Exhibit 4.2
CREDIT AGREEMENT
AMONG
E-LOAN AUTO FUND ONE, LLC
AND
E-LOAN, INC.
AND
XXXXXXX XXXXX BANK USA
DATED AS OF JUNE 1, 2002
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION.......................................................1
1.1 DEFINED TERMS........................................................1
1.2 HEADINGS.............................................................1
1.3 NUMBER...............................................................1
1.4 CURRENCY.............................................................2
1.5 ACCOUNTING PRINCIPLES................................................2
1.6 PER ANNUM CALCULATIONS...............................................2
1.7 SCHEDULES............................................................2
ARTICLE 2 CREDIT FACILITY......................................................3
2.1 CREDIT FACILITY......................................................3
2.2 USE OF PROCEEDS OF ADVANCES..........................................3
2.3 REQUESTS FOR ADVANCES................................................3
2.4 MANDATORY REPAYMENT OF ADVANCES......................................4
2.5 OPTIONAL REPAYMENT OF ADVANCES.......................................4
2.6 EXCESS SPREAD DEFICIENCY; SWAP SPREAD DEFICIENCY.....................5
2.7 NOTE.................................................................6
2.8 AUCTION OPTION UPON OCCURRENCE OF AN AUCTION OPTION TRIGGER EVENT....6
ARTICLE 3 INTEREST; COMMITMENT FEE; AND HEDGE STRATEGY.........................7
3.1 INTEREST ON ADVANCES.................................................7
3.2 INTEREST ON OVERDUE PRINCIPAL, INTEREST AND OTHER AMOUNTS............7
3.3 COMMITMENT FEE.......................................................7
3.4 TIMING OF PAYMENTS OF PRINCIPAL AND INTEREST.........................8
3.5 PAYMENTS TO LENDER...................................................8
3.6 CURRENCY OF PAYMENT..................................................8
3.7 HEDGING STRATEGY.....................................................8
ARTICLE 4 SECURITY.............................................................9
4.1 SECURITY.............................................................9
ARTICLE 5 DISBURSEMENT CONDITIONS.............................................10
5.1 CONDITIONS PRECEDENT TO FIRST ADVANCE...............................10
5.2 CONDITIONS PRECEDENT TO ALL OTHER ADVANCES..........................12
5.3 WAIVER..............................................................13
ARTICLE 6 REPRESENTATIONS AND WARRANTIES......................................14
6.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER......................14
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..........................17
ARTICLE 7 COVENANTS...........................................................18
7.1 AFFIRMATIVE COVENANTS OF THE BORROWER...............................18
7.2 NEGATIVE COVENANTS OF THE BORROWER..................................21
7.3 COVENANTS OF THE SELLER.............................................23
ARTICLE 8 DISTRIBUTIONS FROM COLLECTION ACCOUNT...............................24
8.1 DISTRIBUTIONS FROM COLLECTION ACCOUNT...............................24
8.3 LENDER'S RECOURSE...................................................26
ARTICLE 9 DEFAULT.............................................................26
i
9.1 EVENTS OF DEFAULT..................................................26
9.2 ACCELERATION AND TERMINATION OF RIGHTS.............................28
9.3 REMEDIES...........................................................29
9.4 SAVING.............................................................29
9.5 PERFORM OBLIGATIONS................................................29
9.6 THIRD PARTIES......................................................29
9.7 REMEDIES CUMULATIVE................................................29
9.8 SET-OFF OR COMPENSATION............................................30
ARTICLE 10 CHANGE OF CIRCUMSTANCES...........................................30
10.1 CHANGE IN LAW......................................................30
10.2 RESERVED...........................................................31
10.3 ILLEGALITY.........................................................31
10.4 CAPITAL REQUIREMENTS...............................................31
10.5 DISCRETION OF LENDER AS TO MANNER OF FUNDING.......................32
ARTICLE 11 SUCCESSORS AND ASSIGNS............................................32
11.1 SUCCESSORS AND ASSIGNS.............................................32
11.2 PARTICIPATION......................................................33
ARTICLE 12 MISCELLANEOUS PROVISIONS..........................................33
12.1 CAPITALIZED TERMS..................................................33
12.2 SEVERABILITY.......................................................33
12.3 AMENDMENT, SUPPLEMENT OR WAIVER....................................33
12.4 GOVERNING LAW......................................................33
12.5 THIS AGREEMENT TO GOVERN...........................................34
12.6 PERMITTED ENCUMBRANCES.............................................34
12.7 EXPENSES AND INDEMNITY.............................................34
12.8 MANNER OF PAYMENT AND TAXES........................................37
12.9 THIRD PARTY BENEFICIARY............................................37
12.10 NOTICES............................................................37
12.11 BORROWER'S ACCOUNT AND CONCENTRATION ACCOUNT.......................39
12.12 LENDER ACCOUNT.....................................................39
12.13 TIME OF THE ESSENCE................................................39
12.14 FURTHER ASSURANCES.................................................39
12.15 TERM OF AGREEMENT..................................................39
12.16 PAYMENTS ON BUSINESS DAY...........................................39
12.17 COUNTERPARTS AND FACSIMILE.........................................40
12.18 ENTIRE AGREEMENT...................................................40
12.19 SUBMISSION TO JURISDICTION.........................................40
12.20 NO WAIVER; REMEDIES CUMULATIVE.....................................41
12.21 WAIVERS BY BORROWER................................................41
12.22 WAIVER OF JURY.....................................................41
12.23 EXCEPTIONS TO COVENANTS............................................41
12.24 SURVIVAL...........................................................41
12.25 MAXIMUM INTEREST RATE..............................................42
12.26 SEVERABILITY.......................................................42
SCHEDULE A DEFINED TERMS...................................................1
SCHEDULE B DRAWDOWN NOTICE.................................................1*
SCHEDULE C SELLER CERTIFICATE..............................................1*
ii
SCHEDULE D ACKNOWLEDGMENT OF CUSTODIAN.....................................1*
SCHEDULE E RESERVED........................................................1*
SCHEDULE F MONTHLY SERVICER REPORT.........................................1*
SCHEDULE G BORROWER'S INSURANCE COVERAGE...................................1*
SCHEDULE H BORROWER'S OWNERSHIP............................................1*
SCHEDULE I FORM OF GENERAL UNDERWRITING CRITERIA...........................1*
SCHEDULE J ELIGIBILITY CRITERIA............................................1*
SCHEDULE K FORM OF RELEASE AGREEMENT.......................................1*
SCHEDULE L FORM OF REVOLVING CREDIT NOTE...................................1
SCHEDULE M PERMITTED ENCUMBRANCES..........................................1*
SCHEDULE N FORM OF DEALER AGREEMENT........................................1*
SCHEDULE O FORM OF E-FUND AGREEMENT........................................1*
SCHEDULE P FORM OF NOTE AND SECURITY AGREEMENT.............................1*
*Schedules have been omitted as non-material and will be provided in accordance
with Item 601 of Regulation S-K.
iii
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of the 1st day of June, 2002 (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms, this "Agreement"), by and between E-LOAN AUTO FUND ONE, LLC, a
limited liability company organized pursuant to the laws of the State of
Delaware (together with its successors and assigns, the "Borrower"), E-LOAN,
INC., a corporation organized pursuant to the laws of the State of Delaware
(whether in its individual capacity or in its capacity as originator/seller
"Seller" and in its capacity as administrator "Administrator") and XXXXXXX XXXXX
BANK USA, an industrial loan company organized pursuant to the laws of the State
of Utah (together with its successors and assigns, the "Lender").
RECITALS:
A. The Borrower wishes to obtain from the Lender a credit facility in a maximum
principal amount equal to the Credit Facility Limit (as defined herein) for the
purpose of financing the acquisition of the Contracts, the Receivables and any
other Related Tranche Collateral (each, as defined herein) from the Seller
pursuant to the Contribution and Sale Agreement and for general business
purposes; and
B. The Lender has agreed to establish a credit facility in favor of the
Borrower, but only upon the terms and subject to the conditions contained in
this Agreement and in reliance on the representations and warranties of the
Borrower and the Seller set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereto hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS
In this Agreement, unless something in the subject matter or the
context is inconsistent therewith, capitalized terms used and not otherwise
defined herein shall have the respective meanings attributed to such terms in
Schedule A hereto.
1.2 HEADINGS
The division of this Agreement into Articles and Sections and the
insertion of headings and a table of contents are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.
The terms "this Agreement", "hereof", "hereunder" and similar expressions refer
to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreement supplemental hereto. Unless something in the
subject matter or context is inconsistent therewith, references herein to
"Articles", "Sections" or "Exhibits" are to Articles, Sections or Exhibits of
this Agreement.
1.3 NUMBER
Words importing the singular number only shall include the plural and
VICE VERSA, words importing any gender shall include all genders, words
importing persons shall include individuals, partnerships, associations, trusts,
unincorporated organizations and corporations and VICE VERSA, and
references to statutes or to agreements or other contractual instruments shall,
unless otherwise provided, be deemed to include all present or future
amendments, supplements, restatements or replacements thereof.
1.4 CURRENCY
Except as otherwise specifically provided herein, all monetary amounts
in this Agreement are stated in U.S. Dollars.
1.5 ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to GAAP, such reference
shall be deemed to be to GAAP, applicable (except as otherwise specifically
provided) on a consolidated basis as of the date on which any calculation is
made or required to be made in accordance with GAAP. Where the character or
amount of any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any other Credit Document, such
determination or calculation shall, to the extent applicable and except as
otherwise specified herein, be made in accordance with GAAP applied on a
consistent basis.
1.6 PER ANNUM CALCULATIONS
Unless otherwise stated, wherever in this Agreement reference is made
to a rate of interest "per annum" or a similar expression is used, such interest
shall be calculated using the nominal rate method, and not the effective rate
method, of calculation and on the basis of a calendar year of 360 days. The
principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement.
1.7 SCHEDULES
The following are the Schedules annexed hereto and incorporated by
reference and deemed to be part hereof:
Schedule A........ - Defined Terms
Schedule B........ - Drawdown Notice
Schedule C........ - Seller Certificate
Schedule D........ - Acknowledgment of Custodian
Schedule E........ - Reserved
Schedule F........ - Monthly Servicer Report
Schedule G........ - Borrower's Insurance Coverage
Schedule H........ - Borrower's Capitalization
Schedule I........ - Form of General Underwriting Criteria
Schedule J........ - Eligibility Criteria
Schedule K........ - Form of Release Agreement
Schedule L........ - Form of Revolving Credit Note
Schedule M........ - Permitted Encumbrances
Schedule N........ - Form of Dealer Agreement
Schedule O........ - Form of E-Fund Agreement
Schedule P........ - Form of Note and Security Agreement
2
ARTICLE 2
CREDIT FACILITY
2.1 CREDIT FACILITY
2.1.1 Upon and subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of the Borrower and the
Seller set forth herein, the Lender hereby agrees to provide a revolving credit
facility (the "Credit Facility") of immediately available funds to the Borrower,
on a revolving basis, from the Closing Date until the Commitment Termination
Date, provided that if such day is not a Business Day, the immediately
succeeding Business Day, in a maximum principal amount not to exceed the Credit
Facility Limit. The Lender in its sole discretion may extend the Commitment
Expiration Date for an additional 364 days or less (after a written request from
Borrower, not earlier than one hundred thirty-five (135) days prior to the
Commitment Expiration Date). After receipt of any such request to extend the
Commitment Expiration Date, the Lender shall notify the Borrower within
forty-five (45) days of any such request of (x) its intent to extend the
Commitment Expiration Date and (y) the terms of any such extension; provided
that any requested amendments to the Credit Documents in connection with any
such extension shall be on commercially reasonable terms.
2.1.2 Prior to the Commitment Termination Date, the principal amount of
any Advance that is repaid may be reborrowed from time to time, subject to the
terms of this Agreement.
2.1.3 The right of the Borrower to obtain any Advance hereunder shall
be automatically terminated on the Commitment Termination Date.
2.2 USE OF PROCEEDS OF ADVANCES
The Borrower shall use the proceeds of all Advances to acquire the
Contracts, the Receivables and any other Related Tranche Collateral acquired by
the Borrower from the Seller on the related Drawdown Date, and for general
business purposes. The Borrower hereby directs the Lender to pay all Advances
hereunder directly to the Concentration Account (or as the Borrower may
otherwise direct the Lender in writing from time to time), in each case for the
purpose of funding Contracts acquired by the Borrower from the Seller on such
date.
2.3 REQUESTS FOR ADVANCES
2.3.1 Subject to the prior satisfaction of all conditions precedent
stipulated in Article 5 of this Agreement, the Lender will make the requested
amount of an Advance available to the Borrower on a Drawdown Date selected by
the Borrower, to the extent it does not (i) exceed the related Initial Advance
Amount for such Tranche and (ii) result in the sum of all outstanding Advances
on such day exceeding the Credit Facility Limit on such day, by depositing such
amount into the Seller's Account (or as the Borrower may otherwise direct to the
Lender in writing from time to time). Each Advance shall be in a minimum amount
of One Million Dollars ($1,000,000). There shall be no more than one (1) Advance
made on any Business Day.
2.3.2 The Borrower shall (i) give the Lender irrevocable notice (by
facsimile or an electronic format acceptable to the Lender) of any request for
an Advance (each such notice, a "Drawdown Notice"), in the form attached hereto
as Schedule B (or as otherwise agreed to by the Lender in respect of the first
Advance), which Drawdown Notice, if delivered by an electronic format acceptable
to the Lender, shall be deemed to have been duly executed and delivered by the
Borrower when sent to the Lender in an electronic format acceptable to the
Lender, on or prior to 1:00 p.m. (New York time) on the first Business Day prior
to the Drawdown Date relating to such Advance (but not more than three (3)
3
Business Days prior to such Drawdown Date), (ii) deliver, or cause the Seller to
deliver, to the Lender an executed Seller Certificate, in the form attached
hereto as Schedule C, on or prior to 1:00 p.m. (New York time) on the first
Business Day prior to the Drawdown Date relating to such Advance (but not more
than three (3) Business Days prior to such Drawdown Date), and (iii) deliver the
Receivables Files to the Custodian and cause the Custodian to deliver, by
facsimile or an electronic format to the Lender, an Acknowledgment of Custodian
substantially in the form attached as Schedule D hereto (an "Acknowledgement of
Custodian") and evidencing receipt by the Custodian of all Acknowledged
Receivable Files (as defined in the Servicing and Custodian Agreement)
(including an originally executed copy of the Contract included in each such
file) for each Contract to be added as Collateral on the related Drawdown Date,
which Acknowledgement of Custodian, if delivered by an electronic format
acceptable to the Lender, shall be deemed to have been duly executed and
delivered by the Custodian when sent to the Lender in an electronic format
acceptable to the Lender, on or prior to 11:59 p.m. (Missouri time) on the first
Business Day prior to the Drawdown Date relating to such Advance, but in each
case, not more than three (3) Business Days prior to such Drawdown Date.
2.3.3 Each Drawdown Notice shall include a schedule (a "Schedule of
Contracts"), in the form attached as Appendix A to Schedule B, identifying the
Contracts which comprise the Related Tranche Collateral for such Advance
(provided that all Contracts and other Collateral shall constitute security for
payment and performance of all Obligations), which Schedule of Contracts shall
be current as of close of business on the date of the Drawdown Notice (the
"Cutoff Date"). The Borrower shall ensure that each Contract identified on a
Schedule of Contracts is an Eligible Contract as of the date of the related
Advance and is identified by its Tranche. The Borrower shall not identify any
Contract or any Receivable in a Schedule of Contracts, if immediately prior to
the date of the applicable Drawdown Notice, such Contract or such Receivable
already formed part of the Collateral.
2.4 MANDATORY REPAYMENT OF ADVANCES
2.4.1 On the Termination Date, the Borrower shall repay to the Lender the
Aggregate Loan Balance, together with (i) all accrued and unpaid interest with
respect to the related Advances and (ii) all other Obligations under or in
connection with this Agreement.
2.4.2 The Borrower shall repay to the Lender on each Payment Date the
Monthly Principal Payment with respect to each Tranche. On each Payment Date on
and after the Commitment Termination Date, all amounts on deposit in the
Collection Account, after payment of amounts then due and payable pursuant to
clauses (a) through (c) of Section 8.1, shall be applied against the entire
outstanding Aggregate Loan Amount (whether or not such principal is then due).
2.4.3 Any amounts due and owing to the Borrower from the Seller for the
repurchase of any Receivable pursuant to Section 3.2 of the Contribution and
Sale Agreement shall be deposited directly into the Lender's Account (or as the
Lender may otherwise direct in writing to the Borrower) and shall be applied to
reduce the related Outstanding Tranche Loan Balance together with all accrued
and unpaid interest payable in respect of the related repurchased Receivable(s).
2.5 OPTIONAL REPAYMENT OF ADVANCES
2.5.1 The Borrower shall not have the right to repay all or any portion
(except for (i) the final mandatory repayment on the Termination Date, (ii) any
repayment necessary to cure an Excess Spread Deficiency or Swap Spread
Deficiency in accordance with Section 2.6.2, (iii) any repayments in accordance
with Section 8.1, in an amount not less than $10,000,000 or (iv) as otherwise
expressly provided by this Agreement) of any outstanding Tranche except as
permitted by the Lender. The terms and conditions of any such prepayment shall
be determined by the Lender in its sole discretion.
4
2.5.2 So long as no Event of Default or Pending Event of Default has
occurred and is then continuing on the date of any repayment effected pursuant
to this Section 2.5:
(a) the Borrower shall provide a schedule (a "Schedule of Removed
Contracts") identifying the Contracts and the related Receivables that
are to be released from the security interest previously granted to
the Lender for the benefit of itself, any other Lender and each Hedge
Counterparty under the Auto Fund Security Agreement, on the date of
such repayment; and
(b) the Lender shall, promptly upon its receipt of the full amount of a
repayment made by the Borrower as provided in Section 2.5.3 and
written direction from the Lender, execute and deliver to the Borrower
a release agreement (in the form attached hereto as Schedule K) and a
UCC-3 partial release (to the extent necessary or desirable) with the
related Schedule of Removed Contracts attached to such UCC-3 in order
to release from the security interest granted to the Lender, the
Contracts, the related Receivables and the other related Collateral
identified therein; provided that such release will not result in
either (x) the Aggregate Loan Balance on such day of repayment being
greater than the Credit Facility Limit on such day or (y) the related
Outstanding Tranche Loan Balance on such day of repayment being
greater than the Target Tranche Loan Balance on such day.
2.5.3 On the date of any repayment effected pursuant to this Section 2.5,
the Borrower shall deposit to the Lender Account such repayment amount together
with any Breakage Fee then payable and with all interest accrued and unpaid with
respect to the Advance (or the part thereof) that is then repaid by the Borrower
to the extent that any such repayment amount or interest thereon is not
deposited to the Lender Account pursuant to Section 8.1.
2.5.4 The Borrower shall on demand by the Lender indemnify the Lender for
any loss or expense (including any Breakage Fee) which the Lender incurs as a
result of any repayment made by the Borrower pursuant to Section 2.5 on any
Business Day which is not a Payment Date.
2.5.5 Any repayments made by the Borrower pursuant to this Section 2.5
shall be applied: first, to the repurchase of any Receivables that are Defaulted
Receivables and then, to the repurchase of any remaining Receivables identified
on the Borrower's related Schedule of Removed Contracts; provided however, that
any Defaulted Receivable repurchased hereunder may be rehypothicated to the
Lender by the Borrower pursuant to a future Advance after the related defaults
or delinquencies under such Receivable are cured by the related Obligor in
accordance with the terms of such Receivable.
2.6 EXCESS SPREAD DEFICIENCY; SWAP SPREAD DEFICIENCY
2.6.1 On the last Business Day of each Monthly Period, the Borrower
covenants that the Excess Spread shall be an amount equal to or greater than
1.5%; and the Swap Spread shall be an amount equal to or greater than the
applicable Required Swap Spread.
2.6.2 An excess spread deficiency (an "Excess Spread Deficiency") or a swap
spread deficiency ("Swap Spread Deficiency") shall occur if, as of the last
Business Day of any Monthly Period, the Excess Spread shall be less than 1.5% or
the Swap Spread shall be less than the Required Swap Spread, respectively. If an
Excess Spread Deficiency or a Swap Spread Deficiency shall exist, the Lender
shall have the right to lower the Initial Advance Rate, by an amount equal to
two and one-half (2.5) times such deficiency, with respect to all Advances to
compensate for any such deficiency.
5
2.6.3 The Borrower shall on demand by the Lender indemnify the Lender for
any loss or expense (including any Breakage Fee) which the Lender incurs as a
result of any repayment made by the Borrower pursuant to Section 2.6.2 on any
Business Day other than a Payment Date.
2.7 NOTE
2.7.1 The Borrower's obligation to pay the principal of and interest on all
amounts advanced by the Lender pursuant to all Advances shall be evidenced by a
note of the Borrower (the "Note"), which shall (1) be dated the Closing Date,
(2) be in the stated principal amount of up to $600,000,000, (3) bear interest
as provided herein, (4) be payable to the order of the Lender and mature on the
Termination Date, (5) be entitled to the benefit of the Auto Fund Security
Agreement and (6) be substantially in the form of Schedule L to this Agreement.
2.7.2 The Lender shall make notations in its books and records regarding
the date and amount of each Advance made by the Lender and the amount of each
repayment or prepayment of principal and payment of interest made by the
Borrower with respect to such Advance. Lender is irrevocably authorized by the
Borrower to endorse its Note and the Lender's record shall be conclusive absent
manifest error; provided, however, that the failure of Lender to make, or an
error in making, such a notation with respect to any Advance shall not limit or
otherwise affect the Obligations of the Borrower hereunder or under the Note.
2.8 AUCTION OPTION UPON OCCURRENCE OF AN AUCTION OPTION TRIGGER EVENT
2.8.1 At any time on or after the Commitment Expiration Date, the Lender
shall have the option to purchase or sell all of the Receivables at a purchase
price (the "Call Purchase Price") equal to the fair value of such Receivables
(the "Call Option"). The fair value of the Receivables shall be reasonably
determined by the Lender, provided that the manner set forth in paragraph (b)
shall be deemed to be reasonable.
2.8.2 At any time on or after the Commitment Expiration Date, if the Lender
shall so direct the Borrower, the Borrower shall sell the Receivables at a
commercially reasonable auction acceptable to the Lender (as determined in the
Lender's sole discretion), and the Call Purchase Price shall be equal to the
proceeds from the sale of the Receivables at such auction. No sale of the
Receivables shall be permitted or final without the consent of the Lender. There
shall be no restrictions on the ability of the Lender or any of its Affiliates
to bid at such auction. If the purchaser is the Lender, the purchase price (or
any portion thereof) may be paid by the offset of the right to receive an
equivalent amount of fees, interest, principal and other amounts payable to the
Lender under the Credit Documents, and, in the case of principal, whether or not
such principal is then due. The fees and expenses of the auction shall be paid
by the Borrower after the repayment of the Aggregate Loan Balance, interest,
fees and all other amounts owed (whether due or accrued) under the Credit
Documents to the Hedge Counterparties, the Lenders and the Secured Party at such
time. The purchaser in such auction sale will purchase the Receivables free and
clear of all Encumbrances of the Secured Party and the Lender as long as the
purchase price paid by the purchaser in respect of the sold Receivables is paid
(in immediately available funds of the United States of America) in full to the
Collection Account. The Borrower, the Lender and the Secured Party agree to
execute any assignments, releases and other documents reasonably necessary or
appropriate for the purchaser to purchase the Receivables.
2.8.3 At any time on or after the Commitment Expiration Date, the Lender
may exercise the Call Option by delivering a written notice to the Borrower
setting forth the proposed date of the Lender's purchase or sale of the
Receivables and the manner in which the Lender proposes that the Call Purchase
Price be determined. If the Lender provides that the Call Purchase Price will be
determined in accordance
6
with Section 2.8.2, the Lender shall also set forth in such notice the proposed
date, place and manner (in reasonable detail) of the auction of the Receivables,
and the closing of such purchase and sale shall be immediately following such
auction; provided that none of the Receivables may be sold to any bidder without
the prior written consent of the Lender.
2.8.4 The Call Purchase Price shall be applied in accordance with Section
8.1; provided that any non-cash proceeds from the sale of the Receivables shall
be delivered, assigned and otherwise transferred to the Secured Party for the
benefit of the Lenders and the Hedge Counterparties for satisfaction of any
outstanding obligations of the Borrower.
ARTICLE 3
INTEREST; COMMITMENT FEE; AND HEDGE STRATEGY
3.1 INTEREST ON ADVANCES
3.1.1 Each Advance shall bear interest in U.S. Dollars during each Interest
Period applicable thereto, on the outstanding amount of such Advance, at a rate
per annum equal to LIBOR for such Interest Period plus 1.00% per annum, subject
to the provisions of Section 12.25 below.
3.1.2 Subject to the terms of this Agreement, interest in respect of each
Advance shall accrue from day to day and shall be payable monthly on each
Payment Date, in arrears, calculated on the basis of actual days elapsed during
the Interest Period applicable to such Advance, and computed on a year
consisting of 360 days.
3.2 INTEREST ON OVERDUE PRINCIPAL, INTEREST AND OTHER AMOUNTS
If the Borrower does not pay when due any principal, interest, Breakage Fee
or other amount owed by the Borrower hereunder (whether on any Payment Date, on
the Termination Date, by acceleration or otherwise), such overdue amount shall
bear interest in U.S. Dollars (both before and after judgment, if applicable),
the interest on such overdue amount shall be payable on demand, and the interest
on such overdue amount shall be at a rate per annum equal to LIBOR on the LIBOR
Determination Date relating to the Interest Period immediately preceding such
date of non-payment plus 2.00% per annum from the date of such non-payment to
but excluding the date of payment in full of such overdue amount to the Lender
(which LIBOR shall change automatically and without notice to the Borrower each
Payment Date following such date of non-payment to LIBOR applicable on the LIBOR
Determination Date relating to such Payment Date), subject to the provisions of
Section 12.25 below.
3.3 COMMITMENT FEE
3.3.1 In consideration of the Lender's commitment hereunder in respect of
the Credit Facility, on the Closing Date, the Borrower or the Seller (as the
sole economic member of the Borrower) shall pay to the Lender a one time
commitment fee (the "Commitment Fee"), for the availability of the Credit
Facility, in the amount equal to the difference between (i) $250,000 minus (ii)
the Good Faith Deposit.
3.3.2 The Borrower agrees with the Lender that (i) the Commitment Fee shall
be conclusively deemed to have been fully earned on the Closing Date and, once
paid, shall not be refundable in whole or in part in any circumstances, and (ii)
payment of the Commitment Fee shall not constitute or give rise to any
obligation on the part of the Lender to make any Advance under this Agreement,
other than in accordance with the terms of this Agreement.
7
3.4 TIMING OF PAYMENTS OF PRINCIPAL AND INTEREST
All payments of interest and repayments of outstanding Advances by the
Borrower hereunder must be made prior to 3:00 p.m. (New York City time) on the
date of payment. If payment is made after such time, payment shall be deemed to
have been made on the next Business Day, unless the Lender, in its sole
discretion, agrees to accept payment at a later time as being effective on the
date it is made.
3.5 PAYMENTS TO LENDER
All payments by the Borrower to the Lender hereunder shall be made to
the Lender's Account (or as the Lender may otherwise direct to the Borrower in
writing from time to time) on the date when due, and shall be made in
immediately available funds without set-off or counterclaim.
3.6 CURRENCY OF PAYMENT
All payments of interest, Breakage Fee(s) and repayments of the
principal amount of any Advances by the Borrower hereunder shall be made in U.S.
Dollars.
3.7 HEDGING STRATEGY
(a) At all times on and after the Closing Date, the Borrower shall
have established and shall maintain one or more Hedge Agreements
with an aggregate notional schedule provided by the Administrator
on behalf of the Borrower and acceptable to the Lender and
consistent with a strategy designed to offset the risk of
interest rate movements, which strategy (the "Hedge Strategy")
shall include, without limitation, the execution of Hedge
Agreements which (i) are calculated to avoid or remedy any Excess
Spread Deficiency or Swap Spread Deficiency, (ii) provide that
the notional amounts thereunder shall amortize according to the
expected amortization of the Aggregate Loan Balance as of the
date of execution of each such Hedge Agreement (assuming a
prepayment speed of 1.2% ABS) and (iii) in the aggregate, shall
cover 100% of the then Aggregate Loan Balance (as adjusted from
time to time pursuant to the terms hereof). The Borrower shall
deliver to the Secured Party a copy of each Hedge Agreement
entered into between the Borrower and any other Person and each
confirmation related thereto. As additional security hereunder,
the Borrower shall, pursuant to the Auto Fund Security Agreement,
assign to the Lender all rights (but none of the obligations) of
the Borrower under each Hedge Agreement, including, but not
limited to, all present and future amounts payable by a Hedge
Counterparty to the Borrower under or in connection with such
Hedge Agreement, and all such amounts payable by a Hedge
Counterparty shall be paid by it directly to the Collection
Account. The Borrower acknowledges that, as a result of such
assignment, it may not, without the prior written consent of the
Lender, exercise any rights under any Hedge Agreement that would
adversely affect the rights of the Lender, as the beneficiary of
the Borrower's assignment of its rights under such Hedge
Agreement to the Lender; provided that nothing herein or in the
Auto Fund Security Agreement shall have the effect of releasing
the Borrower from any of its obligations under a Hedge Agreement
nor be construed as requiring the consent of the Lender for the
performance of the Borrower's obligations thereunder.
(b) Each Hedge Agreement shall provide that if the Hedge Counterparty
or any party providing credit support on its behalf suffers a
Hedge Counterparty Downgrade Event, the Hedge Counterparty will
be required to (i) transfer (at its own cost) all of its rights
and obligations under its Hedge Agreement to an Eligible Hedge
Counterparty in
8
accordance with the terms of its Hedge Agreement within 60 days
after the occurrence of the Hedge Counterparty Downgrade Event or
(ii) within 10 Business Days after the occurrence of the Hedge
Counterparty Downgrade Event, post collateral reasonably
acceptable to the Lender securing its obligation under the Hedge
Agreement. In the event the Hedge Counterparty fails to transfer
its rights and interests under the Hedge Agreement or post
collateral, as applicable, in accordance with the terms of this
Agreement, the Lender, as collateral assignee of the Borrower,
shall have the right to terminate the Hedge Agreement and require
the Borrower to, and the Borrower shall, simultaneously enter
into a replacement Hedge Agreement.
(c) The Borrower shall cause any collateral received from a Hedge
Counterparty under a Hedge Agreement to be delivered to the
Lender. The only permitted use of any such collateral delivered
to the Lender in respect of any Hedge Agreement shall be (i) for
application to obligations of the applicable Hedge Counterparty
to the Borrower under its Hedge Agreement if such Hedge Agreement
becomes subject to early termination or (ii) to return collateral
or investment earnings to such Hedge Counterparty when and
required by such Hedge Agreement.
(d) The Administrator agrees that at no time during the term of this
Agreement will the aggregate notional amounts for the then
current calculation period of all outstanding transactions under
each Hedge Agreement then in effect materially mismatch the then
Aggregate Loan Balance (i.e., the difference between the
aggregate notional amounts for the then current calculation
period of all outstanding transactions under each Hedge Agreement
then in effect is less than or greater than the Aggregate Loan
Balance by five percent (5%)) after giving effect to each payment
of principal on the related Payment Date. So long as any Excess
Spread Deficiency, Swap Spread Deficiency, Event of Default or
Pending Event of Default is then continuing, neither the
Administrator nor the Borrower may exercise any discretion in
selecting the specific agreements and notional amounts thereof to
be terminated or reduced. In the event that at any time there is
a material mismatch (i.e., the difference between the aggregate
notional amounts for the then current calculation period of all
outstanding transactions under each Hedge Agreement then in
effect is less than or greater than the Aggregate Loan Balance by
five percent (5%)) between the existing Hedge Agreements and the
Aggregate Loan Balance, the Lender shall have the right in its
sole discretion to reduce or increase, as necessary, the notional
amounts, in whole or in part, for all outstanding transactions
under each Hedge Agreement then in effect, based on the
respective notional amounts for current and remaining calculation
periods in accordance with the requirements of this Section 3.7.
ARTICLE 4
SECURITY
4.1 SECURITY
4.1.1 The Borrower shall ensure that all of the following are delivered
to the Lender:
(a) the Auto Fund Security Agreement creating a first priority,
perfected security interest in the Collateral in favor of the
Lender for the benefit of Lender and the Hedge Counterparties;
and
9
(b) such further guarantees, security agreements, pledges, control
agreements and other instruments of conveyance, assignment,
transfer, mortgage, pledge or charge as the Lender may require
from time to time in order to create or maintain a first
priority, perfected security interest in the Collateral and to
guarantee the payment and performance of the obligations of the
Borrower and the Custodian under the Credit Documents, all in the
manner contemplated by the Auto Fund Security Agreement; provided
that, for the avoidance of doubt, unless and until an Event of
Default shall have occurred and then be continuing, the Borrower
shall not be required by the Lender to notify any Obligors,
Dealers, Eligible Non-Franchise Dealers or insurers of the pledge
of the Collateral to the Lender or of any of the terms and
conditions of this Agreement or any Credit Document.
4.1.2 The Borrower shall, at its expense, perfect the security interest
of the Lender in the Collateral, by filing, registration or recordation in all
offices in all jurisdictions where required by applicable law to do so. The
Borrower shall renew such filings, registrations and recordings as and when
required to keep them in full force and effect at all times and shall provide
the Lender with an annual opinion of counsel, on the earlier of each anniversary
of the Closing Date and each extension of the Commitment Termination Date by the
Lender of the Credit Facility under and pursuant to the terms this Agreement and
at such other times as shall be reasonably required by the Lender, that all such
filings, registrations and recordings have been duly made on a timely basis.
4.1.3 All documents relating to the Lender's security interest in the
Collateral shall be in form and substance satisfactory to the Lender.
ARTICLE 5
DISBURSEMENT CONDITIONS
5.1 Conditions Precedent to First Advance
The obligation of the Lender to effect the first Advance hereunder is
subject to and conditional upon the following conditions precedent being
satisfied on and as of the date of such first Advance:
(a) each of the Borrower and the Seller shall have delivered to the
Lender certified copies of their respective Organizational
Documents;
(b) each of the Borrower and the Seller shall have delivered to the
Lender a currently dated certificate of incumbency;
(c) each of the Borrower and the Seller shall have delivered to the
Lender currently dated certified copies of resolutions of their
respective board of directors (or other governing body)
authorizing the execution, delivery and performance of the Credit
Documents to which each is a party;
(d) each of the Borrower and the Seller shall have delivered to the
Lender certificates of status or the equivalent thereof in
respect of its jurisdiction of organization;
(e) the Borrower shall have delivered to the Lender a certificate,
dated the date of the first Advance, of the Borrower certifying
that, as of the date of such certificate, (i) the representations
and warranties of the Borrower set forth herein and in the other
Credit Documents are true and correct, (ii) the Borrower is in
compliance with all of its
10
covenants hereunder and in the other Credit Documents, (iii) no
Excess Spread Deficiency, Swap Spread Deficiency, Event of
Default or Pending Event of Default has occurred and is
continuing and (iv) the conditions precedent set forth in this
Section 5.1 have been satisfied;
(f) the Custodian shall have delivered to the Lender a certificate,
dated the date of the first Advance, of the Custodian certifying
that as of the date of such Advance, the Custodian is in
compliance with all of its covenants under the Servicing and
Custodian Agreement;
(g) the Borrower shall have delivered or cause to be delivered to the
Lender a duly executed copy, in form and substance satisfactory
to the Lender, of the Auto Fund Security Agreement, and the
Lender's security interest in all Collateral granted under the
Auto Fund Security Agreement shall have been duly perfected in
all jurisdictions where so required under applicable law to so
perfect;
(h) each of the Borrower and the Seller shall have delivered to the
Lender a legal opinion of Borrower's Counsel and Seller's
Counsel, together with the opinions of applicable local counsel,
relating to the Credit Documents executed and delivered by the
Borrower and the Seller, and such other matters as the Lender may
reasonably require, including "true sale", nonconsolidation and
first priority perfected security interest of the Lender in the
Collateral. the Borrower shall have paid the entire Commitment
Fee to the Lender (to the extent not previously paid);
(i) the Borrower shall have delivered to the Lender a release and
discharge agreement from each Person (including, without
limitation, Bank One, NA ("Bank One") pursuant to the Master Loan
and Auto Fund Security Agreement between Bank One and the Seller
dated as of April 2, 2001, as amended), with any Encumbrance,
except for the Permitted Encumbrances in favor of the Lender
only, on any of the Contracts or the Collateral pledged to the
Lender pursuant to this Agreement, the Auto Fund Security
Agreement or any other Credit Document;
(j) [reserved];
(k) the Borrower, the Servicer, the Lender and Bank One shall have
executed and delivered the Securities Account Control Agreement,
in form and substance satisfactory to the Lender, in respect of
the Collection Account and the Collection Sweep Investment
Account;
(l) the Lender shall have received a Drawdown Notice in respect of
the first Advance in compliance with Section 2.3.2;
(m) the Custodian shall have delivered to the Lender the
Acknowledgement of Custodian evidencing receipt by the Custodian
of all Receivable Files (including an originally executed copy of
the Contract included in each such file) for each Contract to be
added as Collateral on the related Drawdown Date and noting any
exceptions to such files;
(n) the Lender shall have received executed original counterparts or
certified copies, in form and substance satisfactory to the
Lender, of this Agreement, the Servicing and Custodian Agreement,
the Contribution and Sale Agreement, the Note, the Administration
Agreement, all other Credit Documents and such other documents
and instruments as the Lender may reasonably request;
11
(o) the Lender shall have received executed copies, in form and
substance satisfactory to the Lender, of each Hedge Agreement
required to be entered into pursuant to Section 3.7 and each
confirmation related thereto;
(p) the Lender shall have received copies of UCC, tax and judgment
lien reports (the expense of which shall be paid directly by the
Borrower) from all jurisdictions reasonably requested by the
Lender, covering such periods as the Lender may reasonably
request and listing effective financing statements and tax and
judgment liens filed against the Seller, and the Borrower,
together with copies of all financing statements or liens
disclosed in such reports, and none of such financing statements
(except those filed in favor of the Lender) or liens shall refer
to the Collateral unless releases therefor, in form and substance
satisfactory to the Lender, have been obtained on or prior to the
Drawdown Date);
(q) the making of such Advance is permitted by law;
(r) the Lender shall have received executed copies, in form and
substance satisfactory to the Lender, of the release (including
any financing statements) by Bank One of its general lien on the
assets of the Seller;
(s) the Lender shall have received from the Seller including a
certificate from a knowledgeable Officer of the Borrower to the
effect that such officer is familiar with the Seller's standard
operating procedures relating to the Seller's acquisition of a
perfected first priority security interest in the motor vehicles
financed by Seller pursuant to the Contracts (the "Financed
Vehicles") originated in the ordinary course of the Seller's
business; and that assuming that Seller's standard procedures are
followed with respect to the perfection of security interests in
the Financed Vehicles, Seller, immediately prior to the transfer
of the Contracts and its interest in the Financed Vehicles to the
Borrower, has acquired or (upon the completion of ministerial
tasks by the pertinent state motor vehicle office) will acquire a
perfected first priority security interest in the Financed
Vehicles;
(t) pursuant to Section 12.7, Lender's counsel shall have been paid
for its services and disbursements; and
(u) such other items as the Lender and/or any Xxxxxxx Counterparty
may reasonably request.
All documents and other materials to be delivered pursuant to this
Section 5.1 shall be in form and substance satisfactory to the
Lender and shall be in full force and effect on the date of the
first Advance.
5.2 CONDITIONS PRECEDENT TO ALL OTHER ADVANCES
The obligation of the Lender to make any Advance after the first
Advance hereunder is subject to and conditional upon the following conditions
precedent being satisfied as of the date of the applicable Advance:
(a) no Event of Default or Pending Event of Default shall have
occurred and be continuing on the applicable Drawdown Date, or
would result from the making of the Advance;
(b) the representations and warranties deemed to be repeated pursuant
to Section 6.2 hereof shall continue to be true and correct as if
made on and as of the Drawdown Date and each
12
of the Seller and the Borrower shall have delivered to the Lender
a certificate (or shall have included in the related Drawdown
Notice) dated as of such date stating that the representations
and warranties contained in Section 6.1 hereof and in the other
Credit Documents are true and correct as of such Drawdown Date;
(c) each of the Borrower and the Seller shall be in compliance with
all of its respective covenants hereunder; and each of the
Borrower, the Seller, the Servicer and the Custodian shall be in
compliance with all of its respective covenants under the other
Credit Documents;
(d) the Lender shall have received a Drawdown Notice in respect of
such Advance in compliance with Section 2.3.2, which Drawdown
Notice shall include a calculation that the requested Advance
would not exceed the Initial Advance Amount on the related
Drawdown Date;
(e) in the reasonable opinion of the Lender, no Material Adverse
Change shall have occurred with respect to the Borrower, the
Seller, the Servicer or the Custodian;
(f) in the reasonable opinion of the Lender, no change in the General
Underwriting Policy, which materially adversely affects the
interests of the Lender under any of the Credit Documents, shall
have occurred prior to the date of the applicable Drawdown
Notice;
(g) Borrower shall have delivered to Lender a release and discharge
agreement from each Person (including, without limitation, Bank
One pursuant to the Master Loan and Auto Fund Security Agreement
between Bank One and the Seller dated as of April 2, 2001, as
amended) with any Encumbrance, except only for the Permitted
Encumbrances in favor of the Lender, on any of the Contracts or
the Collateral pledged to the Lender pursuant to this Agreement,
the Auto Fund Security Agreement or any other Credit Document;
(h) the Custodian shall have delivered to the Lender the
Acknowledgement of Custodian evidencing receipt by the Custodian
of all Receivable Files (including an originally executed copy of
the Contract included in each such file) for each Contract to be
added as Collateral on the related Drawdown Date;
(i) the making of such Advance is permitted by law; and
(j) the Lender shall have received executed copies, in form and
substance satisfactory to the Lender, of each Hedge Agreement
required to be entered into pursuant to Section 3.7 and each
confirmation related thereto;
All documents and other materials to be delivered pursuant to this
Section 5.2 shall be in form and substance satisfactory to the Lender and shall
be in full force and effect on the date of the applicable Advance.
5.3 WAIVER
The conditions set forth in Section 5.1 and 5.2 are for the sole
benefit of the Lender and may be waived by the Lender in its sole discretion in
respect of any Advance, in whole or in part (with or without terms or
conditions), without prejudicing the right of the Lender at any time to assert
such conditions in respect of the making of any subsequent Advance.
13
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants to the Lender that:
(a) the Borrower (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State
of Delaware, (ii) has all requisite power and authority to own
its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (iii) is qualified to
do business in every jurisdiction where such qualification is
necessary (except where the failure to be so qualified could not
individually or in the aggregate have a Material Adverse Effect
on the Collateral or the business or condition (financial or
otherwise) of the Borrower or, so long as a Material Portion is
not affected, impair the enforceability of any Contracts or other
Collateral pledged to the Lender), (iv) has the power and
authority to execute, deliver and perform each Credit Document to
which it is or will be a party, and (v) has taken all action
necessary to authorize the execution, delivery and performance of
the Credit Documents to which it is or will be a party;
(b) the Borrower is not, nor will the execution, delivery and the
performance of and compliance with the terms of the Credit
Documents cause Borrower to be, in violation of any Laws or its
limited liability company operating agreement or certificate of
formation (as each may be amended). The execution, delivery and
the performance of and compliance with the terms of the Credit
Documents are not inconsistent with, and will not conflict with
or result in any breach of, or constitute a default under, or
result in the creation or imposition of any Encumbrance (except
in favor of the Lender, pursuant to the Credit Documents) upon
any of the property, assets or revenues of Borrower pursuant to
the terms of, any indenture, mortgage, lease, deed of trust,
agreement, contract, instrument or Law to which Borrower is a
party or by which Borrower or any of Borrower's property, assets
or revenue is bound or to which it is subject;
(c) this Agreement has been duly executed and delivered by Borrower
and is, and each other Credit Document when executed and
delivered by Borrower will be, a legal, valid and binding
obligation of Borrower, enforceable against it in accordance with
its terms (except as enforcement thereof may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and
equitable principles relating to or affecting enforcement of
creditors' rights generally or relief of debtors generally);
(d) no order, consent, approval, license, permit, waiver, exemption,
authorization of or validation of, or filing, recording or
registration with (except as heretofore have been obtained or
made), or exemption by, any Person is required to authorize, or
is required in connection with, the execution, delivery,
performance, legality, validity, binding effect, or
enforceability of any of the Credit Documents;
(e) there are no proceedings or investigations pending, or, to the
Borrower's knowledge, threatened before any Governmental
Authority having jurisdiction over the Borrower or its property:
(A) asserting the invalidity of this Agreement or any other
Credit Agreement, (B) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any other
Credit Agreement, or (C) seeking any
14
determination or ruling that might cause a Material Adverse
Change; in addition, there is no litigation involving Borrower
involving amounts in excess of $25,000 in the aggregate, nor are
there any outstanding or unpaid judgments against Borrower;
(f) the Borrower is not in violation of any term of its
Organizational Documents, any material Requirement of Law, any
Material Contract to which it is party or any Material Permit
which relates to it;
(g) the Borrower has good and marketable title to all of its
property. Except for Encumbrances permitted by Lender to be
listed on Schedule M hereto and the Encumbrances in favor of
Lender (collectively, the "Permitted Encumbrances"), there is no
Encumbrance on any of Borrower's property or income. None of the
Permitted Encumbrances are Encumbrances against any of the
Contracts or any Related Tranche Collateral pledged to the
Lender;
(h) each of the Collection Account, the Collection Sweep Investment
Account and any amounts deposited therein are not subject to, and
are free and clear of, any Encumbrances, except for Permitted
Encumbrances in favor of the Lender only;
(i) to the best of Borrower's knowledge, there are no facts or
conditions relating to the Credit Documents, any of the
Collateral or the financial condition and business of Borrower
which would, individually or collectively, cause a Material
Adverse Change in respect of the Borrower, the Seller, the
Servicer or the Custodian and which have not been revealed in
writing to Lender. All writings heretofore or hereafter exhibited
or delivered to Lender by or on behalf of Borrower are and will
be genuine and in all respects what they purport and appear to
be. No information furnished to Lender by or on behalf of
Borrower contains any material misstatement of fact or omits to
state any fact necessary to make the statements contained herein
or therein, in light of the circumstances in which they were
made, not misleading which would result in a Material Adverse
Change in respect of the Borrower, the Seller, the Servicer or
the Custodian;
(j) the Borrower is not, nor will the execution, delivery and
performance of and compliance with the terms of the Credit
Documents cause Borrower to be, in default (nor has any potential
default occurred) under any material agreement, document or
instrument other than such defaults or potential defaults which
could not, individually or collectively, cause a Material Adverse
Change in respect of the Borrower, the Seller, the Servicer or
the Custodian;
(k) the jurisdiction of organization of the Borrower is situated in
the State of Delaware and the Borrower is a "registered
organization" within the meaning of Article 9 of the Delaware
UCC; and the principal place of business and chief executive
office of the Borrower are situated in the State of California;
(l) neither Borrower nor any transaction contemplated hereunder is
subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Investment Company Act of
1940, the Interstate Commerce Act (as any of the preceding acts
have been amended), any regulations promulgated by the Office of
Foreign Assets Control as codified in Chapter V of 31 C.F.R., or
any other Law (other than Regulation T, U or X of the Board of
Governors of the Federal Reserve System) which regulates the
incurrence of Debt;
15
(m) the Borrower is neither an "investment company" nor a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended from time to time, or
any successor statute;
(n) the Borrower is Solvent before and after giving effect to the
transactions contemplated by this Agreement;
(o) in the last five years, Borrower has not transacted business
under any other company or trade name, been a party to any
merger, combination, or consolidation or acquired all or
substantially all of the assets of any Person;
(p) no Person who may be deemed to have "control" of Borrower is an
"executive officer," "director," or "principal shareholder" of
Lender or any correspondent of Lender, as such quoted terms are
defined in Section 215.2 of Regulation 0 of the Board of
Governors of the Federal Reserve System, as amended;
(q) the Borrower possesses adequate authority and licenses including,
without limitation, licenses and registrations necessary to
acquire Eligible Contracts and to continue to conduct its
business as presently conducted (except where the failure to have
such authority and licenses would not individually or in the
aggregate have a Material Adverse Effect on the Collateral or the
business or condition (financial or otherwise) of the Borrower
or, so long as a Material Portion is not affected, impair the
enforceability of any Contracts or other Collateral pledged to
the Lender);
(r) all tax returns and reports of Borrower required to be filed have
been filed, and all Taxes imposed upon Borrower which are due and
payable have been paid, other than Taxes being contested in good
faith for which the criteria for Permitted Encumbrances have been
satisfied; provided, however, that the Borrower shall not be in
violation of this covenant if Taxes have not been paid, and/or
tax returns and reports have not been filed, with respect to
Taxes not exceeding an aggregate amount of $250,000;
(s) the Borrower does not currently sponsor or contribute to, nor has
any contract or other obligation to contribute to (nor has
Borrower in the preceding sixty (60) calendar months sponsored or
contributed to, or contracted to or become otherwise obligated to
contribute to) any Plan or any Multiemployer Plan;
(t) the proceeds of the Advances will be used only for the purposes
set forth in Section 2.2 hereof and shall not be used (a) to
purchase or carry any "Margin Stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System), or (b) for any purpose in violation of Regulations T, U
or X of said Board of Governors;
(u) the Borrower has no Subsidiaries;
(v) the Borrower is not a partner or joint venturer in any
partnership or joint venture;
(w) the ownership of Borrower as set forth on Schedule H hereto is
true, correct and complete. The entire limited liability company
membership interest of Borrower has been duly and validly issued
to the Seller in accordance with Borrower's organizational
documents and all applicable requirements of law and is fully
paid and non-assessable. There are no options, warrants, rights,
calls, commitments, plans, contracts or other agreements granted
or issued regarding the limited liability company membership
16
interests of Borrower and none are authorized; PROVIDED that, for
the avoidance of doubt, the Special Members may become Members of
the Borrower, but do not and will not hold any economic interest
in the Borrower;
(x) each of the Dealer Agreements, E-Fund Agreements and Note and
Security Agreements, entered into (whether by assignment or
otherwise) by the Seller with respect to any Contract is in
substantially the form attached hereto as Schedule N, Schedule O
and Schedule P, respectively, and any changes therefrom related
to any particular Contract are not adverse to the Lender;
(y) no Event of Default or Potential Event of Default has occurred
and is continuing;
(z) the Certificates or copies of policies evidencing Borrower's
insurance coverage, delivered to Lender and described on Schedule
G hereto, are complete and accurate;
(aa) Borrower possesses and owns all necessary trademarks, trade name,
copyrights, patents, patent rights, franchises and licenses which
are material to the conduct of its businesses as now operated;
(bb) each Drawdown Notice, Schedule of Contracts, Schedule of Removed
Contracts, and Monthly Servicer Report which has been furnished
to the Lender pursuant to this Agreement was accurate and
complete in all material respects on the date of delivery thereof
to the Lender;
(cc) each Receivable which forms part of the Collateral pledged to the
Lender for any Tranche is an Eligible Contract; and
(dd) affirmations of the foregoing Representations and Warranties
subsequent to the Closing Date shall be based on information
delivered to Lender by Borrower as of the Closing Date (or
subsequent information delivered by Borrower in compliance
herewith).
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties made in this Agreement shall survive
the execution of this Agreement and all other Credit Documents, and shall be
deemed to be made as of each Drawdown Date with respect to the Borrower and the
additional Collateral pledged to the Lender on such date. The Lender shall be
deemed to have relied upon such representations and warranties at such time as a
condition of making an Advance hereunder or continuing to extend the Credit
Facility.
6.3 SELLER REPRESENTATIONS AND WARRANTIES
(a) Each of the Concentration Account, the Draft Account and the ACH
Disbursement Account and any amounts or other property deposited
therein are not subject to, and are free and clear of, any
Encumbrances prior to the interest of the Lender; and
(b) The Form of General Underwriting Criteria attached hereto as
Schedule I is, as of the Closing Date hereof, a true and correct
copy of the Seller's General Underwriting Criteria.
17
ARTICLE 7
COVENANTS
7.1 AFFIRMATIVE COVENANTS OF THE BORROWER
7.1.1 During the term of this Agreement:
(a) the Borrower shall duly and punctually pay the Obligations, or
shall cause to be remitted amounts in respect thereof from the
Collection Account, at the times and places and in the manner
required by the terms thereof;
(b) the Borrower shall, and shall cause each of the Servicer and the
Custodian to, perform its respective obligations under the Credit
Documents to which it is a party in accordance with the terms
thereof;
(c) the Borrower shall only engage in those business and financial
activities set forth in Section 7 of its Limited Liability
Company Agreement;
(d) the Borrower shall maintain its existence as a limited liability
company in good standing, and a "registered organization", under
the laws of the State of Delaware, not (i) liquidate, dissolve or
wind up, (ii) seek appointment of a receiver or (iii) make a
general assignment for the benefit of the creditors (or take any
steps in connection therewith), and do, or cause to be done, all
things necessary to keep in full force and effect all properties,
rights, franchises, licenses and qualifications to carry on
business in all jurisdictions necessary to the performance of any
obligations under each Credit Document;
(e) the Borrower shall, and shall cause the Seller, the Servicer or
the Custodian, as applicable, to, provide the Lender with such
documents, opinions, consents, acknowledgments and agreements as
the Lender may reasonably require in order to implement this
Agreement or any other Credit Documents from time to time;
(f) the Borrower shall file or cause to be filed when due all
federal, state and local returns, filings, elections and reports
which are required to be filed by it in respect of all Taxes, and
shall pay all such Taxes as may be required by law and in
accordance with any assessment or demand for payment received by
it as and when such Taxes become due and payable; provided,
however, that the Borrower shall not be in violation of this
covenant if Taxes have not been paid, and/or tax returns and
requests have not been filed with respect to Taxes not exceeding
an aggregate amount of $250,000; and the Borrower shall provide
evidence of payment of any Taxes if so requested by the Lender;
(g) not later than one (1) Business Day after the occurrence thereof,
the Borrower shall notify the Lender in writing of the occurrence
of any Excess Spread Deficiency, Swap Spread Deficiency, Event of
Default or Pending Event of Default;
(h) not later than one (1) Business Day after the occurrence thereof,
the Borrower shall, or shall cause the Servicer to, notify the
Lender in writing of the occurrence of any Material Adverse
Change in respect of any of the Borrower, the Seller, the
Servicer or the Custodian;
(i) the Borrower shall use the Credit Facility solely for the
purposes set out in Section 2.2;
18
(j) the Borrower shall comply with the limitations on its activities
set forth in Section 9(j)(iv) of its Limited Liability Company
Agreement;
(k) the Borrower shall abide by all limited liability company
formalities, and the Borrower shall cause its financial
statements to be prepared in accordance with GAAP in a manner
that indicates the separate existence of the Borrower and its
assets and liabilities;
(l) the Borrower shall (1) pay all its liabilities, (2) not assume
the liabilities of the Seller or any Affiliate thereof, (3) not
assume the liabilities of the Seller or any Affiliate thereof and
(4) not guarantee the liabilities of the Seller or any Affiliate
thereof;
(m) the Borrower shall make decisions with respect to its business
and daily operations independently of, and not dictated by, any
controlling entity;
(n) the Borrower shall promptly deliver to the Lender a copy of each
Hedge Agreement entered into from time to time in accordance with
the terms of Section 3.7, and each confirmation related thereto;
(o) the Borrower shall, and shall cause the Seller to, upon the
receipt of the invoice therefor, pay to counsel for the Lender
the fees and disbursements of such counsel in connection with the
transactions contemplated hereunder and in accordance with
Section 12.7;
(p) the Borrower shall, on or before the Closing Date, pay to the
Lender the Commitment Fee;
(q) the Borrower shall promptly provide the Lender with all
information reasonably requested by the Lender from time to time
concerning the Servicer's and/or the Custodian's financial
condition, the performance of the Servicer and/or the Custodian
under the Servicing and Custodian Agreement or the Borrower and
the Seller under this Agreement, the Collateral and the
Receivable Files (excluding, for greater certainty, any
proprietary credit scoring models used by the Servicer or the
Seller and any related data or software) during normal business
hours and from time to time upon two (2) Business Days' prior
written notice, permit representatives of the Lender to inspect
the Collateral and the Receivable Files, and to examine and take
extracts from the Borrower's, the Servicer's and/or the
Custodian's financial books, accounts and records, including but
not limited to accounts and records stored in computer data banks
and computer software systems, and to discuss the Servicer's
and/or Custodian's financial condition and its performance of the
Servicing and Custodian Agreement and the Borrower's performance
under this Agreement with the Servicer's senior officers and (in
the presence of such of its representatives as it may designate)
its auditors; provided that:
(i) the Lender's exercise of its rights under this paragraph
shall not be more frequent than is reasonably necessary and
does not unreasonably interfere with the operations of the
Servicer, the Borrower and the Seller, and
(ii) the Lender shall maintain the confidentiality of all
information it receives in connection with any such
inspection or examination and, unless required to do so for
legal or regulatory reasons, shall not disclose same to any
other Person other than (A) its directors, officers,
employees, auditors, agents or professional advisors on a
"need to know" basis, or (B) any assignee or participant
(or potential assignee or participant) pursuant to Article
11 hereof.
19
(r) the Borrower shall, or shall cause the Seller to, promptly notify
the Lender in writing of any material change in the General
Underwriting Policy;
(s) the Borrower shall, or shall cause the Servicer to, promptly
notify the Lender in writing of the occurrence of any litigation,
action, suit, dispute, arbitration, proceeding or other
circumstance affecting the Borrower, the Seller, the Servicer or
the Custodian, the result of which, if determined adversely,
would be a judgment or award against the Borrower, the Seller,
the Servicer or the Custodian (i) in excess of $25,000 or (ii)
which would result in a Material Adverse Change in respect of the
Borrower, the Seller, the Servicer or the Custodian, and the
Borrower shall, or shall cause the Servicer to, from time to time
provide the Lender with all information reasonably requested by
the Lender concerning the status thereof;
(t) the Borrower shall ensure that all accounting policies, practices
and calculation methods of the Borrower are in accordance with
GAAP;
(u) the Borrower shall (i) require the Seller to provide evidence
that each Obligor at origination has obtained the insurance
required by the related Contract and (ii) cause the Servicer,
upon the Servicer's knowledge of any lapse of insurance, to
provide notice to the Obligor of such lapse;
(v) the Borrower shall cause its assets and properties, which are of
an insurable character, to be insured, directly or indirectly, by
financially sound and reputable insurance companies, satisfactory
to the Lender, against loss or damage by fire, exposition, theft
or other hazards which are included under extended coverage in
amounts sufficient to prevent Borrower from becoming a co-insurer
and in amounts consistent with normal industry practices;
(w) the Borrower shall keep all property useful and necessary to its
business in good working order and condition, and from time to
time make all necessary and proper repairs, renewals,
replacements, additions, betterments and improvements thereto so
that at all times the efficiency thereof shall be fully preserved
and maintained, ordinary wear and tear excepted, and excepting
disposal of obsolete and damaged equipment;
(x) the Borrower shall preserve and maintain all of its material
rights, privileges, licenses and franchises;
(y) one Business Day prior to each Payment Date, the Borrower shall
deliver (or cause to be delivered) to the Lender and the
Servicer, in both written and electronic format, (i) a Monthly
Servicer Report (in the form of Exhibit F and which will contain,
among other things, the performance of the Collateral by
Tranche), and (ii) a Schedule of Contracts (in electronic format
as Appendix A) corresponding to the Eligible Contracts comprising
the Collateral pledged to the Lender, listing by Tranche and
Obligor all Receivables together with a report setting forth the
delinquency status of each receivable in a form acceptable to the
Lender;
(z) the Borrower shall, or shall cause the Seller to, deliver to the
Custodian on or prior to each Drawdown Date, the related
Receivable File (and, promptly after such registration, to the
extent available from the State of registration, the original
title or lien registration);
20
(aa) the Borrower shall from time to time withhold and remit all
amounts required to be withheld (including without limitation, in
respect of income tax, withholding taxes on payments to
non-residents, any ERISA pension plan and employment insurance)
from all payments made to officers and employees or to all
non-residents and to all other applicable Persons and the
Borrower shall pay all such amounts, together with any interest
and penalties due, to the appropriate authority as required by
law;
(bb) within forty-five (45) days of the end of each calendar month,
the Borrower shall deliver each record of each draft executed by
a prior lender/lienholder in connection with an Obligor
refinancing of a Vehicle during each such calendar month,
evidencing the acknowledgement by such prior lender/lienholder of
its release in the related Vehicle;
(cc) in connection with any Obligor refinancing of a Vehicle, the
Borrower shall not pay the refinanced amount under the related
Contract to the Obigor, but, on the related Drawdown Date, shall
pay such refinanced amount directly to the prior lender; and
(dd) except for the ninety (90) day period following the Closing Date,
not more than five percent (5%) of the Aggregate Outstanding
Balance is comprised of Eligible Non-Franchise Dealers that are
not any of CarMax, Autonation, Enterprise and each other Person
mutually agreed upon by the Lender and the Borrower.
7.2 Negative Covenants of the Borrower
7.2.1 During the term of this Agreement, the Borrower shall not,
without the prior written consent of the Lender:
(a) operate its business in a manner which would reasonably be
expected to lead to a Material Adverse Change with respect to it;
(b) consolidate, amalgamate or merge with any other Person, enter
into any reorganization or other transaction intended to effect
or otherwise permit a change in its existing organizational
structure, liquidate, wind-up or dissolve itself, or permit any
liquidation, winding-up or dissolution;
(c) do anything to (i) adversely affect the priority, perfection or
validity of the security interest of the Lender in the Collateral
or (ii) create, incur or assume any Encumbrance upon any of the
Collateral except for Permitted Encumbrances in favor of the
Lender only;
(d) change its name without providing the Lender with written notice
thereof at least thirty (30) Business Days prior to any such
change and promptly taking such steps as may be required to
maintain the perfection of the security interest granted to the
Lender in the Collateral in connection with any such change;
(e) permit its state of organization to be located in any
jurisdiction other than the State of Delaware, without providing
the Lender with written notice thereof at least thirty (30)
Business Days prior to any such change and promptly taking such
other steps, if any, as the Lender in its reasonable discretion
requires to permit the Lender to perfect (or maintain the
perfection of) the security interest granted in the Collateral in
connection with any such change;
21
(f) permit (i) to exist any Encumbrance upon any of the Collateral,
except for Permitted Encumbrances in favor of the Lender only, or
(ii) anything to adversely affect the priority, perfection or
validity of the security interest of the Lender in any of the
Collateral; PROVIDED, HOWEVER, that the Borrower shall not be in
violation of this covenant so long as (x) the aggregate
Discounted Contract Balance of all the affected Contracts plus
the face value of all other affected Collateral shall not exceed
the lesser of an aggregate amount of $1,000,000 and one-half of
one percent (0.50%) of the outstanding Aggregate Loan Amount and
(y) any failure under this Section 7.2.1(f) shall be cured within
ten (10) Business Days;
(g) create, incur, assume or permit to exist any Encumbrance upon the
Collection Account, the Collection Investment Sweep Account, or
any amounts deposited therein, except for Permitted Encumbrances
in favor of the Lender only;
(h) sell, transfer, assign, convey or otherwise dispose of any
Collateral other than in accordance with the express terms and
conditions of the Credit Documents;
(i) change its fiscal year end;
(j) create any direct or indirect Subsidiaries or otherwise acquire
equity interests in any other Person or any other investment in
any Person except for investments in cash equivalents;
(k) engage in any activity or enter into any transaction other those
activities which are expressly authorized pursuant to or
contemplated by the terms of the Credit Documents;
(l) contract for, create, incur, assume or suffer to exist any
indebtedness other than that which are expressly authorized
pursuant to or contemplated by the terms of the Credit Documents;
(m) amend, supplement or otherwise modify its Organizational
Documents without the prior written consent of the Lender;
(n) commingle its funds with those of any other Person, except for
any permitted commingling of its funds by the Servicer under the
Servicing Agreement;
(o) engage in any action that would cause the separate legal identity
of the Borrower not to be respected, including, without
limitation (i) holding itself out as being liable for the debts
of any other Person or (ii) acting other than through its duly
authorized representative and agents;
(p) make any loan or advance or credit to, or guaranty (directly or
indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability
of doing, or otherwise), endorse (except for the endorsement of
checks for collection or deposit) or otherwise agree to become
contingently liable, directly or indirectly, in connection with
the obligations, stock or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock,
obligation or securities of, or any other interest in, or make
any capital contribution to, any Person;
(q) enter into or become a party to any agreements or instruments
other than the Credit Documents;
22
(r) sponsor or contribute to, or contract to or incur any other
obligation to contribute to, any Plan or any Multiemployer Plan;
(s) use or authorize others to use the name or marks of Lender in any
publication or medium, including without limitation, any
prospectus, without the Lender's prior written consent;
(t) (1) commence any case, proceeding or other action under any
existing or future bankruptcy, insolvency or similar law seeking
to have an offer for relief entered with respect to it, or
seeking reorganization, arrangement, adjustment, wind-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, (2) seek appointment or a receiver,
trustee, custodian or other similar official for it or any part
of its assets, (3) make a general assignment for the benefit of
creditors or (4) take any action in furtherance of, or consenting
or acquiescing in, any of the foregoing;
(u) at any time, permit the 30+ Day Delinquency Ratio for any Tranche
to exceed 2.5% for one or more Tranches with an aggregate
Outstanding Tranche Collateral Balance of more than 25% of the
Aggregate Outstanding Balance, which excess shall remain uncured
for a period of thirty (30) days or more;
(v) at any time, permit the aggregate Outstanding Tranche Collateral
Balance of all 30+ Day Delinquent Contracts in any one Tranche to
exceed 4.0% of the Outstanding Tranche Collateral Balance of such
Tranche, which excess shall remain uncured for a period of thirty
(30) days or more;
(w) at any time, permit the Annualized Net Loss Ratio for any Tranche
to exceed 1.0% for one or more Tranches with an aggregate
Outstanding Tranche Collateral Balance of more than 25% of the
Aggregate Outstanding Balance, which excess shall remain uncured
for a period of thirty (30) days or more; or
(x) at any time, permit the aggregate Outstanding Tranche Collateral
Balance of all Annualized Net Losses in any one Tranche to exceed
2.0% of the Outstanding Tranche Collateral Balance of such
Tranche, which excess shall remain uncured for a period of thirty
(30) days or more.
7.3 COVENANTS OF THE SELLER
(a) Without the prior written consent of Lender or payoff and
discharge in full and termination of the Credit Facility under
this Agreement, the Seller shall not, directly or indirectly (i)
merge or consolidate with any Person or (ii) liquidate, wind up,
or dissolve itself (or suffer any liquidation or dissolution);
(b) Seller shall not permit its maintenance of cash or cash
equivalents (in the form of unrestricted cash, restricted cash
not in excess of Five Million Dollars ($5,000,000), but excluding
amounts borrowed to satisfy commitments to acquire Contracts) to
be less than Fifteen Million Dollars ($15,000,000), as of the
Closing Date and the last day of each calendar month;
(c) Seller shall not permit its Tangible Net Worth to be less than
Twenty-five Million Dollars ($25,000,000), as of the Closing Date
and the last day of each calendar month;
(d) [Reserved];
23
(e) Seller shall not permit its three (3) month rolling average of
the aggregate principal amount of all Contracts and mortgage
loans (including without limitation home equity loans and lines
of credit) originated and funded by Seller to be less than Two
Hundred Fifty Million Dollars ($250,000,000), as of the Closing
Date and the last day of each Monthly Period thereafter;
(f) Seller shall not permit its ratio of (i) cash or cash equivalents
as described in Section 7.3(b) above, to (ii) current
liabilities, excluding amounts payable under all of the Seller's
warehouse or revolving lines of credit used to fund its mortgage
or direct auto loans, to be less than 1 to 1, as of the last day
of each calendar month;
(g) Seller shall cause, within 30 days of each Drawdown Date, a
Transfer Opinion to be delivered to the Lender, to the extent
that, after giving effect to the sale and/or contribution of
Receivables made on such Drawdown Date there would be one or more
States of the United States in which Financed Vehicles, relating
to Contracts with an aggregate outstanding balance of more than
10% of the Aggregate Outstanding Balance, were titled and as to
which States a Transfer Opinion, in form and substance acceptable
to the Lender, had not previously been given in connection with
this Agreement. As used in the preceding sentence, "Transfer
Opinion" means an opinion of counsel generally to the effect that
(a) the Seller will have a valid, perfected security interest in
each Financed Vehicle titled in the applicable State upon the
occurrence of the completion of specified ministerial and
administrative tasks and (b) with respect to Financed Vehicles
which are titled in the applicable State on a permanent basis, no
filing or other action other than the filing of certain related
financing statements is necessary to continue the perfection
status of the transferee against the Obligor following (i) the
transfer and assignment of the Seller's security interest in such
Financed Vehicles to the Borrower, in the first instance, and
(ii) the Borrower's pledge to the Lender and the grant in favor
of Lender of a perfected security interest in the Borrower's
security interest in and to the Financed Vehicles, in the second
instance; and
(h) Seller shall not create, incur, assume or permit to exist an
Encumbrance upon the Concentration Account, the Draft Account of
the ACH Disbursement Account, or any amounts or other property
deposited therein.
ARTICLE 8
DISTRIBUTIONS FROM COLLECTION ACCOUNT
8.1 DISTRIBUTIONS FROM COLLECTION ACCOUNT
The Borrower shall hold (or cause to be held) in the Collection Account any and
all amounts deposited therein from time to time in trust for the Lender and
shall not withdraw any amount from the Collection Account, other than (i) any
amount which is not contemplated to be deposited into the Collection Account
pursuant to the terms of this Agreement and the other Credit Documents and (ii)
in accordance with this Section 8.1. The Borrower and the Lender hereby agree
that, pursuant to the Administration Agreement, the Administrator shall apply
(or cause to be applied) the monies on deposit in the Collection Account as of
the last day of the immediately preceding Monthly Period (including, for greater
certainty, any interest earned thereon and credited to the Collection Account)
on each Payment Date (unless otherwise specifically stated below) as follows and
as may be more particularly set forth in the related Monthly Servicer Report:
24
(a) first, to each Hedge Counterparty any payments, if any, due under
any Hedge Agreement;
(b) second, to the Servicer, the Custodian and the Administrator, PRO
RATA, the Servicing and Custodian Fee and the Administrator Fee,
respectively;
(c) third, to the Lender Account (or as the Lender may otherwise
direct in writing to the Borrower and the Administrator), PRO
RATA among all Tranches, an amount equal to all interest on each
related Advance which has accrued hereunder for the related
Interest Period and which is due or remains unpaid on such
Payment Date;
(d) fourth, to the Lender Account (or as the Lender may otherwise
direct in writing to the Borrower and the Administrator), PRO
RATA among all Tranches, any and all principal and other amounts
that the Borrower is required to or has agreed to make a payment
pursuant to Section 2.4 or Section 2.5, as applicable, to the
extent not already paid by or on behalf of the Borrower;
(e) fifth, to the Servicer, the Custodian and the Administrator, PRO
RATA, any and all amounts due and payable under the Servicing and
Custodian Agreement or the Administration Agreement
(respectively), to the extent not already paid hereunder or by or
on behalf of the Borrower;
(f) sixth, to the Borrower (or as the Borrower may otherwise direct
in writing to the Administrator) (for the account of the
Borrower, as purchaser of the Related Tranche Collateral from the
Seller), PRO RATA among all Tranches for which the Lender has
received all amounts payable pursuant to Section 2.4, any related
Prime Discount Amount;
(g) seventh, to the Borrower's Account (or as the Borrower may
otherwise direct in writing to the Administrator) any interest on
Eligible Investments in the Collection Sweep Investment Account;
and
(h) eighth, provided that an Event of Default shall not have occurred
and then be continuing, to the Borrower or its assignee and the
Lender, PRO RATA, 85% of any balance remaining in the Collection
Account to the Borrower's Account (or as the Borrower may
otherwise direct in writing to the Administrator) and 15% of any
balance remaining in the Collection Account to the Lender's
Account (or as the Lender may otherwise direct in writing to the
Borrower and the Administrator) for application as prepayment of
principal of the Note; PROVIDED that after the occurrence of an
Event of Default or a Commitment Termination Date no amount shall
be paid to the Borrower from the Collection Account until such
time as the Obligations are repaid in full and until such payment
in full, all amounts in the Collection Account shall be paid to
the Lender on account of the Obligations; PROVIDED FURTHER that
if the Lender, after a request from the Borrower in accordance
with Section 2.1, does not offer to extend the Commitment
Expiration Date for a reason other than the occurrence of any
other Commitment Termination Date, then, after the Commitment
Expiration Date, the Lender shall not be entitled to 15% of any
balance remaining in the Collection Account after the payment of
all outstanding principal of the Note.
25
8.2 INVESTMENT OF COLLECTION ACCOUNT
(a) Subject to subsection (b) below, funds on deposit in the
Collection Account shall be invested in Eligible Investments on
behalf of the Borrower at the written direction of the
Administrator; PROVIDED that if no such written direction shall
have been received or an Event of Default shall have occurred,
such funds shall be invested in the investment described in
subclause (iv) of the definition of Eligible Investments. Any
such written directions shall specify the particular investment
to be made and shall certify that such investment is an Eligible
Investment and is permitted to be made under this Agreement.
(b) Funds on deposit in the Collection Account shall be invested by
the Administrator in Eligible Investments that will mature so
that such funds will be available so as to permit amounts in the
Collection Account to be paid and applied on the Payment Date and
otherwise in accordance with the provisions of Section 8.1
hereof. On each Determination Date, all interest and earnings
(net of losses and investment expenses) on funds on deposit in
the Collection Account shall be retained in the Collection
Account and be available to make any payments required to be made
hereunder by the Borrower.
8.3 LENDER'S RECOURSE
Nothing in Section 8.1 shall be construed as limiting the Lender
recourse against the Borrower under this Agreement or any other Credit Document.
ARTICLE 9
DEFAULT
9.1 EVENTS OF DEFAULT
Each of the following events shall constitute an event of default (an
"Event of Default") under this Agreement:
(a) (1) Borrower or any of its Affiliates shall commence a voluntary
case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy" as now or hereafter in effect, or any
successor thereto, (2) an involuntary case is commenced against
Borrower or any of its Affiliates and the petition is not
controverted within ten (10) days, or is not dismissed within
thirty (30) days, after commencement of the case, (3) a custodian
is appointed for, or takes charge of, all or any substantial part
of the property of Borrower or any of its Affiliates, (4)
Borrower or any of its Affiliates commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction whether now or hereafter in effect relating
to Borrower or such Affiliate, as the case may be, or there is
commenced against Borrower or such Affiliate, as the case may be,
any such proceeding which remains undismissed for a period of
thirty (30) days, (5) Borrower or any of its Affiliates is
adjudicated insolvent or bankrupt, (6) Borrower or any of its
Affiliates makes a general assignment for the benefit of
creditors, (7) Borrower or any of its Affiliates shall fail to
pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due, (8) Borrower or
any of its Affiliates shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts, or
(9) Borrower or any of its Affiliates shall by any act or failure
to act indicate its consent to, approval of or acquiescence in
any of the foregoing; or
26
(b) a Servicer Default shall occur and then be continuing, subject to
any applicable cure period; or
(c) Seller shall permit the aggregate amount of its cash and cash
equivalents (inclusive of restricted cash not in excess of Five
Million Dollars, but excluding amounts borrowed to satisfy
commitments to acquire Contracts) to be less than Fifteen Million
Dollars ($15,000,000), as of the last day of any calendar month;
or
(d) Seller shall permit its Tangible Net Worth to be less than
Twenty-five Million Dollars ($25,000,000), as of the last day of
any calendar month; or
(e) [Reserved]; or
(f) Seller shall permit its three (3) month rolling average of the
aggregate principal amount of all Contracts and mortgage loans
(including without limitation home equity loans and lines of
credit) originated and funded by Seller to be less than Two
Hundred Fifty Million Dollars ($250,000,000), as of the Closing
Date and the last day of each calendar month; or
(g) Seller shall permit its ratio of (i) cash and cash equivalents as
described in Section 9.1(c) above, to (ii) current liabilities,
excluding amounts payable under all of the Seller's warehouse or
revolving lines of credit used to fund its mortgage or direct
auto loans, to be less than 1 to 1, as of the last day of any
calendar month; or
(h) Borrower shall breach any negative covenant in Section 7.2
hereof; or
(i) Borrower shall breach any covenant in Section 7.1 hereof or any
other obligation under this Agreement or any other Credit
Document (which obligation is not the subject of any other Event
of Default as defined in this Section 9.1) and such breach shall
remain uncured for a period of thirty (30) days after the
Borrower shall have received written notice, or acquired actual
knowledge, thereof; or
(j) the occurrence of any event or events which in the reasonable
business judgment of Lender shall have or cause a Material
Adverse Change in respect of the Borrower, the Seller, the
Servicer or the Custodian; or
(k) an event of default shall occur and be continuing under any of
Sections 6.1, 6.3, 6.6, 6.7, 6.8, 6.10, 6.11 or 6.14 of the Loan
Agreement; or
(l) the Borrower fails to make any payment when due in respect of any
amounts payable under this Agreement (except for amounts payable
under Section 2.4.2 hereof) or any other Credit Document (whether
by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) and such failure continues after the applicable
grace or notice period, if any, specified in such other
agreements; or
(m) One or more final (non-interlocutory) judgments, orders or
decrees shall be entered against the Borrower or any of its
Affiliates involving in the aggregate a liability as to any
single or related series of transactions, incidents or
conditions, for which such Person's uninsured liability is Five
Million Dollars ($5,000,000) or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period
of thirty (30) days after the entry thereof; or
27
(n) an Excess Spread Deficiency or a Swap Spread Deficiency shall
have occurred and then be continuing for a period of three (3)
Business Days; or
(o) the Lender shall cease to have a valid and perfected first
priority security interest in the Collateral and such security
interest is not restored to being a valid and perfected first
priority security interest within ten (10) Business Days after
the earlier that Borrower (i) becomes aware thereof and (ii)
receives notice from the Lender; or
(p) any statement, representation, or warranty in the Credit
Documents or in any writing ever delivered by Borrower or on
behalf of Borrower to Lender pursuant to any Credit Document is
false, misleading or erroneous in any material respect when made
or when deemed to be repeated and is not cured within ten (10)
calendar days after the Borrower has knowledge thereof or should
have had knowledge with the exercise of ordinary diligence; or
(q) except as permitted by the Credit Documents, the Custodian
assigns any of its rights and obligations under the Credit
Documents or fails to maintain possession of the Receivable
Files; or
(r) the occurrence of a Reportable Event (within the meaning of
Section 4043 of ERISA) with respect to any Plan, or the
occurrence of any event or condition with respect to a Plan which
reasonably could be expected to result in the imposition of a
Encumbrance on any of the Collateral; or
(s) the Borrower becomes subject to regulation by the Securities and
Exchange Commission as an "investment company" within the meaning
of the Investment Company Act of 1940; or
(t) the Borrower or the Seller denies its obligations under any
Credit Document to which it is a party; or
(u) the Borrower shall breach or default under any Hedge Agreement,
if the effect of such breach or default is to allow the Hedge
Counterparty to proceed against, or otherwise realize from, the
Borrower or any Collateral to satisfy any claim of the Hedge
Counterparty against the Borrower in respect of such Hedge
Agreement; or
(v) Without the prior written consent of the Lender or payoff and
discharge in full and termination of the Credit Facility under
this Agreement, the Seller shall, directly or indirectly, undergo
a change in control of more than twenty-five percent (25%) of the
ownership of Seller.
9.2 ACCELERATION AND TERMINATION OF RIGHTS
If any Event of Default occurs, (i) the Lender shall be under no
further obligation to make Advances and may declare its obligations to make
Advances to be terminated, whereupon the same shall forthwith terminate, and
(ii) the Lender may declare the Obligations hereunder or any of them to be
forthwith due and payable, whereupon they shall become and be forthwith due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower.
28
9.3 REMEDIES
Without prejudice to any other rights or remedies available to the
Lender under the Credit Documents or at law or in equity, whether or not the
Lender shall have made a declaration contemplated by Section 9.2, the Lender may
take such additional action or proceedings, under the Credit Documents, at law
or in equity, as the Lender in its sole discretion may deem expedient to enforce
or realize upon the security interest in the Collateral and to pay all
obligations in full, all without any additional notice, presentment, demand,
protest or other formality, all of which are hereby expressly waived by the
Borrower.
9.4 SAVING
Neither the Lender or any Hedge Counterparty shall be under any
obligation to the Borrower or any other Person to realize on any Collateral,
enforce the Lender's security interest or any part thereof or to require the
enforcement by the Borrower of its rights in the Collateral or any part thereof
or to allow any of such Collateral to be sold, dealt with or otherwise disposed
of. Neither the Lender or any Hedge Counterparty shall be responsible or liable
to the Borrower or any other Person for any loss or damage upon the realization
or enforcement of, the failure to realize or enforce such Collateral or any part
thereof or the failure to allow any such Collateral to be sold, dealt with or
otherwise disposed of or for any act or omission on its part or on the part of
any director, officer, agent, servant or adviser in connection with any of the
foregoing.
9.5 PERFORM OBLIGATIONS
If an Event of Default has occurred and is continuing and if any of the
Borrower, the Seller, the Servicer or the Custodian has failed to perform any of
its covenants or agreements in any Credit Document, the Lender may bring an
action to compel performance or recover damages for breach thereof, and in any
event may, but shall be under no obligation to, perform any such covenants or
agreements in any reasonable manner without thereby waiving any rights to
enforce such Credit Document. The reasonable expenses (including any legal
costs) paid or incurred by the Lender in respect of the foregoing shall be
secured by the security interest granted in the Collateral.
9.6 THIRD PARTIES
No Person dealing with the Lender or any agent of the Lender shall be
required to inquire whether the security interest has become enforceable, or
whether the powers which the Lender or any such agent is purporting to exercise
are or have become exercisable, or whether any Obligations remain outstanding
upon the security interest granted to the Lender, or as to the necessity or
expediency of the stipulations and conditions subject to which any sale shall be
made, or otherwise as to the propriety or regularity of any sale or other
disposition or any other dealing with the security interest granted to the
Lender in, to and under the Collateral or any part thereof.
9.7 REMEDIES CUMULATIVE
The rights and remedies of the Lender under the Credit Documents are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Lender of any
right or remedy for a default or breach of any term, covenant, condition or
agreement contained herein or in any of the other Credit Documents shall not be
deemed to be a waiver of or to alter, affect, or prejudice any other right or
remedy or other rights or remedies to which the Lender may be lawfully entitled
for the same default or breach. Any waiver by the Lender of the strict
observance, performance or compliance with any term, covenant, condition or
agreement contained
29
herein or in any of the other Credit Documents, and any indulgence granted by
the Lender shall be deemed not to be a waiver of any subsequent default.
9.8 SET-OFF OR COMPENSATION
In addition to and not in limitation of any rights now or hereafter
granted under applicable law, at any time after an Event of Default has occurred
and is continuing, the Lender may at any time and from time to time without
notice to the Borrower or any other Person, any notice being expressly waived by
the Borrower, set-off and compensate and apply any and all deposits, general or
special, time or demand, provisional or final, matured or unmatured, and any
other indebtedness at any time owing by the Lender to or for the credit of or
the account of the Borrower, against and on account of the Obligations hereunder
notwithstanding that any of them are contingent or unmatured.
ARTICLE 10
CHANGE OF CIRCUMSTANCES
10.1 CHANGE IN LAW
In the event of any change in any applicable law, rule, guideline,
regulation, treaty or official directive (whether or not having the force of
law) or in the interpretation or application thereof by any court or by any
governmental agency, central bank or other authority or entity charged with the
administration thereof with which the Lender is required to comply or with which
the Lender, in its sole discretion, considers it necessary or advisable to
comply and which now or hereafter:
(a) subjects the Lender to any Tax or changes the basis of taxation,
or increases any existing Tax, on payments of principal,
interest, fees or other amounts payable by the Borrower, the
Seller or the Servicer to the Lender under this Agreement or any
other Credit Document (except for taxes on the overall net income
of the Lender);
(b) imposes, modifies or deems applicable any reserve, special
deposit or similar requirements against assets held by, or
deposits in or for the account of or loans by or any other
acquisition of funds by, an office of the Lender; or
(c) imposes on the Lender or expects there to be maintained by the
Lender any capital adequacy or additional capital requirements in
respect of any Advances, the Credit Facility Limit or any other
condition with respect to this Agreement,
and the result of any of the foregoing shall be to increase the cost to, or
reduce the amount of principal, interest or other amount received or receivable
by the Lender hereunder or its effective return hereunder in respect of making,
maintaining or funding such Advance, the Lender shall determine that amount of
money which shall compensate it for such increase in cost or reduction in income
(herein referred to as "Additional Compensation"). Upon the Lender having
determined that it is entitled to Additional Compensation in accordance with the
provisions of this Section 10.1, the Lender shall promptly so notify the
Borrower, the Seller and the Servicer. The Lender shall provide to the Borrower,
the Seller and the Servicer a photocopy of the relevant law, rule, guideline,
regulation, treaty or official directive and a certificate of a duly authorized
officer of the Lender setting forth the Additional Compensation and the basis of
calculation therefor, which shall be prima facie evidence of such Additional
Compensation in the absence of manifest miscalculation or error. The Borrower
shall, or shall cause the Servicer from amounts on deposit in the Collection
Account to, pay to the Lender within ten (10) Business Days of the giving of
such notice the Additional Compensation calculated to the date of such
notification.
30
10.2 RESERVED
10.3 ILLEGALITY
If the adoption of any applicable law, regulation, treaty or official
directive (whether or not having the force of law) after the execution hereof or
the Closing Date or any change therein or in the interpretation or application
thereof by any court or by any governmental or other authority or central bank
or comparable agency or any other entity charged with the interpretation or
administration thereof or compliance by the Lender with any request or direction
(whether or not having the force of law) of any such authority, central bank or
comparable agency or entity, makes it unlawful or impossible after the execution
hereof or the Closing Date for the Lender to make, fund or maintain an Advance
or to perform its obligations in respect of such an Advance, the Lender may, by
written notice thereof to the Borrower, declare its obligations under this
Agreement to be terminated whereupon the same shall forthwith terminate, and (x)
the Borrower shall repay within the time required by this Agreement or, if
shorter, the time required by such law (or at the end of any longer period as
the Lender in its sole discretion shall have agreed to) the remaining principal
amount of such Advance and any and all other amounts owed by the Borrower and
(y) the Seller shall repay within the time required by this Agreement any and
all amounts owed by the Seller, in each case, together with accrued interest
thereon and such Additional Compensation as may be applicable to the date of
such payment provided that the provisions of Section 2.5 shall apply to any such
repayment. If any such change shall only affect a portion of the Lender
obligations under this Agreement which is, in the opinion of the Lender,
severable from the remainder of this Agreement so that the remainder of this
Agreement may be continued in full force and effect without otherwise affecting
any of the obligations of the Borrower or the Seller hereunder, the Lender shall
only declare its obligations under that portion so terminated.
10.4 CAPITAL REQUIREMENTS
If the Lender shall determine that any change after the date of this
Agreement in any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards," or the adoption after the date
hereof of any other law or requirement of law regarding capital or the adoption
after the date hereof of any other law or requirement of law regarding capital
adequacy, or any change after the date of this Agreement in any of the foregoing
or in the enforcement or interpretation or administration of any of the
foregoing by any Governmental Authority charged with the enforcement or
interpretation or administration thereof, or compliance by the Lender (or any
lending office of the Lender) or the Lender's holding company with any request
or directive regarding capital adequacy (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 the Lender's capital or on the capital of the Lender's holding
company, if any, as a consequence of the maintenance of the Credit Facility or
the making or maintenance of any Advance under this Agreement to a level below
that which the Lender or the Lender's holding company could have achieved but
for such adoption, change or compliance (taking into consideration the Lender's
policies and the policies of the Lender's holding company with respect to
capital adequacy) by an amount deemed by the Lender to be material, then, upon
written demand by the Lender, the Borrower shall pay to the Lender, from time to
time such additional amount or amounts as will compensate the Lender or the
Lender's holding company for any such reduction suffered. Without affecting its
rights under this Section 10.4 or any other provision of this Agreement, the
Lender agrees that if there is any increase in any cost to or reduction in any
amount receivable by the Lender with respect to which the Borrower would be
obligated to compensate the Lender pursuant to this Section 10.4, the Lender
shall use reasonable efforts to select an alternative lending office which would
not result in any such increase in any cost to or reduction in any amount
receivable by Lender; provided, however, that the Lender shall not be obligated
to select an alternative
31
lending office if the Lender determines that (i) as a result of such selection
the Lender would be in violation of any Requirement of Law, or would incur
additional costs or expenses, or (ii) such selection would be inadvisable for
regulatory reasons.
10.5 DISCRETION OF LENDER AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, the
Lender shall be entitled to fund and maintain its funding of all or any part of
the Advances in any manner it elects, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if the
Lender had actually funded and maintained each Advance through the purchase of
deposits having a maturity corresponding to the Maturity Date and bearing an
interest rate equal to LIBOR (whether or not, in any instance, the Lender shall
have granted any participations in such Advance). The Lender may, if it so
elects, fulfill any commitment to make an Advance by causing a foreign branch or
affiliate to make or continue such Advance; PROVIDED, HOWEVER, that in such
event such Advance shall be deemed for the purposes of this Agreement to have
been made by the Lender, and the Obligation of the Borrower to repay such
Advance shall nevertheless be to the Lender and shall be deemed held by the
Lender, to the extent of such Advance, for the account of such foreign branch or
affiliate.
ARTICLE 11
SUCCESSORS AND ASSIGNS
11.1 SUCCESSORS AND ASSIGNS
11.1.1 The Credit Documents to which the Borrower is a party shall
inure to the benefit of the Lender and its successors and assigns and shall be
binding upon and inure to the benefit of the Borrower and its successors and
permitted assigns. Without the prior written consent of the Lender, the Borrower
shall not assign any rights or obligations with respect to this Agreement or any
of the other Credit Documents to which it is party.
This Agreement shall be binding upon the Seller and its successors and
permitted assigns. The Seller shall not assign any rights and/or obligations
with respect to this Agreement or any of the other Credit Documents to which it
is party without the prior written consent of the Lender.
The rights and obligations of the Lender under this Agreement are
assignable in whole or in part to any Person; PROVIDED that in connection with
any such assignment, the Borrower shall have no obligation to indemnify the
Lender or the applicable assignee for any withholding taxes imposed on payments
made by the Borrower hereunder which arise pursuant to such assignment. The
Lender may grant participations in the Credit Facility to any Person. The
Borrower hereby consents to the disclosure of any information relating to the
Borrower to any potential assignee or participant; PROVIDED that the Lender
shall not disclose to any potential participant any information relating to the
Borrower, the Seller, the Servicer, the Custodian or the Collateral which is not
publicly available until such time as such potential participant has entered
into a confidentiality agreement in form and substance reasonably acceptable to
the Borrower, the Seller and the Lender.
Notwithstanding any other provisions of this Agreement, the Lender
agrees that it shall not offer to assign any portion of its rights and
obligations under this Agreement without providing prior written notice thereof
to the Borrower; PROVIDED that after the occurrence of an Event of Default which
has not been waived no such notice shall be required. The Lender shall not be
required to provide notice to the Borrower of the granting of any participation
in the Credit Facility.
32
11.1.2 The sale or other transfer of a participation by the Lender of
its interest (or a part thereof) hereunder or a payment by a participant to the
Lender as a result of the participation will not constitute a payment hereunder
to the Lender or an Advance to the Borrower.
11.2 PARTICIPATION
The Lender may sell participations to one or more Persons in or to all
or a portion of its rights and obligations under this Agreement, but the
participant shall not thereby become a "Lender" and:
(a) the Lender obligations under this Agreement shall remain unchanged;
(b) the Lender shall remain solely responsible to the Borrower for
the performance of such obligations;
(c) the Borrower and the Seller shall continue to deal solely and
directly with the Lender in connection with the Lender rights and
obligations under this Agreement; and
(d) no participant shall have any right to approve any amendment or
waiver of any provision of this Agreement, or any consent to any
departure by any Person therefrom.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 CAPITALIZED TERMS
All capitalized terms used in any of the Credit Documents to which the
Lender, the Seller and the Borrower are parties and which are defined in this
Agreement shall have the respective meanings defined herein unless otherwise
defined in the other Credit Document.
12.2 SEVERABILITY
Any provision of this Agreement which is or becomes prohibited or
unenforceable in any relevant jurisdiction shall not invalidate or impair the
remaining provisions hereof, which shall be deemed severable from such
prohibited or unenforceable provision, and any such prohibition or
unenforceability in any such jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Should this Agreement
fail to provide for any relevant matter, the validity, legality or
enforceability of this Agreement shall not be affected.
12.3 AMENDMENT, SUPPLEMENT OR WAIVER
No amendment or waiver of any provision of this Agreement or any other
Credit Document, nor consent to any departure by Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
12.4 GOVERNING LAW
THIS AGREEMENT AND ALL OTHER CREDIT DOCUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAW PRINCIPLES; PROVIDED THAT SECTIONS 5-1401 AND 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY, AND THE
33
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
12.5 THIS AGREEMENT TO GOVERN
In the event of any conflict between the terms of this Agreement and
the terms of any other Credit Document, the provisions of this Agreement shall
govern to the extent necessary to resolve the conflict.
12.6 PERMITTED ENCUMBRANCES
The designation of an Encumbrance as a Permitted Encumbrance is not,
and shall not be deemed to be, an acknowledgment by the Lender that such
Encumbrance shall have priority over the Lender's security interest in the
Collateral.
12.7 EXPENSES AND INDEMNITY
12.7.1 All statements, reports, certificates, opinions, appraisals and
other documents or information required to be furnished to the Lender by the
Borrower or the Seller under this Agreement shall be supplied without cost to
the Lender. The Borrower shall, and the Seller shall cause the Borrower to, pay
on demand all reasonable out of pocket costs and expenses of the Lender
(including long distance telephone and courier charges and the reasonable fees
and expenses of legal counsel to the Lender), incurred in connection with (i)
the preparation, execution, delivery, administration, periodic review,
modification or amendment of the Credit Documents; (ii) any enforcement of the
Credit Documents; (iii) obtaining advice as to its rights and responsibilities
in connection with this Agreement and the Credit Documents; (iv) reviewing,
inspecting and appraising the Collateral at reasonable intervals; and (v) all
other matters relating to this Agreement and the other Credit Documents;
PROVIDED that that so long as the Closing Date and the date of the first Advance
occurs not later than June 19, 2002, the Borrower shall not be required to
reimburse the Lender for more than $100,000 for services, together with all
disbursements, payable by the Lender to its counsel relating to services
performed up to such date in connection with the transactions contemplated by
the Credit Documents. Such costs and expenses shall be payable whether or not an
Advance is made under this Agreement.
12.7.2 Without limiting any other rights that the Lender may have
hereunder, under any other Credit Document or under applicable law or in equity,
the Borrower and the Seller, each with respect to itself, hereby agrees to
indemnify (and pay upon demand to) each Indemnified Party from and against any
and all Indemnified Amounts awarded against or incurred by any of such
Indemnified Party arising out of or as a result of this Agreement or any other
Credit Documents (including, without limitation the making of any Advance
hereunder), excluding, however, in all of the foregoing instances:
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part
of the Servicer or the Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Contracts that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor or would constitute recourse to the Seller for losses in
respect of uncollectible Receivables;
(c) taxes (including interest and penalties imposed thereon) imposed
by the jurisdiction in which such Indemnified Party's principal
executive office is located, on or measured by the overall net
income of such Indemnified Party;
34
(d) Indemnified Amounts to the extent that they are or result from
lost profits (other than principal, yield and fees with respect
to the Advances); and
(e) Indemnified Amounts to the extent that they constitute
consequential, special or punitive damages;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit
the liability of the Borrower or the Seller or limit the recourse of the Lender
to the Borrower or the Seller for amounts otherwise specifically provided to be
paid by such party under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, the Borrower shall indemnify each
Indemnified Party for Indemnified Amounts (including, without limitation, losses
in respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Borrower, but not including a guaranty of
the creditworthiness of any Obligor) relating to or resulting from:
(i) any representation or warranty made by the Borrower or the
Seller (or any officers of any such Person) under or in
connection with this Agreement, any other Credit Document
or any other information or report delivered by any such
Person pursuant hereto or thereto, which shall have been
false or incorrect when made or deemed made;
(ii) the failure by the Borrower or the Seller or any Related
Tranche Collateral to comply with any applicable law, rule
or regulation, or the nonconformity of any Contract with
any such applicable law, rule or regulation or any failure
of the Borrower or the Seller to keep or perform any of its
obligations, express or implied, with respect to any
Contract;
(iii) any failure of the Borrower or the Seller to perform its
duties, covenants or other obligations in accordance with
the provisions of this Agreement or any other Credit
Document which adversely affects such Indemnified Party's
rights hereunder;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with
the Financed Vehicle or insurance that are the subject of
any Contract;
(v) any dispute, claim, offset or defense (other than discharge
in bankruptcy, insolvency, reorganization or other similar
proceeding), including, without limitation, a defense based
on such Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in
accordance with its terms of the Obligor to the payment of
any amounts due under such Contract;
(vi) the commingling of collections in respect of the Contracts
at any time with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Credit Document,
the transactions contemplated hereby, the use of the
proceeds of any Advance, the ownership of the Contracts or
any other investigation, litigation or proceeding relating
to the Borrower or the Seller in which any Indemnified
Party becomes involved as a result of any of the
transactions contemplated hereby;
35
(viii) any inability to litigate any claim against any Obligor in
respect of its Contract as a result of such Obligor being
immune from civil and commercial law and suit on the
grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(ix) (A) the Borrower or the Seller generally not paying its
debts as such debts become due or shall admitting in
writing its inability to pay its debts generally or making
a general assignment for the benefit of creditors; or (B)
any proceeding instituted by or against the Borrower or the
Seller seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or
any substantial part of its property; or (C) the Borrower
or the Seller taking any organizational action to authorize
any of the actions set forth in clauses (A) or (B) above;
(x) any failure of the Borrower to acquire and maintain legal
and equitable title to, and ownership of the Sold Assets
from the Seller, free and clear of any Encumbrances (other
than Permitted Encumbrances in favor of the Lender); or any
failure of the Borrower to give reasonably equivalent value
to the Seller under the Contribution and Sale Agreement in
consideration of the transfer by the Seller of the Sold
Assets, or any attempt by any Person to void such transfer
under statutory provisions or common law or equitable
action (provided that defense costs are indemnified under
this paragraph (x) only to the extent that the Borrower
does not elect to defend any such attempt);
(xi) any failure to vest and maintain vested in the Borrower or
to transfer to the Borrower a first priority perfected
ownership interest in the Sold Assets, free and clear of
any Encumbrances (other than Permitted Encumbrances in
favor of the Lender);
(xii) any failure to vest and maintain vested in the Lender (for
the benefit of the Lender and any Hedge Counterparty) or to
transfer to the Lender (for the benefit of the Lender and
any Hedge Counterparty), a first priority perfected
security interest in the Collateral, free and clear of any
Encumbrances (other than Permitted Encumbrances in favor of
the Lender);
(xiii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Collateral;
(xiv) any action or omission by the Borrower or the Seller which
reduces or impairs the rights of the Lender with respect to
any Collateral or the value of any such Collateral (except
as permitted under the Credit Documents);
(xv) any attempt by any Person to void any Advance hereunder
under statutory provisions or common law or equitable
action (PROVIDED that defense costs shall be indemnified
under this paragraph (xv) only to the extent that the
Borrower or the Seller does not elect to defend any such
attempt); or
36
(xvi) the failure of any Contract to be an Eligible Contract at
the time pledged to the Lender.
The obligations and agreements of the Seller and the Borrower under
this Section 12.7 shall survive the termination of this Agreement and the
repayment of the Obligations.
12.8 MANNER OF PAYMENT AND TAXES
All payments to be made by the Borrower and the Seller pursuant to the
Credit Documents are to be made without set-off, compensation or counterclaim,
free and clear of and without deduction for or on account of any Tax, including
but not limited to withholding taxes, other than taxes on the overall net income
of the Lender. If any Tax is deducted or withheld from any payments under the
Credit Documents, the payor shall promptly remit to the Lender in the currency
in which such payment was made, the equivalent of the amount of Tax so deducted
or withheld together with the relevant receipt addressed to the Lender. If the
payor is prevented by operation of law or otherwise from paying, causing to be
paid or remitting such Tax, the interest or other amount payable under the
Credit Documents will be increased to such rates as are necessary to yield and
remit to the Lender the principal sum advanced or made available together with
interest at the rates specified in the Credit Documents after provision for
payment of such Tax.
If any of the Borrower or the Seller makes any payment pursuant to the
immediately preceding paragraph, and the Lender receives any tax benefit under
the laws of the United States, any political subdivision thereof or any other
jurisdiction that the Lender would not have received had the payor not made the
payment, the Lender shall pay the payor the amount of the tax benefit after it
is received, to the extent that the payment by the Lender does not place the
Lender in a worse position than it would have been had no payment been made by
the payor. If the payor makes any payment under this Section for the account of
the Lender, the Lender shall take reasonable steps to minimize the net amount
payable by the payor under this Section, but the Lender shall not be obliged to
disclose any information to the payor concerning its income or taxes that is not
otherwise publicly available.
12.9 THIRD PARTY BENEFICIARY
Each Hedge Counterparty is an intended and express third party
beneficiary under this Agreement.
12.10 NOTICES
All notices, requests and other communications to be given hereunder
shall be in writing and shall be given to such party at its address or fax
number set forth below or such other address or fax number as such party may
hereafter specify by notice to each other party. Each such notice, request or
other communication shall be effective (i) if given by fax during the business
hours of the party receiving notice, when transmitted to the fax number
specified in this Section and, on the day of transmittal thereof, a confirmation
of receipt (which may be telephonic) is given by the recipient and in any event
no later than the next Business Day, (ii) if given by mail, on the third day
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other means (including,
without limitation, by air courier), when delivered at the address specified in
this Section; provided that notices given under this subsection (iii) shall not
be effective until received by the respective addressee. All notices shall also
be given, simultaneously and in like manner, to such party's legal counsel at
its address or fax number set forth below or such other address or fax number as
such party may hereafter specify by notice to the other parties.
37
AS TO BORROWER: WITH A COPY TO:
E-LOAN Auto Fund One, LLC E-LOAN, Inc.
0000 Xxxxxx Xxxx 0000 Xxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Telephone: 000-000-0000 Telephone: 000-000-0000
Telefax: 000-000-0000 Telefax: 000-000-0000
Attn: Xxx Xxxxxx, Treasurer Attn: Xxxxxx X. Xxxxxxxx, Esq.
AS TO SELLER: WITH A COPY TO:
E-LOAN, Inc. E-LOAN, Inc.
0000 Xxxxxx Xxxx 0000 Xxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Telephone: 000-000-0000 Telephone: 000-000-0000
Telefax: 000-000-0000 Telefax: 000-000-0000
Attn: Xxx Xxxxxx, Treasurer Attn: Xxxxxx X. Xxxxxxxx, Esq.
AS TO LENDER: WITH A COPY TO:
Xxxxxxx Xxxxx Bank USA Xxxxxxx Xxxxx Bank USA
000 Xxxxxxxx Xxxx Xxxx 00 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
Attn: Xxxxx Xxxxxxx Attn: Xxxx Xxxxxxxx
AS TO XXXXXXX COUNTERPARTY: WITH A COPY TO:
Xxxxxxx Xxxxx Bank USA Xxxxxxx Xxxxx Bank USA
000 Xxxxxxxx Xxxx Xxxx 00 X. Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxx Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
Attn: Xxxxx Xxxxxxx Attn: Xxxx Xxxxxxxx
AS TO SERVICER: WITH A COPY TO:
Systems & Services Technologies, Inc. Systems & Services Technologies, Inc.
0000 Xxxxxxx Xxxx 0000 Xxxxxxx Xxxx
Xx. Xxxxxx, XX 00000 Xx. Xxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefax: (000) 000-0000 Telefax: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, President Attn: Xxxxxx X. Xxxx, General Counsel
38
12.11 BORROWER'S ACCOUNT AND CONCENTRATION ACCOUNT
(a) Unless the Borrower otherwise notifies the Lender in writing, the
following account shall be the Borrower's Account:
Bank: Bank One
Account #: 632787271
ABA: 000000000
Attn: E-Loan Base Account
(b) Unless the Borrower otherwise notifies the Lender in writing or
as set forth in Section 2.2, all Advances shall be made by wire
transfer into the Concentration Account.
12.12 LENDER ACCOUNT
Unless the Lender otherwise notify the Borrower in writing, all
payments to be made by the Borrower to the Lender pursuant to this Agreement or
any other Credit Document shall be made by wire transfer into the following
account (the "Lender Account") of the Lender:
Bank: Xxxxxxx Xxxxx Bank USA
Account #: 62030
ABA: 000000000
Attn: MLMCI - E-LOAN Auto Fund One, LLC
12.13 TIME OF THE ESSENCE
Time shall be of the essence in this Agreement and each of the other
Credit Documents.
12.14 FURTHER ASSURANCES
Each of the Borrower and the Seller shall, at the request of the
Lender, do all such further acts and execute and deliver all such further
documents as may, in the reasonable opinion of the Lender, be necessary or
desirable in order to fully perform and carry out the purpose and intent of the
Credit Documents.
12.15 TERM OF AGREEMENT
Except as otherwise provided herein, this Agreement shall remain in
full force and effect until such time as (a) all of the Obligations owing
hereunder from time to time have been paid and performed in full, and (b) the
Lender has released the Borrower and the Seller from their respective
obligations under this Agreement (except those which arise pursuant to those
provisions which by their terms are expressly intended to survive any
termination of this Agreement) pursuant to an instrument in writing signed by
the Lender.
12.16 PAYMENTS ON BUSINESS DAY
Whenever any payment or performance under the Credit Documents would
otherwise be due on a day other than a Business Day, such payment shall be made
on the following Business Day.
39
12.17 COUNTERPARTS AND FACSIMILE
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this Section, the delivery of a facsimile copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this Agreement, but the party delivering a facsimile copy shall deliver an
original copy of this Agreement as soon as possible after delivering the
facsimile copy.
12.18 ENTIRE AGREEMENT
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN BORROWER AND LENDER AND
SUPERSEDE ALL PRIOR PROPOSALS, AGREEMENTS AND UNDERSTANDINGS RELATING TO THE
SUBJECT MATTER HEREOF. BORROWER CERTIFIES THAT IT IS RELYING ON NO
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT EXCEPT FOR THOSE SET FORTH
HEREIN AND THE OTHER CREDIT DOCUMENTS OF EVEN DATE HEREWITH.
12.19 SUBMISSION TO JURISDICTION
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS ITSELF AND ITS PROPERTY TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY
OTHER FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY ACTION OR PROCEEDING RELATING TO THE
TRANSACTIONS CONTEMPLATED BY OR ARISING FROM, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT IN RESPECT OF, THE CREDIT DOCUMENTS MAY BE BROUGHT IN SUCH
COURTS;
(c) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION
OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(d) AGREES THAT ANY SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH EACH OF THE OTHER
PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT; PROVIDED THAT FOR THE AVOIDANCE OF DOUBT, EACH
PARTY AGREES THAT ANY SERVICE OF PROCESS ON THE BORROWER SHALL BE SENT TO THE
ADDRESS SET FORTH IN SECTION 4 OF ITS LIMITED LIABILITY COMPANY AGREEMENT; AND
40
(e) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
12.20 NO WAIVER; REMEDIES CUMULATIVE
No failure or delay on the part of Lender in exercising any Right or
remedy hereunder and no course of dealing between Borrower and Lender shall
operate as a waiver thereof, nor shall any single or partial exercise of any
Right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other Right or remedy hereunder. The Rights and remedies herein
expressly provided are cumulative and not exclusive of any Rights or remedies
which Lender would otherwise have.
12.21 WAIVERS BY BORROWER
TO THE FULLEST EXTENT PERMITTED BY LAW, EXCEPT AS OTHERWISE PROVIDED
FOR IN THIS AGREEMENT, BORROWER WAIVES (A) PRESENTMENT, DEMAND AND PROTEST AND
NOTICE OF PRESENTMENT, NOTICE OF INTENT TO ACCELERATE THE MATURITY OF THE
OBLIGATIONS AND NOTICE OF SUCH ACCELERATION, PROTEST, DEFAULT, NON-PAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION, OR RENEWAL; AND (B) ALL
RIGHTS TO NOTICE OF A HEARING PRIOR TO THE LENDER'S TAKING POSSESSION OR CONTROL
OF, OR THE LENDER'S REPLEVY, ATTACHMENT OR LEVY UPON, THE COLLATERAL OR ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING THE LENDER TO
EXERCISE ANY OF LENDER'S REMEDIES. BORROWER ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY COUNSEL WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS EVIDENCED
BY THIS AGREEMENT.
12.22 WAIVER OF JURY
LENDER, SELLER AND BORROWER HEREBY VOLUNTARILY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG LENDER, SELLER
AND BORROWER ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG BORROWER, SELLER AND LENDER IN CONNECTION
WITH THE CREDIT DOCUMENTS, THIS AGREEMENT, OR ANY OTHER AGREEMENT OR DOCUMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO ENTER INTO THE FINANCING
TRANSACTION. IT SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY
LENDER'S ABILITY TO PURSUE ITS REMEDIES AS SET FORTH IN THIS AGREEMENT.
12.23 EXCEPTIONS TO COVENANTS
Borrower shall not take any action or fail to take any action which is
permitted as an exception to any of the covenants contained in any of the Credit
Documents if such action or omission would result in the breach of any other
covenant contained in any of the Credit Documents.
12.24 SURVIVAL
All covenants, agreements, undertakings, representations, and
warranties made in any of the Credit Documents shall survive all closings under
the Credit Documents and, except as otherwise indicated, shall not be affected
by any investigation made by any party. Borrower's obligations under Section
12.7 hereof shall remain operative and in full force and effect regardless of
the termination of this Agreement, the repayment of the Note, or the existence
of any investigation made on behalf of the Lender regarding the representations
and warranties made by Borrower in connection with the Credit Documents.
41
12.25 MAXIMUM INTEREST RATE
It is the intention of the parties hereto to comply with applicable
usury laws (now or hereafter enacted); accordingly, notwithstanding any
provision to the contrary in this Agreement, the Note, the other Credit
Documents, or any other document relating hereto, in no event shall this
Agreement or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by such laws.
If from any circumstances whatsoever, fulfillment of any provision of this
Agreement or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by law for the collection or
charging of interest, then, IPSO FACTO, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstances Lender
shall ever receive anything of value as interest or deemed interest by
applicable law under this Agreement, the Note, the other Credit Documents, or
any other document pertaining hereto or otherwise an amount that would exceed
the highest lawful rate, such amount that would be excessive interest shall be
applied to the reduction of the principal amount owing under the Note or on
account of any other indebtedness of Borrower to Lender, and not to the payment
of interest, or if such excessive interest exceeds the unpaid balance of
principal of such indebtedness, such excess shall be refunded to Borrower.
12.26 SEVERABILITY
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable, such provision shall be fully severable, and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected thereby.
[Signature page follows.]
42
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
E-LOAN AUTO FUND ONE, LLC, as Borrower
By:
--------------------------------------
Name:
Title:
E-LOAN, INC.
By:
--------------------------------------
Name:
Title:
XXXXXXX XXXXX BANK USA, as Lender
By:
--------------------------------------
Name:
Title:
SCHEDULE A
DEFINED TERMS
"30+ DAY DELINQUENT CONTRACT" means any Contract then included
in the Collateral on which at least one payment (or any portion thereof) is more
than 30 days past due pursuant to the terms thereof.
"30+ DAY DELINQUENCY RATIO" means, with respect to any
Tranche, the ratio of (x) the Outstanding Balance of all 30+ Day Delinquent
Contracts which are part of the Related Tranche Collateral for such Tranche, to
(y) the related Outstanding Tranche Collateral Balance on such date of
determination.
"ACH" means the Automated Clearinghouse of the Federal
Reserve.
"ACH DISBURSEMENT ACCOUNT" means the segregated ACH
disbursement account maintained by Seller at Bank One (account: E-LOAN, Inc.)
having account number 636101479 (ABA: 000000000) for the purpose of disbursing
the principal amount of each Contract to the related Dealer or Eligible
Non-Franchise Dealer for the related Financed Vehicle via ACH when check is not
used.
"ACKNOWLEDGEMENT OF CUSTODIAN" means an acknowledgement of
Custodian substantially in the form of Schedule D to the Credit Agreement.
"ADDITIONAL COMPENSATION" has the meaning attributed to such
term in Section 10.1 of the Credit Agreement.
"ADMINISTRATION AGREEMENT" means the Administration Agreement,
dated as of June 1, 2002, between the Borrower and the Administrator;
"ADMINISTRATOR" means, as of any date of determination, the
Person then identified as such pursuant to the Administration Agreement;
initially, E-LOAN, Inc.
"ADMINISTRATOR FEE" The compensation payable to the
Administrator for its services under the Administration Agreement, which amount
shall not exceed $2,000 per month.
"ADVANCE" means a borrowing by the Borrower pursuant to the
Credit Agreement, and any reference relating to the amount of Advances shall
mean the sum of the aggregate principal amount of all outstanding Advances.
"AFFILIATE" means any Person who (i) would be an "affiliate"
of Borrower within the meaning of the regulations promulgated pursuant to the
Securities Act of 1933, as such regulations and Act are amended and in effect on
the date in question, if such Person were subject to such Act and regulations,
or (ii) owns any legal or beneficial interest of twenty-five percent (25%) or
more in such Person, (iii) is a director or officer of Borrower, or (iv) is a
relative of any of the Persons described in clause (iii).
"AGGREGATE DISCOUNTED CONTRACT BALANCE" means the aggregate
Discounted Contract Balance on such date of calculation for all Contracts.
2-
"AGGREGATE LOAN BALANCE" means, on any day, the aggregate
Outstanding Tranche Loan Balance on such date of calculation for all Tranches.
"AGGREGATE OUTSTANDING BALANCE" means, on any day, with
respect to the Receivables forming part of the Collateral, the aggregate
Outstanding Balance of all such Receivables on such day.
"AMOUNT FINANCED" means, with respect to a Contract and the
related Receivable, the aggregate principal amount of credit extended to the
related Obligor in connection with the purchase (or financing or refinancing of
the purchase) of the related Financed Vehicle including, without limitation, any
taxes, insurance and related costs financed in connection therewith, as set out
in the Receivable Files.
"ANNUALIZED NET LOSS" means, with respect to any Tranche, an
amount equal to the product of (i) the difference between (A) the aggregate
principal balance of all Receivables then included in such Tranche that became
Defaulted Receivables during the preceding Monthly Period and (B) any recoveries
received during the preceding Monthly Period for any Defaulted Receivables then
included in such Tranche, including any proceeds from disposition of the related
Financed Vehicles and any amounts paid by or on behalf of the related Obligors,
multiplied by (ii) 12.
"ANNUALIZED NET LOSS RATIO" means, with respect to any
Tranche, the ratio of (x) the amount of all Annualized Net Losses with respect
to such Tranche, to (y) the related Outstanding Tranche Collateral Balance on
such date of determination.
"APR" means, with respect to any Receivable, the annual rate
of interest (or finance charges) specified in the related Contract.
"AUTO FUND SECURITY AGREEMENT" means the Security Agreement,
dated as of June 1, 2002, between the Borrower and the Secured Party, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"BANK ONE" means Bank One, NA, a national banking association,
and its successors and permitted assigns.
"BLACK BOOK" means any current, subscription-based car pricing
mini-book updated at least monthly with regional selling prices from wholesale
auto auctions and distributed to auto dealers, as of such date of determination.
"BORROWER" means E-LOAN Auto Fund One, LLC, a Delaware limited
liability company, and its successors and permitted assigns.
"BORROWER'S ACCOUNT" has the meaning attributed to such term
in Section 12.11 of the Credit Agreement.
"BORROWER'S COUNSEL" means Mayer, Brown, Xxxx & Maw.
"BREAKAGE FEE" means an amount equal to 0.15% of (x) the
principal balance of any Contracts that are sold by the Borrower or (y) any
Advances which are repaid on any day other than a Payment Date.
"BUSINESS DAY" means any day other than (i) a Saturday or
Sunday or (ii) a day on which the New York Stock Exchange, the Federal Reserve
Bank of New York or banking institutions in New York
3-
(including New York City) or, to the extent relevant, California or Missouri are
authorized or obligated by law, regulation or executive order to remain closed.
"BUYER" means the Borrower, as buyer under the Contribution
and Sale Agreement.
"CASUALTY LOSS" means any of the following events with respect
to any Financed Vehicle: (a) the actual total loss of such Financed Vehicle, (b)
the Seller's or the Servicer's actual knowledge that such Financed Vehicle has
become lost, stolen or destroyed, (c) 30 days following the Servicer's or the
Buyer's determination that such Financed Vehicle is damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever, or (d) the Seller
or the Servicer become aware that such Financed Vehicle shall have been deemed
under its Contract to have suffered a casualty loss.
"CERTIFICATE OF TITLE" shall have the meaning attributed to
such term in Section 9-102(10) of the UCC.
"CLAIM" has the meaning attributed to such term in Section
7.07 of the Auto Fund Security Agreement.
"CLOSING DATE" means June 18, 2002.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning attributed to such term in
Section 2.01 of the Auto Fund Security Agreement.
"COLLATERAL VALUE" means, with respect to a Financed Vehicle
that is a new vehicle, the invoice price of such vehicle, and with respect to a
Financed Vehicle that is a used vehicle, the trade-in/wholesale price of such
vehicle from an approved used car value guide for a used vehicle. For purposes
of this definition, the approved used car value guides are N.A.D.A., KBB or
Black Book.
"COLLECTION ACCOUNT" means the segregated collection
operations account subject to the Securities Account Control Agreement and
maintained by the Borrower at Bank One (account: E-LOAN Auto Fund One, LLC)
having account number 636101495 (ABA: 000000000) for the purpose of depositing
the Collections forming part of the Collateral.
"COLLECTION SWEEP INVESTMENT ACCOUNT" means the collection
sweep investment sub-account to the Collection Account subject to the Securities
Account Control Agreement and maintained by the Borrower at Bank One for the
purpose of investing amounts held in the Collection Account in Eligible
Investments.
"COLLECTIONS" means the aggregate of all payments and proceeds
(including Insurance Proceeds and the proceeds of disposition of any Financed
Vehicle received as a result of the enforcement of the terms of the related
Contract) received by the Borrower in respect of any Collateral.
"COMMITMENT EXPIRATION DATE" means June 17, 2003 (unless
otherwise extended by the Lender in its sole discretion in accordance with the
terms and conditions of Section 2.1 of the Credit Agreement)
4-
"COMMITMENT FEE" has the meaning attributed to such term in
Section 3.3.1 of the Credit Agreement.
"COMMITMENT TERMINATION DATE" means the earlier to occur of
(i) the Termination Date, (ii) the date on which any purchase pursuant to the
Receivables Auction Option is required to be consummated and (iii) the
Commitment Expiration Date.
"CONCENTRATION ACCOUNT" means the segregated funding
concentration account maintained by the Seller at Bank One (account: E-LOAN,
Inc.) having account number 000000000 (ABA: 000000000) for the purpose of
reconciling the receipts and disbursements on the Contracts.
"CONTRACT" means an E-Fund Agreement, Note and Security
Agreement and each other agreement delivered in connection therewith or pursuant
thereto relating to a Vehicle, which was originated by the Seller and pursuant
to which the related Obligor is required to repay the related Amount Financed in
full during the term of such agreement or contract.
"CONTRACT PURCHASER" means a financial institution that has
entered into a Contract Purchase Agreement with Seller.
"CONTRACT PURCHASE AGREEMENT" means a written agreement
between Seller and a Contract Purchaser whereby the Seller agrees to sell and
the Contract Purchaser agrees to purchase Contracts which satisfy such Contract
Purchaser's Loan Guidelines. A list of all of the Seller's Contract Purchase
Agreements is attached to the Loan Agreement as Exhibit C.
"CONTRIBUTION AND SALE AGREEMENT" means the Contribution and
Sale Agreement, dated as of June 1, 2002, between the Borrower and the Seller,
as the same may be supplemented (including each Seller Assignment), amended or
otherwise modified from time to time in accordance with its terms.
"CREDIT AGREEMENT" means the Credit Agreement, dated as of
June 1, 2002, among the Borrower, the Seller and the Lender, as the same may be
supplemented, amended or otherwise modified from time to time in accordance with
its terms.
"CREDIT DOCUMENTS" means the Credit Agreement, the
Contribution and Sale Agreement, the Servicing and Custodian Agreement, the Auto
Fund Security Agreement, the Note, each Hedge Agreement, the Securities Account
Control Agreement, the Administration Agreement, any supplements to or
confirmations under any such agreement and other documents and certificates
delivered in connection therewith.
"CREDIT FACILITY" has the meaning attributed to such term in
Section 2.1.1 of the Credit Agreement.
"CREDIT FACILITY LIMIT" means, (i) during the period ending
August 31, 2002, $150,000,000; (ii) during the period ending November 30, 2002,
$300,000,000; (iii) during the period ending February 28, 2003, $450,000,000;
and (iv) at all times thereafter, the greater of (A) $540,000,000 and (B) the
Lender's then current legal lending limit, PROVIDED that in no event shall the
amount under this clause (iv) exceed $600,000,000.
"CURRENT FINANCIALS" means the Financial Statements of Seller
for the fiscal year ending December 31, 2001, and the quarter ended March 31,
2002.
5-
"CUSTODIAN" means Systems & Services Technologies, Inc., a
Delaware corporation, and its successors and permitted assigns as custodian
under the Servicing and Custodian Agreement.
"CUTOFF DATE" has the meaning attributed to such term in
Section 2.3.3 of the Credit Agreement.
"DEALER" means a franchise dealer and seller of Vehicles.
"DEALER AGREEMENT" means an agreement between a Dealer or
Eligible Non-Franchise Dealer and the Seller whereby the Seller agrees to make a
direct loan to a consumer for the purchase of a Vehicle from a Dealer or
Eligible Non-Franchise Dealer, provided that such dealer performs certain acts
and provides certain documentation to the Seller, which agreement is
substantially in the form of Exhibit N to the Credit Agreement.
"DEBT" means, at any time, with respect to any Person, without
duplication and, except as provided in item (b) below, without regard to any
interest component thereof (whether actual or imputed) that is not due and
payable, the aggregate of the following amounts, each calculated at such time in
accordance with GAAP, but excluding, for greater certainty, capital stock,
whether or not preferred, which is not referred to in clause (k) below:
(a) money borrowed (including by way of overdraft) or
indebtedness represented by notes payable and drafts accepted
representing extensions of credit;
(b) the face amount of all bankers' acceptances and similar
instruments;
(c) the amount of any indemnity or reimbursement obligations
arising from or relating to letters of credit, letters of guarantee,
legally binding comfort letters, guarantees or security bonds issued on
behalf of such Person;
(d) all obligations (whether or not with respect to the
borrowing of money) that are evidenced by bonds, debentures, notes or
other similar instruments, whether or not any such instruments are
convertible into capital, or that are not so evidenced, but that would
be considered by GAAP to be indebtedness for borrowed money;
(e) all obligations upon which interest charges are
customarily paid by that Person (including purchase money obligations);
(f) principal obligations as lessee under capital leases, all
as determined in accordance with GAAP;
(g) all obligations (contingent or otherwise) under any Hedge
Agreements (after deducting the market value at such time of any
collateral or credit support posted or transferred to the applicable
counterparty as security for such obligations);
(h) any deferred purchase price for property or services
purchased (including vendor financing in connection with any
investment, but excluding trade payables and other liabilities incurred
in the ordinary course of business);
(i) any transfer of property or assets which has been made
with recourse to the transferor or any obligation to repurchase any
property or assets or to purchase property or assets regardless of the
delivery or non-delivery thereof;
6-
(j) any amount secured by an Encumbrance;
(k) any obligation to purchase, redeem or otherwise retire or
purchase for cancellation any shares of capital stock in such Person at
the option of the holder thereof, including any obligation to so
purchase, redeem or otherwise retire or purchase for cancellation any
shares of capital stock issuable upon the exchange or conversion of
other shares; and
(l) any contingent obligation incurred for the purpose of or
having the effect of providing financial assistance to another entity,
including, any guarantee or indemnity (other than by endorsement of
negotiable instruments for collection or deposit in the ordinary course
of business) in any manner of any part or all of an obligation included
in items (a) through (k) above.
"DEFAULTED RECEIVABLE" means a Receivable with respect to which (i) the
Servicer has repossessed the related Financed Vehicle, (ii) the Obligor has been
identified as being the subject of a current bankruptcy proceeding, or (iii)
such Receivable has been charged-off in accordance with the terms of the
Servicing and Custodian Agreement (PROVIDED that any Receivable that is not
performing for a period of greater than 120 days shall be presumed to be a
"Defaulted Receivable" under this definition) or the Servicer has determined in
its good faith that payments thereunder are not likely to be resumed.
"DETERMINATION DATE" means, with respect to any Payment Date, the day
occurring two (2) Business Days prior to such Payment Date.
"DISCOUNTED CONTRACT BALANCE" means, with respect to any Contract, the
then current net present value of the remaining payments due under such
Contract, which amount shall be calculated by discounting such remaining
payments monthly at the related interest rate on such Contract.
"DRAFT ACCOUNT" means the segregated draft account maintained by the
Seller at Bank One (account: E-LOAN, Inc.) having account number 634866339 (ABA:
000000000) for the purpose of disbursing the principal amount of each Contract
to the related Dealer or Eligible Non-Franchise Dealer for the related Financed
Vehicle via check when ACH is not used.
"DRAWDOWN DATE" means the date, which shall be a Business Day, of any
Advance.
"DRAWDOWN NOTICE" has the meaning attributed to such term in Section
2.3.2 of the Credit Agreement.
"E-FUND AGREEMENT" means an E-Fund Agreement originated by the Seller
to an Obligor for the purchase of a Vehicle, substantially in the form of
Schedule O to the Credit Agreement.
"ELIGIBLE CONTRACT" means a Contract which at its respective Transfer
Date and Drawdown Date met the eligibility criteria set forth in Schedule J of
the Credit Agreement.
"ELIGIBLE NON-FRANCHISE DEALER" means (1) CarMax, (2) Autonation, (3)
Enterprise, (4) each other Person mutually agreed upon by the Lender and the
Borrower and (5) except for the ninety (90) day period following the Closing
Date, sellers of vehicles that are not any of the foregoing persons and that do
not comprise more than five percent (5%) of the Aggregate Outstanding Balance,
in each case (x) approved by the Seller based on the Non-Franchise Dealer
Procedures attached as Exhibit B to the Contribution and Sale Agreement and (y)
a party to a Dealer Agreement.
7-
"ELIGIBLE HEDGE COUNTERPARTY" means (1) at the time of execution and
delivery of the related Hedge Agreement, (x) the Lender and any party providing
credit support on its behalf or (y) any bank and any other Person providing
credit support on such Xxxxx'x behalf that has a long-term unsecured debt rating
of at least "A" from S&P and "A2" from Xxxxx'x and has a short-term unsecured
debt rating of "A-1" from S&P and "P-1" from Xxxxx'x, and (2) after the
execution and delivery of the related Hedge Agreement, any Person described in
clause (1) hereof that has not suffered a Hedge Counterparty Downgrade Event.
"ELIGIBLE INVESTMENTS" means negotiable instruments or
securities represented by instruments in bearer or registered or in book-entry
form which evidence obligations fully guaranteed by the United States.
"ENCUMBRANCE" means any mortgage, debenture, pledge, lien,
charge, assignment by way of security, hypothecation or security interest
granted or permitted by a Person or arising by operation of law, in respect of
any Person's property or assets, or any consignment or capital lease of property
by such Person as consignee or lessee or any other security agreement, trust or
arrangement, having the effect of security for the payment or performance of any
debt, liability or obligation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EVENT OF DEFAULT" has the meaning attributed to such term in
Section 9.1 of the Credit Agreement.
"EXCESS SPREAD" means the excess, if any, of the weighted
average (weighted based on the Outstanding Balance of the Receivables) APR of
the Receivables included in the Aggregate Outstanding Balance over the sum of
(i) the weighted average (weighted based on the notional amount of the Hedge
Agreements as of the related date of determination) of the fixed interest rates
payable by the Borrower under the Hedge Agreements and (ii) 1.50%.
"EXCESS SPREAD DEFICIENCY" has the meaning attributed to such
term in Section 2.6.2 of the Credit Agreement.
"FINANCED VEHICLE" means, in respect of a Contract and the
related Receivable, the Vehicle, together with all accessions thereto, securing
the related Obligor's indebtedness in connection with such Contract and the
related Receivable.
"FINANCIAL REPORT CERTIFICATE" means a certificate containing
such certifications, statements, calculations, explanations, and conclusions as
Lender may require concerning compliance with the Loan Documents in form and
substance satisfactory to Lender, which is in the form of Exhibit B to the Loan
Agreement.
"FINANCIAL STATEMENTS" means balance sheets, profit and loss
statements, and statements of cash flows prepared in comparative form with
respect to the corresponding period of the preceding fiscal year and prepared in
accordance with GAAP.
"GAAP" means all applicable generally accepted accounting
principles of the Accounting Principles Board of the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board which
are applicable as of the date of the Current Financials.
8-
"GENERAL UNDERWRITING CRITERIA" means, the Seller's general
underwriting and credit policies with respect to Contracts and Receivables, in
the form set forth as Schedule I to the Credit Agreement, as such criteria may
be amended from time to time in accordance with the terms of the Credit
Agreement.
"GOOD FAITH DEPOSIT" means, with respect to the Borrower, the
$50,000 non-refundable deposit paid by the Borrower or the Seller to the Lender
in contemplation of the consummation of the transaction herein described.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state, county, or city and any political subdivision of any of the foregoing and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GRANT" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create and xxxxx x xxxx
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to the Auto Fund Security Agreement, and other forms of the
verb "to Grant" shall have correlative meanings. A Grant of the Collateral or of
any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"HEDGE AGREEMENT" means an interest rate swap agreement or cap
agreement between a Hedge Counterparty and the Borrower (together with all
supplements, confirmations, amendments and modifications thereto) acceptable to
the Secured Party which provides for monthly payments by the interest rate swap
or cap provider.
"HEDGE COUNTERPARTY" means an interest rate swap or cap
provider.
"HEDGE COUNTERPARTY DOWNGRADE EVENT" means, with respect to
any Hedge Counterparty, the assignment of a long-term unsecured debt rating of
"BBB" or lower from S&P and "Baa2" or lower from Moody's with respect to the
unsecured and unsubordinated debt, deposit or letter of credit obligations of
such Hedge Counterparty (or any party providing credit support on its behalf).
"HEDGE STRATEGY" has the meaning attributed to such term in
Section 3.7 of the Credit Agreement.
"INCLUDING" means "including without limitation" and shall not
be construed to limit any general statement which it follows to the specific or
similar item or items immediately following it and "include" and "includes" have
similar non-restrictive meanings.
"INDEMNIFIED AMOUNTS" means any and all actions, proceedings,
damages, losses, claims, taxes, liabilities, costs, expenses, obligations and
for all other amounts payable, including reasonable attorneys' fees (which
attorneys may be employees of the Lender) and reasonable disbursements.
"INDEMNIFIED PARTIES" means, the Servicer, the Custodian, the
Lender, each Hedge Counterparty, each of their respective Affiliates and their
respective members, directors, officers, employees and agents.
9-
"INITIAL ADVANCE AMOUNT" means, with respect to each Advance
on the related Drawdown Date, an amount equal to the product of (i) the Initial
Advance Rate multiplied by (ii) the Outstanding Tranche Collateral Balance of
the Related Tranche Collateral initially pledged to the Lender on such Drawdown
Date.
"INITIAL ADVANCE RATE" means 99.5%.
"INITIAL SOLD ASSETS" means those Sold Assets transferred by
the Seller to the Buyer on the Closing Date.
"INSOLVENCY EVENT" means, with respect to a specified Person:
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable Federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days, or (b) the commencement by such Person of a voluntary case under any
applicable Federal or State bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INSOLVENCY LAW" The United States Bankruptcy Reform Act of
1978, as amended, or similar applicable law in any applicable jurisdiction.
"INSURANCE PROCEEDS" means, with respect to any Contract and
the related Receivable, any proceeds collected by the Borrower, the Servicer,
the Seller or from claims on any physical damage insurance policies covering the
related Financed Vehicle.
"INTEREST PERIOD" means in respect of any Advance, (A)
initially, the period from and including the Drawdown Date in respect of such
Advance to but excluding (i) with respect to any Advance made on or before the
twenty-fifth (25th) day of a calendar month, the Payment Date following the
calendar month during which the Drawdown Date in respect of such Advance
occurred, and (ii) with respect to any Advance made after the twenty-fifth
(25th) day of a calendar month, the Payment Date following the first calendar
month after the calendar month during which the Drawdown Date in respect of such
Advance occurred, and (B) thereafter, the period from and including each Payment
Date in respect of such Advance to but excluding the next Payment Date, up to
but excluding the earlier of (x) the date on which the Borrower is required to
repay such Advance pursuant to the terms of the Credit Agreement, and (y) the
date on which such Advance is repaid in full.
"KBB" means any current Xxxxx Blue Book Official Guide
published by Xxxxxx Blue Book as of such date of determination.
"LAW" means all applicable statutes, laws, ordinances,
regulations, orders, writs, injunctions or decrees of any Governmental
Authority.
"LENDER" means Xxxxxxx Xxxxx Bank USA, an industrial loan
company organized pursuant to the laws of the State of Utah, its successors and
permitted assigns.
10-
"LENDER ACCOUNT" has the meaning attributed to such term in
Section 12.12 of the Credit Agreement.
"LIBOR" means, with respect to each Interest Period or other
specified time period determined by the Lender, the London interbank offered
rate for deposits in U.S. Dollars having a maturity of one month commencing on
the first day of such Interest Period or other specified time period determined
by the Lender, as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on the applicable LIBOR Determination Date. If such rate does not
appear on Telerate Page 3750, the rate for that day will be determined on the
basis of the rates at which deposits in U.S. Dollars, for such period and in a
principal amount of not less than $1,000,000, are offered at approximately 11:00
a.m. (London time) on such LIBOR Determination Date to prime banks in the London
Interbank market by the Reference Banks. The Servicer will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate for that day will be the
arithmetic mean of the quotations. If fewer than two quotations are provided,
the rate for that day will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Servicer, at approximately 11:00 a.m.
(New York City time) on such LIBOR Determination Date for loans in U.S. Dollars,
for such period and in a principal amount of not less than $1,000,000, to
leading European banks; PROVIDED that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, LIBOR in effect for the applicable
Interest Period or other specified time period determined by the Lender will be
the LIBOR in effect for the previous Interest Period or other specified time
period determined by the Lender; and PROVIDED FURTHER that if LIBOR in effect
for the previous Interest Period or other specified time period determined by
the Lender does not adequately and fairly reflect the cost to the Lender of
funding the Credit Facility, LIBOR in effect for the applicable Interest Period
or other specified time period determined by the Lender shall instead be the
cost of funds to the Lender of funding the Credit Facility. "Telerate Page 3750"
means the display page so designated on the Dow Xxxxx Telerate Service (or such
other page as may replace that page on that service for the purpose of
displaying comparable rates or prices). "Reference Bank" means a leading bank:
(a) engaged in transactions in eurodollar deposits in the international
eurocurrency market, (b) not controlling, controlled by or under common control
with the Seller or the Borrower and (c) having an established place of business
in London.
"LIBOR DETERMINATION DATE" means, with respect to any Interest
Period, the second London business day before the commencement of such Interest
Period. For this purpose, a "London business day" means any day on which
dealings in U.S. dollars are carried on in the London interbank market.
"LIEN" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the related Receivable by operation of law as a result of any act
or omission by the related Obligor.
"LIMITED LIABILITY COMPANY AGREEMENT" means the Limited
Liability Company Agreement of the Borrower, dated as of May 21, 2002, among the
Seller, as the Member, Xxxxxxxx X. Abedine, as a Special Member, and Xxxx X.
Xxxxxxxxxxxx, as a Special Member, as amended from time to time in accordance
with its terms.
"LOAN AGREEMENT" means the Loan Agreement, dated as of June
14, 2002, between the Seller, as borrower thereunder, and the Lender, as the
same may be supplemented, amended or otherwise modified from time to time in
accordance with its terms.
"LOAN DOCUMENTS" has the meaning attributed to such term in
the Loan Agreement.
11-
"LOAN-TO-VALUE RATIO" means a quotient (expressed as a
percentage), the numerator of which is the principal balance of a Contract and
the denominator of which is the Collateral Value of a Financed Vehicle.
"MATERIAL ADVERSE CHANGE" means, in respect of any Person, any
change having a material adverse effect on the business, assets, liabilities,
operations, results of operations, condition (financial or other), of such
Person, or the ability of such Person to carry on its business or a significant
part of its business, or which would reasonably be expected to result in, or has
resulted in, a material adverse effect on the ability of such Person to perform
its obligations under the Credit Documents to which it is a party.
"MATERIAL ADVERSE EFFECT" means, with respect to the Borrower
or the Seller, a material adverse effect on (i) the financial condition or
operations of the Borrower or the Seller, as the case may be, or the ability of
such Person to perform its respective obligations under any Credit Document,
(ii) the legality, validity or enforceability of any Credit Document, (iii) the
Secured Party's security interest in the Collateral generally or in any
Contracts or other Collateral such that the aggregate Discounted Contract
Balance of all the affected Contracts plus the face value of all other affected
Collateral exceeds an aggregate amount of $250,000, or (iv) the collectibility
of the Contracts generally or of any Material Portion of the Contracts.
"MATERIAL CONTRACT" means, with respect to any Person, any
contract or agreement to which such Person is a party (i) involving an aggregate
financial obligation on the part of such Person in excess of $1,000,000, or (ii)
the breach of which by any party thereto would result in a Material Adverse
Change in respect of such Person.
"MATERIAL PERMIT" means, with respect to any Person, any
Permit the breach of which by such Person would result in a Material Adverse
Change in respect of such Person.
"MATERIAL PORTION" means the aggregate Discounted Contract
Balance of all affected Contracts plus the face value of all other affected
Collateral exceeds an aggregate amount of $250,000.
"MATURITY DATE" means the fifteenth (15th) day of the Monthly
Period immediately succeeding the due date of the latest installment due under
the Receivables.
"MEMBER" has the meaning attributed to such term in the
Limited Liability Company Agreement.
"XXXXXXX COUNTERPARTY" means the Person identified in clause
(x) of the definition of "Eligible Hedge Counterparty" above.
"MONTHLY PERIOD" means each calendar month.
"MONTHLY PRINCIPAL PAYMENT" means, for each Tranche and each
Payment Date, an amount equal to the Outstanding Tranche Loan Balance at the
opening of business on such Payment Date, minus the Target Tranche Loan Balance
therefor.
"MONTHLY SERVICER REPORT" means a report of the Borrower for
each Tranche, substantially in the form attached hereto as Schedule F.
"MONTHLY TAPE" means the computerized loan-level information
on all Contracts comprising Collateral to be provided by the Servicer to the
Lender pursuant to the Servicing Agreement
12-
no less frequently than monthly, and which loan-level information shall include,
without limitation, loan number, loan date, lender code, loan amount, product,
tier, borrowing rate, Obligor's full name and full address, FICO score, term,
monthly payment amount, estimated debt-to-income, model year, mileage, auto body
type, auto body style, wholesale book value, servicer i.d., effective date and
such other information as the Lender may reasonably request from time to time.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any
successor thereto.
"MULTIEMPLOYER PLAN" has the meaning attributed to such term
under ERISA.
"N.A.D.A." means any current N.A.D.A. Appraisal Guide
published by NADA Appraisal Guides, Inc. as of such date of determination.
"NOTE" means the revolving credit note issued by the Borrower
to the Lender pursuant to the Credit Agreement, substantially in the form of
Schedule L thereto.
"NOTE AND SECURITY AGREEMENT" means a Note and Security
Agreement originated by the Seller to an Obligor for the refinancing or purchase
of a Vehicle, substantially in the form of Schedule P to the Credit Agreement.
"OBLIGATIONS" means all obligations of the Borrower to the
Lender and/or the Hedge Counterparties under or in connection with the Credit
Agreement, the Note and all other Credit Documents, including, without
limitation, all debts and liabilities, present or future, direct or indirect,
absolute or contingent, matured or not, whenever and howsoever incurred, in any
currency at any time owing by the Borrower to the Lender and/or the Hedge
Counterparties, in any currency or remaining unpaid by the Borrower to the
Lender and/or the Hedge Counterparties, under or in connection with or relating
to the Credit Agreement and all other Credit Documents, whether the same is from
time to time increased, reduced and thereafter incurred again and whether
arising from dealings between the Lender and/or the Hedge Counterparties and the
Borrower or from any other dealings or proceedings by which the Lender and/or
the Hedge Counterparties may be or become in any manner whatever a creditor of
the Borrower, and wherever incurred, and whether incurred by the Borrower alone
or with another or others and whether as principal or surety, and all interest,
fees, legal and other costs, charges and expenses.
"OBLIGOR" means, with respect to a Contract and the related
Receivable, the consumer and any other Person who owes payments under such
Contract and the related Receivable in respect of the purchase or refinancing of
a Financed Vehicle or such Contract and the related Receivable.
"OFFICERS' CERTIFICATE" means a certificate signed by at least
one of the Chairman of the Board, the President, the Vice Chairman of the Board,
an Executive Vice President, any Vice President, a Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary of the Seller, the Servicer or the
Administrator, as appropriate.
"OPINION OF COUNSEL" means a written opinion of counsel (who
may, except as otherwise expressly provided in the Credit Agreement, be an
employee of or counsel to the Seller or the Servicer), which counsel and opinion
shall be acceptable to the Lender.
"ORGANIZATIONAL DOCUMENTS" means, with respect to any
corporation or company, its articles of incorporation, organization, formation
or other similar document and its by-laws, operating agreement or other similar
document, all as amended, supplemented and otherwise modified from time to time.
13-
"ORIGINAL TRANCHE COLLATERAL BALANCE" means, for each Tranche,
the sum of the Related Tranche Collateral amounts in clause (ii) of the Initial
Advance Amount for all Advances comprising such Tranche.
"ORIGINATOR" means the Seller.
"OUTSTANDING BALANCE" means, in respect of any Receivable at
any date of calculation, the original principal amount owing by the related
Obligor under the related Contract less all payments of principal received from
time to time in respect of such Receivable up the opening of business on such
date of calculation.
"OUTSTANDING TRANCHE COLLATERAL BALANCE" means, at the opening
of business on any date of calculation, with respect to the Receivables forming
part of the Related Tranche Collateral for any Tranche, the aggregate
Outstanding Balance of all such Receivables forming part of such Related Tranche
Collateral on such day.
"OUTSTANDING TRANCHE LOAN BALANCE" means, on any day, with
respect to a Tranche, (i) the aggregate Initial Advance Amount for all Advances
comprising such Tranche, less (ii) all payments of principal received from time
to time in respect of such Tranche up to the opening of business on such date of
calculation.
"PAYMENT DATE" means the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the immediately following Business
Day; PROVIDED that the Payment Date in respect of the Interest Period which
includes the Termination Date shall occur on the Termination Date. The first
Payment Date shall be August 15, 2002.
"PENDING EVENT OF DEFAULT" means an event which, but for the
requirement for the giving of notice, lapse of time, or both, or but for the
satisfaction of any other condition subsequent to such event, would constitute
an "EVENT OF DEFAULT".
"PERMIT" means governmental licenses, authorizations,
consents, registrations, exemptions, permits and other approvals required by
law.
"PERMITTED ENCUMBRANCE" has the meaning attributed to such
term in Section 6.1(g) of the Credit Agreement.
"PERSON" means any individual, corporation, limited liability
company, estate, partnership, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"PLAN" means at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be deemed
to be) "an employer" as defined in Section 3(5) of ERISA.
"PAYMENT-TO-INCOME RATIO" means a quotient (expressed as a
percentage), the numerator of which is an Obligor's monthly payment for a
Financed Vehicle under the related Contract and the denominator of which is such
Obligor's monthly income.
"PRIME DISCOUNT AMOUNT" means, with respect to each Tranche,
an amount equal to 0.5% of the related Initial Advance Amount.
14-
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PROPERTY" means, with respect to any Person, all or any
portion of its undertaking, property and assets (whether real, personal,
tangible or intangible).
"RATING AGENCIES" means, Moody's and S&P.
"RECEIVABLE" means any Contract listed on the Schedule of
Receivables and included in the Collateral, and in respect of any such Contract,
all amounts payable by the related Obligor, including, without limitation, all
rights to payments on account of principal and interest together with all
payment obligations thereunder and all moneys received thereon and the security
interest in the related Financed Vehicle.
"RECEIVABLE FILE" means
(a) with respect to a Contract for the purchase of a Vehicle by the
related Obligor, collectively, the following documents or instruments:
1. the original fully executed Contract (including, without
limitation, each E-Fund Agreement or Note and Security Agreement);
2. a true and complete copy of the application for the
Certificate of Title of the related Financed Vehicle, indicating the
Seller, the Borrower or the Secured Party as the sole lienholder or
legal owner thereof;
3. a true and complete copy of the credit application of the
related Obligor;
4. if the related Financed Vehicle is a used Vehicle, a true and
complete copy of the duly executed odometer statement (setting forth
the elapsed number of miles such Financed Vehicle has been driven at or
about the time of the loan by the Seller to the Obligor) with respect
to such Financed Vehicle, which statement may be included in the xxxx
of sale;
5. if there is a co-signer on the Contract, a true and complete
copy of the duly executed notice to co-signer delivered to the
co-signer, which notice may be set forth in the related E-Fund
Agreement;
6. a true and complete copy of the duly executed service contract
or warranty, if any, with respect to the related Financed Vehicle;
7. if the related Financed Vehicle is a new Vehicle, a true and
complete copy of the duly executed xxxx of sale with respect to such
Financed Vehicle;
8. original fully executed promissory notes and true and complete
copies of all letters of credit, agreements, documents and instruments
relating to, evidencing, securing or guarantying the loan to the
related Obligor;
9. within 240 days after the related Transfer Date of such
Contract, the original Certificate of Title for the related Financed
Vehicle, indicating the Seller, the Borrower or the Secured Party as
the sole lienholder or legal owner thereof; and
15-
10. any and all other documents that the Seller shall keep on
file, in accordance with its customary procedures, relating to the Sold
Assets (including, without limitation, the Receivable and the related
Financed Vehicle) or the related Obligor
(b) with respect to a Contract for the refinance of a Vehicle by the
related Obligor:
1. the original fully executed Note and Security Agreement or
other form of Contract, if applicable, together with any modifications
or amendments thereto, including, without limitation, any extension
agreements;
2. a true and complete copy of a duly executed power of attorney
by the Obligor, authorizing the Seller to register itself as the sole
lienholder on the certificate of title for the related Financed
Vehicle;
3. a true and complete copy of the credit application of the
related Obligor;
4. a true and complete copy of the duly executed odometer
statement (setting forth the elapsed number of miles such Financed
Vehicle has been driven at or about the time of the loan by the Seller
to the Obligor) with respect to such Financed Vehicle, which statement
may be included in the xxxx of sale;
5. if there is a co-signer on the Contract, a true and complete
copy of the duly executed notice to co-signer delivered to the
co-signer, which notice may be set forth in the related Note and
Security Agreement;
6. original fully executed promissory notes and true and complete
copies of all letters of credit, agreements, documents and instruments
relating to, evidencing, securing or guarantying the loan to the
related Obligor;
7. within 240 days after the related Transfer Date of such
Contract, the original Certificate of Title for the related Financed
Vehicle, indicating the Seller, the Borrower or the Secured Party as
the sole lienholder or legal owner thereof; and
8. any and all other documents that the Seller shall keep on
file, in accordance with its customary procedures, relating to the
Receivable, the related Obligor or the related Financed Vehicle,
including, without limitation, any record, in a format acceptable to
the Lender (e.g., compact disc), of each draft executed by a prior
lender/lienholder setting forth the acknowledgment by such
lender/lienholder of the release of its lien.
"RECEIVABLES AUCTION OPTION" has the meaning attributed to
such term in Section 2.8 of the Credit Agreement.
"REFERENCE BANK" has the meaning attributed to such term
within the defined term "LIBOR".
"REGULATION T, U AND X" means Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.
"RELATED TRANCHE COLLATERAL" has the meaning attributed to
such term in the definition of "TRANCHE", below.
16-
"REPORTABLE EVENT" means any of the events set forth in
Sections 4043(c) of ERISA, other than those events as to which the notice period
is waived under Sections .21, .22, .23, .26, .27, .28 of Pension Benefit
Guaranty Corporation Reg. Section 4043.
"REQUIRED SWAP SPREAD" means, for each Tranche with a weighted
average FICO score (i) from, and including, 640 to, and including, 679, 3.50%;
(ii) from, and including, 680 to, and including 720, 2.50%; and (iii) over 720,
2.00%.
"REQUIREMENT OF LAW" means, as to any Person, any law, treaty,
regulation, ordinance, decree, judgment, order or similar requirement made or
issued under sovereign or statutory authority and applicable to or binding upon
that Person, or to which that Person or any of its Property is subject.
"RIGHTS" means, as to any Person, any rights of such Person
under any applicable Law or in equity.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"SCHEDULE OF CONTRACTS" has the meaning attributed to such
term in Section 2.3.3 of the Credit Agreement.
"SCHEDULE OF RECEIVABLES" means, collectively, the listing of
the Receivables attached to the Seller Assignment, as amended or modified from
time to time pursuant to the terms of the Contribution and Sale Agreement.
"SCHEDULE OF REMOVED CONTRACTS" has the meaning attributed to
such term in Section 2.5.2 of the Credit Agreement.
"SCHEDULED HEDGE PAYMENT" means all payments then due under
the Hedge Agreement.
"SECURED PARTY" means the Lender.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities Account
Control Agreement, dated as of June 1, 2002, among the Borrower, the Secured
Party and Bank One, NA, as securities intermediary, and acknowledged and agreed
to by the Servicer, as the same may be supplemented, amended or otherwise
modified from time to time in accordance with its terms.
"SECURITIZATION" means the issuance and sale, upon not less
than five (5) Business Days written notice to the Lender, of asset-backed
securities secured directly or indirectly by all or any portion of the
Collateral pledged to the Lender pursuant to the Auto Fund Security Agreement
and the other Credit Documents.
"SECURITY INTEREST" means the security interest granted, and
the pledge and assignment made, by the Borrower to the Secured Party under
Article 2 of the Auto Fund Security Agreement.
"SELLER" means E-LOAN, Inc., a Delaware corporation, its
permitted successors and assigns.
"SELLER ASSIGNMENT" has the meaning attributed to such term in
Section 2.1 of the Contribution and Sale Agreement.
17-
"SELLER CERTIFICATE" means a seller certificate substantially
in the form of Schedule C to the Credit Agreement.
"SELLER'S COUNSEL" means Mayer, Brown, Xxxx & Maw.
"SERVICER" means Systems & Services Technologies, Inc., a
Delaware corporation, together with its permitted successors and assigns.
"SERVICER DEFAULT" has the meaning attributed to such term in
the Servicing and Custodian Agreement.
"SERVICING AND CUSTODIAN AGREEMENT" means the Servicing and
Custodian Agreement, dated as of June 1, 2002, among the Borrower, the Servicer
and the Secured Party, as the same may be supplemented, amended or otherwise
modified from time to time in accordance with its terms.
"SERVICING AND CUSTODIAN FEE" has the meaning attributed to
such term in the Servicing and Custodian Agreement, and which, in any event
shall not exceed on each Payment Date an amount equal to (i) 0.50% divided by
12, multiplied by (ii) the Aggregate Outstanding Balance on such Payment Date.
"SOLD ASSETS" means all of the following:
(a) the Receivables, including all documents constituting
chattel paper included therewith, and all obligations of the Obligors
thereunder, including all rights to payment and moneys paid thereunder
on or after the applicable Cutoff Date, and the related Receivables
Files;
(b) the security interests or Liens in the Financed Vehicles
or any other property granted by Obligors pursuant to the Receivables
and any other interest of the Seller in such Financed Vehicles or other
property, together with any and all interests of the Seller in any and
all security interests granted in connection with such Receivables,
Financed Vehicles or other property;
(c) all guarantees or other credit support supporting or
securing payment of any amount due under a Receivable and any proceeds
with respect to the Receivables from any guaranties or other credit
support or claims on insurance policies covering Financed Vehicles or
Obligors;
(d) any agreements with a Dealer, Eligible Non-Franchise
Dealer or manufacturer of a Financed Vehicle to the extent any such
agreement relates to such Financed Vehicle and any payments, income and
proceeds from recourse to Dealers, Eligible Non-Franchise Dealers or
manufacturers with respect to the Receivables; and
(e) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on
or under, income from and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, general intangibles,
payment intangibles, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property
that at any time constitute all or part of or are included in the
proceeds of any and all of the foregoing.
18-
"SOLVENT" means, with respect to any Person, that each of the
following is correct:
(f) the assets of such Person, at a fair valuation, exceed the
total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person;
(g) based on current expectations, which are based on
underlying assumptions which provide a reasonable basis for the
projections and which reflect such Person's judgment based on present
circumstances of the most likely set of conditions and such Person's
most likely course of action for the period projected (which may
require a refinancing of assets), such Person believes it has
sufficient cash flow to enable it to pay its debts as they mature;
(h) such Person does not have an unreasonably small capital
with which to engage in its anticipated business; and
(i) such Person is generally not in default as to its
obligations to pay principal and interest or other payments.
"STATE" means any one of the 50 states of the United States
of America or the District of Columbia.
"SUBSIDIARY" means, with respect any Person, any other Person
of which at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries of such Person.
"SWAP SPREAD" means the difference of (i) the weighted average
(weighted based on the Outstanding Balance of the Receivables) APR of the
Aggregate Outstanding Balance minus (ii) the weighted average (weighted based on
the notional amount of the Hedge Agreements as of the related date of
determination) of the fixed interest rates payable by the Borrower under the
Hedge Agreements.
"SWAP SPREAD DEFICIENCY" has the meaning attributed to such
term in Section 2.6.2 of the Credit Agreement.
"TANGIBLE NET WORTH" means, with respect to the Seller, total
assets minus all indebtedness, obligations or liabilities of the Seller
(excluding indebtedness, obligations or liabilities which are subordinated to
obligations of the Seller to the Lender) all determined in accordance with GAAP;
PROVIDED, HOWEVER, for purposes of any computation of Tangible Net Worth,
"assets" shall not include (i) goodwill (whether representing the excess of cost
over book value of assets acquired or otherwise), (ii) patents, trademarks,
trade names, copyrights, and franchises, (iii) Debt owed by any Affiliate of the
Seller, and (iv) all other similar assets which would be classified as
intangible assets under GAAP.
"TARGET TRANCHE LOAN BALANCE" means, for each Tranche and each
Payment Date, the Outstanding Tranche Collateral Balance (at the opening of
business on the first day of the Monthly Period in which such Payment Date
occurs) thereof minus an amount equal to the product of one percent (1%) times
the Original Tranche Collateral Balance thereof.
19-
"TAXES" means all taxes, assessments, fees, levies, imposts,
duties, deductions, withholdings, or other charges of any nature whatsoever from
time to time or at any time imposed by any Law or Governmental Authority.
"TERMINATION DATE" means the earlier to occur of (i) the
Maturity Date, (ii) the date on which an Event of Default occurs, (iii) after
August 1, 2002, the first Business Day immediately following any three month
period in which the Seller fails to sell to the Borrower and the Borrower fails
to pledge as Collateral to the Lender at least $75,000,000 of Eligible Contracts
and (iv) the date on which the Credit Agreement is otherwise terminated in
accordance with its terms.
"TRANCHE" means all Advances made during any Monthly Period.
Each Tranche shall have a related, identified pool of Sold Assets (the "RELATED
TRANCHE COLLATERAL") pledged by the Borrower to the Lender as Collateral
hereunder in the Monthly Period in which such Advances were made. Each pool of
Related Tranche Collateral shall be earmarked by the Servicer by the month in
which it is pledged and shall have its performance tracked and reported as a
monthly pool, separate from any other monthly pool, but all Related Tranche
Collateral shall constitute Collateral for all Advances made under the Credit
Agreement.
"TRANSFER DATE" means any Business Day on which the Seller
sells Sold Assets to the Buyer pursuant to the Contribution and Sale Agreement,
including, without limitation, the Closing Date.
"TRANSFER OPINION" has the meaning attributed to such term
in Section 7.3(g) of the Credit Agreement.
"UCC" OR "UNIFORM COMMERCIAL CODE" means the Uniform
Commercial Code as in effect in the relevant jurisdiction, as amended from time
to time.
"U.S. DOLLARS" AND "U.S. $" means lawful money of the United
Sates of America.
"VEHICLE" means a new or used passenger automobile, sport
utility vehicle, light-duty truck, van or minivan which has been purchased or
financed by an Obligor pursuant to the provisions of a Contract.
SCHEDULE L
FORM OF REVOLVING CREDIT NOTE
UP TO $600,000,000 New York, New York
June __, 2002
FOR VALUE RECEIVED, the undersigned, E-LOAN AUTO FUND ONE,
LLC, a Delaware limited liability company (the "BORROWER"), for value received,
hereby unconditionally promises to pay to the order of XXXXXXX XXXXX BANK USA
("Lender"), on the date specified in Section 2.7 of the Credit Agreement (as
hereinafter defined), in lawful money of the United States of America and in
immediately available funds, the principal amount of Six Hundred Million Dollars
($600,000,000), or, if less, the aggregate unpaid principal amount of all
Advances made by the Lender to the Borrower pursuant to the Credit Agreement and
the Auto Fund Security Agreement and to pay interest (including any overdue
interest) at the office of the Lender (as specified in the Credit Agreement), in
like money, from the date hereof on the unpaid principal amount of such Advances
from time to time outstanding at the rates and on the dates specified in the
Credit Agreement and the Auto Fund Security Agreement.
The Lender shall make notations in its books and records
regarding the date, amount and maturity of each Advance made by the Lender and
the amount of each repayment or prepayment of principal and payment of interest
made by the Borrower with respect to such Advance. The Lender is irrevocably
authorized by the Borrower to endorse this Revolving Credit Note and such
Lender's record shall be conclusive absent manifest error; PROVIDED, HOWEVER,
that the failure of a Lender to make, or an error in making, such a notation
with respect to any Advance shall not limit or otherwise affect the Obligations
of the Borrower hereunder or under this Revolving Credit Note.
This Revolving Credit Note is the "Note" referred to in the
Credit Agreement, dated as of June 1, 2002 (as amended, supplemented, or
otherwise modified and in effect from time to time, the "CREDIT Agreement"), by
and among the Borrower, E-LOAN, Inc. and Xxxxxxx Xxxxx Bank USA, and is entitled
to the benefits thereof. Capitalized terms used herein and not defined herein
have the meanings given them in the Credit Agreement.
Payments on this Revolving Credit Note shall be applied in the
manner set forth in the Credit Agreement. This Revolving Credit Note is subject
to optional and mandatory prepayment as provided in the Credit Agreement and the
Auto Fund Security Agreement.
Upon the occurrence of an Event of Default, the Lender shall
have all of the remedies specified in the Credit Agreement and the Auto Fund
Security Agreement and all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of the Lender, be immediately due and
payable pursuant to the Credit Agreement. The Borrower hereby waives diligence,
presentment, demand, protest, and all notices of any kind and, to the full
extent permitted by law, the right to plead any and all statutes of limitations
as a defense to any demands hereunder.
THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAW PRINCIPLES; PROVIDED THAT SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW SHALL APPLY, AND THE OBLIGATIONS,
2-
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
[Signature page follows.]
IN WITNESS WHEREOF, Borrower has caused this Revolving Credit
Note to be duly executed and delivered by its duly authorized officer, as of the
date and place first written above.
E-LOAN AUTO FUND ONE, LLC
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
