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Exhibit 4.03
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LOAN AND SECURITY AGREEMENT
among
KITTY HAWK FUNDING CORPORATION,
as Company
and
UPC BORROWING SPE 1998-1 LIMITED PARTNERSHIP
as Borrower
and
PORTFOLIO FINANCIAL SERVICING COMPANY, L.P.
individually and
as Master Servicer
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of July 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.................................................................. 1
SECTION 1.1. Certain Defined Terms............................. 1
SECTION 1.2. Other Terms....................................... 27
SECTION 1.3. Computation of Time Periods....................... 28
ARTICLE II
PLEDGES AND SETTLEMENTS...................................................... 28
SECTION 2.1. Facility.......................................... 28
SECTION 2.2. Availability of Borrowings........................ 28
SECTION 2.3. Selection of Tranche Periods and Tranche
Rates............................................. 31
SECTION 2.4. Discount, Fees and Other Costs and
Expenses................................................... 34
SECTION 2.5. Settlement and Reinvestment Procedures............ 34
SECTION 2.6. Liquidation Settlement Procedures................. 36
SECTION 2.7. Fees.............................................. 37
SECTION 2.8. Protection of the Interest of the
Company and the Bank Investors............................. 37
SECTION 2.9. Prepayment Shortfalls; Application of
Payments................................................... 39
SECTION 2.10. Payments and Computations, Etc.................... 39
SECTION 2.11. Reports........................................... 40
SECTION 2.12. Accounts.......................................... 40
SECTION 2.13. Sharing of Payments, Etc.......................... 42
SECTION 2.14. Right of Setoff................................... 42
SECTION 2.15. Hedging of Receivables............................ 42
SECTION 2.16. Substitution of Receivables....................... 43
ARTICLE III
REPRESENTATIONS AND WARRANTIES................... 44
SECTION 3.1. Representations and Warranties of the
Borrower................................................... 44
SECTION 3.2. Reaffirmation of Representations and
Warranties by the Borrower................................. 48
SECTION 3.3. [Reserved.]....................................... 48
SECTION 3.4. Representations and Warranties of the
Master Servicer............................................ 48
ARTICLE IV
CONDITIONS PRECEDENT......................................................... 50
SECTION 4.1. Conditions to Closing............................. 50
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ARTICLE V
COVENANTS.................................................................... 54
SECTION 5.1. Affirmative Covenants of Borrower................. 54
SECTION 5.2. Negative Covenants of the Borrower................ 58
SECTION 5.3. [Reserved.]....................................... 61
SECTION 5.4. [Reserved.]....................................... 61
SECTION 5.5. Affirmative Covenants of the Master
Servicer................................................... 61
SECTION 5.6. [Reserved.]....................................... 63
SECTION 5.7. Negative Covenants of the Master
Servicer................................................... 63
ARTICLE VI
ADMINISTRATION AND COLLECTIONS............................................... 64
SECTION 6.1. Appointment of the Master Servicer................ 64
SECTION 6.2. Duties of the Master Servicer..................... 64
SECTION 6.3. Rights After Designation of New Master
Servicer................................................... 70
SECTION 6.4. Master Servicer Default........................... 71
SECTION 6.5. Responsibilities of the Borrower and the
Seller................................... 72
SECTION 6.6. Limitation on Liability of the Master
Servicer and Others........................................ 72
SECTION 6.7. The Master Servicer Not to Resign................. 72
ARTICLE VII
TERMINATION EVENTS........................................................... 73
SECTION 7.1. Termination Events................................ 73
SECTION 7.2. Termination....................................... 75
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS................................... 76
SECTION 8.1. Indemnities by the Borrower....................... 76
SECTION 8.2. Indemnity for Taxes, Reserves and
Expenses................................................... 79
SECTION 8.3. Taxes............................................. 81
SECTION 8.4. Other Costs, Expenses and Related
Matters.................................................... 82
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ARTICLE IX
THE AGENT; BANK COMMITMENT................................................... 83
SECTION 9.1. Authorization and Action.......................... 83
SECTION 9.2. Agent's Reliance, Etc............................. 84
SECTION 9.3. Termination Events................................ 84
SECTION 9.4. Rights as Bank Investor........................... 85
SECTION 9.5. Indemnification of the Agent...................... 85
SECTION 9.6. Non-Reliance...................................... 86
SECTION 9.7. Resignation of Agent.............................. 86
SECTION 9.8. Payments by the Agent............................. 86
SECTION 9.9. Bank Commitment; Assignment to Bank
Investors.................................................. 87
ARTICLE X
MISCELLANEOUS................................................................ 91
SECTION 10.1. Term of Agreement................................. 91
SECTION 10.2. Waivers; Amendments............................... 92
SECTION 10.3. Notices........................................... 92
SECTION 10.4. Governing Law; Submission to
Jurisdiction; Integration.................................. 95
SECTION 10.5. Severability; Counterparts........................ 95
SECTION 10.6. Successors and Assigns............................ 96
SECTION 10.7. Waiver of Confidentiality......................... 97
SECTION 10.8. Confidentiality Agreement......................... 98
SECTION 10.9. No Bankruptcy Petition Against the
Company.................................................... 98
SECTION 10.10. No Recourse Against Stockholders,
Officers or Directors...................................... 98
EXHIBIT B CREDIT POLICY MANUAL AND CREDIT POLICY
PROCEDURE MEMORANDA.................................................B-1
EXHIBIT C [RESERVED.].......................................C-1
EXHIBIT D [RESERVED.].......................................D-1
EXHIBIT E FORM OF INVESTOR REPORT...........................E-1
EXHIBIT F FORM OF BORROWING REQUEST.........................F-1
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT.......G-1
EXHIBIT H LIST OF ACTIONS AND SUITS.........................H-1
EXHIBIT I LOCATION OF RECORDS...............................I-1
EXHIBIT J LIST OF SUBSIDIARIES AND TRADENAMES...............J-1
EXHIBIT K [Reserved.] ......................................K-2
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EXHIBIT L-1 FORM OF OFFICER'S CERTIFICATE OF THE
BORROWER..........................................................L-1-1
EXHIBIT L-2 FORM OF OFFICER'S CERTIFICATE OF THE SELLER..............L-2-1
EXHIBIT L-3 FORM OF OFFICER'S CERTIFICATE OF THE GENERAL
PARTNER.........................................L-3-1
EXHIBIT L-4 FORM OF OFFICER'S CERTIFICATE OF THE PARENT..............L-4-1
EXHIBIT L-5 FORM OF OFFICER'S CERTIFICATE OF THE MASTER
SERVICER.................................................L-5-1
EXHIBIT M FORM OF VARIABLE FUNDING NOTE.....................M-1
EXHIBIT N FORM OF PARENT GUARANTY...........................N-1
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LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT (this "Agreement"), dated as of July 1,
1998, by and among UCP BORROWING SPE 1998-1 LIMITED PARTNERSHIP, a Nevada
limited partnership, as borrower (in such capacity, the "Borrower"), PORTFOLIO
FINANCIAL SERVICING COMPANY, L.P., a Delaware limited partnership, individually
and as master servicer (in such capacity, the "Master Servicer"), KITTY HAWK
FUNDING CORPORATION, a Delaware corporation (the "Company") and NATIONSBANK,
N.A., a national banking association ("NationsBank"), as agent for the Company
and the Bank Investors (in such capacity, the "Agent") and as a Bank Investor,
and each other bank that is a party hereto in the capacity of a Bank Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has requested that the Company make Advances to
the Borrower, from time to time, which will be secured by certain lease and
secured loan receivables and the other collateral described herein and evidenced
by a variable funding note, and the repayment of which will be fully guaranteed
by UniCapital Corporation, a Delaware corporation (the "Parent");
WHEREAS, the Company will finance such Advances through the periodic
issuance of commercial paper and related liquidity draws; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Company is willing to make such Advances to the Borrower.
NOW, THEREFORE, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Accounts" means, collectively, the Collection Account, the
Reserve Account, the Principal Collection Account and the
Interest Accrual Account.
"Administrative Agent" means NationsBank, N.A., as
administrative agent.
"Administrative Fee" means the fee payable to the Agent pursuant to
Section 2.7(a) hereof, the terms of which are set forth in the Fee Letter.
"Advance" has the meaning specified in Section 2.1 hereof.
"Advance Amount" means with respect to any Advance, the amount paid to
the Borrower by the Company or the Bank Investors being the product of the
applicable Advance Percentage and the Outstanding Balance of the related
Receivables at the time of such Advance.
"Advance Percentage" means with respect to any Advance, 93%, or if the
Three-Month Average Net Portfolio Yield as of the related Borrowing Date is less
than or equal to 1.50%, 88% or such other percentage as may be agreed to by the
Agent and the Borrower, as evidenced by the related Borrowing Request.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any Person other than the Company and the Bank Investors (including any UCC
financing statement or any similar instrument filed against such Person's assets
or properties); provided, however, that any lien in favor of a third-party
lessor for the Equipment relating to a Leveraged Lease Loan shall not constitute
an Adverse Claim; provided, further, that a lien on the Borrower's right, title
and interest in any Equipment or proceeds thereof that is expressly subordinated
to the interests of the Agent, the Company and the
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Bank Investors under this Agreement and is made subject to payment in full of
the related Contract shall not constitute an Adverse Claim hereunder.
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for the
Company and the Bank Investors, and any successor thereto appointed pursuant to
Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount with respect to all Tranche
Periods at such time, (ii) the Net Investment at such time, and (iii) all other
amounts owed (whether due or accrued) hereunder by the Borrower to the Company
at such time.
"Assignment Amount" with respect to a Bank Investor shall mean at any
time an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of
the Net Investment at such time and (ii) such Bank Investor's unused Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Available Funds" means, for each Payment Date, all Collections
Available for the related Collection Period, plus all Servicing Advances for
such Payment Date, plus all amounts received under the Hedge Agreements with
respect to such Payment Date, plus all Purchase Facility Release Amounts for
such Payment Date, plus all amounts on deposit in the Interest Accrual Account
immediately prior to such Payment Date.
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"Bank Investors" shall mean NationsBank, N.A. and each other
bank that is party hereto in the capacity of a Bank Investor and
their respective successors and assigns.
"Bankruptcy Code" means the Federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Liquidity Provider (or, if there is
more than one Liquidity Provider, then by NationsBank) from time to time,
changing when and as said prime rate changes (such rate not necessarily being
the lowest or best rate charged by the Liquidity Provider (or NationsBank, as
applicable)) and (ii) the sum of (a) 1.50% and (b) the rate equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the Liquidity Provider
(or, if more than one Liquidity Provider, then by NationsBank) from three
Federal funds brokers of recognized standing selected by it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Borrower, the Seller or any ERISA
Affiliate of the Borrower, or the Seller is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.
"Borrower" means UCP Borrowing SPE 1998-1 Limited Partnership, a Nevada
limited partnership, and its successors and assigns.
"Borrowing Request" has the meaning specified in Section
2.2(a) hereof.
"Borrowing Base" means (i) the product of the Net Receivables Balance
and the Weighted Average Advance Percentage plus (ii) all amounts on deposit in
the Principal Collection Account and the Reserve Account.
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"Borrowing Base Deficiency" means on any day, the excess of the Net
Investment on such day over the Borrowing Base of such day.
"Borrowing Date" means the date of Advances made hereunder.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York; Portland, Oregon; Miami, Florida; or
Charlotte, North Carolina are authorized or required by law to close, and, when
used with respect to the determination of any Eurodollar Rate or any notice with
respect thereto, any such day which is also a day for trading by and between
banks in United States dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche, either (i)
prior to the Termination Date, a period of up to 30 days requested by the
Borrower and agreed to by the Company, NationsBank on behalf of the Liquidity
Provider, or the Agent, as the case may be, commencing on a Business Day
requested by the Borrower and agreed to by the Company, NationsBank or the
Agent, as the case may be, or (ii) after the Termination Date, a period of one
day. If such BR Tranche Period would end on a day which is not a Business Day,
such BR Tranche Period shall end on the next succeeding Business Day.
"Capitalized Lease" means any lease of property by a Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
"Carrying Costs" has the meaning provided in Section 2.5.
"Closing Date" means July __, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in Section 2.8
hereof.
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"Collateral Agent" means NationsBank, N.A., as collateral agent for any
Liquidity Provider, any Credit Support Provider, the holders of Commercial Paper
and certain other parties.
"Collection Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(a).
"Collection Period" means with respect to each Payment Date, the
immediately preceding calendar month (or, with respect to the first Payment
Date, the period beginning on the initial Cutoff Date and ending on the last day
of the month preceding such Payment Date).
"Collections" means, with respect to any Receivable, all cash
collections on and other cash proceeds of or recoveries on the related Contract,
including, without limitation, all interest charges, rental payments, and cash
proceeds of all Related Security, in each case, other than any Excluded Amounts.
"Collections Available" means, for any Payment Date, all Collections
with respect to the related Collection Period, less any amounts allocated since
the preceding Payment Date, or since the initial Borrowing Date in the case of
the first Payment Date, pursuant to Section 2.5(b).
"Commercial Paper" means the promissory notes issued by the Company in
the commercial paper market.
"Commitment" means (i) with respect to each Bank Investor a party
hereto, the commitment of such Bank Investor to make loans to the Borrower or to
acquire such loans from the Company in accordance herewith in an amount not to
exceed the dollar amount set forth opposite such Bank Investor's signature on
the signature page hereto under the heading "Commitment" minus the dollar amount
of any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement plus the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make loans to the Borrower or to acquire such loans from the
Company
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not to exceed the amount set forth in such Assignment and Assumption Agreement
minus the dollar amount of any Commitment or portion thereof assigned pursuant
to an Assignment and Assumption Agreement prior to such time of determination
and (iii) with respect to any assignee of an assignee referred to in clause (ii)
above, the commitment of such assignee to make loans to the Borrower or to
acquire such loans from the Company not to exceed the amount set forth in an
Assignment and Assumption Agreement between such assignee and its assign.
"Commitment Termination Date" means July 30, 1999, or such later date
to which the Commitment Termination Date may be extended by the Borrower, the
Agent and the Bank Investors not later than 90 days prior to the then current
Commitment Termination Date, any such extension to become effective on the then
current Commitment Termination Date and to be for a period not to exceed 364
days from the date of the then current Commitment Termination Date.
"Company" means Kitty Hawk Funding Corporation, and its
successors and assigns.
"Concentration Factor" means for any Obligor on any date of
determination, Receivables of such Obligor having an aggregate Outstanding
Balance not in excess of (a) if the Net Investment is $100,000,000 or more on
such date of determination, the greater of 2% of the Net Investment on such date
and $5,000,000 or, with respect to any Obligor whose long term unsecured debt
obligations are rated at least "Baa3" by Moody's and at least "BBB-" by Standard
& Poor's or, if only rated by one such rating agency, are rated by such rating
agency at least at the applicable rating set forth above, the greater of 5% of
the Net Investment on such date and $7,000,000, (b) if the Net Investment is
less than $100,000,000 on such date of determination, (x) for Obligors whose
Obligor Risk Rating is "5" or worse, $3,000,000 and (y) for Obligors whose
Obligor Risk Rating is "4" or better, $4,000,000; provided that Obligors whose
Obligor Risk Rating is "5" or worse may have pledged Receivables hereunder
having an Outstanding Balance in excess of $3,000,000 but not in excess of
$4,000,000 to the extent that the Transaction Risk Rating for those Receivables
is "4" or better, or (c) in any event, such other greater amount that is
determined by the Agent in the reasonable exercise of its good faith judgment
and disclosed in a written
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notice delivered to the Borrower or such other lesser amount that is determined
by the Agent with the mutual consent of the Borrower.
"Conduit Assignee" means any commercial paper conduit designated by
NationsBank from time to time to accept an assignment from the Company of all or
a portion of the Net Investment.
"Contract" means any lease, conditional sale contract, loan contract or
security agreement with respect to any Equipment under which the Seller acts as
lessor or secured party to an Obligor.
"Contract Payment" means each periodic installment of rent, scheduled
payment of principal and interest or PRR Payment payable by an Obligor under a
Contract.
"Contract Schedule" means the schedule in the form attached hereto as
Schedule I to Exhibit F delivered by the Borrower to the Agent with respect to
each Advance or such other form as may be agreed to by the Agent from time to
time.
"CP Rate" means, with respect to any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper having a term equal to such CP Tranche Period
may be sold by any placement agent or commercial paper dealer selected by the
Company; provided, however, that if the rate (or rates) as agreed between any
such agent or dealer and the Company is a discount rate, then the rate (or if
more than one rate, the weighted average of the rates) resulting from the
Company's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a period of
days not to exceed 90 days commencing on a Business Day requested by the
Borrower and agreed to by the Company pursuant to Section 2.3. If a CP Tranche
Period would end on a day which is not a Business Day, such CP Tranche Period
shall end on the next succeeding Business Day.
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"Credit and Collection Policy" shall mean the Parent's Credit Policy
Manual and Credit Policy and Procedure Memoranda, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the Company and
the Credit Support Provider evidencing the obligation of the Credit Support
Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company in connection with the issuance by the Company of
Commercial Paper.
"Cut-off Date" means, for each Receivable that is subject to an Advance
hereunder, either (a) the first day of the month of such Advance or, if later
than the first day of such month, the date of origination thereof or (b) such
other date as may be specified in the related Borrowing Request.
"Dealer Fee" means the fee payable by the Borrower to the Collateral
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Fee Letter.
"Defaulted Receivable" means a Receivable: (i) as to which any payment
remains unpaid for 180 consecutive days or more from the original due date for
such payment; (ii) as to which an Event of Bankruptcy has occurred and is
continuing with respect to the Obligor thereof; (iii) which has been identified
by the Borrower, the Seller or the Master Servicer as uncollectible; or (iv)
which, consistent with the Credit and Collection Policy, should be written off
as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which any payment
remains unpaid for more than 30 days from the
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original due date for such payment and (ii) which is not a Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon prior
notice to the Borrower from the Agent, which notice shall be based in the
Agent's sole discretion on its assessment of the risk of loss posed by such
Obligor's Receivables and which notice shall be given 30 days prior to the date
such Obligor shall cease to be a Designated Obligor unless to do so would
materially adversely affect the interests of the Agent, the Company or the Bank
Investors hereunder.
"Determination Date" means the 10th day of each month or if such 10th
day is not a Business Day, the immediately preceding Business Day.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
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360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche Period;
provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Discount at a rate which is in excess of the maximum
amount permitted by applicable law; and provided, further, that Discount shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"Discount Rate" means for any date of determination and any Receivable,
the sum of (i) either (x) the "constant maturity" yield, as of the last day of
the Collection Period immediately preceding such date of determination (or, if
later, as of the
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Borrowing Date for such Receivable), on U.S. Treasury securities with a maturity
date equal or nearest to the then expected remaining weighted average life (as
determined by the Agent in its sole discretion) of the related Receivables or
(y) if such Receivables are then subject to a Hedging Agreement, the then
applicable Hedge Rate of such Receivables plus (ii) 2.00%. The "constant
maturity" yield shall be determined based on the average yield, in effect for
the week ending on the last Friday immediately preceding the last day of the
related Collection Period, for U.S. Treasury securities adjusted to a constant
maturity, as published in H.15.
"Early Collection Fee" means, for any Tranche Period (such Tranche
Period to be determined without regard to the last sentence in Section 2.3(a)
hereof) during which the portion of the Net Investment that was allocated to
such Tranche Period is reduced for any reason whatsoever prior to the end of
such Tranche Period, the excess, if any, of (i) the additional Discount that
would have accrued during such Tranche Period if such reductions had not
occurred, minus (ii) the income, if any, received by the recipient of such
reductions from investing the proceeds of such reductions.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by Moody's and
by S&P; (iii) certificates of deposit having, at the time of investment
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or contractual commitment to invest therein, a rating from Moody's and S&P of at
least "P-1" and "A-1", respectively; or (iv) investments in money market funds
rated in the highest investment category or otherwise approved in writing by the
applicable rating agencies; (b) demand deposits in any depositary institution or
trust company referred to in (a)(ii) above; (c) commercial paper (having
original or remaining maturities of no more than 30 days) having, at the time of
investment or contractual commitment to invest therein, a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time
deposits having a credit rating from Moody's and S&P of at least "P-1" and
"A-1", respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein, a
rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the Seller at the instruction
of, or was sold to the Seller by, and in either case was underwritten
by, the Parent or a Subsidiary of the Parent that at the time of the
assignment of such Receivable hereunder, was an Originator, and has
been sold to the Borrower pursuant to and in accordance with the
Receivables Purchase Agreement and to which the Borrower has good title
thereto, free and clear of all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been, unless otherwise permitted herein, the
subject of the grant by the Borrower of a first priority perfected
security interest therein (and in the Collections and Related Security
related thereto), effective until the earlier of the termination of
this Agreement or the time at which the related Contract is either paid
in full or reacquired by the Borrower pursuant to this Agreement;
(iii) the Obligor of which (A) is a United States resident,
(B) is a Designated Obligor on the related Borrowing Date, (C) is not
an Affiliate of any of the parties hereto, and (D) is not a government
or a
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governmental subdivision or agency; provided that Receivables which in
the aggregate do not have an Outstanding Balance that represents more
than 5.0% of the Net Investment or $8 million, whichever is greater,
may be backed by the full faith and credit of the United States or of a
governmental entity whose long term general obligations are rated
investment grade;
(iv) which is not a Defaulted Receivable on the related
Borrowing Date;
(v) which is not a Delinquent Receivable on the related
Borrowing Date;
(vi) which arises pursuant to a Contract with respect to which
each of the Seller, the Originator and the Borrower, as applicable, has
performed all obligations required to be performed by it thereunder on
the related Borrowing Date;
(vii) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(viii) which arises under a Contract that is "chattel paper"
within the meaning of Article 9 of the UCC of all applicable
jurisdictions and is (A) secured by a first priority perfected security
interest in the related Equipment (provided that Receivables as to
which in each case the related Equipment had at the origination of the
related Contract an original equipment cost of less than $35,000 and
which in the aggregate do not have an Outstanding Balance that
represents more than 20% of the Net Investment or $20 million,
whichever is greater, may be represented by Contracts as to which steps
to perfect such security interest have not been taken), (B) a Leveraged
Lease Loan secured by a first priority perfected security interest in
both the related lease and Equipment (subject to such lease), and which
related lease would be an Eligible Receivable had it been directly sold
to the Borrower pursuant to the Receivables Purchase Agreement and
pledged hereunder, or (C) a "true lease" as to which the related
Equipment is owned by the Borrower free and clear of all Adverse
Claims;
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(ix) which is denominated and payable only in United States
dollars in the United States by an Obligor with a billing address in
the United States and for which the related Equipment is located in the
United States;
(x) which, arises under a Contract that, is in full force and
effect and is and at all times will be the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to, nor has there been
asserted, any litigation, right of recession, setoff, counterclaim or
other defense;
(xi) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) has been originated and serviced in accordance
with and otherwise satisfies all applicable requirements of the Credit
and Collection Policy and (B) is assignable without the consent of, or
notice to, the Obligor thereunder;
(xiii) which was generated in the ordinary course of the
Seller's and the Originator's business;
(xiv) the Obligor of which has been directed to make all
payments to the Lock-Box Account;
(xv) as to which the Agent has not given at least 30 days'
notice to the Borrower that such Receivable or class of Receivables is
not acceptable for pledge hereunder, based upon the reasonable
determination of the Agent , that a Material Adverse Effect with
respect to such class of Receivables may arise because of the nature of
the business of the Obligor;
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(xvi) the assignment of which under the Receivables Purchase
Agreement by the Seller and hereunder by the Borrower do not violate,
conflict or contravene any applicable laws, rules, regulations, orders
or writs or any contractual or other restriction, limitation or
encumbrance;
(xvii) to which the Obligor is responsible for the payment of
all expenses in connection with maintenance, repair, insurance, taxes
and otherwise with respect to the related Equipment and which requires
the Obligor to make periodic lease payments without condition
notwithstanding damage to or destruction of the Equipment, or any other
event, including Equipment obsolescence;
(xviii) as to which the related Contract is not a lease on a
vehicle or other type of equipment which requires titling in the name
of the Borrower in order to perfect the Borrower's interest; provided
that certain Receivables may be leases on vehicles or other types of
equipment which require titling in the name of the Borrower, so long as
the aggregate Outstanding Balance of such Receivables does not
represent more than 5.0% of the Net Investment or $7 million, whichever
is greater, and provided that such vehicles are re-titled as required
to perfect such interest within 90 days of the related Borrowing Date;
(xix) which has an outstanding term of 84 months or less,
provided that certain Receivables may have a term greater than 84
months but in no event greater than 120 months if the aggregate
Outstanding Balance of such Receivables does not represent more than
7.5% of the Net Investment or $15 million, whichever is greater;
(xx) which has a remaining Outstanding Balance on the related
Borrowing Date equal to or less than $5,000,000;
(xxi) which contains customary and enforceable provisions
adequate for realization of the benefits of the related Equipment;
(xxii) which is not a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC;
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(xxiii) as to which the Seller or its assignee may accelerate
all remaining Contract Payments (or, if the Contract is a conditional
sale contract or a loan, accelerate the outstanding principal amount
thereof together with any accrued but unpaid interest, penalties and
fees thereon) if the Obligor is in default under any of its obligations
under such Receivable;
(xxiv) which has not been terminated as a result of the loss,
theft, damage beyond repair or governmental seizure of such item of
Equipment or for any other reason;
(xxv) the Outstanding Balance of which does not include the
amount of any security deposit held by the Master Servicer, the Seller
or the Parent, but which may include up to 6 PRR Payments;
(xxvi) which provides that in the event of the loss, theft,
damage beyond repair or governmental seizure of the related Equipment,
the Obligor is required to repair or replace the related Equipment or
pay an amount not less than the Required Payoff Amount;
(xxvii) under which the Obligor has represented to the Seller
and/or the related Originator that such Obligor has accepted the
related Equipment or is contractually bound to accept such Equipment
upon shipment or delivery thereof;
(xxviii) which does not permit prepayment except upon the
payment of an amount not less than the Required Payoff Amount or, if
the Contract is a conditional sale contract or a loan, upon the payment
of the outstanding principal amount thereof together with any accrued
but unpaid interest, penalties and fees thereon;
(xxix) the assignment of such Receivable hereunder will not
cause the Concentration Factor with respect to the related Obligor to
be exceeded;
(xxx) for which the related Contract and Records are in the
custody of the Master Servicer at one of the locations set forth in
Exhibit I, except that (1) for Receivables having an Outstanding
Balance not in excess of 3% of the
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Facility Limit, such Contract and Records shall be delivered to the
Master Servicer's custody not later than the fifth Business Day after
the date of the assignment thereof hereunder and (2) Contracts and
Records during Interim Funding may be at the location of the applicable
Originator; and
(xxxi) which is in Interim Funding; provided that the
aggregate Outstanding Balance of Receivables in Interim Funding will
not exceed $50 million and Interim Funding will not continue for any
such Receivable for a period in excess
of 12 months.
"Equipment" means each item of personal property, together with any
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a
Contract.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Rate" means, with respect to any Eurodollar Tranche Period,
a rate which is 0.75% in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate obtained
by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to 100%
minus the reserve percentage used for determining the maximum reserve
requirement as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the Agent during such Eurodollar Tranche Period in respect of eurocurrency or
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23
eurodollar funding, lending or liabilities (or, if more than one percentage
shall be so applicable, the daily average of such percentage for those days in
such Eurodollar Tranche Period during which any such percentage shall be
applicable) plus (B) the then daily net annual assessment rate (rounded upwards,
if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for
determining the current annual assessment payable by the Agent to the Federal
Deposit Insurance Corporation in respect of eurocurrency or eurodollar funding,
lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to one month requested by
the Borrower and agreed to by the Company, NationsBank, on behalf of the
Liquidity Provider, or the Agent, as the case may be, commencing on a Business
Day requested by the Borrower and agreed to by the Company, NationsBank or the
Agent, as applicable; provided, however, that if such Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Eurodollar Tranche
Period shall expire on the next succeeding Business Day; provided, further, that
if such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Eurodollar Tranche Period shall expire on the next
preceding Business Day or (b) a Business Day for which there is no numerically
corresponding day in the applicable subsequent calendar month, such Eurodollar
Tranche Period shall expire on the last Business Day of such month.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall be unable to pay its debts generally as they become due, (b)
shall file a petition to take advantage of any insolvency statute, (c) shall
make an assignment for the benefit of its creditors, (d) shall commence a
proceeding for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property or (e) shall
file a petition or answer seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute; or (ii)(a) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
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liquidator or conservator of such Person or of the whole or any substantial part
of its properties and such order, judgment or decree continues unstayed and in
effect for a period of sixty days, or approve a petition filed against such
Person seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which petition is not dismissed within
sixty days, (b) under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or control of
such Person or of the whole or any substantial part of its properties, which
control is not relinquished within sixty days, (c) there is commenced against
such Person any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state which proceeding or
petition remains undismissed for a period of sixty days or (d) such Person takes
any action to indicate its consent to or approval of any such proceeding or
petition.
"Excluded Amounts" means any collections on a Receivable or the related
Contract or Related Security therefor (a) attributable to any Taxes, fees or
other charges imposed by any Official Body, (b) representing reimbursements of
insurance premiums or payments for services that were not financed by the Seller
or the Originator, (c) with respect to a Receivable reassigned or substituted
for as provided for in this Agreement, (d) with respect to Equipment related to
any Contract that has been paid in full and (e) attributable to any costs
expressly incurred to third parties, such as any UCC fees, maintenance fees and
the like.
"Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.
"Facility Fee" means the fee payable by the Borrower to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Facility
Fee Letter.
"Facility Fee Letter" means the letter agreement dated the date hereof
between the Borrower and the Agent with respect to the Facility Fee.
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"Facility Limit" means $375,000,000; provided that such amount may not
at any time exceed the aggregate Commitments at any time in effect; and
provided, further, that the Agent will, from time to time, at the request of the
Borrower, within three Business Days after the receipt by the Agent of a
certificate executed by the Borrower in the form attached hereto as Exhibit A,
agree to changes in the Facility Limit without the approval of the Company or
the Bank Investors so long as (i) the Agent receives notice of such change at
least 5 Business Days prior to the date of such change, (ii) any resulting
increase occurs simultaneously with an equivalent decrease, and any resulting
decrease occurs simultaneously with an equivalent increase, in the facility
limit under the Purchase Facility Agreement, and (iii) after giving effect to
any such change, the aggregate of the Facility Limit under this Agreement and
the facility limit under the Purchase Facility Agreement remains the same.
"Facility Pledge Agreement" means that certain agreement, dated as of
June 22, 1998, among the Purchase Facility Pledgors and the Borrower pursuant to
which the Purchase Facility Pledgors, on the one hand, and the Borrower, on the
other, have made reciprocal pledges of certain amounts to be released to the
Purchase Facility Pledgors or the Borrower, as applicable, pursuant to the
Purchase Facility Agreement and this Agreement, respectively.
"Facility Term" means the period commencing on the Closing Date and
ending on the Facility Termination Date.
"Facility Termination Date" means the earlier to occur of (a) the
Termination Date and (b) the Commitment Termination Date.
"Fee Letter" means the letter agreement dated the date hereof among the
Borrower, the Parent and the Company with respect to the Administrative Fee and
the Program Fee to be paid by the Borrower or the Parent hereunder, as amended,
modified or supplemented from time to time.
"Financing Facility Differential" means for any Payment Date (i) the
sum of, for such Payment Date, all Collections Available for the related
Collection Period, plus all Servicing Advances for such Payment Date, plus all
amounts received under the Hedge Agreements with respect to such Payment Date
and plus all amounts
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on deposit in the Interest Accrual Account immediately prior to such Payment
Date minus (ii) the amount required to be remitted on such Payment Date pursuant
to clauses (i) through (ix) of Section 2.5(a).
"Financing Facility Free Cash Flow" means for any Payment Date any
positive Financing Facility Differential for such Payment Date.
"Financing Facility Shortfall" means for any Payment the absolute value
of any negative Financing Facility Differential for such Payment Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
accounting profession, which are in effect as of the date of this Agreement.
"General Partner" means UCP GP SPE 1998-1 LLC, a Nevada limited
liability company, and its successors and assigns.
"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"H.15" means Statistical Release No. H.15 (519) of the Federal Reserve
Board or any successor publication.
"Hedge Counterparty" means with respect to this Agreement, each party
which has entered into a Hedging Agreement with the Borrower, the Parent or the
Seller (which Hedging Agreement has been assigned to the Agent), as to which
such party's (a) long-
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term unsecured debt obligations are rated not lower than one of the two highest
investment categories granted by S&P and Moody's and (b) short-term unsecured
debt obligations are rated at least "A-1" by S&P and "P-1" by Moody's, or such
party that has been approved in advance by the Agent.
"Hedge Payments" means for each Payment Date, any and all amounts due
and payable to the Hedge Counterparty under each Hedging Agreement from but not
including the preceding Payment Date to and including such Payment Date.
"Hedge Rate" means, for any Receivable at any time for which a Hedging
Agreement is in effect, the per annum rate at which the Hedge Payments under the
related Hedging Agreement are calculated net of a percentage amount reflecting
the average daily spread between the yield on the related Treasury security and
the rate that reflects hedge payments with respect to such security as
determined for similar hedging agreements during the preceding calendar quarter.
"Hedged Amount" has the meaning specified in Section 2.15.
"Hedging Agreement" means, each hedging agreement entered into by the
Borrower, the Parent or the Seller and a Hedge Counterparty the form of which
has been approved in writing in advance by the Agent.
"Hedging Event" means the occurrence of a Three-Month Average Net
Portfolio Yield that is less than 2.0%.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
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"Indemnified Amounts" has the meaning specified in Section
8.1 hereof.
"Indemnified Parties" has the meaning specified in Section
8.1 hereof.
"Interest Accrual Account" means the account, established by the Agent
for the benefit of the Company and the Bank Investors, pursuant to Section
2.12(d).
"Interest Component" shall mean, (i) with respect to any Commercial
Paper issued on an interest-bearing basis, the interest payable on such
Commercial Paper at its maturity, and (ii) with respect to any Commercial Paper
issued on a discount basis, the portion of the face amount of such Commercial
Paper representing the discount incurred in respect thereof.
"Interim Funding" means for any Receivable, with respect to which the
related Equipment is delivered in stages, a period during which Contract
Payments are based on the Equipment actually shipped or delivered, with the full
funding term of such Contract to commence pursuant to the terms thereof after
delivery of all such items of Equipment.
"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Borrower and the Agent, furnished by the Master Servicer pursuant to Section
2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Leveraged Lease Loan" means a loan by the Seller or an Originator to a
third party lessor secured by all of such lessor's right, title and interest in
a lease (originated by the Seller or such Originator and sold, together with the
related Equipment, to such third party) and in the related Equipment.
"LIBOR Rate" means, with respect to any Eurodollar Tranche Period, the
rate which appears on Telerate Page 3750 (as defined in the 1987 Interest Rate
and Currency Exchange Definitions published by the International Swap Dealers
Association, Inc.)
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(or such page as may replace Telerate Page 3750), at approximately 11:00 a.m.
(London time), two Business Days before the first day of such Eurodollar Tranche
Period in an amount approximately equal to the Eurodollar Tranche to which the
Eurodollar Rate is to apply and for a period of time approximately equal to the
applicable Eurodollar Tranche Period.
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
and the Liquidity Provider evidencing the obligation of the Liquidity Provider
to provide liquidity support to the Company in connection with the issuance by
the Company of Commercial Paper.
"Lock-Box Account" means, collectively, each account maintained by the
Master Servicer at the Lock-Box Bank for the purpose of receiving Collections.
"Lock-Box Bank" means NationsBank, N.A. or its designee.
"Majority Investors" shall mean, at any time, the Agent and those Bank
Investors which hold Commitments aggregating in excess of 50% of the Facility
Limit as of such date.
"Master Servicer" means at any time the Person then authorized pursuant
to Section 6.1 to service, administer and collect Receivables.
"Master Servicer Default" has the meaning specified in
Section 6.4 hereof.
"Material Adverse Effect" means any event or condition which would have
a material adverse effect on (i) the general collectibility of the Receivables,
(ii) the ability of the Borrower and the Parent to perform their collective
obligations under the Transaction Documents to which they are parties and (iii)
the interests of the Agent, the Company or the Bank Investors under the
Transaction Documents.
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"Maximum Net Investment" means $375,000,000; provided that such amount
shall increase or decrease in an amount equal to any increase or decrease in the
Facility Limit.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Borrower, the Parent or
any ERISA Affiliate of the Borrower or the Parent on behalf of its employees.
"Net Asset Test" shall mean a test that is met if, as of the time of
determination, the sum of the Net Receivables Balance and the amount on deposit
in the Accounts, exceeds the aggregate Net Investment plus the amount of any
outstanding Carrying Costs.
"Net Investment" means, as of any time of determination, the sum of the
Advance Amounts made to the Borrower hereunder (other than from amounts on
deposit in the Principal Collection Account) less the aggregate amount of
Collections received and applied by the Agent prior to such date to reduce such
Net Investment; provided that the Net Investment shall be restored and
reinstated in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; and provided, further, that the Net Investment may be
increased by the amount described in Section 9.9(g) as described therein.
"Net Portfolio Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction the numerator of which is
Available Funds for such Collection Period (not including any Purchase Facility
Release Amounts for such Collection Period) plus any amounts paid by the
Borrower or the Parent to the Agent, the Company or the Bank Investors from
amounts other than Available Funds and minus any amounts payable on the related
Payment Date pursuant to clauses (i) through (v) and (vii) through (viii) of
Section 2.5(a) and the denominator of which is the average Net Investment for
such Collection Period.
"Net Receivables Balance" means at any time the lesser of (i) the
Outstanding Balance of the Eligible Receivables at such time reduced by the
aggregate Outstanding Balance of all Eligible
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Receivables which are Defaulted Receivables and (ii) the current market value of
the Receivables, determined by the Agent in its reasonable discretion.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Obligor Risk Rating" means, with respect to an Obligor, the numerical
"Obligor Rating" assigned pursuant to the Credit and Collection Policy.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Originator" means UniCapital Funding Corporation or any
other Subsidiary of UniCapital Corporation.
"Other Conduit Participant" means any Person other than the Borrower
that has entered into a receivables purchase or pledge agreement or transfer or
pledge and administration agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any date
of determination, an amount equal to the present value of all Contract Payments
(not including delinquent payments in respect of Delinquent Receivables) to
become due thereunder following such date (determined by discounting on a
monthly basis (assuming a calendar year consisting of twelve 30-day months), at
a rate equal to the then applicable Discount Rate for such Receivable or pool of
Receivables, each such Contract Payment from the last day of the Collection
Period during which such Contract Payment is due, to such date). The Outstanding
Balance of any Receivables in Interim Funding shall be equal to 90% of the
related original Equipment cost as set forth in the Contract Schedule, and such
balance shall not decline during Interim Funding based on Contract Payments made
thereunder. In determining the Outstanding Balance with respect to any date of
determination, the future remaining Contract Payments will be calculated after
giving effect to any payments received prior to such date of calculation to the
extent such payments relate to
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Contract Payments due and payable by the Obligors with respect to the related
Collection Period and any prior Collection Period; the Outstanding Balance of
any Defaulted Receivable and any Receivable that has been subject to a Deemed
Collection will be equal to zero.
"Parent" means UniCapital Corporation, a Delaware corporation, and its
successors and assigns.
"Parent Guaranty" means the guaranty agreement, dated as of the date
hereof, made by Parent in favor of the Company and the Bank Investors,
substantially in the form of Exhibit N hereto, as amended, supplemented or
otherwise modified from time to time.
"Payment Date" means the 20th day of each month, or if such day is not
a Business Day the next succeeding Business Day, or such earlier date of the
related month as may be agreed upon by the Agent and the Borrower, commencing in
the month following the initial Advance under this Agreement.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Pledged Interest" means, at any time of determination, all right,
title and interest created hereunder in each and every then outstanding
Receivable, and all Related Security with respect to each such Receivable.
"Prepayment Shortfall" has the meaning specified in Section 2.9.
"Principal Collection Account" means the account established by the
Agent, for the benefit of the Company and the Bank Investors pursuant to Section
2.12(c).
"Principal Deemed Amount" means, for any Payment Date, the excess of
the Outstanding Balance of the Receivables at the end of the second preceding
Collection Period (or for any Receivable for which the Cut-off Date therefor
occurred since the end of such Collection Period, the Outstanding Balance of
each such Receivable as of its Cut-off Date) over the Outstanding Balance
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of the Receivables at the end of the preceding Collection Period; provided,
that, the Principal Deemed Amount will not be calculated for any Receivables as
to which a Take-Out occurred during such preceding Collection Period.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1)
of the UCC.
"Program Fee" means the fee payable to the Company pursuant to Section
2.7 hereof, the terms of which are set forth in the Fee Letter.
"PRR Payment" means, in the case of an Obligor designated on the
Contract Schedule as an Obligor for "PRR-type leases", each of the first 6
monthly payments relating to any 12 month extension of the term of the related
Contract.
"Purchase Facility Agreement" means that certain Transfer and
Administration Agreement, dated as of June 22, 1998, among the Purchase Facility
Pledgors, the Agent, the Company, the Bank Investors and the Master Servicer.
"Purchase Facility Pledgors" means UCP Qualifying SPE 1998-1 Limited
Partnership, a Nevada limited partnership, and UCP Operating Lease SPE 1998-1
Limited Partnership, a Nevada limited partnership, and their respective
successors and assigns.
"Purchase Facility Release Amounts" means, for any Payment Date, all
cash amounts released since the preceding Payment Date to and including such
Payment Date to the Purchase Facility Pledgors pursuant to the Finance Facility
Agreement and pledged to the Borrower pursuant to the Facility Pledge Agreement.
"Purchased Interest" means the interest in the Receivables acquired by
the Liquidity Provider through purchase pursuant to the terms of the Liquidity
Provider Agreement.
"Receivable" means Contracts sold to the Borrower under the
Receivables Purchase Agreement, whether constituting an account,
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chattel paper, instrument, investment property or general intangible or arising
in connection with the sale or lease of Equipment, including all Contract
Payments and other payment obligations (but other than Excluded Amounts) owed
thereunder on or after the related Cut-off Date by the related Obligor,
including the right to payment of any finance charges and other obligations of
such Obligor with respect thereto. Notwithstanding the foregoing, once a
Receivable has been deemed collected pursuant to Section 2.9 hereof, it shall no
longer constitute a Receivable hereunder.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of July 1, 1998, among the Seller, as seller, the Borrower,
as purchaser, and the Parent.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Borrower of written notice that the Company
elects to commence the amortization of its interest in the Net Investment or
otherwise liquidate its interest in the Advances.
"Related Commercial Paper" shall mean Commercial Paper issued by the
Company the proceeds of which were used to acquire, or refinance the acquisition
of, an interest in Receivables.
"Related Security" means with respect to any Receivable, all of the
Borrower's right, title and interest in and to:
(a) any collateral securing the Obligor's obligations under
such Contract (excluding security deposits) or any Guaranty thereof;
(b) all cash realizations on the related Equipment (including
returned and repossessed Equipment) and all loss and casualty insurance
maintained with respect to such Equipment, in each case to the extent
constituting recoveries on a Defaulted Receivable or otherwise
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representing the amount necessary to pay in full all unpaid Contract
Payments and other amounts due on the related Receivable in the event
that it is a Defaulted Receivable;
(c) all Guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting,
securing or insuring any Equipment, to the extent of the cash
realizations set forth in clause (b) above;
(d) all Records related to such Contract; and
(e) all Proceeds of the foregoing;
excluding, however, in each case any Excluded Amounts.
"Required Payoff Amount" means with respect to any Collection Period
for any Receivable, the sum of (i) the Contract Payment due in any Collection
Period, together with any past due Contract Payments, (ii) the Outstanding
Balance of such Receivable as of the last day of such Collection Period (after
taking into account the Contract Payment due on such Collection Period and, if
the applicable Receivable is a Defaulted Receivable, assuming for the purpose of
determining the Outstanding Balance thereof pursuant to this clause (ii) that
such Receivable is not a Defaulted Receivable) plus (iii) any breakage cost
associated with the applicable Hedging Agreement.
"Reserve Account" means the account, established by the Agent, for the
benefit of the Company and the Bank Investors, pursuant to Section 2.12(b).
"Reserve Account Event" means a period commencing on any Payment Date
for which the Three-Month Average Net Portfolio Yield for the related Collection
Period was below 1.75% and ending at the end of any Collection Period for which
the Three-Month Average Net Portfolio Yield is greater than 1.75%.
"Revolving Credit Facility Agreement" means that certain credit
agreement, dated June 10, 1998, among the Parent, NationsBank and certain
lenders a party thereto from time to time.
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"Revolving Credit Facility Default" means the occurrence of an Event of
Default, as defined in the Revolving Credit Facility Agreement.
"Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof.
"Seller" means UniCapital Funding Corporation and its successors and
assigns.
"Servicer Advance" has the meaning specified in Section 6.2(l) hereof.
"Servicing Fee" means the fees payable to the Master Servicer on each
Payment Date in an amount equal to 0.50% per annum on the amount of the
Outstanding Balance of all Receivables as of the beginning of the related
Collection Period.
"Specified Reserve Account Requirement" means zero, or upon the
occurrence and during the continuance of a Reserve Account Event, the greater of
(x) 2.00% of the then outstanding Net Investment and (y) $1,000,000.
"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Substitute Receivable" has the meaning specified in Section 2.16.
"Take-Out" means a prepayment of principal on the VFN on any Payment
Date pursuant to Section 2.5(d) that reduces the Net Investment to an amount
equal to or less than the greater of (x) $20,000,000 or (y) 20% of the Net
Investment outstanding immediately prior to such Payment Date.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
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"Termination Date" means the earliest of (i) the Business Day
designated by the Borrower to the Agent as the Termination Date at any time
following 60 days' written notice to the Agent, (ii) the day upon which the
Termination Date is declared or automatically occurs pursuant to Section 7.2(a)
hereof, (iii) two Business Days prior to the Commitment Termination Date (unless
such date has been extended) or (iv) the Reinvestment Termination Date.
"Termination Event" means an event described in Section 7.1 hereof.
"Three-Month Average Net Portfolio Yield" means as of any date of
determination, commencing in the fourth month following the month of the initial
Advance, the weighted average of the Net Portfolio Yields for the three most
recently ended Collection Periods (or for any date of determination in the
fourth month following the month of the initial Advance, the Net Portfolio Yield
for the immediately preceding Collection Period, and for any such date in the
fifth such month, the weighted average of the Net Portfolio Yields for the two
most recently ended Collection Periods), in the case of each such weighted
average calculation, weighted for each Collection Period by the average Net
Investment for such Collection Period.
"Tranche" means a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.3 hereof.
"Tranche Period" means a CP Tranche Period, a BR Tranche Period or a
Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate or the Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section 8.4(a) hereof.
"Transaction Risk Rating" means, with respect to a Receivable, the
numerical "Transaction Rating" assigned pursuant to the Credit and Collection
Policy.
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"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Facility Fee Letter, the Fee Letter, the VFN
and all of the other instruments, documents and other agreements executed and
delivered by the Seller or the Borrower in connection with any of the foregoing,
in each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"VFN" has the meaning specified in Section 2.1 hereof.
"Weighted Average Advance Percentage" means, as of any date of
determination, the average of the Advance Percentages for the Receivables
weighted for each Receivable by the Outstanding Balance of such Receivable.
SECTION 1.2. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including", the words
"to" and "until" each means "to but excluding", and the word "within" means
"from and excluding a specified date and to and including a later specified
date".
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ARTICLE II
PLEDGES AND SETTLEMENTS
SECTION 2.1. Facility. Subject to the terms and conditions hereof, the
Company agrees to make loans ("Advances") to the Borrower from time to time as
permitted by this Agreement during the Facility Term in an aggregate amount
outstanding at any time not to exceed the Facility Limit; provided, however,
that in no event shall the Company make any Advance if, after giving effect to
such Advance, either (a) the Net Investment plus accrued interest thereon would
exceed the Facility Limit or (b) a Borrowing Base Deficiency would exist.
The Advances shall be evidenced by a variable funding note of the
Borrower, substantially in the form of Exhibit M attached hereto (as amended,
supplemented or otherwise modified from time to time, the "VFN"), payable to the
order of the Agent. The Agent shall record the date and amount of each Advance
made and the date and amount of each payment of principal thereof, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. The VFN shall (a) be dated the Closing Date (b) be
stated to mature on the Commitment Termination Date and (c) provide for the
payment of principal and interest in accordance with Sections 2.5 and 2.6
hereof.
SECTION 2.2. Availability of Borrowings. (a) During the Facility Term,
the Borrower may request Advances on any Business Day by delivering to the
Administrative Agent irrevocable notice of each borrowing via facsimile in the
form of Exhibit B attached hereto (a "Borrowing Request") (i) if the proposed
Advance is greater than $150,000,000, no later than 4:00 p.m. (New York City
time) on the fifth Business Day prior to the proposed Borrowing Date , (ii) if
the proposed Advance is greater than $45,000,000 but less than or equal to
$150,000,000, no later than 4:00 p.m. (New York City time) on the third Business
Day prior to the proposed Borrowing Date, (iii) if the proposed Advance is
greater than $20,000,000 but less than or equal to $45,000,000, no later than
4:00 p.m. (New York City time) on the second Business Day prior to the proposed
Borrowing Date (iv) if the proposed Advance is greater than $5,000,000 but less
than or equal to $20,000,000, no later than 11:00 a.m. (New York City time) on
the Business Day prior to the proposed Borrowing Date and (v) if the proposed
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Advance is less than or equal to $5,000,000, no later than 4:00 p.m. (New York
City time) on the Business Day prior to the proposed Borrowing Date. The
Borrowing Request shall specify (i) the proposed Borrowing Date for such
Advance; (ii) whether such request is made to the Company or the Bank Investors;
(iii) the desired Advance Amount (which shall be at least $1,000,000; and (iv)
the desired Tranche Period related thereto pursuant to Section 2.3 hereof. Each
Borrowing Request shall be irrevocable and binding on the Borrower and the
Borrower shall indemnify the Company and each Bank Investor against any loss or
expense incurred by the Company, any Bank Investor, the Agent or the
Administrative Agent, either directly or indirectly (including in the case of
the Company) through the Liquidity Provider Agreement, as a result of any
failure by the Borrower to complete such borrowing, including, without
limitation, any loss or expense incurred by the Company or any Bank Investor,
either directly or indirectly (including in the case of the Company, pursuant to
the Liquidity Provider Agreement), by reason of the liquidation or reemployment
of funds acquired by the Company, any Bank Investor or the Liquidity Provider
(including, without limitation, funds obtained by issuing commercial paper or
promissory notes or obtaining deposits as loans from third parties) for the
Company, any Bank Investor or the Liquidity Provider to fund such borrowing.
With respect to any failure of either of the Borrower for which the Company or
the Bank Investors are indemnified pursuant to the preceding sentence, the
applicable Bank Investor or the Company, as the case may be, incurring any
indemnified costs as a result of such failure, shall take such steps as may be
reasonable for avoiding or mitigating (consistent with the internal policies and
governance and legal and regulatory restrictions of the Bank Investors or the
Company, as applicable, and without requiring the incurring of any additional
costs by, or otherwise being disadvantageous to, such party) additional costs as
a result of such failure. The Administrative Agent will promptly notify the
Company and each of the Bank Investors, as the case may be, of the Agent's
receipt of any request for an Advance.
(b) By no later than 11:00 a.m. (New York City time) on any
Borrowing Date, the Company or each Bank Investor, as the case may be, shall
remit its share (which, in the case of an Advance by the Bank Investors, shall
be equal to such Bank Investor's Pro Rata Share) of the aggregate Advance Amount
to the
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account of the Agent specified therefor from time to time by the Agent by notice
to such Persons. The obligation of each Bank Investor to remit its Pro Rata
Share of any such Advance Amount shall be several from that of each other Bank
Investor, and the failure of any Bank Investor to so make such amount available
to the Agent shall not relieve any other Bank Investor of its obligation
hereunder. Following each Advance and the Agent's receipt of funds from the
Company or the Bank Investors as aforesaid, the Agent shall remit the Advance
Amount to the Borrower's account at the location indicated in Section 10.3
hereof, in immediately available funds. Unless the Agent shall have received
notice from the Company or any Bank Investor, as applicable, that such Person
will not make its share of any Advance Amount available on the applicable
Borrowing Date therefor, the Agent may (but shall have no obligation to) make
the Company's or any such Bank Investor's share of any such Advance Amount
available to the Borrower in anticipation of the receipt by the Agent of such
amount from the Company or such Bank Investor. To the extent the Company or any
such Bank Investor fails to remit any such amount to the Agent after any such
advance by the Agent on such Borrowing Date, the Company and the Bank Investors
shall be required to pay such amount, together with interest thereon at a per
annum rate equal to the Federal funds rate (as determined in accordance with
clause (ii) of the definition of "Base Rate") to the Agent upon its demand
therefor (provided that the Company shall have no obligation to pay such
interest amounts except to the extent that it shall have sufficient funds to pay
the face amount of its Commercial Paper in full). Until such amount shall be
repaid by the defaulting Company or Bank Investor, as applicable, such amount
shall be deemed to be Net Investment paid by the Agent and the Agent shall be
deemed to be the owner of a Pledged Interest hereunder. Upon the payment of such
amount to the Agent by the Company or the Bank Investors, such payment shall
constitute such Person's payment of its share of the applicable Advance Amount.
(c) Purchase Facility Release Amounts. As additional security
for the payment of all amounts due under this Agreement, the Borrower pledges
and assigns all of its right, title and interest in the Facility Pledge
Agreement, including all Purchase Facility Free Cash Flow to the Agent, which
pledge and assignment the Agent hereby accepts on behalf of the Company and the
Bank Investors, as applicable. Accordingly, Purchase Facility Free
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Cash Flow shall be available on each Payment Date as part of Available Funds for
such Payment Date. As additional security for the payment of all Aggregate
Unpaids, the Borrower pledges and assigns all of its right, title and interest
in the Receivables Purchase Agreement and the parties hereto acknowledge that
the Agent, on behalf of the Company and the Bank Investors, as applicable, may
enforce such right, title and interest directly as if it were party thereto.
(d) Limitations on Equipment. With respect to the interests in
Equipment that are pledged hereunder, such interests are limited to those that
constitute Related Security for the related Receivable. Therefore, upon the
payment in full of any Receivable, the Agent, the Company and the Bank Investors
shall have no further interest hereunder in the related Equipment, and all such
Equipment shall be held by the Borrower or its assignee free and clear of any
lien or other claim created or imposed pursuant to this Agreement.
SECTION 2.3. Selection of Tranche Periods and Tranche
Rates.
(a) Prior to the Termination Date; Pledged Interest held on
behalf of the Company. At all times hereafter, but prior to the
Termination Date and not with respect to any portion of the Pledged
Interest held on behalf of the Bank Investors (or any of them), the
Borrower may, subject to the Company's approval and the limitations
described below, request Tranche Periods and allocate a portion of the
Net Investment to each selected Tranche Period, so that the aggregate
amounts allocated to outstanding Tranche Periods at all times shall
equal the Net Investment held on behalf of the Company. The Borrower
shall give the Company irrevocable notice by telephone of the new
requested Tranche Period(s) at least three Business Days prior to the
expiration of any then existing Tranche Period; provided, however, that
in the event of a Tranche Period with respect to a Borrowing Date, such
notice period shall not exceed the notice period pursuant to Section
2.2 that applies to the related Advance; provided, further, that the
Company may select, in its sole discretion, any such new Tranche Period
if (i) the Borrower fails to provide such notice on a timely basis or
(ii) the Company determines, in its sole
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discretion, that the Tranche Period requested by the Borrower is
unavailable or for any reason commercially undesirable. The Company
confirms that it is its intention to allocate all or substantially all
of the Net Investment held on behalf of it to one or more CP Tranche
Periods; provided that the Company may determine, from time to time, in
its sole discretion, that funding such Net Investment by means of one
or more CP Tranche Periods is not possible or is not desirable for any
reason. If the Liquidity Provider acquires from the Company a Purchased
Interest with respect to the Receivables pursuant to the terms of the
Liquidity Provider Agreement, NationsBank, on behalf of the Liquidity
Provider, may exercise the right of selection granted to the Company
hereby. The initial Tranche Period applicable to any such Purchased
Interest shall be a period of not greater than 7 days and such Tranche
shall be a BR Tranche. Thereafter, provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall be
the BR Rate or the Eurodollar Rate, as determined by the Borrower. In
the case of any Tranche Period outstanding upon the Termination Date,
such Tranche Period shall end on such date.
(b) After the Termination Date; Pledged Interest Held on
behalf of the Company. At all times on and after the Termination Date,
with respect to any portion of the Pledged Interest which shall be held
by the Agent on behalf of the Company, the Company or NationsBank, as
applicable, shall select all Tranche Periods and Tranche Rates
applicable thereto.
(c) Prior to the Termination Date; Pledged Interest Held on
Behalf of Bank Investors. At all times with respect to any portion of
the Pledged Interest held by the Agent on behalf of the Bank Investors,
but prior to the Termination Date, the initial Tranche Period
applicable to such portion of the Net Investment allocable thereto
shall be a period of not greater than 3 days and such Tranche shall be
a BR Tranche. Thereafter, with respect to such portion, and with
respect to any other portion of the Pledged Interest held on behalf of
the Bank Investors (or any of them), provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall
be, at the Borrower's
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option, either a BR Tranche or a Eurodollar Tranche. The Borrower shall
give the Agent irrevocable notice by telephone of the new requested
Tranche Period at least three (3) Business Days prior to the expiration
of any then existing Tranche Period. In the case of any Tranche Period
outstanding upon the occurrence of the Termination Date, such Tranche
Period shall end on the date of such occurrence.
(d) After the Termination Date; Pledged Interest Held on
behalf of Bank Investors. At all times on and after the Termination
Date, with respect to any portion of the Pledged Interest held by the
Agent on behalf of the Bank Investors, the Agent shall select all
Tranche Periods and Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent
is unable to obtain on a timely basis the information necessary to
determine the LIBOR Rate for any proposed Eurodollar Tranche, then
(A) the Agent shall forthwith notify the Company or Bank
Investors, as applicable, and the Borrower that the Eurodollar
Rate cannot be determined for such Eurodollar Tranche, and
(B) while such circumstances exist, neither the Company, the
Bank Investors nor the Agent shall allocate the Net Investment
of any additional Pledged Interests pledged and assigned
during such period or reallocate the Net Investment allocated
to any then existing Tranche ending during such period, to a
Eurodollar Tranche.
(ii) If, with respect to any outstanding Eurodollar Tranche,
the Company or any of the Bank Investors on behalf of which the Agent
holds any Pledged Interest herein notifies the Agent that it is unable
to obtain matching deposits in the London interbank market to fund its
purchase or maintenance of such Pledged Interest or that the Eurodollar
Rate applicable to such Pledged Interest will not adequately reflect
the cost to the Person of funding or maintaining its respective Pledged
Interest for such Tranche
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Period then the Agent shall forthwith so notify the Borrower, whereupon
neither the Agent nor the Company or the Bank Investors, as applicable,
shall, while such circumstances exist, allocate any Net Investment of
any additional Pledged Interest pledged and assigned during such period
or reallocate the Net Interest allocated to any Tranche Period ending
during such period, to a Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall
notify the Agent that such Person has determined (or has been notified
by any Liquidity Provider) that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful
(either for the Company, such Bank Investor, or such Liquidity
Provider, as applicable), or any central bank or other governmental
authority asserts that it is unlawful, for the Company, such Bank
Investor or such Liquidity Provider, as applicable, to fund Advances or
the maintenance of Pledged Interests at the Eurodollar Rate, then (x)
as of the effective date of such notice from such Person to the Agent,
the obligation or ability of the Company or such Bank Investor, as
applicable, to fund Advances or the maintenance of Pledged Interests at
the Eurodollar Rate shall be suspended until such Person notifies the
Agent that the circumstances causing such suspension no longer exist
and (y) the Net Investment of each Eurodollar Tranche in which such
Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Pledged Interest at the Eurodollar Rate until
the last day of the applicable Tranche Period, be reallocated on the
last day of such Tranche Period to another Tranche Period in respect of
which the Net Investment allocated thereto accrues Discount at a
Tranche Rate other than the Eurodollar Rate or (2) if such Person shall
determine that it may not lawfully continue to maintain such Pledged
Interest at the Eurodollar Rate until the end of the applicable Tranche
Period, such Person's share of the Net Investment allocated to such
Eurodollar Tranche shall be deemed to accrue Discount at the Base Rate
from the effective date of such notice until the end of such Tranche
Period.
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SECTION 2.4. Discount, Fees and Other Costs and Expenses. The Borrower
shall pay, as and when due in accordance with this Agreement, all Carrying
Costs, and the Servicing Fees. On the last day of each Tranche Period, the
Borrower shall pay to the Agent, on behalf of the Company or the Bank Investors,
as applicable, an amount equal to the accrued and unpaid Discount for such
Tranche Period together with, in the event the Pledged Interest is held on
behalf of the Company, an amount equal to the discount accrued on the Company's
Commercial Paper to the extent such Commercial Paper was issued in order to fund
the Pledged Interest in an amount in excess of the Advance Amount. The Borrower
shall pay to the Agent, on behalf of the Company, on each day on which Related
Commercial Paper is issued by the Company, the Dealer Fee. Discount shall accrue
with respect to each Tranche on each day occurring during the Tranche Period
related thereto.
SECTION 2.5. Settlement and Reinvestment Procedures. (a) On each
Payment Date, so long as no Termination Event has occurred, all the Available
Funds for such Payment Date will be allocated by the Master Servicer in the
following order of priority:
(i) first, to each Hedge Counterparty, on a pro rata
basis, any Hedge Payments then due;
(ii) second, to the Master Servicer, any
unreimbursed Servicer Advances;
(iii) third, to the Master Servicer, the accrued and unpaid
Servicing Fees, if the Master Servicer is not an Affiliate of
the Parent;
(iv) fourth, to the Agent, for the benefit of the Company
and the Bank Investors, as applicable, the sum of the
following, in each case, to the extent not previously paid and
without duplication: accrued and unpaid Dealer Fees on
Commercial Paper; the Program Fee, Facility Fee and
Administrative Fee; any accrued Discount (whether or not
payable on such Payment Date) and any Discount payable on or
prior to such Payment Date to the extent not previously paid;
any amounts due to the Credit Support Provider under the
Credit Support
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Agreement or the Liquidity Provider under the Liquidity
Provider Agreement, in each case to the extent payable
pursuant to the terms of this Agreement by the Borrower and
not otherwise payable from any of the above-referenced fees;
and Section 8.2 Costs (all of these, the "Carrying Costs");
provided that, any amount allocated pursuant to this clause
(iv) on account of accrued and unpaid Discount that is not yet
payable shall be deposited into the Interest Accrual Account;
(v) fifth, to the Agent, for the benefit of the
Company and the Bank Investors, an amount equal to the
Principal Deemed Amount for such Payment Date plus any unpaid
shortfall in the amount applied pursuant to this clause (v) to
pay the Principal Deemed Amount from prior Payment Dates, for
deposit to the Principal Collection Account, such amount to be
so deposited until the Borrowing Base is equal to the Net
Investment;
(vi) sixth, if a Reserve Account Event has occurred
and is continuing with respect to such Payment Date, to the
Reserve Account the amount, if any, necessary to cause the
balance on deposit therein to equal the Specified Reserve
Account Requirement;
(vii) seventh, to the extent that after giving effect
to clauses (v) and (vi) above, a Borrowing Base Deficiency
exists, to the Agent, for the benefit of the Company and the
Bank Investors, the amount necessary to cause the Net
Investment to equal the Borrowing Base, such amount to be
deposited into the Principal Collection Account;
(viii) eighth, to the Master Servicer, the accrued
and unpaid Servicing Fee, if the Master Servicer is an
Affiliate of the Parent;
(ix) ninth, to the Master Servicer, any amounts
collected during the related Collection Period in respect of
late fees, insufficient funds charges, extension fees and
other like amounts;
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(x) tenth, to the Purchase Facility Pledgors all
amounts required to be remitted thereto pursuant to the
Facility Pledge Agreement; and
(ix) eleventh, the balance, if any, to the Borrower.
To the extent Available Funds, are for any reason insufficient to pay
amounts due under clauses (i) through (vii) above, on any date due, the Borrower
shall pay such deficiency on such date and any remaining unpaid amounts shall
constitute Aggregate Unpaids hereunder.
(b) On the last day of each Tranche Period, first, from
amounts on deposit in the Interest Accrual Account and, second, from the
Collections on deposit in the Collection Account, the Master Servicer shall
deposit to the Agent's account, for the benefit of the Company or the Bank
Investors, as applicable, an amount equal to the accrued and unpaid Discount for
such Tranche Period. To the extent funds on deposit in the Collection Account
are insufficient to pay amounts due pursuant to the preceding sentence, the
Borrower shall pay such deficiency on such date and any remaining unpaid amounts
shall constitute Aggregate Unpaids hereunder. The Agent, upon its receipt of
such amounts in the Agent's account, shall distribute such amounts to the
Company and/or the Bank Investors entitled thereto as set forth above; provided
that if the Agent shall have insufficient funds to pay all of the above amounts
in full on any such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to payment
thereof. In addition, on any Business Day, the Master Servicer shall remit to
the applicable Hedge Counterparty, any Hedge Payments then due.
(c) Amounts on deposit in the Principal Collection Account
will be applied by the Agent to repay the principal component (and not the
Discount related thereto) of the Commercial Paper or other investments being
used to fund the Net Investment as and when the same mature; provided that so
long as the Termination Date has not occurred, the Agent may use amounts on
deposit in the Principal Collection Account to fund Advances pursuant to Section
2.2 to the extent sufficient to prevent the occurrence of a Borrowing Base
Deficiency (so long as the
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Borrower consents to the use thereof to fund Advances or such use shall not
cause a Borrowing Base Deficiency).
(d) The Borrower shall have the right on any Payment Date,
upon written notice to the Administrative Agent not later than the related
Determination Date, to deposit into the Principal Collection Account, as
prepayments of principal on the VFN, amounts to be applied to reduce the Net
Investment. The entire principal balance of the VFN shall be due and payable on
the Facility Termination Date together with all accrued and unpaid Discount
thereon.
SECTION 2.6. Liquidation Settlement Procedures. On the last day of each
Tranche Period to occur on or after the Termination Date, the Master Servicer
shall deposit to the Agent's account to the extent not already so deposited, for
the benefit of the Company or the Bank Investors, as applicable, from amounts on
deposit in the Collection Account, the sum of (i) the accrued Discount for such
Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche
Period, and (iii) all other Aggregate Unpaids. To the extent funds on deposit in
the Collection Account are insufficient to pay amounts due pursuant to the
preceding sentence, the Borrower shall pay such deficiency on such date and any
remaining unpaid amounts shall constitute Aggregate Unpaids hereunder. On such
day, the Master Servicer shall deposit to its account, from amounts on deposit
in the Collection Account which remain after payment in full of the
aforementioned amounts, the accrued Servicing Fee for such Tranche Period. If
there shall be insufficient funds on deposit for the Master Servicer to
distribute funds in payment in full of the aforementioned amounts, the Master
Servicer shall distribute funds first, in payment of the accrued Discount,
second, if the Parent or any Affiliate of the Parent is not then the Master
Servicer, to the Master Servicer's account, in payment of the Servicing Fee
payable to the Master Servicer, third, in reduction of the Net Investment
allocated to any Tranche Period ending on such date, fourth, in payment of all
fees payable by the Borrower hereunder, fifth, in payment of all other Aggregate
Unpaids and sixth, if the Parent or any Affiliate of the Parent is the Master
Servicer, to its account as Master Servicer, in payment of the Servicing Fee
payable to such Person as Master Servicer. The Agent, upon its receipt of such
amounts in the Agent's account, shall distribute such amounts to the Company
and/or the Bank
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Investors entitled thereto as set forth above; provided that if the Agent shall
have insufficient funds to pay all of the above amounts in full on any such
date, the Agent shall pay such amounts in the order of priority set forth above
and, with respect to any such category above for which the Agent shall have
insufficient funds to pay all amounts owing on such date, ratably (based on the
amounts in such categories owing to such Persons) among all such Persons
entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Discount and Servicing Fees have been paid in full and all
other Aggregate Unpaids have been paid in full, (i) the Agent, on behalf of the
Company and the Bank Investors, shall be deemed to have automatically
re-assigned to the Borrower all of the Agent's right, title and interest in and
to the Affected Assets (including the Pledged Interest), (ii) the Master
Servicer shall pay to the Borrower any remaining amounts on deposit in the
Collection Account and (iii) the Agent, on behalf of the Company and the Bank
Investors, shall execute and deliver to the Borrower, at the Borrower's expense,
such documents or instruments as are necessary to terminate the Agent's
interests in the Affected Assets. Any such documents shall be prepared by or on
behalf of the Borrower.
SECTION 2.7. Fees. Notwithstanding any limitation on recourse contained
in this Agreement pursuant to the Fee Letter or the Facility Fee Letter, the
Borrower shall pay, on each Payment Date, the following non-refundable fees: to
the Company, the Program Fee, and to the Agent, the Administrative Fee and the
Facility Fee.
SECTION 2.8. Protection of the Interest of the Company and the Bank
Investors. (a) The Borrower hereby assigns and pledges to the Agent for its
benefit and the ratable benefit of the Company and the Bank Investors, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Company and the Bank Investors a security interest in, all of the Borrower's
right, title and interest in and to the following (collectively, the
"Collateral"):
1. all Receivables and all Related Security related
thereto; and
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2. all proceeds of any and all of the foregoing and,
to the extent not otherwise included, all payments under insurance (whether or
not the Agent is the loss payee thereof), or any indemnity, warranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral. The security interests and liens granted pursuant to this Section
2.8 hereof by the Borrower shall secure the payment of all Aggregate Unpaids.
(b) The Borrower agrees that it will, and will cause the
Seller to, from time to time, at its expense, promptly execute and deliver all
instruments and documents and take all actions as may be necessary or as the
Agent may reasonably request in order to perfect or protect the Pledged Interest
or to enable the Agent, the Company or the Bank Investors to exercise or enforce
any of their respective rights hereunder. Without limiting the foregoing, the
Borrower will, and will cause the Seller to, upon the request of the Agent, the
Company or any of the Bank Investors, in order to accurately reflect this
transaction, execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant to Section 10.6
hereof) as may be requested by the Agent, the Company or any of the Bank
Investors. The Borrower shall, and will cause the Seller to, upon the reasonable
request of the Agent, the Company or any of the Bank Investors obtain such
additional search reports as the Agent, the Company or any of the Bank Investors
shall request. To the fullest extent permitted by applicable law, the Agent
shall be permitted to sign and file continuation statements. Carbon,
photographic or other reproduction of this Agreement or any financing statement
shall be sufficient as a financing statement. The Borrower shall not, and shall
not permit the Seller to, change its respective name, identity or corporate
structure (within the meaning of Section 9-402(7) of the UCC) nor relocate its
respective chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least thirty (30) days prior notice thereof
and (ii) prepared at the Borrower's expense and delivered to the Agent all
financing statements, instruments and other documents necessary to preserve and
protect the Pledged Interest or reasonably requested by the Agent in connection
with such change or relocation. Any filings under the UCC or otherwise that are
occasioned by such change in name or location shall be made at the expense of
the Borrower.
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Upon the later of the payment in full in cash of the Aggregate Unpaids and the
Facility Termination Date, the Pledged Interest shall terminate and all rights
to such Collateral shall revert to
the Borrower.
(c) The Master Servicer shall instruct all Obligors to cause all
Collections to be deposited directly with a Lock-Box Bank. If the Borrower, the
Seller or the Master Servicer receives any Collections, the Borrower, the Seller
or the Master Servicer, as applicable, shall immediately, but in any event
within two Business Days of receipt, remit (and shall cause the Seller to remit)
such Collections to the Collection Account.
SECTION 2.9. Prepayment Shortfalls; Application of Payments. (a) If on
any day during any Collection Period any of the representations or warranties in
Article III is or has become untrue with respect to a Receivable (whether on or
after the date of any pledge of an interest therein to the Agent, the Company or
the Bank Investors as contemplated hereunder), then any party hereto discovering
the same shall so inform the other parties hereto (provided that notice thereof
shall be given to the Agent on behalf of the Company and the Bank Investors),
and unless the breach of such representation or warranty shall have been cured
on or prior to the related Payment Date, the Borrower shall on or prior to the
related Payment Date pay to the Master Servicer an amount equal to the Required
Payoff Amount with respect to such Receivable and such amount shall be allocated
and applied by the Master Servicer as a Collection allocable to the Net
Investment in accordance with Section 2.5 or 2.6 hereof, as applicable; provided
that in lieu of such payment, to the extent permitted pursuant to Section 2.16,
the Borrower may substitute a Substitute Receivable for any such Receivable.
In addition, to the extent any Contract that is a conditional sales
contract or other loan is prepaid by the related Obligor pursuant to its terms,
the amount, if any, by which the amount of such prepayment is less than the
Required Payoff Amount for such Receivable (any such amount, a "Prepayment
Shortfall"), shall be paid by the Borrower to the Agent from its own account.
Any amounts received in respect of any Prepayment Shortfall shall be applied as
a Collection in the manner set forth in the preceding paragraph.
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SECTION 2.10. Payments and Computations, Etc. All amounts to be paid or
deposited by the Borrower or the Master Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available funds; if such amounts
are payable to the Agent (whether on behalf of the Company or any Bank Investor
or otherwise) they shall be paid or deposited in the account indicated in
Section 10.3 hereof, until otherwise notified by the Agent. The Borrower shall,
to the extent permitted by law, pay to the Agent, for the benefit of the Company
and the Bank Investors upon demand, interest on all amounts not paid or
deposited when due hereunder at a rate equal to 2% per annum plus the Base Rate.
All computations of Discount, interest and all per annum fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed. Any computations by the Agent of
amounts payable by the Borrower hereunder shall be binding upon the Borrower
absent manifest error.
SECTION 2.11. Reports. (a) Prior to the fifteenth day of each month
(or, if such fifteenth day is not a Business Day), the immediately preceding
Business Day), the Master Servicer shall prepare and forward to the Agent and
the Administrative Agent (i) an Investor Report as of the end of the last day of
the immediately preceding month and (ii) such other information as the Agent or
the Administrative Agent may reasonably request.
SECTION 2.12. Accounts. (a) Collection Account. There shall be
established on the day of the initial Advance hereunder and maintained with the
Agent, a segregated account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Agent, on behalf of the Company and the Bank Investors. Funds on deposit in
the Collection Account shall be invested by the Agent in Eligible Investments
that will mature so that such funds in the necessary amount will be available
prior to the last day of each successive Tranche Period or Payment Date
following such investment. On the last day of each Tranche Period, all interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be retained in the Collection Account and be available
to make any payments required to be made hereunder (including Discount) by the
Borrower. On
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the date on which the Net Investment is zero, all accrued Discount and Servicing
Fees have been paid in full and all other Aggregate Unpaids have been paid in
full, any funds remaining on deposit in the Collection Account shall be paid to
the Borrower.
(b) Reserve Account. There shall be established on the day of the
initial Advance hereunder and maintained with the Agent, a segregated account
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Agent, on behalf of the
Company and the Bank Investors. Funds on deposit in the Reserve Account shall be
invested by the Agent in Eligible Investments that will mature so that such
funds will be available prior to the last day of each successive Tranche Period
or Payment Date following such investment. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Account shall
be retained in the Reserve Account and be available to make payments required to
be made therefrom. Funds on deposit in the Reserve Account shall be retained in
the Reserve Account and be available (i) to pay any Discount payable pursuant to
Section 2.5(b) to the extent amounts on deposit in the Interest Accrual Account
and the Collection Account are insufficient therefor, (ii) on any Payment Date
to make any payments required to be made under clauses (i) through (v) of
Section 2.5(a) to the extent that Available Funds are insufficient therefor and
(iii) on and after the Termination Date to the Agent to reduce the Net
Investment. On each Payment Date, after giving effect to the allocations set
forth in Section 2.5(a), any amounts on deposit therein that are in excess of
the Specified Reserve Account Balance will be released to the Borrower. At any
time at which a Reserve Account Event is no longer continuing any amounts
remaining on deposit in the Reserve Account, after application of such amounts
to make any payments required pursuant to the preceding sentence, will be
released to the Borrower.
(c) Principal Collection Account. There shall be established on the day
of the initial Advance hereunder and maintained with the Agent, a segregated
account (the "Principal Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. All interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Principal Collection Account shall be
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retained in the Principal Collection Account and be available to make payments
required to be made therefrom. Funds on deposit in the Principal Collection
Account shall be invested by the Agent in Eligible Investments that will mature
so that such funds will be available prior to the last day of each successive
Tranche Period or Payment Date following such investment. Funds on deposit in
the Principal Collection Account will be applied as set forth in Section 2.5(c).
(d) Interest Accrual Account. There shall be established on the day of
the initial Advance hereunder and maintained with the Agent, a segregated
account (the "Interest Accrual Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. Funds on deposit in the
Interest Accrual Account shall be invested by the Agent in Eligible Investments
that will mature so that such funds will be available as needed prior to the
last day of each successive Tranche Period following such investment. All
interest and earnings (net of losses and investment expenses) on funds on
deposit in the Interest Accrual Account shall be retained in the Interest
Accrual Account and be available to make payments required to be made therefrom.
Funds on deposit in the Interest Accrual Account shall be available to make
payments of accrued and unpaid Discount pursuant to Section 2.5(b).
SECTION 2.13. Sharing of Payments, Etc. If the Company or any Bank
Investor (for purposes of this Section only, being a "Recipient") shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Pledged Interest pledged to it (other
than pursuant to Section 2.7 or Article VIII and other than as a result of the
differences in the timing of the applications of Collections pursuant to Section
2.5 or 2.6) in excess of its ratable share of payments on account of Advances
funded by the Company and/or the Bank Investors entitled thereto, such Recipient
shall forthwith purchase from the Company and/or the Bank Investors entitled to
a share of such participations in the Pledged Interest pledged to such Persons
as shall be necessary to cause such Recipient to share the excess payment
ratably with each such other Person entitled thereto; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
Recipient, such purchase from each such other
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Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
SECTION 2.14. Right of Setoff. Without in any way limiting the
provisions of Section 2.13, each of the Company and the Bank Investors is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence of the Termination Date, to set-off, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by the Company or such
Bank Investor to, or for the account of, the Borrower against the amount of the
Aggregate Unpaids owing by the Borrower to such Person or to the Agent on behalf
of such Person (even if contingent or unmatured).
SECTION 2.15. Hedging of Receivables If, at any time, a Hedging Event
has occurred, the Borrower shall enter into such Hedging Agreements as shall be
necessary so that after giving effect to any Advance, the excess of the
Outstanding Balance of the Receivables over the aggregate Hedged Amount under
all Hedging Agreements shall not be equal to or in excess of $10,000,000;
provided that if at any time the aggregate Hedged Amount under all Hedging
Agreements exceeds the Outstanding Balance of the Receivables, the Borrower
shall reduce such excess to zero by terminating or reducing by an appropriate
amount the Hedge Agreements; provided, further that 30 days prior to the date on
which the Agent reasonably determines a Take-Out will occur, the Borrower may
terminate any Hedging Agreements to the extent such Hedging Agreements do not
relate to the anticipated market value of the Receivables. Upon entering into
any Hedging Agreement the Borrower shall assign to the Agent, on behalf of the
Company and the Bank Investors, as applicable, all of the Borrower's rights
under such Hedging Agreement. Each Hedging Agreement shall (i) have a scheduled
termination date that coincides with the last Contract Payment due to occur for
the Receivables to which such Hedging Agreement relates; (ii) provide for a
notional amount equal to 100% of the Outstanding Balance of
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such Receivables rounded to the nearest multiple of $100,000 (the "Hedged
Amount"); (iii) provide that Hedge Payments be calculated based on the "constant
maturity" yield on U.S. Treasury securities with a maturity date equal or
nearest to the then expected remaining weighted average life of the related
Receivables; (iv) provide that the Hedge Counterparty's payment obligations
shall be calculated by reference to the Hedged Amount and a per annum rate
determined by reference to H.15, as defined in the 1991 ISDA Definitions
published by the International Swaps and Derivatives Association, Inc. and as
determined in accordance with the procedures in effect on the date of this
Agreement (the "H.15"); (v) provide that any payments to be paid with respect to
each Payment Date and any early termination date thereunder by the Hedge
Counterparty are to be deposited into the Collection Account, for distribution
in accordance with this Agreement; and (vi) be on such other terms and subject
to such other conditions as shall be reasonably acceptable to the Agent. In the
event the H.15 is no longer available, then the rates described in clause (iii)
above shall be reasonably agreed to between the Borrower and the Hedge
Counterparty and reasonably acceptable to the Agent in order to effect an
economically equivalent business deal between such parties. The Master Servicer
will provide the Agent with written notice confirming the amounts, if any, to be
paid by or to the Hedge Counterparty on each Payment Date and any early
termination date. The Borrower hereby assigns all of its rights under each
Hedging Agreement to the Agent, on behalf of the Company and the Bank Investors.
In addition, the parties hereto agree that all pledges, grants and assignments
made hereunder for the benefit of the Agent, the Company and the Bank Investors
(including, without limitation, Sections 2.2(a), 2.2(c) and 2.8), shall also be
for the ratable benefit of each Hedge Counterparty as if it were named in each
such pledge, as security and assurance to it of the payment in full of all
amounts due or to become due to it hereunder.
SECTION 2.16. Substitution of Receivables. On any day prior to the
occurrence of the Termination Date, the Borrower may, subject to the conditions
set forth in this Section 2.16, replace any Receivable with one or more other
Receivables (each, a "Substitute Receivable"); provided, however, that no such
replacement shall occur unless each of the following conditions is satisfied as
of the date of such replacement and substitution by the Substitute Receivables
to be substituted on such date:
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(a) each Substitute Receivable is an Eligible Receivable;
(b) after giving effect to any such substitution, (x) the sum
of the Net Investment plus, in the case where the Pledged Interest is
held by the Agent on behalf of the Company, the Interest Component of
all outstanding related Commercial Paper, would not exceed the Facility
Limit and (y) the Net Investment would not exceed the Maximum Net
Investment;
(c) the aggregate Outstanding Balance of such Substitute
Receivables shall be equal to or greater than the aggregate Required
Pay-off Amount as of the date of the substitution of the Receivables
being replaced;
(d) all representations and warranties contained in Section
3.1 shall be true and correct with respect to each such Substitute
Receivable;
(e) such substitution does not cause a Termination Event to
occur;
(f) no selection procedure adverse to the Company or the Bank
Investors was utilized in selecting any such Substitute Receivable from
those Contracts owned by the Borrower or the Seller as of the date of
such substitution; and
(g) the Borrower shall deliver to the Agent on the date of
such substitution a certificate certifying that each of the foregoing
is true and correct as of such date.
In connection with any such substitution, the Agent shall,
automatically and without further action, be deemed to transfer to the Borrower,
free and clear of any Adverse Claim created pursuant to this Agreement, all of
the right, title and interest of the Agent to and under such replaced Receivable
and all Related Security, and the Agent shall be deemed to represent and warrant
that it has the corporate authority and has taken all necessary corporate action
to accomplish such transfer, but without any other representation and warranty,
express or implied.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Agent, the Company and the Bank
Investors that:
(a) Existence and Power. The Borrower is a limited partnership
duly organized, validly existing and in good standing under the laws of
the State of Nevada and has all limited partnership power and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. The Borrower is duly qualified to do
business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have
a Material Adverse Effect.
(b) Company and Governmental Authorization; Contravention. The
execution, delivery and performance by the Borrower of this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Facility Fee
Letter, the VFN and the other Transaction Documents to which the
Borrower is a party are within the Borrower's partnership powers, have
been duly authorized by all necessary action on behalf of the Borrower,
require no action by or in respect of, or filing with, any Official
Body or official thereof (except as contemplated by Section 2.8
hereof), and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Limited Partnership of the Borrower or of any agreement, judgment,
injunction, order, writ, decree or other instrument binding upon the
Borrower or result in the creation or imposition of any Adverse Claim
on the assets of the Borrower (except as contemplated by Section 2.8
hereof).
(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter, the VFN
and the other Transaction Documents to
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which the Borrower is a party constitutes the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally.
(d) Perfection. Immediately preceding each pledge of
Collateral hereunder, each Receivable to be pledged and any related
Equipment shall be owned by the Borrower free and clear of all Adverse
Claims, other than those which may be simultaneously released and liens
with respect to Leveraged Lease Loans. On or prior to each pledge of
Collateral, all financing statements and other documents required to be
recorded or filed in order to perfect and protect the Agent's Pledged
Interest against all creditors of and purchasers from the Borrower and
the Seller will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
Notwithstanding the foregoing, it is understood that, except with
respect to Receivables that are Leveraged Lease Loans, (i) no UCC-1
filing may have been made with respect to the Equipment (other than
vehicles as described in (ii) below) underlying those Receivables that
had at the origination of the related Contract an original equipment
cost of less than $35,000 (provided such Receivables do not represent
more than 20% of the Net Investment or $20 million of the Net
Investment, whichever is greater) and (ii) certain Receivables may be
leases on vehicles or other types of equipment which require titling in
the name of the Borrower, so long as the aggregate Outstanding Balance
of such Receivables does not represent more than 5.0% of the Net
Investment or $7 million of the Net Investment, whichever is greater,
and provided that such vehicles are re-titled as required to perfect
such interest within 90 days of the related pledge of Collateral.
(e) Accuracy of Information. All information heretofore
furnished by the Borrower (including without limitation, the Investor
Reports, any other reports delivered pursuant to Section 2.11 hereof
and the Borrower's financial statements) to the Company, any Bank
Investors, the Agent or the Administrative Agent for purposes of or in
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connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to the
Company, any Bank Investors, the Agent or the Administrative Agent will
be, true and accurate in every material respect, on the date such
information is stated or certified.
(f) Tax Status. The Borrower has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge
of the Borrower threatened, against or affecting the Borrower or any
Affiliate of the Borrower, or their respective properties, in or before
any court, arbitrator or other body, which may, individually or in the
aggregate, have a Material Adverse Effect.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Borrower of this Agreement, the performance by the Borrower of the
transactions contemplated by this Agreement, and the fulfillment of the
terms hereof and thereof by the Borrower, have been obtained.
(i) Use of Proceeds. No proceeds of any Advance will be used
by the Borrower to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(j) Place of Business. The principal place of business and
chief executive office of the Borrower are located at the address of
the Borrower indicated in Section 10.3 hereof and the offices where the
Borrower keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Company
in accordance with Section 2.8 hereof in jurisdictions where all action
required by Section 2.8 hereof has been taken and completed.
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(k) Good Title. Upon each pledge of Collateral hereunder, the
Agent shall acquire an assignment of a valid and perfected first
priority perfected security interest to the extent of the Pledged
Interest and in the Related Security and Collections with respect
thereto free and clear of any Adverse Claim.
(l) Trade Names, Etc. The Borrower has no subsidiaries and
within the last five (5) years, has operated under no trade names and
has not changed its name, merged with or into or consolidated with any
other corporation or been the subject of any proceeding under ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy).
(m) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(n) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
(to the extent it is the Parent or any Subsidiary or Affiliate of the
Parent) to service and collect the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event.
(p) Not an Investment Company. The Borrower is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. The Borrower and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.
(r) Lock-Box Account. All Obligors have been instructed to
make payment to a Lock-Box Account.
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(s) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales
act or similar law.
(t) Transfers Under Receivables Purchase Agreement. Each
Receivable has been purchased by the Borrower from the Seller pursuant
to, and in accordance with, the terms of the Receivables Purchase
Agreement.
(u) Preference; Voidability. The Borrower shall have given
reasonably equivalent value to the Seller in consideration for the
transfer to the Borrower of the Receivables and Related Security from
the Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the Seller to the Borrower and no
such transfer is or may be voidable under any Section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. ▇▇.▇▇. 101 et seq.), as amended.
(v) No Borrowing Base Deficiency. No Borrowing Base Deficiency
exists.
(w) Eligible Receivables. Each Receivable listed on the
Contract Schedule is an Eligible Receivable as of the related Borrowing
Date.
Any document, instrument, certificate or notice delivered to the
Company hereunder shall be deemed a representation and warranty by the Borrower.
SECTION 3.2. Reaffirmation of Representations and Warranties by the
Borrower. On each day that an Advance is made hereunder, the Borrower, by
accepting the Advance Amount, shall be deemed to have certified that all
representations and warranties described in Section 3.1 hereof are correct on
and as of such day as though made on and as of such day.
SECTION 3.3. [Reserved.]
SECTION 3.4. Representations and Warranties of the Master Servicer. The
Master Servicer represents and warrants to the Company and the Bank Investors
that:
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(a) Corporate Existence and Power. The Master Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Master Servicer is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Master Servicer of this
Agreement are within the Master Servicer's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Official Body or official
thereof, and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Incorporation or Bylaws of the Master Servicer or of any agreement,
judgment, injunction, order, writ, decree or other instrument binding
upon the Master Servicer or result in the creation or imposition of any
Adverse Claim on the assets of the Master Servicer or any of its
Subsidiaries.
(c) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors.
(d) Accuracy of Information. All information heretofore
furnished by the Master Servicer to the Agent, the Company, any Bank
Investor or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Master Servicer to the
Agent, the Company, any Bank Investor or the Administrative Agent will
be, true and accurate in every material respect, on the date such
information is stated or certified.
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(e) Tax Status. The Master Servicer has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(f) Action, Suits. Except as set forth in Exhibit H, there are
no actions, suits or proceedings pending, or to the knowledge of the
Master Servicer threatened, against or affecting the Master Servicer or
any Affiliate of the Master Servicer or their respective properties, in
or before any court, arbitrator or other body, which may, individually
or in the aggregate, have a Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Master Servicer of this Agreement, the performance by the Master
Servicer of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof and thereof by the Master Servicer,
have been obtained.
(h) Nature of Receivables. Each Receivable included in the
calculation of the Net Receivables Balance in fact satisfies at such
time the definition of "Eligible Receivable".
(i) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(j) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
to service and collect the Receivables.
(k) No Termination Event. No event has occurred and
is continuing and no condition exists which constitutes a
Termination Event.
(l) Not an Investment Company. The Master Servicer is not, and
is not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
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(m) ERISA. Each of the Master Servicer and its ERISA
Affiliates is in compliance in all material respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(n) Lock-Box Account. All Obligors have been instructed to
make payment to the Lock-Box Account.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. (a) On or prior to the date of
execution hereof, the Borrower shall deliver to the Agent the following
documents, instruments and fees all of which shall be in a form and substance
acceptable to the Agent:
(i) A copy of the resolutions of the Member of the General
Partner of the Borrower certified by its Secretary approving the
execution, delivery and performance by the Borrower of this Agreement,
the Receivables Purchase Agreement and the other Transaction Documents
to be delivered by Borrower hereunder or thereunder.
(ii) The Certificate of Limited Partnership or other
organizational document of the Borrower certified by the Secretary of
State or other similar official of the State of Nevada dated a date
reasonably prior to the Closing Date.
(iii) A Good Standing Certificate for the Borrower, issued by
the Secretary of State or similar official of the State of Nevada dated
a date reasonably prior to the Closing Date.
(iv) A Certificate of the Secretary of the General Partner of
the Borrower substantially in the form of Exhibit L-1 attached hereto.
(v) A Certificate of the Secretary of the Seller substantially
in the form of Exhibit L-2 attached hereto.
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(vi) A Certificate of the Secretary of the General Partner
substantially in the form of Exhibit L-3 attached hereto.
(vii) A Certificate of the Secretary of the Parent
substantially in the form of Exhibit L-4 attached hereto.
(viii) A Certificate of the Secretary of the Master Servicer
substantially in the form of Exhibit L-5 attached hereto.
(ix) An opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special
counsel to the Parent, the Master Servicer and the Seller, covering
certain corporate and security interest matters in form and substance
satisfactory to the Agent and the Agent's counsel.
(x) An opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special counsel to the
Borrower and the Seller, covering certain tax matters in form and
substance satisfactory to the Agent and Agent's counsel.
(xi) An opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special counsel to
the Borrower and the Seller covering certain corporate matters in form
and substance satisfactory to the Agent and the Agent's counsel.
(xii) An opinion of ▇▇▇▇▇▇▇▇ and Wedge, special Nevada counsel
to the Borrower and the Seller covering certain corporate matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xiii) An opinion of [_________________], special Florida
counsel to the Borrower and the Seller covering certain tax matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xiv) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter and each of
the other Transaction Documents to be executed by the Seller or the
Borrower.
(xv) The VFN, duly executed by the Borrower.
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(xvi) The Facility Pledge Agreement, duly executed by the
Borrower and the Purchase Facility Pledgors.
(xvii) The Parent Guaranty, duly executed by the Parent.
(xviii) For the Borrower, copies of proper financing
statements (Form UCC-1), dated a date reasonably near to the Closing
Date naming the Borrower as the debtor in favor of the Agent, for the
benefit of the Company and the Bank Investors, as the secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Agent's
interest in all of each Pledgor's respective right, title and interest
in, to and under all Receivables and the Related Security and
Collections relating thereto; provided that no such filings need be
made with respect to the related Equipment.
(xix) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Seller as the debtor in favor of the Borrower as the secured party
and the Agent, for the benefit of the Company and the Bank Investors,
as assignee of the secured party or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Agent
desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Borrower's interest in all applicable
Receivables and the Related Security and Collections relating thereto;
provided that no such filings need be made with respect to the related
Equipment.
(xx) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Borrower as the debtor in favor of Purchase Facility Pledgors as
the secured parties and the Agent, for the benefit of the Company and
the Bank Investors, as assignee or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Agent
desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Agent's interest in the Financing
Facility Free Cash Flow.
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(xxi) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Purchase Facility Pledgors as the debtors in favor of the Borrower
as the secured party and the Agent, for the benefit of the Company and
the Bank Investors, as assignee of the secured party or other similar
instruments or documents as may be necessary or in the reasonable
opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Borrower's interest
in the Purchase Facility Release Amounts.
(xxii) Certified copies of request for information or copies
(Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Advance listing all effective financing statements which name
the Borrower or the Seller (under their respective present names and
any previous names) as debtor and which are filed in jurisdictions in
which the filings were made pursuant to items (xvii) or (xviii) above
together with copies of such financing statements (none of which shall
cover any Receivables or Contracts).
(b) On or prior to the date of execution hereof and, on or prior to the
related Borrowing Date, the Borrower shall deliver to the Agent the following
documents and instruments all of which shall be in a form and substance
acceptable to the Agent:
(i) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by the Borrower.
(ii) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by the Seller.
(iii) A computer tape setting forth all Receivables subject to
such related Borrowing and the Outstanding
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Balances thereon and such other information as the Agent may reasonably
request.
(iv) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
ARTICLE V
COVENANTS
SECTION 5. 1. Affirmative Covenants of Borrower. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) Financial Reporting. The Borrower will, and will cause the
Parent and each of its Subsidiaries to, maintain, for itself and each
of its respective Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Agent:
(i) Annual Reporting. As soon as practical and in any
event within 90 days after the end of each fiscal year of the
Parent, (x) consolidated and unaudited consolidating balance
sheets of the Parent and its Subsidiaries as at the end of
such fiscal year, and the notes thereto, and the related
consolidated and unaudited consolidating statements of income,
stockholders' equity and cash flows, and the respective notes
thereto, for such fiscal year, setting forth (other than for
consolidating statements) comparative financial statements for
the preceding fiscal year, all prepared in accordance with
GAAP applied on a consistent basis and containing, with
respect to the consolidated financial statements, opinions of
Price Waterhouse L.L.P., or other such independent certified
public accountants selected by the Parent and approved
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by the Agent, which are unqualified as to the scope of the
audit performed and as to the "going concern" status of the
Parent and without any exception not acceptable to the Agent
and (y) a certificate of the chief financial officer of the
Parent or any other Person expressly designated by the Board
of Directors of the Parent as an authorized representative
demonstrating compliance with Section 5.2(k).
(ii) Quarterly Reporting. As soon as practical and in
any event within 45 days after the end of each fiscal quarter
(except the last fiscal quarter of the fiscal year of the
Parent), consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for
such fiscal quarter and for the period from the beginning of
the then-current fiscal year through the end of such reporting
period, and accompanied by a certificate of the chief
financial officer of the Parent or any other Person expressly
designated by the Board of Directors of the Parent as an
authorized representative to the effect that such financial
statements present fairly the financial position of the Parent
and its Subsidiaries as of the end of such fiscal period and
the results of their operations and the changes in their
financial position for such fiscal period, in conformity with
the standards typically used in preparation of the interim
financial statements.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate signed by the Borrower's or the Parent's, as
applicable, chief financial officer stating that to the best
of such Person's knowledge, no Termination Event exists and no
event which but for the lapse of time or the giving of notice,
or both, would constitute Termination Event exists, or if any
such event exists, stating the nature and status thereof.
(iv) Shareholders and Partners Statements and
Reports. Promptly upon the furnishing thereof to the
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partners of the Borrower or the shareholders of the
Parent, copies of all financial statements, reports and
proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports which Parent or any
subsidiary files with the Securities and Exchange Commission.
(vi) Notice of Termination Events. As soon as
possible and in any event within two (2) days after the
knowledge of the occurrence of each Termination Event or event
which but for the lapse of time or the giving of notice, or
both, would constitute a Termination Event, a statement of the
chief financial officer or chief accounting officer of the
Borrower setting forth details of such event and the action
which the Borrower proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt
Ratings. Within ten (10) days after the date any material
change in or amendment to the Credit and Collection Policy is
made, a copy of such amendment and, if requested by the Agent,
a copy of the Credit and Collection Policy then in effect.
Within five days after the date of any change in the
Borrower's or Parent's public debt ratings (other than any
asset-backed ratings), if any, a written certification of the
Borrower's or the Seller's public debt ratings (other than any
asset-backed ratings) after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety
(90) days after the close of each of the Parent's and the
Borrower's fiscal years, a complete copy of the Credit and
Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which the
Borrower, the Seller or any ERISA Affiliate of the Borrower or
the Seller files
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under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor
or which the Borrower, the Seller or any ERISA Affiliates of
the Borrower or the Seller receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor.
(x) Other Information. Such other information
(including non-financial information) as the Agent or the
Administrative Agent may from time to time reasonably request
with respect to the Seller, the Borrower or any Subsidiary of
any of the foregoing.
(b) Conduct of Business. The Borrower will carry on and
conduct its business in substantially the same fields of enterprise as
it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(c) Compliance with Laws. The Borrower will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be
subject.
(d) Furnishing of Information and Inspection of Records. The
Borrower will furnish to the Agent from time to time such information
with respect to the Receivables as the Agent may reasonably request,
including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. The Borrower will at any time
and from time to time upon reasonable notice during regular business
hours permit the Agent, or its agents or representatives, (i) to
examine and make copies of and take abstracts from all Records and (ii)
to visit the offices and properties of the Borrower for the purpose of
examining such Records, and to discuss matters relating to Receivables
or the Borrower's performance hereunder and under the other Transaction
Documents to which such Person is a party with any of the officers,
directors, employees or
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independent public accountants of the Borrower having knowledge of such
matters.
(e) Keeping of Records and Books of Account. The Borrower will
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain, all documents, books, records and
other information reasonably necessary or advisable for the collection
of all Receivables (including, without limitation, records adequate to
permit the daily identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). The
Borrower will give the Agent notice of any material change in the
administrative and operating procedures of the Borrower or the Seller,
as applicable, referred to in the previous sentence.
(f) Performance and Compliance with Receivables and Contracts.
The Borrower, at its expense, will timely and fully perform and comply
with all material provisions, covenants and other promises required to
be observed by the Borrower or the Seller under the Contracts related
to the Receivables.
(g) Credit and Collection Policies. The Borrower will comply
in all material respects with the Credit and Collection Policy in
regard to each Receivable and the related Contract.
(h) Collections Received. The Borrower shall hold in trust,
and deposit, immediately, but in any event not later than within two
Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Borrower or the Seller,
as the case may be.
(i) [Reserved]
(j) Partnership Documents. The Borrower shall only amend,
alter, change or repeal Article 2, Section 16.1, Section 20.1, or
Section 21.6 of its Agreement of Limited Partnership with the prior
written consent of the Agent.
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SECTION 5.2. Negative Covenants of the Borrower. At all times from the
date hereof to the later to occur of (i) the Termination Date, or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and in the Receivables Purchase Agreement, the Borrower will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (or the filing of any
financing statement) or with respect to any of the Affected Assets or
any account which concentrates in a Lock-Box Bank to which any
Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Borrower will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(c) No Change in Business or Credit and Collection Policy. The
Borrower will not make any material change in the Credit and Collection
Policy without providing the Agent with prior written notice of the
proposed change; provided that the Borrower will reverse any such
change if the Agent disapproves of such change within 30 days of
receiving prior written notice of such change. The Borrower will not
make any change in the character of its business which would have a
Material Adverse Effect.
(d) No Mergers, Etc. The Borrower will not (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other Person unless, in
the case of the Seller, the Seller is the surviving entity.
(e) Change in Payment Instructions to Obligors. The Borrower
will not make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box
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Account, unless such instructions are to deposit such payments to
another existing Lock-Box Account and the Agent shall have received
written notice of such change at least 30 days prior thereto.
(f) Change of Name, Etc. The Borrower will not change its
name, identity or structure or the location of its chief executive
office, unless at least 10 days prior to the effective date of any such
change the Borrower delivers to the Agent such documents, instruments
or agreements, executed by the Borrower, as are necessary to reflect
such change and to continue the perfection of the Agent's security or
other interests in the Affected Assets.
(g) Amendment to Receivables Purchase Agreement. The Borrower
will not amend, modify, or supplement the Receivables Purchase
Agreement or waive any provision thereof, in each case except with the
prior written consent of the Agent and the Administrative Agent; nor
shall the Borrower take any other action under the Receivables Purchase
Agreement that shall have a Material Adverse Effect or which is
inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein, the Borrower
will not create, incur, assume or suffer to exist any indebtedness
whether current or funded, or any other liability other than (i)
indebtedness of the Borrower representing fees, expenses and
indemnities arising hereunder or under the Receivables Purchase
Agreement for the purchase price of the Receivables under the
Receivables Purchase Agreement, and (ii) other indebtedness incurred in
the ordinary course of its business in an amount not to exceed $50,000
in any fiscal year; provided, however, that the Borrower may incur
indebtedness in order to finance the value or residual value of any
Equipment related to a Receivable hereunder, so long as such
indebtedness is non-recourse, not subject to petition and fully
subordinated to the payment of the related Receivable hereunder.
(i) ERISA Matters. The Borrower will not (i) engage or permit
any of its respective ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of
ERISA) for which an exemption is
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not available or has not previously been obtained from the U.S.
Department of Labor; (ii) permit to exist any accumulated funding
deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of
the Code) or funding deficiency with respect to any Benefit Plan other
than a Multiemployer Plan; (iii) fail to make any payments to any
Multiemployer Plan that the Borrower or any ERISA Affiliate of the
Borrower is required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate any
Benefit Plan so as to result in any liability; or (v) permit to exist
any occurrence of any reportable event described in Title IV of ERISA
which represents a material risk of a liability to the Borrower or any
ERISA Affiliate of the Borrower under ERISA or the Code, if such
prohibited transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year of
the Borrower, in the aggregate, involve a payment of money or an
incurring of liability by the Borrower or any ERISA Affiliate of the
Borrower, in an amount in excess of $1,000,000.
(j) Payment to the Seller. With respect to any Receivable
transferred by the Seller to the Borrower, the Borrower shall, and
shall cause the Seller to, effect such transferred under, and pursuant
to the terms of, the Receivables Purchase Agreement, including, without
limitation, the payment by the Borrower to the Seller of an amount
equal to the purchase price for such Receivable as required by the
terms of the Receivables Purchase Agreement.
(k) Financial Covenants. The Borrower shall not permit:
(i) the Consolidated Net Worth of the Parent to be
less than (i) on June 10, 1998, the greater of either (A)
$630,000,000 or (B) 90% of Consolidated Net Worth on June 30,
1998 and (ii) on the last day of each succeeding fiscal
quarter of the Parent until (but excluding) the last day of
the next following fiscal quarter of the Parent, the sum of
(A) the amount of Consolidated Net Worth required to be
maintained pursuant to this Section 5.2(k) at the end of the
immediately preceding fiscal quarter plus (B) 75% of
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Consolidated Net Income (with no reduction for net losses
during any period) for the fiscal quarter of the Parent ending
on such day (including within "Consolidated Net Income"
certain items otherwise excluded, as provided for in the
definition of "Consolidated Net Income") plus (C) 100% of the
aggregated amount of all the Net Proceeds of any Equity
Offering of the Parent during the fiscal quarter of the Parent
ending on such date;
(ii) the Consolidated Leverage Ratio of the Parent as
of the end of any Applicable Period to be greater than 2.50 to
1.00; and
(iii) the Adjusted Consolidated Fixed Charge Ratio of
the Parent as of the end of the any Applicable Period to be
less than 2.50 to 1.00.
Capitalized terms used in this Section 5.2(k) and not
otherwise defined in this Agreement shall have the meaning assigned to
such terms in the Revolving Credit Facility Agreement.
SECTION 5.3. [Reserved.]
SECTION 5.4. [Reserved.]
SECTION 5.5. Affirmative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) Conduct of Business. The Master Servicer will carry on and
conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
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conduct its business in each jurisdiction in which its business is
conducted.
(b) Compliance with Laws. The Master Servicer will comply in
all material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(c) Furnishing of Information and Inspection of Records. The
Master Servicer will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. The Master
Servicer will, at any time and from time to time upon reasonable notice
during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts
from all Records and (ii) to visit the offices and properties of the
Master Servicer for the purpose of examining such Records, and to
discuss matters relating to Receivables or the Borrower's, the Seller's
or the Master Servicer's performance hereunder and under the other
Transaction Documents to which such Person is a party with any of the
officers, directors, employees or independent public accountants of the
Master Servicer having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Master
Servicer will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other infor mation reasonably necessary or advisable for
the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Master Servicer will give the Agent notice of any
material change in the administrative and operating procedures of the
Master Servicer referred to in the previous sentence.
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(e) Notice of Agent's Interest. In the event that the Borrower
or the Seller shall sell or otherwise transfer any interest in accounts
receivable, any computer tapes or files or other documents or
instruments provided by the Master Servicer in connection with any such
sale or transfer shall disclose the Borrower's ownership of the
Receivables and the Agent's interest therein.
(f) Credit and Collection Policies. The Master Servicer will
comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Collections. The Master Servicer shall instruct all
Obligors to cause all Collections other than Collections remitted
directly to be deposited directly to a Lock-Box Account.
(h) Collections Received. The Master Servicer shall hold in
trust, and deposit, immediately, but in any event not later than within
two Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Master Servicer.
SECTION 5.6. [Reserved.]
SECTION 5.7. Negative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Master Servicer will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(b) No Change in Business or Credit and Collection Policy. The
Master Servicer will not make any material change in the Credit and
Collection Policy without providing
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the Agent with prior written notice of such change; provided that the
Master Servicer will reverse any such change if the Agent disapproves
of such change within 30 days of receiving prior written notice of such
change. The Master Servicer will not make any change in the character
of its business which would have a Material Adverse Effect.
(c) No Mergers, Etc. The Master Servicer will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person
unless the Master Servicer is the surviving entity.
(d) Change in Payment Instructions to Obligors. The Master
Servicer will not make any change in its instructions to Obligors
regarding payments to be made to the Lock-Box Account, unless such
instructions are to deposit such payments to another existing Lock-Box
Account and the Agent shall have received written notice of such change
at least 30 days prior thereto.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6. 1. Appointment of the Master Servicer. The servicing,
administering and collection of the Receivables shall be conducted by the Person
(the "Master Servicer") so designated from time to time in accordance with this
Section 6.1. Until the Company gives notice to the Borrower of the designation
of a new Master Servicer, Portfolio Financial Services Company is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Master Servicer pursuant to the terms hereof. The Master Servicer may not
delegate any of its rights, duties or obligations hereunder, or designate a
substitute Master Servicer, without the prior written consent of the Agent;
provided that it is understood that the Master Servicer's duties hereunder with
respect to particular Receivables may and shall be delegated to the respective
Originators thereof; and provided, further, that the Master Servicer shall
continue to remain solely liable for the performance of the duties as Master
Servicer hereunder
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notwithstanding any such delegation hereunder. The Agent may, and upon the
direction of the Majority Investors the Agent shall, after the occurrence of a
Master Servicer Default or any other Termination Event (other than those
specified in clauses (k), (l), (q) and (r) of Section 7.1) designate as Master
Servicer any Person (including itself) to succeed Portfolio Financial Services
Company or any successor Master Servicer, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Master Servicer pursuant to the terms hereof. Following the occurrence and
continuance of a Master Servicer Default or any Termination Event (other than
those specified above), the Agent may notify any Obligor of the Advances.
SECTION 6.2. Duties of the Master Servicer.
(a) The Master Servicer shall take or cause to be taken all
such action as may be necessary or advisable to collect all payments
due under each Receivable and the related Contract from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy. The Master Servicer's duties will include, without
limitation, collection and posting of all payments, responding to
inquiries of Obligors regarding the Receivables and related Contracts,
investigating delinquencies and remitting payments to the Agent in a
timely manner. Each of the Borrower, the Company, the Agent and the
Bank Investors hereby appoints as its agent the Master Servicer, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To
the extent permitted by applicable law, each of the Borrower and the
Seller hereby grants to any Master Servicer appointed hereunder an
irrevocable power of attorney to take any and all steps in the
Borrower's and/or the Seller's name and on behalf of the Borrower or
the Seller necessary or desirable, in the reasonable determination of
the Master Servicer, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the Borrower's
and/or the Seller's name on checks and other instruments representing
Collections and enforcing such Receivables and the related Contracts.
The Master Servicer shall set aside
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for the account of the Borrower and the Agent their respective
allocable shares of the Collections of Receivables in accordance with
Sections 2.5 and 2.6 hereof. The Master Servicer shall segregate and
deposit to the Agent's account the Agent's allocable share of
Collections of Receivables when required pursuant to Article II hereof.
So long as no Termination Event shall have occurred and be continuing,
the Master Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of Receivables; provided, however, that
such extension or adjustment shall not alter the status of such
Receivable as a Delinquent Receivable or a Defaulted Receivable, as
applicable. The Master Servicer may not otherwise waive, modify or
otherwise vary any provision of a Contract except as consistent with
the Credit and Collection Policy. The Master Servicer may not permit a
Receivable to be terminated prior to the scheduled termination date
thereof unless such termination results in a payment at least equal to
the Required Payoff Amount being deposited into the Collection Account
with respect to the related Payment Date. The Borrower shall deliver to
the Master Servicer and the Master Servicer shall hold in trust for the
Borrower and the Agent, on behalf of the Company and the Bank
Investors, in accordance with their respective interests, all Records
which evidence or relate to Receivables or Related Security. The Master
Servicer shall not make the Agent, the Company or any of the Bank
Investors a party to any litigation without the prior written consent
of such Person.
(b) If the Master Servicer commences a legal proceeding to
enforce a Defaulted Receivable or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or involving
a Contract, the Agent will be deemed to have automatically assigned its
security interest in the related Contract to the Master Servicer for
purposes of commencing or participating in any such proceeding as a
party or claimant, and the Master Servicer is authorized and empowered
by the Agent, the Company and the Bank Investors, to execute and
deliver, on behalf of itself and the Agent for the benefit of the
Company and Bank Investors, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
notices, demands, claims, complaints, responses,
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affidavits or other documents or instruments in connection with any
such proceedings. If in any enforcement suit or legal proceeding it is
held that the Master Servicer may not enforce a Contract on the ground
that it is not a real party in interest entitled to enforce the
Contract, then the Agent will, at the Master Servicer's expense and
direction, take steps on behalf of the Agent as agent for the Company
and the Bank Investors to enforce the Contract, including bringing suit
in the name of the Agent for the benefit of the Company and the Bank
Investors.
Upon termination of a Contract as a result of a default by the
Obligor thereunder, the Master Servicer will use best efforts to
repossess or otherwise comparably covert the ownership of and to
re-lease or otherwise dispose of any related Equipment. Without
limiting the generality of the foregoing, the Master Servicer may
dispose of any such Equipment by purchasing such Equipment or by
selling such Equipment at a public or private sale to any of its
Affiliates for a purchase price equal to the fair market value thereof.
(c) The Master Servicer shall take and retain custody of the
Contracts and other Records in accordance with the terms and conditions
of this Agreement, all for the benefit of the Company and the Bank
Investors and subject to the lien thereon in favor of the Agent, as
agent for the Company and the Bank Investors. Within five Business Days
of its receipt of any Records, the Master Servicer shall review the
related Contract to verify that such Contract has been executed and has
no mutilated pages and to confirm (in reliance on the related contract
number and Obligor name) that such Contract is referenced on the
related list of Receivables. In order to facilitate the foregoing
review by the Master Servicer, in connection with each delivery of
Records hereunder to the Master Servicer, the Master Servicer shall
maintain an electronic file, in EXCEL or a comparable format, that
contains the related list of Receivables or which otherwise contains
the Contract number and the name of the Obligor with respect to each
related Contract. If, at the conclusion of such review, the Master
Servicer shall determine that such Contract is not executed or has
mutilated pages, or that it is not referenced on such
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list of Receivables, the Master Servicer shall promptly notify the
Seller, the Borrower and the Agent of such determination by providing a
written report to such Persons setting forth, with particularity, the
lack of execution of such Contract, that such Contract has mutilated
pages, or the fact that such Contract was not referenced on the related
list of Receivables. In addition, unless instructed otherwise by the
Seller or the Agent within 10 days of the Master Servicer's delivery of
such report, the Master Servicer shall return any Contract not
referenced on such list of Receivables to the Seller.
In taking and retaining custody of the Contracts and other
Records, the Master Servicer shall be deemed to be acting as the agent
of the Agent, as agent for the Company and as agent of the Bank
Investors. The Master Servicer shall clearly indicate that such Records
are the sole property of the Borrower and that the Borrower has granted
a security interest therein to the Agent on behalf of the Company. All
Contracts shall be clearly segregated from any other documents or
instruments maintained by the Master Servicer and shall be kept in
fireproof vaults or cabinets at such locations as shall be reasonably
acceptable to the Agent. The Master Servicer shall notify the Agent of
any change in location by a written notice delivered at least 45 days
prior to such change.
(d) To the extent provided for in any Contract, the Master
Servicer will use its commercially reasonable efforts to collect all
payments with respect to amounts due for taxes and assessments relating
to the related Receivables or the Equipment and remit such amounts to
the appropriate governmental authority or insurer on or prior to the
date such payments are due.
(e) The Master Servicer will use its commercially reasonable
efforts to ensure that each Obligor maintains casualty insurance
coverage with respect to the related Equipment in an amount that is
consistent with prudent leasing industry standards. Additionally, the
Master Servicer will require that each Obligor maintain third party
liability insurance for property damage during the term of each
Contract in amounts and against risks customarily
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insured against by the Obligor on equipment owned by it.
Notwithstanding the preceding two sentences, the Master Servicer, in
accordance with the Credit and Collection Policy, may not require
insurance or may allow Obligors to self-insure. If an Obligor fails to
maintain casualty or property damage liability insurance, the Master
Servicer may purchase and maintain such insurance on behalf of, and at
the expense of, the Obligor. In connection with its activities as
Master Servicer the Master Servicer agrees to present, on behalf of the
Agent as agent for the Company and the Bank Investors, claims to the
insurer under each casualty insurance policy and any such property
damage liability policy, and to settle, adjust and compromise such
claims, in each case, consistent with the terms of each such Contract.
Such Master Servicer's insurance policies with respect to the related
Equipment will insure against liability for personal injury relating to
such Equipment, thereunder will name the Seller as an insured
thereunder and will contain a breach of warranty clause.
(f) The Master Servicer will be required to pay all expenses
incurred by it in connection with its activities under this Agreement,
including fees and disbursements of the Master Servicer, independent
accountants, Taxes imposed on the Master Servicer, and expenses
incurred in connection with payments and reports pursuant to this
Agreement. The Master Servicer will be required to pay all reasonable
fees and expenses owing to any bank or trust company in connection with
the maintenance of the Lock-Box Account. The Master Servicer shall be
required to pay such expenses for its own account and shall not be
entitled to any payment therefor other than the Servicing Fee.
(g) The Master Servicer shall, as soon as practicable
following receipt thereof, turn over to the Borrower any collections
received hereunder or under any of the other Transaction Documents of
any indebtedness of any Person which is not on account of a Receivable.
(h) If the Master Servicer is not the Borrower or the Seller
or an Affiliate of the Borrower or the Seller, the Master Servicer, by
giving three Business Days' prior written notice to the Agent, may
revise the percentage used
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to calculate the Servicing Fee so long as the revised percentage will
not result in a Servicing Fee that exceeds 110% of the current
Servicing Fee.
(i) The Master Servicer, if other than the Borrower or the
Seller or an Affiliate of the Borrower or Seller, shall as soon as
practicable upon demand, deliver to the Seller all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(j) The Master Servicer will provide to the Agent, on or prior
to March 31 of each year, commencing March 31, 1999, an annual report
signed by a officer of the Master Servicer certifying that (a) a review
of the activities of the Master Servicer, and the Master Servicer's
performance pursuant to this Agreement, for the period ending on the
last day of the immediately preceding fiscal year has been made under
such Person's supervision and (b) the Master Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year and no Master
Servicer Default has occurred and is continuing (or if a Master
Servicer Default has so occurred and is continuing, specifying each
such event, the nature and status thereof and the steps necessary to
remedy such event, and, if a Master Servicer Default occurred during
such year and no notice thereof has been given to the Agent, specifying
such Master Servicer Default and the steps taken to remedy such event).
On or before the Closing Date and on a semi-annual basis
thereafter, the Agent shall have the option to have the Agent or its
designees conduct a sample audit of the Receivables and the related
Records in conjunction with a review of the Master Servicer's
collection and administration practices with respect to the Contracts
and the related Receivables in order to assess the performance of such
Receivables and to verify the Master Servicer's compliance with its
written policies and procedures and with this Agreement and the other
Transaction Documents. The Originator shall pay, or reimburse the Agent
for all of the Agent's out-of-pocket expenses relating to any such
audit and review which shall be limited to $5,000 annually except
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during the continuance of a Termination Event; provided, however, that
the Agent shall be responsible for the fees and expenses of a third
party firm engaged by the Agent to perform a sample audit only with
respect to the initial sample audit and one of the semi-annual audits
in each year.
(k) Notwithstanding anything to the contrary contained in this
Article VI, the Master Servicer, if not the Borrower, the Seller or any
Affiliate of the Borrower or the Seller, shall have no obligation to
collect, enforce or take any other action described in this Article VI
with respect to any indebtedness that is not included in the Pledged
Interest other than to deliver to the Borrower the collections and
documents with respect to any such indebtedness as described in Section
6.2 hereof.
(l) For each Payment Date the Master Servicer shall make an
advance (a "Servicer Advance") to the Collection Account in an amount
equal to any Contract Payment on any Receivable due during the
preceding Collection Period and not received on or prior to the
Determination Date immediately preceding such Payment Date.
Notwithstanding the preceding sentence, (i) the Master Servicer shall
be required to make a Servicer Advance if, and only if, the Master
Servicer determines (such determination to be conclusive and binding)
in good faith that such Servicer Advance will be recoverable from the
payment of future collections on, or the liquidation of, the Receivable
as to which such advance is to be made, and (ii) the Master Servicer's
obligation to make a Servicer Advance for any Receivable shall cease on
the day such Receivable becomes a Defaulted Receivable. The Master
Servicer will deposit any Servicer Advances into the Collection Account
on or prior to 11:00 a.m. (New York City time) on the related Payment
Date, in immediately available funds.
SECTION 6.3. Rights After Designation of New Master Servicer. At any
time following the designation of a Master Servicer (other than the Borrower,
the Seller or any Affiliate of the Borrower or the Seller) pursuant to Section
6.1 hereof:
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(i) The Agent may direct that payment of all amounts
payable under any Receivable be made directly to the Agent or
its designee.
(ii) The Borrower shall, at the Agent's request and
at the Borrower's expense, give notice of the Agent's, the
Borrower's and/or the Bank Investors' interest in the
Receivables to each Obligor and direct that payments be made
directly to the Agent or its designee.
(iii) The Borrower shall, at the Agent's request, (A)
deliver all of the Records, to the Agent or its designee at a
place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from
time to time constituting Collections of Receivables in a
manner acceptable to the Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(iv) The Borrower and the Master Servicer hereby
authorize the Agent to take any and all steps in the
Borrower's or the Master Servicer's name and on behalf of the
Borrower and the Master Servicer necessary or desirable, in
the sole determination of the Agent, to collect all amounts
due under any and all Receivables, including, without
limitation, endorsing the Borrower's or the Master Servicer's
name on checks and other instruments representing Collections
and enforcing such Receivables and the related Contracts.
SECTION 6.4. Master Servicer Default. The occurrence of any one or more
of the following events shall constitute a Master Servicer Default:
(a)(i) the Master Servicer shall fail in any material respect
to observe or perform any term, covenant or agreement hereunder (other
than as referred to in clause (ii) of this Section 6.4(a)) or under any
of the other Transaction Documents to which the Master Servicer is a
party or by which the Master Servicer is bound, and such
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failure shall remain unremedied for a period of thirty (30) days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto, or
(ii) the Master Servicer shall fail to make any payment or deposit
required to be made by it hereunder when due and such failure shall
continue for 48 hours; or
(b) any representation or warranty made by the Master Servicer
in this Agreement, any of the other Transaction Documents or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made and
shall not have been cured and corrected for a period of 30 days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto; or
(c) any certification or statement made by the Master Servicer
in this Agreement, or in any of the other Transaction Documents or in
any certificate or report delivered by it pursuant to any of the
foregoing shall prove to have been incorrect in any material respect
when made or deemed made, and a Material Adverse Effect shall result
which shall not have been cured and corrected for a period of 30 days
after the earlier of (x) the date it first became known to any officer
of the Master Servicer or (y) the date on which written notice thereof
shall have been given to the Master Servicer by any other party hereto;
or
(d) failure of the Master Servicer or any of its Subsidiaries
to pay when due any amounts due under any agreement under which any
Indebtedness greater than $5 million is governed; or the default by the
Master Servicer or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness greater than $5 million was created or is governed,
regardless of whether such event is an "event of default" or "default"
under any such agreement; or any Indebtedness of the Master Servicer or
any of its Subsidiaries greater than $5 million shall be declared to be
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due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to the
Master Servicer or any of its Subsidiaries; or
(f) there shall have occurred any material adverse change in
the operations of the Master Servicer since the end of the last fiscal
year ending prior to the date of its appointment as Master Servicer
hereunder which, in the commercially reasonably judgment of the Agent,
materially and adversely affects the Master Servicer's ability to
perform under this Agreement.
SECTION 6.5. Responsibilities of the Borrower and the Seller. Anything
herein to the contrary notwithstanding, the Borrower shall, and/or shall cause
the Seller to, (i) perform all of their obligations under the Contracts related
to the Receivables to the same extent as if interests in such Receivables had
not been pledged hereunder and under the Receivables Purchase Agreement and the
exercise by the Agent, the Company and the Bank Investors of their rights
hereunder and under the Receivables Purchase Agreements shall not relieve the
Borrower or the Seller from such obligations and (ii) pay, or cause the Obligor
or the Master Servicer to pay, when due any taxes, including without limitation,
any sales taxes payable in connection with the Receivables and their creation
and satisfaction. Neither the Agent, the Company nor any of the Bank Investors
shall have any obligation or liability with respect to any Receivable or related
Contracts, nor shall it be obligated to perform any of the obligations of the
Seller thereunder.
SECTION 6.6. Limitation on Liability of the Master Servicer and Others.
Except as provided herein, neither the Master Servicer nor any of the directors
of officers or employees or agents of the Master Servicer shall be under any
liability to the Agent, the Company, the Bank Investors or any other Person for
any action taken or for refraining from the taking of any action pursuant to
this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any liability which would otherwise be
imposed by
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reason of its willful misconduct, bad faith or negligence in the performance of
duties or by reason of its willful misconduct hereunder.
SECTION 6.7. The Master Servicer Not to Resign. The Master Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) the performance of its duties hereunder is or
becomes impermissible under applicable law and (ii) there is no reasonable
action which the Master Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced as to
clause (i) above by an opinion of legal counsel to such effect delivered to the
Agent. No such resignation shall become effective until a successor Master
Servicer shall have assumed the responsibilities and obligations of the Master
Servicer in accordance with Section 6.1.
ARTICLE VII
TERMINATION EVENTS
SECTION 7. 1. Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) the Borrower shall fail to make any payment or deposit to
be made by it hereunder or under the Receivables Purchase Agreement
when due hereunder or thereunder; or
(b) any representation or warranty made by the Borrower, the
Seller or an Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when
made or deemed made and shall not have been cured and corrected for a
period of 30 days after by the earlier of (x) the date it first became
known to any officer of the Borrower or (y) the date on which written
notice thereof shall have been given to the Borrower by any other party
hereto; or
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(c) any certification or statement made by the Borrower, the
Seller or an Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any or any certificate or report delivered by it
pursuant to any of the foregoing shall prove to have been incorrect in
any material respect when made or deemed made and a Material Adverse
Effect shall result which shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(d) the Borrower shall default in any material respect in the
performance of any payment or undertaking (other than those covered by
clause (a) above) (i) to be performed or observed under Sections
5.1(a)(vi), 5.1(h), 5.1(l), 5.2(a), (c), (d), (e), or (f), or (ii) to
be performed or observed under any other provision hereof and such
failure shall remain unremedied for a period of thirty (30) days after
the earlier of (x) the date it first became known to any officer of the
Borrower or (y) the date on which written notice thereof shall have
been given to the Borrower by any other party hereto; or
(e) failure of the Borrower to pay when due any amounts due
under any agreement to which the Borrower is a party and under which
any Indebtedness is governed; failure of the Parent or the Seller to
pay when due any amounts due under any agreement to which the Borrower
is a party and under which any Indebtedness greater than $5,000,000 is
governed; or the default by the Borrower, the Parent or the Seller in
the performance of any term, provision or condition contained in any
agreement to which the Borrower is a party and under which any
Indebtedness owing by the Borrower, the Parent or the Seller was
created or is governed and for which in the case of the Parent or the
Seller the amount of such Indebtedness is greater than $5,000,000; or
any Indebtedness owing by the Borrower, the Parent or the Seller
greater than $5,000,000 shall be declared to be due and payable or
required to be prepaid
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(other than by a regularly scheduled payment) prior to the date of
maturity thereof; or
(f) any Event of Bankruptcy shall occur with respect to the
Borrower, Parent or the Seller; or
(g) the Agent, on behalf of the Company and the Bank
Investors, shall, for any reason, fail or cease to have a valid and
perfected first priority security interest in the Affected Assets free
and clear of any Adverse Claims (except as otherwise contemplated
herein); or
(h) a Master Servicer Default shall have occurred; or
(i) the Receivables Purchase Agreement shall have terminated;
or
(j) a Revolving Credit Facility Default shall have occurred;
or
(k) the Borrower or the Parent shall enter into any
transaction or merger whereby it is not the surviving entity and where,
in the case of the Parent, the surviving entity is not acceptable to
the Agent; or
(l) there shall have occurred any Material Adverse Effect; or
(m) at any time, a Borrowing Base Deficiency shall occur and
be continuing and such deficiency is not cured on or prior to the next
succeeding Payment Date; or
(n) after giving effect to any Payment Date, a Borrowing Base
Deficiency shall exist; or
(o) after giving effect to any Payment Date, the Net
Investment is greater than the Maximum Net Investment; or
(p) at any time, the Net Asset Test is not met; or
(q) the Three Month Average Net Portfolio Yield is less than
1.25%; or
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(r) a Take-Out does not occur within the fifteen months of the
initial Advance under this Agreement or at least once every six-months
after the initial Take-Out under this Agreement; or
(s) at any time the Receivables are not subject to Hedging
Agreements in accordance with Section 2.15, and such failure is not
cured within five Business Days of the earlier of (x) the date it first
became known to any officer of a Borrower or (y) the date on which
written notice thereof shall have been given to the Borrower by any
other party hereto; or
(t) a default shall have occurred and be continuing under the
Parent Guaranty.
SECTION 7.2. Termination. (a) Upon the occurrence of any Termination
Event, the Agent may, or at the direction of the Majority Investors shall, by
notice to the Borrower and the Master Servicer declare the Termination Date to
have occurred; provided that in the case of any event described in Section
7.1(f) or 7.1(g) above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence
of the Termination Date pursuant to Section 7.2(a), the Base Rate plus 2.00%
shall be the Tranche Rate applicable to the Net Investment for all existing and
future Tranches.
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8. 1. Indemnities by the Borrower. Without limiting any other
rights which the Agent, the Company or each Bank Investors may have hereunder or
under applicable law, the Borrower hereby
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agrees to indemnify the Company, the Bank Investors, the Agent, the
Administrative Agent, the Collateral Agent, the Liquidity Provider and the
Credit Support Provider and any successors and permitted assigns and their
respective officers, directors and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable external
attorneys' fees (which such attorneys may be employees of the Liquidity
Provider, the Credit Support Provider, the Agent, the Administrative Agent or
the Collateral Agent, as applicable) and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them in any action or proceeding between the Borrower, the
Parent or the Master Servicer (if an Affiliate of the Borrower) and any of the
Indemnified Parties or between any of the Indemnified Parties and any third
party or otherwise arising out of or as a result of this Agreement, the other
Transaction Documents, the ownership or maintenance, either directly or
indirectly, by the Agent, the Company or any Bank Investor of the Net Investment
or any of the other transactions contemplated hereby or thereby, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of an Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for uncollectible
or uncollected Receivables. Without limiting the generality of the foregoing,
the Borrower shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from:
(i) any representation or warranty made by the
Borrower, the Seller or the Master Servicer (if an Affiliate
of the Borrower) or any officers of the Borrower, the Seller
or the Master Servicer under or in connection with this
Agreement, the Receivables Purchase Agreement, any of the
other Transaction Documents, any Investor Report or any other
information or report delivered by the Borrower or the Master
Servicer pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made;
(ii) the failure by the Borrower, the Seller or the
Master Servicer (if an Affiliate of the Borrower)
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to comply with any applicable law, rule or regulation with
respect to any Receivable or the related Contract, or the
nonconformity of any Receivable or the related Contract with
any such applicable law, rule or regulation;
(iii) the failure to create or maintain a valid and
perfected first priority security interest in favor of the
Agent, for the benefit of the Company and the Bank Investors,
in the Affected Assets as contemplated pursuant to Section
10.11, free and clear of any Adverse Claim;
(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other
similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect
to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limita tion, a defense based on
such Receivable or the related Contract not being the 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 merchandise or services related to
such Receivable or the furnishing or failure to furnish such
merchandise or services; provided that the indemnification
provided hereby shall not extend to credit losses on the
Affected Assets or any payment failure resulting solely from
such credit losses;
(vi) any failure of the Master Servicer (if an
Affiliate of the Borrower) to perform its duties or
obligations in accordance with the provisions hereof; or
(vii) 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
Equipment which is the subject of any Receivable;
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(viii) the pledge hereunder of any Receivable other
than an Eligible Receivable;
(ix) the failure by the Borrower, the Seller or the
Master Servicer (if an Affiliate of the Borrower) to comply
with any term, provision or covenant contained in this
Agreement or any of the other Transaction Documents to which
it is a party or to perform any of its respective duties under
the Contracts; provided that the indemnification provided
hereby shall not extend to credit losses on the Affected
Assets or any payment failure resulting solely from such
credit losses;
(x) the failure of the Seller to pay when due any
taxes, including without limitation, sales, excise or personal
property taxes payable in connection with any of the
Receivables;
(xi) any repayment by any Indemnified Party of any
amount previously distributed in reduction of Net Investment
which such Indemnified Party believes in good faith is
required to be made;
(xii) the commingling by the Borrower, the Seller or
the Master Servicer (if an Affiliate of the Borrower) of
Collections of Receivables at any time with other funds;
(xiii) any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction
Documents, the use of Advance Amounts, the ownership of
Pledged Interests, or any Receivable, Related Security or
Contract;
(xiv) any inability to obtain any judgment in or
utilize the court or other adjudication system of, any state
in which an Obligor may be located as a result of the failure
of the Borrower or the Seller to qualify to do business or
file any notice of business activity report or any similar
report;
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(xv) any failure of the Borrower to give reasonably
equivalent value to the Seller in consideration of the
purchase by the Borrower from the Seller of any Receivable, or
any attempt by any Person to void, rescind or set-aside any
such transfer under statutory provisions or common law or
equitable action, including, without limitation, any provision
of the Bankruptcy Code; or
(xvi) any action taken by the Borrower, the Seller or
the Master Servicer (if an Affiliate of the Borrower) in the
enforcement or collection of any Receivable;
provided, however, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Conduit Participants, the
Company shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Borrower and each Other Conduit
Participant; and provided, further, that if such Indemnified Amounts are
attributable to the Borrower, the Seller or the Master Servicer and not
attributable to any Other Conduit Participant, the Borrower shall be solely
liable for such Indemnified Amounts or if such Indemnified Amounts are
attributable to Other Conduit Participants and not attributable to the Borrower,
the Seller or the Master Servicer, such Other Conduit Participants shall be
solely liable for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If after
the date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax,
duty or other charge (other than Excluded Taxes) with respect
to this Agreement, the other Transaction Documents, the
maintenance or financing of the Pledged
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Interest, the Receivables or payments of amounts due
hereunder, or shall change the basis of taxation of payments
to any Indemnified Party of amounts payable in respect of this
Agreement, the other Transaction Documents, maintenance or
financing of the Pledged Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the
credit support furnished by the Credit Support Provider or
otherwise in respect of this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged
Interest or the Receivables (except for changes in the rate of
general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by any jurisdiction;
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by,
any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or
the London interbank market any other condition affecting this
Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the
credit support provided by the Credit Support Provider or
otherwise in respect of this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged
Interests or the Receivables; or
(iii) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable external
attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing) with
respect to this Agreement, the other Transaction Documents,
the maintenance or financing of the Pledged Interest, the
Receivables or payments of amounts due hereunder or its
obligation to
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advance funds hereunder under the Liquidity Provider Agreement
or the credit support furnished by the Credit Support Provider
or otherwise in respect of this Agreement, the other
Transaction Documents, the maintenance or financing of the
Pledged Interest or the
Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged Interest, the
Receivables, the obligations hereunder, the funding of any purchases hereunder,
the Liquidity Provider Agreement or the Credit Support Agreement, by an amount
deemed by such Indemnified Party to be material, then, within ten (10) days
after written demand (including an explanation of the basis for such demand) by
such Indemnified Party through the Agent, the Borrower shall pay to the Agent,
for the benefit of such Indemnified Party, such additional amount or amounts as
will compensate such Indemnified Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof by any Official Body, or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not having
the force of law) of any such Official Body, has or would have the effect of
reducing the rate of return on capital of such Indemnified Party (or its parent)
as a consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time to time,
within ten (10) days after demand by such Indemnified Party through the Agent,
the Borrower shall pay to the Agent, for the benefit of such Indemnified Party,
such additional amount or amounts as will compensate such Indemnified Party (or
its parent) for such reduction.
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(c) The Agent will promptly notify the Borrower of any event
of which it has knowledge, occurring after the date hereof, which will entitle
an Indemnified Party to compensation pursuant to this Section 8.2. A notice
(including an explanation of the basis for such demand) by the Agent or the
applicable Indemnified Party claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining such amount, the
Agent or any applicable Indemnified Party may use any reasonable averaging and
attributing methods consistent with those used for similar transactions.
(d) With respect to any liability to any Indemnified Party for
any amounts under this Section 8.2 ("Section 8.2 Costs"), the Agent agrees that
it shall, upon the incurring of any Section 8.2 Costs, take such steps as may be
reasonable, and consult with the Borrower in good faith with a view toward
agreeing to alternative arrangements, for avoiding or mitigating (consistent
with the internal policies and governance and legal and regulatory restrictions
of the applicable Indemnified Party and without requiring the incurring of any
additional costs by, or otherwise being disadvantageous to, such party)
additional Section 8.2 Costs.
(e) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the acquisition of
interests in receivables from one or more Other Conduit Participants, the
Company shall allocate any Section 8.2 costs which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
provided by the Credit Support Provider to the Borrower and each Other Conduit
Participant; provided, however, that if such Section 8.2 Costs are attributable
to the Borrower, the Seller or the Master Servicer and not attributable to any
Other Conduit Participant, the Borrower shall be solely liable for such Section
8.2 Costs or if such Section 8.2 Costs are attributable to Other Conduit
Participants and not attributable to the Borrower, the Seller or the Master
Servicer, such Other Conduit Participants shall be solely liable for such
Section 8.2 Costs.
SECTION 8.3. Taxes. All payments made hereunder by the Borrower or the
Master Servicer (each, a "payor") to the Company, any Bank Investor or the Agent
(each, a "recipient") shall be
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made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and any other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority on any
recipient (or any assignee of such parties) (such non-excluded items being
called "Taxes"), but excluding franchise taxes and taxes imposed on or measured
by the recipient's net income or gross receipts ("Excluded Taxes"). In the event
that any withholding or deduction from any payment made by the payor hereunder
is required in respect of any Taxes, then such payor shall:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.
SECTION 8.4. Other Costs, Expenses and Related Matters. (a) The
Borrower agrees, upon receipt of a written invoice, to
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pay and to save the Company, the Bank Investors (subject to Section 9.9(b)) and
the Agent harmless against liability for the payment of, all reasonable
out-of-pocket documented expenses (including, without limitation, reasonable
attorneys', accountants' and other third parties' fees and reasonable expenses,
any filing fees and expenses incurred by officers or employees of the Company,
the Bank Investors and/or the Agent) or intangible, documentary or recording
taxes incurred by or on behalf of the Company, any Bank Investor and the Agent
(i) in connection with the negotiation, execution, delivery and preparation of
this Agreement, the other Transaction Documents and any documents or instruments
delivered pursuant hereto and thereto and the transactions contemplated hereby
or thereby (including, without limitation, the perfection or protection of the
Pledged Interest) and (ii) from time to time (a) relating to any amendments,
waivers or consents under this Agreement and the other Transaction Documents,
(b) arising in connection with the Company's, any Bank Investor's, the Agent's
or the Collateral Agent's enforcement or preservation of rights (including,
without limitation, the perfection and protection of the Pledged Interest under
this Agreement), or (c) arising in connection with any audit, dispute,
disagreement, litigation or preparation for litigation involving this Agreement
or any of the other Transaction Documents (all of such amounts, collectively,
"Transaction Costs").
(b) The Borrower shall pay the Agent, for the account of the
Company and the Bank Investors, as applicable, on demand any Early Collection
Fee due on account of the reduction of a Tranche on a day prior to the last day
of its Tranche Period.
SECTION 8.5. [Reserved.]
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION 9. 1. Authorization and Action. The Company and each Bank
Investor hereby irrevocably appoints and authorizes the Agent to act as its
agent under this Agreement and the other Transaction Documents with such powers
and discretion as are specifically
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delegated to the Agent by the terms of this Agreement and the other Transaction
Documents, together with such other powers as are reasonably incidental thereto.
The Agent (which term as used in this sentence and in Section 9.05 and the first
sentence of Section 9.06 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and shall not be a trustee or fiduciary for the Company or any Bank Investor;
(b) shall not be responsible to the Company or any Bank Investor for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Transaction Document or any certificate or other
document referred to or provided for in, or received by any of them under, any
Transaction Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Transaction Document, or any other
document referred to or provided for therein or for any failure by any of the
Borrower, the Seller or the Master Servicer or any other Person to perform any
of its obligations thereunder; (c) shall not be responsible for or have any duty
to ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any of the Borrower, the Seller or the Master
Servicer or the satisfaction of any condition or to inspect the property
(including the books and records) of any of the Borrower, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Transaction Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Transaction
Document, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
SECTION 9.2. Agent's Reliance, Etc. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Borrower, the Seller or the Master
Servicer), independent
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accountants, and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Investors, and such
instructions shall be binding on the Company and all of the Bank Investors;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Transaction
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Bank Investors against any and all liability and expense
which may be incurred by it by reason of taking any such action.
SECTION 9.3. Termination Events. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Termination Event or an event which
but for the lapse of time or the giving of notice or both, would constitute a
Termination Event, unless the Agent has received written notice specifying such
event and stating that such notice is a "Notice of Termination Event". In the
event that the Agent receives such a notice of the occurrence of a Termination
Event or potential Termination Event, the Agent shall give prompt notice thereof
to the Company. The Agent shall (subject to Section 9.02 hereof) take such
action with respect to such Termination Event or potential Termination Event as
shall reasonably be directed by the Majority Investors; provided that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Termination Event or potential Termination Event as it
shall deem advisable in the best interest of the Company and the Bank Investors.
SECTION 9.4. Rights as Bank Investor. With respect to its Commitment,
NationsBank (and any successor acting as Agent) in its capacity as a Bank
Investor hereunder shall have the same rights and powers hereunder as any other
Bank Investor and may exercise the same as though it were not acting as the
Agent, and the term "Bank Investor" or "Bank Investors" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
NationsBank (and any successor acting as Agent) and its affiliates may (without
having to account therefor to the
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Company or any Bank Investor) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any of the Borrower, the Seller and the
Master Servicer or any of their Subsidiaries or affiliates as if it were not
acting as Agent, and NationsBank (and any successor acting as Agent) and its
affiliates may accept fees and other consideration from any of the Borrower, the
Seller and the Master Servicer or any of their Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Company or any Bank Investor.
SECTION 9.5. Indemnification of the Agent. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Borrower), ratably in
accordance with their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
(including by the Company or any Bank Investor) in any way relating to or
arising out of this Agreement or any other Transaction Document or the
transactions contemplated thereby or any action taken or omitted by the Agent
under this Agreement or any other Transaction Document; provided that no Bank
Investors shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person indemnified. Without
limitation of the foregoing, the Bank Investors agree to reimburse the Agent,
ratably in accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
other Transaction Documents, to the extent that such expenses are incurred in
the interests of or otherwise in respect of the Bank Investors hereunder and/or
thereunder and to the extent that the Agent is not reimbursed for such expenses
by the Borrower. The agreements contained in this Section shall survive payment
in full of the Net Investment and all other amounts payable under this
Agreement.
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SECTION 9.6. Non-Reliance. The Company and each Bank Investor agrees
that it has, independently and without reliance on the Agent or the Company or
any Bank Investor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, the Seller, the
Originators and the Master Servicer and their Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent, the Company or any Bank Investor, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Transaction
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Company and the Bank Investors by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Company with any credit or other information concerning the affairs,
financial condition, or business of any of the Borrower, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates that may come into
the possession of the Agent or any of its affiliates.
SECTION 9.7. Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Company, the Bank Investors and the Borrower. Upon
any such resignation, the Majority Investors shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Investors and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Company and the Bank Investors, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
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SECTION 9.8. Payments by the Agent. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective Assignment
and Assumption Agreements) in accordance with their respective related pro rata
interests in the Net Investment on the Business Day received by the Agent,
unless such amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to the Bank
Investors on such Business Day, but, in any event, shall pay such amounts to the
Bank Investors in accordance with their respective related pro rata interests in
the Net Investment not later than the following Business Day.
SECTION 9.9. Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect an
Advance as requested under Section 2.2(a), then at any time, the
Borrower shall have the right to require the Company to assign its
interest in the Net Investment in whole to the Bank Investors pursuant
to this Section 9.9. In addition, if at any time on or prior to the
Commitment Termination Date (i) a Termination Event occurs that results
in the Termination Date or (ii) the Company elects to give notice to
the Borrower of a Reinvestment Termination Date, the Borrower hereby
requests and directs that the Company assign its interest in the Net
Investment in whole to the Bank Investors pursuant to this Section 9.9
and the Borrower hereby agrees to pay the amounts described in Section
9.9(d) below. Provided that the Net Asset Test is satisfied, upon any
such election by the Company or any such request by the Borrower, the
Company shall make such assignment and the Bank Investors shall accept
such assignment and shall assume all of the Company's obligations
hereunder. In connection with any assignment from the Company to the
Bank Investors pursuant to this Section 9.9, each Bank Investor shall,
on the date of such assignment, pay to the Company an amount equal to
its Assignment Amount. In addition, at any time on or prior to the
Commitment Termination Date, the Borrower shall have the right to
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request funding under this Agreement directly from the Bank Investors;
provided, however, that at such time all conditions precedent set forth
herein for an Advance shall be satisfied. In connection with such
funding by the Bank Investors, the Bank Investors shall accept the
assignment of all of the Company's interest in the Net Investment and
assume all of the Company's obligations hereunder concurrently with or
prior to any such Advance. Upon any assignment by the Company to the
Bank Investors contemplated hereunder, the Company shall cease to make
any additional Advances hereunder.
(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Net Investment, the Receivables and Related
Security with respect thereto and its rights and obligations hereunder
to any Person unless approved in writing by the Parent (which consent
will not be unreasonably withheld), the Administrative Agent, on behalf
of the Company, and the Agent (which consent will not be unreasonably
withheld). In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment,
the Receivables and Related Security with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall
promptly execute and deliver all further instruments and documents, and
take all further action, that the assignee may reasonably request, in
order to protect, or more fully evidence the assignee's right, title
and interest in and to such interest and to enable the Agent, on behalf
of such assignee, to exercise or enforce any rights hereunder and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. Upon any such
assignment, (i) the assignee shall have all of the rights and
obligations of the assignor hereunder and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party with respect to such interest for all purposes
of this Agreement and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment,
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was a party (it being understood that the Bank Investors, as assignees,
shall (x) be obligated to fund Advances under Section 2.2(a) in
accordance with the terms thereof, notwithstanding that the Company was
not so obligated and (y) not have the right to elect the commencement
of the amortization of the Net Investment pursuant to the definition of
"Reinvestment Termination Date", notwithstanding that the Company had
such right) and (ii) the assignor shall relinquish its rights with
respect to such interest for all purposes of this Agreement and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. No such assignment
shall be effective unless a fully executed copy of the related
Assignment and Assumption Agreement shall be delivered to the Agent and
the Borrower. All Transaction Costs incurred in connection with the
initial assignment hereunder of NationsBank's Pro Rata Share of its
interests as Bank Investor shall be borne by the Borrower, but the
costs associated with any other such assignment by Bank Investors shall
not be borne by the Borrower. No Bank Investor shall assign any portion
of its Commitment hereunder without also simultaneously assigning an
equal portion of its interest in the Liquidity Provider Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and 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
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any state ments,
warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
or this Agreement, the other Transaction Documents or any such other
instrument or document; (ii) the assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower, the Seller or the Master Servicer or the
performance or observance by the Borrower, the Seller or the Master
Servicer of any of their respective obligations under this
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Agreement, the Receivables Purchase Agreement, the other Transaction
Documents or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, the Receivables Purchase Agreement and such other
instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Assumption Agreement and to purchase such interest; (iv) such
assignee will, independently and without reliance upon the Agent, or
any of its Affiliates, or the assignor and based on such agreements,
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 and the other Transaction Documents; (v)
such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement,
the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and
interests in and under this Agreement, the other Transaction Documents,
the Receivables, the Contracts and the Related Security; (vi) such
assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the
assignee of the assignor; and (vii) such assignee agrees that it will
not institute against the Company any proceeding of the type referred
to in Section 10.9 prior to the date which is one year and one day
after the payment in full of all Commercial Paper issued by the
Company.
(d) Borrower's Obligation to Pay Certain Amounts; Additional
Assignment Amount. The Borrower shall pay to the Agent, for the account
of the Company from the sources set forth in Section 2.5, in connection
with any assignment by the Company to the Bank Investors pursuant to
this Section 9.9, an aggregate amount equal to all Discount to accrue
through the end of each outstanding Tranche Period plus all other
Aggregate Unpaids (other than the Net Investment). To the extent that
such Discount relates to interest or discount on Related Commercial
Paper, if the Borrower fails
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to make payment of such amounts at or prior to the time of assignment
by the Company to the Bank Investors, such amount shall be paid by the
Bank Investors (in accordance with their respective Pro Rata Shares) to
the Company as additional consideration for the interests assigned to
the Bank Investors and the amount of the "Net Investment" hereunder
held by the Bank Investors shall be increased by an amount equal to the
additional amount so paid by the Bank Investors.
(e) Administration of Agreement After Assignment. After any
assignment by the Company to the Bank Investors pursuant to this
Section 9.9 (and the payment of all amounts owing to the Company in
connection therewith), all rights of the Administrative Agent and the
Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.9, all payments to be made
hereunder by the Borrower or the Master Servicer to the Company shall
be made to the Agent's account as such account shall have been notified
to the Borrower and the Master Servicer.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 9.9, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or Moody's, respectively (or such
rating shall have been withdrawn by Standard & Poor's or Moody's), such
Bank Investor, upon request of the Agent, shall, within five (5)
Business Days of such request, assign its rights and obligations
hereunder to another financial
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institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). In
either such case, if any such Bank Investor shall not have assigned its
rights and obligations under this Agreement within the applicable time
period described above, the Company shall have the right to require
such Bank Investor to accept the assignment of such Bank Investor's Pro
Rata Share of the Net Investment; such assignment shall occur in
accordance with the applicable provisions of this Section 9.9. Such
Bank Investor shall be obligated to pay to the Company, in connection
with such assignment, in addition to the Pro Rata Share of the Net
Investment, an amount equal to the interest component of the
outstanding Commercial Paper issued to fund the portion of the Net
Investment being assigned to such Bank Investor, as reasonably
determined by the Agent, such amount when paid to constitute an
addition to the Net Investment held by such Bank Investor.
Notwithstanding anything contained herein to the contrary, upon any
such assignment to a downgraded Bank Investor as contemplated pursuant
to the immediately preceding sentence, the aggregate available amount
of the Facility Limit, solely as it relates to new Advances by the
Company, shall be reduced by the amount of unused Commitment of such
downgraded Bank Investor; it being understood and agreed, that nothing
in this sentence or the two preceding sentences shall affect or
diminish in any way any such downgraded Bank Investor's Commitment to
the Borrower or such downgraded Bank Investor's other obligations and
liabilities hereunder and under the other Transaction Documents.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, in each case, in cash;
provided that (i) the rights
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and remedies of the Agent, the Company, the Bank Investors and the
Administrative Agent with respect to any representation and warranty made or
deemed to be made by the Borrower pursuant to this Agreement, (ii) the
indemnification and payment provisions of Article VIII, and (iii) the agreement
set forth in Section 10.9 hereof, shall be continuing and shall survive any
termination of this Agreement.
SECTION 10.2. Waivers; Amendments. (a) No failure or delay on the part
of the Agent, the Company, the Administrative Agent or any Bank Investor in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any other Transaction
Document may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower, the Master Servicer, the Company and
the Majority Investors (and, if Article IX or the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by each Bank Investor directly affected thereby, (i)
increase the Commitment of a Bank Investor, (ii) reduce the Net Investment or
rate of interest to accrue thereon or any fees or other amounts payable
hereunder, (iii) postpone any date fixed for the payment of any scheduled
distribution in respect of the Net Investment or interest with respect thereto
or any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments or the number of Bank
Investors, which shall be required for the Bank Investors or any of them to take
any action under this Section or any other provision of this Agreement, (v)
release all or substantially all of the property with respect to which a
security or other interest therein has been granted hereunder to the Agent or
the Bank Investors or (vi) extend or permit the extension of the Commitment
Termination Date. In the event the Agent requests the Company's or a Bank
Investor's consent pursuant to the foregoing provisions and the Agent does not
receive a consent (either positive or negative) from the Company or such Bank
Investor within 10 Business Days of the
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Company's or Bank Investor's receipt of such request, then the Company or such
Bank Investor (and its percentage ownership interest hereunder) shall be
disregarded in determining whether the Agent shall have obtained sufficient
consent hereunder.
SECTION 10.3. Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 10.3 and confirmation is received,
(ii) if given by mail 3 Business Days following such posting, postage prepaid,
U.S. certified or registered, (iii) if given by overnight courier, one (1)
Business Day after deposit thereof with a national overnight courier service, or
(iv) if given by any other means, when received at the address specified in this
Section 10.3. However, anything in this Section to the contrary notwithstanding,
the Borrower hereby authorizes the Company to effect Advances, Tranche Period
and Tranche Rate selections based on telephonic notices made by any Person which
the Company in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Company a written confirmation of
each telephonic notice signed by an authorized officer of the Borrower. However,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs in any material respect from the action
taken by the Company, the records of the Company shall govern absent manifest
error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities
Two ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Administrative Agent)
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If to the Borrower:
UCP Borrowing SPE 1998-1 Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
with a copy to:
UCP Borrowing SPE 1998-1 Limited Partnership
c/o ▇▇▇▇▇▇ ▇▇▇▇▇, Treasurer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
Bank: NationsBank, N.A.
ABA No.: 111 000 012
Account Name: UCP Borrowing SPE 1998-1 Limited
Partnership
Account No.: 37510 59352
If to the Master Servicer
Portfolio Financial Servicing Company, L.P.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Seller:
UniCapital Funding Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
NationsBank, N.A.
ABA No.: 111 000 012
Account 37510 33 747
Reference: UniCapital Lease Funding
If to the Agent:
NationsBank, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
NationsBank, N.A.
ABA No.: ▇▇▇-▇▇▇-▇▇▇
for the account of NationsBank Charlotte
Account No. 10822016511
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Collateral Agent:
NationsBank, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Bank Investors, at their respective addresses set
forth on the signature pages hereto or of the Assignment and
Assumption Agreement pursuant to which it became a party
hereto.
SECTION 10.4. Governing Law; Submission to Jurisdiction; Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Nothing in this Section 10.4 shall affect
the right of the Company to bring any action or proceeding against the Borrower
or its respective properties in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete integration
of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the
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entire Agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.
SECTION 10.5. Severability; Counterparts. 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. Any provisions of this Agreement which are prohibited or unenforce
able in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.6. Successors and Assigns. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that neither the Borrower nor Master Servicer may assign any
of its rights or delegate any of its duties hereunder or under the Receivables
Purchase Agreement or under any of the other Transaction Documents to which it
is a party without the prior written consent of the Agent. No provision of this
Agreement shall in any manner restrict the ability of the Company or any Bank
Investor to assign, participate, grant security interests in, or otherwise
transfer any portion of the Pledged Interest.
(b) Without limiting the foregoing, the Company may, from time
to time, with prior or concurrent notice to the Borrower, the Parent and the
Master Servicer, in one transaction or a series of transactions, assign all or a
portion of the Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee; provided that if such Conduit Assignee is not administered by
NationsBank, the Company shall only make such assignment if the Borrower
consents to such assignment. Upon and to the extent of such assignment by the
Company to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of
the assigned portion of the Net Investment, (ii) the related administrative or
managing agent for such Conduit Assignee will act as the Administrative Agent
for such Conduit Assignee, with
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all corresponding rights and powers, express or implied, granted to the
Administrative Agent hereunder or under the other Transaction Documents, (iii)
such Conduit Assignee and its liquidity support provider(s) and credit support
provider(s) and other related parties shall have the benefit of all the rights
and protections provided to the Company and its Liquidity Support Provider(s)
and Credit Support Provider(s), respectively, herein and in the other
Transaction Documents (including, without limitation, any limitation on recourse
against such Conduit Assignee or related parties, any agreement not to file or
join in the filing of a petition to commence an insolvency proceeding against
such Conduit Assignee, and the right to assign to another Conduit Assignee as
provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the
assigned or assumed portion) of the Company's obligations, if any, hereunder or
any other Transaction Document, and the Company shall be released from such
obligations, in each case to the extent of such assignment, and the obligations
of the Company and such Conduit Assignee shall be several and not joint, (v) all
distributions in respect of the Net Investment shall be made to the applicable
agent or administrative agent, as applicable, on behalf of the Company and such
Conduit Assignee on a pro rata basis according to their respective interests,
(vi) the definition of the term "CP Rate" with respect to the portion of the Net
Investment funded with commercial paper issued by the Company from time to time
shall be determined in the manner set forth in the definition of "CP Rate"
applicable to the Company on the basis of the interest rate or discount
applicable to commercial paper issued by such Conduit Assignee (rather than the
Company), (vii) the defined terms and other terms and provisions of this
Agreement and the other Transaction Documents shall be interpreted in accordance
with the foregoing, and (viii) if requested by the Agent or the agent or
administrative agent with respect to the Conduit Assignee, the parties will
execute and deliver such further agreements and documents and take such other
actions as the Agent or such agent or administrative agent may reasonably
request to evidence and give effect to the foregoing. No Assignment by the
Company to a Conduit Assignee of all or any portion of the Net Investment shall
in any way diminish the related Bank Investors' obligation under Section 9.9 to
fund any Advance not funded by the Company or such Conduit Assignee or to
acquire from the Company or such Conduit Assignee all or any portion of the Net
Investment.
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(c) Each of the Borrower, the Seller and Master Servicer
hereby agrees and consents to the assignment by the Company from time to time of
all or any part of its rights under, interest in and title to this Agreement and
the Pledged Interest to any Liquidity Provider or to any Conduit Assignee as set
forth in section 10.6(b). In addition, each of the Borrower and the Seller
hereby consents to and acknowledges the assignment by the Company of all of its
rights under, interest in and title to this Agreement and the Pledged Interest
to the Master Servicer.
SECTION 10.7. Waiver of Confidentiality. Each of the Borrower, the
Seller and the Master Servicer hereby consents to the disclosure of any
non-public information (other than the identity of the Obligors and other
information relating to the identity of the Obligors) with respect to it
received by the Company, the Agent, any Bank Investor or the Administrative
Agent to any of the Company, the Agent, any nationally recognized rating agency
rating the Company's Commercial Paper (informing such agency of the highly
confidential nature of such information), the Administrative Agent, the
Collateral Agent, any Bank Investor, the Liquidity Provider or the Credit
Support Provider in relation to this Agreement. Each of the Agent, the Company
and each Bank Investor agrees that, other than as set forth in the preceding
sentence, it shall not disclose such information to any other Person except (i)
its auditors and attorneys and employees, (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction or, (iii) to a
potential Bank Investor upon its agreement to abide by the provisions of this
Section with respect to such information.
SECTION 10.8. Confidentiality Agreement. Each of the Borrower and the
Master Servicer hereby agrees that it will not disclose the contents of this
Agreement or any other proprietary or confidential information of the Company,
the Agent, the Administrative Agent, the Collateral Agent, any Liquidity
Provider or any Bank Investor to any other Person except (i) its auditors and
attorneys, employees or financial advisors (other than any commercial bank) and
any nationally recognized rating agency, provided such auditors, attorneys,
employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information or (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction.
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SECTION 10.9. No Bankruptcy Petition Against the Company. Each of the
Borrower, the Master Servicer and the Seller hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
SECTION 10.10. No Recourse Against Stockholders, Officers or Directors.
No recourse under any obligation, covenant or agreement of the Company contained
in this Agreement shall be had against ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any
affiliate thereof), or any stockholder, officer or director of the Company, 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 this Agreement is solely a corporate obligation of the Company,
and that no personal liability whatsoever shall attach to or be incurred by
▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof), or the
stockholders, officers or directors of the buyer, as such, or any of them, under
or by reason of any of the obligations, covenants or agreements of the Company
contained in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by the Company of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or constitution, of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof) and every such
stockholder, officer or director of the Company is hereby expressly waived as a
condition of and consideration for the execution of this Agreement].
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Loan and Security Agreement as of the date first written above.
KITTY HAWK FUNDING CORPORATION,
as Company
By: _________________________
Name:
Title:
UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP, as Borrower
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
PORTFOLIO FINANCIAL SERVICING
COMPANY, L.P., as Master Servicer
By: PFSC ACQUISITION CORP.,
as general partner
By: _________________________
Name:
Title:
Commitment NATIONSBANK, N.A., as Agent
and a Bank Investor
$---------
By: ________________________
Name:
Title:
125
EXHIBIT A
FORM OF NOTICE OF CHANGE IN FACILITY LIMIT
[Date]
NationsBank, N.A.
NationsBank Corporate ▇▇▇▇▇▇--▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇--
Structured Finance
Dear ▇▇. ▇▇▇▇▇:
Reference is made to the Loan and Security Agreement dated as of July
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as Borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company, L.P.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
Pursuant to the Agreement, the undersigned hereby request that the
Facility Limit be [increased][decreased] from $__________ to $_______________,
concurrently with an equivalent [decrease][increase] in the facility limit under
the Purchase Facility Agreement. A separate request under that facility is being
made concurrently herewith. The undersigned request that such change be
effective as of [date], which is at least three Business Days from the date of
delivery hereof.
A-1
126
UCP BORROWING SPE 1998-1 Limited
Partnership, as Borrower
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:_________________________
Name:
Title:
Confirmed and Accepted as of this
___ day of _______, ____
NATIONSBANK, N.A., as Agent
By:________________________
Name:
Title:
A-2
127
EXHIBIT B
CREDIT POLICY MANUAL AND CREDIT POLICY PROCEDURE MEMORANDA
Each of the Parent's Credit Policy Manual and Credit Policy Procedure Memoranda
were delivered by the Borrower on June 25, 1998 to the Agent and the receipt of
which has been separately acknowledged by the Agent.
B-1
128
EXHIBIT C
[RESERVED.]
C-1
129
EXHIBIT D
[RESERVED.]
D-1
130
EXHIBIT E
FORM OF INVESTOR REPORT
E-1
131
EXHIBIT F
FORM OF BORROWING REQUEST
NationsBank, N.A.
NationsBank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - Structured Finance
Reference is made to the Loan and Security Agreement dated as of July
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as Borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company, L.P.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
The Borrower, pursuant to Section 2.2(a) of the Agreement, hereby
requests that the Company make an Advance to it pursuant to the following
instructions:
Borrowing Date:
________________________________________
Borrowing request is made to:
[Company] [Bank Investors]
Advance Amount:
________________________________________
Tranche Period(s):
________________________________________
Account to be credited:
____________________________[bank name]
▇-▇
▇▇▇
▇▇▇ ▇▇.
________________________________________
Account No.
________________________________________
Reference No.
________________________________________
Please credit the above-mentioned account by 11:00 a.m. (New
York City time) on the Borrowing Date.
The Borrower hereby certifies as of the date hereof that $__________ is
available for additional Advances based on the following calculation:
$________________ (Maximum Net Investment)
- $________________ (Net Investment)
= $________________ (amount available for Borrowing)
F-2
133
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Request
to be duly executed and delivered by its duly authorized officer as of the date
first above written.
UCP BORROWING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:___________________________
Name:
Title:
Dated:____________________________
F-3
134
SCHEDULE I TO EXHIBIT F
CONTRACT SCHEDULE
Lease Specific Information -- Origination
Account Number
Serial Number
Lessee Name
Street Address
City
State
Zip Code
Credit Rating of Lessee, if attainable (D&B)
Credit Score as per UniCapital Corporation's Credit and
Collection Policy
Location of Collateral
City
State
Zip Code
Location of Contracts (Name and Institution where held)
Collateral Type (ex. Personal Computer, Printing Press)
Type of Lease
Operating
Sales-type
Finance
Promissory Note
Vendor/Manufacturer
Flag for "unique funding arrangements"
Advance Vendor Payments
Progress Funding
Wet Funding
PPR-type leases
Gross Contractual Receivable Balance
Outstanding Remaining Lease Balance
Amount of Rent (Lease Payment)
Frequency of Lease Payments (Monthly, quarterly,
or semi-annually)
Lease Rate (Yield)
Discount Rate (Applicable Hedge Rate Pursuant to TAA)
Term (months)
Amount Financed
Original Cost of Equipment (OEC)
F-4
135
End of Term Provision(s)
nominal: guaranteed/unguaranteed
or fair market value
Current Status of Lease Pool
Gross Receivables Serviced And Owned
Fair market Value of Collateral
Date of Fair Market Value determination
Booked Value of Equipment
Residual Value booked
Actual Residual Realized
Remarketing Revenue
Remarketing Fees
Delinquent Status
1-30 Day
31-60 Day
61-90 Day
91-120 Day
121-150 Day
151-180 Day
180+ Day
Defaulted Receivables (Y/N)
Cause of Default (Why Lessee cannot pay?)
Gross Charge-offs
Net Charge-offs
Recoveries
Flag for Repossessed Collateral
Flag for Prepay
Amount Prepaid
Accrued Interest
Outstanding Principal of Receivable
Maturity Date of Lease Term
Cut-Off Date
F-5
136
ANNEX 1 TO EXHIBIT F
GRID
Date of Advance:
Amount of Advance:
Increase in Net Investment (Giving effect to Advance):
Decrease in Net Investment (Giving effect to Advance):
F-6
137
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Loan and Security Agreement dated as of June
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
___________________ (the "Assignor") and _____________________ (the "Assignee")
agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee,
without recourse and without representation and warranty, 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 and the other Transaction Documents, as of the date hereof.
Such interest is expressed as a percentage of all rights and
obligations of the Bank Investors being equal to the percentage
equivalent of a fraction the numerator of which is $________, and the
denominator of which is $________ the current Facility Limit. After
giving effect to such sale and assignment, the Assignee's Commitment
will be as set forth on the signature page hereto.
(b) [In consideration of the payment of $___________, being
___% of the existing Net Investment, and of $___________, being ___% of
the aggregate unpaid accrued Discount, receipt of which payment is
hereby acknowledged, the Assignor hereby assigns to the Agent for the
account of the Assignee, and the Assignee hereby purchases from the
Assignor, a ___% interest in and to all of the Assignor's
G-1
138
right, title and interest in and to the Net Investment purchased by the
undersigned on _______________, 1998 under the Agreement.][INCLUDE IF
AN EXISTING NET INVESTMENT IS BEING ASSIGNED.]
(c) 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, any other
Transaction Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or the Receivables,
any other Transaction Document 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 the Borrower, [the Master Servicer], the Agent or the
Seller or the performance or observance by the Borrower, [the Master
Servicer], the Agent or the Seller of any of their respective
obligations under the Agreement, any other Transaction Document, or any
instrument or document furnished pursuant thereto.
(d) The Assignee (i) confirms that it has received a copy of
the Agreement, the related Receivables Purchase Agreement, the VFN, the
Facility Fee Letter and the Fee Letter, together with copies of the
financial statements referred to in Section 5.1 of the Agreement, to
the extent delivered through the date of this Agreement, 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
Assumption Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent, any of its Affiliates, the Assignor or
any other [Bank 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
and/or any other Transaction Document; (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers and
G-2
139
discretion under the Agreement and/or the other Transaction Documents
as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (iv) 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 [Bank Investor]; and (vi) specifies as its address
for notices and its account for payments the office and account set
forth beneath its name on the signature pages hereof[; and (vii)
attaches the forms prescribed by the Internal Revenue Service of the
United States of America certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes
with respect to all payments to be made to the Assignee under the
Agreement or such other documents as are necessary to indicate that all
such payments are subject to such rates at a rate reduced by an
applicable tax treaty]. [The Assignee also covenants with each of the
Agent and the Master Servicer that the Assignee will not make a public
offering of the interest being assigned to and accepted by it hereby,
and will not reoffer or resell such interest, in a manner that would
render the issuance and sale of such interest, whether considered
together with the resale or otherwise, a violation of the Securities
Act of 1933 or any state securities or "Blue Sky" laws or require
registration pursuant thereto.]
(e) The effective date for this Assignment and Assumption
Agreement shall be the later of (i) the date on which the Agent
receives this Assignment executed by the parties hereto and receives
the consent of [the Borrower and] the Administrative Agent, on behalf
of the Company, and (ii) the date of this Assignment and Assumption
Agreement (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement and the consent of [the Borrower
and] the Administrative Agent, on behalf of the Company, this
Assignment and Assumption Agreement will be delivered to the Agent for
acceptance and recording.
(f) Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Assumption Agreement,
shall have the rights
G-3
140
and obligations of a Bank Investor thereunder; and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations
under the Agreement.
(g) Upon such acceptance and recording, from and after the
Effective Date, the 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 in respect of such
interest in Net Investment, Discount and fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Agreement for periods prior to the Effective Date
directly between themselves.
(h) This Assignment and Assumption Agreement shall be governed
by, and construed in accordance with, the laws of the State of New
York.
(i) This Assignment and Assumption 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 taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of the
signature page to this Assignment by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
G-4
141
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the ____ day of July , 1998.
Remaining [NAME OF ASSIGNOR]
Commitment
$___________
By:____________________________
Name:
Title:
Commitment [NAME OF ASSIGNEE]
$___________
By: ____________________________
Name:
Title:
[Address]
Address for notices
[Account]
Account for payments:
Consented to this __ day
of _________, 1998
NATIONSBANK, N.A., as
Administrative Agent
By: ________________________
Name:
Title:
NATIONSBANK, N.A.,
as Agent
By: ________________________
Name:
Title:
G-5
142
EXHIBIT H
LIST OF ACTIONS AND SUITS
None.
H-1
143
EXHIBIT I
LOCATION OF RECORDS
Portfolio Financial Servicing Company, L.P.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
K.L.C., Inc. (Keystone) - with respect to
Receivables for which it is Originator
▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇
I-1
144
EXHIBIT J
LIST OF SUBSIDIARIES AND TRADENAMES
None.
J-1
145
EXHIBIT K
[Reserved.]
K-2
146
EXHIBIT L-1
FORM OF OFFICER'S CERTIFICATE OF THE BORROWER
I, __________________, the undersigned _________ of UniCapital
Funding Corporation, the member (in such capacity, the "Member") of UCP GP SPE
1998-1 LLC, which is the general partner of UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP (the "Partnership"), a Nevada limited partnership, DO HEREBY CERTIFY
that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-1-1
147
WITNESS my hand as of this ____ day of ________, 1998.
_____________________________
Name:
Title:
I, the undersigned, of UniCapital Funding Corporation DO HEREBY CERTIFY
that _____________________ is the duly elected and qualified _________ of
UniCapital Funding Corporation and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
_____________________________
Name:
Title:
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OFFICER'S CERTIFICATE OF THE SELLER
I, __________________, the undersigned _________ of UniCapital
Funding Corporation (the "Company"), a Delaware corporation, DO HEREBY CERTIFY
that as of the date hereof and
since June 26, 1998:
1. There has been no modification or amendment to the Certificate of
Incorporation of the Company.
2. There has been no modification or amendment to the By-laws of the
Company.
3. The resolutions duly adopted by the Board of Directors of the
Company adopted by consent as of June 9, 1998 and June 19, 1998 have not been
revoked, modified, amended or rescinded and are still in full force and effect.
L-2-1
149
WITNESS my hand as of this ____ day of ________, 1998.
By: _____________________
Name:
Title:
I, the undersigned, ______________ of the Company, DO HEREBY CERTIFY
that _____________________ is the duly elected and qualified _________ of the
Company and the signature above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
By: __________________________
Name:
Title:
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OFFICER'S CERTIFICATE OF THE GENERAL PARTNER
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, a Nevada limited liability company (the "Company"), DO
HEREBY CERTIFY that as of the date hereof and since June 26, 1998:
1. There has been no modification or amendment to the Articles of
Organization of the Company.
2. There has been no modification or amendment to the Operating
Agreement of the Company.
L-3-1
151
WITNESS my hand as of this ____ day of ________, 1998.
_____________________________
Name:
Title: Secretary
I, the undersigned, ___________________ of the Company, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
______________ of the Company and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
_____________________________
Name:
Title:
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OFFICER'S CERTIFICATE OF THE PARENT
I, __________________, the undersigned __________________ of
UniCapital Corporation (the "Company"), a Delaware corporation, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of May 24, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
---- ------ ---------
__________________________
__________________________
__________________________
__________________________
L-4-1
153
WITNESS my hand as of this ____ day of ________, 1998.
By:____________________________
Name:
Title:
I, the undersigned, ___________________ of UniCapital Corporation, DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
______________ of UniCapital Corporation and the signature above is his/her
genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
By:____________________________
Name:
Title:
▇-▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OFFICER'S CERTIFICATE OF THE MASTER SERVICER
I, __________________, the undersigned ______________ of PFSC
Acquisition Corp., the general partner of PORTFOLIO FINANCIAL SERVICING COMPANY,
L.P. (the "Partnership"), a Delaware limited partnership, DO HEREBY CERTIFY
that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the general partner of the Partnership adopted by
consent as of June 8, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
L-5-1
155
WITNESS my hand as of this ____ day of ________, 1998.
By:____________________________
Name:
Title:
I, the undersigned, __________________ of PFSC Acquisition Corp., DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
___________ of PFSC Acquisition Corp. and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
By:____________________________
Name:
Title:
L-5-2
156
EXHIBIT M
FORM OF VARIABLE FUNDING NOTE
THIS NOTE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED EXCEPT IN ACCORDANCE WITH THE LOAN AND SECURITY AGREEMENT
REFERRED TO HEREIN. THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND NO
TRANSFER HEREOF MAY BE MADE EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT OF
1933, AS AMENDED AND ANY OTHER APPLICABLE LAWS.
$375,000,000
[Date]
This Note is secured solely by a pool of equipment lease and contract
receivables generated from time to time in the ordinary course of business by
UniCapital Funding Corporation (the "Seller") and acquired by UCP Borrowing SPE
1998-1 Limited Partnership (the "Borrower").
(By way of clarification, this Note does not represent any interest
(equity or otherwise) in the Borrower).
FOR VALUE RECEIVED, the Borrower promises to pay to Nationsbank, N.A.,
on behalf of and as agent for Kitty Hawk Funding Corporation (the "Buyer") and
the Bank Investors (as defined in the Agreement), the principal sum of
$375,000,000 (Three hundred and seventy-five million dollars) or such other
amount as shall represent the outstanding Net Investment together with all other
Aggregate Unpaids, at the times and on the dates and all as more fully provided
in the Loan and Security Agreement dated as of July 1, 1998 among the Buyer, the
Borrower, Portfolio Financial Servicing Company, L.P., individually and as
master servicer, Kitty Hawk Funding Corporation (the "Company"), NationsBank,
N.A. as agent for the Company and the Bank Investors, and certain financial
institutions that may become a party thereto in the capacity of a Bank Investor
(such agreement as amended, supplemented or modified from time to time, the
M-1
157
"Agreement"). The Receivables consist of all receivables generated under the
Contracts from time to time hereafter, all monies due or to become due in
payment of the Receivables and the other assets and interests as provided in the
Agreement.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned to such terms in the Agreement. This Note is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the holder hereof by virtue of
the acceptance hereof assents and by which the holder hereof is bound. In the
event of any inconsistency or conflict between the terms of this Note and the
terms of the Agreement, the terms of the Agreement shall prevail.
This Note is secured by the Receivables and Related Security, including
the right to receive Collections and other amounts at the times and in the
amounts specified in the Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of New York. This Note is issued
pursuant to, and is entitled to the benefits of, the Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
M-2
158
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed.
UCP BORROWING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
M-3
159
EXHIBIT N
FORM OF PARENT GUARANTY
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this "Guaranty"),
dated as of July 1, 1998, is made by UNICAPITAL CORPORATION, a Delaware
corporation (the "Guarantor") in favor of UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP, a Nevada limited partnership ("Borrrowing"), KITTY HAWK FUNDING
CORPORATION, a Delaware corporation (the "Conduit"), NATIONSBANK, N.A., a
national banking association organized and existing under the laws of the United
States, as agent (the "Agent") for the Bank Investors (as defined herein) and
the Conduit and as Bank Investor and the other BANK INVESTORS from time to time.
All capitalized terms used but not otherwise defined herein shall have, unless
otherwise specified, the meaning assigned to such terms in the LSA (as defined
herein).
WITNESSETH:
WHEREAS, UniCapital Funding Corporation (the "Seller") has entered into
that certain Receivables Purchase Agreement (as the same may from time to time
be amended, restated, supplemented or otherwise modified, the "Purchase
Agreement") dated as of even date herewith with the Guarantor and Borrowing,
under which the Seller has agreed to sell and assign from time to time hereafter
all of its right, title and interest in and to certain "Contracts," the related
"Equipment" (each as defined therein) and various related assets as described
therein;
WHEREAS, Borrowing has entered into that certain Loan and Security
Agreement (as the same may from time to time be amended, restated, supplemented
or otherwise modified, the "LSA") dated as of even date herewith with the
Conduit, Portfolio Financial Servicing Company, L.P., as master servicer
thereunder, certain bank investors from time to time (the "Bank Investors" and,
together with the Conduit, the "Investors") and the Agent, under which Borrowing
shall from time to time borrow amounts secured by a pledge and assignment of its
right, title and interest in all Receivables and Related Security, arising from
the Contracts and
N-1
160
Equipment and related assets acquired by Borrowing from the Seller under the
Purchase Agreement; and
WHEREAS, the Seller, which is a wholly owned subsidiary of the
Guarantor, owns all of the issued membership interests in Borrowing, and it is a
condition precedent to the effectiveness of the LSA that the Guarantor enter
into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Guarantor hereby agrees as follows:
1. GUARANTY. The Guarantor hereby unconditionally and irrevocably
undertakes and agrees with and for the benefit of the Investors and the Agent to
cause the due and punctual performance and observance by Borrowing with each of
Borrowing's obligations under the LSA and other Transaction Documents including
without limitation (i) by Borrowing of all of the terms, covenants conditions,
agreements and undertakings on the part of Borrowing to be performed or observed
by it under the LSA and the other Transaction Documents, and (ii) the due and
punctual payment of all sums of every kind, nature and character which are or
may become due and owing by Borrowing under the terms and provisions of the LSA
and the other Transaction Documents, whether for any Carrying Costs (including
the Discount and any other amount accrued with respect thereto, the Advances
made under the LSA in each case at the applicable rate provided for pursuant to
the LSA), fees, expenses, indemnified amounts or otherwise, whether on any
Payment Date, upon the occurrence of any Termination Event or for any other
reason whatsoever (collectively the "Borrower's Obligations"). All such
covenants, agreements and obligations on the part of Borrowing to be paid or
performed and together with all convenants or other obligations in the
Transaction Documents ascribed to the Guarantor (and, in each case, regardless
of whether incurred after the commencement of any bankruptcy proceeding with
respect to Borrowing) are collectively referred to herein as "Guarantor's
Obligations". The liability of the Guarantor individually with respect to the
Guarantor's Obligations shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
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The Guarantor agrees that it is directly and primarily liable for the
Guarantor's Obligations.
2. PAYMENT AND PERFORMANCE. In the event that Borrowing shall fail to
perform or observe any of the Guarantor's Obligations when the same shall be
required to be performed or observed under any Transaction Document, then the
Guarantor will itself (to the fullest extent permitted by law) duly and
punctually perform or observe, or cause to be duly and punctually performed or
observed, such Guarantor's Obligation, and it shall not be a condition to the
accrual of the Guarantor's Obligations of the Guarantor hereunder to perform or
observe, or cause the performance or observance of, any Guarantor's Obligation
that Borrowing, any Investor or the Agent shall have first made any request of
or demand upon or give any notice to the Guarantor or its respective successors
or assigns, or have instituted any action or proceeding against the Guarantor or
Borrowing or their respective successors or assigns in respect thereof.
3. UNCONDITIONAL OBLIGATIONS. The Guarantor's Obligations under this
Guaranty Agreement shall be absolute and unconditional irrespective of the
validity, legality or enforceability of the LSA, any other Transaction Documents
or any other any other guaranty of the Borrower's Obligations, and shall not be
affected by any action taken under the LSA, any other Transaction Document, any
other guaranty of the Borrower's Obligations or any other agreement between the
Investors and the Borrower or any other Person, in the exercise of any right or
power therein conferred, or by any failure or omission to enforce any right
conferred thereby, or by any waiver of any covenant or condition therein
provided, or by any acceleration of the maturity of any of the Borrower's
Obligations, or by the release or other disposal of any security for any of the
Borrower's Obligations, or by the dissolution of the Borrower or any transfer or
disposition of any assets of the Borrower or by any extension or renewal of the
LSA or any other Transaction Document, in whole or in part, or by any
modification, alteration, amendment or addition of or to the LSA, any other
Transaction Document, any other guaranty of the Borrower's Obligations or any
other agreement between any of the Investors and the Borrower or any other
Person, or by any other circumstance whatsoever (with or without notice to or
knowledge of the Guarantor) which may or might in any manner or to any extent
vary the risks of the
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Guarantor, or might otherwise constitute a legal or equitable discharge of a
surety or a guarantor; it being the purpose and intent of the parties hereto
that this Guaranty Agreement and the Guarantor's Obligations hereunder shall be
absolute and unconditional under any and all circumstances and shall not be
discharged except by performance or payment as herein provided.
4. CURRENCY AND FUNDS OF PAYMENT. The Guarantor hereby guarantees that
any payment of Guarantor's Obligations will be paid in lawful currency of the
United States of America and in immediately available funds, regardless of any
law, regulation or decree now or hereafter in effect that might in any manner
affect the Borrower's Obligations, or the rights of the Investors with respect
thereto as against the Borrower, or cause or permit to be invoked any alteration
in the time, amount or manner of payment by the Borrower of any or all of the
Borrower's Obligations.
5. SUITS. The Guarantor from time to time shall perform or pay to the
Agent for the benefit of the Investors, on demand, at the Agent's place of
business set forth in the LSA or such other address as the Agent shall give
notice of to the Guarantor, any Guarantor's Obligations as they become or are
declared due, and in the event such performance or payment is not made
forthwith, the Agent or the Conduit or any of them may proceed to suit against
the Guarantor. At the Agent's election, one or more and successive or concurrent
suits may be brought hereon by the Agent against the Guarantor, whether or not
suit has been commenced against the Borrower, any other guarantor of the
Borrower's Obligations or any other Person and whether or not the Investors have
taken or failed to take any other action to collect all or any portion of the
Borrower's Obligations or have taken or failed to take any actions against any
collateral securing payment or performance of all or any portion of the
Borrower's Obligations.
6. SET-OFF AND WAIVER. The Guarantor waives any right to assert against
the Investors as a defense, counterclaim, set-off or cross claim, any defense
(legal or equitable) or other claim which the Guarantor may now or at any time
hereafter have against the Borrower or any Investor without waiving any
additional defenses, set-off, counterclaims or other claims otherwise available
to the Guarantor. If at any time hereafter the Agent or any Investor employs
counsel for advice or other
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representation to enforce the Guarantor's Obligations that arise out of a
Termination Event, then, in any of the foregoing events, all of the reasonable
attorneys' fees arising from such services and all expenses, costs and charges
in any way or respect arising in connection therewith or relating thereto shall
be paid by the Guarantor to the Agent, for the benefit of the Investors, on
demand.
7. WAIVER; SUBROGATION.
(a) The Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Conduit's heretofore, now or from time to time hereafter making Advances and
otherwise loaning monies or giving or extending credit to or for the benefit of
the Borrower, whether pursuant to the LSA or any other Transaction Document or
any amendments, modifications, or supplements thereto, or replacements or
extensions thereof, (iii) the Investors or the Borrower heretofore, now or at
any time hereafter, obtaining, amending, substituting for, releasing, waiving or
modifying the LSA or any other Transaction Documents; (iv) presentment, demand,
default, non-payment, partial payment and protest; (v) any Investor heretofore,
now or at any time hereafter granting to the Borrower (or any other party liable
to the Conduit on account of the Borrower's Obligations) or to the Guarantor any
indulgence or extensions of time of payment of the Borrower's Obligations or the
Guarantor's Obligations, respectively; and (vi) any Investor heretofore, now or
at any time hereafter accepting from the Borrower, the Guarantor, any other
guarantor of the Borrower's Obligations or any other Person, any partial payment
or payments on account of the Borrower's Obligations or any collateral securing
the payment thereof or the Agent settling, subordinating, compromising,
discharging or releasing the same. The Guarantor agrees that each Investor may
heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as each Investor, in its sole and
absolute discretion, deems advisable, without in any way or respect impairing,
affecting, reducing or releasing the Guarantor from the Guarantor's Obligations,
and the Guarantor hereby consents to each and all of the foregoing events or
occurrences.
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(b) The Guarantor hereby agrees that payment or performance by the
Guarantor of the Guarantor's Obligations under this Guaranty Agreement may be
enforced by the Agent on behalf of the Conduit upon demand by the Agent to such
Guarantor without the Agent being required, such Guarantor expressly waiving any
right it may have to require the Agent, to (i) prosecute collection or seek to
enforce or resort to any remedies against the Borrower or any other guarantor of
the Borrower's Obligations, or (ii) seek to enforce or resort to any remedies
with respect to any security interests, liens or encumbrances granted to the
Agent by the Borrower, or any other Person on account of the Borrower's
Obligations or any guaranty thereof, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED
AND AGREED TO BY THE GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE
MADE BY THE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE AGENT ON BEHALF OF
THE INVESTORS. Neither the Agent nor the Conduit shall have any obligation to
protect, secure or insure any of the foregoing security interests, liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantor's Obligations shall in no way be impaired, affected, reduced, or
released by reason of any Investor's failure or delay to do or take any of the
acts, actions or things described in this Guaranty including, without limiting
the generality of the foregoing, those acts, actions and things described in
this Section 7.
(c) The Guarantor further agrees with respect to this Guaranty that the
Guarantor shall have no right of subrogation, reimbursement or indemnity, nor
any right of recourse to security for the Borrower's Obligations until the
Facility Termination Date and the indefeasible payment in full of all Aggregate
Unpaids and any other amounts due to the Agent and the Investors under the
Transaction Documents.
8. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date hereof and shall continue in full force and effect
until the later of the Facility Termination Date and the indefeasible payment in
full of all Aggregate Unpaids and any other amounts due to the Agent and the
Investors under the Transaction Documents. This Guaranty Agreement shall be
binding upon and inure to the benefit of the Guarantor, the Agent and the
Investors and their respective successors and assigns. Notwithstanding the
foregoing, the Guarantor may not, without the
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prior written consent of the Agent, assign any rights, powers, duties or
obligations hereunder. Any claim or claims that the Investors may at any time
hereafter have against the Guarantor under this Guaranty Agreement may be
asserted by the Agent or any Investor by written notice directed to such
Guarantor.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor warrants and
represents to the Agent for the benefit of the Investors that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against the
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that the Guarantor's execution, delivery and performance of this
Guaranty Agreement does not violate or constitute a breach of its certificate of
incorporation or other documents of corporate governance or any agreement to
which the Guarantor is a party, or any applicable laws, orders, regulations,
decrees or awards of any applicable governmental authority or arbitral body.
10. EXPENSES. The Guarantor agrees to be liable for the payment of all
reasonable fees and expenses, including attorney's fees, incurred by the Agent
in connection with the enforcement of this Guaranty Agreement.
11. REINSTATEMENT. The Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Agent or the Investors under the LSA or this Guaranty
Agreement is rescinded or must be restored for any reason.
12. ATTORNEY-IN-FACT. The Guarantor hereby appoints the Agent as the
Guarantor's attorney-in-fact for the purposes of carrying out the provisions of
this Guaranty Agreement and taking any action and executing any instrument which
the Agent may deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is irrevocable; provided, that
the Agent shall have and may exercise rights under this power of attorney only
upon the occurrence and during the continuance of a Termination Event.
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13. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Investors, and
all obligations of the Guarantor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the LSA, any other
Transaction Document or any other agreement or instrument relating to any of the
Guarantor's Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guarantor's Obligations, or any other amendment
or waiver of or any consent to any departure from the LSA, any other Transaction
Document or any other agreement or instrument relating to any of the Guarantor's
Obligations;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Guarantor's Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Guarantor in respect of the Guarantor's
Obligations or of this Guaranty Agreement.
14. RELIANCE. The Guarantor represents and warrants to the Agent, for
the benefit of the Investors, that: (a) the Guarantor has adequate means to
obtain from the Borrower, on a continuing basis, information concerning the
Borrower and the Borrower's financial condition and affairs and has full and
complete access to the Borrower's books and records; (b) the Guarantor is
executing this Guaranty freely and deliberately, and understands the obligations
and financial risk undertaken by providing this Guaranty; (c) the Guarantor has
relied solely on the Guarantor's own independent investigation, appraisal and
analysis of the Borrower and the Borrower's financial condition and affairs in
deciding to provide this Guaranty and is fully aware of the same; and (d) the
Guarantor has not depended or relied on the Agent or any Investor, its or their
employees, agents or representatives, for any information whatsoever concerning
the Borrower or the Borrower's financial condition and affairs or other matters
material to the Guarantor's decision to provide this Guaranty or for any
counseling, guidance, or special consideration or any
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promise therefor with respect to such decision. The Guarantor agrees that
neither the Agent nor any Investor has any duty or responsibility whatsoever,
now or in the future, to provide to the Guarantor any information concerning the
Borrower or the Borrower's financial condition and affairs, and that, if the
Guarantor receives any such information from the Agent or any Investor, its or
their employees, agents or other representatives, the Guarantor will
independently verify the information and will not rely on the Agent or any
Investor, or its or their employees, agents or other representatives, with
respect to such information.
15. ENTIRE AGREEMENT This Guaranty Agreement, together with the LSA and
the other Transaction Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
Neither this Guaranty Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged, canceled, terminated, or
amended orally or in any manner other than by an agreement, in writing signed by
the parties hereto.
16. SEVERABILITY. In case any lien, security interest or other right of
the Agent or any Investor or any provision hereof shall be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other lien, security interest or other right granted hereby or
provision hereof
17. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
18. INDEMNIFICATION. Without limitation of Article VIII of the LSA or
any other indemnification provision in any Transaction Document, the Guarantor
hereby covenants and agrees to pay, indemnify, and hold the Investors harmless
from and against any and all other out-of-pocket liabilities, costs, expenses or
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disbursements of any kind or nature whatsoever arising in connection with any
claim or litigation by any Person resulting from the execution, delivery,
enforcement, performance and administration of this Guaranty Agreement or the
Transaction Documents, or the transactions contemplated hereby or thereby, or in
any respect relating to the Collateral or any transaction pursuant to which such
Guarantor has incurred any Guarantor's Obligations (all the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
Guarantor shall have no obligation hereunder with respect to indemnified
liabilities directly or primarily arising from the willful misconduct or gross
negligence of the Agent or any Investor. The agreements in this subsection shall
survive termination or expiration of this Guaranty Agreement, the LSA and the
Facility Termination Date.
19. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies provided by law or under the LSA,
the other Transaction Documents or other applicable agreements or instruments.
The making of Advances to the Borrower pursuant to the LSA shall be conclusively
presumed to have been made in reliance upon the Guarantor's guaranty of the
Guarantor's Obligations pursuant to the terms hereof.
20. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to the Guarantor, at the address of the Borrower indicated in
Section 10.3 of the LSA (b) with respect to the Agent or the Conduit, at the
Agent's address indicated in Section 10.3 of the LSA. All such notices shall be
given and shall be effective as provided in Section 10.3 of the LSA. All notices
to the Bank Investors shall be directed in care of the Agent at the above
referenced address.
21. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE NOTWITHSTANDING ITS
EXECUTION AND DELIVERY OUTSIDE SUCH STATE.
(b) THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT
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OF OR RELATING TO THIS GUARANTY AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN THE COUNTY OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDMONALLY TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) AND IN ACCORDANCE WITH SECTION 10.3 OF
THE LSA OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL PRECLUDE
THE AGENT OR ANY INVESTOR FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENT IN THE COURTS OF ANY PLACE WHERE THE GUARANTOR OR OF THE
GUARANTOR'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS GUARANTY AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE GUARANTOR HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
THE GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT
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MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
UNICAPITAL CORPORATION,
as Guarantor
By:________________________________
Name:
Title:
UCP BORROWING SPE 1998-1 Limited
Partnership
By: UCP GP SPE 1998-1 LLC,
as general partner
By:________________________________
Name:
Title:
KITTY HAWK FUNDING CORPORATION
By:________________________________
Name:
Title:
NATIONSBANK, N.A.,
as Agent
By:________________________________
Name:
Title:
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