTOOD that the agreements of
such Secured Party contained in this Agreement and all of the other agreements,
instruments and documents entered into by it pursuant hereto or in connection
herewith are, in each case, solely the corporate obligations of such Secured
Party, and that no personal liability whatsoever shall attach to or be incurred
by any administrator of such Secured Party or any incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of such Secured Party contained in this
Agreement or in any other such instruments, documents or agreements, or that are
implied therefrom, and that any and all personal liability of every such
administrator of such Secured Party and each incorporator, stockholder,
affiliate, officer, employee or director of such Secured Party or of any such
administrator, or any of them, for breaches by such Secured Party of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of and in consideration for the execution of this
Agreement. The provisions of this SECTION 7.8 shall survive the termination of
this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, VFCC shall
not have any obligation to pay any amount required to be paid by it hereunder in
excess of any amount available to VFCC after paying or making provision for the
payment of its Commercial Paper Notes. All payment obligations of VFCC hereunder
are contingent on the availability of funds in excess of the amounts necessary
to pay its Commercial Paper Notes and each of the other parties hereto agrees
that it will not have a claim under SECTION 101(5) of the Bankruptcy Code if and
to the extent that any such payment obligation owed to it by VFCC exceeds the
amount available to
29
VFCC to pay such amount after paying or making provision for the payment of its
Commercial Paper Notes.
SECTION 7.9 FURTHER ASSURANCES.
The Issuer agrees to do such further acts and things and to execute and
deliver to the Deal Agent or the Collateral Agent such additional assignments,
agreements, powers and instruments as are required by the Deal Agent, the
Liquidity Agent, any Note Investor or the Collateral Agent to carry into effect
the purposes of this Agreement or the Security Agreement or to better assure and
confirm unto the Deal Agent, the Liquidity Agent, any Note Investor or the
Collateral Agent its rights, powers and remedies hereunder or under any other
Transaction Document.
SECTION 7.10 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, EACH SECURED PARTY
AND EACH HEDGE COUNTERPARTY HEREBY (a) AGREES TO THE NON-EXCLUSIVE JURISDICTION
OF ANY FEDERAL COURT LOCATED WITHIN ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇; (b)
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 (c)
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.
SECTION 7.11 WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO, EACH
SECURED PARTY AND EACH HEDGE COUNTERPARTY 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 7.12 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. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this 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
30
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 delivered by the Issuer to the Deal Agent.
SECTION 7.13 HEADINGS.
Section headings used in this Agreement are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
31
IN WITNESS WHEREOF, each of the parties hereto have caused this
Note
Purchase Agreement to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
THE ISSUER: FIRST INVESTORS RESIDUAL FUNDING LIMITED,
as Issuer
By: FIALAC Holdings, Inc., its sole general partner
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. Duck
Title: Vice President and Chief Financial Officer
First Investors Residual Funding LP
c/o FIFS Acquisition Funding Company, L.L.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Duck
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
THE DEAL AGENT AND
THE COLLATERAL AGENT: FIRST UNION SECURITIES, INC.
By
-------------------------------------
Name:
Title:
First Union Securities, Inc.
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INITIAL NOTE
INVESTOR: VARIABLE FUNDING CAPITAL CORPORATION
By First Union Securities, Inc.,
as attorney-in-fact
By
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Name:
Title:
Variable Funding Capital Corporation
c/o First Union Securities, Inc.
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Attention: Conduit Administration
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THE LIQUIDITY AGENT: FIRST UNION NATIONAL BANK
By
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Name:
Title:
First Union National Bank
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THE LIQUIDITY BANK: FIRST UNION NATIONAL BANK
By
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Name:
Title:
First Union National Bank
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EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ___________
Reference is made to the
Note Purchase Agreement dated as of December 6,
2001 (the "AGREEMENT") among First Investors Residual Funding LP, as the Issuer,
Variable Funding Capital Corporation, as an Initial Note Investor, the Note
Investors named therein, First Union Securities, Inc., as the Deal Agent and
First Union National Bank, as the Liquidity Agent. Except as otherwise provided
herein, capitalized terms used herein will have the meanings ascribed to them in
the Agreement.
__________________ (the "ASSIGNOR") and ___________________ (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Agreement as of the date hereof
which represents the percentage interest specified in SECTION 1 of Schedule 1 of
all outstanding rights and obligations of the Assignor under the Agreement,
including, without limitation, such interest in the Note held by the Assignor.
After giving effect to such sale and assignment, the amount of Outstanding
Amount with respect to the Note held by the Assignee will be as set forth in
SECTION 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other instrument or document furnished pursuant thereto;
and (iii) 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 the Agreement or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of such financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Deal Agent, the Liquidity Agent, the
Assignor or any other Note 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 the Agreement; (iii) confirms
that it is an Eligible Assignee; (iv) appoints and authorizes the Deal Agent and
the Liquidity Agent each to take such action as agent on its behalf and to
exercise such powers under the Agreement as are delegated to the Deal Agent and
the Liquidity Agent, respectively, by the terms thereof, together with such
powers as are reasonably incidental thereto; and (v) agrees that it will perform
in accordance with their terms all
of the obligations which by the terms of the Agreement are required to be
performed by it as a Note Investor.
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to each of the Deal Agent and
the Liquidity Agent for acceptance and recording by the Deal Agent. The
effective date of this Assignment and Acceptance (the "TRANSFER DATE") shall be
the date of acceptance thereof by the Deal Agent and the Liquidity Agent, unless
a later date is specified in SECTION 3 of Schedule 1 hereof.
5. Upon such acceptance by the Deal Agent and the Liquidity Agent and upon
such recording by the Deal Agent, as of the Transfer Date, (i) the Assignee
shall be a party to the Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Note Investor thereunder
and (ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Agreement.
6. Upon such acceptance by the Deal Agent and the Liquidity Agent and upon
such recording by the Deal Agent, from and after the Transfer Date, the Deal
Agent and the Liquidity Agent shall make, or cause to be made, all payments
under the Agreement in respect of the interest assigned hereby (including,
without limitation, all payments of principal and interest with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement for periods prior to the Transfer
Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of
New York.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the Date first above written.
[NAME OF ASSIGNOR]
By:
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Name:
Title:
Address for notices
[ADDRESS]
[NAME OF ASSIGNEE]
By:
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Name:
Title:
Address for notices
[ADDRESS]
Acknowledged and accepted
this ___ day of ___________,___
FIRST UNION NATIONAL BANK,
as Liquidity Agent
By:
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Name:
Title:
Acknowledged and accepted
this ___ day of ___________,___
FIRST UNION SECURITIES, INC.,
as Deal Agent
By:
--------------------------------
Name:
Title:
Schedule 1
to
Assignment and Acceptance
Dated ___________
SECTION 1.
Outstanding Amount of Note. ________
Type of Note: ________.
Percentage Interest Transferred: ________%
SECTION 2.
Outstanding Amount
Owing to the Assignee: $_____________
SECTION 3.
Transfer Date: ___________________
EXHIBIT B
FORM OF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT"), OR ANY STATE SECURITIES LAW AND THE ISSUER HAS NOT BEEN
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT
COMPANY ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, AS
EVIDENCED BY AN OPINION OF COUNSEL, CERTIFICATION AND OTHER INFORMATION
SATISFACTORY TO THE ISSUER, AND SUBJECT TO DELIVERY TO THE ISSUER AND THE
REGISTRAR OF A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE REGISTRAR, AND ANY NOTEHOLDER
WILL, AND EACH SUBSEQUENT NOTEHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. THE ISSUER IS
NOT OBLIGATED TO REGISTER THIS NOTE UNDER THE 1933 ACT OR ANY STATE SECURITIES
OR BLUE SKY LAWS. EACH HOLDER OF THIS NOTE AGREES THAT THIS NOTE IS SUBJECT TO
THE PROVISIONS OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ALL
APPLICABLE JURISDICTIONS.
ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN IN VIOLATION OF ANY OF THE
PROVISIONS OF THE
NOTE PURCHASE AGREEMENT SHALL BE VOID.
THE HOLDER OF THIS NOTE IS SUBJECT TO PROVIDING ADDITIONAL AMOUNTS TO THE ISSUER
HEREOF ON THE TERMS AND CONDITIONS SET FORTH IN THE
NOTE PURCHASE AGREEMENT
DESCRIBED BELOW.
NOTE
(First Investors Residual Funding LP)
$13,500,000.00 December 6, 2001
Reference is hereby made to that certain
Note Purchase Agreement dated as
of December 6, 2001 (as amended, supplemented, restated or otherwise modified in
accordance with the terms thereof and in effect from time to time, the "
NOTE
PURCHASE AGREEMENT") by and among First Investors Residual Funding LP, a
Delaware limited partnership (the "ISSUER"), Variable Funding Capital
Corporation, a Delaware corporation (the "COMPANY"), First Union Securities,
Inc. ("FUSI"), as deal agent and collateral agent, certain note investors from
time to time party thereto and First Union National Bank, as liquidity agent.
All capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Note Purchase Agreement.
FOR VALUE RECEIVED, the Issuer hereby promises to pay to the holder hereof
the principal sum of THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($13,500,000.00), in lawful money of the United States of America and in
immediately available funds.
The holder of this Note may be required under the terms and conditions of
the Note Purchase Agreement to made additional amounts of principal available to
the Issuer, in an amount not to exceed the Facility Limit. The date and amount
of each Funding extended by a holder to the Issuer under the Note Purchase
Agreement, and each payment of principal thereof by the Issuer, shall be
recorded by the holder or its agent on its books and/or on the schedule attached
hereto or any continuation thereof. Although the stated principal amount of this
Note is as stated above, this Note shall be enforceable, with respect to the
Issuer's obligation to pay the principal hereof, only to the extent of the
unpaid principal amount of the Fundings outstanding thereunder at the time such
enforcement shall be sought.
Note Interest on the outstanding principal amount of this Note shall accrue
at the Note Interest Rate and is payable on each Payment Date. Note Interest
will be computed on the basis of a 360-day year for the actual number of days
elapsed during the Accrual Period related to a Payment Date.
Principal may be prepaid in whole or in part at any time upon at least
sixty (60) days' prior written notice by the Issuer to the holder of this Note.
The entire outstanding principal amount of this Note and accrued interest
thereon will be due and payable on the maturity date.
The Issuer shall pay all costs of collection of any amount due hereunder
when incurred, including without limitation, reasonable attorney's fees and
expenses, and including all costs and expenses actually incurred in connection
with the pursuit by the holder of any of its rights or remedies referred to
herein or in the Note Purchase Agreement or the protection of or realization
upon collateral.
The Issuer waives presentment, notice of dishonor, protest and other notice
or formality with respect to this Note.
THE HOLDER OF THIS NOTE MAY TRANSFER THIS NOTE AND ITS INTEREST HEREIN ONLY
IN ACCORDANCE WITH THE PROVISIONS OF THE NOTE PURCHASE AGREEMENT. ANY TRANSFER
OF THIS NOTE OR ANY NOTE INTEREST HEREIN IN VIOLATION OF ANY OF THE PROVISIONS
OF THE NOTE PURCHASE AGREEMENT SHALL BE VOID.
THIS NOTE SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF
NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this Note to be signed and
delivered by its duly authorized officer as of the date set forth above.
FIRST INVESTORS RESIDUAL FUNDING LP
By:
--------------------------------
Name:
Title:
DATE AMOUNT OF AMOUNT OF PRINCIPAL NOTATION
FUNDING REPAYMENT OUTSTANDING BY
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
____________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto __________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:_____________
[exact name of assignor, which must correspond with the name of the registered
owner as it appears on the face of the within Note and the Register in every
particular, without alteration, enlargement or any change whatsoever]___________
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Signature Guaranteed:
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