Exhibit 10
EXECUTION VERSION
LOAN FUNDING AGREEMENT
dated as of January 24, 2002
Among
▇▇▇▇▇ FUNDING, L.L.C.,
as Borrower,
▇▇▇▇▇ CAPITAL CORPORATION
as Servicer,
JUPITER SECURITIZATION CORPORATION,
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Financial Institution
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
TABLE OF CONTENTS
ARTICLE I
LOAN ARRANGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
Section 1.1 Loan Facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
Section 1.2 Obtaining Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
Section 1.3 Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
Section 1.4 Payment Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
ARTICLE II
PAYMENTS AND COLLECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Section 2.1 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Section 2.2 Collections Generally; Collections Prior to Amortization . . . . . . . . . . . . Page 4
Section 2.3 Collections Following Amortization . . . . . . . . . . . . . . . . . . . . . . . Page 4
Section 2.4 Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5
Section 2.5 Payment Recission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5
Section 2.6 Maximum Lender Percentage and Notional Shortfall
Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6
Section 2.7 Repurchase of Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6
Section 2.8 Deemed Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6
ARTICLE III
CONDUIT FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Section 3.1 CP Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Section 3.2 CP Costs Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Section 3.3 Calculation of CP Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
Section 3.4 Interest After Occurrence of an Amortization Event . . . . . . . . . . . . . . . Page 7
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 8
Section 4.4 Financial Institution Discount Rates . . . . . . . . . . . . . . . . . . . . . . Page 8
Section 4.5 Suspension of the LIBO Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
Section 5.1 Representations and Warranties of Borrower Parties . . . . . . . . . . . . . . . Page 9
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Section 5.2 Financial Institution Representations and Warranties . . . . . . . . . . . . . . Page 13
ARTICLE VI
CONDITIONS OF LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 14
Section 6.1 Conditions Precedent to Initial Loan . . . . . . . . . . . . . . . . . . . . . . Page 14
Section 6.2 Conditions Precedent to All Loans. . . . . . . . . . . . . . . . . . . . . . . . Page 14
ARTICLE VII
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 15
Section 7.1 Affirmative Covenants of the Borrower Parties. . . . . . . . . . . . . . . . . . Page 15
Section 7.2 Negative Covenants of the Borrower Parties . . . . . . . . . . . . . . . . . . . Page 23
Section 7.3 Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 24
ARTICLE VIII
ADMINISTRATION AND COLLECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 25
Section 8.1 Designation of Servicer . . . . .. . . . . . . . . . . . . . . . . . . . . . . . Page 25
Section 8.2 Duties of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 26
Section 8.3 Collection Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 27
Section 8.4 Responsibilities of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . Page 28
Section 8.5 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 28
Section 8.6 Servicing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 28
ARTICLE IX
AMORTIZATION EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 28
Section 9.1 Amortization Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 28
Section 9.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 31
ARTICLE X
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 31
Section 10.1 Indemnities by the Borrower Parties. . . . . . . . . . . . . . . . . . . . . . . Page 31
Section 10.2 Increased Cost and Reduced Return. . . . . . . . . . . . . . . . . . . . . . . . Page 34
Section 10.3 Other Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 34
ARTICLE XI
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 35
Section 11.1 Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 35
Section 11.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 35
Section 11.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 35
Section 11.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 36
Section 11.5 Non-Reliance on Agent and Other Lenders. . . . . . . . . . . . . . . . . . . . . Page 36
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Section 11.6 Reimbursement and Indemnification. . . . . . . . . . . . . . . . . . . . . . . . Page 36
Section 11.7 Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . Page 37
Section 11.8 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 37
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 37
Section 12.1 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 37
Section 12.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 38
ARTICLE XIII
LIQUIDITY FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 39
Section 13.1 Transfer to Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . Page 39
Section 13.2 Transfer Price Reduction Yield . . . . . . . . . . . . . . . . . . . . . . . . . Page 39
Section 13.3 Payments to the Conduit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 39
Section 13.4 Limitation on Commitment to Purchase from the
Conduit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 39
Section 13.5 Defaulting Financial Institutions. . . . . . . . . . . . . . . . . . . . . . . . Page 40
Section 13.6 Terminating Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . Page 40
ARTICLE XIV
SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 14.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 14.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 14.3 Termination after Final Payout Date. . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 14.4 Limitation on Rights to Collateral Proceeds. . . . . . . . . . . . . . . . . . . Page 42
ARTICLE XV
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 15.1 Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Section 15.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 43
Section 15.3 Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 44
Section 15.4 Protection of Security Interests of the Lenders. . . . . . . . . . . . . . . . . Page 44
Section 15.5 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 45
Section 15.6 Bankruptcy Petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 45
Section 15.7 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 46
Section 15.8 Choice of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 46
Section 15.9 Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 46
Section 15.10 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 46
Section 15.11 Integration; Binding Effect; Survival of Terms . . . . . . . . . . . . . . . . . Page 47
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Section 15.12 Counterparts; Severability; Section References. . . . . . . . . . . . . . . . . . . . . . . . . Page 47
Section 15.13 Bank One Chicago Roles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 47
Section 15.14 Characterization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 48
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EXHIBITS AND SCHEDULES
Exhibit I - Definitions
Exhibit II - Form of Loan Request
Exhibit III - Places of Business of the Borrower Parties; Locations
of Records; Federal Employer Identification Number(s)
Exhibit IV - Form of Repayment Notice
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
Exhibit XII - Form of Repurchase Notice
Schedule A - Commitment of Financial Institutions
Schedule B - Closing Documents
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LOAN FUNDING AGREEMENT
This Loan Funding Agreement is dated as of January 24, 2002 among ▇▇▇▇▇
Funding, L.L.C., an Ohio limited liability company (the "BORROWER"), ▇▇▇▇▇
Capital Corporation, an Ohio corporation ("RCC"), as initial Servicer (the
Servicer together with the Borrower, the "BORROWER PARTIES" and each a "BORROWER
PARTY"), Bank One, NA (Main Office Chicago) (together with its respective
successors and assigns hereunder, the "FINANCIAL INSTITUTIONS"), Jupiter
Securitization Corporation (the "CONDUIT") and Bank One, NA (Main Office
Chicago), as agent for the Lenders 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
The Borrower is a wholly-owned Subsidiary of RCC.
RCC and the Borrower have entered into a Receivables Sale Agreement
pursuant to which RCC has sold or contributed to the Borrower all of its right,
title and interest in and to the Collateral whether existing or hereinafter
arising.
The Borrower desires to obtain Loans from the Conduit from time to time
secured by the Collateral.
The Conduit may, in its absolute and sole discretion, make Loans to the
Borrower from time to time.
In the event that the Conduit declines to make any Loan, the Financial
Institutions shall, at the request of the Borrower, make such Loan from time to
time. In addition, the Financial Institutions have agreed to provide a liquidity
facility to the Conduit 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 Conduit and the Financial Institutions in accordance
with the terms hereof.
ARTICLE I
LOAN ARRANGEMENTS
Section 1.1 LOAN FACILITY. Upon the terms and subject to the conditions
hereof, the Borrower may, at its option, obtain Loans from the Agent on behalf
of one or more of the Lenders. In accordance with the terms and conditions set
forth herein, the Conduit may, at its option, instruct the Agent to make a Loan
on behalf of the Conduit, or if the Conduit shall decline to make a Loan, the
Agent shall, on behalf of the Financial Institutions, make a Loan from time to
time in an aggregate amount not to exceed at such time the lesser of (i) the
Loan Limit and (ii) the aggregate amount of the Commitments during the period
from the date hereof to but not including the Facility Termination Date.
Section 1.2 OBTAINING LOANS.
(a) LOAN REQUEST. The Borrower shall notify the Agent of its request for a
Loan no later than 11:00 a.m. (Chicago time) on the second Business Day
preceding the proposed date of the making of the Loan, in a form set forth as
EXHIBIT II hereto (the "LOAN REQUEST"). Each Loan Request shall be subject to
SECTION 6.2 hereof and, except as set forth below, shall be irrevocable and
shall specify the requested Original Principal Amount (which shall not be less
than $5,000,000 and which shall be an integral multiple of $1,000,000) and date
of the loan (which shall be on a Business Day). The Borrower may submit to the
Agent no more than four Loan Requests during any Reporting Period. Following
receipt of a Loan Request, the Agent will determine whether the Conduit agrees
to make the Loan. If the Conduit declines to make a proposed Loan, the Borrower
may cancel the Loan Request or, in the absence of such a cancellation, the
Subsequent Loan will be made by the Financial Institutions.
(b) LOANS. On the date of each Subsequent Loan, upon satisfaction of the
applicable conditions precedent set forth in ARTICLE VI, the Conduit or the
Financial Institutions, as applicable, shall deposit to the Collection Account,
in immediately available funds, no later than 12:00 noon (Chicago time), an
amount equal to (i) in the case of the Conduit, the aggregate Original Principal
Amount of the Loans the Conduit is then making or (ii) in the case of a
Financial Institution, such Financial Institution's Pro Rata Share of the
aggregate Original Principal Amount of the Loans the Financial Institutions are
making.
Section 1.3 REPAYMENTS. The Borrower shall provide the Agent with prior
written notice (delivered no later than 11:00 a.m. (Chicago time) on the second
Business Day preceding the Proposed Repayment Date), of any expected repayment
of Aggregate Capital requested by the Borrower (a "REPAYMENT NOTICE"), in a form
set forth as EXHIBIT IV hereto. Such Repayment Notice shall designate (i) the
date (the "PROPOSED REPAYMENT DATE") upon which any such repayment of Aggregate
Capital shall occur, and (ii) the amount of Aggregate Capital to be repaid which
shall be applied ratably to Loans of the Conduit and the Financial Institutions
in accordance with the amount of Capital (if any) owing to the Conduit, 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 REPAYMENT"). Only one
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(1) Repayment Notice shall be outstanding at any time. No repayments will be
permitted following the occurrence of the Amortization Date without the consent
of the Agent.
Section 1.4 PAYMENT REQUIREMENTS. All amounts to be paid or deposited by
any Borrower 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 Lender, they shall be
paid to the Agent, for the account of such Lender, at ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Agent. All computations of Yield,
per annum fees calculated as part of any 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.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 PAYMENTS. Notwithstanding any limitation on recourse contained
in this Agreement, the Borrower shall immediately pay, unless otherwise
specified, to the Agent when due, for the account of the relevant Lender or
Lenders on a full recourse basis, (i) to the Conduit, such fees as set forth in
the Fee Letter (which fees shall be sufficient to pay all fees owing to the
Financial Institutions), (ii) to the Conduit, all CP Costs, (iii) all amounts
payable as Yield, (iv) all amounts payable as Deemed Collections (which shall be
immediately due and payable by the Borrower and applied to reduce outstanding
Aggregate Capital hereunder in accordance with SECTIONS 2.2 and 2.3 hereof), (v)
all amounts required pursuant to SECTION 2.6, (vi) to the applicable Indemnified
Party, all amounts payable pursuant to ARTICLE X, if any, (vii) to the Servicer,
Servicer costs and expenses, including the Servicing Fee, in connection with
servicing, administering and collecting the Receivables, (viii) all Broken
Funding Costs, (ix) all amounts payable pursuant to the Interest Rate Swaps, and
(x) all Default Fees (collectively, the "OBLIGATIONS"). If the Borrower fails to
pay any of the Obligations when due, the Borrower 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 time the Borrower receives any
Collections or is deemed to receive any Collections, the Borrower 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 the Borrower for the exclusive benefit of the Lenders and the Agent.
Page 3
Section 2.2 COLLECTIONS GENERALLY; COLLECTIONS PRIOR TO AMORTIZATION.
(a) All Collections and/or Deemed Collections received by the Servicer or
in the Depository Account or any Lock-Box Receipts shall be deposited in the
Collection Account within two Business Days of receipt by the Servicer. Prior to
the Amortization Date, on any day other than a Settlement Date, the Servicer
shall instruct the Collection Account Bank to (i) pay all Obligations due and
owing on such day pursuant to SECTION 2.1 and (ii) distribute all remaining
funds on deposit in the Collection Account (the "EXCESS FUNDS") on such day to
the Servicer on behalf of the Borrower and the Agent. The Servicer shall set
aside and hold in trust such Excess Funds for the payment of any accrued and
unpaid Aggregate Unpaids as provided in this SECTION 2.2.
(b) On each Settlement Date prior to the occurrence of the Amortization
Date, the Servicer shall remit to (unless otherwise specified in SECTION 2.1)
the Agent's account the amounts set aside during the preceding Accrual Period
and apply such amounts (if not previously paid in accordance with SECTION 2.1 or
SECTION 2.2(a)) FIRST, to reduce unpaid Obligations, SECOND, to reduce the
Capital of all Loans of Terminating Financial Institutions, applied ratably to
each Terminating Financial Institution according to its respective Termination
Percentage, THIRD, if applicable, no later than 11:00 a.m. (Chicago time) to the
extent required to fund any Aggregate Repayment on such Settlement Date and
FOURTH, to the Borrower. Each Terminating Financial Institution shall be
allocated a ratable portion of Collections from the date of any assignment by
the Conduit pursuant to SECTION 13.6 (the "TERMINATION DATE") until such
Terminating Financing Institution's Capital shall be paid in full. This ratable
portion shall be calculated on the Termination Date of each Terminating
Financial Institution as a percentage equal to (i) Capital of such Terminating
Financial Institution outstanding on its Termination Date, DIVIDED BY (ii) the
Aggregate Capital outstanding on such Termination Date (the "TERMINATION
PERCENTAGE"). Each Terminating Financial Institution's Termination Percentage
shall remain constant prior to the Amortization Date. On and after the
Amortization Date, each Termination Percentage shall be disregarded, and each
Terminating Financial Institution's Capital shall be reduced ratably with all
Financial Institutions in accordance with SECTION 2.3.
Section 2.3 COLLECTIONS FOLLOWING AMORTIZATION. On the Amortization Date
and on each day thereafter, the Servicer shall direct each Receiving Bank to
deposit into the Collection Account, for the benefit of the Lenders, the Lender
Percentage of all Collections received on such day and an additional amount for
the payment of any accrued and unpaid Obligations owed by Borrower and not
previously paid in accordance with SECTION 2.1. Notwithstanding the foregoing,
if the Servicer fails to deliver a Monthly Report, on each day after the
Amortization Date the Servicer shall direct each Receiving Bank to deposit into
the Collection Account, for the benefit of the Lenders, all Collections received
on such day and an additional amount for the payment of any accrued and unpaid
Obligations owed by Borrower and not previously paid in accordance with SECTION
2.1. 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
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the preceding two sentences, as applicable, and (ii) apply such amounts to
reduce the Aggregate Capital associated with each Loan 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 from an Obligor
in respect of sales taxes, included in Collections and deposited in the
Collection Account with respect to the Receivables,
SECOND, to the payment of Third-Party Servicer Costs,
THIRD, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
FOURTH, to the Swap Counterparty, amounts payable under the Interest Rate
Swaps,
FIFTH, (to the extent applicable) to the ratable repayment of the Aggregate
Capital,
SIXTH, 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 including the Servicing Fee when the Borrower 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
SEVENTH, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to the Borrower.
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 Lenders 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. The Borrower 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.
Page 5
Section 2.6 MAXIMUM LENDER PERCENTAGE AND NOTIONAL SHORTFALL AMOUNT. The
Borrower shall ensure that the Lender Percentage shall at no time exceed 100%.
If the Lender Percentage exceeds 100%, the Borrower shall pay to the Agent
within one Business Day an amount to be applied to reduce the Aggregate Capital
of the Loans, such that after giving effect to such payment, the Lender
Percentage equals or is less than 100%. If on any day, the Aggregate Capital
exceeds the Aggregate Notional Amount of the Interest Rate Swaps (a "NOTIONAL
SHORTFALL AMOUNT"), the Borrower shall either (i) pay to the Agent within one
Business Day an amount to be applied to reduce the Aggregate Capital of the
Loans or (ii) enter into an Interest Rate Swap within one Business Day, such
that after giving effect to such payment or increase in Aggregate Notional
Amount, the Notional Shortfall Amount is zero. If, on any day, there is an
Excess Fixed Rate and a Fast Pay Notional Amount, the Borrower shall within one
(1) Business Day reduce the Aggregate Notional Amount such that, after such
reduction, there is no Fast Pay Notional Amount.
Section 2.7 REPURCHASE OF RECEIVABLES. The Originator may repurchase all or
a portion of Excess Receivables from the Borrower. The Borrower shall provide
the Agent with prior written notice (delivered no later than the Business Day
preceding the Proposed Repurchase Date) of any expected repurchase by the
Originator of Excess Receivables, in a form set forth as EXHIBIT XII hereto (a
"REPURCHASE NOTICE"). Each Repurchase shall be subject to the conditions
precedent specified in SECTION 6.2 hereof. Each Repurchase Notice shall specify
(i) the purchase price, (ii) the date of Repurchase (the "PROPOSED REPURCHASE
DATE") and (iii) after giving effect to such Repurchase, the Discounted Lease
Balance and the Lender Percentage. On and after the Amortization Date, the
purchase price shall be deposited on the date of such Repurchase in the
Collection Account in immediately available funds.
Section 2.8 DEEMED COLLECTIONS. If at any time the Outstanding Balance of
any Receivable is either (x) reduced as a result of any defective or rejected
goods or services, any discount or any adjustment or otherwise by the Borrower,
Servicer or any sub-servicer (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of (i) 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) or (ii) the categorization of
such Receivable as an Upgraded Receivable, then the Borrower 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 the Borrower shall be
deemed to have received a Collection in full of such Receivable. The Borrower
hereby agrees to pay all Deemed Collections immediately to the Servicer for
application in accordance with the terms and conditions hereof; PROVIDED,
HOWEVER on any day prior to the Amortization Date, the Borrower shall not be
required to pay Deemed Collections to the Servicer, to the extent that (i) the
Originator is the Servicer, (ii) the Originator is (and remains) obligated to
pay such Deemed Collections to the Borrower pursuant to the Sale Agreement and
(iii) such amount would constitute Excess Funds and be distributed to the
Servicer on such day in accordance with SECTION 2.2.
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ARTICLE III
CONDUIT FUNDING
Section 3.1 CP COSTS. The Borrower shall pay CP Costs with respect to the
Capital associated with Loans of the Conduit for each day that any Capital with
respect to such Loans is outstanding. Each Loan funded substantially with Pooled
Commercial Paper will accrue CP Costs each day on a pro rata basis, based on the
percentage share the Capital in respect of such Loan represents in relation to
all assets held by the Conduit and funded substantially with Pooled Commercial
Paper.
Section 3.2 CP COSTS PAYMENTS. On each Settlement Date, the Borrower shall
pay to the Conduit an aggregate amount equal to all accrued and unpaid CP Costs
in respect of the Capital of the Conduit for the immediately preceding Accrual
Period in accordance with ARTICLE II.
Section 3.3 CALCULATION OF CP COSTS. On or before the third Business Day
immediately preceding each Settlement Date, the Conduit shall calculate the
aggregate amount of CP Costs for the applicable Accrual Period and shall notify
the Borrower of such aggregate amount.
Section 3.4 INTEREST AFTER OCCURRENCE OF AN AMORTIZATION EVENT.
Notwithstanding the foregoing, on and after the Amortization Date, interest
shall accrue on the Capital of the Loans of the Conduit at the Base Rate plus 2%
for such Accrual Period.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 FINANCIAL INSTITUTION FUNDING. Each Loan 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 the Borrower gives notice to the Agent of another Discount Rate in
accordance with SECTION 4.4, the initial Discount Rate for any Loan 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
Conduit any Loan (or portion thereof) pursuant to ARTICLE XIII, the Loan (or
portion thereof) so assigned shall be deemed to have a new Tranche Period
commencing on the date of any such assignment.
Section 4.2 YIELD PAYMENTS. On each Settlement Date for each Loan, the
Borrower shall pay to the Agent (for the benefit of the Financial Institutions)
an aggregate amount equal to all accrued and unpaid Yield for the entire Tranche
Period of each such Loan in accordance with ARTICLE II.
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Section 4.3 SELECTION AND CONTINUATION OF TRANCHE PERIODS.
(a) With consultation from (and approval, which approval shall not be
unreasonably withheld, by) the Agent, the Borrower shall from time to time
request Tranche Periods for Loans of the Financial Institutions, provided that,
if at any time the Financial Institutions shall have any Loans, the Borrower
shall always request Tranche Periods such that at least one Tranche Period shall
end on the date specified in clause (A) of the definition of Settlement Date.
(b) The Borrower 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 Loan, may, effective on the last day of the
Terminating Tranche: (i) divide any Loan into multiple Loans, (ii) combine any
such Loan with one or more other Loan that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Loan with a
new Loan to be purchased on the day such Terminating Tranche ends, PROVIDED,
that in no event may a Loan of the Conduit be combined with a Loan of the
Financial Institutions.
Section 4.4 FINANCIAL INSTITUTION DISCOUNT RATES. The Borrower may select
the LIBO Rate or the Base Rate for each Loan of the Financial Institutions. The
Borrower 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 the 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 the new Discount Rate, give the
Agent irrevocable notice of the new Discount Rate for each Loan associated with
such Terminating Tranche.
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
Loans 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 Loans at such LIBO Rate are not available
or (ii) such LIBO Rate does not accurately reflect the cost of acquiring or
maintaining Loans at such LIBO Rate, then the Agent shall suspend the
availability of such LIBO Rate and require the Borrower to select the Base Rate
for any Loan 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 the Borrower, the Conduit or the
Agent, to assign all of its rights and obligations hereunder to (i) another
Financial Institution or (ii) another funding entity nominated by the Borrower
or the Agent that is acceptable to the Conduit 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
Page 8
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 Loans 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 BORROWER PARTIES. Each
Borrower Party hereby represents and warrants to the Agent and the Lenders, as
to itself, as of the date hereof and as of the date of each Subsequent Loan:
(a) CORPORATE EXISTENCE AND POWER. The Borrower is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Ohio, and is duly qualified to do business and is in good standing
as a foreign limited liability company, and has and holds all power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted, except
where the failure to be so qualified or to so hold could not reasonably be
expected to have a Material Adverse Effect. RCC is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Ohio, 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, except where the failure to be
so qualified or to so hold could not reasonably be expected to have a Material
Adverse Effect.
(b) POWER AND AUTHORITY; DUE AUTHORIZATION, EXECUTION AND DELIVERY. The
execution and delivery by such Borrower 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 the Borrower,
Borrower's use of the proceeds of the Loans made hereunder, are within its
powers and authority and have been duly authorized by all necessary action on
its part. This Agreement and each other Transaction Document to which such
Borrower Party is a party has been duly executed and delivered by such Borrower
Party.
(c) NO CONFLICT. The execution and delivery by such Borrower 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 articles of
organization, as applicable, or by-laws or operating agreement, as applicable,
(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
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creation or imposition of any Adverse Claim on assets of such Borrower Party or
its Subsidiaries (except as created hereunder) except, in the case of clauses
(ii), (iii) and (iv), where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance by such Borrower 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
that has not been obtained is required for the due execution and delivery by
such Borrower 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
threatened, against or affecting the Borrower, or any of its
properties, in or before any court, arbitrator or other body. The
Borrower is not in default with respect to any order of any court,
arbitrator or governmental body binding upon the Borrower or any of
its properties.
(B) There are no actions, suits or proceedings pending or
threatened, against or affecting RCC, 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. RCC is not in default with
respect to any order of any court, arbitrator or governmental body
binding upon RCC or any of its properties.
(f) BINDING EFFECT. This Agreement and each other Transaction Document to
which such Borrower Party is a party constitute the legal, valid and binding
obligations of such Borrower Party enforceable against such Borrower 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
Borrower Party or any of its Affiliates to the Agent or the Lenders 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 Borrower Party or any of its Affiliates to the Agent
or the Lenders will be, true and accurate in all material respects on the date
such information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state any material fact or any fact
necessary to make the statements contained therein not misleading.
Page 10
(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 Loan hereunder, the Borrower
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 the Borrower's
ownership interest or security interest in each Receivable, the Related
Security, the Collections with respect thereto and other Collateral.
Notwithstanding anything to the contrary in this Agreement, the parties hereto
acknowledge that financing statements have not been filed to perfect the
Originator's or the Borrower's security interest in the Exempted Contracts.
(j) PERFECTION. This Agreement, together with the filing of the financing
statements contemplated hereby creates in favor of the Agent for the benefit of
the relevant Lender or Lenders a valid and perfected first priority security
interest in each Receivable existing or hereafter arising, the Related Security,
the Collections with respect thereto and other Collateral, 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 Lenders) security interest in the
Receivables, the Related Security, the Collections and other Collateral.
Notwithstanding the foregoing, the Borrower Parties make no representation or
warranty as to the perfection or priority of the Agent's (on behalf of the
Lenders) ownership or security interest in the Exempted Contracts.
(k) PLACES OF BUSINESS. The principal places of business and chief
executive office of such Borrower 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 15.4(a) has been taken and
completed. The Borrower'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 the Borrower at each Receiving Bank and the post
office box number of each Lock-Box, are listed on Exhibit III to the Receivables
Sale Agreement. The Collection Account shall at all times be subject to a
Collection Account Agreement substantially in the form of Exhibit VI. The
Borrower has not granted any Person, other than the Agent as contemplated by
this Agreement, control of any Receiving Account (except that the Originator
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in its capacity as Servicer has access thereto), or the right to take control of
any such Receiving Account at a future time or upon the occurrence of a future
event.
(m) MATERIAL ADVERSE EFFECT. (i) Since September 30, 2001, no event has
occurred that would have a material adverse effect on the financial condition or
operations of the initial Servicer and its Subsidiaries or the ability of the
initial Servicer to perform its obligations under this Agreement, and (ii) the
Borrower represents and warrants that since the date of this Agreement, no event
has occurred that would have a material adverse effect on (A) the financial
condition or operations of the Borrower, (B) the ability of the Borrower to
perform its obligations under the Transaction Documents, or (C) the
collectibility of the Receivables generally or any material portion of the
Receivables.
(n) NAMES. In the past five (5) years, the Borrower has not used any names,
trade names or assumed names other than the name in which it has executed this
Agreement.
(o) OWNERSHIP OF THE BORROWER. RCC is the sole member of the Borrower, and
holds all of its issued and outstanding membership interests free and clear of
any Adverse Claim.
(p) NOT A HOLDING COMPANY OR AN INVESTMENT COMPANY. Such Borrower 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 Borrower 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) Such Borrower Party 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 where a failure to
comply could not reasonably be expected individually or in the aggregate to
have a Material Adverse Effect.
(B) Each Receivable, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto (in-
cluding, without limitation, laws, rules and regulations relating to truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), and no part of
such Contract is in violation of any such law, rule or regulation, except
where such contravention or violation could not reasonably be expected to
have a Material Adverse Effect.
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(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. The Servicer has complied
in all material respects with the Credit and Collection Policy with regard to
each Receivable and 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)(vi).
(s) PAYMENTS TO THE ORIGINATOR. With respect to each Receivable transferred
to the Borrower under the Receivables Sale Agreement, the Borrower 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, enforce- able
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 definition of Net
Receivables as an Eligible Receivable was an Eligible Receivable at the time so
included.
(v) DISCOUNTED LEASE BALANCE. Immediately after giving effect to each Loan
hereunder, the Discounted Lease Balance is at least equal to the sum of (i) the
Aggregate Capital PLUS (ii) the Loss Reserve.
(w) ACCOUNTING. The manner in which such Borrower Party accounts for and
discloses the transactions contemplated hereunder and by the Receivables Sale
Agreement does not jeopardize the true sale analysis.
Section 5.2 FINANCIAL INSTITUTION REPRESENTATIONS AND WARRANTIES. Each
Financial Institution hereby represents and warrants to the Agent and the
Conduit 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
Page 13
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.
(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 LOANS
Section 6.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The initial Loan under
this Agreement is subject to the conditions precedent that (a) the Agent shall
have received on or before the date of such Loan 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 LOANS. Each Loan (other than
pursuant to SECTION 13.1) and Repurchase shall be subject to the further
conditions precedent that, after taking such Loan or Repurchase into account:
(a) in the case of each such Loan or Repurchase, the Servicer shall have
delivered to the Agent on or prior to the date of such Loan or Repurchase, in
form and substance satisfactory to the Agent, all Monthly Reports as and when
due under SECTION 8.5;
(b) the Facility Termination Date shall not have occurred;
(c) no Amortization Event or Potential Amortization Event shall have
occurred and be continuing;
Page 14
(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 Loan Limit, the Lender
Percentage does not exceed 100%, the Aggregate Capital does not exceed the
Aggregate Notional Amount of the Interest Rate Swaps and there is either no Fast
Pay Notional Amount or Excess Fixed Rate;
(f) Interest Rate Swaps meeting the requirements of SECTION 7.3 shall be in
effect; and
(g) the representations and warranties set forth in SECTION 5.1 are true
and correct on and as of the date of such Loan or Repurchase as though made on
and as of such date.
ARTICLE VII
COVENANTS
Section 7.1 AFFIRMATIVE COVENANTS OF THE BORROWER 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 Borrower Party hereby
covenants, as to itself, as set forth below:
(a) FINANCIAL REPORTING. Such Borrower 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) audited, unqualified financial statements
(which shall include balance sheets, statements of income and retained
earnings and a statement of cash flows) for RCC and its Consolidated
Subsidiaries for such fiscal year certified in a manner acceptable to the
Agent by independent public accountants acceptable to the Agent and (B)
unaudited financial statements (which shall include balance sheets and
statements of income and retained earnings) for the Borrower for such
fiscal year.
(ii) QUARTERLY REPORTING. Within 50 days after the close of the first
three (3) quarterly periods of each of its respective fiscal years, balance
sheets of (a) RCC and its Consolidated Subsidiaries and (b) the Borrower,
in each case, as of the close of each such period and statements of income
and retained earnings and a statement of cash flows for (a) RCC and its
Consolidated Subsidiaries and (b) the Borrower, in each case, for the
period from the beginning of such fiscal
Page 15
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 each Borrower Party 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 such Borrower Party, copies of all financial
statements, reports and proxy statements so furnished.
(v) 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 Conduit, copies of the same.
(vi) CHANGE IN CREDIT AND COLLECTION POLICY. At least thirty (30) days
prior to the effectiveness of any material change in or material 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.
(vii) 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 Borrower Party
as the Agent may from time to time reasonably request in order to protect
the interests of the Agent and the Lenders under or as contemplated by this
Agreement.
(b) NOTICES. Such Borrower 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:
(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 each of the Borrower
Parties.
Page 16
(ii) JUDGMENTS AND PROCEEDINGS.
(A) The entry of any judgment or decree against the Borrower; or
the institution of any litigation, arbitration proceeding or governmental
proceeding against the Borrower.
(B) (1) 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 such judgments and decrees then outstanding
against the Servicer and its Subsidiaries exceeds $10,000,000 and (2) the
institution of any litigation, arbitration proceeding or governmental
proceeding against the Servicer which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) TERMINATION 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 involving
Indebtedness in excess of $10,000,000 pursuant to which any Borrower Party
is a debtor or an obligor.
(vi) DOWNGRADE OF RCC OR THE PROVIDER. Any downgrade in any rating
that may be assigned to any Indebtedness of RCC or the Provider by S&P or
by ▇▇▇▇▇'▇, setting forth the Indebtedness affected and the nature of such
change.
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF CORPORATE OR LEGAL EXISTENCE.
Such Borrower Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards imposed by
all governmental authorities in respect of the conduct of their respective
businesses and the ownership of their respective properties, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Such Borrower Party will preserve and maintain its corporate or legal
existence, rights, franchises and privileges in the jurisdiction of its
incorporation or organization, and qualify and remain qualified in good standing
as a foreign corporation or limited liability company, as applicable, in each
jurisdiction where its business is conducted, except
Page 17
where the failure to so preserve and maintain or qualify could not
reasonably be expected to have a Material Adverse Effect.
(d) AUDITS. Such Borrower 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 Borrower Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Borrower 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, without limitation, 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 the Borrower or the Servicer having knowledge of such
matters; provided, that prior to the occurrence of an Amortization Event, the
Borrower Parties shall not be responsible for the costs of more than one such
audit in any calendar year.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) The Servicer will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection of
all Receivables (including, without limitation, records adequate to permit
the 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 Borrower Party will (A) on or prior to the date hereof, ▇▇▇▇
its master data processing records and other books and records relating to
the Receivables with a legend, acceptable to the Agent, describing the
security interest of the Agent (for the benefit of the Lenders) and (B)
upon the request of the Agent following the occurrence and during the
continuation of an Amortization Event (x) ▇▇▇▇ each Contract with a legend
describing the security interest of the Agent (for the benefit of the
Lenders) and (y) deliver to the Agent all Contracts (including, without
limitation, all multiple originals of any such Contract) relating to the
Receivables.
(f) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY. Such
Borrower
Page 18
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, except where the failure to so perform or comply
could not reasonably be expected to have a Material Adverse Effect, 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. The Borrower
will, and will require RCC to, perform each of their respective obligations and
undertakings under and pursuant to the Receivables Sale Agreement, will purchase
Receivables thereunder in strict compliance with the terms thereof and will
vigorously enforce the rights and remedies accorded to the Borrower under the
Receivables Sale Agreement. The Borrower shall take all actions to perfect and
enforce its rights and interests (and the rights and interests of the Agent and
the Lenders as assignees of the Borrower) under the Receivables Sale Agreement
as the Agent may from time to time reasonably request, including, without
limitation, making claims to which it may be entitled under any indemnity,
reimbursement or similar provision contained in the Receivables Sale Agreement.
(h) OWNERSHIP. The Borrower will take all necessary action to (i) vest
legal and equitable title to the Receivables, the Related Security, the
Collections with respect thereto and other Collateral purchased under the
Receivables Sale Agreement irrevocably in the Borrower, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Agent and the Lenders
(including, without limitation, 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 Borrower's interest in such
Receivables, Related Security, the Collections with respect thereto and other
Collateral and such other action to perfect, protect or more fully evidence the
interest of the Borrower therein as the Agent may reasonably request), and (ii)
establish and maintain, in favor of the Agent, for the benefit of the Lenders, a
valid and perfected first priority security interest in all Receivables, Related
Security, the Collections with respect thereto and other Collateral 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 Lenders (including,
without limitation, 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
Lenders) interest in such Receivables, Related Security, the Collections with
respect thereto and other Collateral and such other action to perfect, protect
or more fully evidence the security interest of the Agent for the benefit of the
Lenders as the Agent may reasonably request). Notwithstanding anything to the
contrary in this Agreement, neither the Borrower nor any other Person shall have
any obligation to take any further action to perfect any security interest in
Exempted Contracts. The Borrower shall take all action necessary to ensure that
the Originator shall obtain and maintain a perfected ownership interest, free
and clear of any Adverse Claims, in all Related Equipment.
(i) LENDERS' RELIANCE. The Borrower acknowledges that the Lenders are
entering into the transactions contemplated by this Agreement in reliance upon
the Borrower's identity as a legal entity that is separate from the Originator.
Therefore, from and after the date of execution and delivery of this
Page 19
Agreement, the Borrower shall take all reasonable steps, including, without
limitation, all steps that the Agent or any Lender may from time to time
reasonably request, to maintain the Borrower's identity as a separate legal
entity and to make it manifest to third parties that the Borrower is an entity
with assets and liabilities distinct from those of the Originator and any
Affiliates thereof and not just a division of the Originator or any such
Affiliate. Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, the Borrower will:
(A) conduct its own business in its own name and require that all
full-time employees of the Borrower, if any, identify themselves as such
and not as employees of Originator (including, without limitation, by means
of providing appropriate employees with business or identification cards
identifying such employees as the Borrower's employees);
(B) compensate all employees, consultants and agents directly, from
the Borrower's own funds, for services provided to the Borrower by such
employees, consultants and agents and, to the extent any employee,
consultant or agent of the Borrower is also an employee, consultant or
agent of the Originator or any Affiliate thereof, allocate the compensation
of such employee, consultant or agent between the Borrower and the
Originator or such Affiliate, as applicable, on a basis that reflects the
services rendered to the Borrower and the 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 Originator, the
Borrower shall lease such office at a fair market rent on an allocated
basis;
(D) haveaseparatetelephonenumber,whichwillbeanswered only in its name
and separate stationery, invoices and checks in its own name;
(E) conduct all transactions with the Originator and the Servicer
(including, without limitation, any delegation of its obligations hereunder
as Servicer) strictly on an arm's-length basis, allocate all overhead
expenses (including, without limitation, telephone and other utility
charges) for items shared between the Borrower and the 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 an Independent Director;
Page 20
(G) observe all company and legal formalities as a distinct entity,
and ensure that all company actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the dissolution
or liquidation of the Borrower or (C) the initiation of, participation in,
acquiescence in or consent to any bankruptcy, insolvency, reorganization or
similar proceeding involving the Borrower, are duly authorized by unanimous
vote of its Directors (including the Independent Director);
(H) maintain the Borrower's books and records separate from those of
the Originator and any Affiliate thereof and otherwise readily identifiable
as its own assets rather than assets of Originator and any Affiliate
thereof;
(I) prepare its financial statements separately from those of
Originator and insure that any consolidated financial statements of
Originator or any Affiliate thereof that include the Borrower and that are
filed with the Securities and Exchange Commission or any other governmental
agency have notes clearly stating that the Borrower is a separate legal
entity and that its assets will be available first and foremost to satisfy
the claims of the creditors of the Borrower;
(J) except for funds in the Depository Account or the Lock- Box and
except as herein specifically otherwise provided, maintain the funds or
other assets of the Borrower separate from, and not commingled with, those
of the Originator or any Affiliate thereof and only maintain bank accounts
or other depository accounts to which the Borrower alone is the account
party, into which the Borrower alone (or the Servicer or the Agent
hereunder) makes deposits and from which the Borrower alone (or the
Servicer or the Agent hereunder) has the power to make withdrawals;
(K) pay all of the Borrower's operating expenses from the Borrower's
own assets (except for certain payments by the Originator or any other
Person 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
Page 21
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 under the Receivables Sale Agreement, and
(4) the incurrence of operating expenses in the ordinary course of business
of the type otherwise contemplated by this Agreement;
(M) maintain its charter in conformity with this Agreement, such that
it does not amend, restate, supplement or otherwise modify its articles of
organization or operating agreement in any respect that would impair its
ability to comply with the terms or provisions of any of the Transaction
Documents, including, without limitation, this SECTION 7.1(i);
(N) maintain the effectiveness of, and continue to perform under the
Receivables Sale Agreement and the Performance Undertaking, such that it
does not amend, restate, supplement, cancel, terminate or otherwise modify
the Receivables Sale Agreement or the Performance Undertaking, or give any
consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement or the
Performance Undertaking 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 membership interests or payment of any
subordinated indebtedness which would cause the Required Capital Amount to
cease to be so maintained; and
(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 ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ as counsel for the Borrower, in connection with the closing or
initial
Page 22
Loan 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 Borrower 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, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. The Borrower 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 Conduit, the Agent or any Financial Institution.
(k) COLLECTIONS. Such Borrower Party shall cause (1) all Lock-Box Receipts
(together with any proceeds deposited in the Depository Account) to be deposited
in the Collection Account in accordance with, and to the extent required by,
SECTIONS 2.2 AND 2.3 hereof and (2) the Collection Account to be subject at all
times to a Collection Account Agreement that is in full force and effect. In the
event any payments relating to Receivables are remitted directly to the Borrower
or any Affiliate of the Borrower, the Borrower will remit (or will cause all
such payments to be remitted) directly to the Collection Account Bank and
deposited into the Collection Account within two (2) Business Days following
receipt thereof, and, at all times prior to such remittance, the Borrower will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of the Agent and the Lenders. The Borrower will maintain
exclusive ownership, and control (subject to the terms of this Agreement) of the
Collection Account (except that Originator shall continue to have access to the
Collection Account in its capacity as Servicer) and shall not grant the right to
take control of the Collection Account at a future time or upon the occurrence
of a future event to any Person, except to the Agent as contemplated by this
Agreement.
(l) INSURANCE. At the Agent's request, RCC will maintain in effect, or
cause to be maintained in effect, at RCC's own expense, such casualty and
liability insurance covering the Related Equipment as RCC shall deem appropriate
in its good faith business judgment. If insurance is required, the Agent, for
the benefit of the Lenders, shall be named as an additional insured with respect
to all such liability insurance maintained by RCC. RCC 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 Lender in certificated form upon the Agent's or such Lender's
request. The foregoing requirements shall not be construed to negate, reduce or
modify, and are in addition to, RCC's or the Borrower's obligations hereunder.
(m) PAYMENT TO ORIGINATOR. With respect to any Receivable purchased by the
Borrower from Originator, such sale shall be effected under, and in strict
compliance with the terms of, the Receivables Sale Agreement, including, without
limitation, the terms relating to the amount and timing of payments to be made
to Originator in respect of the Purchase Price for such Receivable.
Page 23
Section 7.2 NEGATIVE COVENANTS OF THE BORROWER 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 Borrower Party hereby
covenants, as to itself, that:
(a) NAME CHANGE, OFFICES AND RECORDS. Such Borrower Party will not change
its name, identity or corporate or legal structure (within the meaning of
9-507(c) of the UCC or change its location (within the meaning of SECTION 9-307
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 thirty (30) 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 Borrower 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 Lock-Box or
Depository Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, written notice of such addition,
termination or change.
(c) MODIFICATIONS TO CONTRACTS AND CREDIT AND COLLECTION POLICY. Such
Borrower Party will not make any change to the Credit and Collection Policy that
could be reasonably likely to 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. The Borrower 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, without limitation,
the filing of any financing statement) or with respect to, any Receivable (other
than Repurchased Receivables), Related Security, the Collections with respect
thereto and other Collateral, or upon or with respect to any Contract under
which any Receivable arises, or the 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 Lenders provided for
herein), and the Borrower shall defend the security interest of the Agent and
the Lenders in, to and under any of the foregoing property, against all claims
of third parties claiming through or under the Borrower or the Originator. The
Borrower will not create or suffer to exist any mortgage, pledge, security
interest, encumbrance, lien, charge or other similar arrangement on any of its
inventory, the lease of which gives rise to any Receivable.
(e) DISCOUNTED LEASE BALANCE. At no time prior to the Amortization Date
shall the Borrower permit the Discounted Lease Balance to be less than an amount
equal to the sum of (i) the Aggregate Capital of all Loans PLUS (ii) the Loss
Reserve.
Page 24
(f) TERMINATION DATE DETERMINATION. The Borrower will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to the 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.
Section 7.3 INTEREST RATE SWAPS.
(a) On the date of the initial Loan hereunder, the Borrower shall enter
into an interest rate swap agreement in form and substance acceptable to the
Agent (the "INITIAL INTEREST RATE SWAP") with Bank One, NA (Main Office Chicago)
or another counterparty acceptable to the Agent (the "SWAP COUNTERPARTY")
pursuant to which the Borrower shall have the fixed rate obligation and the Swap
Counterparty shall have the floating rate obligation. The obligations under the
Initial Interest Rate Swap shall be based upon a schedule of notional amounts
which shall initially equal the Aggregate Capital and shall decline over time.
Such schedule of notional amounts shall reflect an anticipated amount of
Aggregate Capital, based upon scheduled payments and an anticipated level of
defaults and upgrades on the Receivables then subject to this Agreement.
(b) On each Notional Amount Reset Date, if there is a Notional Amount
Shortfall, the Borrower and the Swap Counterparty shall enter into a new
interest rate swap agreement in form and substance acceptable to the Agent with
respect to such Notional Amount Shortfall (the interest rate swap agreements
which are in effect at any given time being, collectively, the "INTEREST RATE
SWAPS" at such time, which term includes the Initial Interest Rate Swap for so
long as it is in effect).
(c) The floating rate payable by the Swap Counterparty under the Interest
Rate Swaps shall equal the LIBO Rate (the "FLOATING SWAP RATE"). The fixed rate
payable by the Borrower under each Interest Rate Swap shall be established by
the Swap Counterparty.
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. RCC 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 at any time after (i) the
Amortization Date or (ii) the Servicer fails to perform its duties in accordance
with this Agreement designate as Servicer any Person to succeed RCC or any
successor Servicer.
(b) Without the prior written consent of the Agent, RCC shall not be
permitted to delegate any of its duties or responsibilities as Servicer to any
Person other than (i) the Borrower and (ii)
Page 25
with respect to certain Delinquent Receivables and Charged-Off Receivables,
outside collection agencies or other similar entities in accordance with its
customary practices. The Borrower shall not be permitted to further delegate to
any other Person any of the duties or responsibilities of the Servicer delegated
to it by RCC. If the Agent shall designate as Servicer any other Person to
succeed RCC, all duties and responsibilities theretofore delegated by RCC to the
Borrower may, at the discretion of the Agent, be terminated forthwith on notice
given by the Agent to RCC and to the Borrower.
(c) Notwithstanding the foregoing subsection (b), if RCC delegates any of
its duties or responsibilities as Servicer to any Person , (i) RCC shall be and
remain primarily liable to the Agent and the Lenders for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Agent and the Lenders shall be entitled to deal exclusively with RCC in
matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agent and the Lenders shall not be required to
give notice, demand or other communication to any Person other than RCC in order
for communication to the Servicer and its sub-servicer or other delegate with
respect thereto to be accomplished. RCC, 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 Obligors to pay all Collections directly
to the Lock Box, the Depository Account or the Collection Account. The Servicer
shall effect a Collection Account Agreement substantially in the form of EXHIBIT
VI with each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box, Depository Account or Collection Account
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 or other Collateral, the Servicer shall promptly remit such items to
the Person identified to it as being the owner of such remittances. The Servicer
shall cause all amounts on deposit in the Depository Account and any Lock-Box
Receipts related to the Receivables to be remitted to the Collection Account
when and as described in SECTION 2.2(a) hereof.
(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 the Borrower and the Lenders 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 the Borrower
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 the
Lender Percentage of Collections of Receivables set
Page 26
aside for the Lenders 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 Lenders 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 the Borrower and the Lenders all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are 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 the Borrower 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 Lender, furnish to the Lenders (promptly
after any such request) a calculation of the amounts set aside for the Lenders
pursuant to ARTICLE II.
(f) Any payment by an Obligor in respect of any indebtedness owed by it to
the Originator or the Borrower 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 Lenders, shall
establish and maintain an account bearing the designation "▇▇▇▇▇ Funding,
L.L.C." (the "COLLECTION ACCOUNT") No. 363653874 at Bank One Michigan. The
Collection Account shall be the property of the Borrower, subject to the rights
of the Agent in the property held in the Collection Account.
(h) If, at any time, there is an Excess Concentration Amount, the Servicer
shall designate one or more Eligible Receivables of the applicable Obligor as an
Excess Concentration Receivable such that, after giving effect to the
designation of such Eligible Receivable as an Excess Concentration Receivable,
the Excess Concentration Amount is reduced to zero.
Section 8.3 COLLECTION NOTICES. The Agent is authorized at any time to date
and to deliver to the Collection Account Banks the Collection Notices. The
Borrower hereby transfers to the Agent for the benefit of the Lenders, effective
when the Agent delivers such notice, the exclusive ownership
Page 27
and control of the Collection Account. In case any authorized signatory of the
Borrower 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.
The Borrower hereby authorizes the Agent, and agrees that the Agent shall be
entitled to (i) endorse the Borrower'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 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
the Borrower.
Section 8.4 RESPONSIBILITIES OF THE BORROWER. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Lenders of their
rights hereunder, shall not release the Servicer, the Originator or the Borrower
from any of their duties or obligations with respect to any Receivables or under
the related Contracts. The Lenders 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 the Borrower.
Section 8.5 REPORTS. The Servicer shall prepare and forward to the Agent
(i) on or before the 19(th) day of each calendar month or, if such day is not a
Business Day, then the first Business Day thereafter or on any day on which the
discounted value of the sum of (A) the Excess Receivables to be repurchased on
such day and (B) Excess Receivables repurchased by the Originator within the
prior thirty (30) days is greater than 10% of the Discounted Lease Balance (the
"MONTHLY REPORT DATE"), a Monthly Report and (ii) 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 Reporting Period preceding the date on which such Monthly Report is
delivered; PROVIDED, HOWEVER, that with respect to a Monthly Report delivered in
connection with a Repurchase, all computations in such Monthly Report shall be
made after giving effect to such Repurchase.
Section 8.6 SERVICING FEES. In consideration of RCC's agreement to act as
Servicer hereunder, the Lenders hereby agree that, so long as RCC shall continue
to perform as Servicer hereunder, the Borrower shall pay over to RCC a fee (the
"SERVICING FEE") on the first calendar day of each month, in arrears for the
immediately preceding month, equal to 1.0% per annum of the Lender Percentage of
the average Outstanding Balance of all Receivables during such period, as
compensation for its servicing activities.
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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 Borrower 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 Aggregate 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
Borrower 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.
(c) Failure of the Borrower to pay when due any Indebtedness or the failure
of any other Borrower Party to pay when due Indebtedness in excess of
$10,000,000, or the failure of any such Person to pay any interest or premium on
such Indebtedness when due or within any applicable grace period and which
failure could reasonably be expected to have a Material Adverse Effect; or the
default by any Borrower Party 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 Borrower Party 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) Any Borrower 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 any Borrower
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 and, in the case
of a proceeding instituted against a Borrower Party (but not by such Borrower
Party), such Borrower Party fails to (A) move, in good faith, to have such
proceeding dismissed within thirty (30) days of the institution of such
proceeding and such proceeding shall remain undismissed or unstayed for a period
of forty-five (45) days or such longer period as the Agent consents to in
writing and (B) set aside adequate reserves on its books in accordance with GAAP
or (iii) any Borrower Party or any of its Subsidiaries shall take any corporate
or legal action to authorize any of the actions set forth in clauses (i) or (ii)
above in this subsection (d).
Page 29
(e) The Borrower shall fail to comply with the terms of SECTION 2.6 hereof.
(f) A Change of Control shall occur.
(g) A Change of Ownership shall occur.
(h) As of the end of any Reporting Period, the Three-Month Average
Delinquency Ratio shall exceed 2.25%.
(i) As of the end of any Reporting Period, the Three-Month Average Gross
Loss to Liquidation Ratio shall exceed 15%.
(j) (i) One or more final judgments for the payment of money shall be
entered against the Borrower or (ii) one or more final judgments for the payment
of money in an amount in excess of $10,000,000, individually or in the
aggregate, shall be entered against the Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue without discharge or stay for sixty (60)
consecutive days.
(k) The "TERMINATION DATE" under and as defined in the Receivables Sale
Agreement shall occur under the Receivables Sale Agreement or the 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 the Borrower
under the Receivables Sale Agreement.
(l) 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 the Borrower, or any Obligor shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability and which contest could reasonably be expected
to have a Material Adverse Effect, or the Agent for the benefit of the Lenders
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security, the Collections with respect thereto and
other Collateral.
(m) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and its Subsidiaries, on a Consolidated basis
fail to maintain:
(i) a Consolidated Leverage Ratio less than or equal to 2.75 to 1.0;
or
(ii) a Consolidated Interest Coverage Ratio greater than or equal to
3.50 to 1.0.
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(n) The Scheduled Maturity Date or the Maturity Date under and as defined
in the Credit Agreement shall occur and, within five (5) Business Days, a
substitute credit facility, on terms and conditions substantially similar to the
Credit Agreement shall not have been put in place.
(o) 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 Provider, or Provider shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability.
(p) The Swap Counterparty fails to maintain a rating with respect to
short-term deposit obligations of at least P-1 by ▇▇▇▇▇'▇ and at least A-1 by
S&P and with respect to long-term unsecured debt obligations, a rating of A2 or
higher by ▇▇▇▇▇'▇ or A or higher by S&P and the Agent, or an Affiliate or
Subsidiary of the Agent, is not the Swap Counterparty.
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 Borrower Party; PROVIDED, HOWEVER, that upon the occurrence of an
Amortization Event described in SECTION 9.1(d)(ii), or of an actual or deemed
entry of an order for relief with respect to any Borrower 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 Borrower 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, and (v) notify Obligors of the Lenders'
security interest in the Receivables. 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 Lenders 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 BORROWER PARTIES. Without limiting any
other rights that the Agent or any Lender may have hereunder or under applicable
law, (A) the Borrower hereby agrees to indemnify the Agent (except, if
applicable, in its capacity as Swap Counterparty), each Lender and their
respective assigns, officers, directors, agents and employees (each an
"INDEMNIFIED PARTY") from and against
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any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable by any such Indemnified Party, including reasonable
attorneys' fees 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, to a
Lender of a security 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):
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction or a final decree issued in connection with an
administrative proceeding holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) 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
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the Loans as a loan or loans by the Lenders to the
Borrower secured by the Receivables, the Collections with respect thereto
and other Collateral;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of any Borrower Party or limit the recourse of the Lenders to any
Borrower Party for amounts otherwise specifically provided to be paid by such
Borrower Party under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, the Borrower shall indemnify each
Indemnified Party for Indemnified Amounts (including losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to the Borrower or the Servicer) relating to or resulting
from:
(a) any representation or warranty made by any Borrower 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;
(b) the failure by the Borrower, the Servicer or the Originator to
comply with any applicable law, rule or regulation with respect to any
Receivable or
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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;
(c) any failure of the Borrower, 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;
(d) 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;
(e) 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;
(f) the commingling of Collections of Receivables at any time with
other funds;
(g) 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 the initial Loan or a
Subsequent Loan or any other investigation, litigation or proceeding
relating to the Borrower, the Servicer or the Originator in which any
Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;
(h) 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;
(i) any Amortization Event described in SECTION 9.1(d);
(j) any failure of the Borrower to acquire and maintain legal and
equitable title to, and ownership of any Receivable, the Related Security,
Collections with respect thereto and other Collateral from the Originator,
free and clear of any Adverse Claim (other than as created pursuant to any
Transaction Document); or any failure of the
Page 33
Borrower 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;
(k) any failure to vest and maintain vested in the Agent for the
benefit of the Lenders, or to transfer to the Agent for the benefit of the
Lenders, a first priority perfected security interest in the Receivables,
the Related Security, Collections with respect thereto and other Collateral
(excluding the Exempted Contracts), free and clear of any Adverse Claim
(except as created by the Transaction Documents);
(l) 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, Collections with respect thereto and
other Collateral, and the proceeds of any thereof (excluding Exempted
Contracts), whether at the time of any Subsequent Loan or at any subsequent
time;
(m) any action or omission by any Borrower Party which reduces or
impairs the rights of the Agent or the Lenders with respect to any
Receivable or the value of any such Receivable;
(n) any attempt by any Person to void any Subsequent Loan hereunder
under statutory provisions or common law or equitable action; or
(o) the failure of any Receivable included in the definition of the
Net Receivables 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
Page 34
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 all or any 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, the Borrower 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.
Section 10.3 OTHER COSTS AND EXPENSES. The Borrower shall pay to the Agent
and the Conduit 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 Conduit's auditors
auditing the books, records and procedures of the Borrower, reasonable fees and
out-of-pocket expenses of legal counsel for the Conduit and the Agent (which
such counsel may be employees of the Conduit or the Agent) with respect thereto
and with respect to advising the Conduit and the Agent as to their respective
rights and remedies under this Agreement. The Borrower shall pay to the Agent on
demand any and all reasonable costs and expenses of the Agent and the Lenders,
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 Lender hereby designates and
appoints Bank One Chicago 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 Lender, 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 Lenders and does not assume nor shall be
deemed to have assumed any obligation or relationship of trust or agency with or
for any Borrower Party or any of such Borrower 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
Page 35
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 Lender hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements on behalf of such Lender (the terms of
which shall be binding on such Lender).
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.
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 Lenders for any recitals, statements, representations or
warranties made by any Borrower 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 Borrower 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 Lender 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 Borrower 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 the Borrower or a Lender.
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
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 the Borrower), 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 Conduit or the Required Financial Institutions or all of the Lenders, as
applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Lenders; 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 Lenders. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of the Conduit or the Required
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Financial Institutions or all of the Lenders, as applicable, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
Section 11.5 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender 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 Borrower Party, shall be deemed to constitute any
representation or warranty by the Agent. Each Lender represents and warrants to
the Agent that it has and will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of the Borrower and made its own decision to enter into this
Agreement, 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 Borrower Parties (i) for any
amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Borrower Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Lenders, 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 the Borrower or any Affiliate of the Borrower as though the Agent
were not the Agent hereunder. With respect to Loans made pursuant to this
Agreement, the Agent shall have the same rights and powers under this Agreement
in its individual capacity as any Lender and may exercise the same as though it
were not the Agent, and the terms "FINANCIAL INSTITUTION," "LENDER," "FINANCIAL
INSTITUTIONS" and "LENDERS" shall include the Agent in its individual capacity.
Section 11.8 SUCCESSOR AGENT. The Agent may, upon five days' notice to the
Borrower and the Lenders, and the Agent will, upon the direction of all of the
Lenders (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 Lenders 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 Lenders shall perform all of the duties of the Agent
hereunder and under the other Transaction Documents and the Borrower and the
Servicer (as applicable) shall make all payments in respect of the Aggregate
Unpaids directly to the applicable Lenders and for all purposes shall deal
directly with the Lenders. After the effectiveness of any retiring Agent's
resignation hereunder as Agent, the retiring Agent shall be discharged from its
duties and obligations
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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) The Borrower and each Financial Institution
hereby agree and consent to the complete or partial assignment by the Conduit 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 Conduit shall be released
from its obligations so assigned. Further, the Borrower and each Financial
Institution hereby agree that any assignee of the Conduit of this Agreement or
all or any of the Loans of the Conduit shall have all of the rights and benefits
under this Agreement as if the term "THE CONDUIT" explicitly referred to such
party, and no such assignment shall in any way impair the rights and benefits of
the Conduit hereunder. Neither the Borrower 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 Conduit 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 S&P and P-1
by ▇▇▇▇▇'▇ and must agree to deliver to the Agent, promptly following any
request therefor by the Agent or the Conduit, an enforceability opinion in form
and substance satisfactory to the Agent and the Conduit. 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 a Financial Institution party to this Agreement and shall have all
the rights and obligations of a Financial Institution under this Agreement to
the same extent as if it were an original party hereto and no further consent or
action by the Borrower, the Lenders 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 S&P and P-1 by
▇▇▇▇▇'▇ (an "AFFECTED FINANCIAL INSTITUTION"), such Affected Financial
Institution shall be obliged, at the request of the Conduit 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 Conduit, 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
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such Financial Institution's Pro Rata Share of the Aggregate Capital of the
Financial Institutions 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 Loans 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 Loans of the
Financial Institutions, its obligation to pay the Conduit 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
the Borrower, the Conduit and the Agent shall continue to deal solely and
directly with such Financial Institution in connection with such Financial
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 15.1(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 Conduit delivered on or prior to the Liquidity Termination Date, it
shall acquire by assignment from the Conduit, without recourse or warranty, its
Pro Rata Share of one or more of the Loans of the Conduit as specified by the
Conduit. Each such assignment by the Conduit shall be made pro rata among the
Financial Institutions, except for pro rata assignments to one or more
Terminating Financial Institutions pursuant to SECTION 13.6; PROVIDED, HOWEVER,
that the Conduit 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 Conduit
and any Financial Institution) to the Agent at an account designated by the
Agent, for the benefit of the Conduit, 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 Conduit in reliance upon such assumption. The Conduit hereby sells and
assigns to the Agent for the ratable benefit of the Financial Institutions, and
the Agent hereby purchases and assumes from the Conduit, effective upon the
receipt by the Conduit of the Conduit Transfer Price, the Loans of the Conduit
which are the subject of any transfer pursuant to this ARTICLE XIII.
Page 39
Section 13.2 TRANSFER PRICE REDUCTION YIELD. If the Adjusted Funded Amount
is included in the calculation of the Conduit Transfer Price for any Loans, each
Financial Institution agrees that the Agent shall pay to the Conduit the
Reduction Percentage of any Yield received by the Agent with respect to such
Loans.
Section 13.3 PAYMENTS TO THE CONDUIT. In consideration for the reduction of
the Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective
only at such time as the aggregate amount of Capital of the Loans of the
Financial Institutions equals the Conduit Residual, each Financial Institution
hereby agrees that the Agent shall not distribute to the Financial Institutions
and shall immediately remit to the Conduit 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 Loans of the Financial Institutions.
Section 13.4 LIMITATION ON COMMITMENT TO PURCHASE FROM THE CONDUIT.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Loans from the Conduit,
pursuant to SECTION 13.1 or otherwise, if:
(a) the Conduit 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 Conduit or taken any
corporate action for the purpose of effectuating any of the foregoing; or
(b) involuntary proceedings or an involuntary petition shall have been
commenced or filed against the Conduit by any Person under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation or
reorganization of the Conduit 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 CONDUIT 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, after
excluding the Commitment of any Approved Unconditional Liquidity Providers) of
the Conduit Transfer Price Deficit and (y) the unused portion of such
Non-Defaulting Financial Institution's Commitment; PROVIDED, HOWEVER, that if an
Approved Unco nditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this SECTION 13.5 as a result of a
default by such Approved Unconditional Liquidity Provider; PROVIDED, FURTHER,
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting
Page 40
Financial Institution pursuant to this SECTION 13.5. 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 Conduit may have under applicable
law, each Defaulting Financial Institution shall pay to the Conduit 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 Conduit in full, at a rate per annum equal to
the Federal Funds Effective Rate plus two percent (2%).
Section 13.6 TERMINATING FINANCIAL INSTITUTIONS.
(a) Each Financial Institution hereby agrees to deliver written notice to
the Agent not more than 30 days and not less than five (5) days prior to the
Liquidity Termination Date indicating whether such Financial Institution intends
to renew its Commitment hereunder. If any Financial Institution fails to deliver
such notice on or prior to the date that is five (5) Business Days prior to the
Liquidity Termination Date, such Financial Institution will be deemed to have
declined to renew its Commitment (each Financial Institution which has declined
or has been deemed to have declined to renew its Commitment hereunder, a
"NON-RENEWING FINANCIAL INSTITUTION"). The Agent shall promptly notify the
Conduit of each Non-Renewing Financial Institution and the Conduit, in its sole
discretion, may (A) to the extent of Commitment Availability, declare that such
Non-Renewing Financial Institution's Commitment shall, to such extent,
automatically terminate on a date specified by the Conduit on or before the
Liquidity Termination Date or (B) upon one (1) Business Days' notice to such
Non-Renewing Financial Institution assign to such Non-Renewing Financial
Institution on a date specified by the Conduit its Pro Rata Share of the
aggregate Loans then held by the Conduit, subject to, and in accordance with,
SECTION 13.1. In addition, the Conduit may, in its sole discretion, at any time
(x) to the extent of Commitment Availability, declare that any Affected
Financial Institution's Commitment shall automatically terminate on a date
specified by the Conduit or (y) assign to any Affected Financial Institution on
a date specified by the Conduit its Pro Rata Share of the aggregate Loans then
held by the Conduit, subject to, and in accordance with, SECTION 13.1 (each
Affected Financial Institution or each Non-Renewing Financial Institution is
hereinafter referred to as a "TERMINATING FINANCIAL INSTITUTION"). The parties
hereto expressly acknowledge that any declaration of the termination of any
Commitment, any assignment pursuant t o this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by the Conduit in its sole and absolute discretion.
Page 41
(b) Upon any assignment to a Terminating Financial Institution as provided
in this SECTION 13.6, any remaining Commitment of such Terminating Financial
Institution shall automatically terminate. Upon reduction to zero of the Capital
of all of the Loans of a Terminating Financial Institution (after application of
Collections thereto pursuant to SECTIONS 2.2 and 2.3) all rights and obligations
of such Terminating Financial Institution hereunder shall be terminated and such
Terminating Financial Institution shall no longer be a "Financial Institution"
hereunder; PROVIDED, HOWEVER, that the provisions of ARTICLE X shall continue in
effect for its benefit with respect to Loans held by such Terminating Financial
Institution prior to its termination as a Financial Institution.
ARTICLE XIV
SECURITY INTEREST
Section 14.1 GRANT OF SECURITY INTEREST. To secure the due and punctual
payment of the Aggregate Unpaids, whether now or hereafter existing, due or to
become due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, in each case pro rata according to the
respective amounts thereof, the Borrower hereby pledges to the Agent, for the
benefit of the Secured Parties, and thereby grants to the Agent, for the benefit
of the Secured Parties, a security interest in, all of the Borrower's right,
title and interest now or hereafter existing in, to and under (a) all existing
or hereafter arising Receivables, the Related Security and Collections with
respect thereto, (b) the Receivables Sale Agreement and the other Transaction
Documents, including the Interest Rate Swaps and the Performance Undertaking,
(c) the Collection Account, (d) all other assets of the Borrower and (e) all
proceeds of any of the foregoing (collectively, the "COLLATERAL").
Section 14.2 REMEDIES. Upon the occurrence of an Amortization Event, the
Agent, on behalf of the Secured Parties, shall have, with respect to the
Collateral granted pursuant to SECTION 14.1, and in addition to all other rights
and remedies available to the Secured Parties or the Agent under this Agreement
and the other Transaction Documents or other applicable law, all the rights and
remedies of a secured party upon default under the UCC.
Section 14.3 TERMINATION AFTER FINAL PAYOUT DATE. Each of the Secured
Parties hereby authorizes the Agent, and the Agent hereby agrees, promptly after
the Final Payout Date to execute and deliver to the Borrower such UCC-3
termination statements as may be necessary to terminate the Agent's security
interest in and Lien upon the Collateral, all at the Borrower's expense. Upon
the Final Payout Date, all right, title and interest of the Agent and the
Secured Parties in and to the Collateral shall terminate.
Section 14.4 LIMITATION ON RIGHTS TO COLLATERAL PROCEEDS. Nothing in this
Agreement shall entitle the Secured Parties to receive or retain proceeds of the
Collateral in excess of the aggregate amount of the Aggregate Unpaids owing to
such Secured Party (or to any Indemnified Party claiming through such Secured
Party).
Page 42
ARTICLE XV
MISCELLANEOUS
Section 15.1 WAIVERS AND AMENDMENTS. (a) No failure or delay on the part of
the Agent or any Lender in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. 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
15.1(b). The Conduit, the Borrower 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 Lender, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by the Borrower or the Servicer, (B) reduce the rate or extend
the time of payment of Yield or any CP Costs (or any component of Yield or
CP Costs thereof), (C) reduce any fee payable to the Agent for the benefit
of the Lenders, (D) except pursuant to ARTICLE XII hereof, change the
amount of the Capital of any Lender, 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 15.1(b), (F)
consent to or permit the assignment or transfer by the Borrower 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 i n 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.
Page 43
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, the Agent may, with the consent of the Borrower, amend this
Agreement solely to add additional Persons as Financial Institutions hereunder
and (ii) the Agent, the Required Financial Institutions and the Conduit may
enter into amendments to modify any of the terms or provisions of ARTICLE XI,
ARTICLE XII, SECTION 15.13 or any other provision of this Agreement without the
consent of the Borrower; PROVIDED, that such amendment has no negative impact
upon the Borrower. Any modification or waiver made in accordance with this
SECTION 15.1 shall apply to each of the Lenders equally and shall be binding
upon the Borrower, the Lenders and the Agent.
Section 15.2 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 15.2. The
Borrower 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 f aith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of the Borrower; 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 15.3 RATABLE PAYMENTS. If any Lender, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Lender (other than payments received pursuant to SECTION
10.2 or 10.3) in a greater proportion than that received by any other Lender
entitled to receive a ratable share of such Aggregate Unpaids, such Lender
agrees, promptly upon demand, to purchase for cash without recourse or warranty
a portion of such Aggregate Unpaids held by the other Lenders so that after such
purchase each Lender 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 Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
Section 15.4 PROTECTION OF SECURITY INTERESTS OF THE LENDERS.
(a) The Borrower agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the security interest of the Lenders, or
to enable the Agent or the Lenders to exercise and enforce their rights and
remedies hereunder. At any
Page 44
time following the occurrence of an Amortization Event, the Agent may, or the
Agent may direct the Borrower or the Servicer to, notify the Obligors of
Receivables (other than Repurchased Receivables), at the Borrower's expense, of
the security interests of the Lenders under this Agreement and may also direct
that payments of all amounts due or that become due under any or all Receivables
(other than Repurchased Receivables) be made directly to the Agent or its
designee; PROVIDED, that unless the Servicer has failed to deliver a Monthly
Report, the Agent shall distribute the Borrower Percentage of Collections
received by the Agent to the Borrower. The Borrower or the Servicer (as
applicable) shall, at any Lender's request, withhold the identity of such Lender
in any such notification.
(b) If any Borrower Party fails to perform any of its obligations
hereunder, the Agent or any Lender may (but shall not be required to) perform,
or cause performance of, such obligations, and the Agent's or such Lender's
costs and expenses incurred in connection therewith shall be payable by the
Borrower as provided in SECTION 10.3. Each Borrower 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
Borrower Party (i) to execute on behalf of the Borrower as debtor and to file
financing statements necessary or desirable by the Agent to perfect and to
maintain the perfection and priority of the interest of the Lenders 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 necessary or desirable to perfect and to
maintain the perfectio n and priority of the interests of the Lenders in the
Receivables. This appointment is coupled with an interest and is irrevocable.
Section 15.5 CONFIDENTIALITY.
(a) Each Borrower Party, the Agent and each Lender shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
the Agent and the Conduit 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 Borrower Party and such
Lender and its officers and employees may disclose such information to such
Borrower Party's, and such Lender's directors, external accountants and
attorneys (provided each such Person is informed of the confidential nature of
such information) and as required by any applicable law or order of any judicial
or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Borrower Party
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to the Agent, the Financial Institutions or the Conduit by each other,
(ii) by the Agent or the Lenders to any prospective or actual assignee or
participant of any of them, (iii) by the Agent to any rating agency, Commercial
Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to the Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One
Chicago acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, (iv) by
the Agent to any actual or potential successor Servicer or back-up Servicer
Page 45
or (v) at any time on or following the Amortization Date, by the Agent, the
Lenders or the Financial Institutions to any Person in conjunction with the
exercise of any of their remedies hereunder. In addition, the Lenders 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 15.6 BANKRUPTCY PETITION. Each of the parties hereto 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 Conduit or any Unconditional
Liquidity Provider, it will not institute against, or join any other Person in
instituting against, the Conduit, the Borrower or any such entity 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 15.7 LIMITATION OF LIABILITY. Except with respect to any claim
arising out of the willful misconduct or gross negligence of the Conduit, the
Agent or any Financial Institution, no claim may be made by any Borrower Party
or any other Person against the Conduit, 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 Borrower 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 15.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
Section 15.9 CONSENT TO JURISDICTION. EACH BORROWER 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 BORROWER 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 LENDER TO BRING
PROCEEDINGS AGAINST ANY BORROWER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY BORROWER PARTY AGAINST THE AGENT OR ANY LENDER OR
ANY AFFILIATE OF THE AGENT OR ANY LENDER
Page 46
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 BORROWER
PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 15.10 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 ANY
BORROWER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 15.11 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement, each other Transaction Document, 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 Borrower Party pursuant to
ARTICLE V, (ii) the indemnification and payment provisions of ARTICLE X, and
SECTIONS 15.5 and 15.6 shall be continuing and shall survive any termination of
this Agreement.
Section 15.12 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 15.13 BANK ONE CHICAGO ROLES. Each of the Financial Institutions
acknowledges that Bank One Chicago acts, or may in the future act, (i) as
administrative agent for the Conduit or any Financial Institution, (ii) as
issuing and paying agent for the Commercial Paper, (iii) to provide credit or
Page 47
liquidity enhancement for the timely payment for the Commercial Paper, (iv) to
provide other services from time to time for the Conduit or any Financial
Institution and (v) as Swap Counterparty (collectively, the "BANK ONE CHICAGO
ROLES"). Without limiting the generality of this SECTION 15.13, each Financial
Institution hereby acknowledges and consents to any and all Bank One Chicago
Roles and agrees that in connection with any Bank One Chicago Role, Bank One
Chicago may take, or refrain from taking, any action that it, in its discretion,
deems appropriate, including in its role as administrative agent for the
Conduit, and the giving of notice to the Agent of a mandatory purchase pursuant
to SECTION 13.1.
Section 15.14 CHARACTERIZATION. It is the intention of the parties hereto
that each Loan hereunder shall be characterized as a secured loan and not a sale
and it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law. In furtherance of the
foregoing, the Borrower hereby grants to the Agent for the ratable benefit of
the Lenders a valid and perfect security interest in all of Borrower's right,
title and interest in, to and under all Receivables now existing or hereafter
arising, the Related Security, Collections with respect thereto and other
Collateral 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 Lenders 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 u nder the UCC and other applicable law, which rights and
remedies shall be cumulative.
[SIGNATURE PAGES FOLLOW]
Page 48
IN WITNESS WHEREOF, the parties hereto have caused this Loan Funding
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
▇▇▇▇▇ FUNDING, L.L.C., as the Borrower
By:
--------------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇▇▇ CAPITAL CORPORATION, as Servicer
By:
--------------------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax:
JUPITER SECURITIZATION CORPORATION,
as the Conduit
By:
--------------------------------------------
Authorized Signatory
Address: c/o Bank One, NA (Main Office
Chicago), as Agent
Asset Backed Finance
Suite 0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
By:
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0594, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (MAIN OFFICE CHICAGO), as a
Financial Institution
By:
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0594, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 Loan hereunder to (and including) the last day of the calendar month in
which such initial Loan occurs.
"ACQUISITION AMOUNT" means, on the date of any purchase from the Conduit of
one or more Loans pursuant to SECTION 13.1, (i) with respect to each Financial
Institution [(other than any Unconditional Liquidity Provider)], the lesser of
(a) such Financial Institution's Pro Rata Share of the sum of (A) the lesser of
(1) the Adjusted Liquidity Price of each such Loan and (2) the Loan and (B) all
accrued and unpaid CP Costs for each such Loan and (ii) such Financial
Institution's unused Commitment and (b) with respect to each Unconditional
Liquidity Provider, the lesser of (x) such Unconditional Liquidity Provider's
Pro Rata Share of the sum of (1) the Capital of each such Loan and (2) all
accrued and unpaid CP Costs for each such Loan and (y) such Unconditional
Liquidity Provider's unused Commitment.
"ADJUSTED FUNDED AMOUNT" means, in determining the Conduit Transfer Price
for any Loan, an amount equal to the sum of (a) the Adjusted Liquidity Price of
each such Loan and (b) an amount equal to each Unconditional Liquidity
Provider's Pro Rata Share of the difference between (i) the Adjusted Liquidity
Price of each such Loan and (ii) the Capital of each such Loan.
"ADJUSTED LIQUIDITY PRICE" means an amount equal to
NDR
---
LP [(i) DC (ii) [1.075]]
where:
LP = Lender Percentage.
DC = the Deemed Collections.
Exh. I-1
NDR = the Outstanding Balance of all Receivables which are not
Defaulted Receivables.
Each of the foregoing shall be determined from the most recent Monthly 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.
"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 all Capital of all Loans outstanding on such date.
"AGGREGATE NOTIONAL AMOUNT" means, on any day, the aggregate of all current
Notional Amounts on the Interest Rate Swaps.
"AGGREGATE REPAYMENT" has the meaning specified in SECTION 1.3.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all
Aggregate Capital and all Third-Party Servicer Costs and other unpaid
Obligations (whether due or accrued) at such time.
"AGREEMENT" means this Loan Funding Agreement, as it may be amended or
modified and in effect from time to time.
"AMORTIZATION DATE" means the earliest to occur of (i) the Business Day
immediately prior to the occurrence of an Amortization Event set forth in
SECTION 9.1(d), (ii) the Business Day specified in a written notice from the
Agent following the occurrence of any other Amortization Event, and (iii) the
date which is thirty (30) Business Days after the Agent's receipt of written
notice from the Borrower that it wishes to terminate the facility evidenced by
this Agreement.
"AMORTIZATION EVENT" has the meaning specified in ARTICLE IX.
Exh. I-2
"ASSIGNMENT AGREEMENT" has the meaning set forth in SECTION 12.1(b).
"AUTHORIZED OFFICER" shall mean, with respect to any Borrower Party, its
respective controller or chief financial officer, treasurer, assistant
treasurer, president or secretary who is authorized to sign on behalf of the
respective Borrower Party.
"BANK ONE CHICAGO" 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 announced from time to time by the Reference Bank
or its parent, changing when and as said base rate changes.
"BORROWER" has the meaning set forth in the preamble to this Agreement.
"Borrower Parties" has the meaning set forth in the preamble of this Agreement.
"Borrower Percentage" means, at any time, (i) one minus (ii) the Lender
Percentage.
"BROKEN FUNDING COSTS" means for any Loan which (i) has its Capital
reduced, without compliance by the Borrower with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Repayment following
the delivery of any Repayment 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 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
Loan (as applicable) subsequent to the date of such repayment, assignment or
termination (or in respect of clause (ii) above, the date such Aggregate
Repayment was designated to occur pursuant to the Repayment Notice) of the
Capital of such Loan if such repayment, assignment or termination had not
occurred or such Repayment 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 Loan,
the amount of CP Costs or Yield actually accrued during the remainder of such
period on such Capital for the new Loan, and (y) to the extent such Capital is
not allocated to another Loan, the income, if any, actually received during the
remainder of such period by the holder of such Loan 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 Lender or
Lenders agree to pay to the Borrower 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
Exh. I-3
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"CAPITAL" with respect to a Lender means, at any time, (A) the Original
Principal Amount of all Loans made or purchased by such Lender, minus (B) the
sum of the aggregate amount of Collections and other payments received by the
Agent which in each case are applied to repay such Original Principal Amount 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.
"CHANGE OF CONTROL" means an event described in clause (i), (ii), (iii) or
(iv) below shall have occurred: (i) during any period of twelve (12) consecutive
months, individuals who at the beginning of such period constituted the board of
directors of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ (together with any new directors whose
election by such board or whose nomination for election by the shareholders of
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) and who
were entitled to vote on such matters, cease for any reason to constitute a
majority of the board of directors of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ then in office, (ii)
any person or group of persons (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) shall obtain ownership or control
in one or more series of transactions of more than 35% of the common stock or
35% of t he voting power of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ entitled to vote in the
election of members of the board of directors of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, (iii)
there shall have occurred under any indenture or other instrument evidencing any
Indebtedness in excess of $10,000,000 any "change in control" (as defined in
such indenture or other evidence of Indebtedness) obligation of ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ to repurchase, redeem or repay all or any part of the Indebtedness
provided for therein or (iv) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ fails to own 100% of RCC.
"CHANGE OF OWNERSHIP" means, with respect to the Borrower, that RCC ceases
to own, free and clear of all Adverse Claims, all of the outstanding membership
interests of the Borrower.
"CLOSING DATE" means January 24, 2002.
"COLLATERAL" has the meaning it is given in SECTION 14.1.
"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, the Borrower, the Agent and a Collection Account Bank.
Exh. I-4
"COLLECTION ACCOUNT BANK" means the bank holding the Collection Account.
"COLLECTION NOTICE" means a notice, substantially in the form of Annex A to
EXHIBIT VI, from the Agent to the Collection Account Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash collections
and other cash proceeds (including the purchase price paid in immediately
available funds of any Repurchased Receivable which has been received by the
Borrower) 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.
"COMMERCIAL PAPER" means promissory notes of the Conduit issued by the
Conduit in the commercial paper market.
"COMMITMENT" means, for each Financial Institution, the commitment of such
Financial Institution to (i) make Loans to the Borrower and (ii) purchase Loans
from the Conduit 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
(including, without limitation, any termination of Commitments pursuant to
SECTION 13.6 hereof) and (ii) with respect to any individual purchase hereunder,
its Pro Rata Share of the Purchase Price therefor.
"COMMITMENT AVAILABILITY" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
MINUS an amount equal to 2% of such aggregate Commitments at such time MINUS (b)
the Aggregate Capital at such time.
"CONCENTRATION LIMIT" means, with respect to any Obligor and as of any date
of determination, an amount equal to 2% of the aggregate Outstanding Balance of
all Eligible Receivables at such time.
"CONDUIT" has the meaning set forth in the preamble to this Agreement.
"CONDUIT RESIDUAL" means the sum of the Conduit Transfer Price Reductions.
"CONDUIT TRANSFER PRICE" means, with respect to the assignment by Conduit
of one or more Loans 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 Loan and (b) the Adjusted Funded Amount of each
such Loan and (ii) all accrued and unpaid CP Costs for each such Loan.
"CONDUIT TRANSFER PRICE DEFICIT" has the meaning set forth in SECTION 13.5.
Exh. I-5
"CONDUIT TRANSFER PRICE REDUCTION" means in connection with the assignment
of a Loan by the Conduit to the Agent for the benefit of the Financial
Institutions, the positive difference (if any) between (i) the Capital of such
Loan and (ii) the Adjusted Funded Amount for such Loan.
"CONSOLIDATED" means, when used with reference to financial statements or
financial statement items of a Person and its Subsidiaries, such statements or
items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"CONSOLIDATED EBIT" means, for any period, as applied to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ and its Consolidated Subsidiaries without duplication, the sum of the
amounts for such period of: (a) Consolidated Net Income, PLUS (b) Consolidated
Interest Expense and (c) all federal, state, foreign and local income tax
expense, all of the foregoing as determined and computed on a Consolidated basis
in accordance with GAAP.
"CONSOLIDATED EBITDA" means, for any period, as applied to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ and its Consolidated Subsidiaries without duplication, the sum of the
amounts for such period of (a) Consolidated Net Income, PLUS (b) Consolidated
Interest Expense, (c) all Federal, state, foreign and local income tax expense
and (d) depreciation and amortization expense, all of the foregoing determined
and computed on a Consolidated basis in accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" means, as of any date, all Debt of ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ and its Consolidated Subsidiaries for borrowed money, including without
limitation, all Debt referred to in clauses (a), (b), (f), (g), (h) and (l) of
the definition of "Debt" set forth in the Credit Agreement.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of the last day of any
fiscal quarter, the ratio of (a) Consolidated EBIT to (b) Consolidated Interest
Expense, in each case for the period of four (4) consecutive fiscal quarters
ending as of such day.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, as applied to
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and its Consolidated Subsidiaries, all interest expense
(whether paid or accrued) and capitalized interest (including, without
duplication, interest expense of RCC), including without limitation (a) the
amortization of debt discount and premium, (b) the interest component under
Capital Leases (as defined in the Credit Agreement) and (c) the implied interest
component, discount or other similar fees or charges in connection with any
asset securitization program, in each case as determined and computed on a
Consolidated basis in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, as of the last day of any fiscal
quarter, the ratio of (a) Consolidated Funded Debt on such day to (b)
Consolidated EBITDA for the period of four (4) consecutive fiscal quarters
ending as of such day.
Exh. I-6
"CONSOLIDATED NET INCOME" means, for any period, the net income, after
taxes, of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and its Consolidated Subsidiaries for such
period as determined and computed on a Consolidated basis in accordance with
GAAP.
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary or other
entity the accounts of which, in accordance with GAAP, are Consolidated with
those of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ in its Consolidated financial statement as of
such date.
"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.
"CONTRACT" means, with respect to any Receivable, any and all leases,
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 or yield 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 Loan of the Conduit
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 S ubsequent Loan during any period of time determined by the
Agent in its sole discretion to result in incrementally higher CP Costs
applicable to such Subsequent Loan, the Capital associated with any such
Subsequent Loan shall, during such period, be deemed to be funded by the Conduit
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 AGREEMENT" means the Credit Agreement dated as of August 7, 2001
among ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, RCC, the lenders from time to time party thereto
and Bank of America, N.A., as administrative agent, as the same may be amended,
restated or otherwise modified from time to time.
Exh. I-7
"CREDIT AND COLLECTION POLICY" means the Borrower'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.
"DEALER FEE" shall have the meaning given to such term in the Fee Letter.
"DEBT" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or similar instruments, (iii) obligations
to pay the deferred purchase price of property or services, (iv) obligations as
lessee under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases and (v) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through (iv) above, including warranty and indemnification agreements.
"DEEMED COLLECTIONS" means the aggregate of all amounts the Borrower shall
have been deemed to have received as a Collection of a Receivable pursuant to
SECTION 2.8, without respect to the proviso thereto.
"DEFAULT FEE" means with respect to any amount due and payable by the
Borrower in respect of any Aggregate Unpaids, other than Capital, an amount
equal to the greater of (i) $1000 and (ii) interest on any such unpaid Aggregate
Unpaids, other than Capital, at a rate per annum equal to 2% above the Base
Rate.
"DEFAULTED 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(d) (as if references to Borrower 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 Borrower's books as uncollectible or (iv) which has been
identified by the Borrower as uncollectible.
"DEFAULTING FINANCIAL INSTITUTION" has the meaning set forth in SECTION
13.5.
"DELINQUENCY RATIO" means, as of the last day of any Reporting Period, a
percentage equal to the (i) aggregate Outstanding Balance of all Delinquent
Receivables divided by (ii) the aggregate Outstanding Balance of all Receivables
(other than Defaulted Receivables) as of the last day of such Reporting Period.
"DELINQUENT RECEIVABLE" means a Receivable as to which any payment, or part
thereof, remains unpaid for at least 60 days from the original due date (other
than any Defaulted Receivable).
"DEPOSITORY ACCOUNT" means RCC's demand deposit account no. 0459-041 at
Provident Bank in Dayton, Ohio.
Exh. I-8
"DILUTIONS" means, at any time, the aggregate amount of reductions or
cancellations (excluding reductions or cancellations in respect of Upgraded
Receivables) described in the definition of "Deemed Collections".
"DISCOUNTED LEASE BALANCE" means, at any time, the aggregate of the
discounted present values of the remaining scheduled payments which will become
due on each Net Receivable, which present value shall be established, for each
Net Receivable, by discounting on a monthly basis such remaining payments using
the monthly equivalent of the Receivables Discount Rate applicable to each such
Net Receivable as the discount rate, excluding from such payments any amounts
that the Person receiving such payments is required to pay under any sales or
other similar surcharge tax imposed by any state, municipality or other taxing
authority (other than taxes imposed and calculated upon the income of such
receiving Person).
"DISCOUNT RATE" means the LIBO Rate or the Base Rate, as applicable.
"EARLY BUYOUT AMOUNT" means, for an Early Buyout Receivable, the amount of
the Outstanding Balance of such Early Buyout Receivable.
"EARLY BUYOUT RECEIVABLE" means a Receivable as to which the Obligor
thereof has remitted full payment of the Outstanding Balance of such Receivable
and, in connection therewith, the related Contract has been terminated prior to
its scheduled termination date.
ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(i) for which the Obligor (a) 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 Affiliate of any of the parties
hereto; (c) if a natural person, is a resident of the United States;
and (d) is not a government or a governmental subdivision or agency,
(ii) which is denominated and payable only in United States
dollars in the United States,
(iii) the Obligor of which is not the Obligor of any Defaulted
Receivable,
(iv) which is not a Defaulted Receivable,
(v) which is not a Delinquent Receivable,
Exh. I-9
(vi) which has an original term which does not exceed sixty (60)
months,
(vii) which has not been modified, amended or extended and has
not had any requirements thereof waived except in accordance with the
Credit and Collection Policy,
(viii) which is "chattel paper" within the meaning of the UCC of
all applicable jurisdictions,
(ix) 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 the 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
Lender to exercise its rights under this Agreement, including, without
limitation, its right to review the Contract,
(x) 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,
(xi) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xii) which was generated in the ordinary course of the
Originator's business,
(xiii) 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,
(xiv) 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 a "hell or high water" obligation which specifically provides that
the lessee is obligated to pay all sales and property taxes and to
perform all maintenance, except in each case as such enforcement may
be limited
Exh. I-10
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);
(xv) which arises solely from the lease of equipment and related
software and intellectual property rights and/or the provision of
services by the Originator or an Affiliate of the Originator, and not
by any other Person (in whole or in part) and which arises under a
Contract that contains an obligation to pay a specified sum of money,
contingent only upon the lease of equipment or the provision of
services by the Originator,
(xvi) which is not owned by or pledged to any other Person,
(xvii) as to which the Agent has not notified the Borrower 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,
(xviii) 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 the
Originator or any other Adverse Claim,
(xix) as to which the 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
(xx) all right, title and interest to and in which has been
validly transferred by the Originator directly to the Borrower under
and in accordance with the Receivables Sale Agreement, and the
Borrower has good and marketable title thereto free and clear of any
Adverse Claim except as created pursuant to the Transaction Documents.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EXCESS CONCENTRATION AMOUNT" means, at any time the aggregate amount of
all Excess Concentration Balances on such date.
Exh. I-11
"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 (other than Eligible Receivables previously designated as Excess
Concentration Receivables) exceeds the Concentration Limit (or, if applicable, a
Special Concentration Limit) for such Obligor.
"EXCESS CONCENTRATION RECEIVABLE" means, at any time, a Receivable
designated as such in accordance with SECTION 8.2(h).
"EXCESS FIXED RATE" means, on any day, the excess, if any, of the Fixed
Swap Rate over the Floating Swap Rate. Such excess shall be expressed as a
percentage. If no excess exists, there shall be no Excess Fixed Rate.
"EXCESS RECEIVABLES" means, at any time, all performing Net Receivables
other than Required Receivables.
"EXEMPTED CONTRACTS" means Contracts, each of which are dated on or prior
to September 30, 2000, with Outstanding Balances, in the aggregate, as of the
Closing Date, less than or equal to $30,000,000.
"FACILITY FEE" shall have the meaning given such term in the Fee Letter.
"FACILITY TERMINATION DATE" means the earliest of (i) January 23, 2006,
(ii) the Liquidity Termination Date, and (iii) the Amortization Date.
"FAST PAY NOTIONAL AMOUNT" means, on any day, the amount by which the
Aggregate Notional Amount exceeds the Discounted Lease Balance, in each case on
such day. If no such excess exists, there shall be no Fast Pay Notional Amount.
"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 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 Agent from three federal funds brokers of recognized standing
selected by it.
Exh. I-12
"FEE LETTER" means that certain letter agreement dated as of the date
hereof among the Borrower, the Originator, the Conduit and the Agent, as it may
be amended or modified and in effect from time to time.
"FINAL PAYOUT DATE" means the date following the Facility Termination Date
on which the Obligations have been paid in full.
"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 INSTITUTIONS" has the meaning set forth in the preamble in this
Agreement.
"FIXED SWAP RATE" means, for any day during an Accrual Period, the fixed
rate payable under each Interest Rate Swap (without taking into account any
netting provisions thereunder) as provided in SECTION 7.3(c).
"FLOATING SWAP RATE" has the meaning it is given in SECTION 7.3(c).
"FUNDING AGREEMENT" means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of the Conduit.
"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 Conduit.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"GROSS LOSS TO LIQUIDATION RATIO" means, as of the last day of any
Reporting Period, a percentage equal to (i) the Outstanding Balance of all
Receivables which became Defaulted Receivables or Upgraded Receivables during
such Reporting Period divided by (ii) the sum of (a) the aggregate amount of
Collections on all Receivables (other than Defaulted Receivables or Upgraded
Receivables) during such Reporting Period, (b) the aggregate amount of Deemed
Collections during such Reporting Period and (c) the Outstanding Balance of all
Receivables which became Defaulted Receivables during such Reporting Period.
"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
Exh. I-13
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 swaps, exchange or cap
agreements, (vii) Contingent Obligations and (viii) liabilities in respect of
unfunded vested benefits under plans covered by Title IV of ERISA.
"INDEMNIFIED AMOUNTS" has the meaning it is given in SECTION 10.1.
"INDEPENDENT DIRECTOR" has the meaning it is given in the Operating
Agreement of the Borrower.
"INELIGIBLE RECEIVABLE" means a Receivable that is not an Eligible
Receivable.
"INTEREST EXPENSE" means interest determined in accordance with GAAP.
"INTEREST RATE SWAPS" have the meaning given in SECTION 7.3.
"LENDER" means the Conduit or a Financial Institution, as applicable.
"LENDER PERCENTAGE" means, at any time, an undivided percentage interest
(computed as set forth below) in the Collateral associated with the Aggregate
Capital. Such undivided percentage interest shall equal:
AC
------
DLB LR
where:
AC = the Aggregate Capital on the date the Lender Percentage is
calculated.
LR = the Loss Reserve as set forth on the most recent Monthly
Report.
DLB = the Discounted Lease Balance on the date the Lender Percentage
is calculated.
Until the Amortization Date, the Lender Percentage shall be automatically
recomputed (or deemed to be recomputed) on each day. On and after the
Amortization Date, the Lender Percentage shall be the greater of (i) the Lender
Percentage recomputed on such day or (ii) the variable percentage represented by
the Lender Percentage as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date.
Exh. I-14
"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, (x) 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 (y) 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
det ermined by the Agent to be the rate at which Bank One Chicago 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 Agent 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) 1.0% per
annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
"LIEN" or "LIENS" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof), any filing or
agreement to file a financing statement as debtor under the UCC or any similar
statute (other than to reflect ownership by a third party of property leased to
the Originator under a lease which is not in the nature of a conditional sale or
title retention agreement), or any subordination arrangement in favor of another
Person.
"LIQUIDITY TERMINATION DATE" means January 23, 2003.
"LOAN" means a loan by Lender to the Borrower pursuant to SECTION 1.1 of
this Agreement as such Loan may be divided or combined pursuant to ARTICLE XII
of this Agreement.
"LOAN DATE" means the date specified as such in the applicable Loan
Request.
"LOAN LIMIT" means $100,000,000.
"LOAN REQUEST" has the meaning set forth in SECTION 1.2.
"LOCK-BOX" means any 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 III of the
Receivables Sale Agreement.
Exh. I-15
"LOCK-BOX RECEIPTS" means any funds remitted to a Lock-Box.
"LOSS PERCENTAGE" means, at any time, the greater of (i) product of (A) 3
and (B) the Six-Month Average Gross Loss to Liquidation Ratio and (ii) 15.0%.
"LOSS RESERVE" means, on any date, an amount equal to the Loss Percentage
multiplied by the Discounted Lease Balance as of the close of business of the
Servicer on such date.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of any Borrower Party and its Subsidiaries
taken as a whole, (ii) the ability of any Borrower Party to perform its
obligations under this Agreement or the Provider to perform its obligations
under the Performance Undertaking, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iv) any
Lender's interest in the Receivables generally or in any significant portion of
the Receivables, the Related Security, Collections with respect thereto or other
Collateral, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"MINIMUM DISCOUNT RATE" means, for any day as of which the Discounted Lease
Balance is to be determined, the sum of: (i) the weighted average of the Fixed
Swap Rates under the Interest Rate Swaps, (ii) the Servicing Fee Rate and (iii)
the percentage equivalent of the sum of the fees set forth in the Fee Letter.
"MONTHLY REPORT" means a report, in substantially the form of EXHIBIT X-A
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to SECTION 8.5.
"MONTHLY REPORT DATE" has the meaning it is given in SECTION 8.5.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NET RECEIVABLES" means, at any time, all Eligible Receivables at such time
reduced by all Excess Concentration Receivables.
"NET WORTH" means net worth of a Person determined from time to time in
accordance with GAAP.
"NET WORTH RATIO" means with respect to RCC, on a Consolidated basis,
determined in accordance with GAAP, the ratio of Debt of RCC and its
Subsidiaries (excluding Subordinated Debt) to the sum of the Net Worth of RCC
and the amount of Subordinated Debt.
"NOTIONAL AMOUNT" means, for any interest rate swap agreement, the current
notional amount as set forth on the applicable schedule of notional amounts.
Exh. I-16
"NOTIONAL AMOUNT RESET DATE" means January 31, 2003 and each January 31
thereafter, and if such day is not a Business Day, the prior Business Day or
such other day on which the Borrower enters into an Interest Rate Swap or
reduces the Notional Amount of an Interest Rate Swap in accordance with SECTION
2.6 hereof.
"NOTIONAL SHORTFALL AMOUNT" shall have the meaning set forth in SECTION
2.6.
"OBLIGATIONS" shall have the meaning set forth in SECTION 2.1.
"OBLIGOR" means a Person obligated to make payments pursuant to a Contract.
"ORIGINAL PRINCIPAL AMOUNT" means, with respect to any Loan, the amount
loaned to the Borrower which shall not exceed the least of (i) the amount
requested by the Borrower in the applicable Loan Request, (ii) the unused
portion of the Loan Limit on the applicable Loan Date and (iii) the excess, if
any, of the Discounted Lease Balance (less the Loss Reserve) on the applicable
Loan Date over the 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 Loan.
"ORIGINATOR" means RCC in its capacity as the Originator under the
Receivables Sale Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the arithmetic
sum of all remaining payments (excluding any Finance Charges) which will become
due on such Receivable.
"PERFORMANCE UNDERTAKING" means the Performance Undertaking dated as of the
date hereof by the Provider, in favor of the Borrower, substantially in the form
of EXHIBIT XI, as the same may be amended, restated or otherwise modified from
time to time.
"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.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of the Conduit
subject to any particular pooling arrangement by the Conduit, but excluding
Commercial Paper issued by the Conduit for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by the
Conduit.
"POTENTIAL AMORTIZATION EVENT" means an event which, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
Exh. I-17
"PRINCIPAL LEASE DOCUMENTS" means, with respect to any Receivable, each
original executed lease agreement (including any master lease agreement and any
original executed supplement or amendment thereto) pursuant to which such
Receivable arises or which evidence such Receivable.
"PROGRAM FEE" shall have the meaning given to such term in the Fee Letter.
"Proposed Repayment Date" has the meaning set forth in Section 1.3.
"PROPOSED REPURCHASE DATE" has the meaning set forth in SECTION 2.7.
"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,
adjusted as necessary to give effect to the application of the terms of SECTIONS
13.1 or 13.5.
"PROVIDER" means ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
"RCC" has the meaning set forth in the Preamble to this Agreement.
"RECEIVABLE" means any now existing or hereafter arising indebtedness and
other obligations owed to the Originator and accounted for in Branch 4000 of 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 by the Originator to a
lessee of equipment, and further includes, without limitation, the obligation to
pay any Finance Charges with respect thereto; PROVIDED HOWEVER that Repurchased
Receivables shall not be "Receivables" on and after the date of repurchase.
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, the
Originator or the Borrower treats such indebtedness, rights or obligations as a
separate payment obligation.
"RECEIVABLES DELINQUENCY RATIO" means, at any time, a percentage equal to
(i) the Outstanding Balance of all Delinquent Receivables divided by (ii) the
aggregate Outstanding Balance of all Receivables other than Charged-Off
Receivables.
"RECEIVABLES DISCOUNT RATE" means, for any day as of which the Discounted
Lease Balance is to be determined and for any Receivable, the nominal annual
rate which is the equivalent to the monthly periodic rate that discounts the
remaining scheduled payments which will become due on such Receivable
Exh. I-18
equal to the book value of such Receivable; PROVIDED, HOWEVER, that if the
weighted average Receivables Discount Rate of Net Receivables is less than the
Minimum Discount Rate, the Receivables Discount Rate for all Net Receivables
shall be the Minimum Discount Rate.
"RECEIVABLES SALE AGREEMENT" means the Receivables Sale Agreement, dated as
of the date hereof, between the Originator and the Borrower.
"RECEIVING ACCOUNT" means each of (i) the Collection Account and (ii) the
Depository 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 PERCENTAGE" means, for any Loan acquired by the Financial
Institutions from the Conduit for less than the Capital of such Loan, a
percentage equal to a fraction the numerator of which is the Conduit Transfer
Price Reduction for such Loan and the denominator of which is the Capital of
such Loan.
"REFERENCE BANK" means Bank One Chicago or such other bank as the Agent
shall designate with the consent of the Borrower.
"RELATED EQUIPMENT" means, with respect to any Receivable (i) goods or
equipment which are leased to an Obligor under a Contract that gave rise to such
Receivable and (ii) all financing statements or other filings with respect
thereto.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the Borrower'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
Borrower or the Originator gave rise to such Receivable, and all
insurance contracts with respect thereto,
(ii) 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,
Exh. I-19
(iii) all guaranties, letters of credit, insurance, security
deposits and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such Receivable
whether pursuant to the Contract related to such Receivable or
otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable (other than service, support and
maintenance agreements between the Obligor and ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇),
(v) all Principal Lease Documents and Records related to such
Receivable,
(vi) all of the Borrower's right, title and interest in and to
the Collection Account,
(vii) all of the Borrower's right, title and interest in, to and
under the Receivables Sale Agreement in respect of such Receivable and
all of Borrower'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 Borrower, and
(viii) all proceeds of any of the foregoing.
"REPAYMENT NOTICE" has the meaning set forth in SECTION 1.3.
"REPORTING PERIOD" means each calendar month, provided the initial
Reporting Period hereunder means the period from (and including) the date of the
initial Loan hereunder to (and including) the last day of the calendar month in
which such initial purchase occurs.
"REPURCHASE" means any repurchase of Excess Receivables by RCC in
accordance with SECTION 2.7.
"REPURCHASED RECEIVABLE" means any receivable repurchased by RCC in
accordance with SECTION 2.7; PROVIDED, that Upgraded Receivables and Early
Buyout Receivables shall not be Repurchased Receivables.
"REPURCHASED NOTICE has the meaning set forth in SECTION 2.7.
Exh. I-20
"REQUIRED FINANCIAL INSTITUTIONS" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Loan Limit.
"REQUIRED RECEIVABLES" means, at any time, Eligible Receivables with a
discounted present value of the remaining scheduled payments which will become
due on such Eligible Receivables greater than or equal to $170,000,000. The
discounted present value of an Eligible Receivable shall be established by
discounting on a monthly basis the remaining payments using the monthly
equivalent of the Receivables Discount Rate as the discount rate, excluding from
such payments any amounts that the Person receiving such payments is required to
pay under any sales or other similar surcharge tax imposed by any state,
municipality or other taxing authority (other than taxes imposed and calculated
upon the income of such receiving Person).
"▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇" means The ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Company, an Ohio
corporation.
"S&P" means Standard and Poor's Ratings Services.
"SECURED PARTIES" means the Agent, the Indemnified Parties and each of the
Lenders.
"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 RATE" means 1.0% per annum.
"SETTLEMENT DATE" means (A) with respect to an Accrual Period, the second
Business Day following the Monthly Report Date which occurs in the calendar
month following such Accrual Period and (B) the last day of the relevant Tranche
Period.
"SIX-MONTH AVERAGE GROSS LOSS TO LIQUIDATION RATIO" means, as of the last
day of any Reporting Period, the average of the Gross Loss to Liquidation Ratios
for such Reporting Period and each of the five immediately preceding Reporting
Periods.
"SUBSEQUENT LOAN" means a Loan made after the Closing Date, which Loan
increases the total outstanding Aggregate Capital hereunder.
"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, limited liability company, 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
Exh. I-21
owned or controlled. Unless otherwise expressly provided, all references herein
to a "Subsidiary" shall mean a Subsidiary of the Borrower.
"TERMINATING TRANCHE" has the meaning set forth in SECTION 4.3(b).
"TERMINATION DATE" has the meaning set forth in SECTION 2.2.
"TERMINATION PERCENTAGE" has the meaning set forth in SECTION 2.2.
"THREE-MONTH AVERAGE DELINQUENCY RATIO" means, as of the last day of any
Reporting Period, the average of the Delinquency Ratios for such Reporting
Period and each of the two immediately preceding Reporting Periods.
"THREE-MONTH AVERAGE GROSS LOSS TO LIQUIDATION RATIO" means, as of the last
day of a Reporting Period, the average Gross Loss to Liquidation Ratio for such
Reporting Period and each of the two immediately preceding Reporting Periods.
"TRANCHE PERIOD" means, with respect to any Loan held by a Financial
Institution:
(a) if Yield for such Loan 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 the Borrower, commencing on a Business Day
selected by the Borrower 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 Loan 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 Loan 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.
Exh. I-22
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each Loan
Notice, the Receivables Sale Agreement, the Collection Account Agreement, the
Performance Undertaking, the Fee Letter, the Subordinated Note (as defined in
the Receivables Sale Agreement) and all other instruments, documents and
agreements executed and delivered in connection herewith or in connection with
the Interest Rate Swaps.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"UNCONDITIONAL LIQUIDITY PROVIDER" means a Financial Institution that is
identified by the Agent or by Bank One as an entity which will not under any
circumstance receive any Conduit Transfer Price Reduction hereunder.
"UPGRADED RECEIVABLE" means a Receivable as to which either (a) the Obligor
thereof has been released from payment and a credit memorandum issued by
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ in favor of the Borrower in the amount of the Outstanding
Balance of such Receivable or (b) the Outstanding Balance of such Receivable is
included in a new Receivable, in either case, as an inducement for the
applicable Obligor to enter into a new lease with RCC.
"YIELD" means for each respective Tranche Period relating to a Loan of the
Financial Institutions, an amount equal to the product of the applicable
Discount Rate for each Loan multiplied by the Capital of such Loan 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
EXHIBIT II
FORM OF LOAN REQUEST
[Date]
Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Asset Backed Finance Treasury
Re: Loan Request
Ladies and Gentlemen:
Reference is hereby made to the Loan Funding Agreement, dated as of January
24, 2002, by and among the undersigned, as Borrower, ▇▇▇▇▇ Capital Corporation,
as initial Servicer, Jupiter Securitization Corporation (the "Conduit"), certain
Financial Institutions parties thereto and Bank One, NA (Main Office Chicago),
as Agent (the "Loan Funding Agreement"). Capitalized terms used herein shall
have the meanings assigned to such terms in the Loan Funding Agreement.
The Borrower hereby requests the following Subsequent Loan:
Original Principal Amount: $
Date of Loan:
Requested Discount Rate: [LIBO Rate] [Base Rate]
[Pooled Commercial Paper Rate]
Please wire-transfer the Original Principal Amount (net of any offsets to
which you are entitled) in immediately available funds on the above-specified
date of the Loan to:
[Account Name]
[Account No.] [Bank]
Exh. II-1
[Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. No. ( )
Please advise [Name] at telephone no ( ) _________________ if the Conduit will
not be making this Loan.
In connection with the Subsequent Loan to be made on the above listed "Date
of Loan" (the "Loan Date"), the Borrower hereby certifies that the following
statements are true on the date hereof, and will be true on the Loan Date
(before and after giving effect to the proposed Subsequent Loan):
(i) the representations and warranties of the Borrower set forth in
Section 5.1 of the Loan Funding Agreement are true and correct on and as of the
Loan Date as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from the
proposed Subsequent Loan, 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 Loan Limit, the Lender Percentage does not exceed
100%, the Aggregate Capital does not exceed the Aggregate Notional Amount of the
Interest Rate Swaps and there is either no Fast Pay Notional Amount or Excess
Fixed Rate;
(iv) the Servicer has delivered to you on or prior to the date hereof,
all Servicer Reports as and when due under Section 8.5 of the Loan Funding
Agreement;
(v) Interest Rate Swaps meeting the requirements of Section 7.3 are in
effect; and
(vi) the amount of Aggregate Capital is $_________ after giving effect
to the Subsequent Loan to be made on the Loan Date.
Very truly yours,
▇▇▇▇▇ FUNDING, L.L.C.
By:
Name:
Exh. II-2
EXHIBIT III
PLACES OF BUSINESS OF THE BORROWER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
PLACES OF BUSINESS:
1. ▇▇▇▇▇ FUNDING, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
LOCATIONS OF RECORDS:
1. ▇▇▇▇▇ FUNDING, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FEDERAL EMPLOYER IDENTIFICATION NUMBERS:
1. ▇▇▇▇▇ FUNDING, L.L.C.
▇▇-▇▇▇▇▇▇▇
2. ▇▇▇▇▇ CAPITAL CORPORATION
▇▇-▇▇▇▇▇▇▇
Exh. IIl-1
EXHIBIT IV
FORM OF REPAYMENT 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: REPAYMENT NOTICE
Ladies and Gentlemen:
The undersigned refers to the Loan Funding Agreement, dated as of January
24, 2002 (the "LOAN FUNDING AGREEMENT," the terms defined therein being used
herein as therein defined), among the undersigned, as Borrower, ▇▇▇▇▇ Capital
Corporation, as initial Servicer, Jupiter Securitization Corporation
("JUPITER"), certain Financial Institutions parties thereto and Bank One, NA
(Main Office Chicago), as Agent for Jupiter and such Financial Institutions, and
hereby gives you notice, irrevocably, pursuant to SECTION 1.3 of the Loan
Funding Agreement that the undersigned hereby requests a Proposed Repayment
under the Loan Funding Agreement, and in that connection sets forth below the
information relating to such Repayment (the "PROPOSED REPAYMENT") as required by
SECTION 1.3 of the Loan Funding Agreement:
(i) The Business Day of the Proposed Repayment is [ ________ ], which date
is at least two (2) Business Days after the date hereof.
(ii) The amount in respect of the Proposed Repayment is ________________.
Very truly yours,
▇▇▇▇▇ FUNDING, L.L.C.
By:
------------------------------------
Exh. IV-1
Name:
Title:
Exh. IV-2
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate is furnished pursuant to that certain Loan
Funding Agreement dated as of January 24, 2002 among ▇▇▇▇▇ Funding, L.L.C. (the
"BORROWER"), ▇▇▇▇▇ Capital Corporation, as the initial "SERVICER" (the SERVICER
together with the Borrower, the "BORROWER PARTIES" and each a "BORROWER PARTY"),
the Lenders party thereto including Jupiter Securitization Corporation and Bank
One, NA (Main Office Chicago), as Agent for such Lenders (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of Borrower, and the duly
elected _______ of Servicer.
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 Borrower and of the Servicer 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 certain 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 Borrower and/or the Servicer, as the case may be,
has taken, is taking, or proposes to take with respect to each such condition or
event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exh. V-1
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 ______,____.
▇▇▇▇▇ FUNDING, L.L.C.
By:
Name:
Title:
▇▇▇▇▇ CAPITAL CORPORATION
By:
Name:
Title:
Exh. V-2
EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
See attached
Exh. VI-1
EXHIBIT VII
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 Loan Funding Agreement dated as
of January 24, 2002 by and among ▇▇▇▇▇ Funding, L.L.C. ("RFL"), ▇▇▇▇▇ Capital
Corporation, Jupiter 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 "LOAN AGREEMENT"). Capitalized terms
used and not otherwise defined herein are used with the meanings set forth or
incorporated by reference in the Loan Agreement.
B. The Seller is a Financial Institution party to the Loan 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 Loan Agreement and the Transaction Documents, including
the Seller's Commitment and (if applicable) the Capital of the Seller's Loans 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 Conduit, the
Seller and the Purchaser. From and after the Effective Date, the Purchaser shall
be a Financial Institution party to the Loan 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 Loan 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
Percentage of the
Exh. VII-1
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 Loan Agreement.
3. If the Seller has any outstanding Capital under the Loan 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 Loans (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, rece ived and assumed from the Seller, the Transferred
Percentage of the Seller's Commitment and the Capital of the Seller's Loans (if
applicable) and all related rights and obligations under the Loan Agreement and
the Transaction Documents, including the Transferred Percentage of the Seller's
future funding obligations under Section 4.1 of the Loan 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 Loan 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 Loan Agreement or the Transaction Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Purchaser, the Loan 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, RCC, any RCC Affiliate or the performance
or ▇▇▇▇▇ ▇▇▇▇▇ by the Seller, any Obligor, RCC, any RCC Affiliate of any of
their respective obligations under the Transaction Documents or any other
instrument or document furnished pursuant thereto or in connection
Exh. VII-2
therewith; (c) the Purchaser confirms that it has received a copy of the
Transaction Documents, 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 Conduit, 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 Loan 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 act ion 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 Loan 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 Loan Agreement,
including Sections 4.1, 13.1 and 15.6 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. THISASSIGNMENT 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 Conduit, it will not institute against, or join any other
Person in instituting against, the Conduit 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
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
SCHEDULE I TO ASSIGNMENT AGREEMENT
----------------------------------
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
----------------------------------
DATE: _______________, ____
-----
TRANSFERRED PERCENTAGE: ________%
-----------------------
▇-▇ ▇-▇ ▇-▇ ▇-▇
SELLER COMMITMENT COMMITMENT OUTSTANDING RATABLE SHARE
------ EXISTING REVISED CAPITAL OF OUTSTANDING
-------- ------- (IF ANY) SHARE CAPITAL
-------------- -------
▇-▇ ▇-▇ ▇-▇
PURCHASER COMMITMENT OUTSTANDING RATABLE SHARE
--------- EXISTING CAPITAL OF OUTSTANDING
-------- (IF ANY) SHARE CAPITAL
-------------- -------
ADDRESS FOR NOTICES
-------------------
--------------------------------
--------------------------------
Attention:
Phone:
Exh. VII-5
Fax:
Exh. VII-6
SCHEDULE II TO ASSIGNMENT AGREEMENT
-----------------------------------
EFFECTIVE NOTICE
TO: ________________________, Seller
________________________
________________________
________________________
TO: ________________________, Purchaser
________________________
________________________
________________________
The undersigned, as Agent under the Loan Agreement dated as of January 24,
2002 by and among ▇▇▇▇▇ Capital Corporation, ▇▇▇▇▇ Funding, L.L.C., Jupiter
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 Conduit hereby consents to the Assignment Agreement as required by
Section 12.1(b) of the Loan 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:
---------------------------------
JUPITER SECURITIZATION CORPORATION
By:
------------------------------------
Authorized Signatory
Exh. VII-7
EXHIBIT VIII
CREDIT AND COLLECTION POLICY
See Attached
Exh. VIII-1
EXHIBIT IX
FORM OF CONTRACT(S)
See Attached
Exh.IX-1
EXHIBIT X
FORM OF MONTHLY REPORT
See Attached
Exh.X-2
EXHIBIT XI
FORM OF PERFORMANCE UNDERTAKING
Exh.XI-1
EXHIBIT XII
FORM OF REPURCHASE 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: Repurchase Notice
Ladies and Gentlemen:
Reference is hereby made to the Loan Funding Agreement, dated as of January
24, 2002, by and among the undersigned, as Borrower, ▇▇▇▇▇ Capital Corporation,
as initial Servicer, Jupiter Securitization Corporation (the "Conduit"), certain
Financial Institutions parties thereto and Bank One, NA (Main Office Chicago),
as Agent (the "LOAN FUNDING AGREEMENT"). Capitalized terms used herein shall
have the meanings assigned to such terms in the Loan Funding Agreement.
The Agent is hereby notified of the following Repurchase:
Outstanding Balance of Receivables to be Repurchased: $
Purchase Price: $
Date of Repurchase:
In connection with the Repurchase to be made on the above listed "Date of
Repurchase" (the "REPURCHASE DATE"), the Borrower hereby certifies that the
following statements are true on the date hereof, and will be true on the
Repurchase Date (before and after giving effect to the proposed Repurchase):
(i) the representations and warranties of the Borrower set forth
in Section 5.1 of the Loan Funding Agreement are true and correct on and as of
the Repurchase Date as though made on and as of such date;
Exh.XII-1
(ii) no event has occurred and is continuing, or would result from the
proposed Repurchase, 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 Loan Limit, the Lender Percentage does not exceed 100%, the
Aggregate Capital does not exceed the Aggregate Notional Amount of the Interest
Rate Swaps and there is either no Fast Pay Notional Amount or Excess Fixed Rate;
(iv) the Servicer has delivered to you on or prior to the date hereof, all
Monthly Reports as and when due under Section 8.5 of the Loan Funding Agreement;
(v) Interest Rate Swaps meeting the requirements of Section 7.3 are in
effect; and
(vi) the Discounted Lease Balance is $_________ and the Lender Percentage
is _____ after giving effect to the Repurchase to be made on the Repurchase
Date.
Very truly yours,
▇▇▇▇▇ FUNDING, L.L.C.
By:
Name:
Title:
Exh.XII-2
SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS
FINANCIAL INSTITUTION COMMITMENT
Bank One, NA (Main Office Chicago) $102,000,000.00
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE OR LOAN
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 or Certificate of Incorporation of Originator certified by the
Secretary of State of the jurisdiction of incorporation of Originator on or
after January 9, 2002, together with an Originator's Officer support
certificate.
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, issued on or after January 8, 2002 (together with a RCC's
Officer support certificate) each of which is listed below:
a. Ohio
b. California
c. Florida
d. ▇▇▇▇▇▇▇
▇. Michigan
f. New Jersey
g. North Carolina
h. Pennsylvania
i. Texas (Comptroller Certificate and Certificate of Existence)
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 jurisdiction:
a. Ohio
7. Executed UCC-1 financing statements in proper form for filing under the UCC
on or before the Closing Date (as defined in the Receivables Sale
Agreement) in all jurisdictions as may be
B-1
necessary or, in the opinion of Buyer (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.
8. Executed UCC-3 termination statements, if any, in proper form for filing
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 Buyer (or its assigns) which addresses the following matters and such
other matters as Buyer (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
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 ownership or security interest in favor of Buyer
in all Receivables, Collections with respect thereto, Related
Security and Related Equipment and upon the filing of financing
statements, Seller shall acquire a first priority perfected
ownership or security interest in such Receivables (other than
the Exempted Contracts).
-- To the best of the opinion giver's knowledge, there is no action,
suit or other proceeding against 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 Articles of Incorporation of RCC.
14. Executed copies of the Subordinated Note (as defined in the Receivables
Sale Agreement) by the Buyer in favor of Originator.
15. Executed copies of the Subscription Agreement (as defined in the
Receivables Sale Agreement).
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 Borrower 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.
B-3
3. Articles of Organization or Articles of Incorporation of each Borrower
Party and Provider certified by the Secretary of State of its jurisdiction
of incorporation or organization on or within thirty (30) days prior to the
initial Loan.
4. Good Standing Certificate for each Borrower Party and Provider issued by
the Secretaries of State of its state of incorporation or organization and
each jurisdiction where it has material operations, each of which is listed
below:
(a) Borrower: Ohio
(b) Servicer: Ohio, California, Florida, Georgia, Michigan, New Jersey,
North Carolina, Pennsylvania and Texas
(c) Provider: Ohio, California, Florida, Georgia, Michigan, New Jersey,
North Carolina, New York, Pennsylvania and Texas
5. A certificate of the Secretary of each Borrower 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 or Operating
Agreement.
6. Pre-filing state and federal tax lien, judgment lien and UCC lien searches
against each Borrower Party from the following jurisdictions:
1. Borrower: Ohio
2. Servicer: Ohio
7. UCC-1 financing statements in proper form for filing under the UCC on or
before the date of the initial Loan 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. Executed UCC-3 termination statements, if any, in proper form for filing
necessary to release all security interests and other rights of any Person
in the Receivables, Contracts or Related Security previously granted by
Borrower.
9. Executed copies of Collection Account Agreement - Bank One Michigan.
10. A favorable opinion of legal counsel for the Borrower Parties and Provider
reasonably acceptable to the Agent which addresses the following matters
and such other matters as the Agent may reasonably request:
-- The Borrower Party is a limited liability company duly organized,
validly existing and in good standing under the laws of the State
of Ohio. Each of
B-4
RCC and Provider is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Ohio.
-- Each Borrower 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 Borrower 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.
-- The provisions of the Agreement are effective to create a valid
security interest in favor of the Agent for the benefit of the
Lenders in all Receivables, the Related Security, Collections
with respect thereto and the other Collateral and upon the filing
of financing statements, the Agent for the benefit of the Lenders
shall acquire a perfected security interest in such Receivables,
the Related Security, Collections with respect thereto and the
other Collateral (other than the Exempted Contracts).
B-5
-- To the best of the opinion giver's knowledge, there is no action,
suit or other proceeding against any Borrower 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 the Conduit 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 of December 31, 2001.
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. Executed copies of the Performance Undertaking.
B-6
EXECUTION VERSION
RECEIVABLES SALE AGREEMENT
DATED AS OF JANUARY 24, 2002
BETWEEN
▇▇▇▇▇ CAPITAL CORPORATION,
as Originator
AND
▇▇▇▇▇ FUNDING, L.L.C.,
as Buyer
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of January 24, 2002,
is by and between ▇▇▇▇▇ Capital Corporation, an Ohio corporation ("Originator"),
and ▇▇▇▇▇ Funding, L.L.C., an Ohio limited liability company ("Buyer"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Exhibit I hereto (or, if not defined in
Exhibit I hereto, the meaning assigned to such term in Exhibit I to the LFA, as
defined below).
PRELIMINARY STATEMENTS
Originator now owns, and from time to time hereafter will own,
Receivables. Originator wishes to sell and assign to Buyer, and Buyer
wishes to purchase from Originator, all of Originator's right, title
and interest in and to such now existing or hereafter arising
Receivables, together with the Related Security and Collections with
respect thereto.
Originator and Buyer intend the transactions contemplated
hereby to be true sales of the Receivables from Originator to Buyer,
providing Buyer with the full benefits of ownership of the Receivables,
and Originator and Buyer do not intend these transactions to be, or for
any purpose to be characterized as, loans from Buyer to Originator.
Following the purchase of Receivables from Originator, Buyer
will pledge its interests therein and in the associated Related
Security and Collections as collateral for loans pursuant to that
certain Loan Funding Agreement dated as of the date hereof (as the same
may from time to time hereafter be amended, supplemented, restated or
otherwise modified, the "LFA") among Buyer, Originator, as Servicer,
Jupiter Securitization Corporation("Conduit"), Bank One, NA (Main
Office Chicago) as a Financial Institution, and Bank One, NA (Main
Office Chicago) or any successor agent appointed pursuant to the terms
of the LFA, as agent for the Conduit and such Financial Institution (in
such capacity, the "Agent").
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, on the terms and
subject to the conditions set forth in this Agreement and in consideration for
the Purchase Price does hereby sell, assign, transfer, set-over and otherwise
convey to Buyer without recourse (except to the extent expressly provided
herein) and the Buyer does hereby purchase from Originator, all of Originator's
right, title and interest in and to all: (i) Receivables existing as of the
close of business on the Business Day immediately prior to the date hereof (the
"Initial Cut-Off Date"), together with the Related Security and Collections with
respect thereto and (ii) all Receivables thereafter arising through and
including the Termination Date together, in each case, with all the Related
Security relating thereto and all Collections thereof. In accordance with the
preceding sentence, on the date hereof Buyer shall acquire all of Originator's
right, title and interest in and to all Receivables existing as of the Initial
Cut-Off Date and thereafter arising through and including the Termination Date,
together with all Related Security relating thereto and all Collections thereof.
Buyer shall be obligated to pay the Purchase Price for the Receivables purchased
hereunder in accordance with Section 1.2. In connection with consummation of the
Purchase Price for any Receivables purchased hereunder, Buyer may request that
Originator deliver, and Originator shall deliver, such approvals, opinions,
information, reports or documents as Buyer may reasonably request.
(b) It is the intention of the parties hereto that the
Purchase of Receivables made hereunder shall constitute a sale, which sale is
absolute and irrevocable and provides Buyer with the full benefits of ownership
of the Receivables. Except for the Purchase Price Credits owed pursuant to
Section 1.3, the sale of Receivables hereunder is made without recourse to
Originator; provided, however, that (i) Originator shall be liable to Buyer for
all representations, warranties, covenants and indemnities made by Originator
pursuant to the terms of the Transaction Documents to which Originator is a
party, and (ii) such sale does not constitute and is not intended to result in
an assumption by Buyer or any assignee thereof of any obligation of Originator
or any other Person arising in connection with the Receivables, the related
Contracts and/or other Related Security or any other obligations of Originator.
In view of the intention of the parties hereto that the Purchase of Receivables
made hereunder shall constitute a sale of such Receivables rather than loans
secured thereby, Originator agrees that it will, on or prior to the date hereof
and in accordance with Section 4.1(e)(ii), ▇▇▇▇ its master data processing
records relating to the Receivables with a legend acceptable to Buyer
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and to the Agent (as Buyer's assignee), evidencing that Buyer has purchased such
Receivables as provided in this Agreement and to note in its audited financial
statements that its Receivables have been sold to Buyer. Upon the request of
Buyer or the Agent (as Buyer's assignee), Originator will execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate to perfect and maintain the perfection of Buyer's ownership interest
in the Receivables and the Related Security and Collections with respect
thereto, or as Buyer or the Agent (as Buyer's assignee) may reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Receivables in existence
on the Initial Cut-Off Date shall be payable in full by Buyer to Originator on
the date hereof, and shall be paid to Originator in the following manner:
(i) by delivery of immediately available funds, to
the extent of funds made available to Buyer in connection with the
initial Loan pursuant the LFA; provided that a portion of such funds
shall be offset by amounts owed by Originator to Buyer on account of
the issuance of equity in the manner contemplated in the
Subscription Agreement and having a total value of not less than the
Required Capital Amount; and
(ii) the balance, by delivery of the proceeds of a
subordinated revolving loan from Originator to Buyer (a
"Subordinated Loan") in an amount not to exceed the least of (i) the
remaining unpaid portion of such Purchase Price, (ii) the maximum
Subordinated Loan that could be borrowed without rendering Buyer's
Net Worth less than the Required Capital Amount, and (iii) the
maximum Subordinated Loan that could be borrowed without rendering
the Net Value less than the aggregate outstanding principal balance
of the Subordinated Loans (including the Subordinated Loan proposed
to be made on such date). Originator is hereby authorized by Buyer
to endorse on the schedule attached to the Subordinated Note an
appropriate notation evidencing the date and amount of each advance
thereunder, as well as the date of each payment with respect
thereto, provided that the failure to make such notation shall not
affect any obligation of Buyer thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by Buyer to Originator or its
designee on the date each such
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Receivable came into existence (except that Buyer may, with respect to any such
Purchase Price, offset against such Purchase Price any amounts owed by
Originator to Buyer hereunder and which have become due but remain unpaid) and
shall be paid to Originator in the manner provided in the following paragraphs
(b), (c) and (d).
(b) With respect to any Receivables coming into
existence after the Initial Cutoff Date, on each Settlement Date, Buyer shall
pay the Purchase Price therefor in accordance with Section 1.2(d) and in the
following manner:
first, by delivery of immediately available funds, to
the extent of funds available to Buyer from its subsequent sale of an
interest in the Receivables to the Agent for the benefit of the Lenders
under the Loan Agreement or other cash on hand; and
second, either (i) by delivery of the proceeds of a
Subordinated Loan, provided that the making of any such Subordinated
Loan shall be subject to the provisions set forth in Section
1.2(a)(ii); or (ii) unless Originator has declared the Termination Date
to have occurred pursuant to Section 5.2, by accepting a contribution
to its capital pursuant to the Subscription Agreement in an amount
equal to the remaining unpaid balance of such Purchase Price; provided,
however that unless a notation is made on the schedule to the
Subordinated Note to reflect a Subordinated Loan, the Buyer will be
deemed to have accepted a contribution to its capital.
Subject to the limitations set forth in Section 1.2(a)(ii), Originator
irrevocably agrees to advance each Subordinated Loan requested by Buyer on or
prior to the Termination Date. The Subordinated Loans shall be evidenced by, and
shall be payable in accordance with the terms and provisions of the Subordinated
Note and shall be payable solely from funds which Buyer is not required under
the LFA to set aside for the benefit of, or otherwise pay over to, the Lenders.
(c) From and after the Termination Date, Originator
shall not be obligated to (but may, at its option): (i) sell Receivables to
Buyer, or (ii) contribute Receivables to Buyer's capital pursuant to clause
second of Section 1.2(b) unless Originator reasonably determines that the
Purchase Price therefor will be satisfied with funds available to Buyer from
Loans made by the Lenders pursuant to the LFA, Collections, proceeds of
Subordinated Loans, other cash on hand or otherwise.
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(d) Although the Purchase Price for each Receivable
coming into existence after the Initial Cutoff Date shall be due and payable in
full by Buyer to Originator on the date such Receivable came into existence,
settlement of the Purchase Price between Buyer and Originator shall be effected
on a monthly basis on Settlement Dates with respect to all Receivables coming
into existence during the same Calculation Period and based on the information
contained in the Monthly Report delivered by the Servicer pursuant to Article
VIII of the Loan Agreement for the Calculation Period then most recently ended.
Although settlement shall be effected on Settlement Dates, increases or
decreases in the amount owing under the Subordinated Note made pursuant to
Section 1.2(b) and any contribution of capital by Originator to Buyer made
pursuant to Section 1.2(b) shall be deemed to have occurred and shall be
effective as of the last Business Day of the Calculation Period to which such
settlement relates.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or
rejected or returned goods or services, any discount or any
adjustment or otherwise by Originator (other than cash Collections
on account of the Receivables or losses due to Receivables that are
uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor),
(ii) reduced or canceled as a result of (x) a
setoff in respect of any claim by any Person or (y) the
categorization of such Receivable as an Upgraded Receivable, or
(b) any of the representations and warranties set forth
in Article II are not true when made or deemed made with respect to any
Receivable, then, in such event, Buyer shall be entitled to a credit (each, a
"Purchase Price Credit") against the Purchase Price otherwise payable hereunder
equal to the amount by which the Outstanding Balance of such Receivable was
reduced by the applicable reduction or cancellation. If such Purchase Price
Credit exceeds the Original Balance of the Receivables coming into existence on
any day, then Originator shall pay the remaining amount of such Purchase Price
Credit in cash immediately, provided that if the Termination Date has not
occurred, Originator shall be allowed to deduct
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the remaining amount of such Purchase Price Credit from any indebtedness owed to
it under the Subordinated Note.
Section 1.4 Payments and Computations, Etc. All amounts to be
paid or deposited by Buyer hereunder shall be paid or deposited in accordance
with the terms hereof on the day when due in immediately available funds to the
account of Originator designated from time to time by Originator or as otherwise
directed by Originator. In the event that any payment owed by any Person
hereunder becomes due on a day that is not a Business Day, then such payment
shall be made on the next succeeding Business Day. If any Person fails to pay
any amount hereunder when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid in full; provided, however, that such Default
Fee shall not at any time exceed the maximum rate permitted by applicable law.
All computations of interest payable hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables
hereunder, Originator hereby sells, transfers, assigns and otherwise conveys to
Buyer all of Originator's right and title to and interest in the Records
relating to all Receivables sold hereunder, without the need for any further
documentation in connection with the Purchase. In connection with such transfer,
Originator hereby grants to each of Buyer, the Agent and the Servicer an
irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by Originator to account for the Receivables, to the
extent necessary to administer the Receivables, whether such software is owned
by Originator or is owned by others and used by Originator under license
agreements with respect thereto, provided that should the consent of any
licensor of such software be required for the grant of the license described
herein, to be effective, Originator hereby agrees that upon the request of Buyer
(or Buyer's assignee), Originator will use its reasonable efforts to obtain the
consent of such third-party licensor and will pay any license or sub-license
rights, costs, fees or other expenses in connection with such third-party
licensor consent. The license granted hereby shall be irrevocable until the
indefeasible payment in full of the Aggregate Unpaids, and shall terminate on
the date this Agreement terminates in accordance with its terms.
(b) Originator (i) shall take such action requested by
Buyer and/or the Agent (as Buyer's assignee), from time to time hereafter, that
may be necessary or appropriate to ensure that Buyer and its assigns under the
LFA have an enforceable
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ownership or security interest, as applicable, in the Records relating to the
Receivables purchased from Originator hereunder, and (ii) shall use its
reasonable efforts to ensure that Buyer, the Agent and the Servicer each has an
enforceable right (whether by license or sublicense or otherwise) to use all of
the computer software used to account for the Receivables and/or to recreate
such Records.
Section 1.6 Characterization. If, notwithstanding the
intention of the parties expressed in Section 1.1(b), any sale or contribution
by Originator to Buyer of Receivables hereunder shall be characterized as a
secured loan and not a sale or such sale shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties' intention that the sale of Receivables
hereunder shall constitute a true sale thereof, Originator hereby grants to
Buyer a duly perfected security interest in all of Originator's right, title and
interest in, to and under all Receivables now existing and hereafter arising
all, the Related Security and the Collections with respect thereto, all
Collateral, all other rights and payments relating to the Receivables and all
proceeds of the foregoing to secure the prompt and complete payment of a loan
deemed to have been made to Originator in an amount equal to the Purchase Price
of the Receivables together with all other obligations of Originator hereunder,
which security interest shall be prior to all other Adverse Claims thereto.
Buyer and its assigns shall have, in addition to the rights and remedies which
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.
Section 1.7 Repurchase or Withdrawal of Receivables. The
Originator may repurchase or withdraw (with respect to Contributed Receivables)
all or a part of the Excess Receivables upon compliance with the provisions of
this Section 1.7 and Section 2.7 of the Loan Agreement. The purchase price of
each Repurchased Receivable shall equal the fair value of such Repurchased
Receivable. On and after the Amortization Date, the purchase price of
Repurchased Receivables shall be deposited on the Repurchase Date in the
Collection Account in immediately available funds. The Originator shall select
Excess Receivables for Repurchase on a random basis and shall not knowingly
select Excess Receivables for Repurchase in any manner that materially and
adversely affects Buyer.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator.
Originator hereby represents and warrants to Buyer on the date hereof, on the
date of the Purchase and on each date that any Receivable comes into existence
that:
(a) Corporate Existence and Power. Originator 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, except where the failure to be so qualified or to so hold would not
reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization,
Execution and Delivery. The execution and delivery by Originator of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder and, Originator's use of
the proceeds of the 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 Originator
is a party has been duly executed and delivered by Originator.
(c) No Conflict. The execution and delivery by
Originator 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 or any shareholder agreements, voting trusts, and similar arrangements
applicable to any of its authorized shares, (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 Originator or its Subsidiaries (except as
created hereunder) except, in the case of clauses (ii), (iii) and (iv), where
such contravention or violation could not reasonably be expected to have a
Material Adverse Effect; and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
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(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 that has not been obtained is required for the due
execution and delivery by Originator 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. There are no actions, suits or
proceedings pending, or threatened, against or affecting Originator, 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. Originator is not in
default with respect to any order of any court, arbitrator or governmental body
binding upon Originator or any of its properties.
(f) Binding Effect. This Agreement and each other
Transaction Document to which Originator is a party constitute the legal, valid
and binding obligations of Originator enforceable against Originator 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 written
information heretofore furnished by Originator or any of its Affiliates to Buyer
(or its assigns) 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 Originator or any of
its Affiliates to Buyer (or its assigns) will be, true and accurate in all
material respects on the date such information is stated 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 in any material respect as of the date stated or certified.
(h) Use of Proceeds. No proceeds of any Purchase
Price payment 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.
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(i) Good Title. Immediately prior to the Purchase
hereunder, and upon the creation of each Receivable coming into existence after
the Initial Cut-Off Date, Originator (i) is the legal and beneficial owner of
the Receivables and (ii) is the legal and beneficial owner of the Related
Security with respect thereto or possesses a valid and perfected security
interest therein, in each case, 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 Originator's
ownership interest or security interest in each Receivable, its Collections and
the Related Security. Notwithstanding anything to the contrary in this
Agreement, the parties hereto acknowledge that financing statements have not
been filed to perfect the Originator's security interest in Exempted Contracts.
(j) Perfection. This Agreement and the filing of
the financing statements contemplated hereby, is effective to transfer to Buyer
(and Buyer shall acquire from Originator) (i) legal and equitable title to, with
the right to sell and encumber each Receivable existing and hereafter arising,
together with the Collections with respect thereto, (ii) all of Originator's
right, title and interest in the Related Security associated with each
Receivable, in each case, free and clear of any Adverse Claim, except as created
by the Transactions Documents and (iii) a valid, enforceable, perfected and
first priority security interest in all of the Related Equipment. 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 Buyer's ownership interest in the Receivables, the
Related Security and the Collections. Notwithstanding the foregoing, the
Originator makes no representation or warranty as to the perfection or priority
of the Buyer's security interest in the Exempted Contracts.
(k) Places of Business and Locations of Records.
The principal places of business and chief executive office of Originator and
the offices where it keeps all of its Records are located at the address(es)
listed on Exhibit II or such other locations of which Buyer has been notified in
accordance with Section 4.2(a) in jurisdictions where all action required by
Section 4.2(a) has been taken and completed. Originator's Federal Employer
Identification Number is correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements
set forth in Section 4.1(i) have at all times been satisfied and duly performed.
The names and addresses of all Receiving Banks, together with the account
numbers of the Depository Account at each Receiving Bank and the post office box
number of each Lock-Box, are listed on Exhibit III.
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Originator has not granted any Person or (other than to Buyer and its assigns)
the right to take control of any such Lock-Box or Receiving Account at a future
time or upon the occurrence of a future event (except that the Originator in its
capacity as Servicer has access to Lock-Box and Depository Accounts).
(m) Material Adverse Effect. Since September 30,
2001 no event has occurred that has had a Material Adverse Effect.
(n) Names. In the past five (5) years, Originator
has not used any corporate names, trade names or assumed names other than the
name in which it has executed this Agreement.
(o) Ownership of Buyer. Originator is the sole
member of and owns all of the membership interests of Buyer, free and clear of
any Adverse Claim.
(p) Not a Holding Company or an Investment
Company. Originator 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. Originator 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. Originator 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
where a failure to comply could not reasonably be expected individually or in
the aggregate to have a Material Adverse Effect. Each Receivable, together with
the Contract related thereto, does not contravene any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy), and no part of
such Contract is in violation of any such law, rule or regulation, except where
such contravention or violation could not reasonably be expected to have a
Material Adverse Effect.
(r) Compliance with Credit and Collection Policy.
Originator has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which Buyer (or its assigns) has been notified in accordance with
Section 4.1(a)(vii).
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(s) Payments to Originator. With respect to each
Receivable transferred to Buyer hereunder, the Purchase Price received by
Originator constitutes reasonably equivalent value in consideration therefor and
such transfer was not made for or on account of an antecedent debt. No transfer
by Originator of any Receivable hereunder 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 any 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 definition of Net Receivables as an Eligible Receivable was an Eligible
Receivable at the time so included.
(v) Accounting. The manner in which Originator
accounts for and discloses the transactions contemplated by this Agreement does
not jeopardize the characterization of the transactions contemplated herein as
being true sales.
(w) No Adverse Selection. To the extent that
Originator has originated receivables and accounted for such receivables in any
branch other than Branch 4000, Originator has not knowingly originated and
accounted for those receivables in a branch other than Branch 4000 in any manner
that materially adversely affects Buyer.
ARTICLE III
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase
under this Agreement is subject to the conditions precedent that (a) Buyer shall
have received on or before the date of such purchase those documents listed on
Schedule A and (b) all of the
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conditions to the initial Loan under the LFA shall have been satisfied or waived
in accordance with the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments.
Buyer's obligation to pay for Receivables coming into existence after the
Initial Cut-Off Date shall be subject to the further conditions precedent that
(a) the Facility Termination Date shall not have occurred; (b) Buyer (or its
assigns) shall have received such other approvals, opinions or documents as it
may reasonably request and (c) on the date such Receivables came into existence,
the following statements shall be true (and acceptance of the proceeds of any
payment for such Receivable shall be deemed a representation and warranty by
Originator that such statements are then true):
(i) the representations and warranties set forth in Article II
are true and correct on and as of the date such Receivables came into existence
as though made on and as of such date; and
(ii) no event has occurred and is continuing that will
constitute a Termination Event or a Potential Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash, through an increase in the
amounts outstanding under the Subordinated Note, by offset of amounts owed to
Buyer and/or by offset of capital contributions), title to such Receivable and
the Related Security and Collections with respect thereto shall vest in Buyer,
whether or not the conditions precedent to Buyer's obligation to pay for such
Receivable were in fact satisfied.
ARTICLE IV
COVENANTS
Section 4.1 Affirmative Covenants of Originator. Until the
date on which this Agreement terminates in accordance with its terms, Originator
hereby covenants as set forth below:
(a) Financial Reporting. Originator will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to Buyer (or its assigns):
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(i) Annual Reporting. Within 90 days after the
close of each of its respective fiscal years, audited, unqualified
financial statements (which shall include balance sheets, statements of
income and retained earnings and a statement of cash flows) for
Originator and its consolidated subsidiaries for such fiscal year.
(ii) Quarterly Reporting. Within 50 days after the
close of the first three (3) quarterly periods of each of its
respective fiscal years, balance sheets of Originator as at the close
of each such period and statements of income and retained earnings and
a statement of cash flows for Originator for the period from the
beginning of such fiscal year to the end of such quarter, all certified
by its chief financial officer, treasurer or assistant treasurer.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit IV signed by Originator's Authorized
Officer 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 Originator, 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 Originator 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 Buyer, the
Agent or the Conduit, 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 material
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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 Buyer'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 Originator as Buyer (or its assigns) may from time to time
reasonably request in order to protect the interests of Buyer (and its
assigns) under or as contemplated by this Agreement.
(b) Notices. Originator will notify the Buyer (or its
assigns) 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:
(i) Termination Events or Potential Termination
Events. The occurrence of each Termination Event and each Potential
Termination Event, by a statement of an Authorized Officer of
Originator.
(ii) Judgment and Proceedings. The entry of any
judgment or decree against Originator or any of its Subsidiaries; or
the institution of any litigation, arbitration proceeding or
governmental proceeding against Originator if the aggregate amount of
all judgments and decrees then outstanding against Originator exceeds
$10,000,000.
(iii) Material Adverse Effect. The occurrence of
any event or condition that has had, or could reasonably be expected to
have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements. The
occurrence of a default or an event of default under any other
financing arrangement involving Indebtedness in excess of $10,000,000
pursuant to which Originator is a debtor or an obligor.
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(v) Downgrade of the Originator. Any downgrade in
any rating that may be assigned to any Indebtedness of Originator by
S&P or by ▇▇▇▇▇'▇, setting forth the Indebtedness affected and the
nature of such change.
(c) Compliance with Laws and Preservation of Corporate
Existence. Originator will comply in all respects with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards
imposed by all governmental authorities in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Originator 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, except where
the failure to so qualify or remain qualified would not reasonably be expected
to have a Material Adverse Effect.
(d) Audits. Originator will furnish to Buyer (or its
assigns) from time to time such information with respect to it and the
Receivables as Buyer (or its assigns) may reasonably request. Originator will,
from time to time during regular business hours as requested by Buyer (or its
assigns), upon reasonable notice and at the sole cost of Originator, permit
Buyer (or its assigns) or their respective agents or representatives (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of Originator relating to the Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to
Originator's financial condition or the Receivables and the Related Security or
Originator's performance under any of the Transaction Documents or Originator's
performance under the Contracts and, in each case, with any of the officers or
employees of Originator having knowledge of such matters; provided that, prior
to the occurrence of a Termination Event, Originator shall not be responsible
for the costs of more than one such audit in any calendar year.
(e) Keeping and Marking of Records and Books.
(i) Originator will maintain and implement
administrative and operating procedures (including, without limitation,
an ability to recreate records evidencing Receivables in the event of
the
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destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of
each new Receivable and all Collections of and adjustments to each
existing Receivable). Originator will give Buyer (or its assigns)
notice of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Originator will (A) on or prior to the date
hereof, ▇▇▇▇ its master data processing records and other books and
records relating to the Receivables with a legend, acceptable to Buyer
(or its assigns), describing Buyer's ownership interests in the
Receivables and further describing the security interest of the Agent
(on behalf of the Lenders) under the LFA and (B) upon the request of
Buyer (or its assigns) following the occurrence and during the
continuance of a Termination Event, (x) ▇▇▇▇ each Contract with a
legend describing Buyer's ownership interests in the Receivables and
further describing the security interest of the Agent (on behalf of the
Lenders) and (y) deliver to Buyer (or its assigns) all Contracts
(including, without limitation, all multiple originals of any such
Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Originator 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 except where the failure to so perform or
comply could not reasonably be expected to have a Material Adverse Effect, and
(ii) comply in all respects with the Credit and Collection Policy in regard to
each Receivable and the related Contract.
(g) Ownership. Originator will take all necessary action
to establish and maintain, irrevocably in Buyer, (A) legal and equitable title
to the Receivables and the Collections and (B) all of Originator's right, title
and interest in the Related Security associated with the Receivables, in each
case, free and clear of any Adverse Claims other than Adverse Claims in favor of
Buyer (and its assigns) (including, without limitation, 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
Buyer's interest in such Receivables, Related Security and Collections and such
other action to perfect, protect or more fully evidence the interest of Buyer as
Buyer (or its assigns) may reasonably request). Originator
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shall obtain and maintain a perfected ownership interest, free and clear of any
Adverse Claims, in all Related Equipment. Notwithstanding anything to the
contrary in this Agreement, the parties hereto acknowledge that financing
statements have not been filed to perfect the Originator's or the Buyer's
security interest in the Exempted Contracts.
(h) Lenders' Reliance. Originator acknowledges that the
Agent and the Lenders are entering into the transactions contemplated by the LFA
in reliance upon Buyer's identity as a legal entity that is separate from
Originator and any Affiliates thereof. Therefore, from and after the date of
execution and delivery of this Agreement, Originator will take all reasonable
steps including, without limitation, all steps that Buyer or any assignee of
Buyer may from time to time reasonably request to maintain Buyer's identity as a
separate legal entity and to make it manifest to third parties that Buyer is an
entity with assets and liabilities distinct from those of Originator and any
Affiliates thereof and not just a division of Originator or any such Affiliate.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, Originator (i) will not hold itself out to third
parties as liable for the debts of Buyer nor purport to own the Receivables and
other assets acquired by Buyer, (ii) will take all other actions necessary on
its part to ensure that Buyer is at all times in compliance with the covenants
set forth in Section 7.1(i) of the LFA and (iii) will cause all tax liabilities
arising in connection with the transactions contemplated herein or otherwise to
be allocated between Originator and Buyer on an arm's-length basis and in a
manner consistent with the procedures set forth in U.S. Treasury Regulations
Sections 1.1502-33(d) and 1.1552-1.
(i) Collections. All Lock-Box Receipts (together with
any proceeds deposited in the Depository Account) shall be deposited into the
Collection Account in accordance with, and to the extent required by, Section
2.2 and Section 2.3 of the LFA. In the event any payments relating to
Receivables are remitted directly to Originator or any Affiliate of Originator,
Originator will remit (or will cause all such payments to be remitted) directly
to the Collection Account Bank and deposited into the Collection Account within
two (2) Business Days following receipt thereof and, at all times prior to such
remittance, Originator will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of Buyer and its assigns.
Originator shall not grant the right to take control of any Lock-Box or
Receiving Account at a future time or upon the occurrence of a future event to
any Person, except to Buyer (or its assigns) as contemplated by this Agreement
and the LFA.
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(j) Taxes. Originator will file all tax returns and
reports required by law to be filed by it and promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Originator will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Buyer and its assigns.
(k) Insurance. Originator will, at the request of the
Agent, maintain in effect, or cause to be maintained in effect, at Originator's
own expense, such casualty and liability insurance covering the Related
Equipment as Originator deems appropriate in its good faith business judgement.
If insurance is required, Buyer and the Agent, for the benefit of the Lenders,
shall be named as additional insureds with respect to all such liability
insurance maintained by Originator. Originator will pay or cause to be paid the
premiums therefor and deliver to Buyer and the Agent evidence satisfactory to
Buyer and the Agent of such insurance coverage. Copies of each policy shall be
furnished to Buyer, the Agent and any Lender in certificated form upon Buyer's,
the Agent's or such Lender's request.
Section 4.2 Negative Covenants of Originator. Until the date
on which this Agreement terminates in accordance with its terms, Originator
hereby covenants that:
(a) Name Change, Offices and Records. Originator will
not change its name, identity or corporate structure (within the meaning of
Section 9-507(c) of the UCC) or change its location (within the meaning of
Section 9-307 of the UCC) or relocate its chief executive office or any office
where Records are kept unless it shall have: (i) given Buyer (or its assigns) at
least thirty (30) days' prior written notice thereof and (ii) delivered to Buyer
(or its assigns) all financing statements, instruments and other documents
reasonably requested by Buyer (or its assigns) in connection with such change or
relocation.
(b) Change in Payment Instructions to Obligors.
Originator 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
Lock-Box or Depository Account, unless Buyer (or its assigns) shall have
received, at least ten (10) days before the proposed effective date therefor,
written notice of such addition, termination or change.
(c) Modifications to Contracts and Credit and Collection
Policy. Originator will not make any change to the Credit and Collection Policy
that could be
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reasonably likely to adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables. Except as
otherwise permitted in its capacity as Servicer pursuant to Article VIII of the
LFA, Originator 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. Originator will 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,
without limitation, the filing of any financing statement) or with respect to,
any Receivable (other than Repurchased Receivables), Related Security or
Collections, or upon or with respect to any Contract under which any Receivable
arises, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of Buyer (and its
assigns) provided for herein), and Originator will defend the right, title and
interest of Buyer in, to and under any of the foregoing property, against all
claims of third parties claiming through or under Originator. Originator shall
not create or suffer to exist any mortgage, pledge, security interest,
encumbrance, lien, charge or other similar arrangement on any of its inventory.
(e) No Adverse Selection. To the extent that Originator
has originated receivables and accounted for such receivables in any branch
other than Branch 4000, Originator will not knowingly originate and account for
such receivables in a branch other than Branch 4000 in any manner that
materially adversely affects Buyer.
ARTICLE V
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or
more of the following events shall constitute a Termination Event:
(a) Originator shall fail (i) to make any payment or
deposit required hereunder when due and 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)) or any
other Transaction Document to which it is a party and such failure shall
continue for three (3) consecutive Business Days.
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(b) Any representation warranty, certification or
statement made by Originator in this Agreement, any other Transaction Document
or in any document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Originator to pay when due any
Indebtedness in excess of $10,000,000, or failure of Originator to pay any
interest or premium on such Indebtedness when due or within any applicable grace
period, which failure could reasonably be expected to have a Material Adverse
Effect; or the default by Originator 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 Originator 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) Originator 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 Originator 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
and, in the case of a proceeding instituted against Originator or any of its
Subsidiaries (but not by the Originator or such Subsidiary), the Originator or
such Subsidiary fails to (A) move, in good faith, to have such proceeding
dismissed within thirty (30) days of the institution of such proceeding and such
proceeding shall remain undismissed or unstayed for a period of forty-five (45)
days or such longer period as the Agent consents to in writing and (B) set aside
adequate reserves on its books in accordance with GAAP; or (iii) Originator or
any of its Subsidiaries shall take any corporate action to authorize any of the
actions set forth in the foregoing clauses (i) or (ii) of this subsection (d).
(e) A Change of Control shall occur.
(f) One or more final judgments for the payment of money
in an amount in excess of $10,000,000, individually or in the aggregate, shall
be entered against
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Originator on claims not covered by insurance or as to which the insurance
carrier has denied its responsibility, and such judgment shall continue without
discharge or stay for sixty (60) consecutive days.
(g) Originator shall fail to (i) transfer, establish and
maintain, irrevocably in Buyer, (A) legal and equitable title to the Receivables
and the Collections and (B) all of Originator's right, title and interest in the
Related Security associated with the Receivables, in each case, free and clear
of any Adverse Claims other than Adverse Claims in favor of Buyer (and its
assigns) and; (ii) shall fail to obtain and maintain a perfected security
interest, free and clear of any Adverse Claims, in all Related Equipment.
(h) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and its Subsidiaries, on a
Consolidated basis, shall fail maintain to:
(i) a Consolidated Leverage Ratio less than or
equal to 2.75 to 1.0; or
(ii) a Consolidated Interest Coverage Ratio
greater than or equal to 3.5 to 1.0;
(i) The Scheduled Maturity Date or the Maturity Date
under and as defined in the Credit Agreement shall occur and, within five (5)
Business Days, a substitute credit facility, on terms and conditions
substantially similar to the Credit Agreement shall not have been put in place.
(j) 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 Provider, or Provider
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability.
(k) The Swap Counterparty fails to maintain a rating
with respect to short-term deposit obligations of at least P-1 by ▇▇▇▇▇'▇ and at
least A-1 by S&P and, with respect to long-term unsecured debt obligations, a
rating of A2 or higher by ▇▇▇▇▇'▇ or A or higher by S&P, and the Agent, or an
Affiliate or Subsidiary of the Agent, is not the Swap Counterparty.
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Section 5.2 Remedies. Upon the occurrence and during the
continuation of a Termination Event, Buyer may take any of the following
actions: (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Originator;
provided, however, that upon the occurrence of a Termination Event described in
Section 5.1(d), or of an actual or deemed entry of an order for relief with
respect to Originator under the Federal Bankruptcy Code, the Termination Date
shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by Originator and (ii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any amounts then due and owing by Originator to Buyer. The
aforementioned rights and remedies shall be without limitation and shall be in
addition to all other rights and remedies of Buyer and its assigns 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 VI
INDEMNIFICATION
Section 6.1 Indemnities by Originator. Without limiting any
other rights that Buyer may have hereunder or under applicable law, Originator
hereby agrees to indemnify (and pay upon demand to) Buyer and its 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 by any such Indemnified Party, including
reasonable attorneys' fees and disbursements (all of the foregoing together with
the exclusions 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 Buyer of an
interest in the Receivables, excluding, however:
(i) Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction or a final decree issued
in connection with an administrative proceeding 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
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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;
provided, however, that nothing contained in this sentence shall limit the
liability of Originator or limit the recourse of Buyer to Originator for amounts
otherwise specifically provided to be paid by Originator under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
Originator shall indemnify Buyer and any other Indemnified Parties for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Originator) relating to or resulting from:
(i) any representation or warranty made by
Originator (or any officers of Originator) under or in connection with
this Agreement, any other Transaction Document or pursuant hereto or
thereto shall prove to be incorrect when made or deemed made, or any
other information or report (other than a representation or warranty)
made by Originator or delivered by Originator pursuant under or in
connection with this Agreement, any other Transaction Document or
pursuant hereto or thereto shall prove to have been false or incorrect
when made or deemed made;
(ii) the failure by 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 Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of Originator to perform its
duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
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(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, without limitation, 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) except as permitted in the Transaction
Documents, the commingling of Collections of Receivables at any time
with other funds;
(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 any Purchase Price Payment, the ownership of the Receivables or any
other investigation, litigation or proceeding relating to 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 Termination Event described in Section
5.1(d);
(x) any failure to vest and maintain vested in
Buyer, or to transfer to Buyer, legal and equitable title to, and
ownership of, the Receivables and the Collections, and all of
Originator's right, title and interest in the Related Security
associated with the Receivables (excluding the Exempted Contracts), in
each case, free and clear of any Adverse Claim (except as created by
the Transaction Documents);
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(xi) 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
with respect thereto, and the proceeds of any thereof (excluding
Exempted Contracts), whether at the time of the Purchase or at any
subsequent time;
(xii) any action or omission by Originator which
reduces or impairs the rights of Buyer with respect to any Receivable
or the value of any such Receivable; or
(xiii) any attempt by any Person to void the
Purchase hereunder under statutory provisions or common law or
equitable action.
Section 6.2 Other Costs and Expenses. Originator shall pay to
Buyer on demand all reasonable 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. Originator shall pay to Buyer on demand any and all reasonable costs
and expenses of Buyer, 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 a
Termination Event.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Buyer (or its
assigns) in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
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(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing signed by Originator and
Buyer and, to the extent required under the LFA, the Agent and the Financial
Institutions or the Required Financial Institutions.
Section 7.2 Notices. 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 7.2.
Section 7.3 Protection of Ownership Interests of Buyer.
(a) Originator 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 reasonably desirable, or that Buyer
(or its assigns) may reasonably request, to perfect, protect or more fully
evidence the interest of Buyer hereunder and the security interest of the Agent
(on behalf of the Lenders), or to enable Buyer (or its assigns) to exercise and
enforce their rights and remedies hereunder. At any time, Buyer (or its assigns)
may direct Originator to notify the Obligors of Receivables, at Originator's
expense, of the ownership interests of Buyer 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 Buyer or its designee.
(b) If Originator fails to perform any of its
obligations hereunder, Buyer (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and Buyer's (or such
assigns') costs and expenses incurred in connection therewith shall be payable
by Originator as provided in Section 6.2. Originator irrevocably authorizes
Buyer (and its assigns) at any time and from time to time in the sole discretion
of Buyer (or its assigns), and appoints Buyer (and its assigns) as its
attorney(ies)-in-fact, to act on behalf of Originator (i) to execute on behalf
of Originator as debtor and to file financing statements necessary or reasonably
desirable by Buyer (or its assigns) to perfect and to maintain the perfection
and priority of the interest of Buyer in the Receivables and (ii) to file a
carbon, photographic or other reproduction of this Agreement or any financing
statement
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with respect to the Receivables as a financing statement in such offices as
necessary or reasonably desirable to perfect and to maintain the perfection and
priority of Buyer's interests in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 7.4 Confidentiality.
(a) Originator shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of this Agreement and
the other confidential or proprietary information with respect to the Agent, any
Lender or the Conduit and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that Originator and its officers and employees may
disclose such information to Originator's external accountants and attorneys
(provided each such Person is informed of the confidential nature of such
information) and as required by any applicable law or order of any judicial or
administrative proceeding. Subject to Section 7.4(b), the Agent and the Lenders
shall maintain and shall cause each of its employees to maintain the
confidentiality of this Agreement and the other confidential or proprietary
information with respect to Originator, Buyer, the Obligors and their respective
businesses obtained by them in connection with the due diligence evaluations,
structuring, negotiating and execution of the Transaction Documents, and the
consummation of the transactions contemplated herein and any other activities of
the Agent and the Lenders arising from or related to the transactions
contemplated herein.
(b) Anything herein to the contrary notwithstanding,
Originator hereby consents to the disclosure of any nonpublic information with
respect to it (i) to Buyer, the Agent, any Lender or the Conduit by each other,
(ii) by Buyer, the Agent, the Custodian or the Purchasers to any prospective or
actual assignee or participant of any of them, (iii) by the Agent to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to the Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which the Agent
acts as the administrative agent and to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing (iv) by the Agent to
any actual or potential successor Servicer, or (v) at any time, on or following
an the Amortization Date, by the Agent, the Lenders or a Financial Institution
to any Person in conjunction with the exercise of any of their remedies
hereunder. In addition, the Lenders 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).
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(c) Buyer shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential or proprietary information with respect to Originator, the
Obligors and their respective businesses obtained by it in connection with the
due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of Buyer arising from or related to the
transactions contemplated herein; provided, however, that each of Buyer and its
employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the Agent and the other Lenders, (ii) to any
prospective or actual assignee or participant of the Agent or the other Lenders
who execute a confidentiality agreement for the benefit of Originator and Buyer
on terms comparable to those required of Buyer hereunder with respect to such
disclosed information, (iii) to any rating agency, provider of a surety,
guaranty or credit or liquidity enhancement to the Conduit, (iv) to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing (provided each such Person is informed of the confidential nature of
such information), and (v) to the extent required pursuant to any applicable
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings with competent
jurisdiction (whether or not having the force or effect of law) so long as such
required disclosure is made under seal to the extent permitted by applicable law
or by rule of court or other applicable body.
Section 7.5 Bankruptcy Petition.
(a) Originator and Buyer each 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 Conduit or any Financial
Institution that is a special purpose bankruptcy remote entity, it will not
institute against, or join any other Person in instituting against, the Conduit
or any such entity 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.
(b) Originator covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
obligations of Buyer under the LFA, it will not institute against, or join any
other Person in instituting against, Buyer 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.
-29-
Section 7.6 Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct or gross negligence of the
Conduit, the Agent or any Financial Institution, no claim may be made by
Originator or any other Person against the Conduit, 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 Originator
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 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
Section 7.8 CONSENT TO JURISDICTION. ORIGINATOR 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 ORIGINATOR PURSUANT TO THIS AGREEMENT AND ORIGINATOR 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 BUYER (OR ITS ASSIGNS) TO BRING PROCEEDINGS AGAINST
ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ORIGINATOR AGAINST BUYER (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO
THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 7.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
-30-
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 ORIGINATOR PURSUANT TO THIS AGREEMENT
OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document
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 Originator, Buyer and their respective successors and permitted
assigns (including any trustee in bankruptcy). Originator may not assign any of
its rights and obligations hereunder or any interest herein without the prior
written consent of Buyer. Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of Originator. Without limiting the foregoing, Originator acknowledges
that Buyer, pursuant to the LFA, may assign to the Agent, for the benefit of the
Lenders, its rights, remedies, powers and privileges hereunder and that the
Agent may further assign such rights, remedies, powers and privileges to the
extent permitted in the LFA. Originator agrees that the Agent, as the assignee
of Buyer, shall, subject to the terms of the LFA, have the right to enforce this
Agreement and to exercise directly all of Buyer's rights and remedies under this
Agreement (including, without limitation, the right to give or withhold any
consents or approvals of Buyer to be given or withheld hereunder) and Originator
agrees to cooperate fully with the Agent in the exercise of such rights and
remedies. 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 Originator pursuant to Article II; (ii) the
indemnification and payment provisions of Article VI; and (iii) Section 7.5
shall be continuing and shall survive any termination of this Agreement.
Section 7.11 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in
-31-
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 7.12 Subordination. Originator shall have the right to
receive, and Buyer shall make, any and all payments relating to any
indebtedness, obligation or claim, Originator may from time to time hold or
otherwise have against Buyer or any assets or properties of Buyer, whether
arising hereunder or otherwise existing, provided that, after giving effect to
any such payment, the aggregate Outstanding Balance of Receivables owned by
Buyer at such time exceeds the sum of (a) the Aggregate Unpaids under the LFA,
plus (b) the aggregate outstanding principal balance of the Subordinated Loans.
Originator hereby agrees that at any time during which the condition set forth
in the proviso of the immediately preceding sentence shall not be satisfied,
Originator shall be subordinate in right of payment to the prior payment of any
indebtedness or obligation of Buyer owing to the Agent or any Lender under the
LFA.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Receivables Sale Agreement to be executed and delivered by their duly authorized
officers as of the date hereof.
▇▇▇▇▇ CAPITAL CORPORATION
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇▇▇ FUNDING, L.L.C.
By:
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax:
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits, Schedules and Annexes thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex
thereto, and not otherwise defined therein or in this Exhibit I, such term shall
have the meaning assigned thereto in Exhibit I to the LFA.
"Agent" has the meaning set forth in the Preliminary
Statements to the Agreement.
"Agreement" means the Receivables Sale Agreement, dated as of
January 24, 2002, between Originator and Buyer, as the same may be amended,
restated or otherwise modified.
"Buyer" has the meaning set forth in the preamble to the
Agreement.
"Calculation Period" means each calendar month or portion
thereof which elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the Purchase of Receivables hereunder and
the final Calculation Period shall terminate on the Termination Date.
"Change of Control" has the meaning set forth in the LFA.
"Closing Date" means January 24, 2002.
"Collateral" means all of the Originator's right, title and
interest now or hereafter existing in, to and under (a) all existing and
hereafter arising Receivables, the Related Security and the Collections with
respect thereto, (b) the Transaction Documents, (c) the Receiving Accounts and
the Lock-Box and (d) all proceeds of the foregoing.
"Conduit" has the meaning set forth in the Preliminary
Statements to the Agreement.
Exh. I-1
"Credit and Collection Policy" means Originator's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit V, as modified from time to time in
accordance with the Agreement.
"Default Fee" means a per annum rate of interest equal to the
sum of (i) the LIBO Rate, plus (ii) 2% per annum.
"Dilutions" means, at any time, the aggregate amount of
reductions or cancellations described in Section 1.3(a) of the Agreement.
"Discounted Balance" means, the discounted present value of
the remaining scheduled payments which will become due on the Receivables, which
present value shall be established by discounting on a monthly basis such
remaining payments using the monthly equivalent of the Loss Discount Factor as
the discount rate.
"Excess Receivables" has the meaning set forth in the LFA.
"Exempted Contracts" means Contracts, each of which are dated
on or before September 30, 2000, with Outstanding Balances, in the aggregate, as
of the Closing Date, less than or equal to $30,000,000.
"Initial Cut-Off Date" has the meaning set forth in Section
1.1(a) of the Agreement.
"LFA" has the meaning set forth in the Preliminary Statements
to the Agreement.
"Loss Discount Factor" means a percentage calculated to
provide Buyer with a reasonable return on its investment in the Receivables
after taking account of the risk of nonpayment by the Obligors and the time
value of money. Originator and Buyer may agree from time to time to change the
Loss Discount Factor based on changes in one or more of the items affecting the
calculation thereof, provided that any change to the Loss Discount Factor shall
take effect as of the commencement of a Calculation Period, shall apply only
prospectively and shall not affect the Purchase Price payment made prior to the
Calculation Period during which Originator and Buyer agree to make such change.
Exh. I-2
"Material Adverse Effect" means a material adverse effect on
(i) the financial condition or operations of Originator and its Subsidiaries
taken as a whole, (ii) the ability of Originator to perform its obligations
under the Agreement or any other Transaction Document, (iii) the legality,
validity or enforceability of the Agreement or any other Transaction Document,
(iv) Originator's, Buyer's, the Agent's or any Lender's interest in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or Collections with respect thereto, or (v) the collectibility
of the Receivables generally or of any material portion of the Receivables.
"Net Value" means, as of any date of determination, an amount
equal to the sum of (i) the aggregate Outstanding Balance of the Receivables at
such time, minus (ii) the sum of (A) the Aggregate Capital outstanding at such
time, plus (B) the Loss Reserve.
"Net Worth" means as of the last Business Day of each
Calculation Period preceding any date of determination, the excess, if any, of
(a) the aggregate Outstanding Balance of the Receivables at such time, over (b)
the sum of (i) the Aggregate Capital outstanding at such time, plus (ii) the
aggregate outstanding principal balance of the Subordinated Loans (including any
Subordinated Loan proposed to be made on the date of determination).
"Original Balance" means, with respect to any Receivable
coming into existence after the Initial Cut-Off Date, the Outstanding Balance of
such Receivable on the date it was created.
"Originator" has the meaning set forth in the preamble to the
Agreement.
"Outstanding Balance" of any Receivable at any time means the
arithmetic sum of all remaining payments which will become due on such
Receivable.
"Potential Termination Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute a Termination
Event.
"Purchase" means the purchase pursuant to Section 1.1(a) of
the Agreement by Buyer from Originator of the Receivables and the Related
Security and Collections related thereto, together with all related rights in
connection therewith.
Exh. I-3
"Purchase Price" means, with respect to the Purchase, the
aggregate price to be paid by Buyer to Originator for such Purchase in
accordance with Section 1.2 of the Agreement for the Receivables, Collections
and Related Security being sold to Buyer, which price shall equal on any date
(i) the Discounted Balance of such Receivables on such date, minus (ii) any
Purchase Price Credits to be credited against the Purchase Price otherwise
payable in accordance with Section 1.3 of the Agreement.
"Purchase Price Credit" has the meaning set forth in Section
1.3 of the Agreement.
"Receivable" means any now existing or hereafter arising
indebtedness and other obligations owed to the Originator and accounted for in
Branch 4000 of the Originator (at the time it arises, and before giving effect
to any transfer or conveyance under the Agreement) whether constituting an
account, chattel paper, instrument or general intangible, arising in connection
with the provision of financing by the Originator to a lessee of equipment, and
further includes, without limitation, the obligation to pay any Finance Charges
with respect thereto; provided, however that Repurchased Receivables shall not
be "Receivables" on and after the date of repurchase. 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, the Originator or Buyer
treats such indebtedness, rights or obligations as a separate payment
obligation.
"Related Security" means, with respect to any Receivable:
(i) all of Originator'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 Originator gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) 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
Exh. I-4
otherwise, together with all financing statements and security
agreements describing any collateral securing such Receivable,
(iii) 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,
(iv) all service contracts and other contracts and
agreements associated with such Receivable (other than service, support
and maintenance agreements between the Obligor and ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇),
(v) all Principal Lease Documents and Records related to
such Receivable,
(vi) all of the Originator's right, title and interest
in the Collection Account,
(vii) all of Originator's right, title and interest in,
to and under the Agreement in respect of such Receivable and all of
Originator's right, title and interest in, to and under each other
Transaction Document, including the Performance Undertaking, executed
in favor of or otherwise for the benefit of, the Originator, and
(viii) all proceeds of any of the foregoing.
"Repurchased Receivables" has the meaning set forth in the
LFA.
"Required Capital Amount" means, as of any date of
determination, an amount equal to the greater of (i) the product of (A) .75 and
(B) the Loss Percentage of Aggregate Capital and (ii) $17,000,000.
"Settlement Date" means with respect to any Calculation
Period, the second Business Day in the calendar month following such Calculation
Period.
"Subordinated Loan" has the meaning set forth in Section
1.2(a) of the Agreement.
Exh. I-5
"Subordinated Note" means a promissory note in substantially
the form of Exhibit VI hereto as more fully described in Section 1.2(b) of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Subscription Agreement" means a Subscription Agreement
between ▇▇▇▇▇ Capital Corporation and ▇▇▇▇▇ Funding, L.L.C., substantially in
the form of Exhibit VII hereof.
"Termination Date" means the earliest to occur of (i) the
Facility Termination Date, as such date may be extended from time to time (ii)
the Business Day immediately prior to the occurrence of a Termination Event set
forth in Section 5.1(d), (iii) the Business Day specified in a written notice
from Buyer to Originator following the occurrence of any other Termination
Event, and (iv) the date which is thirty (30) Business Days after Buyer's
receipt of written notice from Originator that it wishes to terminate the
facility evidenced by this Agreement.
"Termination Event" has the meaning set forth in Section 5.1
of the Agreement.
"Transaction Documents" means, collectively, this Agreement,
the LFA, each Collection Account Agreement, the Subordinated Note, the
Performance Undertaking, the Fee Letter, 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.
"Upgraded Receivable" means a Receivable as to which either
(a) the Obligor thereof has been released from payment and a credit memorandum
has been issued by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ in favor of the Borrower in the amount
of the Outstanding Balance of such Receivable or (b) the Outstanding Balance of
such Receivable is included in a new Receivable, in either case, as an
inducement for the applicable Obligor to enter into a new lease with the
Originator.
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of Ohio, and not specifically defined herein, are used herein as defined
in such Article 9.
Exh. I-6
EXHIBIT II
Places of Business; Locations of Records;
Federal Employer Identification Number(s); Other Names
Places of Business:
1. ▇▇▇▇▇ Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ Funding, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Locations of Records:
1. ▇▇▇▇▇ Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ Funding, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Federal Employer Identification Numbers:
1. ▇▇▇▇▇ Capital Corporation
▇▇-▇▇▇▇▇▇▇
2. ▇▇▇▇▇ Funding, L.L.C.
▇▇-▇▇▇▇▇▇▇
Exh. II-1
EXHIBIT III
Names of Receiving Banks; Receiving Accounts
Name of Receiving Type of Account Lock-Box No. (if Related Account
Bank any) No.
---------------------------------------------------------------------------------------------
Provident Bank, Lock-Box 1474
Dayton, Ohio
Provident Bank, Depository 0459-041
Dayton Ohio
Exh. III-1
EXHIBIT IV
Form of Compliance Certificate
This Compliance Certificate is furnished pursuant to that
certain Receivables Sale Agreement dated as of January 24, 2002, between ▇▇▇▇▇
Capital Corporation ("Originator") and ▇▇▇▇▇ Funding, L.L.C. (as amended or
otherwise modified, the "Agreement"). Capitalized terms used and not otherwise
defined herein are used with the meanings attributed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of Originator.
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 Originator and its Subsidiaries 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 a Termination Event or a Potential Termination 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 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 Originator has taken, is taking, or
proposes to take with respect to each such condition or event:
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 _____, ____.
_______________________________________
[Name]
Exh. IV-1
EXHIBIT V
Credit and Collection Policy
See Attached
Exh. V-1
EXHIBIT VI
Form of Subordinated Note
SUBORDINATED NOTE
January 24, 2002
1. Note. FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇ FUNDING, L.L.C., an
Ohio limited liability company ("RFL"), hereby unconditionally promises to pay
to the order of ▇▇▇▇▇ CAPITAL CORPORATION, an Ohio corporation ("Originator"),
in lawful money of the United States of America and in immediately available
funds on the Collection Date (as defined below), the aggregate unpaid principal
sum outstanding of all "Subordinated Loans" made from time to time by Originator
to RFL pursuant to and in accordance with the terms of that certain Receivables
Sale Agreement dated as of January 24, 2002 between Originator and RFL (as
amended, restated, supplemented or otherwise modified from time to time, the
"RSA").
The Collection Date shall be the date following the
Termination Date which is one year and one day after the date on which (i) the
Outstanding Balance of all Receivables sold under the "RSA" referred to below
has been reduced to zero and (ii) Originator has paid to the Buyer all
indemnities, adjustments and other amounts which may be owed thereunder in
connection with the Purchases. Reference to Section 1.2 of the RSA is hereby
made for a statement of the terms and conditions under which the loans evidenced
hereby have been and will be made. All terms which are capitalized and used
herein and which are not otherwise specifically defined herein shall have the
meanings ascribed to such terms in the RSA.
2. Interest. RFL further promises to pay interest on the outstanding
unpaid principal amount hereof from the date hereof until payment in full hereof
at the LIBO Rate (as defined in the LFA); provided, however, that if RFL shall
default in the payment of any principal hereof, RFL promises to pay, on demand,
interest at the rate of the LIBO Rate plus 2.00% per annum on any such unpaid
amounts, from the date such payment is due to the date of actual payment.
Interest shall be payable on the first Business Day of each month in arrears;
provided, however, that RFL may elect on the date any interest payment is due
Exh. VI-1
hereunder to defer such payment and upon such election the amount of interest
due but unpaid on such date shall constitute principal under this Subordinated
Note. The outstanding principal of any loan made under this Subordinated Note
shall be due and payable on the Collection Date and may be repaid or prepaid at
any time without premium or penalty.
3. Principal Payments. Originator is authorized and directed by RFL to
enter on the grid attached hereto, or, at its option, in its books and records,
the date and amount of each loan made by it which is evidenced by this
Subordinated Note and the amount of each payment of principal made by RFL, and
absent manifest error, such entries shall constitute prima facie evidence of the
accuracy of the information so entered; provided that neither the failure of
Originator to make any such entry or any error therein shall expand, limit or
affect the obligations of RFL hereunder.
4. Subordination. Originator shall have the right to receive, and RFL
shall make, any and all payments relating to the loans made under this
Subordinated Note provided that, after giving effect to any such payment, the
aggregate Outstanding Balance of Receivables (as each such term is defined in
the Loan Funding Agreement hereinafter referred to) owned by RFL at such time
exceeds the sum of (a) the Aggregate Unpaids (as defined in the Loan Funding
Agreement) outstanding at such time under the Loan Funding Agreement, plus (b)
the aggregate outstanding principal balance of all loans made under this
Subordinated Note. Originator hereby agrees that at any time during which the
conditions set forth in the proviso of the immediately preceding sentence shall
not be satisfied, Originator shall be subordinate in right of payment to the
prior payment of any indebtedness or obligation of RFL owing to the Agent or any
Lender under that certain Loan Funding Agreement dated as of January 24, 2002 by
and among RFL, Originator, as Servicer, Jupiter Securitization Corporation, Bank
One, NA (Main Office Chicago) as a Financial Institution, and Bank One, NA (Main
Office Chicago), as the "Agent" (as amended, restated, supplemented or otherwise
modified from time to time, the "LFA"). The subordination provisions contained
herein are for the direct benefit of, and may be enforced by, the Agent and the
Lenders and/or any of their respective assignees (collectively, the "Senior
Claimants") under the LFA. Until the date on which all "Capital" outstanding
under the LFA has been repaid in full and all other obligations of RFL and/or
the Servicer thereunder and under the "Fee Letter" referenced therein (all such
obligations, collectively, the "Senior Claim") have been indefeasibly paid and
satisfied in full, Originator shall not institute against RFL any proceeding of
the type described in Section 5.1(d) of the RSA unless and until the Collection
Date has occurred. Should any payment, distribution or security or proceeds
thereof be received by Originator in violation of this Section 4, Originator
agrees that such payment shall be segregated, received and held in trust
Exh. VI-2
for the benefit of, and deemed to be the property of, and shall be immediately
paid over and delivered to the Agent for the benefit of the Senior Claimants.
5. Bankruptcy; Insolvency. Upon the occurrence of any proceeding of the
type described in Section 5.1(d) of the RSA involving RFL as debtor, then and in
any such event the Senior Claimants shall receive payment in full of all amounts
due or to become due on or in respect of the Aggregate Capital and the Senior
Claim (including the "Yield" and "CP Costs" as defined and as accruing under the
LFA after the commencement of any such proceeding, whether or not any or all of
such Yield and CP Costs are an allowable claim in any such proceeding) before
Originator is entitled to receive payment on account of this Subordinated Note,
and to that end, any payment or distribution of assets of RFL of any kind or
character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or deliverable upon
or with respect to any or all indebtedness under this Subordinated Note, is
hereby assigned to and shall be paid or delivered by the Person making such
payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Agent for application to, or
as collateral for the payment of, the Senior Claim until such Senior Claim shall
have been paid in full and satisfied.
6. Amendments. This Subordinated Note shall not be amended or modified
except in accordance with Section 7.1 of the RSA. The terms of this Subordinated
Note may not be amended or otherwise modified without the prior written consent
of the Agent for the benefit of the Purchasers.
7. GOVERNING LAW. THIS SUBORDINATED NOTE HAS BEEN MADE AND DELIVERED AT
DAYTON, OHIO, AND SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE
OF OHIO. WHEREVER POSSIBLE EACH PROVISION OF THIS SUBORDINATED NOTE SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW,
BUT IF ANY PROVISION OF THIS SUBORDINATED NOTE SHALL BE PROHIBITED BY OR INVALID
UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THIS SUBORDINATED NOTE.
Exh. VI-3
8. Waivers. All parties hereto, whether as makers, endorsers, or
otherwise, severally waive presentment for payment, demand, protest and notice
of dishonor. Originator additionally expressly waives all notice of the
acceptance by any Senior Claimant of the subordination and other provisions of
this Subordinated Note and expressly waives reliance by any Senior Claimant upon
the subordination and other provisions herein provided.
9. Assignment. This Subordinated Note may not be assigned, pledged or
otherwise transferred to any party other than Originator without the prior
written consent of the Agent, and any such attempted transfer shall be void.
▇▇▇▇▇ FUNDING, L.L.C.
By: ____________________________
Title:
Exh. VI-4
Schedule
to
SUBORDINATED NOTE
SUBORDINATED LOANS AND PAYMENTS OF PRINCIPAL
Amount of Amount of Unpaid
Subordinated Principal Principal Notation made by
Date Loan Paid Balance
------------- -------------- ------------- ---------- -----------------
Exh. VI-5
SCHEDULE A
DOCUMENTS TO BE DELIVERED TO BUYER
ON OR PRIOR TO THE PURCHASE
SEE PART I OF SCHEDULE B TO THE LOAN FUNDING AGREEMENT.
Exh. VI-6
TABLE OF CONTENTS
Page
ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables .................................. -2-
Section 1.2 Payment for the Purchase ................................. -3-
Section 1.3 Purchase Price Credit Adjustments ........................ -5-
Section 1.4 Payments and Computations, Etc ........................... -6-
Section 1.5 Transfer of Records ...................................... -6-
Section 1.6 Characterization ......................................... -7-
Section 1.7 Repurchase or Withdrawal of Receivables .................. -7-
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Originator ............. -7-
ARTICLE III CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase ......................... -12-
Section 3.2 Conditions Precedent to Subsequent Payments .............. -12-
ARTICLE IV COVENANTS
Section 4.1 Affirmative Covenants of Originator ...................... -13-
Section 4.2 Negative Covenants of Originator ......................... -19-
ARTICLE V TERMINATION EVENTS
Section 5.1 Termination Events ....................................... -20-
Section 5.2 Remedies ................................................. -22-
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Page
ARTICLE VI INDEMNIFICATION
Section 6.1 Indemnities by Originator ............................... -23-
Section 6.2 Other Costs and Expenses ................................ -26-
ARTICLE VII MISCELLANEOUS
Section 7.1 Waivers and Amendments .................................. -26-
Section 7.2 Notices ................................................. -26-
Section 7.3 Protection of Ownership Interests of Buyer .............. -27-
Section 7.4 Confidentiality ......................................... -27-
Section 7.5 Bankruptcy Petition ..................................... -29-
Section 7.6 Limitation of Liability ................................. -29-
Section 7.7 Choice of Law ........................................... -30-
Section 7.8 Consent to Jurisdiction ................................. -30-
Section 7.9 Waiver of Jury Trial .................................... -30-
Section 7.10 Integration; Binding Effect; Survival of Terms .......... -30-
Section 7.11 Counterparts; Severability; Section References .......... -31-
Section 7.12 Subordination ........................................... -31-
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Exhibits and Schedules
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number; Other Names
Exhibit III - Names of Receiving Banks; Receiving Accounts
Exhibit IV - Form of Compliance Certificate
Exhibit V - Credit and Collection Policy
Exhibit VI - Form of Subordinated Note
Exhibit VII - Form of Subscription Agreement
Schedule A List of Documents to Be Delivered to Buyer Prior to the Purchase
-iii-