Exhibit 10(n)
VARIABLE FUNDING LOAN AGREEMENT
dated as of March 3, 1995
among
ENTERPRISE FUNDING CORPORATION,
the Lender,
and
MID-STATE TRUST V,
the Borrower,
and
FIRST UNION NATIONAL BANK OF FLORIDA,
the Custodian/Collateral Agent,
and
NATIONSBANK, N.A. (CAROLINAS)
the Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I
GENERAL............................... 2
SECTION 1.1. Certain Defined Terms.......................................... 2
SECTION 1.2. Other Terms.................................................... 2
SECTION 1.3. Computation of Time Periods.................................... 2
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT................... 2
SECTION 2.1. Revolving Credit Facility...................................... 2
SECTION 2.2. Variable Funding Note.......................................... 2
SECTION 2.3. Availability of Borrowings..................................... 3
SECTION 2.4. Selection of Tranche Periods and Tranche Rates................. 3
SECTION 2.5. Interest and Fees.............................................. 4
SECTION 2.6. Mandatory and Optional Prepayments............................ 4
SECTION 2.7. Proceeds and Payments.......................................... 6
SECTION 2.8. Pledged Accounts............................................... 6
SECTION 2.9. Payments and Computations, Etc................................. 7
SECTION 2.10. Reports....................................................... 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES.................... 8
SECTION 3.1. Representations and Warranties of the Borrower................. 8
(a) Existence and Standing.................................... 8
(b) Authorization and Contravention........................... 8
(c) Binding Effect............................................ 8
(d) Perfection................................................ 8
(e) Good Title................................................ 9
(f) Accuracy of Information................................... 9
(g) Tax Status................................................ 9
(h) Use of Proceeds........................................... 9
(i) Place of Business......................................... 9
(j) Nature of Accounts........................................ 9
(k) No Event of Default....................................... 9
(l) Not an Investment Company................................. 9
(m) ERISA..................................................... 9
(n) Beneficial Ownership...................................... 10
(o) Debt for Tax.............................................. 10
(p) Unacceptable Investment................................... 10
(q) Action, Error, Omission, Etc.............................. 10
(r) No Litigation............................................. 10
(s) Default and Delinquency Ratios............................ 10
(t) Monthly Payments.......................................... 10
SECTION 3.2. Reaffirmation of Representations\
and Warranties by the Borrower............................... 11
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ARTICLE IV
CONDITIONS PRECEDENT........................ 11
SECTION 4.1. Conditions to Effectiveness.................................... 11
SECTION 4.2. Conditions to Each Loan........................................ 13
ARTICLE V
COVENANTS.............................. 15
SECTION 5.1. Affirmative Covenants of Borrower.............................. 15
(a) Comfort Letter............................................ 15
(b) Other Information......................................... 15
(c) Compliance Certificate.................................... 15
(d) Notice of Event of Default or
Potential Event of Default................................ 16
(e) Conduct of Business....................................... 16
(f) Compliance with Laws...................................... 16
(g) Furnishing of Information and
Inspection of Records..................................... 16
(h) Payment of Obligations.................................... 16
(i) Further Assurances........................................ 16
(j) Access.................................................... 17
(k) Costs and Expenses........................................ 17
(l) Amendments; Miscellaneous................................. 17
SECTION 5.2. Negative Covenants of Borrower.................................. 17
(a) No Extension or Amendment of Accounts..................... 17
(b) No Sale................................................... 18
(c) No Insurance.............................................. 18
(d) Other Business............................................ 18
(e) Dissolution............................................... 18
(f) Liens..................................................... 18
(g) No Amendment.............................................. 18
(h) No Mergers, Etc........................................... 18
(i) Change of Name, Etc....................................... 18
(j) Borrowing Base Deficiency................................. 19
(k) Pledged Accounts.......................................... 19
(l) Successor Service......................................... 19
ARTICLE VI
EVENTS OF DEFAULT......................... 19
SECTION 6.1. Events of Default.............................................. 19
SECTION 6.2. Remedies....................................................... 21
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ARTICLE VII
INDEMNIFICATION; EXPENSES; RELATED MATTERS............. 21
SECTION 7.1. Indemnities by the Borrower.................................... 21
SECTION 7.2. Indemnity for Taxes, Reserves, and Expenses.................... 22
SECTION 7.3. Other Costs; Expenses and Related Matters...................... 24
ARTICLE VIII
MISCELLANEOUS........................... 25
SECTION 8.1. Term of Agreement.............................................. 25
SECTION 8.2. Waivers; Amendments............................................ 25
SECTION 8.3. Notices........................................................ 25
SECTION 8.4. Governing Law; Submission to Jurisdiction;
Integration.................................................... 27
SECTION 8.5. Severability; Counterparts..................................... 28
SECTION 8.6. Successors and Assigns......................................... 28
SECTION 8.7. Waiver of Confidentiality...................................... 28
SECTION 8.8. Confidentiality Agreement...................................... 28
SECTION 8.9. Liability of Owner Trustee..................................... 29
SECTION 8.10. No Bankruptcy Petition Against the Lender...................... 29
SECTION 8.11. No Recourse Against Stockholders,
Officers, or Directors......................................... 29
Form of Variable Funding Note.............................................. A-1
Form of Borrowing Request.................................................. B-1
Form of Borrower's Counsel Opinion......................................... C-1
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VARIABLE FUNDING LOAN AGREEMENT
VARIABLE FUNDING LOAN AGREEMENT (this "Loan Agreement"),
dated as of March 3, 1995, by and among ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Lender"), MID-STATE
TRUST V, a Delaware business trust, as borrower (the "Borrower"),
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking
association, as custodian and collateral agent (the "Collateral
Agent"), and NATIONSBANK, N.A. (CAROLINAS), a national banking
association, as administrative agent (the "Administrative
Agent").
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has been established pursuant to the
Trust Agreement dated as of the date hereof;
WHEREAS, on the Closing Date, and from time to time pursuant
to the Depositor Account Transfer Agreement dated as of the date
hereof (the "DAT Agreement"), ▇▇▇ ▇▇▇▇▇▇ Homes, Inc. (the
"Originator") has agreed to convey certain Accounts to Mid-State
Homes, Inc. (the "Depositor"), and the Depositor, pursuant to the
Borrower Account Transfer Agreement dated as of the date hereof
(the "BAT Agreement"), has agreed to convey certain Accounts to
the Borrower;
WHEREAS, pursuant to the Custodian/Collateral Agent
Agreement dated as of the date hereof (the "CCA Agreement"), and
as collateral security for its obligations under this Loan
Agreement, the Borrower has agreed to assign all Accounts
purchased by it, all of its rights under the DAT Agreement, the
BAT Agreement, the Contribution Agreement, the Master Servicing
Agreement and the Subservicing Agreement, and all of its right,
title, interest in and to certain bank accounts and certain other
collateral, and to deliver any notes evidencing indebtedness and
certain other documents related to the Accounts, to the
Collateral Agent for the benefit of the Lender, and to take such
other steps as set forth in the CCA Agreement to create and
perfect a first lien in all such rights in favor of the
Collateral Agent, for the benefit of the Lender;
WHEREAS, the Borrower has requested that the Lender make
Loans to the Borrower, from time to time, which will be secured
by the Collateral described above and evidenced by a Variable
Funding Note, the proceeds of which will be used to purchase the
Accounts;
WHEREAS, the Lender will finance the Loans through the
periodic issuance of Transaction Commercial Paper and Related
Liquidity Draws; and
WHEREAS, subject to the terms and conditions set forth
herein, the Lender is willing to make the Loans to the Borrower.
NOW, THEREFORE, in consideration of the mutual benefits to
be derived and the representations and warranties, conditions and
promises herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
GENERAL
SECTION 1.1. Certain Defined Terms. Capitalized terms used
in this Loan Agreement shall have the meanings given such terms
in Annex A hereto, unless otherwise defined herein.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein or in Annex A hereto shall be
construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC of the State
of New York, and not specifically defined herein or in Annex A,
are used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise
stated in this Loan Agreement, in the computation of a period of
time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until"
each means "to but excluding."
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT
SECTION 2.1. Revolving Credit Facility. Subject to the
terms and conditions hereof, the Lender agrees to make loans
("Loans") to the Borrower from time to time as permitted by this
Loan Agreement during the Facility Term in an aggregate amount
outstanding at any time not to exceed the Maximum Net Investment;
provided, however, that in no event shall the Lender make any
Loan if, after giving effect to such Loan, either (a) the Net
Investment would exceed the Maximum Net Investment or (b) a
Borrowing Base Deficiency would exist.
SECTION 2.2. Variable Funding Note. The Loans shall be
evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit A (the "VFN"), payable to the order of the
Lender. The Lender shall record the date and amount of each Loan
made and the date and amount of each payment of principal
thereof, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded. The VFN
shall (a) be dated the Closing Date, (b) be stated to mature on
the Scheduled Termination Date, and (c) provide for the payment
of principal, interest and fees in accordance with Section 2.5
and Section 2.6 hereof.
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SECTION 2.3. Availability of Borrowings. During the
Facility Term, the Borrower may request Loans on any Business Day
by delivering to the Administrative Agent irrevocable notice of
each borrowing via facsimile in the form of Exhibit B hereto (a
"Borrowing Request") on the related Determination Date with
respect to Loans to be made on a Remittance Date and at least two
Business Days prior to the proposed Borrowing Date with respect
to Loans to be made on any other Borrowing Date. The Borrowing
Request shall specify (a) the proposed Borrowing Date for such
Loan; (b) the amount of the Loan requested, which shall be at
least $5,000,000 and integral multiples of $1,000,000 in excess
thereof, and (c) the desired Tranche Period related thereto
pursuant to Section 2.4. Each Borrowing Request shall be
irrevocable and binding on the Borrower and the Borrower shall
indemnify the Lender and the Administrative Agent against any
loss or expense incurred by the Lender or the Administrative
Agent, either directly or through the Liquidity Provider
Agreement, as a result of any failure by the Borrower to complete
such borrowing, including, without limitation, any loss
(including loss of anticipated profits) or expense incurred by
the Lender, either directly or pursuant to the Liquidity Provider
Agreement, by reason of the liquidation or reemployment of funds
acquired by the Lender or the Liquidity Provider (including,
without limitation, funds obtained by issuing commercial paper or
promissory notes or obtaining deposits as loans from third
parties) for the Lender to fund such borrowing.
SECTION 2.4. Selection of Tranche Periods and Tranche Rates.
(a) At all times hereafter, but prior to the
occurrence of a Termination Event, the Borrower shall,
subject to the Lender's approval and the limitations
described below, request Tranche Periods and allocate a
portion of the Net Investment to each selected Tranche
Period, so that the aggregate amounts allocated to
outstanding Tranche Periods at all times shall equal the Net
Investment. The Borrower shall give the Administrative
Agent irrevocable notice by telephone of the new requested
Tranche Period(s) at least two Business Days prior to the
expiration of any then existing Tranche Period; provided,
however, that the Lender may select, in its sole discretion,
any such new or other Tranche Period if (i) the Borrower
fails to provide such notice on a timely basis or (ii) the
Lender determines, in its sole discretion, that the Tranche
Period requested by the Borrower is unavailable or for any
reason commercially undesirable. The Lender confirms that it
is its intention to allocate all or substantially all of the
Net Investment to one or more CP Tranche Periods; provided,
that the Lender may determine, from time to time, in its
sole discretion, that funding such Net Investment by means
of one or more CP Tranche Periods is not desirable for any
reason. If the Liquidity Provider acquires an interest with
respect to the Accounts pursuant to the terms of the
Liquidity Provider Agreement, the Liquidity Provider may
exercise the right of selection granted to the Lender
hereby. The Tranche Rate applicable to any such interest
may be the BR Rate, the
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CD Rate, or the Eurodollar Rate, as determined by the
Liquidity Provider. In the case of any Tranche Period
outstanding upon the occurrence of a Termination Event, such
Tranche Period shall end on the date of such occurrence.
(b) At all times on and after the occurrence of a
Termination Event, the Lender or the Liquidity Provider, as
applicable, shall select all Tranche Periods and Tranche
Rates applicable thereto.
SECTION 2.5. Interest and Fees. The Borrower shall pay to
the Lender, pursuant to the terms of the CCA Agreement, as
interest on the outstanding Loans, the following amounts on the
following dates:
(a) on each day (i) that a Tranche matures or
(ii) interest is due and owing on any Related Credit Support
Disbursements, an amount equal to the Discount due on such
maturing Tranche (together with an amount equal to any
Discount due on maturing Transaction Commercial Paper to the
extent the amount of Transaction Commercial Paper issued in
order to fund such Loan exceeds the amount of such Loan) and
on such Credit Support Related Disbursement;
(b) on each day that Transaction Commercial Paper is
issued, the Dealer Fee with respect to such Transaction
Commercial Paper;
(c) on each Remittance Date:
(i) the Program Costs (exclusive of any Dealer
Fees paid pursuant to paragraph (b) of this Section
2.5) due and payable on such date;
(ii) Defaulted Interest; and
(iii) an amount equal to the amount owing to any
Indemnified Party pursuant to Article VII hereof and
certain other expenses imposed on the Lender with
respect to funding the Net Investment or its other
obligations hereunder for the related Collection
Period, if any.
SECTION 2.6. Mandatory and Optional Prepayments. Unless a
Termination Event has occurred:
(a) On each Remittance Date following the Facility
Termination Date, the Borrower shall, or shall cause the
Collateral Agent to, deposit in the Principal Payment
Account the lesser of (i) the Net Investment as of the last
day of the related Collection Period and (ii) the amount of
Collections available therefor after application pursuant to
clauses (i) through (iii) of Section 4.1(d) of the CCA
Agreement.
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(b) On the Remittance Date with respect to which a
Borrowing Base Deficiency existed on the related
Determination Date and continues to exist on such Remittance
Date, and on the second Business Day following the
occurrence of a Borrowing Base Deficiency at any other time,
if such Borrowing Base Deficiency still exists on such
second Business Day, the Borrower shall, or shall cause the
Collateral Agent to, deposit into the Principal Payment
Account, an amount at least equal to such Borrowing Base
Deficiency.
(c) On each day that principal is due with respect to
a Related Liquidity Draw or a Related Credit Support
Disbursement pursuant to the Credit Support Agreement, the
Borrower shall, or shall cause the Collateral Agent to,
deposit in the Principal Payment Account an amount equal to
such principal.
(d) On or prior to the initial Scheduled Termination
Date the Borrower shall, or shall cause the Collateral Agent
to, deposit in the Principal Payment Account an amount not
less than the lesser of (i) the Net Investment (or such
other amount as agreed to by the Lender on the Business Day
prior to such deposit) and (ii) the greater of (A) fifty
percent of the highest outstanding Net Investment during the
period from the Closing Date to the most recent origination
date of the Accounts to be released from the Lien of this
Loan Agreement in connection with such Take-Out (a "Take-Out
Cut-Off Date") and (B) $100,000,000 (such deposit, a
"Take-Out"). After a Take-Out occurs, if the Facility Term
is extended pursuant to Section 8.1 hereof, the Borrower
shall, or shall cause the Collateral Agent to, deposit in
the Principal Payment Account within 36 months of the prior
Take-Out not less than the lesser of (x) the Net Investment
(or such other amount as agreed to by the Lender on the
Business Day prior to such deposit) and (y) the greater of
(1) fifty percent of the highest outstanding Net Investment
during the period from the prior Take-Out to the related
Take-Out Cut-Off Date and (2) $100,000,000.
(e) Following the occurrence of the Facility
Termination Date, on each Remittance Date on which the
amount on deposit in the Reserve Account (after giving
effect to all deposits to such account to be made on such
date) exceeds the Specified Reserve Account Requirement for
such date, the Borrower shall, or shall cause the Collateral
Agent to, deposit in the Principal Payment Account the
amount of such excess.
(f) The Borrower shall have the right on any
Remittance Date, upon written notice to the Administrative
Agent not later than the related Determination Date, to
deposit into the Principal Payment Account prepayments of
principal on the VFN.
(g) The Lender agrees that amounts deposited in the
Principal Payment Account pursuant to the provisions of this
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Loan Agreement or the CCA Agreement shall be applied to
repay maturing Tranches or related Credit Support
Disbursements on each day a Tranche or Related Credit
Support Disbursement matures. The Net Investment shall be
reduced by any amounts withdrawn and paid to or at the
direction of the Lender from the Principal Payment Account.
(h) The entire principal balance of the VFN shall be
due and payable on the Scheduled Termination Date together
with all accrued and unpaid Discount thereon.
SECTION 2.7. Proceeds and Payments. The proceeds of the
Loans shall be used by the Borrower solely to purchase Accounts
and to pay other amounts expressly permitted under the terms and
conditions of the Operative Documents. Unless otherwise
specified herein, any payments to be made to the Lender hereunder
shall be paid or deposited in its account with Bankers Trust
Company, Corporate Agency Group, ABA No. 021 001 033, Account No.
▇▇▇▇▇▇▇▇, Reference EFC FFC to XX447 General Collateral, Attn: J.
R. ▇▇▇▇▇▇, or such other account as may be designated in writing
by the Lender to the Borrower.
SECTION 2.8. Pledged Accounts.
(a) The Borrower shall establish, on or prior to the
Closing Date, an Eligible Bank Account No. __________) at
the Collateral Agent in the name of the Collateral Agent
(the "Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Lender.
(b) The Borrower shall establish, on or prior to the
Closing Date, an Eligible Bank Account (No. _____________)
at the Collateral Agent in the name of the Collateral Agent
(the "Reserve Account") bearing a designation clearly
indicating that the funds deposited therein are for the
benefit of the Lender.
(c) The Borrower shall establish, on or prior to the
Closing Day, an Eligible Bank Account (No.______________)
at the Collateral Agent in the name of the Collateral Agent
(the "Holding Account") bearing a designation clearly
indicating that the funds deposited therein are for the
benefit of the Lender.
(d) The Borrower shall establish, on or prior to the
Closing Date, an Eligible Bank Account (ABA No. ▇▇▇▇▇▇▇▇▇;
Account No. 001366855) at the Administrative Agent in the
name of the Lender (the "Principal Payment Account") bearing
a designation clearly indicating that the funds deposited
therein are for the benefit of the Lender. Funds on deposit
in the Principal Payment Account (other than investment
earnings) shall be invested in Eligible Investments at the
written direction of the Borrower; provided that such
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investments will mature so that sufficient funds will be
available uninvested for application by the Lender pursuant
to paragraph (g) of Section 2.6 hereof. Investment earnings
on amounts on deposit in the Principal Payment Account shall
be paid by the Lender to the Borrower as soon as practicable
following receipt thereof by the Lender. The Borrower will
deposit into the Principal Payment Account losses on
investments in the Principal Payment Account.
(e) If at any time the Collection Account, the Reserve
Account or the Holding Account shall no longer be an
Eligible Bank Account, then the Borrower shall, within 10
Business Days (or such longer period, not to exceed 30
calendar days, as to which the Lender shall consent), cause
such account to be moved such that such account will be an
Eligible Bank Account. The Borrower shall immediately
notify the Administrative Agent of the new location and
account number of such account.
SECTION 2.9. Payments and Computations, Etc.
(a) On the Business Day preceding a Borrowing Date,
the Borrower shall request from the Lender, and the Lender
shall provide to Borrower, the Market Discount Rate
applicable to such Borrowing Date. On each Determination
Date on which a Borrowing Request is made and within one
Business Day of a written request from the Lender, the
Borrower shall calculate the AEB, AMV and the Borrowing
Base, using in the case of the AMV, the Market Discount Rate
supplied by the Lender. The Lender and the Administrative
Agent shall not be bound by, any calculation of the AEB, the
AMV or the Borrowing Base by the Borrower.
(b) All amounts to be paid or deposited by the
Borrower hereunder shall be paid or deposited in accordance
with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available
funds. If such amounts are payable to the Lender they shall
be paid or deposited in accordance with Section 2.6 hereof,
until otherwise notified by the Lender. The Borrower shall,
to the extent permitted by law, pay to the Lender upon
demand, interest on all amounts not paid to the Lender or
deposited when required hereunder at a rate equal to the
Base Rate. All computations of discount, interest, and all
per annum fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed. Any
computations by the Lender of a Borrowing Base Deficiency or
amounts payable by the Borrower hereunder to the Lender, the
Liquidity Provider or the Credit Support Provider shall be
binding absent manifest error.
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SECTION 2.10. Reports. On each Determination Date, the Borrower shall
cause the Master Servicer to provide to the Lender (a) the Master Servicing
Certificate for the related Collection Period, (b) a Schedule of Accounts
with respect to all Accounts owned by the Borrower and (c) such other
information as the Lender may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Lender that:
(a) Existence and Standing. The Borrower (i) is a business trust
duly organized, validly existing, and in good standing under the laws of
the State of Delaware, (ii) has all power and all material governmental
licenses, authorizations, consents, and approvals required to carry on
its business in each jurisdiction in which its business is now
conducted, and (iii) is duly qualified to do business and is in good
standing under the laws of each jurisdiction where the conduct of its
business requires such qualification.
(b) Authorization and Contravention. The execution, delivery, and
performance by the Borrower of this Loan Agreement, the VFN, and the
other Operative Document to which the Borrower is a party are within the
Borrower's powers, have been duly authorized by all necessary action,
require no action by or in respect of, or filing with, any Governmental
Authority, and do not contravene, or constitute a default under, any
provision of applicable law or regulation or any other Operative
Document to which the Borrower is a party, or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower, or result in the creation or imposition of any lien on assets
of the Borrower.
(c) Binding Effect. This Loan Agreement and the VFN constitute
the legal, valid, and binding obligations of the Borrower, enforceable
in accordance with their terms, subject to applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting the rights of
creditors.
(d) Perfection. At all times, the Borrower shall be the owner of
all of the Collateral, free and clear of all liens, encumbrances,
security interests, preferences, or other security arrangement of any
kind or nature whatsoever (other than those permitted by the Operative
Documents), and all mortgages, financing statements, and other documents
required to be recorded or filed in order to perfect and protect the
Collateral against all creditors of and purchasers from the Borrower
will have been duly filed in each filing office necessary for such
purpose and all filing fees and taxes, if
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any, payable in connection with such filings shall have been paid in
full.
(e) Good Title. At all times, the Lender shall have a valid and
perfected first-priority security interest in the Collateral free and
clear of any Adverse Claim.
(f) Accuracy of Information. All information heretofore furnished
by the Borrower or any Affiliate of the Borrower (including, without
limitation, any information delivered pursuant to Sections 2.10 and 5.1
hereof) to the Lender or the Administrative Agent for purposes of or in
connection with this Loan Agreement or any transactions contemplated
hereby is, and all such information hereafter furnished by the Borrower
to the Lender or the Administrative Agent will be, true and accurate in
every material respect on the date such information is stated or
certified.
(g) Tax Status. The Borrower has filed all tax returns (federal,
state, and local) required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments, and other
governmental charges.
(h) Use of Proceeds. The proceeds of the Loans will be used
solely to purchase Accounts and to pay other amounts expressly permitted
under the terms and conditions of the Operative Documents.
(i) Place of Business. The chief place of business of the
Borrower is located at the address of the Borrower indicated in Section
8.3 hereof and all of the Borrower's Records are kept at the offices of
the Collateral Agent.
(j) Nature of Accounts. Each Account to be purchased with the
proceeds of a Loan is an Eligible Account and an "eligible asset" as
defined in Rule 3a-7 under the Investment Company Act of 1940, as
amended.
(k) No Event of Default. No event has occurred and is continuing
and no condition exists which constitutes an Event of Default or, to the
knowledge of the Borrower, a Potential Event of Default.
(l) Not an Investment Company. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, or is exempt from all provisions of such Act.
(m) ERISA. The Borrower is in compliance in all material respects
with ERISA and no lien in favor of the Pension Benefit Guaranty
Corporation on any of the Accounts exists.
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(n) Beneficial Ownership. The Depositor holds a 100% beneficial
ownership in the Borrower.
(o) Debt for Tax. The Borrower will treat the Loans as
indebtedness for federal income tax purposes.
(p) Unacceptable Investment. The Borrower has no knowledge of any
material circumstance or condition with respect to the Accounts, the
Obligors, or the credit standing of the Obligors that could reasonably
be expected to cause an Account to be an unacceptable investment or
adversely affect the value of any Account.
(q) Action, Error, Omission, Etc.. To the knowledge of the
Borrower, no material action, error, omission, misrepresentation,
negligence, fraud, or similar occurrence with respect to an Account has
taken place on the part of any person, including, without limitation,
any Obligor, the Depositor, the Originator, any appraiser, any builder,
or developer, or any other party involved in the origination of the
Accounts or in the application of insurance in relation to such Accounts.
(r) No Litigation. There are no actions, suits, or proceedings
pending, or to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Affiliate of the Borrower or their
respective properties, in or before any court, arbitrator, or other body
which question the validity of this Loan Agreement or the transactions
contemplated herein, or which could be reasonably expected to have a
materially adverse effect on the financial condition of the Borrower or
its ability to perform its obligations under this Loan Agreement (other
than an appeal of the Consensual Plan after entry of the Confirmation
Order so long as such Confirmation Order remains unstayed).
(s) Default and Delinquency Ratios. The Default Ratio and the
Delinquency Ratio with respect to the Accounts owned by the Borrower
have not exceeded 3.1% and 1.4% respectively, for the 12-month period
prior to December 31, 1994 and 3.8% and 1.8% respectively, for the
period from January 1, 1995 to the Closing Date.
(t) Monthly Payments. All Monthly Payments (net of the Servicing
Fee) on the Accounts to be purchased with the proceeds of a Loan due
after the applicable Cut-Off Date and received more than three Business
Days prior to the Borrowing Date, plus the proceeds of each Full
Prepayment of any such Account (including any related payment of
interest) received by the Master Servicer after the Cut-Off Date but
more than three Business Days prior to the Borrowing Date, will have
been for deposited in the Holding Account in accordance with Section 2.7
of the Master Servicing Agreement.
-10-
Any document, instrument, certificate or notice delivered to the Lender
or the Administrative Agent under this Loan Agreement shall be deemed a
representation and warranty by the Borrower.
SECTION 3.2. Reaffirmation of Representations and Warranties by the
Borrower. On each day that a Loan is made hereunder, the Borrower, by
accepting the proceeds of such Loan, shall be deemed to have certified that
all representations and warranties described in Section 3.1 are true and
correct on and as of such day as though made on and as of such day.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Effectiveness. On or prior to the Closing
Date, the Lender shall have received the following documents, instruments,
and fees, all of which shall be in a form and substance acceptable to the
Lender, or the following actions shall have occurred:
(a) the Lender shall have received a certified copy of the Trust
Agreement duly executed by the Owner Trustee and the Depositor;
(b) the Lender shall have received a Good Standing Certificate for
the Borrower issued by the Secretary of State of Delaware and
certificates of qualification in all foreign jurisdictions where such
qualification is material to the transactions contemplated by this Loan
Agreement;
(c) the Lender shall have received copies of all Operative
Documents, together with all of the documents required to be delivered
to the Lender thereunder;
(d) the Lender shall have received (i) an Opinion of Counsel of
▇▇▇▇▇▇▇▇▇▇▇, Farrior, Stallings, & ▇▇▇▇▇, P.A., special counsel to the
Borrower, covering the matters set forth in Exhibit C hereto and (ii)
such Opinions of Counsel as the Lender may reasonably request
satisfactory to the Lender regarding issues of state law relating to the
effectiveness of the Account Documents to vest in the Collateral Agent a
first priority lien in the Mortgaged Properties;
(e) the Lender shall have received the VFN, duly executed by the
Borrower, and all other Operative Documents, duly executed by the
parties thereto;
(f) the Borrower shall have paid to the Lender the Arrangement Fee
and the Commitment Fee and any Dealer Fee to be paid on the Closing Date;
-11-
(g) an order shall have been entered by the United
States Bankruptcy Court confirming the Consensual Plan of
Reorganization of ▇▇▇▇▇▇ Industries, Inc. and its
subsidiaries (the "Consensual Plan"), which order shall not
have been stayed, and the Consensual Plan shall have become
effective; provided, however, notwithstanding any other
provision of this Loan Agreement, the filing or existence of
an appeal of an order confirming the Consensual Plan, which
shall not be the subject of a stay, and shall not be a
basis, either directly or indirectly, for the failure or
refusal of the Lender on or after the effective date of the
Consensual Plan to make Loans under this Loan Agreement;
(h) a final, nonappealable order shall have been
entered by the United States Bankruptcy Court (A)
authorizing and approving the Operative Documents and the
transactions contemplated thereby in all respects and (B)
containing specific findings that (x) the transfers of
Accounts contemplated by the DAT Agreement and the BAT
Agreement are true arms-length sales for fair consideration
under the applicable state law, (y) upon purchase of the
Accounts by the Depositor and the Borrower, the Accounts
become the sole property of the Depositor and the Borrower,
as applicable, and (z) neither the Depositor nor the
Originator retains any ownership rights in the Accounts
pursuant to Section 541 of the Bankruptcy Code or otherwise;
(i) the Lender shall have received an Opinion of
Counsel (i) covering the items set forth in clauses (x)
(solely with respect to the BAT Agreement), (y) and (z) of
paragraph (h) (B) of this Section 4.1 and (ii) to the effect
that, in the event of the insolvency of the Originator or
the Depositor, the Borrower would not be substantively
consolidated with either such Person for purposes of the
Bankruptcy Code;
(j) the Borrower shall have established the Pledged
Accounts;
(k) the Lender shall have received lien searches in
the State of Florida with respect to the Originator and the
Depositor, and in the State of Delaware with respect to the
Borrower, in form and substance satisfactory to the Lender.
Any termination statements or releases requested by the
Lender to be filed with respect to the Accounts shall have
been filed;
(l) the Default Ratio and the Delinquency Ratio with
respect to all Accounts originated by the Originator shall
not have exceeded 3.1% and 1.4%, respectively, for the
12-month period prior to December 31, 1994 and 3.8% and
1.8%, respectively, for the period from January 1, 1995 to
the Closing Date;
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(m) the Lender shall have received (i) a listing or
magnetic tape of the portfolio of outstanding unpledged
retail installment sales contracts of the Depositor as of
January 31, 1995 showing with respect to each such contract
(A) the economic balance and (B) the pay-off balance of each
such contract, and (ii) the Originator's and/or the
Depositor's magnetic tape format and specifications, and the
Lender shall be satisfied with the results thereof; and
(n) the Lender and the Administrative Agent shall have
received such other documents instruments, certificates and
opinions as the Lender or the Administrative Agent shall
reasonably request.
SECTION 4.2. Conditions to Each Loan. The obligation of the Lender to
make the initial Loan hereunder and any subsequent Loan is subject to the
satisfaction of the following conditions, each of which may be waived by the
Lender:
(a) the Lender shall have received an Officers' Certificate from the
Borrower stating that:
(i) no Event of Default or Potential Event of
Default shall have occurred and the Loan to be made on
such date will not result in any breach of any of the
terms, conditions or provisions of, or constitute a
default under any of the Operative Documents to which
the Borrower is a party, or any indenture, mortgage,
deed of trust or other agreement or instrument to which
the Borrower is a party or by which it is bound, or any
order of any Governmental Authority entered in any
proceeding to which the Borrower is a party or by which
it may be bound or to which it may be subject, and all
conditions precedent provided in this Loan Agreement
relating to the Loan to be made on such date have been
complied with;
(ii) the Borrower is the owner of and has good
title to each Account, has not assigned any interest or
participation in any such Account (or, if any such
interest or participation has been assigned, it has
been released) and has the right to Grant each such
Account to the Collateral Agent, and no other Person
has any lien on, security interest in or other rights
to any such Account;
(iii) the Borrower has Granted to the Collateral
Agent all of its right, title, and interest in and to
each Account Granted to the Collateral Agent by it to
secure the VFN;
(iv) the information set forth in the Schedule of
Accounts delivered to the Collateral Agent is correct;
and
-13-
(v) no material adverse change shall have
occurred in the affairs of the Borrower or the Master
Servicer or the value of the Accounts since December
20, 1994, with respect to the initial Loan, and the
preceding Borrowing Date, with respect to each Loan
thereafter;
(b) all of the Account Documents relating to the
Accounts to be purchased on such date have been delivered to
the Collateral Agent within the time periods specified in
Section 3.1 of the CCA Agreement, except that (i) in lieu of
delivering the Account Documents for any Account which has
been the subject of a Full Prepayment received by the Master
Servicer after the Cut-Off Date but no later than three
Business Days prior to the Borrowing Date, the Borrower may
deliver, or cause to be delivered, as indicated in the
Officers' Certificate from the Master Servicer delivered
pursuant to paragraph (a) of this Section 4.2, the cash
proceeds of such Full Prepayment and (ii) in lieu of
delivering the Account Documents for any Account with
respect to which foreclosure proceedings have been commenced
and such Account Documents are required in connection with
the prosecution of such proceedings, the Borrower may
deliver a trust receipt pursuant to Section 3.2 of the CCA
Agreement;
(c) the Borrower shall have delivered a Borrowing
Request to the Lender pursuant to Section 2.3 hereof;
(d) the Lender and the Collateral Agent shall have
received the Schedule of Accounts relating to the Accounts
to be purchased with the proceeds of such Loan;
(e) the Lender shall have received acknowledgment
copies of proper financing statements, duly filed under the
Uniform Commercial Code of all jurisdictions that the Lender
may deem necessary or desirable in order to perfect the
ownership interest of the Borrower created by the BAT
Agreement and the security interests created by the CCA
Agreement and all other filings, notifications, consents and
recordings necessary to consummate the transactions
contemplated hereunder and under the other Operative
Documents shall be accomplished and the Lender shall have
received evidence of such filings, notifications, consents
and recordings satisfactory in form and substance to the
Lender;
(f) the Lender shall have received copies of all
consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by
it and the validity and enforceability against it of the
Operative Documents to approvals shall be in full force and
effect;
(g) no more than 7% of the Accounts then owned by the
Borrower may be in arrears for 60 days or more as of the
last day of any month preceding the Borrowing Date;
-14-
(h) the Depositor shall have continued to purchase or
otherwise acquire all of the Accounts originated by the
Originator on an ongoing basis;
(i) after giving effect to any new Loan, no Borrowing
Base Deficiency shall exist;
(j) the Facility Termination Date shall not have
occurred;
(k) the order entered by the United States Bankruptcy
Court confirming the Consensual Plan shall not have been
stayed; and
(l) no Servicer Default or default under any
Subservicing Agreement shall have occurred and be
continuing, and no condition that with the giving of notice
or the passage of time world constitute a Servicer Default
or a default under any Subservicing Agreement shall have
occurred and be continuing.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Borrower. At all times from the
date hereof to the date on which all amounts due and owing to the Lender
hereunder have been paid in full and this Loan Agreement has terminated
unless the Lender shall otherwise consent in writing:
(a) Comfort Letter. The Borrower shall deliver to the
Lender within 60 days of its reasonable request a Comfort
Letter with respect to all Accounts owned by the Borrower.
(b) Other Information. The Borrower shall deliver to
the Lender (i) a copy of all financial documents and reports
provided to the Borrower by the Depositor, the Originator or
any other Person in any capacity pursuant to the Operative
Documents, and (ii) such other information (including
non-financial information) as the Lender may from time to
time reasonably request.
(c) Compliance Certificate. The Borrower shall
deliver to the Lender within 90 days after the close of its
fiscal year, a compliance certificate signed by an
authorized signatory of the Borrower stating that no Event
of Default or Potential Event of Default exists, or if any
Event of Default or Potential Event of Default exists,
stating the nature and status thereof.
-15-
(d) Notice of Event of Default or Potential Event of
Default. As soon as possible and in any event within two
days after the occurrence of an Event of Default or a
Potential Event of Default, the Borrower shall provide to
the Lender a statement setting forth details of such Event
of Default or Potential Event of Default and the action
which the Borrower proposes to take with respect thereto.
The Borrower shall notify the Administrative Agent of the
occurrence of any event of default or event, which, due to
the giving of notice or lapse of time, or both, could become
an event of default by itself, the Depositor or the
Originator in any capacity under any of the Operative
Documents of which it becomes aware.
(e) Conduct of Business. The Borrower will carry on
and conduct its business in substantially the same manner as
it is presently conducted and do all things necessary to
remain duly organized, validly existing, and in good
standing as a business trust in the State of Delaware and
maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
(f) Compliance with Laws. The Borrower will comply
with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees, or awards to which it may be subject.
(g) Furnishing of Information and Inspection of
Records. The Borrower will furnish to the Lender from time
to time such information with respect to the Accounts as the
Lender may reasonably request, including, without
limitation, a schedule identifying the Obligor and the
Outstanding Balance for each Account.
(h) Payment of Obligations. The Borrower shall pay,
discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its
obligations of whatever nature.
(i) Further Assurances. The Borrower shall do such
further acts and things and execute and deliver to the
Lender such assignments, agreements, powers and instruments
as are required by the Lender to carry into effect the
purposes of this Agreement and the other Operative Documents
or to better assure and confirm unto the Lender its rights,
powers and remedies hereunder and under the other Operative
Documents, including, without limitation, to obtain such
consents and give such notices, and to file and record all
such documents and instruments, and renew each such consent,
notice, filing and recordation, at such time or times, in
such manner and at such places, as may be necessary or
desirable to preserve and protect the position of the Lender
hereunder and under the other Operative Documents. This
covenant shall survive the termination of this Loan
Agreement.
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(j) Access. The Borrower shall allow, and cause the
Depositor to allow, the Lender and its representatives full
and complete access during normal business hours and upon
reasonable notice to the books, records, documents, and
facilities of the Borrower and the Depositor, and will on
the same conditions make the officers, employees, attorneys,
agents, independent accountants, and actuaries of the
Borrower and the Depositor available to discuss such aspects
of the business, financial condition, or prospects of the
Borrower and the Depositor as may be reasonably necessary.
(k) Costs and Expenses. The Borrower shall pay all
costs, fees, intangible, documentary and recording taxes in
connection with the execution and delivery of this Loan
Agreement and the other Operative Documents.
(l) Amendments; Miscellaneous.
(i) The Borrower shall furnish to the Collateral
Agent and the Lender copies of the form of each
proposed amendment to the Trust Agreement, the Master
Servicing Agreement or the Subservicing Agreement at
least 60 days prior to the proposed date of adoption of
any such proposed amendment.
(ii) The Borrower will at all times hold itself
out to the public under the Borrower's own name and as
a separate and distinct entity from ▇▇▇▇▇▇ Industries,
Inc. and any of its Affiliates.
(iii) The Borrower will at all times be responsible
for the payment of all its obligations and
indebtedness, will at all times maintain a business
office, records, books of account, and funds separate
from the Depositor and will observe all customary
formalities of independent existence.
(iv) To the extent such compliance involves
questions of law, the Borrower shall be deemed in
compliance with the requirements of any provision of
this paragraph (l) if it is acting in accordance with
an opinion of counsel as to such requirements.
SECTION 5.2. Negative Covenants of Borrower. During the
term of this Loan Agreement, unless the Lender shall otherwise
consent in writing:
(a) No Extension or Amendment of Accounts. Except as
permitted by Section 2.1(j) of the Master Servicing
Agreement or Section 3.4 of the CCA Agreement, the Borrower
will not extend, amend, or otherwise modify the terms of any
Account, or amend, modify, or waive any term or condition of
any Account Document related thereto.
- 17 -
(b) No Sale. The Borrower shall not sell, transfer,
exchange or otherwise dispose of any portion of the
Collateral except as expressly permitted by the Operative
Documents.
(c) No Insurance. The Borrower shall not obtain or
carry insurance relating to the Accounts separate from that
required by the Master Servicing Agreement, unless the
Lender shall have the same rights with respect thereto as it
has with respect to the insurance required by the Master
Servicing Agreement.
(d) Other Business. The Borrower shall not engage in
any business or activity other than in connection with, or
relating to, the issuance of the VFN or the preservation of
the Collateral and the release of assets therefrom pursuant
to this Loan Agreement, and the other Operative Documents to
which the Borrower is a party.
(e) Dissolution. The Borrower shall not dissolve or
liquidate in whole or in part.
(f) Liens. The Borrower shall not (i) permit the
validity or effectiveness of this Loan Agreement or the CCA
Agreement to be impaired, or permit the lien of the CCA
Agreement to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be
released from any covenants or obligations under this Loan
Agreement or, (ii) except as may be expressly permitted by
the Operative Documents, permit any lien, charge, security
interest, mortgage or other encumbrance (other than the lien
of the CCA Agreement) to be created on or extend to or
otherwise arise upon or burden the Collateral or any part
thereof or any interest therein or the proceeds thereof, or
(iii) except as permitted by the Operative Documents, permit
the lien of the CCA Agreement not to constitute a valid and
perfected first priority security interest in the
Collateral.
(g) No Amendment. The Borrower shall not amend the
Trust Agreement.
(h) No Mergers, Etc. The Borrower will not
consolidate or merge with or into any other Person.
(i) Change of Name, Etc. The Borrower will not change
its name, identity, or structure or its chief executive
office, unless at least 10 days prior to the effective date
of any such change the Borrower delivers to the Collateral
Agent UCC financing statements, executed by the Borrower,
necessary to reflect such change and to continue the
perfection of the Lender's ownership interests or security
interests in the Accounts.
(j) Borrowing Base Deficiency. The Borrower shall not
on any day, permit a Borrowing Base Deficiency to exist.
- 18 -
(k) Pledged Accounts. The Borrower shall not move any
Pledged Account from the institution at which they are
maintained on the Closing Date, except as permitted in
accordance with Section 2.8.
(l) Successor Servicer. The Borrower shall not permit
any change of master servicer, except in accordance with the
Master Servicing Agreement.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. Events of Default. The occurrence of any one
or more of the following events shall constitute an Event of
Default:
(a) Any representation, warranty, certification, or
statement made by the Borrower in this Loan Agreement or in
any other document delivered pursuant hereto or other
Operative Document, or by the Depositor or the Originator in
any of the Operative Documents, shall prove to have been
incorrect in any material respect when made or deemed made;
(b) Failure of the Borrower, to pay or deposit any
amounts when required hereunder;
(c) Failure of the Borrower, the Depositor, the
Originator, or any of their respective Affiliates to pay
when due any amounts due hereunder or the default by the
Borrower, in the performance of any term, provision, or
condition contained in any agreement under which any
Indebtedness greater than $5,000,000 was created or is
governed, regardless of whether such event is an "event of
default" or "default" under any such agreement; or any
Indebtedness greater than $5,000,000 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) The default by the Borrower in the performance of
any covenant or undertaking (i) to be performed or observed
under Sections 5.1(d), 5.2(b), (d), (e), (f), (g), or (h) or
(ii) to be performed or observed under any other provision
hereof (other than described in paragraph (b) of this
Section 6.1) and such default in the case of this clause
(ii) shall continue for five days;
(e) Any representation or warranty made or deemed made
by the Borrower, the Originator or the Depositor, in any
capacity, which is contained in any Operative Document or in
any agreement, written report or written information
furnished at any time under or required by the Operative
Documents shall prove to have been false or incorrect in any
material respect on or as of the date made or deemed made;
- 19 -
(f) Any Event of Bankruptcy shall occur with respect
to the Borrower, the Depositor, the Originator, or any of
their Affiliates;
(g) The Collateral Agent, for the benefit of the
Lender, shall, for any reason, fail to have a valid and
perfected first-priority security interest in the
Collateral;
(h) The Depositor or the Originator shall enter into
any transaction or merger whereby it is not the surviving
entity;
(i) There shall have occurred any material adverse
change in the operations of the Borrower, the Depositor, the
Master Servicer or the Originator since the Closing Date
which would have or reasonably could be expected to have a
material adverse effect on the Lender or any other event
shall have occurred which materially affects the Borrower's
ability to perform under this Loan Agreement or the
collectibility of the Accounts;
(j) An event of default under the Master Servicing
Agreement or the Subservicing Agreement shall have occurred;
(k) The Depositor shall fail to maintain its 100%
beneficial ownership interest in the Borrower;
(l) The Collections Coverage Ratio averaged for any
three consecutive Collection Periods is (i) until a Take-Out
has occurred, less than 125% for the first four Collection
Periods after the Closing Date, 150% for any of the next
eight Collection Periods, and 175% thereafter, (ii)
following the occurrence of a Take-Out that is between 50%
and 75% of the highest outstanding Net Investment for the
period from the Closing Date to the Take-Out Cut-Off Date,
in the case of the first Take-Out, or for the period between
Take-Out Cut-Off Dates for subsequent Take-Outs, less than
150% for the four Collection Periods following such Take-Out
and 175% for each Collection Period thereafter and (iii)
following the occurrence of a Take-Out that is greater than
75% of the highest outstanding Net Investment for the period
from the Closing Date to the Take-Out Cut-Off Date, in the
case of the first Take-Out, or for the period between
Take-Out Cut-Off Dates for subsequent Take-Outs, less than
125% for the three Collection Periods following such
Take-Out, 150% for the next six Collection Periods, and 175%
thereafter;
(m) The amount on deposit in the Reserve Account fails
to reach the Specified Reserve Account Requirement on or
prior to the 15th Remittance Date or on or prior to the
sixth Remittance Date following a Reserve Account Event;
(n) The Delinquency Ratio with respect to the Accounts
owned by the Borrower averaged for any three consecutive
Collection Periods exceeds 3.5%;
- 20 -
(o) The Default Ratio with respect to the Accounts owned by the
Borrower averaged for any three consecutive Collection Periods exceeds
6%; or
(p) The Borrower fails to perform a Take-Out as set forth in
Section 2.6 hereof.
SECTION 6.2. Remedies. If a Termination Event shall have occurred,
the Facility Term shall terminate. Upon the occurrence of a Termination
Event, the Lender shall be entitled to exercise any rights it may have
pursuant to the Operative Documents, including, without limitation, the CCA
Agreement. The Lender may declare all amounts outstanding with respect to
the VFN to be immediately due and payable, by a notice in writing to the
Borrower, and upon any such declaration, together with accrued and unpaid
interest thereon to the date of such acceleration and any other amounts due
and payable to the Lender hereunder, shall become immediately due and payable.
ARTICLE VII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 7.1 Indemnities by the Borrower. Without limiting any other
rights which the Lender may have hereunder or under applicable law, the
Borrower hereby agrees to indemnify the Lender, the Liquidity Provider and
the Credit Support Provider and any of their permitted assigns and their
respective officers, directors, and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
costs, and expenses, including reasonable attorneys' fees (which such
attorneys may be employees of the Liquidity Provider, the Credit Support
Provider, or the Lender) and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them arising out of or as a result of this Loan Agreement
or the transactions contemplated hereby excluding, however, (i) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct
on the part of an Indemnified Party or (ii) recourse (except as otherwise
specifically provided in this Loan Agreement) for uncollectible Accounts.
Without limiting the generality of the foregoing, the Borrower shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(a) reliance on any representation or warranty made by the Borrower
under or in connection with this Loan Agreement or any other information
or report delivered by the Borrower pursuant hereto, which shall have
been false or incorrect in any material respect when made or deemed made;
(b) the failure by the Borrower to comply with any applicable law,
rule, or regulation with respect to any
- 21 -
Account, or the nonconformity of any Account with any such applicable
law, rule, or regulation;
(c) the failure to vest and maintain vested in the Lender a
first-priority perfected security interest in the Collateral, free and
clear of any Adverse Claim;
(d) the failure to file or record, or any delay in filing or
recording, mortgages, financing statements, continuation statements, or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any of the
Collateral; or
(e) any dispute, claim, offset, or defense (other than discharge in
bankruptcy) of an Obligor to the payment of any Account (including,
without limitation, a defense based on such Account not being legal,
valid, and binding obligation of such Obligor enforceable against it in
accordance with its terms);
provided, however, that if the Lender enters into agreements for the purchase
of interests in receivables from or the making of loans to one or more Other
Transferors, the Lender shall allocate such Indemnified Amounts which are in
connection with the Liquidity Provider Agreement, the Credit Support
Agreement or the credit support furnished by the Credit Support Provider to
the Borrower and each Other Transferor; and provided, further, that if such
Indemnified Amounts are attributable to the Borrower and not attributable to
any Other Transferor, the Borrower shall be solely liable for such
Indemnified Amounts or if such Indemnified Amounts are attributable to Other
Transferors and not attributable to the Borrower, such Other Transferors
shall be solely liable for such Indemnified Amounts.
SECTION 7.2. Indemnity for Taxes, Reserves, and Expenses.
(a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation of
any existing or future Law or bank regulatory guideline by any
Governmental Authority charged with the administration, interpretation,
or application thereof, or the compliance with any directive of any
Governmental Authority (in the case of any bank regulatory guideline,
whether or not having the force of Law):
(i) shall subject any Indemnified Party to any tax, duty, or
other charge with respect to this Loan Agreement, the VFN, the
Accounts, or payments of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts
payable in respect of this Loan Agreement, the VFN, the Accounts, or
payments of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or
- 22 -
the credit support furnished by the Credit Support Provider or
otherwise in respect of this Loan Agreement, the VFN or the Accounts
(except for changes in the rate of general corporate, franchise, net
income, or other income tax imposed on such Indemnified Party by the
jurisdiction in which such Indemnified Party's principal executive
office is located);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System) against assets of, deposits with or
for the account of, or credit extended by, any Indemnified Party or
shall impose on any Indemnified Party or on the United States market
for certificates of deposit or the London interbank market any other
condition affecting this Loan Agreement, the VFN, the Accounts, or
payments of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or the credit support
provided by the Credit Support Provider or otherwise in respect of
this Loan Agreement, the VFN, or the Accounts; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Loan
Agreement, the VFN, the Accounts, or payments of amounts due
hereunder or its obligation to advance funds under the Liquidity
Provider Agreement or the credit support furnished by the Credit
Support Provider or otherwise in respect of this Loan Agreement, the
VFN, or the Accounts,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Loan Agreement, the VFN, the
Accounts, the obligations hereunder, the funding of any Loans hereunder,
the Liquidity Provider Agreement, or the Credit Support Agreement, by an
amount deemed by such Indemnified Party to be material, then, within 10
days after demand by the Lender, the Borrower shall pay to the Lender
such additional amount or amounts as will compensate such Indemnified
Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after the
date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any
change in the interpretation thereof by any Governmental Authority, or
any directive regarding capital adequacy (in the case of any bank
regulatory guideline, whether or not having the force of law) of any such
Governmental Authority, has or would have the effect of reducing the rate
of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified
- 23 -
Party (or its parent) could have achieved but for such adoption, change,
request, or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Indemnified
Party to be material, then from time to time, within 10 days after demand
by the Lender, the Borrower shall pay to the Lender such additional
amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction.
(c) The Lender will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Section
7.2. A notice by the Lender claiming compensation under this Section 7.2
and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Lender may use any reasonable averaging and
attributing methods.
(d) Anything in this Section 7.2 to the contrary notwithstanding,
if the Lender enters into agreements for the acquisition of interests in
receivables from one or more Other Transferors, the Lender shall allocate
the liability for any amounts under this Section 7.2 ("Section 7.2
Costs") to the Borrower and each Other Transferor; provided, however,
that if such Section 7.2 Costs are attributable to the Borrower and not
attributable to any Other Transferor, the Borrower shall be solely liable
for such Section 7.2 Costs or if such Section 7.2 Costs are attributable
to Other Transferors and not attributable to the Borrower, such Other
Transferors shall be solely liable for such Section 7.2 Costs.
SECTION 7.3. Other Costs; Expenses and Related Matters.
(a) The Borrower agrees, upon receipt of a written invoice, to pay
or cause to be paid, and to save the Lender and the Administrative Agent
harmless against liability for the payment of, all reasonable
out-of-pocket expenses (including, without limitation, attorneys',
accountants' and other third parties' fees and expenses, any filing fees
and expenses incurred by officers or employees of the Lender) incurred by
or on behalf of the Lender and the Administrative Agent (i) in connection
with the negotiation, execution, delivery, and preparation of this Loan
Agreement, the other Operative Documents, and any documents or
instruments delivered pursuant hereto and the transactions contemplated
hereby (including, without limitation, the perfection or protection
of the Collateral) and (ii) from time to time (A) relating to any
amendments, waivers, or consents under this Loan Agreement, (B) arising
in connection with the Lender's or its agent's enforcement or
preservation of rights (including, without limitation, the perfection and
protection
- 24 -
of the Collateral under this Loan Agreement), or (C) arising
in connection with any audit, dispute, disagreement, litigation, or
preparation for litigation involving this Loan Agreement and the other
Operative Documents (all of such amounts, collectively, "Transaction
Costs").
(b) The Borrower shall pay the Lender on demand any Early
Collection Fee due on account of the reduction of the Net Investment on a
day prior to a Remittance Date.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Term of Agreement. This Loan Agreement shall terminate
following the Facility Termination Date when the Net Investment has been
reduced to zero, all accrued Discount has been paid in full, and all other
amounts due under this Loan Agreement have been paid in full; provided,
however, that (i) the rights and remedies of the Lender with respect to any
representation and warranty made or deemed to be made by Borrower pursuant to
this Loan Agreement, (ii) the indemnification and payment provisions of
Article VII, and (iii) the agreement set forth in Section 8.9 thereof, shall
be continuing and shall survive any termination of this Loan Agreement.
SECTION 8.2 Waivers; Amendments. No failure or delay on the part of the
Lender in exercising any power, right, or remedy under this Loan 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 provision of this Loan Agreement may be
amended if, but only if, such amendment is in writing and is signed by the
Borrower and the Lender.
SECTION 8.3 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 party at its address or telecopy number set forth below
or at such other address or telecopy number as such party may hereafter
specify for the purposes of notice to such party. Each such notice or other
communication shall be effective (a) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified in this Section and
confirmation is received, (b) if given by mail three Business Days following
such posting, or (c) if given by any other means, when received at the
address specified in this Section 8.3. However, anything in this Section 8.3
to the contrary notwithstanding, the Borrower hereby authorizes the Lender to
effect Loans and Tranche Period selections based on telephonic notices made
by any Person which the Lender in good faith believes
- 25 -
to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation of each
telephonic notice signed by an authorized officer of the Borrower. However,
the absence of such confirmation shall not affect the validity of such
notice. If the written confirmation differs in any material respect from the
action taken by the Lender, the records of the Lender and the Administrative
Agent shall govern absent manifest error.
If to the Lender:
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Markets Inc.
World Financial Center -- South Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Administrative Agent)
If to the Borrower:
Mid-State Trust V
c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Mid-State Homes, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Collateral Agent:
First Union National Bank of Florida, N.A.
First Union Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
- 26 -
If to the Administrative Agent:
NationsBank, N.A. (Carolinas)
NationsBank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Investment Banking
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 8.4. Governing Law; Submission to Jurisdiction; Integration.
(a) THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE BORROWER HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Borrower hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Nothing in this Section 8.4 shall affect the right of the Lender to bring
any action or proceeding against the Borrower or its property in the
courts of other jurisdictions.
(b) This Loan Agreement contains the final and complete integration
of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof superseding all
prior oral or written understandings.
(c) Notwithstanding paragraph (a) of this Section 8.4, if anything
in such paragraph is deemed to conflict with the retention of
jurisdiction by the Court (as defined in the Consensual Plan) set forth
in the Consensual Plan, the Consensual Plan shall govern.
SECTION 8.5. Severability; Counterparts. This Loan 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 Loan 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
- 27 -
hereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 8.6. Successors and Assigns.
(a) This Loan Agreement shall be binding on the parties hereto and
their respective successors and assigns; provided, however, that the
Borrower may not assign any of its rights or delegate any of its duties
hereunder without the prior written consent of the Lender. No provision
of this Loan Agreement shall in any manner restrict the ability of the
Lender to assign, participate, grant security interests in, or otherwise
transfer any portion of the Collateral.
(b) The Borrower hereby agrees and consents to the assignment by
the Lender from time to time of all or any part of its rights under,
interest in, and title to this Loan Agreement and its interest in the
Collateral to any Liquidity Provider. In addition, the Borrower hereby
agrees and consents to the complete assignment by the Lender of all of
its rights under, interest in, and title to this Loan Agreement and its
interest in the Collateral to the Collateral Agent.
SECTION 8.7. Waiver of Confidentiality. The Borrower hereby consents to
the disclosure of any nonpublic information with respect to it received by
the Lender or the Administrative Agent to any of the Lender, any nationally
recognized rating agency rating the Lender's commercial paper, the
Administrative Agent, the Liquidity Provider, the Dealers, or the Credit
Support Provider in relation to this Loan Agreement.
SECTION 8.8. Confidentiality Agreement. The Borrower hereby agrees that
it will not disclose the contents of this Loan Agreement or any other
proprietary or confidential information of the Lender, the Collateral Agent,
the Administrative Agent, the Liquidity Provider or the Credit Support
Provider to any other Person except (a) its auditors and attorneys, employees
or financial advisors (other than any commercial bank), and any nationally
recognized rating agency, provided such auditors, attorneys, employees,
financial advisors, or rating agencies are informed of the highly
confidential nature of such information or (b) as otherwise required by
applicable law or order of a court of competent jurisdiction.
SECTION 8.9. Liability of Owner Trustee. It is expressly understood and
agreed by the parties hereto that (a) this Loan Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee under the Trust Agreement, in the exercise of the
powers and authority conferred and vested in it as the Owner Trustee, (b)
each of the representations, undertakings and agreements herein made on the
part of the Borrower is made and intended not as personal
- 28 -
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose for binding only the Borrower, (c) nothing
herein contained shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the other parties hereto and by any Person claiming by,
through or under such parties and (d) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any indebtedness or
expenses of the Borrower or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Borrower under this Loan Agreement.
SECTION 8.10. No Bankruptcy Petition Against the Lender. The Borrower
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all outstanding Commercial Paper or other
indebtedness of the Lender, it will not institute against, or join any other
Person in instituting against, the Lender 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 8.11. No Recourse Against Stockholders, Officers, or Directors.
No recourse under any obligation, covenant, or agreement of the Lender
contained in this Loan Agreement shall be had against ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money
Markets Inc. (or any affiliate thereof), or any stockholder, officer, or
director of the Lender, as such, by the enforcement of any assessment or by
any legal or equitable proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Loan Agreement is solely a
corporate obligation of the Lender, and that no personal liability whatever
shall attach to or be incurred by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or any
affiliate thereof), or the stockholders, officers, or directors of the
lender, as such, or any of them, under or by reason of any of the
obligations, covenants, or agreements of the Lender contained in this Loan
Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Lender of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute or constitution, of ▇▇▇▇▇▇▇
▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof) and every such
stockholder, officer, or director is hereby expressly waived as a condition
of and consideration for the execution of this Loan Agreement.
- 29 -
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Variable Funding Loan Agreement as of the date first written above.
ENTERPRISE FUNDING CORPORATION,
as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
MID-STATE TRUST V,
as Borrower
By: Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK OF FLORIDA,
as Custodian/Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NATIONSBANK, N.A. (CAROLINAS)
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
- 30 -
EXHIBIT A
[Form of Variable Funding Note]
VARIABLE FUNDING NOTE
New York, New York
[Closing Date]
FOR VALUE RECEIVED, the undersigned, MID-STATE TRUST V, a Delaware
business trust (the "Borrower"), promises to pay to the order of ENTERPRISE
FUNDING CORPORATION (the "Lender"), on the date specified in Section 2.3 of
the Loan Agreement (as hereinafter defined), at the office of the Lender, c/o
NationsBank, N.A. (Carolinas), as Administrative Agent, NationsBank ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, in lawful money of the
United States of America and in immediately available funds, the principal
amount of FIVE HUNDRED MILLION DOLLARS ($500,000,000), or, if less, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to the Loan Agreement, and to pay interest at such office,
in like money, from the date hereof on the unpaid principal amount of such
Loans from time to time outstanding at the rates and on the dates specified
in Sections 2.5 and 2.6 of the Loan Agreement.
The Lender is authorized to record, on the schedules annexed hereto and
made a part hereof or on other appropriate records of the Lender, the date
and the amount of each Loan made by the Lender, each continuation thereof,
the Tranche Period for such Loan and the date and amount of each payment or
prepayment of principal thereof. Any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded; provided that
the failure of the Lender to make any such recordation (or any error in such
recordation) shall not affect the obligations of the Borrower hereunder or
under the Loan Agreement in respect of the Loans.
This Variable Funding Note is the Variable Funding Note referred to in
the Variable Funding Loan Agreement dated as of March __, 1995 (as amended,
supplemented, or otherwise modified and in effect from time to time, the
"Loan Agreement") among the Lender, the Borrower, First Union National Bank
of Florida, as Collateral Agent, and NationsBank, N.A. (Carolinas), as
Administrative Agent, and is entitled to the benefits thereof. Capitalized
terms used herein without definition have the meanings assigned to them in
the Loan Agreement.
This Variable Funding Note is subject to optional and mandatory prepayment as
provided in the Loan Agreement.
Upon the occurrence of a Termination Event, the Lender shall have all of
the remedies specified in the Loan Agreement. The Lender hereby waives
presentment, demand, protest, and all notices of any kind.
THIS VARIABLE FUNDING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
MID-STATE TRUST V
By: Wilmington Trust Company,
not in its individual
capacity but solely as
Owner Trustee
By: _________________________
Title:
Schedule 1 to
VARIABLE FUNDING NOTE
Principal Discount Prepayment
of on of
Date Loans Loans Loans Notation By
---- --------- -------- ---------- -----------
EXHIBIT B
[Form of Borrowing Request]
BORROWING REQUEST
MID-STATE TRUST V (the "Borrower"), pursuant to Section 2.3 of the
Variable Funding Loan Agreement dated as of March __, 1995 (as amended,
modified, or supplemented from time to time, the "Loan Agreement"), hereby
requests that Enterprise Funding Corporation make a Loan to it pursuant to
the following instructions:
Borrowing Date: ____________
Loan amount: _____________
Tranche Period(s): ____________
Account to be credited: ____________ [bank name]
ABA No. ____________
Account No. ____________
Reference No. ____________
Please credit the above-mentioned account by 10:00 a.m. (New York City time)
on the Borrowing Date. Capitalized terms used herein have the meaning
assigned to them in the Loan Agreement.
AEB: $______________
AMV: $______________
Borrowing Base: $______________
The Borrower hereby certifies as of the date hereof that the Conditions
Precedent to each Loan set forth in Section 4.2 of the Loan Agreement have
been satisfied, and that all of the representations and warranties made in
Section 3.1 of the Loan Agreement are true and correct on and as of the
Borrowing Date for such Loan, both before and after giving effect to such
Loan.
MID-STATE TRUST V
________________________________
By:
Title:
Dated: ___________ __, 199_
EXHIBIT C
[Form of Borrower's Counsel Opinion]
[Letterhead of Counsel for the Borrower]
March __, 1995
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Markets Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center--South Tower
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇--▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBank, N.A. (Carolinas)
as Liquidity Provider and Collateral Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.1 of the
Variable Funding Loan Agreement dated as of March __, 1995 (the "Loan
Agreement") among Mid-State Trust V (the "Borrower") and Enterprise Funding
Corporation (the "Lender"). Terms defined in the Loan Agreement and not
otherwise defined herein are used in this opinion with the meanings so
defined.
We have acted as counsel to the Borrower in connection with the
preparation of the Loan Agreement and the transactions and other documents
contemplated thereby.
We have examined, on the date hereof, the Loan Agreement and all
Exhibits thereto, the Variable Funding Note, the other Operative Documents to
which the Borrower is a party, certificates of public officials, copies of
each of the above having been delivered to you. We have also examined the
closing documents delivered pursuant to the Loan Agreement and copies of all
such documents and records and have made such investigations of law, as we
have deemed necessary and relevant as a basis for our opinion. With respect
to the accuracy of material factual matters which were not independently
established, we have relied on certificates and statements of officers of the
Borrower.
On the basis of the foregoing, we are of the opinion that:
1. The Borrower is a Delaware business trust duly formed, validly
existing and in good standing under the laws of the State of Delaware, Del.
Code ▇▇▇. tit. 12 Section 3801, et seq. (1994), has the power and authority
to own its properties and to carry on
Enterprise Funding Corporation
NationsBank, N.A. (Carolinas)
March __, 1995
Page 2
its business as now being conducted, and had at all relevant times, and now
has, all necessary power, authority, and legal right to acquire and own the
Trust Assets, and is duly qualified and in good standing as a foreign
business trust and is authorized to do business in each jurisdiction in which
the affect upon the business properties of the Borrower or its ability to
perform its obligations under the Loan Agreement.
2. The Borrower has the power and has taken all necessary action to
execute, deliver, and perform the Loan Agreement, the Variable Funding Note,
and all other Operative Documents to which the trust is a party, each in
accordance with its respective terms, and to consummate the transactions
contemplated thereby. The Loan Agreement, the Variable Funding Note, and all
other Operative Documents to which the Borrower is a party have been duly
executed and delivered by the Borrower and when duly executed and delivered
will constitute the legal, valid, and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
3. The execution, delivery, and performance in accordance with their
terms by the Borrower of the Loan Agreement, the Variable Funding Note, and
all other Operative Documents to which the Borrower is a party and the
consummation of the transactions contemplated thereby, do not and will not
(a) require (i) any governmental approval or (ii) any consent or approval of
any other party which has not been obtained, (b) violate or conflict with,
result in a breach of, or constitute a default under (i) the Trust Agreement,
(ii) to the best of our knowledge after due inquiry, any other agreement to
which the Borrower is a party or by which the Borrower or any of its
properties may be bound, or (iii) any applicable law, or any order, rule, or
regulation applicable to the Borrower of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Borrower or any of its proper ties, or (c)
result or require in the creation or imposition of any Lien upon any of the
assets, property or revenue of the Borrower other than as contemplated by the
Operative Documents.
4. To the best of our knowledge, after due inquiry, there are not, in
any court or before any arbitrator of any kind or before or by any
governmental or non-governmental body, any actions, suits, proceedings, or
investigations, pending or
Enterprise Funding Corporation
NationsBank, N.A. (Carolinas)
March __, 1995
Page 3
threatened, (a) against the Borrower or the business or any property of the
Borrower except actions, suits, or proceedings that, if adversely determined,
would not, singly or in the aggre gate, have a materially adverse affect on
the Borrower, or on the ability of the Borrower to perform its respective
obligations under the Loan Agreement, the Variable Funding Note, and all
other Operative Documents to which the Borrower is a party or (b) relating to
the Loan Agreement, the Variable Funding Note, and all other Operative
Documents to which the Borrower is a party.
5. Upon the delivery of the Account Documents relating to the Accounts
to the Collateral Agent and the execution and delivery of the CCA Agreement,
the Lender will have a first priority perfected security interest in the
Collateral.
The foregoing opinions and conclusions were given only in respect
of the laws of New York and, to the extent specifically referred to herein,
the Federal laws of the United States of America.
This opinion has been delivered at your request for the purposes
contemplated by the Loan Agreement. Without our prior written consent, this
opinion is not to be utilized or quoted for any other purpose and no one
other than you is entitled to rely thereon.
Very truly yours,
AMENDMENT NO. 1 TO LOAN AGREEMENT
AMENDMENT NO. 1 TO LOAN AGREEMENT (this "Amendment"), dated as of August 2,
1995, by and among MID-STATE TRUST V, as Borrower (the "Borrower"), ENTERPRISE
FUNDING CORPORATION, as Lender (the "Lender"), FIRST UNION NATIONAL BANK OF
FLORIDA, as Custodian/Collateral Agent (the "Collateral Agent"), and
NATIONSBANK, N.A. (CAROLINAS), as Administrative Agent (the "Administrative
Agent").
Capitalized terms used and not defined in this Amendment shall have the
meanings ascribed to such terms in the Variable Funding Loan Agreement, dated as
of March 3, 1995 (the "Loan Agreement"), among the parties hereto.
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto are parties to the Loan Agreement;
WHEREAS, the parties hereto wish to amend certain terms of the Loan
Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and in the Loan Agreement and other good and valuable consideration, the receipt
and adequacy of which is hereby expressly acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
SECTION 1. Amendments. The Loan Agreement is hereby amended as follows:
(a) Section 2.5 is hereby amended by:
(i) deleting paragraph (a) of such Section and replacing it with
the following:
"(a) on each day (i) that a Tranche matures or (ii)
interest is due and owing on any Related Credit
Support Disbursements or Related Liquidity Draws,
an amount equal to the Discount due on such
maturing Tranche (together with an amount equal to
any Discount due on maturing Transaction
Commercial Paper to the extent the amount of
Transaction Commercial Paper issued in order to
fund such Loan exceeds the amount of such Loan)
and the interest due
on such Related Credit Support Disbursement or Related
Liquidity Draw.";
(ii) deleting clause (iii) of paragraph (c) of such Section in
its entirety and replacing it with the following:
"(iii) to the extent not paid by the Borrower
under Article VII hereof, an amount equal to the
amount owing to any Indemnified Party pursuant to
such Article VII"; and
(iv) inserting the following at the end of such Section:
"Notwithstanding anything to the contrary, the
amount due and payable from the Borrower to the
Lender pursuant to clause (i) of paragraph (c) of
this Section 2.5 shall be discharged on each
Remittance Date to the extent and in the amount of
any Surety Bond Premium paid by the Collateral
Agent to the Surety Provider on such date. As
used in this Agreement, the terms "Surety Bond
Premium" and "Surety Provider" shall have the
meanings ascribed to such terms in the Amended and
Restated CCA Agreement dated as of August 2, 1995
(the "Amended and Restated CCA Agreement") among
the Lender, the Borrower, the Collateral Agent,
NationsBank, N.A. (Carolinas) ("NationsBank") and
Capital Markets Assurance Corporation."
(b) Section 2.6 is hereby amended by:
(i) inserting the following at the end of paragraph (a) thereof:
"(net of all accrued and unpaid Discount on all
Tranches and interest on any Related Credit
Support Disbursements and Related Liquidity Draws
through such Remittance Date.)"
(ii) inserting the following at the end of paragraph (e) thereof;
and
-2-
"less any amount due to the Surety Provider
pursuant to Section 4.2(c) of the Amended and
Restated CCA Agreement."
(iii) inserting the phrase ", Related Liquidity Draw" immediately
following the word "Tranches" and immediately following the
word "Tranche" in the first sentence of paragraph (g)
thereof.
(c) Section 2.8 is hereby amended by:
(i) inserting the phrase "in the name of the Collateral Agent"
following the phrase "Eligible Investments" in paragraph (d)
of such Section; and
(ii) deleting paragraph (e) of such Section in its entirety and
replacing it with the following:
"If at any time the Collection Account, the Reserve
Account, the Principal Payment Account or the Holding
Account shall no longer be an Eligible Bank Account,
then the Borrower shall, within 10 Business Days (or
such longer period, not to exceed 30 calendar days, as
to which the Lender shall consent), cause such account
and the funds on deposit therein to be moved so that
such account shall be an Eligible Bank Account. The
Borrower shall immediately notify the Administrative
Agent and the Rating Agencies of the new location and
account number of such account. For purposes of this
Agreement, the term "Eligible Bank Account" shall
mean, if such bank account does not meet the
requirements of paragraphs (a) and (b) of such
definition, a bank account otherwise acceptable to the
Lender, the Surety Provider and the Rating Agencies."
(d) Section 2.9 is hereby amended by deleting the first sentence thereof
and replacing it with the following sentence:
"On the Business Day preceding a Determination Date
relating to a Borrowing Date, the Borrower shall
request from the Lender, and the Lender shall provide
to the Borrower, the Market Discount Rate applicable to
the related Borrowing Date."
-3-
(e) Section 7.1 is hereby amended by:
(i) adding the following at the end of clause (ii) of such
Section 7.1
"or (iii) any obligations of the Lender or of
NationsBank owing to the Surety Provider under the
Insurance and Reimbursement Agreement, dated as of
August 2, 1995, among the Lender, the Borrower,
NationsBank, the Surety Provider and the Collateral
Agent."; and
(ii) deleting the proviso to such Section in its entirety.
SECTION 2. Effectiveness; Binding Effect. This Amendment shall be
effective as of the date hereof. This Amendment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.
SECTION 3. Severability of Provisions. Any provision of this Amendment
which is 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 4. Captions. The captions in this Amendment are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 5. Loan Agreement to Remain in Full Force and Effect. Except as
amended hereby, the Loan Agreement shall remain in full force and effect and is
hereby ratified, adopted and confirmed in all respects. All references in the
Loan Agreement to "herein," or words of like import, and all references to the
Loan Agreement in any agreement or document shall hereafter be deemed to refer
to the Loan Agreement as amended hereby.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
-4-
SECTION 7. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
MID-STATE TRUST V
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ENTERPRISE FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK OF FLORIDA,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NATIONSBANK, N.A. (CAROLINAS),
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
-5-
AMENDMENT NO. 2 TO LOAN AGREEMENT
AMENDMENT NO. 2 TO LOAN AGREEMENT (this "Amendment"), dated as of March 29,
1996, by and among MID-STATE TRUST V, as Borrower (the "Borrower"), ENTERPRISE
FUNDING CORPORATION, as Lender (the "Lender"), FIRST UNION NATIONAL BANK OF
FLORIDA, as Custodian/Collateral Agent (the "Collateral Agent"), and
NATIONSBANK, N.A., as Administrative Agent (the "Administrative Agent").
Capitalized terms used and not defined in this Amendment shall have the
meanings ascribed to such terms in the Variable Funding Loan Agreement, dated
as of March 3, 1995, among the parties hereto, as amended from time to time (as
so amended, the "Loan Agreement").
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto are parties to the Loan Agreement;
WHEREAS, the parties hereto wish to amend certain terms of the Loan
Agreement as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and in the Loan Agreement and other good and valuable consideration, the receipt
and adequacy of which is hereby expressly acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
SECTION 1. Amendments. The Loan Agreement is hereby amended as follows:
(a) Section 2.6 is hereby amended by inserting the following at the end of
the parenthetical at the end of paragraph (a) thereof:
"and net of any amounts paid to the provider of any
Qualified Hedge Agreement as permitted by the CCA Agreement".
(b) Section 5.1 is hereby amended by adding the following clause at the
end of such Section:
"(m) The Borrower shall maintain in full force and effect a
Qualified Hedge Agreement with respect to all Accounts owned by the
Borrower the Account Notes of which bear interest at a rate of less
than 10% per annum."
(c) Section 6.1 is hereby amended by:
(i) Deleting the period at the end of paragraph (p) thereof and
replacing it with "; and"; and
(ii) Inserting the following after paragraph (p) thereof:
"(q) at any time at which the Borrower is required
to have a Qualified Hedge Agreement in place pursuant
to Section 5.1(m) hereof, the earliest to occur of (i)
a default by the Borrower in its obligations under any
Qualified Hedge Agreement obtained by it; (ii) a
default by the provider of any Qualified Hedge
Agreement in its payment obligations to the Borrower
under such Qualified Hedge Agreement which default is
not cured within ten (10) Business Days; (iii) a
default by the provider of any Qualified Hedge
Agreement in any other obligations under such Qualified
Hedge Agreement which default is not cured within
thirty (30) Business Days or (iv) any Qualified Hedge
Agreement obtained by the Borrower ceases to be a
Qualified Hedge Agreement (other than as a result of a
default described in the preceding clause (ii)) and is
not replaced with a new Qualified Hedge Agreement
within thirty (30) Business Days of the date of such
occurrence."
(d) Annex A is hereby amended by:
(i) Adding the following phrase at the end of each of the
definitions of "CCA Agreement", "Trust Agreement", "Loan
Agreement" and "Master Servicing Agreement":
"as such agreement may be amended from time to
time".
(ii) Adding the following definition after the definition of
"Account Note":
""Account Note Interest Rate" means, with respect
to a Qualified Hedge Agreement, the interest rate set
forth in the Account Notes for the Accounts to
- 2 -
which such Qualified Hedge Agreement relates."
(iii) Deleting clause (j) of the definition of "Eligible Account"
therein in its entirety and replacing it with the following:
"for which the Account Note evidences an
account bearing a fixed rate of interest and fully
amortizing level monthly payments due on the 5th
or the 15th day of each month; such Account Note
bears an interest rate of not less than 10% per
annum; and such Account Note has an original term
to maturity not in excess of (i) 25 years with
respect to Accounts on which the sales price to
the customer is less than $50,000 and (ii) 30
years with respect to Accounts on which the sales
price to the customer is equal to or greater than
$50,000."
"Notwithstanding the foregoing, an Account
which otherwise meets the criteria specified for
an "Eligible Account" except that the related
Account Note provides for an interest rate of less
than 10% per annum shall be considered an
"Eligible Account", provided that the Borrower has
obtained, prior to the date any such Account is to
be considered an Eligible Account, and maintains
at all times while the related Account Notes are
outstanding, a Qualified Hedge Agreement with
respect to such Accounts."
(iv) Adding the following definition after the definition of
"Independent":
""Insurance Agreement" means the Insurance and
Reimbursement Agreement, dated as of August 2, 1995,
among the Borrower, the Lender, the Collateral Agent,
the Surety Provider and NationsBank, N.A., as such
agreement may be amended from time to time."
(v) Adding the following at the end of the definition of
"Operative Documents":
- 3 -
"and any Qualified Hedge Agreement obtained
by the Borrower."
(vi) Adding the following definitions after the definition of
"Program Fee":
""Qualified Hedge Agreement" means one or more
interest rate swaps, caps or collars, or any
combination of such arrangements which, taken as a
whole:
(a) is pledged to the Collateral Agent as collateral
for the Senior Secured Obligations and provides
that all payments to be made thereunder will be
made to the Collection Account for the benefit of
the Collateral Agent;
(b) provides for a notional amount at least equal to
the Qualified Hedge Notional Amount for the
Accounts to which such arrangement relates but
which is not greater than the aggregate Economic
Balance of all Eligible Accounts of the Borrower;
(c) provides that all payments to be made thereunder
will be made on a Remittance Date;
(d) which, (i) in the case of an interest rate cap,
provides for a strike price at least 1.00% below
the Account Note Interest Rate for the related
Accounts and (ii) in the case of an interest rate
swap agreement, provides that the Borrower shall
pay a fixed rate of interest not greater than a
rate 1.00% below the Account Note Interest Rate
for the related Accounts and the counterparty
shall pay into the Collection Account for the
benefit of the Collateral Agent by direct wire
transfer interest calculated at a floating rate at
least equal to the daily unweighted average of the
USD-CP-H.15 (as defined in the 1991 ISDA
Definitions);
(e) the counterparty of which is a Qualified Hedge
Agreement Provider;
- 4 -
(f) is entered into pursuant to an ISDA Master
Agreement and Schedule substantially in the form
attached hereto as Exhibit I;
(g) the confirmation with respect to which does not
amend or alter the terms of the agreement and
schedule referred to in the preceding clause
(f)(other than deminimus non-material changes);
(h) will provide that the payments referred to in
clause (d) of this definition will continue from
the date of such Qualified Hedge Agreement through
the 8-year and three-month period following the
Scheduled Termination Date in effect as of the
effective date of such Qualified Hedge Agreement;
and
(i) is otherwise satisfactory in form and substance to
each of the Lender and the Surety Provider as
evidenced by their execution and delivery of a
certificate in the form attached hereto as Exhibit
II.
"Qualified Hedge Agreement Notional Amount" means,
with respect to any group of Accounts the Account Notes
of which provide for interest at a rate of less than
10% per annum, an amount at least equal to the
aggregate Economic Balance of such Accounts.
"Qualified Hedge Agreement Provider" means any
Person (a) in the case of NationsBank, N.A., the
long-term debt rating of which is at least "A" from
each of S&P and ▇▇▇▇▇'▇, and (b) in the case of any
other Person, the long-term debt obligations of which
are rated in one of the two highest long-term debt
rating categories of each of S&P and ▇▇▇▇▇'▇."
- 5 -
(vii) Adding the following definition after the definition of
"Successor Servicer":
""Surety Provider" means Capital Markets
Assurance Corporation, a New York stock insurance
company.";
(viii) Adding Exhibit I hereto as Exhibit I to Annex I; and
(ix) Adding Exhibit II hereto as Exhibit II to Annex I.
SECTION 2. Effectiveness; Binding Effect. This Amendment shall be
effective as of the date hereof. This Amendment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.
SECTION 3. Severability of Provisions. Any provision of this Amendment
which is 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 4. Captions. The captions in this Amendment are for convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 5. Loan Agreement to Remain in Full Force and Effect. Except as
amended hereby, the Loan Agreement shall remain in full force and effect and is
hereby ratified, adopted and confirmed in all respects. All references in the
Loan Agreement to "herein," or words of like import, and all references to the
Loan Agreement in any agreement or document shall hereafter be deemed to refer
to the Loan Agreement as amended hereby.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
- 6 -
SECTION 7. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
MID-STATE TRUST V
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
ENTERPRISE FUNDING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK OF FLORIDA,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NATIONSBANK, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
- 7 -
Capital Markets Assurance
Corporation hereby consents to
this Amendment No. 2 to Loan
Agreement by the execution
hereof.
CAPITAL MARKETS ASSURANCE
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
- 8 -
EXHIBIT II
EXHIBIT II TO ANNEX I
CERTIFICATE
Reference is made to the Loan Agreement, dated as of March 2, 1995,
among Mid-State Trust V, as Borrower, Enterprise Funding Corporation, as Lender
(the "Lender"), First Union National Bank of Florida, as collateral agent, and
NationsBank, N.A., as administrative agent, as such agreement may be amended
from time to time (the "Loan Agreement"). Capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in the Loan
Agreement.
This certificate is hereby delivered for the purposes of clause (i) of
the definition of Qualified Hedge Agreement contained in the Loan Agreement.
The undersigned hereby certify that as of the date hereof, [the
Interest Rate Agreement, the Schedule thereto and the Confirmations] executed
copies of which are attached hereto as Exhibit A constitute a "Qualified Hedge
Agreement" with respect to Accounts, the related Account Notes which provide for
interest at a rate of less than 10% per annum but are intended to qualify as
Eligible Accounts as specified in paragraph (j) of the definition of Eligible
Accounts. The attached Qualified Hedge Agreement shall continue to be
satisfactory to the undersigned only until the occurrence of any of the events
set forth in Section 6.1(q) of the Loan Agreement which are not cured within the
time frame specified therein and only for so long as the Qualified Hedge
Agreement meets
the criteria set forth in clauses (a) through (h) of the definition of
"Qualified Hedge Agreement" in Annex A to the Loan Agreement.
IN WITNESS WHEREOF, we have hereunto set our hands.
March ,1996 ENTERPRISE FUNDING CORPORATION
By____________________________
Name:
Title:
CAPITAL MARKETS ASSURANCE
CORPORATION
By____________________________
Name:
Title:
- B - ii -
AMENDMENT NO. 3 TO LOAN AGREEMENT AND AMENDMENTS TO BORROWER
ACCOUNT TRANSFER AGREEMENT AND FEE LETTER
AMENDMENT NO. 3 TO LOAN AGREEMENT and AMENDMENTS TO BORROWER ACCOUNT
TRANSFER AGREEMENT and FEE LETTER (this "Amendment"), dated as of July 31, 1997,
by and among MID-STATE TRUST V, as Borrower (the "Borrower"), ENTERPRISE FUNDING
CORPORATION, as Lender (the "Lender"), FIRST UNION NATIONAL BANK, formerly known
as First Union National Bank of North Carolina and successor by merger to First
Union National Bank of Florida, as Custodian/Collateral Agent (the "Collateral
Agent"), NATIONSBANK, N.A., as Administrative Agent (the "Administrative
Agent"), MID-STATE HOMES, INC. ("Mid-State") and ▇▇▇ ▇▇▇▇▇▇ HOMES, INC. ("JWH").
Capitalized terms used and not defined in this Amendment shall have the
meanings ascribed to such terms in the Variable Funding Loan Agreement, dated as
of March 3, 1995, among the parties hereto, as amended from time to time (as so
amended, the "Loan Agreement").
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto are parties to the Loan Agreement, certain of
the parties hereto executed the Fee Letter, and Mid-State and the Borrower are
parties to the BAT Agreement;
WHEREAS, Mid-State, JWH and such Eligible Originators as may become party
thereto, from time to time, are parties to the Amended and Restated DAT
Agreement, dated as of the date hereof;
WHEREAS, the parties hereto wish to amend certain terms of the Loan
Agreement, the BAT Agreement and the Fee Letter as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and in the Loan Agreement, the BAT Agreement and the Fee Letter and other good
and valuable consideration, the receipt and adequacy of which is hereby
expressly acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
SECTION 1. Amendments to Loan Agreement. The Loan Agreement is
hereby amended as follows:
(a) Section 2.6 is hereby amended by:
(i) deleting the following at the end of the parenthetical at
the end of paragraph (a) thereof:
"and net of any amounts paid to the provider of any
Qualified Hedge Agreement as permitted by the CCA Agreement"; and
-1-
(ii) replacing (A) "8.1" in the thirteenth line thereof with
"2.11" and (B) "36" in the fifteenth line of paragraph (d) thereof
with "24".
(b) Adding the following as a new Section 2.11 thereto:
"SECTION 2.11 Renewal of Revolving Credit Facility. In the
event that the Borrower desires to extend the Scheduled
Termination Date, it shall, at least 60 days but not more
than 120 days prior to the then current Scheduled
Termination Date, send a notice (an 'Extension Request') to
the Lender, requesting whether or not the Lender elects, in
its sole discretion, to extend the Scheduled Termination
Date for an additional 364 days following the then effective
Scheduled Termination Date. The Lender shall, within 30
days after receipt of the Extension Request, notify the
Borrower, the Collateral Agent, the Administrative Agent and
the Surety Provider of its decision regarding such
extension. If the Lender agrees to so extend, then the
Scheduled Termination Date shall be extended to the date
which is 364 days after the then effective Scheduled
Termination Date; if the Lender does not agree to so extend,
then the Scheduled Termination Date shall remain as the then
effective Scheduled Termination Date."
(c) Section 3.1(q) is hereby amended by adding the
phrase "or Eligible Originator" after the word "Originator" in
the sixth line thereof.
(d) Section 4.1(i) is hereby amended by adding the phrase
", any Eligible Originator" after the word "Originator" in the
fifth line thereof.
(e) Section 4.1(k) is hereby amended by adding the phrase
", the State of its incorporation with respect to any Eligible
Originator" after the phrase "Depositor," in the third line
thereof.
(f) Section 4.1(m) is hereby amended by adding the phrase
", any Eligible Originator's" after the word "Originator's" in
the sixth line thereof.
(g) Section 4.2(h) is hereby amended by adding the
following phrase after "Originator" in the third line thereof:
"(or originated by an Eligible Originator and sold to the
Depositor)".
(h) Section 5.1(b) is hereby amended by adding the phrase
", any Eligible Originator" after the word "Originator" in the
third line thereof.
(i) Section 5.1(d) is hereby amended by adding the phrase
", any Eligible Originator" after the word "Depositor" in the
tenth line thereof.
(j) Section 5.1 is hereby amended by deleting clause (m) at
the end of such Section.
-2-
(k) Section 5.2 is hereby amended by adding the following
clause (m) at the end thereof:
"(m) Approval of Administrative Agent and Surety
Provider. The Borrower shall not make any request for a
Loan hereinunder unless all criteria set forth in the
definition of "Eligible Originator" have been satisfied."
(l) Section 6.1 is hereby amended by:
(i) adding the phrase ", any Eligible Originator,"
before "the Originator" in clauses (c), (e) and (f)
thereof and after "Depositor" in clauses (a), (h) and
(i) thereof;
(ii) placing a period at the end of paragraph (p)
thereof; and
(iii) deleting paragraph (q) thereof.
(m) Amending Annex A thereto by:
(i) making the following changes to the definition of
"Account Documents":
(A) adding the following phrase after
"Originator" in clause (iv) thereof: "or an Eligible
Originator";
(B) adding the following phrase before
"Originator" in clause (vi)(1) thereof: "Eligible
Originator or to the"; and
(C) adding the phrase "an Eligible Originator,"
after "Depositor" in clause (viii) thereof;
(ii) deleting the definition of "Account Note Interest
Rate";
(iii) replacing "80%" and "70%" in the definition
of "AEB" with "85%" and "75%", respectively;
(iv) adding the following phrase after "Originator" in
the fourth line of the definition of "Agreement for Deed":
"(or an Eligible Originator)";
(v) adding the phrase "and any Eligible Originator"
after the word "Originator" in the third line of the
definition of "Assignments";
(vi) adding the following phrase before the period in
the definition of "BAT Agreement" ", as amended from time
to time";
(vii) adding the phrase "and any Eligible
Originator" after the word "Originator" in the second line
of the definition of "Buy-Back Obligation";
-3-
(viii) adding the following phrase before the period
in the definition of "DAT Agreement" ", as amended from time
to time";
(ix) deleting the second paragraph of clause (j) of the
definition of "Eligible Account" and changing "10%" in the
seventh line of the first paragraph thereof to "8.5%";
(x) adding the phrase "or any Eligible Originator"
after the word "Originator" in the third line of clause (o)
of the definition of "Eligible Account"
(xi) deleting "and" after the semicolon in clause (x)
of the definition of "Eligible Account," replacing the
period at the end of clause (y) of such definition with ";"
and adding the following new clause (z) to such definition:
"(z) which has been generated by the Originator, or by an
Eligible Originator; and";
(xii) adding the following new clause (aa) to the
definition of "Eligible Account": "(aa) with respect to any
Account originated by an Eligible Originator, the amount
thereof, together with the amount of all other outstanding
Accounts of such Eligible Originator purchased under the DAT
Agreement, would not represent greater than 3% of the
Borrowing Base, and (ii) with respect to any Account
originated by an Eligible Originator, the amount thereof,
together with the amount of all outstanding Accounts
purchased from all Eligible Originators under the DAT
Agreement, would not represent greater than 10% of the
Borrowing Base.";
(xiii) by adding the following new definition
thereto after the definition of "Eligible Investments":
'Eligible Originator' means a corporation (i) engaged
in the residential building business, all of the
outstanding capital stock of which is owned by either
the Originator or ▇▇▇▇▇▇ Industries, Inc., (ii) which
has been approved in writing by the Administrative
Agent and the Surety Provider in their sole discretion,
(iii) which has delivered opinions of its counsel, in
form satisfactory to the Administrative Agent and
Surety Provider, with respect to (A) the enforceability
of the Amended and Restated DAT Agreement against such
Eligible Originator; and (B) the creation and
perfection of a security interest by such Eligible
Originator in the Accounts and Account Documents
created under the DAT Agreement in favor of the
Depositor; which such opinion shall be delivered when
such Eligible Originator becomes a party thereto,
except that in the case of ▇▇▇▇▇▇▇▇▇▇ Homes, Inc., such
opinion shall be delivered no later than 15 days after
the effectiveness of the Amended and Restated DAT
Agreement (the "Opinion Date"); and (iv) as to which
UCC-1 financing statements have been filed against such
Eligible Originator
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covering the property conveyed to Mid-State under the
Amended and Restated DAT Agreement.";
(xiv) adding the following phrase after the definition
of "Fee Letter": "as such agreement may be amended from
time to time.";
(xv) changing "$500,000,000" in the definition of
"Maximum Net Investment" to "$400,000,000";
(xvi) deleting the phrase "and any Qualified Hedge
Agreement obtained by the Borrower" at the end of the
definition of "Operative Documents";
(xvii) deleting the following definitions: "Qualified
Hedge Agreement", "Qualified Hedge Agreement Notional
Amount" and "Qualified Hedge Agreement Provider";
(xviii) adding the phrase "or Eligible Originator"
after the word "Originator" in the third line of the
definition of "Repurchase Price";
(xix) adding "or Eligible Originator" after
"Originator" in the definition of "Resale Account"; and
(xx) deleting the definition of "Scheduled Termination
Date" and replacing it in its entirety by the following:
"'Scheduled Termination Date' means June __, 1998, or
such later date as is agreed to by the Lender in its
sole discretion, pursuant to Section 2.11 of the Loan
Agreement."
SECTION 2. Amendment to BAT Agreement. (a) Section 1 of the BAT
Agreement shall be amended by adding the phrase "or Eligible Originator" after
the word "Originator" in the eighth line thereof.
(b) Section 3(a)(ii) of the BAT Agreement is hereby amended
by adding the phrase "or Eligible Originator" after the word
"Originator" in the first line thereof.
(c) Section 3(c)(xi) is hereby amended by adding the
phrase "or Eligible Originator" after the word "Originator" in
the sixth line thereof.
(d) Section 3(c)(xv) is hereby amended by adding the phrase
"or Eligible Originator" after the word "Originator" in the third
line thereof.
(e) Section 3(c)(xviii) is hereby amended by adding the
phrase "or Eligible Originator" after the word "Originator" in
the first line thereof.
(f) Section 3(c)(xix) is hereby amended by adding the
phrase "or Eligible Originator" after the word "Originator" in
the third line thereof.
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SECTION 3. Amendment to Fee Letter. Schedule A to the Fee Letter
shall be amended by replacing (a) ".20%" in Facility Fee with ".15%" and (b)
".50%" in "Program Fee" with ".30%".
SECTION 4. Conditions to Effectiveness. This Amendment
shall be effective on and as of the date on which all parties hereto have
executed this Amendment and delivered their signature pages hereto to the
Lender and the Lender shall have received the following, each of which shall
be in form and substance satisfactory to the Lender:
(a) An amendment to the Insurance Agreement and the
surrender by the Collateral Agent of the Surety Bond issued by
the Surety Provider to the Collateral Agent on March 29, 1996,
and cancellation thereof, and issuance of a new Surety Bond in
the forms attached hereto as Exhibits A and B, respectively,
duly executed by the parties thereto;
(b) An opinion of counsel to the Surety Provider regarding
the enforceability of the amendments described in (a) above
against the Surety Provider;
(c) The Trust shall have executed and delivered to the
Lender a new Variable Funding Note in the form of Exhibit C
attached hereto;
(d) The ISDA Master Agreement, dated as of March 29, 1996,
between the Trust and NationsBank, N.A., and the schedule
attached thereto, shall have been terminated and all payments due
and owing thereunder by the parties thereto shall have been paid
in full;
(e) The Amended and Restated DAT Agreement shall have been
duly executed by the parties thereto.
SECTION 5. Conditions Subsequent to Effectiveness. Mid-State
hereby agrees to deliver an opinion of its counsel, in form satisfactory to the
Administrative Agent and the Surety Provider, with respect to the creation and
perfection of the security interest created under the BAT Agreement by Mid-State
in the Accounts and Account Documents in favor of the Borrower, which such
opinion shall be delivered by the Opinion Date.
SECTION 6. Severability of Provisions. Any provision of this
Amendment which is 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 7. Captions. The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 8. Agreements to Remain in Full Force and Effect.
Except as amended hereby, the Loan Agreement, the Depositor Account Transfer
Agreement and the Fee Letter shall remain in full force and effect and are
hereby ratified, adopted and confirmed in all respects. All references in the
Loan Agreement and the Fee Letter to "herein," or words of like import, and all
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references to the Loan Agreement and the Fee Letter in any agreement or document
shall hereafter be deemed to refer to the Loan Agreement and Fee Letter,
respectively, as amended hereby.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same amendment. The parties
hereto do not intend that the Collateral Agent shall become, and the Collateral
gent shall not become, a party to the BAT Agreement or the Fee Letter as a
result of its execution and delivery of one (1) or more counterparts of this
Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed as of the date and year first above written.
MID-STATE TRUST V
By: Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ENTERPRISE FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK,
as Collateral Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NATIONSBANK, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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MID-STATE HOMES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ HOMES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
Capital Markets Assurance
Corporation hereby consents to
the foregoing amendment by the
execution hereof:
CAPITAL MARKETS ASSURANCE
CORPORATION
By: /s/ Rajat Basu
-----------------------------
Name: Rajat Basu
Title: Managing Director
Date:
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