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RECEIVABLES PURCHASE AGREEMENT
dated as of August 31, 2000
Among
GOLDEN EAGLE RECEIVABLES LLC,
as Seller,
GOLDEN EAGLE LEASING, INC.
as Servicer,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
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TABLE OF CONTENTS
PURCHASE ARRANGEMENTS .............................................................. Page 1
Section 1.1 Purchase Facility ..................................... Page 1
Section 1.2 Increases ............................................. Page 2
Section 1.3 Decreases ............................................. Page 2
Section 1.4 Payment Requirements .................................. Page 2
Section 1.5 Schedule of Aggregate Receivables ..................... Page 3
ARTICLE II
PAYMENTS AND COLLECTIONS ...................................................... Page 3
Section 2.1 Payments .............................................. Page 3
Section 2.2 Collections Prior to Amortization ..................... Page 3
Section 2.3 Collections Following Amortization .................... Page 4
Section 2.4 Application of Collections ............................ Page 4
Section 2.5 Payment Recission ..................................... Page 5
Section 2.6 Purchaser Interests ................................... Page 5
Section 2.7 Repurchases and Releases of Receivables ............... Page 5
ARTICLE III
CONDUIT FUNDING ............................................................... Page 6
Section 3.1 Allocable CP Costs .................................... Page 6
Section 3.2 Allocable CP Costs Payments ........................... Page 6
Section 3.3 Calculation of Allocable CP Costs ..................... Page 6
ARTICLE IV
FINANCIAL INSTITUTION FUNDING ................................................. Page 7
Section 4.1 Financial Institution Funding ......................... Page 7
Section 4.2 Yield Payments ........................................ Page 7
Section 4.3 Selection and Continuation of Tranche Periods ......... Page 7
Section 4.4 Financial Institution Discount Rates .................. Page 7
Section 4.5 Suspension of the LIBO Rate ........................... Page 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES ................................................ Page 8
Section 5.1 Representations and Warranties of Seller Parties ...... Page 8
Section 5.2 Financial Institution Representations and Warranties .. Page 12
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ARTICLE VI
CONDITIONS OF PURCHASES Page 13
Section 6.1 Conditions Precedent to Initial Purchase .............. Page 13
Section 6.2 Conditions Precedent to All Purchases and Reinvestments Page 13
ARTICLE VII
COVENANTS ..................................................................... Page 14
Section 7.1 Affirmative Covenants of the Seller Parties ........... Page 14
Section 7.2 Negative Covenants of the Seller Parties .............. Page 22
ARTICLE VIII
ADMINISTRATION AND COLLECTION ................................................. Page 23
Section 8.1 Designation of Servicer ............................... Page 23
Section 8.2 Duties of Servicer .................................... Page 24
Section 8.3 Collection Notices .................................... Page 26
Section 8.4 Responsibilities of Seller ............................ Page 26
Section 8.5 Reports ............................................... Page 26
Section 8.6 Servicing Fees ........................................ Page 26
ARTICLE IX
AMORTIZATION EVENTS ........................................................... Page 27
Section 9.1 Amortization Events ................................... Page 27
Section 9.2 Remedies .............................................. Page 29
INDEMNIFICATION .................................................................... Page 29
Section 10.1 Indemnities by the Seller Parties ..................... Page 29
Section 10.2 Increased Cost and Reduced Return ..................... Page 32
Section 10.3 Other Costs and Expenses .............................. Page 33
ARTICLE XI
THE AGENT ..................................................................... Page 33
Section 11.1 Authorization and Action .............................. Page 33
Section 11.2 Delegation of Duties .................................. Page 34
Section 11.3 Exculpatory Provisions ................................ Page 34
Section 11.4 Reliance by Agent ..................................... Page 34
Section 11.5 Non-Reliance on Agent and Other Purchasers ............ Page 35
Section 11.6 Reimbursement and Indemnification ..................... Page 35
Section 11.7 Agent in its Individual Capacity ...................... Page 35
Section 11.8 Successor Agent ....................................... Page 35
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ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS ................................................... Page 36
Section 12.1 Assignments ........................................... Page 36
Section 12.2 Participations ........................................ Page 37
ARTICLE XIII
LIQUIDITY FACILITY ............................................................ Page 37
Section 13.1 Transfer to Financial Institutions .................... Page 37
Section 13.2 Transfer Price Reduction Yield ........................ Page 37
Section 13.3 Payments to the Company ............................... Page 38
Section 13.4 Limitation on Commitment to Purchase from the Company . Page 38
Section 13.5 Defaulting Financial Institutions ..................... Page 38
ARTICLE XIV
MISCELLANEOUS ................................................................. Page 39
Section 14.1 Waivers and Amendments ................................ Page 39
Section 14.2 Notices ............................................... Page 40
Section 14.3 Ratable Payments ...................................... Page 40
Section 14.4 Protection of Ownership Interests of the Purchasers ... Page 41
Section 14.5 Confidentiality ....................................... Page 41
Section 14.6 Bankruptcy Petition ................................... Page 42
Section 14.7 Limitation of Liability ............................... Page 42
Section 14.8 Choice of Law ......................................... Page 42
Section 14.9 Consent to Jurisdiction ............................... Page 42
Section 14.10 Waiver of Jury Trial .................................. Page 43
Section 14.11 Integration; Binding Effect; Survival of Terms ........ Page 43
Section 14.12 Counterparts; Severability; Section References ........ Page 43
Section 14.13 Bank One Roles ........................................ Page 44
Section 14.14 Characterization ...................................... Page 44
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EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II-A - Form of Purchase Notice
Exhibit II-B - Form of Interim Report
Exhibit III - Places of Business of the Seller Parties; Locations
of Records; Federal Employer Identification Number(s)
Exhibit IV - Form of Hedge Account Agreement
Exhibit V - Form of Compliance Certificate
Exhibit VI - Form of Collection Account Agreement
Exhibit VII - Form of Assignment Agreement
Exhibit VIII - Credit and Collection Policy
Exhibit IX - Form of Contract(s)
Exhibit X - Form of Monthly Report
Exhibit XI - Form of Performance Undertaking
Schedule A - Commitment of Financial Institutions
Schedule B - Closing Documents
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RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement is dated as of August 31, 2000
among Golden Eagle Receivables LLC, a Delaware limited liability company
("Seller"), Golden Eagle Leasing, Inc., an Arizona corporation ("GELI"), as
initial Servicer (the Servicer together with the Seller, the "Seller Parties"
and each a "Seller Party"), the funding entities listed on Schedule A to this
Agreement (together with their respective successors and assigns hereunder, the
"Financial Institutions"), Falcon Asset Securitization Corporation (the
"Company") and Bank One, NA (Main Office Chicago), as agent for the Purchasers
hereunder or any successor agent hereunder (together with its successors and
assigns hereunder, the "Agent"). Unless defined elsewhere herein, capitalized
terms used in this Agreement shall have the meanings assigned to such terms in
Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the
Purchasers from time to time.
The Company may, in its absolute and sole discretion, purchase
Purchaser Interests from Seller from time to time.
In the event that the Company declines to make any purchase, the
Financial Institutions shall, at the request of Seller, purchase Purchaser
Interests from time to time. In addition, the Financial Institutions have agreed
to provide a liquidity facility to the Company in accordance with the terms
hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to
act as Agent on behalf of the Company and the Financial Institutions in
accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility. Upon the terms and
subject to the conditions hereof, Seller may, at its option, sell and assign
Purchaser Interests to the Agent for the benefit of one or more of the
Purchasers. In accordance with the terms and conditions set forth herein, the
Company may, at its option, instruct the Agent to purchase on behalf of the
Company, or if the Company shall decline to purchase, the Agent shall purchase,
on behalf of the Financial Institutions, Purchaser Interests from time to time
in an aggregate amount not to exceed at such time the lesser of (i) the Purchase
Limit and (ii) the aggregate amount of the Commitments during the period from
the date hereof to but not including the Facility Termination Date. Seller
hereby assigns, transfers and conveys to the Agent for the benefit of the
Company or the Financial Institutions, as applicable, and the Agent hereby
acquires, all of Seller's now
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owned and existing and hereafter arising or acquired right, title and interest
in and to the Purchaser Interests.
Section 1.2 Increases. Seller shall provide the Agent
with at least three Business Days' prior notice in a form set forth as Exhibit
II-A hereto of each Incremental Purchase (a "Purchase Notice"). For each
Incremental Purchase which is to be made on a date other than a Settlement Date,
Seller shall also provide the Agent with an interim monthly report (an "Interim
Report") in the form set forth as Exhibit II-B hereto. Each Purchase Notice
shall be subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000 and which shall be an integral multiple of $100,000) and
date of purchase and, in the case of an Incremental Purchase to be funded by the
Financial Institutions, the requested Discount Rate and Tranche Period. Seller
may submit to the Agent no more than four Purchase Notices during any Accrual
Period. Following receipt of a Purchase Notice, the Agent will determine whether
the Company agrees to make the purchase. If the Company declines to make a
proposed purchase, Seller may cancel the Purchase Notice or, in the absence of
such a cancellation, the Incremental Purchase of the Purchaser Interest will be
made by the Financial Institutions. On the date of each Incremental Purchase,
upon satisfaction of the applicable conditions precedent set forth in Article
VI, the Company or the Financial Institutions, as applicable, shall deposit to
Account No. ▇▇▇-▇▇▇-▇▇▇▇ at Fleet National Bank, in immediately available funds,
no later than 12:00 noon (Chicago time), an amount equal to (i) in the case of
the Company, the aggregate Purchase Price of the Purchaser Interests the Company
is then purchasing or (ii) in the case of a Financial Institution, such
Financial Institution's Pro Rata Share of the aggregate Purchase Price of the
Purchaser Interests the Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent
with at least two Business Days' prior written notice of any reduction of
Aggregate Capital requested by Seller (a "Reduction Notice"). Such Reduction
Notice shall designate (i) the date (the "Proposed Reduction Date") upon which
any such reduction of Aggregate Capital shall occur, and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of the Company and the Financial Institutions in accordance with the
amount of Capital (if any) owing to the Company, on the one hand, and the amount
of Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the "Aggregate Reduction"). Only
one (1) Reduction Notice shall be outstanding at any time. Notwithstanding the
foregoing, the Aggregate Reduction will not be made if the Amortization Date
shall have occurred for any reason on or prior to the Proposed Reduction Date.
Section 1.4 Payment Requirements. All amounts to be paid
or deposited by any Seller Party pursuant to any provision of this Agreement
shall be paid or deposited in accordance with the terms hereof no later than
11:00 a.m. (Chicago time) on the day when due in immediately available funds,
and if not received before 11:00 a.m. (Chicago time) shall be deemed to be
received on the next succeeding Business Day. If such amounts are payable to a
Purchaser they shall be paid to the Agent, for the account of such Purchaser, at
1 Bank ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Agent.
Upon notice to Seller, the Agent may offset the amount owed by it to Seller in
connection with an
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Incremental Purchase for all amounts due and payable hereunder. All computations
of Yield, per annum fees calculated as part of any Allocable CP Costs, per annum
fees hereunder and under the Fee Letter shall be made on the basis of a year of
360 days for the actual number of days elapsed. If any amount hereunder shall be
payable on a day which is not a Business Day, such amount shall be payable on
the next succeeding Business Day.
Section 1.5 Schedule of Aggregate Receivables. The
Servicer shall furnish to the Agent at any time upon request a list of all
Receivables then subject to this Agreement (the "Schedule of Aggregate
Receivables"), together with a reconciliation of such list to the previous
Schedule of Aggregate Receivables and to each of the Seller's reacquisitions of
Released Overdue Receivables occurring before such request indicating the
removal of such Released Overdue Receivables. Upon request, the Servicer shall
furnish a copy of any such list to the Seller. The Agent and the Seller shall
hold the Schedule of Aggregate Receivables for examination by interested parties
during normal business hours at their respective offices located at the
addresses set forth on the signature pages hereto.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on
recourse contained in this Agreement, Seller shall immediately pay to the Agent
when due, for the account of the relevant Purchaser or Purchasers on a full
recourse basis, (i) such fees as set forth in the Fee Letter (which fees shall
be sufficient to pay all fees owing to the Financial Institutions), (ii) all
Allocable CP Costs, (iii) all amounts payable as Yield, (iv) all amounts payable
as Deemed Collections (which shall be immediately due and payable by Seller and
applied to reduce outstanding Aggregate Capital hereunder in accordance with
Sections 2.2 and 2.3 hereof), (v) all amounts payable pursuant to Article X, if
any, (vi) all Third-Party Servicer Costs, (vii) all Broken Funding Costs, (viii)
all Hedging Costs incurred by the Agent or the Purchaser, (ix) any Hedge Account
Required Deposit, and (x) all Default Fees (collectively, the "Obligations"). If
any Seller Party fails to pay any of the Obligations when due, such Seller Party
agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any ▇▇▇▇ ▇▇▇▇▇▇
receives any Collections or is deemed to receive any Collections, Seller shall
immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment, such Collections or Deemed Collections shall be held in
trust by Seller for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to
the Amortization Date, any Collections and/or Deemed Collections received by the
Servicer (after the initial purchase of a Purchaser Interest hereunder) shall be
deposited into the Collection Account within one Business Day. At any time any
Collections are deposited into the Collection Account prior to the Amortization
Date, the Seller hereby requests and the Purchasers hereby agree to make,
simultaneously with such deposit, a reinvestment (each
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a "Reinvestment") with that portion of each and every Collection received by the
Servicer that is part of any Purchaser Interest, such that after giving effect
to such Reinvestment, the amount of Capital of such Purchaser Interest
immediately after such deposit and corresponding Reinvestment shall be equal to
the amount of Capital immediately prior to such deposit (except that no such
Reinvestment shall be made if and to the extent that such Reinvestment would
cause the Purchaser Interest to exceed 100%). The Servicer shall instruct the
Collection Account Bank to remit to the Servicer all of such reinvested
Collections which shall be set aside and held in trust by the Servicer for the
payment of any accrued and unpaid Aggregate Unpaids; provided, however, prior to
an Amortization Event, the Servicer shall have no obligation to physically
segregate such collections and may use such funds for general corporate
purposes. On each Settlement Date prior to the occurrence of the Amortization
Date, the Servicer shall remit to the Agent's account and shall apply such
portion of the amounts set aside during the preceding Settlement Period (along
with any Hedge Receipts received during such Settlement Period) as shall be
necessary to reduce accrued and unpaid Allocable CP Costs, Yield and other
Obligations to zero. If such Allocable CP Costs, Yield and other Obligations
shall be reduced to zero, any additional Collections received by the Servicer
and Hedge Receipts shall (i) if applicable, be remitted to the Agent's account
no later than 11:00 a.m. (Chicago time) to the extent required to fund any
Aggregate Reduction on such Settlement Date and (ii) thereafter be remitted from
the Servicer to Seller on such Settlement Date.
Section 2.3 Collections Following Amortization. On the
Amortization Date and on each day thereafter, the Servicer shall direct the
Operating Account Bank to deposit into the Collection Account, for the holder of
each Purchaser Interest, all Collections received on such day. On and after the
Amortization Date, the Servicer shall, at any time upon the request from time to
time by (or pursuant to standing instructions from) the Agent (i) direct the
Collection Account Bank to remit to the Agent's account the amounts set aside
pursuant to the preceding sentence, and (ii) apply such amounts, together with
any Hedge Receipts, to reduce the Capital associated with each such Purchaser
Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall
be insufficient funds on deposit for the Servicer to distribute funds in payment
in full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as
applicable), the Servicer shall distribute funds:
first, to the payment of any sales taxes actually collected
and deposited in the Collection Account with respect to the Receivables,
second, to the payment of Third-Party Servicing Costs,
third, to the reimbursement of the Agent's costs of collection
and enforcement of this Agreement,
fourth, (if applicable) in reduction of Capital of the
Purchaser Interests,
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fifth, for the ratable payment of all other unpaid
Obligations, provided that to the extent such Obligations relate to the payment
of Servicer costs and expenses when the Seller or one of its Affiliates is
acting as the Servicer, such costs and expenses will not be paid until after the
payment in full of all other Obligations, and
sixth, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to the Seller.
Collections applied to the payment of Aggregate Unpaids shall
be distributed in accordance with the aforementioned provisions, and, giving
effect to each of the priorities set forth in this Section 2.4, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Recission. No payment of any of the
Aggregate Unpaids shall be considered paid or applied hereunder to the extent
that, at any time, all or any portion of such payment or application is
rescinded by application of law or judicial authority, or must otherwise be
returned or refunded for any reason. Seller shall remain obligated for the
amount of any payment or application relating to such Aggregate Unpaids so
rescinded, returned or refunded, and shall promptly pay to the Agent (for
application to the Person or Persons who suffered such recission, return or
refund) the full amount thereof, plus the Default Fee from the date of any such
recission, return or refund.
Section 2.6 Purchaser Interests. Seller shall ensure
that the Purchaser Interests of the Purchasers shall at no time exceed in the
aggregate 100%. If the aggregate of the Purchaser Interests of the Purchasers
exceeds 100%, Seller shall, within one (1) Business Day, pay to the Agent an
amount to be applied to reduce the Aggregate Capital of the Purchaser Interests
(as allocated by the Agent), such that after giving effect to such payment the
aggregate of the Purchaser Interests equals or is less than 100%.
Section 2.7 Repurchases and Releases of Receivables.
(a) Clean Up Call. In addition to Seller's
rights pursuant to Section 1.3, Seller shall have the right (after providing at
least two Business Days' written notice to the Agent), at any time following the
reduction of the Aggregate Capital to a level that is less than 10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Purchaser Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.
(b) Releases of Delinquent and Charged-Off
Receivables. Upon not less than two Business Days' written notice to the Agent,
the Seller shall also be entitled at any time to reacquire from the Agent all of
the interests in any Receivable which, immediately prior to such repurchase,
constitutes a part of the Purchaser Interest and which is a Delinquent (61)
Receivable or a Charged-Off Receivable (a "Released Overdue Receivable");
provided, that no such Receivable may be so reacquired unless each of
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the conditions specified in Section 6.2 for an Incremental Purchase or a
Reinvestment shall be satisfied. Upon satisfaction of such conditions, the
Agent's interest in such Released Overdue Receivables shall be automatically and
without further action released by the Agent, and no payment shall be due to
Agent in connection with such release. Such release shall be without
representation, warranty or recourse of any kind by, on the part of, or against
any Purchaser or the Agent.
(c) Repurchases in Connection with Takeout
Financing. Upon not less than ten Business Days' notice to the Agent, the Seller
shall be entitled to repurchase all (but not less than all) of the Receivables
which immediately prior to such repurchase constitute a part of the Purchaser
Interest in connection with the occurrence of a Takeout Financing. The aggregate
purchase price in respect of such repurchase shall be an amount equal to the
Aggregate Unpaids immediately prior to such repurchase, and such purchase price
shall be payable to the Agent by wire transfer of immediately available funds.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against any Purchaser or the Agent.
ARTICLE III
CONDUIT FUNDING
Section 3.1 Allocable CP Costs. Seller shall pay
Allocable CP Costs with respect to the Capital associated with each Purchaser
Interest of the Company for each day that any Capital in respect of such
Purchaser Interest is outstanding. Each Purchaser Interest funded substantially
with Pooled Commercial Paper will accrue Allocable CP Costs each day on a pro
rata basis, based upon the percentage share the Capital in respect of such
Purchaser Interest represents in relation to all assets held by the Company and
funded substantially with Pooled Commercial Paper.
Section 3.2 Allocable CP Costs Payments. On each
Settlement Date, Seller shall pay to the Agent (for the benefit of the Company)
an aggregate amount equal to all accrued and unpaid CP Costs in respect of the
Capital associated with all Purchaser Interests of the Company ("Allocable CP
Costs") for the immediately preceding Accrual Period in accordance with Article
II.
Section 3.3 Calculation of Allocable CP Costs. On the
third Business Day immediately preceding each Settlement Date, the Company shall
calculate the aggregate amount of Allocable CP Costs for the applicable Accrual
Period and shall notify the Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each
Purchaser Interest of the Financial Institutions shall accrue Yield for each day
during its Tranche Period at either the LIBO Rate or the Base Rate in accordance
with the terms and conditions hereof. Until Seller gives notice to the Agent of
another
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Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Base Rate. If the Financial
Institutions acquire by assignment from the Company any Purchaser Interest
pursuant to Article XIII, each Purchaser Interest so assigned shall each be
deemed to have a new Tranche Period commencing on the date of any such
assignment.
Section 4.2 Yield Payments. On the Settlement Date for
each Purchaser Interest of the Financial Institutions, Seller shall pay to the
Agent (for the benefit of the Financial Institutions) an aggregate amount equal
to the accrued and unpaid Yield for the entire Tranche Period of each such
Purchaser Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche
Periods. (a) With consultation from (and approval by) the Agent, Seller shall
from time to time request Tranche Periods for the Purchaser Interests of the
Financial Institutions, provided that, at any time the Financial Institutions
shall have a Purchaser Interest, Seller shall always request Tranche Periods
such that at least one Tranche Period shall end on each Settlement Date.
(b) Seller or the Agent, upon notice to and
consent by the other received at least three (3) Business Days prior to the end
of a Tranche Period (the "Terminating Tranche") for any Purchaser Interest, may,
effective on the last day of the Terminating Tranche: (i) divide any such
Purchaser Interest into multiple Purchaser Interests, (ii) combine any such
Purchaser Interest with one or more other Purchaser Interests that have a
Terminating Tranche ending on the same day as such Terminating Tranche or (iii)
combine any such Purchaser Interest with a new Purchaser Interests to be
purchased on the day, such Terminating Tranche ends, provided, that in no event
may a Purchaser Interest of the Company be combined with a Purchaser Interest of
the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller
may select the LIBO Rate or the Base Rate for each Purchaser Interest of the
Financial Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least
three (3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Discount Rate and
(ii) at least one (1) Business Day prior to the expiration of any Terminating
Tranche with respect to which the Base Rate is being requested as a new Discount
Rate, give the Agent irrevocable notice of the new Discount Rate for the
Purchaser Interest associated with such Terminating Tranche. Until Seller gives
notice to the Agent of another Discount Rate, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Base Rate.
Section 4.5 Suspension of the LIBO Rate. (a) If any
Financial Institution notifies the Agent that it has determined that funding its
Pro Rata Share of the Purchaser Interests of the Financial Institutions at a
LIBO Rate would violate any applicable law, rule, regulation, or directive of
any governmental or regulatory authority, whether or not having the force of
law, or that (i) deposits of a type and maturity appropriate to match fund its
Purchaser Interests at such LIBO Rate are not available or (ii)
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such LIBO Rate does not accurately reflect the cost of acquiring or maintaining
a Purchaser Interest at such LIBO Rate, then the Agent shall suspend the
availability of such LIBO Rate and require Seller to select the Base Rate for
any Purchaser Interest accruing Yield at such LIBO Rate.
(b) If less than all of the Financial
Institutions give a notice to the Agent pursuant to Section 4.5(a), each
Financial Institution which gave such a notice shall be obliged, at the request
of Seller, the Company or the Agent, to assign all of its rights and obligations
hereunder to (i) another Financial Institution or (ii) another funding entity
nominated by Seller or the Agent that is acceptable to the Company and willing
to participate in this Agreement through the Liquidity Termination Date in the
place of such notifying Financial Institution; provided that (i) the notifying
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such notifying Financial Institution's Pro Rata
Share of the Capital and Yield owing to all of the Financial Institutions and
all accrued but unpaid fees and other costs and expenses payable in respect of
its Pro Rata Share of the Purchaser Interests of the Financial Institutions, and
(ii) the replacement Financial Institution otherwise satisfies the requirements
of Section 12.1(b).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Seller
Parties. Each Seller Party hereby represents and warrants to the Agent and the
Purchasers, as to itself, as of the date hereof and as of the date of each
Incremental Purchase and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller
Party is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, and is duly qualified to do
business and is in good standing as a foreign corporation, and has and holds all
corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is conducted.
(b) Power and Authority; Due Authorization,
Execution and Delivery. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder and, in the case of
Seller, Seller's use of the proceeds of purchases made hereunder, are within its
corporate powers and authority and have been duly authorized by all necessary
corporate action on its part. This Agreement and each other Transaction Document
to which such Seller Party is a party has been duly executed and delivered by
such Seller Party.
(c) No Conflict. The execution and delivery by
such Seller Party of this Agreement and each other Transaction Document to which
it is a party, and the performance of its obligations hereunder and thereunder
do not contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any
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agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Seller Party or
its Subsidiaries (except as created hereunder); and no transaction contemplated
hereby requires compliance by such Seller Party with any bulk sales act or
similar law.
(d) Governmental Authorization. Other than the
filing of the financing statements required hereunder, no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution and delivery by
such Seller Party of this Agreement and each other Transaction Document to which
it is a party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits.
(A) There are no actions, suits
or proceedings pending, or to the best of Seller's
knowledge, threatened, against or affecting Seller,
or any of its properties, in or before any court,
arbitrator or other body. Seller is not in default
with respect to any order of any court, arbitrator or
governmental body.
(B) There are no actions, suits
or proceedings pending, or to the best of GELI's
knowledge, threatened, against or affecting GELI, or
any of its properties, in or before any court,
arbitrator or other body that could reasonably be
expected to have a Material Adverse Effect. GELI is
not in default with respect to any order of any
court, arbitrator or governmental body that could
reasonably be expected to have a Material Adverse
Effect.
(f) Binding Effect. This Agreement and each
other Transaction Document to which such Seller Party is a party constitute the
legal, valid and binding obligations of such Seller Party enforceable against
such Seller Party in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information
heretofore furnished by such Seller Party or any of its Affiliates to the Agent
or the Purchasers for purposes of or in connection with this Agreement, any of
the other Transaction Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by such Seller Party or
any of its Affiliates to the Agent or the Purchasers will be, true and accurate
in every material respect on the date such information is stated
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or certified and does not and will not contain any material misstatement of fact
or omit to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(h) Use of Proceeds. No proceeds of any purchase
hereunder will be used (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Good Title. Immediately prior to each
purchase hereunder, Seller shall be the legal and beneficial owner of the
Receivables and Related Security with respect thereto, free and clear of any
Adverse Claim, except as created by the Transaction Documents. There have been
duly filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Seller's ownership interest in each Receivable, its Collections and
the Related Security.
(j) Perfection. This Agreement, together with
the filing of the financing statements contemplated hereby, is effective to, and
shall, upon each purchase hereunder, transfer to the Agent for the benefit of
the relevant Purchaser or Purchasers (and the Agent for the benefit of such
Purchaser or Purchasers shall acquire from Seller) a valid and perfected first
priority undivided percentage ownership or security interest in each Receivable
existing or hereafter arising and in the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections. All actions have been taken that are
necessary to ensure that the Originator shall obtain and maintain a perfected
security interest, free and clear of any Adverse Claims, in all Related
Equipment (other than any Related Equipment Securing a Contract (such Contract,
an "Excepted Contract") under which the original receivable balance was less
than (i) $20,000 for any Wireless Contract or (ii) $8,000 for any POS Contract).
(k) Places of Business. The principal places of
business and chief executive office of such Seller Party and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit III
or such other locations of which the Agent has been notified in accordance with
Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has
been taken and completed. Seller's Federal Employer Identification Number is
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements
set forth in Section 7.1(k) and Section 8.2 have at all times been satisfied and
duly performed. The names and addresses of each Receiving Bank, together with
the account numbers of the Receiving Accounts of Seller at each Receiving Bank
and the post office box number of each Lock-Box, are listed on Exhibit III to
the Sale Agreement. The Collection Account shall at all times be subject to a
Collection Account Agreement in the form of
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Exhibit VI. Seller has not granted any Person, other than the Agent as
contemplated by this Agreement, dominion and control of any Receiving Account,
or the right to take dominion and control of any such Receiving Account at a
future time or upon the occurrence of a future event.
(m) Material Adverse Effect. Since December 31,
1999, no event has occurred that would have a Material Adverse Effect.
(n) Names. In the past five (5) years, no Seller
Party has used any corporate names, trade names or assumed names other than (i)
the name in which it has executed this Agreement and (ii) in the case of GELI,
"Hypercom Financial, Inc."
(o) Ownership of Seller. GELI and the Special
Member are the sole members of Seller, and each holds its membership interest
free and clear of any Adverse Claim.
(p) Not a Holding Company or an Investment
Company. Such Seller Party is not a "holding company" or a "subsidiary holding
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or any successor statute. Such Seller Party is
not an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or any successor statute.
(q) Compliance with Law.
(A) Seller has complied in all
respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject.
(B) Each Receivable, together
with the Contract related thereto, does not
contravene any laws, rules or regulations applicable
thereto (including 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 no part
of such Contract is in violation of any such law,
rule or regulation.
(C) GELI has complied in all
respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, except
to the extent any failure to comply would not have a
Material Adverse Effect.
(r) Compliance with Credit and Collection
Policy. Such Seller Party has complied in all material respects with the Credit
and Collection Policy with regard to each Receivable and
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the related Contract, and has not made any change to such Credit and Collection
Policy, except such material change as to which the Agent has been notified in
accordance with Section 7.1(a)(vii).
(s) Payments to Originator. With respect to each
Receivable transferred to Seller under the Receivables Sale Agreement, Seller
has given reasonably equivalent value to the Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by the Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract
with respect to each Receivable is effective to create, and has created, a
legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and accrued Finance
Charges thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable
included in the Net Receivables Balance as an Eligible Receivable on the date of
its purchase under the Receivables Sale Agreement was an Eligible Receivable on
such purchase date.
(v) Discounted Receivables Balance. Immediately
after giving effect to each purchase hereunder, the Discounted Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Loss Reserves.
Section 5.2 Financial Institution Representations and
Warranties. Each Financial Institution hereby represents and warrants to the
Agent and the Company that:
(a) Existence and Power. Such Financial
Institution is a corporation or a banking association duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate power to perform its
obligations hereunder.
(b) No Conflict. The execution and delivery by
such Financial Institution of this Agreement and the performance of its
obligations hereunder are within its corporate powers, have been duly authorized
by all necessary corporate action, do not contravene or violate (i) its
certificate or articles of incorporation or association or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its property
is bound, or (iv) any order, writ, judgment, award, injunction or decree binding
on or affecting it or its property, and do not result in the creation or
imposition of any Adverse Claim on its assets. This Agreement has been duly
authorized, executed and delivered by such Financial Institution.
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(c) Governmental Authorization. No authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due execution and
delivery by such Financial Institution of this Agreement and the performance of
its obligations hereunder.
(d) Binding Effect. This Agreement constitutes
the legal, valid and binding obligation of such Financial Institution
enforceable against such Financial Institution in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Purchase.
The initial purchase of a Purchaser Interest under this Agreement is subject to
the conditions precedent that (a) the Agent shall have received on or before the
date of such purchase those documents listed on Schedule B and (b) the Agent
shall have received all fees and expenses required to be paid on such date
pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments. Each purchase of a Purchaser Interest (other than pursuant to
Section 13.1) and each Reinvestment shall be subject to the further conditions
precedent that, after taking such purchase or Reinvestment into account:
(a) in the case of each such purchase or
Reinvestment, the Servicer shall have delivered to the Agent on or prior to the
date of such purchase, in form and substance satisfactory to the Agent, all
Monthly Reports and Interim Reports as and when due under Section 8.5 and all
Interim Reports as and when due under Section 1.2;
(b) the Facility Termination Date shall not have
occurred;
(c) no Amortization Event or Potential
Amortization Event shall have occurred and be continuing;
(d) the Agent shall have received such other
approvals, opinions or documents as it may reasonably request;
(e) the Aggregate Capital does not exceed the
Purchase Limit and the aggregate Purchaser Interests do not exceed 100%; and
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(f) either (x) the amount of funds in the Hedge
Account on such date shall equal or exceed the Hedge Account Required Balance as
of such date or (y) Seller shall have arranged for Interest Rate ▇▇▇▇▇▇ in
respect of the Receivables which are satisfactory in form and substance to the
Agent.
With respect to each Incremental Purchase, as a condition to such Incremental
Purchase, on the date of such purchase the Seller and GELI represent and warrant
that the representations and warranties set forth in Section 5.1 are true and
correct, as such representations and warranties apply to either Seller or GELI,
on and as of the date of such Incremental Purchase (and after giving effect
thereto) as though made on and as of such date.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement terminates in accordance with its terms, each Seller
Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will
maintain, for itself and each of its Subsidiaries, a system of
accounting established and administered in accordance with GAAP, and
furnish to the Agent:
(i) Annual Reporting. Within
90 days after the close of each of its respective fiscal years, (A)
unaudited financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash
flows) for GELI and its consolidated subsidiaries for such fiscal year
and (B) unaudited financial statements (which shall include balance
sheets and statements of income and retained earnings) for Seller for
such fiscal year.
(ii) Quarterly Reporting. Within
45 days after the close of the first three (3) quarterly periods of
each of its respective fiscal years, balance sheets of GELI and its
consolidated subsidiaries as of the close of each such period and
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statements of income and retained earnings and a statement of cash
flows for GELI and its consolidated subsidiaries for the period from
the beginning of such fiscal year to the end of such quarter, all
certified by its respective chief financial officer or another
Authorized Officer.
(iii) Compliance Certificate.
Together with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit V signed by an
Authorized Officer of GELI and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and
Reports. Promptly upon the furnishing thereof to the shareholders of
any Seller Party 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 any Seller
Party or any of its Subsidiaries files with the Securities and Exchange
Commission.
(vi) Copies of Notices. Promptly
upon its receipt of any notice, request for consent, financial
statements, certification, report or other communication under or in
connection with any Transaction Document from any Person other than the
Agent or the Company, copies of the same.
(vii) Change in Credit and
Collection Policy. At least thirty (30) days prior to the effectiveness
of any material change in or amendment to the Credit and Collection
Policy, a copy of the Credit and Collection Policy then in effect and a
notice (A) indicating such change or amendment, and (B) if such
proposed change or amendment would be reasonably likely to adversely
affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables, requesting the Agent's
consent thereto.
(viii) Other Information.
Promptly, from time to time, such other information, documents, records
or reports relating to the Receivables or the condition or operations,
financial or otherwise, of such Seller Party as the Agent may from time
to time reasonably request in order to protect the interests of the
Agent and the Purchasers under or as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the
Agent in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
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(i) Amortization Events or
Potential Amortization Events. The occurrence of each Amortization
Event and each Potential Amortization Event, by a statement of an
Authorized Officer of such Seller Party.
(ii) Judgments and Proceedings.
(A) The entry of any judgment or decree against
the Seller or any Subsidiary of any Seller Party; or the institution of
any litigation, arbitration proceeding or governmental proceeding
against such Seller Party or any Subsidiary of any Seller Party.
(B) The entry of any judgment or decree against
the Servicer or any Subsidiary of the Servicer; or the institution of
any litigation, arbitration proceeding or governmental proceeding
against the Servicer if the aggregate amount of all judgments and
decrees then outstanding against the Servicer exceeds $250,000.
(iii) Material Adverse Effect.
The occurrence of any event or condition that has, or could reasonably
be expected to have, a Material Adverse Effect.
(iv) Amortization Date. The
occurrence of the "Termination Date" under and as defined in the
Receivables Sale Agreement.
(v) Defaults Under Other
Agreements. The occurrence of a default or an event of default under
any other financing arrangement pursuant to which any Originator Party
is a debtor or an obligor.
(vi) Downgrade of Originator or
Provider. Any downgrade in any rating that may be assigned to any
Indebtedness of GELI or the Provider by Standard and Poor's Ratings
Services or by ▇▇▇▇▇'▇ Investors Service, Inc., setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of
Corporate Existence. Such Seller Party will comply in all respects with all
applicable laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject. Such Seller Party will preserve
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted.
(d) Audits. Such Seller Party will furnish to
the Agent from time to time such information with respect to it and the
Receivables as the Agent may reasonably request. Such Seller Party
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will, from time to time during regular business hours as requested by the Agent
upon reasonable notice and at the sole cost of such Seller Party, permit the
Agent, or its agents or representatives, (i) to examine and make copies of and
abstracts from all Records in the possession or under the control of such Person
relating to the Receivables and the Related Security, including the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of the
Transaction Documents or any Person's performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will maintain
and implement administrative and operating procedures (including 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 records
adequate to permit the immediate identification of each new Receivable
and all Collections of and adjustments to each existing Receivable).
The Servicer will give the Agent notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(ii) Such Seller Party will (A)
on or prior to the date hereof, ▇▇▇▇ its master data processing records
and other books and records relating to the Purchaser Interests with a
legend, acceptable to the Agent, describing the Purchaser Interests and
(B) upon the occurrence and during the continuation of an Amortization
Event or Potential Amortization Event (x) ▇▇▇▇ each Contract with a
legend describing the Purchaser Interests and (y) deliver to the Agent
all Contracts (including all multiple originals of any such Contract)
relating to the Receivables.
(f) Compliance with Contracts and Credit and
Collection Policy. Such Seller Party will timely and fully (i) perform and
comply with all provisions, covenants and other promises required to be observed
by it under the Contracts related to the Receivables, and (ii) comply in all
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract.
(g) Performance and Enforcement of Receivables
Sale Agreement. Seller shall, and shall require each Originator Party to,
perform each of their respective obligations and undertakings under and pursuant
to the Receivables Sale Agreement, shall purchase Receivables thereunder in
strict compliance with the terms thereof and shall vigorously enforce the rights
and remedies accorded to Seller under the Receivables Sale Agreement. Seller
shall take all actions to perfect and enforce its rights and interests (and the
rights and interests of the Agent and the Purchasers as assignees of Seller)
under the Receivables Sale Agreement as the Agent may from time to time
reasonably request, including making
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claims to which it may be entitled under any indemnity, reimbursement or similar
provision contained in the Receivables Sale Agreement.
(h) Ownership. Seller shall take all necessary
action to (i) vest legal and equitable title to the Receivables, the Related
Security and the Collections purchased under the Receivables Sale Agreement
irrevocably in Seller, free and clear of any Adverse Claims other than Adverse
Claims in favor of the Agent and the Purchasers (including the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Seller's interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of Seller
therein as the Agent may reasonably request), and (ii) establish and maintain,
in favor of the Agent, for the benefit of the Purchasers, a valid and perfected
first priority undivided percentage ownership interest (and/or a valid and
perfected first priority security interest) in all Receivables, Related Security
and Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Agent for the benefit
of the Purchasers (including the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent's (for the benefit of the
Purchasers) interest in such Receivables, Related Security and Collections and
such other action to perfect, protect or more fully evidence the interest of the
Agent for the benefit of the Purchasers as the Agent may reasonably request).
Seller shall take all action necessary to ensure that the Originator shall
obtain and maintain a perfected security interest, free and clear of any Adverse
Claims, in all Related Equipment (other than any Related Equipment securing an
Excepted Contract).
(i) Purchasers' Reliance. Seller acknowledges
that the Purchasers are entering into the transactions contemplated by this
Agreement in reliance upon Seller's identity as a legal entity that is separate
from the Originator. Therefore, from and after the date of execution and
delivery of this Agreement, Seller shall take all reasonable steps, including
all steps that the Agent or any Purchaser may from time to time reasonably
request, to maintain Seller's identity as a separate legal entity and to make it
manifest to third parties that Seller is an entity with assets and liabilities
distinct from those of each Originator Party and any Affiliates thereof and not
just a division of any Originator Party. Without limiting the generality of the
foregoing and in addition to the other covenants set forth herein, Seller shall:
(A) conduct its own business in its own name and
require that all full-time employees of Seller, if any, identify
themselves as such and not as employees of any Originator Party
(including by means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);
(B) compensate all employees, consultants and
agents directly, from Seller's own funds, for services provided to
Seller by such employees, consultants and agents and, to the extent any
employee, consultant or agent of Seller is also an employee, consultant
or agent of Originator or any Affiliate thereof, allocate the
compensation of such employee, consultant or agent between Seller and
Originator or such Affiliate, as
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applicable, on a basis that reflects the services rendered to Seller
and Originator or such Affiliate, as applicable;
(C) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in the offices
of any Originator Party, Seller shall lease such office at a fair
market rent;
(D) have a separate telephone number, which will
be answered only in its name and separate stationery, invoices and
checks in its own name;
(E) conduct all transactions with Originator and
the Servicer strictly on an arm's-length basis, allocate all overhead
expenses (including, telephone and other utility charges) for items
shared between Seller and Originator on the basis of actual use to the
extent practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use;
(F) at all times maintain a Special Member;
(G) observe all company formalities as a
distinct entity, and ensure that all company actions relating to (A)
the selection, maintenance or replacement of the Special Member, (B)
the dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its members (including the Special
Member);
(H) maintain Seller's books and records separate
from those of Originator and any Affiliate thereof and otherwise
readily identifiable as its own assets rather than assets of any
Originator Party;
(I) prepare its financial statements separately
from those of any Originator Party and insure that any consolidated
financial statements of any Originator Party or any Affiliate thereof
that include Seller have notes clearly stating that Seller is a
separate corporate entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of Seller;
(J) except as herein specifically otherwise
provided, maintain the funds or other assets of Seller separate from,
and not commingled with, those of each Originator Party and only
maintain bank accounts or other depository accounts to which the Seller
alone is the account party, into which the Seller alone makes deposits
and from which the Seller alone (or the Servicer or the Agent
hereunder) has the power to make withdrawals;
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(K) pay all of Seller's operating expenses from
the Seller's own assets (except for certain payments by Originator
Parties or other Persons pursuant to allocation arrangements that
comply with the requirements of this Section 7.1(i));
(L) operate its business and activities such
that: it does not engage in any business or activity of any kind, or
enter into any transaction or indenture, mortgage, instrument,
agreement, contract, lease or other undertaking, other than the
transactions contemplated and authorized by this Agreement and the
Receivables Sale Agreement; and does not create, incur, guarantee,
assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business, (2) the
incurrence of obligations under this Agreement, (3) the incurrence of
obligations, as expressly contemplated in the Receivables Sale
Agreement, to make payment to the Originator thereunder for the
purchase of Receivables from the Originator, and (4) the incurrence of
operating expenses in the ordinary course of business of the type
otherwise contemplated by this Agreement;
(M) maintain its corporate charter in conformity
with this Agreement, such that it does not amend, restate, supplement
or otherwise modify its LLC Agreement in any respect that would impair
its ability to comply with the terms or provisions of any of the
Transaction Documents, including this Section 7.1(i);
(N) maintain the effectiveness of, and continue
to perform under the Receivables Sale Agreement, such that it does not
amend, restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement, or give any consent, waiver, directive or
approval thereunder or waive any default, action, omission or breach
under the Receivables Sale Agreement or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the
Agent;
(O) maintain its separateness such that it does
not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any
Person, nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary;
(P) maintain at all times the Required Capital
Amount (as defined in the Receivables Sale Agreement) and refrain from
making any dividend, distribution, redemption of capital stock or
payment of any subordinated indebtedness which would cause the Required
Capital Amount to cease to be so maintained; and
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(Q) take such other actions as are necessary on
its part to ensure that the facts and assumptions set forth in the
opinion issued by ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., as counsel for Seller, in
connection with the closing or initial purchase under this Agreement
and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all
material respects at all times.
(j) Taxes. Such Seller Party shall file all tax
returns and reports required by law to be filed by it and shall promptly pay all
taxes and governmental charges at any time owing. Seller will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of the Company, the Agent or any Financial
Institution.
(k) Collections. Such Seller Party will cause
(1) all proceeds from each Lock-Box to be directly deposited by the related
Lock-Box Bank into the related Lock-Box Account and (2) all Automatic Debit
Collections to be deposited directly into the Collection Account. In the event
any payments relating to Receivables are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to the Collection Account Bank and deposited into the
Collection Account within one (1) Business Day following receipt thereof, and,
at all times prior to such remittance, Seller will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of the Agent and the Purchasers. The Seller will cause the Collection
Account at all times to be subject to a Collection Account Agreement. Seller
will maintain exclusive ownership, dominion and control (subject to the terms of
this Agreement) of each Lock-Box and each Receiving Account and shall not grant
the right to take dominion and control of any Lock-Box or Receiving Account at a
future time or upon the occurrence of a future event to any Person.
(l) Insurance. Seller will maintain in effect,
or cause to be maintained in effect, at Seller's own expense, such casualty and
liability insurance covering the Related Equipment as Seller shall deem
appropriate in its good faith business judgment. The Agent, for the benefit of
the Purchasers, shall be named as an additional insured with respect to all such
liability insurance maintained by Seller. Seller will pay or cause to be paid,
the premiums therefor and deliver to the Agent evidence satisfactory to the
Agent of such insurance coverage. Copies of each policy shall be furnished to
the Agent and any Purchaser in certificated form upon the Agent's or such
Purchaser's request. The foregoing requirements shall not be construed to
negate, reduce or modify, and are in addition to, Seller's obligations
hereunder.
(m) Takeout Financing. Not later than the
Takeout Financing Deadline, the Seller Parties shall effect a Takeout Financing.
Section 7.2 Negative Covenants of the Seller Parties.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement terminates in accordance with its terms, each Seller
Party hereby covenants, as to itself, that:
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(a) Name Change, Offices and Records. Such
Seller Party will not change its name, identity or corporate structure (within
the meaning of Section 9-402(7) of any applicable enactment of the UCC) or
relocate its chief executive office or any office where Records are kept unless
it shall have: (i) given the Agent at least forty-five (45) days' prior written
notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.
(b) Change in Payment Instructions to Obligors.
Such Seller Party will not add or terminate any bank as a Receiving Bank, or
make any change in the instructions to Obligors regarding payments to be made to
any Receiving Account, unless the Agent shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change; provided, however, that the Servicer may make
changes in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Lock-Box Account or
Collection Account.
(c) Modifications to Contracts and Credit and
Collection Policy. Such Seller Party will not make any change to the Credit and
Collection Policy that could adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created Receivables.
Except as provided in Section 8.2(d), the Servicer will not extend, amend or
otherwise modify the terms of any Receivable or any Contract related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller shall not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, or create or suffer to exist any Adverse Claim upon (including
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and Seller shall defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under Seller or the
Originator.
(e) Discounted Receivables Balance. At no time
prior to the Amortization Date shall Seller permit the Discounted Receivables
Balance to be less than an amount equal to the sum of (i) the Aggregate Capital
of all the Purchaser Interests plus (ii) the Loss Reserve.
(f) Termination Date Determination. Seller will
not designate the Termination Date (as defined in the Receivables Sale
Agreement), or send any written notice to Originator in respect thereof, without
the prior written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.
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Section 7.3. Hedging. (a) On each Settlement Date, the
Servicer shall deposit into the Hedge Account an amount of Collections or other
funds at least equal to at least to the Hedge Account Required Deposit as of
such Settlement Date.
(b) On each Settlement Date, if no Amortization
Event or Potential Amortization Event has occurred and if and to the extent that
the amount of funds on deposit in the Hedge Account exceeds the Hedge Account
Required Amount, then the Servicer shall be entitled to direct the Hedge Account
Intermediary to withdraw such excess from the Hedge Account and transfer such
excess funds to the Servicer.
(c) On any date on which an Amortization Event
or Potential Amortization Event has occurred and is continuing, the Agent shall
be entitled to withdraw any or all of the funds from the Hedge Account and use
such funds for the purpose of acquiring one or more Interest Rate ▇▇▇▇▇▇.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing,
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated in accordance with this Section 8.1. GELI
is hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer pursuant to the terms of this Agreement. The Agent may
designate any Person as Servicer to succeed GELI at any time following the
occurrence and during the continuation of an Amortization Event, a Potential
Amortization Event or any other event which the Agent in good faith believes
could have a Material Adverse Effect.
(b) Without the prior written consent of the
Agent and the Required Financial Institutions, GELI shall not be permitted to
delegate any of its duties or responsibilities as Servicer to any Person other
than (i) the Seller and (ii) with respect to certain Charged-Off Receivables,
outside collection agencies or other similar entities in accordance with its
customary practices. Seller shall not be permitted to further delegate to any
other Person any of the duties or responsibilities of the Servicer delegated to
it by GELI. If the Agent shall designate as Servicer any other Person to succeed
GELI, all duties and responsibilities theretofore delegated by GELI to Seller
may, at the discretion of the Agent, be terminated forthwith on notice given by
the Agent to GELI and to Seller.
(c) Notwithstanding the foregoing subsection
(b), for the period during which GELI is acting as Servicer hereunder (i) GELI
shall be and remain primarily liable to the Agent and the Purchasers for the
full and prompt performance of all duties and responsibilities of the Servicer
hereunder and (ii) the Agent and the Purchasers shall be entitled to deal
exclusively with GELI in matters relating to the discharge by the Servicer of
its duties and responsibilities hereunder. The Agent and the Purchasers shall
not be required to give notice, demand or other communication to any Person
other than GELI in
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order for communication to the Servicer and its sub-servicer or other delegate
with respect thereto to be accomplished. GELI, at all times that it is the
Servicer, shall be responsible for providing any sub-servicer or other delegate
of the Servicer with any notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Receivable 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.
(b) The Servicer will instruct all Point-of-Sale
Obligors to pay all Collections directly to the Collection Account and all
Wireless Obligors to pay all collections directly to either the Collection
Account or a Lock-Box. The Servicer shall cause any payments made by Automatic
Debit Collection to be deposited directly into the Collection Account from each
Obligor's relevant account. In the case of any remittances received in any
Lock-Box that shall have been identified, to the satisfaction of the Servicer,
to not constitute Collections or other proceeds of the Receivables or the
Related Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. On each Business Day,
the Servicer shall cause all amounts on deposit in the Operating Account or any
Lock-Box Account related to the Receivables to be remitted to the Collection
Account.
(c) The Servicer shall administer the
Collections in accordance with the procedures described herein and in Article
II. The Servicer shall set aside and hold in trust for the account of Seller and
the Purchasers their respective shares of the Collections in accordance with
Article II. The Servicer shall, upon the request of the Agent, segregate, in a
manner acceptable to the Agent, all cash, checks and other instruments received
by it from time to time constituting Collections from the general funds of the
Servicer or Seller prior to the remittance thereof in accordance with Article
II. If the Servicer shall be required to segregate Collections pursuant to the
preceding sentence, the Servicer shall segregate and deposit with a bank
designated by the Agent such allocable share of Collections of Receivables set
aside for the Purchasers on the first Business Day following receipt by the
Servicer of such Collections, duly endorsed or with duly executed instruments of
transfer.
(d) The Servicer may, in accordance with the
Credit and Collection Policy, extend the maturity of any Receivable or adjust
the Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent
or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller
and the Purchasers all Records that (i) evidence or relate to the Receivables,
the related Contracts and Related Security or (ii) are
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otherwise necessary or desirable to collect the Receivables and shall, as soon
as practicable upon demand of the Agent, deliver or make available to the Agent
all such Records, at a place selected by the Agent. The Servicer shall, as soon
as practicable following receipt thereof, turn over to Seller any cash
collections or other cash proceeds received with respect to Indebtedness not
constituting Receivables. The Servicer shall, from time to time at the request
of any Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any
indebtedness owed by it to the Originator or Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Agent, be applied as a Collection of any Receivable
of such Obligor (starting with the oldest such Receivable) to the extent of any
amounts then due and payable thereunder before being applied to any other
receivable or other obligation of such Obligor.
(g) The Servicer, for the benefit of the Agent
and the Purchasers, shall establish and maintain an account bearing the
designation "Golden Eagle Receivables LLC, (the "Collection Account") at Fleet
National Bank. The Collection Account shall be the property of the Seller
subject to the rights of the Agent in the property held in the Collection
Account.
(h) The Servicer, for the benefit of the Agent
and the Purchasers, shall establish and maintain with the Hedge Account
Intermediary an account bearing the designation "Golden Eagle Receivables LLC"
(the "Hedge Account"). The Hedge Account shall be the property of the Seller
subject to the rights of the Agent in the property held in the Hedge Account.
The Hedge Account is an account to which Financial Assets will be credited.
Funds held in the Hedge Account shall be invested in such Financial Assets as
shall be selected by the Servicer with the approval of the Agent, provided that
(i) no such Financial Assets shall have ratings of less than A-1 from Standard &
Poor's Ratings Services or P-1 from ▇▇▇▇▇'▇ Investors Service, Inc. and (ii) no
such Financial Assets shall mature on a date later than the next following
Settlement Date. Investment earnings on such Financial Assets shall be retained
in the Hedge Account.
Section 8.3 Collection Notices. The Agent is authorized,
at any time (i) after the termination of GELI as Servicer or the appointment of
another Person as subservicer in accordance with the provisions of Section 8.1
or (ii) following the occurrence and during the continuance of any Amortization
Event, Potential Amortization Event or any other event which the Agent in good
faith believes could have a Material Adverse Effect, to date and to deliver to
the Collection Account Banks the Collection Notices. Seller hereby transfers to
the Agent for the benefit of the Purchasers, effective when the Agent delivers
such notice, the exclusive ownership and control of each Collection Account. In
case any authorized signatory of Seller whose signature appears on a Collection
Account Agreement shall cease to have such authority before the delivery of such
notice, such Collection Notice shall nevertheless be valid as if such authority
had remained in force. Seller hereby authorizes the Agent, and agrees that the
Agent shall be entitled to (i) endorse Seller's name on checks and other
instruments representing Collections, (ii) enforce the Receivables, the related
Contracts and the Related Security and (iii) take such action as shall
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be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder upon the termination of GELI as Servicer in accordance with the
provisions of Section 8.1, shall not release the Servicer, the Originator or
Seller from any of their duties or obligations with respect to any Receivables
or under the related Contracts. The Purchasers shall have no obligation or
liability with respect to any Receivables or related Contracts, nor shall any of
them be obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on the tenth day of each month (or, if such day is not a Business Day,
on the immediately following Business Day) and at such other times as the Agent
shall request, a Monthly Report, (ii) on the 21st day of each month (or, if such
day is not a Business Day, on the immediately following Business Day), an
Interim Report containing information that is accurate as of the 14th day of
such month (or, if such day is not a business Day, as of the immediately
following Business Day) and (iii) at such times as the Agent shall request, a
listing by Obligor of all Receivables together with an aging of such
Receivables. Unless otherwise requested by the Agent, all computations in such
Monthly Report shall be made as of the close of business on the last day of the
Accrual Period preceding the date on which such Monthly Report is delivered.
Section 8.6 Servicing Fees. In consideration of GELI's agreement
to act as Servicer hereunder, the Purchasers hereby agree that, so long as GELI
shall continue to perform as Servicer hereunder, the Seller shall on each
Settlement Date pay over to GELI a monthly fee equal to one-twelfth of 1.00%
multiplied by the lesser of (i) the Outstanding Balance or (ii) the Aggregate
Capital as compensation for its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more
of the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due and, for any such payment or deposit which
is not in respect of Capital, such failure continues for one (1) Business day,
or (ii) to perform or observe any term, covenant or agreement hereunder (other
than as referred to in clause (i) of this paragraph (a) and paragraph 9.1(e))
and such failure shall continue for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
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(c) Failure of Seller to pay when due any Indebtedness or
the failure of any other Seller Party to pay when due Indebtedness in excess of
$250,000 or the failure of the Provider to pay when due any Indebtedness in
excess of $500,000, or the failure of any such Person to pay any interest or
premium on such Indebtedness when due or within any applicable grace period; or
the default by any Seller Party or the Provider in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party or the Provider shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date of
maturity thereof.
(d) (i) The Provider, any Seller Party or any of its
Subsidiaries shall generally not pay its debts as such debts become due or shall
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against the Provider, any Seller Party or any of its
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property or (iii) the Provider,
any Seller Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth in clauses (i) or (ii) above in this
subsection (d).
(e) Seller shall fail to comply with the terms of Section
2.6 hereof.
(f) The Servicer or Sellers, as applicable, default on any
Interest Rate Hedge in respect of the Receivables.
(g) A Change of Control shall occur.
(h) A Change of Ownership shall occur.
(i) As of the end of any Accrual Period, the Pool
Three-Month Average Delinquency Ratio shall exceed 2.6%.
(j) As of the end of any Accrual Period, the Consolidated
Three-Month Average Delinquency Ratio shall exceed 2.6%.
(k) As of the end of any Accrual Period, the Pool
Three-Month Average Loss to Liquidation Ratio shall exceed 26.5%.
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(l) As of the end of any Accrual Period, the Consolidated
Three-Month Average Consolidated Loss to Liquidation Ratio shall exceed 26.5%.
(m) As of the end of any Accrual Period, the Pool
Three-Month Average Collections to Balance Ratio shall be less than 3.2%.
(n) As of the end of any Accrual Period, the Consolidated
Three-Month Average Collections to Balance Ratio shall be less than 3.2%.
(o) (i) One or more final judgments for the payment of money
shall be entered against Seller or (ii) one or more final judgments for the
payment of money in an amount in excess of $250,000, individually or in the
aggregate, shall be entered against the Provider or the Servicer on claims not
covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect for
thirty (30) consecutive days without bonding or a stay of execution.
(p) The "Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(q) This Agreement shall terminate in whole or in part
(except in accordance with its terms), or shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto,
the Related Equipment and the Collection Accounts.
(r) The Provider shall fail to perform or observe any term,
covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of The Provider, or The
Provider shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability.
Section 9.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the direction of
the Required Financial Institutions shall, take any of the following actions:
(i) replace the Person then acting as Servicer (ii) declare the Amortization
Date to have occurred, whereupon the Amortization Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Seller Party; provided, however, that upon the
occurrence of an Amortization Event described in Section 9.1(d)(ii), or of an
actual
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or deemed entry of an order for relief with respect to any Seller Party under
the Federal Bankruptcy Code, the Amortization Date shall automatically occur,
without demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Seller Party, (iii) to the fullest extent permitted by
applicable law, declare that the Default Fee shall accrue with respect to any of
the Aggregate Unpaids outstanding at such time, (iv) deliver the Collection
Notices to the Collection Account Banks, (v) notify Obligors of the Purchasers'
interest in the Receivables and (vi) acquire one or more Interest Rate ▇▇▇▇▇▇.
The aforementioned rights and remedies shall be without limitation, and shall be
in addition to all other rights and remedies of the Agent and the Purchasers
otherwise available under any other provision of this Agreement, by operation of
law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by the Seller Parties. Without limiting
any other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) each of Seller and Servicer hereby agrees to indemnify the
Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing, together with the exclusions set forth below, being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by a Purchaser of an interest in the Receivables, and
(B) the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(i) Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(ii) Indemnified Amounts to the extent the same
includes losses in respect of Receivables that are uncollectible
on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; or
(iii) taxes imposed by any jurisdiction in which
such Indemnified Party is subject to taxation, on or measured by
the overall net income of such Indemnified Party (a) to the extent
that the computation of such taxes is consistent with the
characterization for income tax purposes of the acquisition by the
Purchasers of Purchaser Interests as a loan or loans by the
Purchasers to Seller secured by the Receivables, the
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Related Security, the Collection Accounts and the Collections or
(b) such tax was assessed due to the failure of such Indemnified
party to observe its obligations under Section 14.14(c);
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify the Agent and the
Purchasers for Indemnified Amounts (including losses in respect of uncollectible
receivables, regardless of whether reimbursement therefor would constitute
recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any
Seller Party or the Originator (or any officers of any such
Person) under or in connection with this Agreement, any other
Transaction Document or any other information or report delivered
by any such Person pursuant hereto or thereto, which shall have
been false or incorrect when made or deemed made;
(ii) the failure by any Seller, the Servicer or the
Originator to comply with any applicable law, rule or regulation
with respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with
any such applicable law, rule or regulation or any failure of the
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or the
Originator to perform its duties, covenants or other obligations
in accordance with the provisions of this Agreement or any other
Transaction Document;
(iv) any products liability, personal injury or
damage suit, or other similar claim arising out of or in
connection with merchandise, insurance or services that are the
subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable (including a defense based on such
Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the
sale of the merchandise or service related to such Receivable or
the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables
at any time with other funds;
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(vii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the
proceeds of an Incremental Purchase or a Reinvestment, the
ownership of the Purchaser Interests or any other investigation,
litigation or proceeding relating to Seller, the Servicer or the
Originator in which any Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against
any Obligor in respect of any Receivable as a result of such
Obligor being immune from civil and commercial law and suit on the
grounds of sovereignty or otherwise from any legal action, suit or
proceeding;
(ix) any Amortization Event described in Section
9.1(d);
(x) any failure of Seller to acquire and maintain
legal and equitable title to, and ownership of any Receivable and
the Related Security and Collections with respect thereto from the
Originator, free and clear of any Adverse Claim (other than as
created hereunder); or any failure of Seller to give reasonably
equivalent value to the Originator under the Receivables Sale
Agreement in consideration of the transfer by the Originator of
any Receivable, or any attempt by any Person to void such transfer
under statutory provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the
Agent for the benefit of the Purchasers, or to transfer to the
Agent for the benefit of the Purchasers, legal and equitable title
to, and ownership of, a first priority perfected undivided
percentage ownership interest (to the extent of the Purchaser
Interests contemplated hereunder) or security interest in the
Receivables, the Related Security and the Collections, free and
clear of any Adverse Claim (except as created by the Transaction
Documents);
(xii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivable, the Related
Security and Collections (except as relates to the Excepted
Contracts) with respect thereto, and the proceeds of any thereof,
whether at the time of any Incremental Purchase or Reinvestment or
at any subsequent time;
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(xiii) any action or omission by any Seller Party
which reduces or impairs the rights of the Agent or the Purchasers
with respect to any Receivable or the value of any such
Receivable;
(xiv) any attempt by any Person to void any
Incremental Purchase or Reinvestment hereunder under statutory
provisions or common law or equitable action;
(xv) any failure of performance by any party or any
default under or termination of any Interest Rate Hedge.
(xvi) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible
Receivable to be an Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "Regulatory Change"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction;
provided, however, that if the Agent fails to make such demand within 90 days
after it obtains knowledge of such increased costs, reductions or other
compensable items ("costs"), the Funding Source shall, with respect to
compensation payable in respect of any such costs, only be entitled to
compensation for such costs incurred from and after the 90th day preceding the
day the Agent does make such demand.
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Section 10.3 Other Costs and Expenses. Seller shall pay to the
Agent and the Company on demand all costs and out-of-pocket expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder, including without limitation, the cost of the Company's
auditors auditing the books, records and procedures of Seller, reasonable fees
and out-of-pocket expenses of legal counsel for the Company and the Agent (which
such counsel may be employees of the Company or the Agent) with respect thereto
and with respect to advising the Company and the Agent as to their respective
rights and remedies under this Agreement. Seller shall pay to the Agent on
demand any and all reasonable costs and expenses of the Agent and the
Purchasers, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered
hereunder and in connection with any restructuring or workout of this Agreement
or such documents, or the administration of this Agreement following an
Amortization Event.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements on behalf of such Purchaser (the terms of
which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of
its duties under this Agreement and each other Transaction Document by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
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Section 11.3 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of the Company or the Required Financial Institutions or
all of the Purchasers, as applicable, as it deems appropriate and it shall first
be indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Company or the Required Financial Institutions or all of the Purchasers, as
applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of any Seller Party, shall be deemed
to constitute any representation or warranty by the Agent. Each Purchaser
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of Seller and made its
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own decision to enter into this Agreement, the other Transaction Documents and
all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days'
notice to Seller and the Purchasers, and the Agent will, upon the direction of
all of the Purchasers (other than the Agent, in its individual capacity) resign
as Agent. If the Agent shall resign, then the Required Financial Institutions
during such five-day period shall appoint from among the Purchasers a successor
agent. If for any reason no successor Agent is appointed by the Required
Financial Institutions during such five-day period, then effective upon the
termination of such five day period, the Purchasers shall perform all of the
duties of the Agent hereunder and under the other Transaction Documents and
Seller and the Servicer (as applicable) shall make all payments in respect of
the Aggregate Unpaids directly to the applicable Purchasers and for all purposes
shall deal directly with the Purchasers. After the effectiveness of any retiring
Agent's resignation hereunder as Agent, the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Transaction
Documents and the provisions of this Article XI and Article X shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and under the other Transaction
Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial
Institution hereby agree and consent to the complete or partial assignment by
the Company of all or any portion of its rights under, interest in, title to and
obligations under this Agreement to the Financial Institutions pursuant to
Section 13.1 or to any other Person, and upon such assignment, the Company shall
be released from its obligations so
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assigned. Further, Seller and each Financial Institution hereby agree that any
assignee of the Company of this Agreement or all or any of the Purchaser
Interests of the Company shall have all of the rights and benefits under this
Agreement as if the term "the Company" explicitly referred to such party, and no
such assignment shall in any way impair the rights and benefits of the Company
hereunder. Neither the Seller nor the Servicer shall have the right to assign
its rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from time
to time assign to one or more Persons ("Purchasing Financial Institutions") all
or any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of the Company shall be
required prior to the effectiveness of any such assignment. Each assignee of a
Financial Institution must have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Services and P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
and must agree to deliver to the Agent, promptly following any request therefor
by the Agent or the Company, an enforceability opinion in form and substance
satisfactory to the Agent and the Company. Upon delivery of the executed
Assignment Agreement to the Agent, such selling Financial Institution shall be
released from its obligations hereunder to the extent of such assignment.
Thereafter the Purchasing Financial Institution shall for all purposes be an
Financial Institution party to this Agreement and shall have all the rights and
obligations of an Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Services and P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
(an "Affected Financial Institution"), such Affected Financial Institution shall
be obliged, at the request of the Company or the Agent, to assign all of its
rights and obligations hereunder to (x) another Financial Institution or (y)
another funding entity nominated by the Agent and acceptable to the Company, and
willing to participate in this Agreement through the Liquidity Termination Date
in the place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay the Company its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, the Company and the Agent shall continue to
deal solely and directly with such Financial Institution in connection with such
Financial
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Institution's rights and obligations under this Agreement. Each Financial
Institution agrees that any agreement between such Financial Institution and any
such Participant in respect of such participating interest shall not restrict
such Financial Institution's right to agree to any amendment, supplement, waiver
or modification to this Agreement, except for any amendment, supplement, waiver
or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from the Company delivered on or prior to the Liquidity
Termination Date, it shall acquire by assignment from the Company, without
recourse or warranty, its Pro Rata Share of one or more of the Purchaser
Interests of the Company as specified by the Company. Each such assignment by
the Company shall be made pro rata among the Financial Institutions, provided,
however, that the Company may at any time and from time to time, in its sole and
absolute discretion, make any such assignment to any Affected Financial
Institution on a non-pro rata basis. Each Financial Institution shall, no later
than 1:00 p.m. (Chicago time) on the date of such assignment, pay in immediately
available funds (unless another form of payment is otherwise agreed between the
Company and any Financial Institution) to the Agent at an account designated by
the Agent, for the benefit of the Company, its Acquisition Amount. Unless a
Financial Institution has notified the Agent that it does not intend to pay its
Acquisition Amount, the Agent may assume that such payment has been made and
may, but shall not be obligated to, make the amount of such payment available to
the Company in reliance upon such assumption. The Company hereby sells and
assigns to the Agent for the ratable benefit of the Financial Institutions, and
the Agent hereby purchases and assumes from the Company, effective upon the
receipt by the Company of the Company Transfer Price, the Purchaser Interests of
the Company which are the subject of any transfer pursuant to this Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the Adjusted
Liquidity Price is included in the calculation of the Company Transfer Price for
any Purchaser Interest, each Financial Institution agrees that the Agent shall
pay to the Company the Reduction Percentage of any Yield received by the Agent
with respect to such Purchaser Interest.
Section 13.3 Payments to the Company. In consideration for the
reduction of the Company Transfer Prices by the Company Transfer Price
Reductions, effective only at such time as the aggregate amount of the Capital
of the Purchaser Interests of the Financial Institutions equals the Company
Residual, each Financial Institution hereby agrees that the Agent shall not
distribute to the Financial Institutions and shall immediately remit to the
Company any Yield, Collections or other payments received by it to be applied
pursuant to the terms hereof or otherwise to reduce the Capital of the Purchaser
Interests of the Financial Institutions.
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Section 13.4 Limitation on Commitment to Purchase from the
Company. Notwithstanding anything to the contrary in this Agreement, no
Financial Institution shall have any obligation to purchase any Purchaser
Interest from the Company, pursuant to Section 13.1 or otherwise, if:
(i) The Company shall have voluntarily commenced any
proceeding or filed any petition under any bankruptcy, insolvency
or similar law seeking the dissolution, liquidation or
reorganization of the Company or taken any corporate action for
the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary
petition shall have been commenced or filed against the Company by
any Person under any bankruptcy, insolvency or similar law seeking
the dissolution, liquidation or reorganization of the Company and
such proceeding or petition shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "the Company Transfer Price Deficit"), then
upon notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions) of
the Company Transfer Price Deficit and (y) the unused portion of such
Non-Defaulting Financial Institution's Commitment. A Defaulting Financial
Institution shall forthwith upon demand pay to the Agent for the account of the
Non-Defaulting Financial Institutions all amounts paid by each Non-Defaulting
Financial Institution on behalf of such Defaulting Financial Institution,
together with interest thereon, for each day from the date a payment was made by
a Non-Defaulting Financial Institution until the date such Non-Defaulting
Financial Institution has been paid such amounts in full, at a rate per annum
equal to the Federal Funds Effective Rate plus two percent (2%). In addition,
without prejudice to any other rights that the Company may have under applicable
law, each Defaulting Financial Institution shall pay to the Company forthwith
upon demand, the difference between such Defaulting Financial Institution's
unpaid Acquisition Amount and the amount paid with respect thereto by the
Non-Defaulting Financial Institutions, together with interest thereon, for each
day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to the Company in full, at a rate per annum equal to
the Federal Funds Effective Rate plus two percent (2%).
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay on
the part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a
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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. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). The Company, Seller and the Agent, at the
direction of the Required Financial Institutions, may enter into written
modifications or waivers of any provisions of this Agreement, provided, however,
that no such modification or waiver shall:
(i) without the consent of each affected Purchaser,
(A) extend the Liquidity Termination Date or the date of any
payment or deposit of Collections by Seller or the Servicer, (B)
reduce the rate or extend the time of payment of Yield or any
Allocable CP Costs (or any component of Yield or Allocable CP
Costs thereof), (C) reduce any fee payable to the Agent for the
benefit of the Purchasers, (D) except pursuant to Article XII
hereof, change the amount of the Capital of any Purchaser, any
Financial Institution's Pro Rata Share (except pursuant to
Sections 13.1 or 13.5) or any Financial Institution's Commitment,
(E) amend, modify or waive any provision of the definition of
Required Financial Institutions or this Section 14.1(b), (F)
consent to or permit the assignment or transfer by Seller of any
of its rights and obligations under this Agreement, (G) change the
definition of "Eligible Receivable," "Loss Reserve," or "Loss
Percentage," or (H) amend or modify any defined term (or any
defined term used directly or indirectly in such defined term)
used in clauses (A) through (G) above in a manner that would
circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of the then Agent,
amend, modify or waive any provision of this Agreement if the
effect thereof is to affect the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, the Agent may, with the consent of Seller, amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and the Company may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
(c) In the event that the Seller or the Originator effects a
Takeout Financing and the terms of the operative documents created in connection
with such Takeout Financing contain provisions
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which are more favorable to the investors in such Takeout Financing than the
terms of the Basic Documents with respect to either eligibility criteria for
receivables (including concentration limits) or the required level of credit
enhancement, then the Agent shall have the right to cause the Seller, each
Originator and the Servicer (and any Affiliate thereof) to amend the Basic
Documents to incorporate any such more favorable provisions, and the Seller, the
Originator and the Servicer agree to enter into such an amendment.
Section 14.2 Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including bank wire,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other parties hereto at their respective addresses or telecopy
numbers set forth on the signature pages hereof or at such other address or
telecopy number as such Person may hereafter specify for the purpose of notice
to each of the other parties hereto. Each such notice or other communication
shall be effective (i) if given by telecopy, upon the receipt thereof, (ii) if
given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or (iii) if given by any
other means, when received at the address specified in this Section 14.2. Seller
hereby authorizes the Agent to effect purchases and Tranche Period and Discount
Rate selections based on telephonic notices made by any Person whom the Agent in
good faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an authorized officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff
or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received pursuant
to Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that the Agent may request, to perfect,
protect or more fully evidence the Purchaser Interests, or to enable the Agent
or the Purchasers to exercise and enforce their rights and remedies hereunder.
At any time, the Agent may, or the Agent may direct Seller or the Servicer to,
notify the Obligors of Receivables, at Seller's expense, of the ownership or
security interests of the Purchasers under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
be made directly to the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser's request, withhold the identity of such
Purchaser in any such notification.
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(b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligation, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 14.5 Confidentiality. (a) Each Seller Party, the Agent and
each Purchaser shall maintain and shall cause each of its employees and officers
to maintain the confidentiality of this Agreement and the other confidential
proprietary information with respect to each Seller Party (except to the extent
provided in Section 14.5(b) below) the Agent and the Company and their
respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or the Company by
each other, (ii) by the Agent or the Purchasers to any prospective or actual
assignee or participant of any of them or (iii) by the Agent to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to the Company or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One acts
as the administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing. In addition, the Purchasers
and the Agent may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent
and each Financial Institution hereby covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
senior 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.
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Section 14.7 Limitation of Liability. Except with respect to any
claim arising out of the willful misconduct or gross negligence of the Company,
the Agent or any Financial Institution, no claim may be made by any Seller Party
or any other Person against the Company, the Agent or any Financial Institution
or their respective Affiliates, directors, officers, employees, attorneys or
agents for any special, indirect, consequential or punitive damages in respect
of any claim for breach of contract or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and each Seller Party
hereby waives, releases, and agrees not to ▇▇▇ upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 14.8 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 14.9 Consent to Jurisdiction. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH OF SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR A PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 14.10 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
Page 42
48
(a) This Agreement, each Collection Account Agreement and
the Fee Letter contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. 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
unenforceable 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. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for the Company or any Financial Institution, (ii) as issuing and paying
agent for the Commercial Paper, (iii) to provide credit or liquidity enhancement
for the timely payment for the Commercial Paper and (iv) to provide other
services from time to time for the Company or any Financial Institution
(collectively, the "Bank One Roles"). Without limiting the generality of this
Section 14.13, each Financial Institution hereby acknowledges and consents to
any and all Bank One Roles and agrees that in connection with any Bank One Role,
Bank One may take, or refrain from taking, any action that it, in its
discretion, deems appropriate, including in its role as administrative agent for
the Company, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
Section 14.14 Characterization.
(a) It is the intention of the parties hereto that each
purchase hereunder shall constitute and be treated as an absolute and
irrevocable sale in the state of Connecticut, which purchase shall provide the
applicable Purchaser with the full benefits of ownership of the applicable
Purchaser Interest. Except as specifically provided in this Agreement, each sale
of a Purchaser Interest hereunder
Page 43
49
is made without recourse to Seller; provided, however, that (i) Seller shall be
liable to each Purchaser and the Agent for all representations, warranties,
covenants and indemnities made by Seller pursuant to the terms of this
Agreement, and (ii) such sale does not constitute and is not intended to result
in an assumption by any Purchaser or the Agent or any assignee thereof of any
obligation of Seller or the Originator or any other person arising in connection
with the Receivables, the Related Security, or the related Contracts, or any
other obligations of Seller or the Originator.
(b) If the conveyance by Seller to the Agent for the benefit
of the Purchasers of interests in Receivables hereunder shall be characterized
as a secured loan and not a sale, it is the intention of the parties hereto that
this Agreement shall constitute a security agreement under applicable law. In
furtherance of the foregoing, Seller hereby grants to the Agent for the ratable
benefit of the Purchasers a valid and perfected security interest in all of
Seller's right, title and interest in, to and under the Receivables, the
Collections, each Collection Account, all Related Security, all other rights and
payments relating to the Receivables, and all proceeds of any thereof prior to
all other liens on and security interests therein to secure the prompt and
complete payment of the Aggregate Unpaids. The Agent and the Purchasers shall
have, in addition to the rights and remedies that they may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be cumulative.
(c) For purposes of federal, state and local income taxes,
sales taxes and similar taxes, the parties shall treat: (i) the amounts advanced
from time to time to Seller by Company and any Purchaser as a loan to, and the
indebtedness of, Seller and not as the proceeds from the sale by Seller of any
interest in the Receivables or Related Security and (ii) the payments made by
Seller to Agent for the benefit of the Company and any Purchaser as (in the
following order) (x) the payment of any costs of Agent or any Purchasers that
are required to be reimbursed hereunder, (y) interest on the outstanding balance
from time to time of the loans made hereunder, and (z) the repayment of the
principal balance of such loans.
[SIGNATURE PAGES FOLLOW]
Page 44
50
IN WITNESS WHEREOF, the parties hereto have caused this Receivables
Purchase Agreement to be executed and delivered by their duly authorized
officers as of the date hereof.
GOLDEN EAGLE RECEIVABLES LLC
By: ______________________________________________
Name:
Title:
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GOLDEN EAGLE LEASING, INC.
By: ______________________________________________
Name:
Title:
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FALCON ASSET SECURITIZATION
CORPORATION
By:_______________________________________________
Authorized Signatory
Address: c/o Bank One, NA
(Main Office Chicago), as Agent
Asset Backed Finance
Suite 0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
51
Bank One, NA (Main Office Chicago), as a Financial
Institution and as Agent
By:_______________________________________________
Name:
Title:
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0594, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
52
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Accrual Period" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
in which such initial purchase occurs.
"Acquisition Amount" means, on the date of any purchase from the Company
of Purchaser Interests pursuant to Section 13.1, (i) with respect to each
Financial Institution, the lesser of (a) such Financial Institution's Pro Rata
Share of the Company Transfer Price and (b) such Financial Institution's unused
Commitment.
"Adjusted Liquidity Price" means, in determining the Company Transfer
Price for any Purchaser Interest, an amount equal to
|- |- -| -|
| | NDR | |
RI | (i) DC (ii) | ------- | |
| | 1.225 | |
|- |- -| -|
where:
RI = the undivided percentage interest evidenced by such
Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to which any
payment, or part thereof, has not remained unpaid for 121
days or more from the due date for such payment.
Each of the foregoing shall be determined from the most recent Monthly Report or
Interim Report received from the Servicer.
"Adverse Claim" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
Exh. I-1
53
"Affected Financial Institution" has the meaning specified in Section
12.1(c).
"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 or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the controlling Person owns 10% or more of
any class of voting securities of the controlled Person or 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 stock, by
contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of all
accrued and unpaid fees under the Fee Letter, Allocable CP Costs, Yield,
Aggregate Capital, Third-Party Servicing Costs and all other unpaid Obligations
(whether due or accrued) at such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
"Allocable CP Costs" has the meaning set forth in Section 3.2.
"Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii)
the Business Day immediately prior to the occurrence of an Amortization Event
set forth in Section 9.1(d), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
and (iv) the date which is 30 Business Days after the Agent's receipt of written
notice from Seller that it wishes to terminate the facility evidenced by this
Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" shall mean, with respect to any Seller Party, its
respective corporate controller or chief financial officer, president or
secretary who is authorized to sign on behalf of the respective Seller Party.
Exh. I-2
54
"Automatic Debit Collection" means the payment under a Contract by an
Obligor by means of automatic electronic funds transfer from the Obligor's bank
account to the Collection Account.
"Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
"Base Rate" means a rate per annum equal to the corporate base rate, prime
rate or base rate of interest, as applicable, announced by the Reference Bank
from time to time, changing when and as such rate changes.
"Broken Funding Costs" means for any Purchaser Interest which: (i) has its
Capital reduced without compliance by the Seller with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Reduction following
the delivery of any Reduction Notice or (iii) is assigned under Article XIII or
terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the Allocable CP Costs or Yield (as
applicable) that would have accrued during the remainder of the Tranche Periods
or the tranche periods for Commercial Paper determined by the Agent to relate to
such Purchaser Interest (as applicable) subsequent to the date of such reduction
or termination (or in respect of clause (ii) above, the date such Aggregate
Reduction was designated to occur pursuant to the Reduction Notice) of the
Capital of such Purchaser Interest if such reduction, assignment or termination
had not occurred or such Reduction Notice had not been delivered, over (B) the
sum of (x) to the extent all or a portion of such Capital is allocated to
another Purchaser Interest, the amount of Allocable CP Costs or Yield actually
accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated to
another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or required
to close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Capital" of any Purchaser Interest means, at any time, (A) the Purchase
Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of
Collections and other payments received by the Agent which in each case are
applied to reduce such Capital in accordance with the terms and conditions of
this Agreement; provided that such Capital shall be restored (in accordance with
Section 2.5) in the amount of any Collections or other payments so received and
applied if at any time the distribution of such Collections or payments are
rescinded, returned or refunded for any reason.
Exh. I-3
55
"Change of Ownership" means, (i) with respect to the Seller, that GELI
ceases to own, free and clear of all Adverse Claims, all of the outstanding
shares of capital stock of the Seller or (ii) with respect to GELI, that the
Provider ceases to own, free and clear of all Adverse Claims, all of the
outstanding shares of capital stock of GELI.
"Change of Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of the
Provider.
"Charged-Off Receivable" means a Receivable: (i) as to which the Obligor
thereof has taken any action, or suffered any event to occur, of the type
described in Section 9.1(h) (as if references to Seller Party therein refer to
such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 121 or more days from the due date for such payment.
"Closing Date" means August 31, 2000.
"Collection Account" shall have the meaning specified in Section 8.2(g).
"Collection Account Agreement" means an agreement substantially in the
form of Exhibit VI or other form for which the Agent has given its consent,
among the Originator, Seller, the Agent and a Collection Account Bank.
"Collection Account Bank" means the bank holding the Collection Account.
"Collections" means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including all yield,
finance charges or other related amounts accruing in respect thereof and all
cash proceeds of Related Security with respect to such Receivable and including
any proceeds of the sale or other disposition of such a Receivable.
"Collections to Balance Ratio" means, as of the last day of any Accrual
Period, (i) the total amount of collections (including recoveries in respect of
Charged-Off Receivables) on Receivables received by the Servicer during such
Accrual Period divided by (ii) the Outstanding Balance of all Receivables other
than Delinquent (181) Receivables as of such day.
"Commercial Paper" means promissory notes of the Company issued by the
Company in the commercial paper market.
Exh. I-4
56
"Commitment" means, for each Financial Institution, the commitment of such
Financial Institution to purchase Purchaser Interests from (i) Seller and (ii)
the Company in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution's name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
and (ii) with respect to any individual purchase hereunder, its Pro Rata Share
of the Purchase Price therefor.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Residual" means the sum of the Company Transfer Price Reductions.
"Company Transfer Price" means, with respect to the assignment by Company
of one or more Purchaser Interests to the Agent for the benefit of one or more
of the Financial Institutions pursuant to Section 13.1, the sum of (i) the
lesser of (a) the Capital of each such Purchaser Interest and (b) the Adjusted
Liquidity Price of each such Purchaser Interest and (ii) all accrued and unpaid
CP Costs for each such Purchaser Interest.
"Company Transfer Price Deficit" has the meaning set forth in Section
13.5.
"Company Transfer Price Reduction" means in connection with the assignment
of a Purchaser Interest by Company to the Agent for the benefit of the Financial
Institutions, the positive difference (if any) between (i) the Capital of such
Purchaser Interest and (ii) the Adjusted Funded Amount for such Purchaser
Interest.
"Concentration Limit" means, in relation to any individual Obligor, and as
of any date of determination, an amount equal to 1.0% of the aggregate
Outstanding Balance of the Eligible Receivables at such time or such higher
percentage of such aggregate Outstanding Balance or higher amount (either, a
"Special Concentration Limit") as may be designated by the Agent in a written
notice delivered to the Seller. Until the Agent otherwise notifies the Seller in
writing, the only Special Concentration Limit shall apply to Receivables the
Obligor of which is Microsoft Corporation, and such Special Concentration Limit
shall be 2.0% of the Outstanding Balance of Eligible Receivables.
"Consolidated Charged-Off Receivables" means a Consolidated Receivable of
the type described in the definition of Charged-Off Receivable (without regard
to whether such Consolidated Receivable is a Receivable).
"Consolidated Collections to Balance Ratio" means, as of the last day of
any Accrual Period, (i) the total amount of collections (including recoveries in
respect of Charged-Off Receivables) on Consolidated Receivables received by the
Servicer during such Accrual Period divided by (ii) the Outstanding Balance of
all Consolidated Receivables other than Consolidated Delinquent (181)
Receivables as of such day.
Exh. I-5
57
"Consolidated Delinquency Ratio" means, at any time, a percentage equal to
(i) the Outstanding Balance of all Consolidated Delinquent (91-120) Receivables
divided by (ii) the aggregate Outstanding Balance of all Consolidated
Receivables other than Consolidated Charged-Off Receivables.
"Consolidated Delinquent (91-120) Receivable" means a Consolidated
Receivable as to which any payment, or part thereof, remains unpaid for at least
91 but not more than 120 days from the original due date.
"Consolidated Delinquent (181) Receivable" means a Consolidated Receivable
as to which any payment, or part thereof, remains unpaid for 181 or more days
from the original due date.
"Consolidated Loss to Liquidation Ratio" means, as of the last day of any
Accrual Period, a percentage equal to (i) the difference of (x) the amount of
Consolidated Receivables which became Consolidated Charged-Off Receivables
during such Accrual Period minus (y) the amount of recoveries on Consolidated
Charged-Off Receivables during such Accrual Period, loss and destruction fees
and late payments actually collected by the Servicer during such Accrual Period
divided by (ii) the sum of the aggregate amount of collections on Consolidated
Receivables during such Accrual Period and the amount specified in clause (i).
"Consolidated Receivables" means all Originated Receivables, whether owned
by the Seller, the Originator, any Affiliate of the Originator or a third party.
"Consolidated Three-Month Average Collections to Balance Ratio" means, as
of the last day of any Accrual Period, the average of the Consolidated
Collections to Balance Ratios for such Accrual Period and each of the two
immediately preceding Accrual Periods.
"Consolidated Three-Month Average Delinquency Ratio" means, as of the last
day of any Accrual Period, the average of the Consolidated Delinquency Ratios
for such Accrual Period and each of the two immediately preceding Accrual
Periods.
"Consolidated Three-Month Average Loss to Liquidation Ratio" means, as of
the last day of any Accrual Period, the average of the Consolidated Loss to
Liquidation Ratios for such Accrual Period and each of the two immediately
preceding Accrual Periods.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability 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 creditor of such other Person
against loss, including any comfort letter, operating agreement, take-or-pay
contract or application for a letter of credit.
Exh. I-6
58
"Contract" means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable.
"CP Costs" means, for each day, the sum of (i) discount accrued on Pooled
Commercial Paper on such day, plus (ii) any and all accrued commissions in
respect of placement agents and Commercial Paper dealers, and issuing and paying
agent fees incurred, in respect of such Pooled Commercial Paper for such day,
plus (iii) other costs associated with funding small or odd-lot amounts with
respect to all receivable purchase facilities which are funded by Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses
received on such day from investment of collections received under all
receivable purchase facilities funded substantially with Pooled Commercial
Paper, minus (v) any payment received on such day net of expenses in respect of
Broken Funding Costs related to the prepayment of any Receivables Interest of
the Company pursuant to the terms of any receivable purchase facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs,
if Seller shall request any Incremental Purchase during any period of time
determined by the Agent in its sole discretion to result in incrementally higher
CP Costs applicable to such Incremental Purchase, the Capital associated with
any such Incremental Purchase shall, during such period, be deemed to be funded
by Company in a special pool (which may include capital associated with other
receivable purchase facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such Capital.
"Credit and Collection Policy" means Seller's credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in Exhibit VIII hereto, as modified from time to time
in accordance with this Agreement.
"Deemed Collections" means the aggregate of all amounts Seller shall have
been deemed to have received as a Collection of a Receivable. If at any time the
Outstanding Balance of, or any accrued Finance Charges on, any Receivable are
either (x) reduced as a result of any defective or rejected goods or services,
any discount or any adjustment or otherwise by Seller, Servicer or any
subservicer (other than cash Collections on account of the Receivables) or (y)
reduced or canceled as a result of a setoff in respect of any claim by any
Person (whether such claim arises out of the same or a related transaction or an
unrelated transaction), then Seller shall be deemed to have received a
Collection of such Receivable in the amount of such reduction or cancellation.
If at any time any of the representations or warranties in Article V are no
longer true with respect to any Receivable, then Seller shall be deemed to have
received a Collection in full of such Receivable (including any accrued Finance
Charges). Seller hereby agrees to pay all Deemed Collections immediately to the
Servicer for application in accordance with the terms and conditions hereof.
"Default Fee" means with respect to any amount due and payable by Seller
in respect of any Aggregate Unpaids, an amount equal to the greater of (i) $1000
and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal
to 2% above the Base Rate.
Exh. I-7
59
"Delinquent (61) Receivable" means a Receivable as to which any payment,
or part thereof, remains unpaid for 61 or more days from the original due date.
"Delinquent (91-120) Receivable" means a Receivable as to which any
payment, or part thereof, remains unpaid for at least 91, but not more than 120
days from the original due date.
"Delinquent (121) Receivables" means a Receivable as to which any payment,
or part thereof, remains unpaid for 121 days or more from the original due date.
"Delinquent (181) Receivables" means a Receivable as to which any payment,
or part thereof, remains unpaid for 181 days or more from the original due date.
"Designated Obligor" means an Obligor indicated by the Agent to Seller in
writing as unacceptable to the Agent.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in the definition of "Deemed Collections".
"Discount Rate" means, the LIBO Rate or the Base Rate, as applicable, with
respect to each Purchaser Interest of the Financial Institutions. Following an
Amortization Event, the Discount Rate shall be the Base Rate plus 2%.
"Discounted Receivables Balance" means, at any time, the discounted
present value of the remaining payments which will become due on the Receivables
comprising the Net Receivables Balance, which present value shall be established
by discounting on a monthly basis such remaining payments using the monthly
equivalent of the Receivables Discount Factor as the discount rate. For purposes
of calculating the Discounted Receivables Balance, in the event that (1) there
are Excess Concentration Balances with respect to Receivables owing from any
Obligor or (2) any of the eligibility thresholds established in clauses (i)(d),
(vii)(b), (viii)(a) and (ix) of the definition of Eligible Receivables has been
exceeded with respect to any group of Receivables, then the Servicer shall
exclude from its computation of Discounted Receivables Balance those remaining
payments which will become due on such Receivables which have the latest due
dates (the "excluded payments"), until the Servicer has identified a sufficient
amount of excluded payments to ensure that the arithmetic sum of all remaining
payments on all Receivables included in the Net Receivables Balance (other than
excluded payments) does not exceed the Net Receivables Balance (computed on the
basis described in the definition thereof).
"Eligible Receivable" means, at any time, a Receivable:
(i) for which the Obligor (a) if a natural person, is a resident of
the United States or, if a corporation or other business organization, is
organized under the laws of the United States or any political subdivision
thereof and has its chief executive office in the United States; (b) is
not an
Exh. I-8
60
Affiliate of any of the parties hereto; (c) is not a Designated Obligor;
and (d) if a government or a governmental subdivision or agency, is the
United States of America, a State or municipality within the United States
of America, or an agency or instrumentality of any of the foregoing
(provided that the aggregate amount of Eligible Receivables the Obligors
of which are described in this clause (d) shall not in any event exceed
1.0% of the aggregate Outstanding Balance of all Receivables at any time),
(ii) which is denominated and payable only in United States dollars
in the United States,
(iii) the Obligor of which is not the Obligor (a) of any Charged-Off
Receivable, (b) with respect to Wireless Receivables, of Receivables more
than 30% of which are Delinquent (61) Receivables or (c) with respect to
POS Receivables, of any Delinquent (61) Receivables.
(iv) which is not a Charged-Off Receivable,
(v) which is not more than 60 days past due,
(vi) the Obligor of which has made at least one payment,
(vii) which, if a Wireless Receivable, (a) has an original term
which does not exceed 36 months and (b) the Outstanding Balance of which
does not, in the aggregate with all other Wireless Receivables, exceed
10.0% of the aggregate Outstanding Balance of all Receivables,
(viii) which, if a POS Receivable, has (a) an original term which
does not exceed 48 months (provided that POS Receivables with original
terms of greater than 48 months but not more than 60 months, in an
aggregate amount not to exceed 5.0% of the aggregate Outstanding Balance
of all Receivables, shall also constitute Eligible Receivables) and (b) a
renewal term (if any) which does not exceed 12 months,
(ix) which, if a POS Receivable, has received a credit score of A,
B, C or D under the current credit scoring system utilized by the Servicer
and in effect on the date of this Agreement; provided, that (i) no more
than 72% in the aggregate of the Outstanding Balance of POS Receivables
shall have such credit scores of B, C and D, (ii) no more than 40% in the
aggregate of the Outstanding Balance of POS Receivables shall have such
credit scores of C and D, and (iii) no more than 27% in the aggregate of
the Outstanding Balance of POS Receivables shall have such credit scores
of D;
(x) which has not been modified, amended or extended and have not
had any requirements thereof waived,
Exh. I-9
61
(xi) which is an account receivable representing all or part
of the sales price of merchandise, insurance or services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940,
(xii) which is an "account," "chattel paper" or "general
intangible" within the meaning of Section 9-105 or 9-106 of the UCC of
all applicable jurisdictions,
(xiii) which arises under a Contract which (A) does not
require the Obligor under such Contract to consent to the transfer,
sale or assignment of the rights and duties of Originator or any of its
assignees under such Contract and (B) does not contain a
confidentiality provision that purports to restrict the ability of any
Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
(xiv) which, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto
(including any law, rule and regulation 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,
(xv) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xvi) which was generated in the ordinary course of the
Originator's business,
(xvii) which arises under a Contract in substantially the form
of one of the forms comprising Exhibit IX hereto or otherwise approved
by the Agent in writing,
(xviii) which, together with the related Contract, (a) is in
full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor to pay the full face amount thereof,
enforceable against such Obligor in accordance with its terms, and (b)
is not prepayable or cancelable and is a "triple net", "hell or high
water" obligation, except in each case as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors rights generally and by
general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or law);
(xix) which arises solely from the sale of goods or the
provision of services to the related Obligor by the Originator, and not
by any other Person (in whole or in part),
(xx) which is not owned by or pledged to any other Person,
Exh. I-10
62
(xxi) as to which the Agent has not notified the Seller that
the Agent has determined that such Receivable or class of Receivables
is not acceptable as an Eligible Receivable, including because such
Receivable arises under a Contract that is not acceptable to the Agent,
(xxii) which is not subject to any right of rescission,
set-off, counterclaim, any other defense (including defenses arising
out of violations of usury laws) of the applicable Obligor against
Originator or any other Adverse Claim, and the Obligor thereon holds no
right as against Originator to cause Originator to repurchase the goods
or merchandise the sale of which shall have given rise to such
Receivable (except with respect to sale discounts effected pursuant to
the Contract, or defective goods returned in accordance with the terms
of the Contract),
(xxiii) as to which Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to be
performed by any Person with respect thereto other than payment thereon
by the applicable Obligor, and
(xxiv) all right, title and interest to and in which has been validly
transferred by Originator directly to Seller under and in accordance with the
Receivables Sale Agreement, and Seller has good and marketable title thereto
free and clear of any Adverse Claim.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Excepted Contract" shall have the meaning specified in Section 5.1(j).
"Excess Concentration Balances" means at any time the aggregate, with
respect to any Obligor, of the amounts, if any, by which the aggregate
Outstanding Balance of the Eligible Receivables of such Obligor and its
Affiliates exceeds the Concentration Limit (or, if applicable, a Special
Concentration Limit) for such Obligor.
"Facility Termination Date" means the earliest of (i) August 31, 2005,
(ii) the Liquidity Termination Date, (iii) the occurrence of an Amortization
Event or (iv) upon 30 Business Days' written notice from the Seller.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period equal to (a) 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 preceding
Business Day) by the Federal Reserve
Exh. I-11
63
Bank of New York in the Composite Closing Quotations for U.S. Government
Securities; or (b) if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago
time) for such day on such transactions received by the Reference Bank from
three federal funds brokers of recognized standing selected by it.
"Fee Letter" means that certain letter agreement dated as of the date
hereof among the Seller, the Originator, the Company and the Agent, as it may be
amended or modified and in effect from time to time.
"Finance Charges" means, with respect to a Contract, any finance
charges, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract or any service fees related to such Contract.
"Financial Assets" has the meaning given to such term in Section 8-102
of the UCC.
"Financial Institutions" has the meaning set forth in the preamble in
this Agreement.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of the
Company.
"Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to the Company.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"GELI" has the meaning set forth in the Preamble to this Agreement.
"Hedge Account" shall have the meaning set forth in Section 8.2(g) of
this Agreement.
"Hedge Account Intermediary" means Bank One, Arizona, NA, in its
capacity as the Securities Intermediary with whom the Hedge Account is
established.
"Hedge Account Required Deposit" shall mean, on any date, the excess,
if any, of the Hedge Account Required Balance on such date over the amount of
funds then on deposit in the Hedge Account.
"Hedge Account Required Balance" shall mean, on any date, an amount
equal to the product of 2.5 and the Hedge Requirement Purchase Price as of such
date.
Exh. I-12
64
"Hedging Costs" shall mean all costs incurred in the acquisition of a
Interest Rate Hedge pursuant to Section 9.2 of this Agreement and, if such
Interest Rate Hedge requires the Seller, the Servicer, the Agent or any
Purchaser to make subsequent periodic or lump sum payments, any such payments.
"Hedge Receipts" shall mean, with respect to any Settlement Date, the
aggregate amount of payments received by the Agent or in the Collection Account
from the counterparty under any Interest Rate Hedge since the preceding
Settlement Date.
"Hedge Requirement Purchase Price" shall mean, on any date, the cost
(as determined by the Agent) on such date of purchasing an interest rate cap
having (i) a strike rate equal to the sum of 2.5% and the percentage equivalent
of the amount of CP Costs and Yield accruing on Aggregate Capital during the
immediately preceding Accrual Period, (ii) a notional amount equal to the
Aggregate Capital on such date and (iii) a term equal to 48 months.
"Incremental Purchase" means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable 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, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Interest Rate Hedge" means an interest rate cap, swap, collar, cash
collateral account or other derivative instrument entered into by Seller or
Servicer and a counterparty satisfactory to the Agent, having terms and
conditions satisfactory to the Agent, and the receipts on which shall constitute
Collections for purposes of this Agreement.
"Interim Report" shall have the meaning set forth in Section 1.2.
"LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant Tranche Period, and having
a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen
FRBD is not available to the Agent for any reason, the applicable LIBO Rate for
the relevant Tranche Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
and having a maturity equal to such Tranche Period, and
Exh. I-13
65
(ii) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the rate determined by the Agent to be the rate at which Bank
One offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Tranche
Period, divided by (b) one minus the maximum aggregate reserve requirement
(including all basic, supplemental, marginal or other reserves) which is imposed
against the Reference Bank in respect of Eurocurrency liabilities, as defined in
Regulation D of the Board of Governors of the Federal Reserve System as in
effect from time to time (expressed as a decimal), applicable to such Tranche
Period plus (ii) 2.5% per annum. The LIBO Rate shall be rounded, if necessary,
to the next higher 1/16 of 1%.
"Liquidity Termination Date" means the earliest of (i) August 29, 2001;
(ii) the occurrence of an Amortization Event, or (iii) upon 30 Business Days'
written notice from the Seller.
"LLC Agreement" means the Operating Agreement dated as of June 26, 2000
between GELI, as the Owner Member, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as the Special Member.
"Lock-Box" means each locked postal box with respect to which a bank
has been granted exclusive access for the purpose of retrieving and processing
payments made on the Receivables and which is listed on Exhibit IV.
"Lock-Box Account" means each concentration lock-box account or similar
account in which any Collections are collected or deposited and which is listed
on Exhibit IV.
"Lock-Box Bank" means, at any time, any of the banks holding one or
more Lock-Box Accounts.
"Loss Percentage" means, at any time, 45%.
"Loss Reserve" means, on any date, an amount equal to the Loss
Percentage multiplied by the Discounted Receivables Balance as of the close of
business of the Servicer on such date.
"Loss-to-Liquidation Ratio" means, as at the last day of any Accrual
Period, a percentage equal to (i) the difference of (x) the amount of
Receivables which became Charged-Off Receivables during such Accrual Period
minus (y) the amount of recoveries on Charged-Off Receivables not previously
purchased under 2.7(b) during such Accrual Period, loss and destruction fees and
late payments actually collected by the Servicer during such Accrual Period,
divided by (ii) the sum of the aggregate amount of Collections during such
Accrual Period and the amount specified in clause (i).
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries, (ii)
the ability of any Seller Party to perform its obligations under this Agreement,
(iii) the legality, validity or enforceability of this Agreement or any other
Exh. I-14
66
Transaction Document, (iv) any Purchaser's interest in the Receivables generally
or in any significant portion of the Receivables, the Related Security or the
Collections with respect thereto, or (v) the collectibility of the Receivables
generally or of any material portion of the Receivables.
"Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5. In addition to such other information as may be
included therein, each Monthly Report shall set forth the following with respect
to the related Calculation Period (as defined in the Receivables Sale
Agreement): (i) the aggregate Outstanding Balance of Receivables created and
conveyed by the Originator to Seller in purchases pursuant to the Receivables
Sale Agreement during such Calculation Period, as well as the Net Receivables
Balance included therein, (ii) the aggregate purchase price payable to the
Originator in respect of such purchases, specifying the Discount Factor (as
defined in the Receivables Sale Agreement) in effect for such Calculation Period
and the aggregate Purchase Price Credits (as defined in the Receivables Sale
Agreement) deducted in calculating such aggregate purchase price, (iii) the
aggregate amount of funds received by the Servicer during such Calculation
Period which are to be applied as Reinvestments, (iv) the increase or decrease
in the amount outstanding under the Subordinated Note (as defined in the
Receivables Sale Agreement) as of the end of such Calculation Period after
giving effect to the application of funds toward the aggregate purchase price
and the restrictions on Subordinated Loans (as defined in the Receivables Sale
Agreement) set forth in Section 1.2(a)(ii) of the Receivables Sale Agreement,
and (v) the amount of any capital contribution made by the Originator to Seller
as of the end of such Calculation Period pursuant to Section 1.2(b) of the
Receivables Sale Agreement.
"Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate Excess
Concentration Balances.
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"Obligor Owned Equipment" means, with respect to any Receivable, (i)
goods (a) which are leased (or sold) to an Obligor under a lease (or in a
transaction that involved a loan to the Obligor) that gave rise to such
Receivable and (b) which the Originator treats as owned by the Obligor or a
third party for federal, state and local income and sales tax purposes and (ii)
all financing statements or other filings with respect thereto.
"Operating Account" means the Originator's demand deposit account no.
936136-2606 at Fleet National Bank.
"Operating Account Bank" means Fleet National Bank.
Exh. I-15
67
"Originated Receivable" means the indebtedness and other obligations
owed to the Originator (at the time it arises, and before giving effect to any
transfer or conveyance under the Receivables Sale Agreement or otherwise)
whether constituting an account, chattel paper, instrument or general
intangible, arising in connection with the provision of financing to a purchaser
or lessor of Point of Sale Equipment or Wireless Equipment, and further
includes, without limitation, the obligation to pay any Finance Charges with
respect thereto. Indebtedness and other rights and obligations arising from any
one transaction, including, without limitation, indebtedness and other rights
and obligations represented by an individual invoice, shall constitute a
Receivable separate from a Receivable consisting of the indebtedness and other
rights and obligations arising from any other transaction; provided further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable regardless of whether the account
debtor or Seller treats such indebtedness, rights or obligations as a separate
payment obligation. Originated Receivable shall also include any such
indebtedness and other obligations acquired by any predecessor to the
Originator, including any entity from whom the Originator acquired all or
substantially of the assets thereof.
"Originator" means GELI in its capacity as Seller under the Receivables
Sale Agreement.
"Originator Owned Equipment" means, with respect to any Receivable, (i)
goods (a) which are leased to an Obligor under a lease that gave rise to such
Receivable and (b) which the Originator treats as owned by it for federal, state
and local income and sales tax purposes and (ii) all financing statements or
other filings with respect thereto.
"Originator Party" means each of the Provider and the Originator.
"Outstanding Balance" of any Originated Receivable at any time means
the arithmetic sum of all remaining payments which will become due on such
Originated Receivable; provided, that payments which will become due on a POS
Receivable during its renewal term, if any, shall not be counted for purposes of
the definition unless and until such renewal term has commenced.
"Performance Undertaking" means the Performance Undertaking dated as of
August 31, 2000 executed by the Provider in favor of the Agent and the
Purchasers.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Point of Sale Equipment" means equipment utilized by merchants to
initiate electronic payments.
"Pool Delinquency Ratio" means, at any time, a percentage equal to (i)
the aggregate Outstanding Balance of all Delinquent (91-120) Receivables divided
by (ii) the aggregate Outstanding Balance of all Receivables other than
Charged-Off Receivables.
Exh. I-16
68
"Pool Three-Month Average Collections to Balance Ratio" means, as of
the last day of any Accrual Period, the average of the Collections to Balance
Ratios for such Accrual Period and each of the two immediately preceding Accrual
Periods.
"Pool Three-Month Average Delinquency Ratio" means, as of the last day
of any Accrual Period, the average of the Receivables Delinquency Ratio for such
Accrual Period and each of the two immediately preceding Accrual Periods.
"Pool Three-Month Average Loss to Liquidation Ratio" means, as of the
last day of any Accrual Period, the average of the Loss-to-Liquidation Ratios
for such Accrual Period and each of the two immediately preceding Accrual
Periods.
"Pooled Commercial Paper" means Commercial Paper notes of the Company
subject to any particular pooling arrangement by the Company, but excluding
Commercial Paper issued by the Company for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by the
Company.
"POS Contract" means a contract relating to a POS Receivable.
"POS Obligor" means an Obligor in respect of a POS Receivable.
"POS Receivable" means a Receivable arising from the lease or sale of
Point of Sale Equipment.
"Potential Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
"Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions
hereunder divided by the Purchase Limit, adjusted as necessary to give effect
to the application of the terms of Sections 13.1 or 13.5.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Provider" means Hypercom Corporation, a Delaware corporation.
"Purchase Limit" means $50,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
"Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount
Exh. I-17
69
requested by Seller in the applicable Purchase Notice, (ii) the unused portion
of the Purchase Limit on the applicable purchase date and (iii) the excess, if
any, of the Discounted Receivables Balance (less the Loss Reserve) on the
applicable purchase date over the aggregate outstanding amount of Aggregate
Capital determined as of the date of the most recent Monthly Report, adjusted on
a pro forma basis to give effect to any proposed Incremental Purchase.
"Purchaser" means the Company or a Financial Institution, as
applicable.
"Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C
----------
DRB LR
where:
C = the Capital of such Purchaser Interest.
LR = the Loss Reserve.
DRB = the Discounted Receivables Balance.
Such undivided percentage ownership interest shall be initially
computed on its date of purchase. Thereafter, until its Amortization Date, each
Purchaser Interest shall be automatically recomputed (or deemed to be
recomputed) on each day prior to its Amortization Date. The variable percentage
represented by any Purchaser Interest as computed (or deemed recomputed) as of
the close of the business day immediately preceding its Amortization Date shall
remain constant at all times after such Amortization Date.
"Receivable" means, at any time, any Originated Receivable then
outstanding which Seller has purchased from Originator pursuant to the Sale
Agreement, other than any Originated Receivable conveyed by the Seller back to
the Originator or to another Person, either pursuant to the terms of the Sale
Agreement or with the written consent of the Agent.
"Receivable Discount Factor," as of any Settlement Date, means a
percentage equal to the sum of the following percentages:
Exh. I-18
70
(i) the total of the CP Costs, Yield and Fees
allocable to or charged to the Seller during the prior Accrual
Period, as a percentage of Aggregate Capital (such percentage
equivalent to be provided by the Agent to the Seller);
(ii) the percentage equivalent of the Servicing Fee;
and
(iii) 2.5%.
"Receivables Delinquency Ratio" means, at any time, a percentage equal
to (i) the Outstanding Balance of all Delinquent (91-120) Receivables divided by
(ii) the aggregate Outstanding Balance of all Receivables other than Charged-Off
Receivables.
"Receivables Sale Agreement" means the Receivables Sale Agreement,
dated as of the date hereof, between the Originator and Seller.
"Receiving Account" means each of the Collection Account, the Operating
Account and each Lock-Box Account.
"Receiving Bank" means, at any time, any of the banks holding one or
more Receiving Accounts.
"Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including computer
programs, tapes, disks, punch cards, data processing software and related
property and rights) relating to such Receivable, any Related Security therefor
and the related Obligor.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from the Company for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Company Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"Reference Bank" means Bank One or such other bank as the Agent shall
designate with the consent of Seller.
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Equipment" means the Originator Owned Equipment or the Obligor
Owned Equipment.
"Related Security" means, with respect to any Receivable:
Exh. I-19
71
(i) the Collection Account,
(ii) all of Seller's interest in the Related
Equipment or other inventory and goods (including returned or
repossessed inventory or goods), if any, the sale, financing
or lease of which by the Seller or any Originator gave rise to
such Receivable, and all insurance contracts with respect
thereto,
(iii) all other security interests or liens and
property subject thereto from time to time, if any, purporting
to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together
with all financing statements and security agreements
describing any collateral securing such Receivable,
(iv) all guaranties, letters of credit, insurance and
other agreements or arrangements of whatever character from
time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or
otherwise,
(v) all service contracts and other contracts and
agreements associated with such Receivable,
(vi) all Records related to such Receivable,
(vii) all of Seller's right, title and interest in,
to and under the Receivables Sale Agreement in respect of such
Receivable and all of Seller's right, title and interest in,
to and under the Performance Undertaking, and each other
Transaction Document executed in favor of or otherwise for the
benefit of the Seller, and
(vii) all proceeds of any of the foregoing.
"Released Overdue Receivables" shall have the meaning set forth in
Section 2.7(b).
"Required Financial Institutions" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.
"Schedule of Aggregate Receivables" has the meaning given to such term
in Section 1.5.
"Securities Intermediary" has the meaning given to such term in Section
8-102 of the UCC.
"Seller" has the meaning set forth in the preamble to this Agreement.
Exh. I-20
72
"Seller Interest" means, at any time, an undivided percentage ownership
interest of Seller in the Receivables, Related Security and all Collections with
respect thereto equal to (i) one minus (ii) the aggregate of the Purchaser
Interests.
"Seller Parties" has the meaning set forth in the preamble to this
Agreement.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means (A) the fourteenth day of each month (or if
such day is not a Business Day, then the next Business Day) and (B) the last day
of the relevant Tranche Period in respect of each Purchaser Interest of the
Financial Institutions.
"Settlement Period" means (A) in respect of each Purchaser Interest of
the Company, the immediately preceding Accrual Period, and (B) in respect of
each Purchaser Interest of the Financial Institutions, the entire Tranche Period
of such Purchaser Interest.
"Special Concentration Limit" has the meaning set forth in the
definition of Concentration Limit.
"Special Member" shall mean the person appointed as Special Member as
that term is defined in the LLC Agreement who is not at such time, and has not
been at any time, (A) a director, officer, employee or affiliate of Seller, the
Originator, or any of their respective Subsidiaries or Affiliates, or (B) the
beneficial owner (at the time of such individual's appointment as a Special
Member or at any time thereafter while serving as a Special Member) of any of
the outstanding common shares or other securities of Seller, the Originator, or
any of their respective Subsidiaries or Affiliates.
"Subsidiary" of a Person means (i) any corporation of which more than
50% of the outstanding securities having ordinary voting power shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization of which more than 50% of the ownership interests having ordinary
voting power shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of Seller.
"Takeout Financing" means an offering and sale of asset-backed
securities utilizing Originated Receivables, which shall result in the
conveyance to Originator or a third party of all or substantially all of the
Receivables for a purchase price that is not less than the Aggregate Unpaids at
such time and the application of the proceeds of such sale to reduce the
Aggregate Unpaids to zero.
Exh. I-21
73
"Takeout Financing Deadline" means the earlier of (i) April 30, 2001
and (ii) the 30th day following the first date on which the Outstanding Balance
of Receivables is equal to or greater than $85,000,000. In the event that, on
the earlier of such dates, unfavorable capital markets exist which, in the
reasonable discretion of the Agent, prevent the Seller Parties from consummating
a Takeout Financing, then the Takeout Financing Deadline shall be extended for
an additional 30 days beyond such earlier date (and shall be subject to further
extension by reason of the continuation of such disruption until such disruption
has ended if the Agent consents to such extension).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Third-Party Servicing Costs" means the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing, administering and
collecting the Receivables if Seller or one of its Affiliates is not then acting
as the Servicer.
"Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:
(a) if Yield for such Purchaser Interest is
calculated on the basis of the LIBO Rate, a period of one,
two, three or six months, or such other period as may be
mutually agreeable to the Agent and Seller, commencing on a
Business Day selected by Seller or the Agent pursuant to this
Agreement. Such Tranche Period shall end on the day in the
applicable succeeding calendar month which corresponds
numerically to the beginning day of such Tranche Period,
provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche
Period shall end on the last Business Day of such succeeding
month; or
(b) if Yield for such Purchaser Interest is
calculated on the basis of the Base Rate, a period commencing
on a Business Day selected by Seller and agreed to by the
Agent, provided no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day,
such Tranche Period shall end on the next succeeding Business Day, provided,
however, that in the case of Tranche Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Tranche Period
shall end on the immediately preceding Business Day. In the case of any Tranche
Period for any Purchaser Interest of which commences before the Amortization
Date and would otherwise end on a date occurring after the Amortization Date,
such Tranche Period shall end on the Amortization Date. The duration of each
Tranche Period which commences after the Amortization Date shall be of such
duration as selected by the Agent.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, each Performance Undertaking,
each Collection Account Agreement or Receiving Account Agreement, the Fee
Letter, the Subordinated Note (as defined in the Receivables Sale
Exh. I-22
74
and all other instruments, documents and agreements executed and delivered in
connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Wireless Contract" means a Contract relating to a Wireless Receivable.
"Wireless Equipment" means electronic paging or messaging devices.
"Wireless Obligor" means an Obligor in respect of a Wireless
Receivable.
"Wireless Receivable" means a Receivable arising from the sale or lease
of Wireless Equipment.
"Yield" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, an amount equal to the product of the
applicable Discount Rate for each Purchaser Interest multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Tranche Period,
annualized on a 360 day basis.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles. All terms
used in Article 9 of the UCC in the State of Illinois, and not specifically
defined herein, are used herein as defined in such Article 9. As used herein,
"including" shall mean "including, without limitation," and shall not be
construed to be an exclusive listing.
Exh. I-23
75
EXHIBIT II-A
FORM OF PURCHASE NOTICE
[Date]
Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Asset Backed Finance Treasury
Re: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated
as of August 31, 2000, (the "Receivables Purchase Agreement," the terms defined
therein being used herein as therein defined), by and among the undersigned, as
Seller, Golden Eagle Leasing, Inc., as initial Servicer, Falcon Asset
Securitization Corporation (the "Company"), certain Financial Institutions
parties thereto and Bank One, NA (Main Office Chicago), as Agent (the
"Receivables Purchase Agreement"). Capitalized terms used herein shall have the
meanings assigned to such terms in the Receivables Purchase Agreement.
The Agent is hereby notified of the following Incremental Purchase:
Purchase Price: $
Date of Purchase:
Requested Discount Rate: [LIBO Rate] [Base Rate] [Pooled
Commercial Paper rate]
Please wire-transfer the Purchase Price (net of any offsets to which
you are entitled) in immediately available funds on the above-specified date of
purchase to:
Exh. II-A-1
76
[Account Name]
[Account No.]
[Fleet Boston Bank]
[Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. No. ( )
Please advise [Name] at telephone no ( )_________________ if Company
will not be making this purchase.
In connection with the Incremental Purchase to be made on the above
listed "Date of Purchase" (the "Purchase Date"), the Seller hereby certifies
that the following statements are true on the date hereof, and will be true on
the Purchase Date (before and after giving effect to the proposed Incremental
Purchase):
(i) the representations and warranties of the Seller set forth
in Section 5.1 of the Receivables Purchase Agreement are true and correct on and
as of the Purchase Date as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from the proposed Incremental Purchase, that will constitute an Amortization
Event or a Potential Amortization Event;
(iii) the Facility Termination Date has not occurred, the
Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser
Interests do not exceed 100%;
(iv) either (x) the amount of funds in the Hedge Account on
such date shall equal or exceed the Hedge Account Required Balance as of such
date or (y) Seller shall have arranged for Interest Rate ▇▇▇▇▇▇ in respect of
the Receivables which are satisfactory in form and substance to the Agent; and
(v) the amount of Aggregate Capital is $ after giving
effect to the Incremental Purchase to be made on the Purchase Date.
Very truly yours,
GOLDEN EAGLE RECEIVABLES LLC
By:
-----------------------------------
Name:
Title:
Exh. II-A-2
77
EXHIBIT II-B
FORM OF INTERIM REPORT
See Attached
Exh. II-B-1
78
EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
Places of Business:
1. Golden Eagle Receivables LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Golden Eagle Leasing, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Locations of Records:
1. Golden Eagle Receivables LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Golden Eagle Leasing, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Federal Employer Identification Numbers:
1. Golden Eagle Receivables LLC None
2. Golden Eagle Leasing, Inc. ▇▇-▇▇▇▇▇▇▇
Exh. III-1
79
EXHIBIT IV
FORM OF HEDGE ACCOUNT AGREEMENT
[To Come]
Exh. IV-1
80
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement dated as of August 31, 2000 among Golden Eagle
Receivables LLC (the "Seller"), Golden Eagle Leasing, Inc., as the initial
"Servicer" (the Servicer together with the Seller, the "Seller Parties" and each
a "Seller Party"), the Purchasers party thereto including Falcon Asset
Securitization Corporation, and Bank One, NA (Main Office Chicago), as Agent for
such Purchasers (the "Agreement").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of Seller.
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of Seller during the accounting period covered by the attached
financial statements.
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
an Amortization Event or Potential Amortization Event, as each such term is
defined under the Agreement, during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.
4. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Seller has taken, is taking, or
proposes to take with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exh. V-1
81
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of , .
GOLDEN EAGLE RECEIVABLES LLC
By:
------------------------------------
Name:
Title:
Exh. V-2
82
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
[To Come]
▇▇▇. ▇▇-▇
▇▇
▇▇▇▇▇▇▇ ▇▇▇
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Assignment Agreement) is
entered into as of the___ day of____________,____, by and
between_____________________ ("Seller") and __________________ ("Purchaser").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered
in accordance with Section 12.1(b) of that certain Receivables Purchase
Agreement dated as of August 31, 2000 by and among Golden Eagle Receivables LLC
("GERL"), Golden Eagle Leasing, Inc., Falcon Asset Securitization Corporation,
Bank One, NA (Main Office Chicago) as Agent, and the Financial Institutions
party thereto (as amended, modified or restated from time to time, the "Purchase
Agreement"). Capitalized terms used and not otherwise defined herein are used
with the meanings set forth or incorporated by reference in the Purchase
Agreement.
B. The Seller is a Financial Institution party to the Purchase
Agreement, and the Purchaser wishes to become a Financial Institution
thereunder; and
C. The Seller is selling and assigning to the Purchaser an
undivided______% (the "Transferred Percentage") interest in all of Seller's
rights and obligations under the Purchase Agreement and the Transaction
Documents, including the Seller's Commitment and (if applicable) the Capital of
the Seller's Purchaser Interests as set forth herein;
The parties hereto hereby agree as follows:
1. This sale, transfer and assignment effected by this
Assignment Agreement shall become effective (the "Effective Date") two (2)
Business Days (or such other date selected by the Agent in its sole discretion)
following the date on which a notice substantially in the form of Schedule II to
this Assignment Agreement ("Effective Notice") is delivered by the Agent to the
Company, the Seller and the Purchaser. From and after the Effective Date, the
Purchaser shall be a Financial Institution party to the Purchase Agreement for
all purposes thereof as if the Purchaser were an original party thereto and the
Purchaser agrees to be bound by all of the terms and provisions contained
therein.
2. If the Seller has no outstanding Capital under the Purchase
Agreement, on the Effective Date, Seller shall be deemed to have hereby
transferred and assigned to the Purchaser, without recourse, representation or
warranty (except as provided in paragraph 6 below), and the Purchaser shall be
deemed to have hereby irrevocably taken, received and assumed from the Seller,
the Transferred
Exh. VII-1
84
Percentage of the Seller's Commitment and all rights and obligations associated
therewith under the terms of the Purchase Agreement, including the Transferred
Percentage of the Seller's future funding obligations under Section 4.1 of the
Purchase Agreement.
3. If the Seller has any outstanding Capital under the
Purchase Agreement, at or before 12:00 noon, local time of the Seller, on the
Effective Date the Purchaser shall pay to the Seller, in immediately available
funds, an amount equal to the sum of (i) the Transferred Percentage of the
outstanding Capital of the Seller's Purchaser Interests (such amount being
hereinafter referred to as the "Purchaser's Capital"); (ii) all accrued but
unpaid (whether or not then due) Yield attributable to the Purchaser's Capital;
and (iii) accruing but unpaid fees and other costs and expenses payable in
respect of the Purchaser's Capital for the period commencing upon each date such
unpaid amounts commence accruing, to and including the Effective Date (the
"Purchaser's Acquisition Cost"); whereupon, the Seller shall be deemed to have
sold, transferred and assigned to the Purchaser, without recourse,
representation or warranty (except as provided in paragraph 6 below), and the
Purchaser shall be deemed to have hereby irrevocably taken, received and assumed
from the Seller, the Transferred Percentage of the Seller's Commitment and the
Capital of the Seller's Purchaser Interests (if applicable) and all related
rights and obligations under the Purchase Agreement and the Transaction
Documents, including the Transferred Percentage of the Seller's future funding
obligations under Section 4.1 of the Purchase Agreement.
4. Concurrently with the execution and delivery hereof, the
Seller will provide to the Purchaser copies of all documents requested by the
Purchaser which were delivered to such Seller pursuant to the Purchase
Agreement.
5. Each of the parties to this Assignment Agreement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Assignment Agreement.
6. By executing and delivering this Assignment Agreement, the
Seller and the Purchaser confirm to and agree with each other, the Agent and the
Financial Institutions as follows: (a) other than the representation and
warranty that it has not created any Adverse Claim upon any interest being
transferred hereunder, the Seller makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made by any other Person in or in connection with the Purchase
Agreement or the Transaction Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Purchaser, the Purchase
Agreement or any other instrument or document furnished pursuant thereto or the
perfection, priority, condition, value or sufficiency of any collateral; (b) the
Seller makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Seller, any Obligor, GERL, any GERL
Affiliate or the performance or observance by the Seller, any Obligor, GERL, any
GERL Affiliate of any of their respective obligations under the Transaction
Documents or any other instrument or document furnished pursuant thereto or in
connection therewith; (c) the Purchaser confirms that it has received a copy of
the Transaction Documents,
Exh. VII-2
85
together with such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment
Agreement; (d) the Purchaser will, independently and without reliance upon the
Agent, the Company, the Seller or any other Financial Institution or Purchaser
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 Purchase Agreement and the Transaction Documents; (e) the Purchaser
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Transaction Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (f) the Purchaser appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the
Transaction Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (g) the
Purchaser agrees that it will perform in accordance with their terms all of the
obligations which, by the terms of the Purchase Agreement and the Transaction
Documents, are required to be performed by it as a Financial Institution or,
when applicable, as a Purchaser.
7. Each party hereto represents and warrants to and agrees
with the Agent that it is aware of and will comply with the provisions of the
Purchase Agreement, including Sections 4.1, 13.1 and 14.6 thereof.
8. Schedule I hereto sets forth the revised Commitment of the
Seller and the Commitment of the Purchaser, as well as administrative
information with respect to the Purchaser.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
10. The Purchaser hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all senior
indebtedness for borrowed money 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.
Exh. VII-3
86
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers of the
date hereof.
[SELLER]
By:
-----------------------------------------
Title:
-----------------------------------
[Purchaser]
By:
-----------------------------------------
Title:
-----------------------------------
Exh. VII-4
87
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: ,
TRANSFERRED PERCENTAGE: %
▇-▇ ▇-▇ ▇-▇ ▇-▇
OUTSTANDING
COMMITMENT COMMITMENT CAPITAL RATABLE
SELLER EXISTING REVISED (IF ANY) SHARE
------ -------- ------- -------------- ---------
▇-▇ ▇-▇ ▇-▇
OUTSTANDING
COMMITMENT CAPITAL RATABLE
PURCHASER EXISTING (IF ANY) SHARE
------ ---------- -------------- ---------
ADDRESS FOR NOTICES
--------------------------
--------------------------
--------------------------
Attention:
Phone:
Fax:
Exh. VII-5
88
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: , Seller
------------------------
------------------------
------------------------
------------------------
TO: , Purchaser
------------------------
------------------------
------------------------
------------------------
The undersigned, as Agent under the Purchase Agreement dated
as of August 31, 2000 by and among Golden Eagle Receivables LLC, Golden Eagle
Leasing, Inc., Falcon Asset Securitization Corporation, Bank One, NA (Main
Office Chicago), as Agent, and the Financial Institutions made a party thereto
from time to time, hereby acknowledges receipt of executed counterparts of a
completed Assignment Agreement dated as of ,
between , as Seller, and , as Purchaser.
Terms defined in such Assignment Agreement are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that
the Effective Date will be , .
2. The Company hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the Purchase Agreement.
3. Pursuant to such Assignment Agreement, the Purchaser is
required to pay $ to the Seller at or before 12:00 noon (local time
of the Seller) on the Effective Date in immediately available funds.
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO),
individually and as Agent
By:
--------------------------------------
Title:
-----------------------------------
FALCON ASSET SECURITIZATION CORPORATION
By:
--------------------------------------
Authorized Signatory
Exh. VII-6
89
EXHIBIT VIII
CREDIT AND COLLECTION POLICY
See Attached
Exh. VIII-1
90
EXHIBIT IX
FORM OF CONTRACT(S)
See Attached
Exh.IX-1
91
EXHIBIT X
FORM OF MONTHLY REPORT
See Attached
Exh.X-2
92
EXHIBIT XI
FORM OF PERFORMANCE UNDERTAKING
This Performance Undertaking (this "Undertaking"), dated as of August
31, 2000, is executed by Hypercom Corporation, a Delaware corporation (the
"Provider") in favor of Bank One NA (Main Office Chicago), as Agent (together
with its successors and assigns, "Recipient").
RECITALS
1. Golden Eagle Leasing, Inc. an Arizona corporation ("Originator") and
Golden Eagle Receivables LLC ("SPC") have entered into a Receivables Sale
Agreement, dated as of August 31, 2000 (as amended, restated or otherwise
modified from time to time, the "Sale Agreement"), pursuant to which Originator,
subject to the terms and conditions contained therein, is selling its right,
title and interest in certain of its accounts receivable to SPC.
2. SPC, Recipient, Falcon Asset Securitization Corporation, Originator
and the Financial Institutions party thereto have entered into a Receivables
Purchase Agreement, dated as of August 31, 2000 (as amended, restated or
otherwise modified from time to time, the "Purchase Agreement"), pursuant to
which SPC, subject to the terms and conditions contained therein, is selling to
the Agent on behalf of the Purchasers an undivided interest in certain of its
accounts receivable.
3. Originator is a Subsidiary of Provider and Provider is expected to
receive substantial direct and indirect benefits from the sale of Receivables by
Originator to SPC pursuant to the Sale Agreement (which benefits are hereby
acknowledged).
4. As an inducement for Recipient to purchase interests in Receivables
pursuant to the Purchase Agreement, Provider has agreed to guaranty the due and
punctual performance by Originator of its obligations under the Purchase
Agreement and its Servicing Related Obligations (as hereinafter defined).
5. Provider wishes to guaranty the due and punctual performance by
Originator of its obligations to Recipient under or in respect of the Purchase
Agreement and its Servicing Related Obligations (as hereinafter defined), as
provided herein.
AGREEMENT
NOW, THEREFORE, Provider hereby agrees as follows:
Exh. XI-1
93
Section 1. Definitions. Capitalized terms used herein and not
defined herein shall the respective meanings assigned thereto in the Purchase
Agreement or the Purchase Agreement (as hereinafter defined). In addition:
"Obligations" means, collectively, (i) all covenants, agreements,
terms, conditions and indemnities to be performed and observed by Originator
under and pursuant to the Sale Agreement and each other document executed and
delivered by Originator pursuant to the Sale Agreement, including, without
limitation, the due and punctual payment of all sums which are or may become due
and owing by Originator under the Sale Agreement, whether for fees, expenses
(including counsel fees), indemnified amounts or otherwise, whether upon any
termination or for any other reason and (ii) all obligations of Originator (1)
as Servicer under the Purchase Agreement or (2) which arise pursuant to Sections
8.2, 8.3 or 14.4(a) of the Purchase Agreement as a result of its termination as
Servicer (all such obligations collectively, the "Servicing Related
Obligations").
Section 2. Guaranty of Performance of Obligations. Provider
hereby guarantees to Recipient, the full and punctual payment and performance by
Originator of the Obligations. This Undertaking is an absolute, unconditional
and continuing guaranty of the full and punctual performance of all of the
Obligations of Originator under the Agreements and each other document executed
and delivered by Originator pursuant to the Agreements and is in no way
conditioned upon any requirement that Recipient first attempt to collect any
amounts owing by Originator to Recipient, the Agent or the Purchasers from any
other Person or resort to any collateral security, any balance of any deposit
account or credit on the books of Recipient, the Agent or any Purchaser in favor
of Originator or any other Person or other means of obtaining payment. Should
Originator default in the payment or performance of any of the Obligations,
Recipient (or its assigns) may cause the immediate performance by Provider of
the Obligations and cause any payment Obligations to become forthwith due and
payable to Recipient (or its assigns), without demand or notice of any nature
(other than as expressly provided herein), all of which are hereby expressly
waived by Provider. Notwithstanding the foregoing, this Undertaking is not a
guarantee of the collection of any of the Receivables and Provider shall not be
responsible for any Obligations to the extent the failure to perform such
Obligations by Originator results from Receivables being uncollectible on
account of the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; provided, that nothing herein shall relieve Originator from performing
in full its Obligations under the Sale Agreement or Provider of its undertaking
hereunder with respect to the full performance of such duties.
Section 3. Provider's Further Agreements to Pay. Provider
further agrees, as the principal obligor and not as a guarantor only, to pay to
Recipient (and its assigns), forthwith upon demand in funds immediately
available to Recipient, all reasonable costs and expenses (including court costs
and legal expenses) incurred or expended by Recipient in connection with the
Obligations, this Undertaking and the enforcement thereof, together with
interest on amounts recoverable under this Undertaking from the time when such
amounts become due until payment, at a rate of interest (computed for the actual
number of days elapsed based on a 360 day year) equal to the Base Rate plus 2%
per annum, such rate of interest changing when and as the Base Rate changes.
Exh. XI-2
94
Section 4. Waivers by Provider. Provider waives notice of
acceptance of this Undertaking, notice of any action taken or omitted by
Recipient (or its assigns) in reliance on this Undertaking, and any requirement
that Recipient (or its assigns) be diligent or prompt in making demands under
this Undertaking, giving notice of any Amortization Event, other default or
omission by Originator or asserting any other rights of Recipient under this
Undertaking. Provider warrants that it has adequate means to obtain from
Originator, on a continuing basis, information concerning the financial
condition of Originator, and that it is not relying on Recipient to provide such
information, now or in the future. Provider also irrevocably waives all defenses
(i) that at any time may be available in respect of the Obligations by virtue of
any statute of limitations, valuation, stay, moratorium law or other similar law
now or hereafter in effect or (ii) that arise under the law of suretyship,
including impairment of collateral. Recipient (and its assigns) shall be at
liberty, without giving notice to or obtaining the assent of Provider and
without relieving Provider of any liability under this Undertaking, to deal with
Originator and with each other party who now is or after the date hereof becomes
liable in any manner for any of the Obligations, in such manner as Recipient in
its sole discretion deems fit, and to this end Provider agrees that the validity
and enforceability of this Undertaking, including without limitation, the
provisions of Section 7 hereof, shall not be impaired or affected by any of the
following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Obligations or any part thereof or any
agreement relating thereto at any time; (b) any failure or omission to enforce
any right, power or remedy with respect to the Obligations or any part thereof
or any agreement relating thereto, or any collateral securing the Obligations or
any part thereof; (c) any waiver of any right, power or remedy or of any
Amortization Event, or default with respect to the Obligations or any part
thereof or any agreement relating thereto; (d) any release, surrender,
compromise, settlement, waiver, subordination or modification, with or without
consideration, of any other obligation of any person or entity with respect to
the Obligations or any part thereof; (e) the enforceability or validity of the
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to the Obligations or any part
thereof; (f) the application of payments received from any source to the payment
of any payment Obligations of Originator or any part thereof or amounts which
are not covered by this Undertaking even though Recipient (or its assigns) might
lawfully have elected to apply such payments to any part or all of the payment
Obligations of Originator or to amounts which are not covered by this
Undertaking; (g) the existence of any claim, setoff or other rights which
Provider may have at any time against Originator in connection herewith or any
unrelated transaction; (h) any assignment or transfer of the Obligations or any
part thereof; or (i) any failure on the part of Originator to perform or comply
with any term of the Agreements or any other document executed in connection
therewith or delivered thereunder, all whether or not Provider shall have had
notice or knowledge of any act or omission referred to in the foregoing clauses
(a) through (i) of this Section 4.
Section 5. Unenforceability of Obligations Against Originator.
Notwithstanding (a) any change of ownership of Originator or the insolvency,
bankruptcy or any other change in the legal status of Originator; (b) the change
in or the imposition of any law, decree, regulation or other governmental act
which does or might impair, delay or in any way affect the validity,
enforceability or the payment when due of the Obligations; (c) the failure of
Originator or Provider to maintain in full force, validity or effect or to
obtain or renew when required all governmental and other approvals, licenses or
consents required in connection with the Obligations or this Undertaking, or to
take any other action required in connection with
Exh. XI-3
95
the performance of all obligations pursuant to the Obligations or this
Undertaking; or (d) if any of the moneys included in the Obligations have become
irrecoverable from Originator for any other reason other than final payment in
full of the payment Obligations in accordance with their terms, this Undertaking
shall nevertheless be binding on Provider. This Undertaking shall be in addition
to any other guaranty or other security for the Obligations, and it shall not be
rendered unenforceable by the invalidity of any such other guaranty or security.
In the event that acceleration of the time for payment of any of the Obligations
is stayed upon the insolvency, bankruptcy or reorganization of Originator or for
any other reason with respect to Originator, all such amounts then due and owing
with respect to the Obligations under the terms of the Agreements, or any other
agreement evidencing, securing or otherwise executed in connection with the
Obligations, shall be immediately due and payable by Provider.
Section 6. Representations and Warranties. Provider hereby
represents and warrants to Recipient that:
(a) Existence and Standing. Provider 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 governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted.
(b) Authorization, Execution and Delivery; Binding
Effect. Provider has the corporate power and authority and legal right to
execute and deliver this Undertaking, perform its obligations hereunder and
consummate the transactions herein contemplated. The execution and delivery by
Provider of this Undertaking, the performance of its obligations and
consummation of the transactions contemplated hereunder have been duly
authorized by proper corporate proceedings, and Provider has duly executed and
delivered this Undertaking. This Undertaking constitutes the legal, valid and
binding obligation of Provider enforceable against Provider in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally.
(c) No Conflict; Government Consent. The execution
and delivery by Provider of this Undertaking and the performance of its
obligations hereunder are within its corporate powers, have been duly authorized
by all necessary corporate action, do not contravene or violate (i) its articles
of incorporation or by-laws, (ii) any law, rule or regulation applicable to it,
(iii) any restrictions under any agreement, contract or instrument to which it
is a party or by which it or any of its property is bound, or (iv) any order,
writ, judgment, award, injunction or decree binding on or affecting it or its
property and, do not result in the creation or imposition of any Adverse Claim
on assets of Provider.
(d) Financial Statements. The consolidated financial
statements of Provider and its consolidated Subsidiaries dated as of December
31, 1999 heretofore delivered to Recipient have been prepared in accordance with
generally accepted accounting principles consistently applied and fairly present
in all material respects the consolidated financial condition and results of
operations of Provider and its consolidated Subsidiaries as of such date and for
the period ended on such date. Since the later of (i) June
Exh. XI-4
96
30, 2000 and (ii) the last time this representation was made or deemed made, no
event has occurred which would or could reasonably be expected to have a
Material Adverse Effect.
(e) Taxes. Provider has filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by Provider or any of its Subsidiaries, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. The United States income tax returns of Provider have been audited by
the Internal Revenue Service through the fiscal year ended December 31, 1995. No
federal or state tax liens have been filed and no claims are being asserted with
respect to any such taxes. The charges, accruals and reserves on the books of
Provider in respect of any taxes or other governmental charges are adequate.
(f) Litigation and Contingent Obligations. Except as
disclosed in the filings made by Provider with the Securities and Exchange
Commission, there are no actions, suits or proceedings pending or, to the best
of Provider's knowledge threatened against or affecting Provider or any of its
properties, in or before any court, arbitrator or other body, that could
reasonably be expected to have a material adverse effect on (i) the business,
properties, condition (financial or otherwise) or results of operations of
Provider and its Subsidiaries taken as a whole, (ii) the ability of Provider to
perform its obligations under this Undertaking, or (iii) the validity or
enforceability of any of this Undertaking or the rights or remedies of Recipient
hereunder. Provider is not default with respect to any order of any court,
arbitrator or governmental body and does not have any material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 6(d).
Section 7. Covenants. The Provider hereby covenants and agrees
for the benefit of the Purchasers, until all of the Obligations have been
satisfied in full and the Purchase Agreement has been terminated, as follows:
Section 7.1 Financial Reporting. It will maintain a system of
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Agent:
(a) Annual Reporting. Within 90 days after the close
of each of its fiscal years, a complete copy of the Provider consolidated audit
report, which shall include at least the Provider consolidated balance sheet,
income statement and statement of cash flow for such year, examined in
accordance with generally accepted auditing standards by an independent public
accountant of international reputation selected by the Provider and reasonably
acceptable to the Agent, together with the certificate described in clause (c)
below. Such auditor's report shall be free from exceptions, reservations or
qualifications as a result of which the auditor is unable to conclude that the
financial statements fairly present or adequately disclose the financial
condition of the Provider and its consolidated Subsidiaries and shall not be
limited because of restricted or limited access by such accountant to any
material portion of the Provider's or any of its Subsidiary's records.
Exh. XI-5
97
(b) Quarterly Reporting. Within 60 days after the
close of each of the first three quarterly periods of each of its fiscal years,
the Provider's unaudited consolidated balance sheet, income statement and
statement of cash flow for such quarter and that portion of the fiscal year
ending with such quarter, certified by the chief financial officer of the
Provider as being complete and correct and fairly presenting the Provider's and
its consolidated Subsidiaries' financial condition and results of operations as
of the end of such quarter and for that portion of the fiscal year ending with
such quarter, together with the certificate described in clause (c) below.
(c) Compliance Certificate. Together with the
financial statements required to be delivered under clauses (a) and (b) above, a
compliance certificate in substantially the form of Exhibit A hereto signed by
the Provider's chief financial officer and dated the date of such annual
financial statement or such quarterly financial statement, as the case may be.
(d) Shareholders Statements and Reports. Promptly
upon the furnishing thereof to the shareholders of the Provider, copies of all
financial statements, reports and proxy statements so furnished.
(e) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements, notices of securities issuance, annual,
quarterly, monthly or other regular reports, if any, which the Provider or any
of its Subsidiaries files with the Securities and Exchange Commission.
(f) Notices under Transaction Documents. Forthwith
upon its receipt of any notice, request for consent, certification, report or
other communication under or in connection with any Transaction Document from
any Person other than the Agent or any Purchaser, copies of the same (other than
any such notice, request, certification, report or other communication delivered
by or in connection with any Obligor that does not indicate the occurrence or
the likely occurrence of a material adverse effect on the collectibility of a
material portion of Receivables attributable to such Obligor).
(g) Notice of Downgrade of Provider. Provider will
notify the Purchasers in writing of any downgrade in any rating that may be
assigned to any Indebtedness of the Provider, by Standard and Poor's Ratings
Services or by ▇▇▇▇▇'▇ Investors Service, Inc., setting forth the indebtedness
and the nature of such change. Such notice shall be delivered promptly upon
learning of the occurrence thereof, describing the same and, if applicable, the
steps being taken with respect thereto.
(h) Change in Credit and Collection Policy. At least
thirty (30) days prior to the effectiveness of any material change in or
amendment to the Credit and Collection Policy, a Copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to adversely affect the collectibility of the Receivables or decrease the
credit quality of any newly created Receivables, requesting the Agent's consent
thereto.
Exh. XI-6
98
(i) Other Information. Such other information
(including non-financial information) as the Agent (or any of its assignees) may
from time to time reasonably request.
Section 7.2 Notices. Until all of the Obligations have been
indefeasibly paid and performed in full and until all other obligations of the
Provider under this Performance Undertaking have been performed, the Provider
agrees that it shall notify the Agent in writing of any of the following
promptly upon learning of the occurrence thereof, describing the same and, if
applicable, the steps being taken with respect thereto.
(a) Judgments and Proceedings.
(i) The entry of any judgment or decree against the
Provider or any Subsidiary of the Provider; or the institution of any
litigation, arbitration proceeding or governmental proceeding against the
Provider or any Subsidiary of the Provider if the aggregate amount of all
judgments and decrees then outstanding against the Provider or any Subsidiary of
the Provider exceeds $500,000.
(ii) Material Adverse Effect. The occurrence
of any event or condition that has, or could reasonably be
expected to have, a Material Adverse Effect.
Section 7.3 Financial Covenants. Until all of the Obligations
have been indefeasibly paid and performed in full and until all other
obligations of the Provider under this Performance Undertaking have been
performed, the Provider agrees that, unless the Agent shall otherwise consent in
writing, it shall, and shall permit any of its Subsidiaries to maintain:
(a) Tangible Net Worth. A minimum Tangible Net Worth
in an amount equal to the sum of (i) $170,000,000.00 and (ii) the aggregate of
forty percent (40.0%) of the consolidated Net Income of Provider for each fiscal
year, commencing with that fiscal year ending December 31, 2000. Tangible Net
Worth shall not be reduced by any Net Income for the fiscal year that is less
than zero (i.e., a net deficit or loss) in other words, if Net Income in any
fiscal year is less than zero, such Net Income shall, for purposes of Section
7.3 be deemed to be zero.
(b) EBITDA Ratio. A maximum EBITDA Ratio of 4:00 to
1.0 as of the end of any fiscal quarter (commencing with the fiscal quarter
ending June 30, 2000) ending prior to December 31, 2000 and 3.75 to 1.0 as of
the end of any fiscal quarter ending on or after December 31, 2001.
(c) Interest Coverage Ratio. A minimum interest
coverage ratio of 2.0 to l.0 as of the end of any fiscal quarter, commencing
with the fiscal quarter ending June 30, 2000. This ratio shall be calculated on
a rolling four quarter basis by dividing (i) EBITDA for the four fiscal quarters
ending on the applicable quarter end date, by (ii) the Interest Expense for such
four fiscal quarters, all on a consolidated basis.
Exh. XI-7
99
(d) Definitions. As used herein, the following terms
shall have the meanings specified below.
"Capital Lease Obligations" means, as of the date of calculation, any
and all lease obligations of the Related Parties on a consolidated basis that,
in accordance with GAAP, have been or are required to be capitalized on the
books of the Related Parties.
"Cirilium" means a joint venture between Provider and Inter-Tel
Corporation.
"Domestic" means any entity formed under the laws of a state of the
United States of America.
"EBITDA" means for any period Net Income for such period plus to the
extent deducted from revenues in determining such Net Income: (i) Interest
Expense, (ii) expenses for income taxes paid or accrued, (iii) deprecation, (iv)
amortization, and (v) extraordinary losses incurred other than in the ordinary
course of business (including foreign currency translation losses and Non-Cash
Losses related to Borrower's share of equity losses of Cirilium), and less to
the extent included in Net Income, extraordinary gains realized other than in
the ordinary course of business (including foreign currency translation gains
and Non-Cash Gains related to Borrower's share of equity profits of Cirilium),
all calculated for the Borrower and its Subsidiaries on a consolidated basis.
"EBITDA Ratio" means, as of the last day of any fiscal quarter of
Provider, the ratio of (i) the sum of Indebtedness less Eligible Marketable
Securities as of the last day of such fiscal quarter to (ii) EBITDA, determined
on a consolidated basis in accordance with GAAP, for the prior twelve (12) month
period ending on such date.
"Eligible Marketable Securities" means the sum of (a) all cash and
Marketable Securities held by a Domestic Related Party which are (i) not subject
to any offset or restriction and (ii) subject to a perfected security interest
in favor of the Agent for the benefit of the Banks and not to any other Lien,
less (b) $5,000,000.00; where "Marketable Securities" means: (A) commercial
paper: securities related in the highest short-term debt category by at least
two for the six Nationally Recognized Statistical Rating Organizations, those
being: ▇▇▇▇▇'▇, S&P, Duff & Phelps, Fitch, Thomson Bank Watch, and International
Bank Credit Analysis; (B) asset-backed securities: issues with a credit rating
of AAA or better by Moody's or S&P; (C) corporate notes: securities with a
credit rating of A or better by Moody's or S&P; or (D) money market: funds
investing in like instruments.
"Intangible Assets" means all intangible assets under GAAP, provided,
that regardless of GAAP, Intangible Assets shall include: copyrights;
franchises; goodwill; licenses; loan origination fees; non-competition
covenants; organization or formation expenses; patents; shares of the capital
stock of Provider; service marks; service names; trademarks; tradenames;
write-up in the book value of any asset in excess of the acquisition cost of the
asset to Provider; any amount, however designated on the balance sheet,
representing the excess of the purchase price paid for assets or stock acquired
over the value assigned thereto on the books of Provider; unamortized debt
discount; deferred discount; computer software; and
Exh. XI-8
100
research and development costs and expenses.
"Interest Expense" means, for any period, (determined on a consolidated
and combined basis, without duplication, in accordance with GAAP) all interest
in respect of Indebtedness (including the interest component of any payments in
respect of Capital Lease Obligations but excluding the capitalization and
amortization of any capitalized financing fees) accrued or capitalized during
such period (whether or not actually paid during such period).
"Lien" means each and all of the following: (i) any lease or other
right to use; (ii) any assignment as security, conditional sale, grant in trust,
lien, mortgage, pledge, security interest, title retention arrangement, other
encumbrance, or other interest or right securing the payment of money or the
performance of any other liability or obligation, whether voluntarily or
involuntarily created and whether arising by agreement, document, or instrument,
under any law, ordinance, regulation, or rule (federal, state, or local), or
otherwise; and (iii) any option, right of first refusal, or other interest or
right.
"Net Income" means, for any period, the net income or net loss for such
period of the Provider, on a consolidated basis, determined in conformity with
GAAP.
"Net-Cash Gain" means any gain recognized by any Related Party,
including without limitation any profit related to Cirilium.
"Non-Cash Loss" means any loss recognized by any Related Party,
including without limitation any loss related to Cirilium.
"Related Party" means any of Provider and each subsidiary of Provider
consolidated or combined with Provider in the audited financial statements
initially delivered by Provider to the Banks and "Related Parties" means,
collectively, all such Persons (in each case, other than any special purpose
entity formed for the purpose of entering into any securitization transaction).
"Tangible Net Worth" means (i) the sum of all consolidated capital
accounts of the Provider (including, without limitation, any paid-in capital,
capital surplus, and retained earnings but excluding for the avoidance of doubt,
Treasury Stock), less (ii) the sum of the value on Provider's books of all
consolidated Intangible Assets.
Section 8. Subrogation; Subordination. Notwithstanding
anything to the contrary contained herein, until the Obligations are paid in
full Provider: (a) will not enforce or otherwise exercise any right of
subrogation to any of the rights of Recipient, the Agent or any Purchaser
against Originator, (b) hereby waives all rights of subrogation (whether
contractual, under Section 509 of the United States Bankruptcy Code, at law or
in equity or otherwise) to the claims of Recipient, the Agent and the Purchasers
against Originator and all contractual, statutory or legal or equitable rights
of contribution, reimbursement, indemnification and similar rights and "claims"
(as that term is defined in the United States Bankruptcy Code) which Provider
might now have or hereafter acquire against Originator that arise from the
existence
Exh. XI-9
101
or performance of Provider's obligations hereunder, (c) will not claim any
setoff, recoupment or counterclaim against Originator in respect of any
liability of Provider to Originator and (d) waives any benefit of and any right
to participate in any collateral security which may be held by Beneficiaries,
the Agent or the Purchasers. The payment of any amounts due with respect to any
indebtedness of Originator now or hereafter owed to Provider is hereby
subordinated to the prior payment in full of all of the Obligations. Provider
agrees that, after the occurrence of any default in the payment or performance
of any of the Obligations, Provider will not demand, ▇▇▇ for or otherwise
attempt to collect any such indebtedness of Originator to Provider until all of
the Obligations shall have been paid and performed in full. If, notwithstanding
the foregoing sentence, Provider shall collect, enforce or receive any amounts
in respect of such indebtedness while any Obligations are still unperformed or
outstanding, such amounts shall be collected, enforced and received by Provider
as trustee for Recipient (and its assigns) and be paid over to Recipient (or its
assigns) on account of the Obligations without affecting in any manner the
liability of Provider under the other provisions of this Undertaking. The
provisions of this Section 8 shall be supplemental to and not in derogation of
any rights and remedies of Recipient under any separate subordination agreement
which Recipient may at any time and from time to time enter into with Provider.
Section 9. Termination of Performance Undertaking. Provider's
obligations hereunder shall continue in full force and effect until all
Obligations are finally paid and satisfied in full and the Purchase Agreement is
terminated,provided, that this Undertaking shall continue to be effective or
shall be reinstated, as the case may be, if at any time payment or other
satisfaction of any of the Obligations is rescinded or must otherwise be
restored or returned upon the bankruptcy, insolvency, or reorganization of
Originator or otherwise, as though such payment had not been made or other
satisfaction occurred, whether or not Recipient (or its assigns) is in
possession of this Undertaking. No invalidity, irregularity or unenforceability
by reason of the federal bankruptcy code or any insolvency or other similar law,
or any law or order of any government or agency thereof purporting to reduce,
amend or otherwise affect the Obligations shall impair, affect, be a defense to
or claim against the obligations of Provider under this Undertaking.
Section 10. Effect of Bankruptcy. This Performance Undertaking
shall survive the insolvency of Originator and the commencement of any case or
proceeding by or against Originator under the federal bankruptcy code or other
federal, state or other applicable bankruptcy, insolvency or reorganization
statutes. No automatic stay under the federal bankruptcy code with respect to
Originator or other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes to which Originator is subject shall postpone the
obligations of Provider under this Undertaking.
Section 11. Setoff. Regardless of the other means of obtaining
payment of any of the Obligations, Recipient (and its assigns) is hereby
authorized at any time and from time to time, without notice to Provider (any
such notice being expressly waived by Provider) and to the fullest extent
permitted by law, to set off and apply any deposits and other sums against the
obligations of Provider under this Undertaking, whether or not Recipient (or any
such assign) shall have made any demand under this Undertaking and although such
Obligations may be contingent or unmatured.
Section 12. Taxes. All payments to be made by Provider
hereunder shall be made free
Exh. XI-10
102
and clear of any deduction or withholding. If Provider is required by law to
make any deduction or withholding on account of tax or otherwise from any such
payment, the sum due from it in respect of such payment shall be increased to
the extent necessary to ensure that, after the making of such deduction or
withholding, Recipient receive a net sum equal to the sum which they would have
received had no deduction or withholding been made.
Section 13. Further Assurances. Provider agrees that it will
from time to time, at the request of Recipient (or its assigns), provide
information relating to the business and affairs of Provider as Recipient may
reasonably request. Provider also agrees to do all such things and execute all
such documents as Recipient (or its assigns) may reasonably consider necessary
or desirable to give full effect to this Undertaking and to perfect and preserve
the rights and powers of Recipient hereunder.
Section 14. Successors and Assigns. This Performance
Undertaking shall be binding upon Provider, its successors and permitted
assigns, and shall inure to the benefit of and be enforceable by Recipient and
its successors and assigns. Provider may not assign or transfer any of its
obligations hereunder without the prior written consent of each of Recipient and
the Agent. Without limiting the generality of the foregoing sentence, Recipient
may assign or otherwise transfer the Agreements, any other documents executed in
connection therewith or delivered thereunder or any other agreement or note held
by them evidencing, securing or otherwise executed in connection with the
Obligations, or sell participations in any interest therein, to any other entity
or other person, and such other entity or other person shall thereupon become
vested, to the extent set forth in the agreement evidencing such assignment,
transfer or participation, with all the rights in respect thereof granted to the
Recipient herein.
Section 15. Amendments and Waivers. No amendment or waiver of
any provision of this Undertaking nor consent to any departure by Provider
therefrom shall be effective unless the same shall be in writing and signed by
Recipient, the Agent and Provider. No failure on the part of Recipient to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
Section 16. Notices. All notices and other communications
provided for hereunder shall be made in writing and shall be addressed as
follows: if to Provider, at the address set forth beneath its signature hereto,
and if to Recipient, at the addresses set forth beneath its signature hereto, or
at such other addresses as each of Provider or any Recipient may designate in
writing to the other. Each such notice or other communication shall be effective
(1) if given by telecopy, upon the receipt thereof, (2) if given by mail, three
(3) Business Days after the time such communication is deposited in the mail
with first class postage prepaid or (3) if given by any other means, when
received at the address specified in this Section 15.
SECTION 17. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
Exh. XI-11
103
SECTION 18. CONSENT TO JURISDICTION. EACH OF PROVIDER AND
RECIPIENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR
ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND
EACH OF PROVIDER AND RECIPIENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM.
Section 19. Bankruptcy Petition. Provider hereby covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior Indebtedness of FALCON, it will not institute
against, or join any other Person in instituting against, FALCON 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 20. Miscellaneous. This Undertaking constitutes the
entire agreement of Provider with respect to the matters set forth herein. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Undertaking shall be
in addition to any other guaranty of or collateral security for any of the
Obligations. The provisions of this Undertaking are severable, and in any action
or proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of Provider hereunder would otherwise be
held or determined to be avoidable, invalid or unenforceable on account of the
amount of Provider's liability under this Undertaking, then, notwithstanding any
other provision of this Undertaking to the contrary, the amount of such
liability shall, without any further action by Provider or Recipient, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding. Any provisions of this
Undertaking which are prohibited or unenforceable 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. Unless otherwise
specified, references herein to "Section" shall mean a reference to sections of
this Undertaking.
* * * *
Exh. XI-12
104
IN WITNESS WHEREOF, Provider has caused this Undertaking to be executed
and delivered as of the date first above written.
HYPERCOM CORPORATION
By:_______________________________
Name:
Title:
Address:
Exh. XI-13
105
EXHIBIT A TO PERFORMANCE UNDERTAKING
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate is furnished pursuant to that certain
Performance Undertaking dated as of August 31, 2000 executed by Hypercom
Corporation (the "Provider") in favor of Bank One NA, as Agent.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________________ of Provider.
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of Provider during the accounting period covered by
the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes an Amortization Event or Potential Amortization Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.
4. Schedule I attached hereto sets forth financial data and
computations evidencing the compliance with Sections 7.2(a), (b) and (c)
covenants of the Agreement, all of which data and computations are true,
complete and correct.
5. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Provider has taken, is taking, or
proposes to take with respect to each such condition or event:
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Exh. XI-14
106
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of ,
.
HYPERCOM CORPORATION
By:_______________________________
Name:
Title:
Exh. XI-15
107
SCHEDULE I TO COMPLIANCE REPORT
A. Schedule of Compliance as of__________,____ with Section 7.1(c) of the
Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the
Agreement.
This schedule relates to the month ended: _________
Exh. XI-16
108
SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS
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Financial Institution Commitment
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Bank One, NA (Main Office Chicago) $51,000,000
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109
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
PART I: DOCUMENTS TO BE DELIVERED IN CONNECTION WITH THE RECEIVABLES SALE
AGREEMENT
1. Executed copies of the Receivables Sale Agreement, duly executed by the
parties thereto.
2. Copy of the Resolutions of the Board of Directors of Originator
certified by its Secretary, authorizing Originator's execution,
delivery and performance of the Receivables Sale Agreement and the
other documents to be delivered by it thereunder.
3. Articles of Certificate of Incorporation of Originator certified by the
Secretary of State of the jurisdiction of incorporation of Originator
on or within thirty (30) days prior to the initial Purchase (as defined
in the Receivables Sale Agreement).
4. Good Standing Certificate for Originator issued by the Secretaries of
State of its state of incorporation and each jurisdiction where it has
material operations, each of which is listed below:
a. Arizona
b. Connecticut
5. A certificate of the Secretary of Originator certifying: (i) the names
and signatures of the officers authorized on its behalf to execute the
Receivables Sale Agreement and any other documents to be delivered by
it thereunder and (ii) a copy of Originator's By-Laws.
6. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against Originator from the following jurisdictions:
a. Arizona
b. Connecticut
7. Time stamped receipt copies of proper financing statements, duly filed
under the UCC on or before the date of the initial Purchase (as defined
in the Receivables Sale Agreement) in all jurisdictions as may be
necessary or, in the opinion of Seller (or its assigns), desirable,
under the UCC of all appropriate jurisdictions or any comparable law in
order to perfect the ownership interests contemplated by the
Receivables Sale Agreement.
B-1
110
8. Time stamped receipt copies of proper UCC termination statements, if
any, necessary to release all security interests and other rights of
any Person in the Receivables, Contracts or Related Security previously
granted by Originator.
9. A favorable opinion of legal counsel for Originator reasonably
acceptable to Seller (or its assigns) which addresses the following
matters and such other matters as Seller (or its assigns) may
reasonably request:
-- Originator is a corporation duly incorporated,
validly existing, and in good standing under the laws
of its state of incorporation.
-- Originator has all requisite authority to conduct its
business in each jurisdiction where failure to be so
qualified would have a material adverse effect on
Originator's business.
-- The execution and delivery by Originator of the
Receivables Sale Agreement and each other Transaction
Document to which it is a party and its performance
of its obligations thereunder have been duly
authorized by all necessary corporate action and
proceedings on the part of Originator and will not:
(a) require any action by or in respect of, or
filing with, any governmental body, agency
or official (other than the filing of UCC
financing statements);
(b) contravene, or constitute a default under,
any provision of applicable law or
regulation or of its articles or certificate
of incorporation or bylaws or of any
agreement, judgment, injunction, order,
decree or other instrument binding upon
Originator; or
(c) result in the creation or imposition of any
Adverse Claim on assets of Originator or any
of its Subsidiaries (except as contemplated
by the Receivables Sale Agreement).
-- The Receivables Sale Agreement and each other
Transaction Document to which it is a party has been
duly executed and delivered by Originator and
constitutes the legal, valid, and binding obligation
of Originator enforceable in accordance with its
terms, except to the extent the enforcement thereof
may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of
B-2
111
creditors' rights generally and subject also to the
availability of equitable remedies if equitable
remedies are sought.
-- The provisions of the Receivables Sale Agreement are
effective to create a valid security interest in
favor of Seller in all Receivables and upon the
filing of financing statements, Seller shall acquire
a first priority, perfected security interest in such
Receivables.
-- To the best of the opinion giver's knowledge, there
is no action, suit or other proceeding against
Originator or any Affiliate of Originator, which
would materially adversely affect the business or
financial condition of Originator and its Affiliates
taken as a whole or which would materially adversely
affect the ability of Originator to perform its
obligations under the Receivables Sale Agreement.
10. A "true sale" opinion and "substantive consolidation" opinion of
counsel for Originator with respect to the transactions contemplated by
the Receivables Sale Agreement.
11. A Compliance Certificate.
12. Executed copies of (i) all consents from and authorizations by any
Persons and (ii) all waivers and amendments to existing credit
facilities, that are necessary in connection with the Receivables Sale
Agreement.
13. Executed copies of the LLC Agreement (as defined in the Receivables
Sale Agreement).
14. Executed copies of the Subordinated Note (as defined in the Receivables
Sale Agreement) by Seller in favor of Originator.
15. Initial Notice of Sale, with attachments.
16. A direction letter executed by Originator authorizing Seller (and its
assignees) and directing warehousemen to allow Seller (and its
assignees) to inspect and make copies from Originator's books and
records maintained at off-site data processing or storage facilities.
17. Executed three party blocked account services agreement (Collection
Account Agreement).
B-3
112
PART II: DOCUMENTS TO BE DELIVERED IN CONNECTION WITH THE AGREEMENT
1. Executed copies of the Agreement, duly executed by the parties thereto.
2. Copy of the Resolutions of the Board of Directors of each Seller Party
and Provider certified by its Secretary authorizing such Person's
execution, delivery and performance of this Agreement and the other
documents to be delivered by it hereunder.
3. Articles or Certificate of Incorporation of each Seller Party and
Provider certified by the Secretary of State of its jurisdiction of
incorporation on or within thirty (30) days prior to the initial
Incremental Purchase.
4. Good Standing Certificate for each Seller Party and Provider issued by
the Secretaries of State of its state of incorporation and each
jurisdiction where it has material operations, each of which is listed
below:
1. Seller:
2. Servicer:
3. Provider:
5. A certificate of the Secretary of each Seller Party and Provider
certifying (i) the names and signatures of the officers authorized on
its behalf to execute this Agreement and any other documents to be
delivered by it hereunder and (ii) a copy of such Person's By-Laws.
6. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against each Seller Party from the following jurisdictions:
1. Seller: Connecticut, Arizona, Delaware
2. Servicer: Connecticut, Arizona
7. Time stamped receipt copies of proper financing statements, duly filed
under the UCC on or before the date of the initial Incremental Purchase
in all jurisdictions as may be necessary or, in the opinion of the
Agent, desirable, under the UCC of all appropriate jurisdictions or any
comparable law in order to perfect the ownership interests contemplated
by this Agreement.
8. Time stamped receipt copies of proper UCC termination statements, if
any, necessary to release all security interests and other rights of
any Person in the Receivables, Contracts or Related Security previously
granted by Seller.
B-4
113
9. Executed copies of Lock-Box Account Agreements for each Lock-Box
Account.
10. A favorable opinion of legal counsel for the Seller Parties and
Provider reasonably acceptable to the Agent which addresses the
following matters and such other matters as the Agent may reasonably
request:
-- Each Seller Party and Provider is a corporation duly
incorporated, validly existing, and in good standing
under the laws of its state of incorporation.
-- Each Seller Party and Provider has all requisite
authority to conduct its business in each
jurisdiction where failure to be so qualified would
have a material adverse effect on such Person's
business.
-- The execution and delivery by each Seller Party and
Provider of this Agreement and each other Transaction
Document to which it is a party and its performance
of its obligations thereunder have been duly
authorized by all necessary corporate action and
proceedings on the part of such Person and will not:
(a) require any action by or in respect of, or
filing with, any governmental body, agency
or official (other than the filing of UCC
financing statements);
(b) contravene, or constitute a default under,
any provision of applicable law or
regulation or of its articles or certificate
of incorporation or bylaws or of any
agreement, judgment, injunction, order,
decree or other instrument binding upon such
Person; or
(c) result in the creation or imposition of any
Adverse Claim on assets of such Person or
any of its Subsidiaries (except as
contemplated by this Agreement).
-- This Agreement and each other Transaction Document to
which such Person is a party has been duly executed
and delivered by such Person and constitutes the
legal, valid, and binding obligation of such Person,
enforceable in accordance with its terms, except to
the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and
subject also to the availability of equitable
remedies if equitable remedies are sought.
B-5
114
-- The provisions of the Agreement are effective to
create a valid security interest in favor of the
Agent for the benefit of the Purchasers in all
Receivables, and upon the filing of financing
statements, the Agent for the benefit of the
Purchasers shall acquire a first priority, perfected
security interest in such Receivables.
-- To the best of the opinion giver's knowledge, there
is no action, suit or other proceeding against any
Seller Party, Provider or any of their respective
Affiliates, which would materially adversely affect
the business or financial condition of such Person
and its Affiliates taken as a whole or which would
materially adversely affect the ability of such
Person to perform its obligations under any
Transaction Document to which it is a party.
11. If requested by Company or the Agent, a favorable opinion of legal
counsel for each Financial Institution, reasonably acceptable to the
Agent which addresses the following matters:
-- This Agreement has been duly authorized by all
necessary corporate action of such Financial
Institution.
-- This Agreement has been duly executed and delivered
by such Financial Institution and, assuming due
authorization, execution and delivery by each of the
other parties thereto, constitutes a legal, valid and
binding obligation of such Financial Institution,
enforceable against such Financial Institution in
accordance with its terms.
12. A Compliance Certificate.
13. The Fee Letter.
14. A Monthly Report as at July 31, 2000.
15. Executed copies of (i) all consents from and authorizations by any
Persons and (ii) all waivers and amendments to existing credit
facilities, that are necessary in connection with this Agreement.
16. A direction letter executed by Seller and the Servicer authorizing the
Agent and Company, and directing warehousemen to allow the Agent and
Company to inspect and make copies from Seller's books and records
maintained at off-site data processing or storage facilities.
B-6
115
17. For each Purchaser that is not incorporated under the laws of the
United States of America, or a state thereof, two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Purchaser is entitled to receive payments
under the Agreement without deduction or withholding of any United
States federal income taxes.
18. Executed copies of the Performance Undertaking, duly executed by the
parties thereto.
B-7