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LIQUIDITY LOAN AGREEMENT
among
THE LIQUIDITY LENDERS
FROM TIME TO TIME PARTY HERETO,
MARKET STREET CAPITAL CORP.
ENVIROTEST PARTNERS
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrator and Liquidity Agent
Dated as of November 26, 1996
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TABLE OF CONTENTS
PAGE
----
1. Certain Defined Terms................................................. 2
2. Making of Liquidity Loans............................................. 9
3. Register; Information Regarding Liquidity Lenders..................... 14
4. Distribution of Payments.............................................. 14
5. Representations and Warranties........................................ 17
6. The Liquidity Agent and the Administrator............................. 20
7. Rights of the Issuer and the Administrator............................ 24
8. Obligations of the Liquidity Lenders, Including Confidentiality....... 24
9. Assignability and Purchase Limit...................................... 24
10. Liquidity Termination Date; Extension of Liquidity Termination Date... 26
11. Miscellaneous......................................................... 27
Exhibit A: Form of Assignment of Liquidity Commitment
LIQUIDITY LOAN AGREEMENT
The Liquidity Loan Agreement (this "Agreement") is entered into as
of November 26, 1996 among PNC BANK, NATIONAL ASSOCIATION, a national banking
corporation (in its individual capacity, "PNC") and each of the parties who
has executed as an "Assignee" an Assignment of Liquidity Commitment in the
form of Exhibit A hereto (each, an "Assignment")(PNC and each such other
Assignee being referred to collectively as the "Liquidity Lenders" and
individually as a "Liquidity Lender"), PNC BANK, NATIONAL ASSOCIATION, as
agent for the Liquidity Lenders under this Agreement (In such capacity,
together with its successors and permitted assigns in such capacity, the
"Liquidity Agent"), MARKET STREET CAPITAL CORP., a Delaware corporation
(together with its successors and permitted assigns, the "Issuer"),
Envirotest partners (formerly known as Envirotest/Synterra Partners), a
Pennsylvania partnership (the "Seller") and PNC BANK, NATIONAL ASSOCIATION,
as the Administrator for the Issuer in such capacity, together with its
successors and permitted assigns in such capacity, the "Administrator").
PRELIMINARY STATEMENTS
(1) Reference is made to (i) Purchase and Sale Agreement dated as
of November 26, 1996 (as amended, restated, supplemented or otherwise
modified from time to time in accordance with the provisions thereof and in
effect, the "Receivables Sale Agreement"), among the Seller and ES Funding
Corporation, a Delaware corporation (the "Seller Sub"), and (ii) that certain
Receivable Purchase Agreement dated as a November 26, 1996 (as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the provisions thereof and in effect, the "Receivables Purchase
Agreement") among the Issuer, the Administrator, the Liquidity Agent and the
Seller Sub, copies of which have been delivered to each Liquidity Lender.
(2) The Issuer has purchased from the Seller Sub all of the Seller
Sub's rights (including, but not limited to, all of the Seller Sub's right,
title and interest in and to the right to receive payment of the Settlement
Receivable Assets, but not its obligations, (the "Purchased Interest") under
(i) the Settlement Agreement and (ii) the Receivables Sale Agreement. The
Administrator may in the future determine from time to time to have the
Issuer fund all or a portion of such purchase with the proceeds of Liquidity
Loans made by the Liquidity Lenders hereunder. The Issuer therefore hereby
pledges to the Liquidity Agent, for the benefit of the Liquidity Lenders, as
security for the Liquidity Loans, a security interest in the Purchased
Interest. The Issuer may fund its acquisition of the Purchased Interest
through the issuance of commercial paper notes (the "Notes"), through loans
or other extensions of credit from various banks and other financial
institutions, or by borrowing from the Liquidity Lenders hereunder.
(3) Each Liquidity Lender, by becoming a party hereto agrees to
make Liquidity Loans to the Issuer on the terms and conditions set forth in
this Agreement (its "Liquidity Commitment") when requested by the
Administrator.
NOW, THEREFORE, the parties agree as follows:
1. Certain Defined Terms.
(a) As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Administration Account" means the special account (account number
1002420425) of the Issuer maintained at the office of PNC at 000 Xxxxx
Xxx., Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or such other account as may
be so designated in writing by the Administrator to the Seller.
"Administrator" has the meaning set forth in the preamble.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such
Person, except that with respect to the Issuer, Affiliate shall mean the
holder(s) of its capital stock.
"Agent-Related Person" has the meaning specified in Section 6(c).
"Agreement" has the meaning set forth in the preamble.
"Alternate Rate" for any Interest Period means an interest rate per
annum equal to (i) .25% per annum above the Eurodollar Rate on the
amount of such Liquidity Loan for the first ten (10) Business Days
during which such Liquidity Loan remains outstanding and (ii) .75% per
annum above the Eurodollar Rate on such outstanding amount thereafter;
provided, however, that in the case of any Interest Period on or prior
to the first day on which the Administrator shall have been notified by
the Issuer or other Program Support Provider that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other Governmental Authority asserts
that it is unlawful, for the Issuer or such other Program Support
Provider to fund any Capital (based on the Eurodollar Rate) as set forth
above (and the Issuer or such other Program Support Provider shall not
have
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subsequently notified the Administrator that such circumstance no longer
exit) the "Alternate Rate" for each such Interest Period shall be an
interest rate per annum equal to the Base Rate in effect on each day of
such Interest Period.
"Assignment" has the meaning set forth in the preamble.
"Attorney Costs" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal
legal services and all disbursements of internal counsel.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.), as amended from time to time.
Base Rate" means for any day, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate shall be at all
times equal to the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by PNC in Pittsburgh, Pennsylvania as
its reference rate," which is a rate set by PNC based upon various
factors, including PNC's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such
announced rate; and
(b) 0.50% per annum above the latest Federal Funds Rate.
"Borrowing" means as the context may require the Liquidity Loans
made, or requested to be made, by all Liquidity Lenders on the same
Business Day pursuant to the related Borrowing Notice in accordance with
Section 2(a).
"Borrowing Notice" has the meaning set forth in Section 2(a).
"Business Day" means any day on which (i) banks are not authorized
or required to close in New York City or Pittsburgh, Pennsylvania and
(ii) if this definition of "Business Day" is utilized in connection with
the Eurodollar Rate, dealings are carried out in the London interbank
market.
"Capital" means the purchase price paid by the Issuer to the Seller
Sub in respect of the Purchased Interest pursuant to the Receivables
Purchase Agreement, as reduced from time to time by collections on the
Purchased Interest
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distributed and applied on account of such Capital; provided, that if
such Capital shall have been reduced by any distribution and thereafter
all or a portion of such distribution is rescinded or must otherwise be
returned for any reason, such Capital shall be increased by the amount
of such rescinded or returned distribution, as though it had not been
made.
"Collateral Interest" has the meaning set forth in Section 2(b).
"Commercial Paper Account" has the meaning set forth in the
Depositary Agreement dated as of December 15, 1995, between the Issuer
and PNC, as depositary, as amended, supplemented or otherwise modified
and in effect from time to time.
"CP Rate" means, for any fixed period to the extent the Issuer
funds Capital for such Fixed Period by issuing Notes, a rate per annum
equal to the sum of (i) the rate (or if more than one rate, the weighted
average of the rates) at which Notes of the Issuer having a term equal
to such Fixed Period and to be issued to fund such Capital may be sold
by any placement agent or commercial paper dealer selected by the
Administrator on behalf of the Issuer, as agreed between each such agent
or dealer and the Administrator; provided, that if the rate (or rates)
as agreed between any such agent or dealer and the Administrator with
regard to any Fixed Period for such Capital is a discount rate (or
rates), then such rate shall be the rate (or if more than one rate, the
weighted average of the rates) resulting from converting such discount
rate (or rates) to an interest-bearing equivalent rate per annum, plus
(ii) the commissions and charges charged by such placement agent or
commercial paper dealer with respect to such Notes.
Discount" means (a) with respect to the Issuer's cost of funding
the Capital from time to time:
(i) with respect to the Capital for any Fixed Period to the
extent such Capital is funded on the first day of such Fixed Period
through the issuance of Notes,
CPR x C x ED ; and
360
(ii) with respect to the Capital for any Fixed Period to the
extent such Capital is not funded on the first day of such Fixed
Period through the issuance of Notes,
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AR x C x ED
360
where:
AR = the Alternate Rate for the Capital for such Fixed Period
C = the Capital during such Fixed Period
CPR = the CP Rate for the Capital for such Fixed Period
ED = the actual number of days during such Fixed Period
and (b) with respect to the interest accruing in respect of the
Purchased Interest from time to time, 6% per annum.
provided, that no provision of this Agreement shall require the payment
or permit the collection of Discount in excess of the maximum permitted
by applicable law; and provided, further, that Discount for the Capital
shall not be considered paid by any distribution to the extent that at
any time all or a portion of such distribution is rescinded or must
otherwise be returned for any reason.
"Downgrade Collateral Account" has the meaning set forth in Section
11(h).
"Eligible Agent" means an Eligible Institution whose short-term
debt is rated by each Rating Agency not lower than the respective
current ratings assigned by the Rating Agencies to the Notes.
"Eligible Assignee" means any Eligible Institution (i) whose
short-term debt is rated by each Rating Agency not lower than the
respective current ratings assigned by the Rating Agencies to the Notes
or (ii) whose short-term debt is rated lower than the respective current
ratings assigned by the Rating Agencies to the Notes, or is unrated,
provided, that a written statement is obtained by the Issuer from each
of the Rating Agencies that the rating of the Notes will not be
downgraded or withdrawn solely as a result of the assignment of rights
and obligations under this Agreement to such Eligible Institution.
7
"Eligible Institution" means a commercial bank having a combined
capital and surplus of at least $250,000,000.
"Eurodollar Reserve Percentage" means, for any Fixed Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to
the nearest 1/100th of 1 %) in effect on the date LIBOR for such Fixed
Period is determined under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to "Eurocurrency" funding (currently referred
to as "Eurocurrency liabilities") having a term comparable to such Fixed
Period.
"Face Amount" means, (i) with respect to any Notes issued on a
discount basis, the face amount of any such Notes, and (ii) with respect
to any Notes issued on an interest bearing basis, the principal amount
of, plus the amount of all interest accrued and to accrue thereon to the
stated maturity date of any such Notes.
"Fixed Period" means, with respect to the Capital:
(a) initially the period commencing on the date of the purchase by
the Issuer of the Purchased Interest and ending such number of days later as
the Administrator shall select, subject to the approval of the Administrator,
up to 180 days after such date; and
(b) thereafter each period commencing on the last day of the
immediately preceding Fixed Period and ending such number of days (not to
exceed 180 days) as the Administrator shall select, provided, that
(i) any Fixed Period in respect of which Discount is computed
by reference to the Alternate Rate shall be a period from one to
and including 180 days, or a period of one, two, three or six
months;
(ii) any Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day; provided, however, if
Discount in respect of such Fixed Period is computed by reference
to the Eurodollar Rate, and such Fixed Period would otherwise end
on a day which is not a Business Day, and there is no subsequent
Business Day in the same calendar month as such day, such Fixed
Period shall end on the next preceding Business Day;
(iii) in the case of any Fixed Period of one day, (A) if such
Fixed Period is the initial Fixed Period,
8
such Fixed Period shall be the day of purchase of the Purchased
Interest; (B) any subsequently occurring Fixed Period which is one
day shall, if the immediately preceding Fixed Period is more than
one day, be the last day of such immediately preceding Fixed
Period, and, if the immediately preceding Fixed Period is one day,
be the day next following such immediately preceding Fixed Period;
and (C) if such Fixed Period occurs on a day immediately preceding
a day which is not a Business Day, such Fixed Period shall be
extended to the next succeeding Business Day; and
(iv) in the case of any Fixed Period which commences before
the Termination Date and would otherwise end on a date occurring
after the Termination Date, such Fixed Period shall end on such
Termination Date and the duration of each Fixed Period which
commences on or after the Termination Date shall be of such
duration as shall be selected by the Administrator.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof any central bank (or similar
monetary or regulatory authority) thereof, any body or entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government, including without limitation any court,
and any Person owned or controlled, through stock or capital ownership
or otherwise, by any of the foregoing.
"Indemnified Liabilities" has the meaning specified in Section
6(i).
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors of a Person, composition, marshalling of assets for
creditors of a Person; or other similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; in each
of cases (a) and (b) undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
"Interest Period" means, with respect to any Liquidity Loan, the
Fixed Period for the Capital being funded or maintained by the Issuer
with the proceeds of such Liquidity Loan.
"Issuer" has the meaning set forth in the preamble.
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"LIBOR" means the rate of interest per annum determined by the
Liquidity Agent to be the arithmetic mean (rounded upward to the nearest
1/16th of 1%) of the rates of interest per annum notified to the
Liquidity Agent by each Reference Bank as the rate of interest at which
dollar deposits in the approximate amount of the Capital associated with
such Fixed Period would be offered to major banks in the London
interbank market at their request at or about 11:00 a.m. (London time)
on the second Business Day prior to the commencement of such Fixed
Period.
"Liquidity Agent" has the meaning set forth in the preamble.
"Liquidity Commitment Amount" means- with respect to each Liquidity
Lender, the amount set forth below its signature to this Agreement or in
the Assignment pursuant to which it became a Liquidity Lender, as such
amount may be reduced or terminated pursuant to Section 2(j) or modified
in connection with any subsequent Assignment pursuant to Section 9(b) or
in connection with a termination of such Liquidity Lender's Liquidity
Commitment pursuant to Section 11(h).
"Liquidity Commitment" has the meaning set forth in paragraph (3)
of the Preliminary Statements.
"Liquidity Downgrade Draw" has the meaning set forth in Section
11(h).
"Liquidity Funded Percentage" at any time means a percentage
representing the portion of the Purchased Interest in which a security
interest has been granted to secure Liquidity Loans made by the
Liquidity Lenders hereunder. The Liquidity Funded Percentage shall
initially be zero, and shall be increased in connection with each
Borrowing hereunder by a percentage determined in accordance with
Section 2(a), provided that at no time shall the Liquidity Funded
Percentage exceed 100%.
"Liquidity Lender" has the meaning set forth in the preamble.
"Liquidity Loans" has the meaning set forth in Section 2(a).
"Liquidity Termination Date" has the meaning set forth in Section
10 hereof.
"Majority Lenders" means at any time Liquidity Lenders whose
Percentages aggregate more than 50%.
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"MSFC" means Market Street Funding Corporation, a Delaware
corporation.
"Notes" means the commercial paper notes issued by the Issuer from
time to time to finance the Capital, not to exceed a term of 180 days.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Percentage" means, with respect to each Liquidity Lender, the
percentage set forth below its signature to this Agreement or in the
Assignment pursuant to which it became a Liquidity Lender, as such
percentage may be modified in connection with any subsequent Assignment
pursuant to Section 9(b).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Placement Agent" means, at any time, any Person who has agreed to
act as a placement agent for the Notes pursuant to a commercial paper
placement agreement which is in effect at such time.
"PNC" has the meaning set forth in the preamble.
"Program Support Provider" means the Liquidity Lender.
"Program Support Agreement means and includes the Liquidity
Agreement.
"Purchased Interest" means the rights sold and assigned by the
Seller Sub to the Issuer under the Receivables Purchase Agreement.
"Purchase Limit" means $79,405,707.00 as reduced from time to time
by collections on the Purchased Interest applied as reductions of
Capital.
"Rating Agencies" means, collectively, Xxxxx'x Investors Service,
Inc. and Standard & Poor's Ratings Services, and their respective
successors that are nationally recognized rating agencies.
"Receivables Purchase Agreement" has the meaning set forth in
paragraph (1) of the Preliminary Statements.
"Register" has the meaning set forth in Section 3(a) hereof.
11
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and by-laws or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of or settlement with an
arbitrator or Governmental Authority, in each case applicable to or
binding upon such Person or to which such Person is subject.
"Scheduled Payment Date" means each of July 31, 1997 and July 31,
1998, as set forth in Section 4 of the Settlement Agreement.
"Seller" has the meaning set forth in paragraph (1) of the
Preliminary Statements.
"Seller Sub" has the meaning set forth in paragraph (1) of the
Preliminary Statements.
"Settlement Agreement" means that certain General Release and
Settlement Agreement, dated December 15, 1995, as amended by Amendment
No. l to General Release and Settlement Agreement dated November 26,
1996 by and among the Seller, Envirotest Systems Corp., a Delaware
corporation, Envirotest Technologies, Inc., a Delaware corporation and
the Commonwealth of Pennsylvania including, without limitation, its
agency, the Commonwealth of Pennsylvania, Department of Transportation.
"Settlement Receivable Assets" means the right of the Seller or its
assigns to receive payment of the outstanding balance of the Base
Settlement Amount (as defined in the Settlement Agreement), together
with interest thereon accruing from (but excluding) and after the
Closing Date (as defined in the Receivables Purchase Agreement) at the
rate of six percent (6.00%) per annum, pursuant to Section 4 of the
Settlement Agreement. The Settlement Receivable Assets shall not include
(i) the sums due on December 31, 1995 and July 31, 1996 under Section 4
of the Settlement Agreement, together with accrued interest through July
31, 1996 on the unpaid balance of the Base Settlement Amount pursuant to
Section 4 of the Settlement Agreement, which the Seller has previously
received and are no longer outstanding, (ii) accrued interest from and
after July 31, 1996 to and including the Closing Date on the unpaid
balance of the Base Settlement Amount pursuant to Section 4 of the
Settlement Agreement, which shall remain the property of the Seller, or
(iii) any Settlement Amount Increase (as defined in the Settlement
Agreement) or any other amount (other than the Base Settlement Amount)
payable pursuant to the Settlement Agreement, which shall remain
property of the Seller.
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"Withholding Tax" has the meaning set forth in Section 11(g)
hereof.
(b) Unless otherwise defined herein, the terms defined in the
Receivables Purchase Agreement are used herein as therein defined.
(c) In this Agreement, in the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words"to" and "until" each means "to but excluding."
2. Making of Liquidity Loans. (a) Each Liquidity Lender agrees,
on the terms and conditions of this Agreement, to make loans to the Issuer
(relative to each Liquidity Lender, its "Liquidity Loans"), without recourse
to the Issuer except as provided herein, in accordance with its respective
Percentage, during the period from the Business Day following the effective
date of this Agreement to and including the Liquidity Termination Date, in an
aggregate principal amount at any one time outstanding up to but not
exceeding such Lender's Liquidity Commitment. Subject to the terms and
conditions hereof, the Company may borrow, repay and reborrow Liquidity
Loans.
The Administrator shall provide notice of each Borrowing (a
"Borrowing Notice") to the Liquidity Agent no later than 1:45 P.M. (New York
City time) on the Business Day of such Borrowing and shall specify the date
of such Borrowing, the aggregate amount of such Borrowing and the calculation
of the Collateral Interest in reasonable detail. The Liquidity Agent shall
provide notice of such Borrowing no later than 2:30 P.M. (New York City time)
on the Business Day of such Borrowing which notice shall be made by telephone
calls or by facsimile to all Liquidity Lenders confirmed (if such notice is
by telephone calls) in writing sent by facsimile on the same day to all
Liquidity Lenders, and shall specify the date of such Borrowing and the
aggregate amount of such Borrowing and the calculation of the Collateral
Interest as provided by the Administrator. Such notice shall also specify the
Fixed Periods and Discount applicable to the Capital (or any applicable
Discount) being funded in connection with such Borrowing. Prior to 4:00 P.M.
(New York City time) on the date of such Borrowing, each Liquidity Lender
shall pay to the Liquidity Agent for the account of the Issuer in immediately
available funds in United States dollars, by depositing to an account
designated by the Liquidity Agent (and the Liquidity Agent shall transfer
such funds to the Commercial Paper Account prior to 4:30 P.M. (New York City
time) on such day, to the extent necessary to pay maturing Notes on such
day), an amount equal to such Liquidity Lender's Percentage of the amount of
such Borrowing, determined as set forth in the following paragraph. If on the
date of any payment of the Base Settlement Amount the Company has
insufficient funds to pay
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maturing Notes the Administrator and the Liquidity Agent shall provide
Borrowing Notices and the Liquidity Lenders shall advance funds in accordance
with the terms hereof. In the event that Xxxxx'x Investors Service, Inc.
("Moody's") lowers its long-term or short-term debt rating of the
Commonwealth of Pennsylvania below a rating of "P1," or in the event that the
Commonwealth of Pennsylvania is on review by Moody's with negative
implications, then until such time as such debt rating is at least "PI" and
the Commonwealth of Pennsylvania is no longer on review by Moody's with
negative implications, (i) the Administrator and the Liquidity Agent shall
provide Borrowing Notices to the Liquidity Lenders and the Liquidity Lenders
shall advance funds equal to the full amount of the then outstanding Notes
into the Issuer Account (established and maintained under that certain
Depositary Agreement, dated as of December 15, 1995, as amended from time to
time, between the Issuer and PNC, as depositary), and (ii) the Issuer shall
cease to issue any Notes.
In connection with each Borrowing, the Liquidity Funded Percentage
shall be increased by a percentage determined by the Administrator as the
lowest percentage which will result in an aggregate principal amount of new
Liquidity Loans (in accordance with the computation set forth below)
sufficient to permit the Issuer to fund the Capital to be funded by such
Borrowing. The amount of any Borrowing shall equal the lesser of (i) the
Capital (and any accrued and unpaid Discount thereon) being funded in
connection with such Borrowing, and (ii) the largest amount that would not
cause the aggregate unpaid principal amount of all outstanding Liquidity
Loans to exceed the aggregate of the Liquidity Commitments of all the
Liquidity Lenders.
Notwithstanding the foregoing, a Liquidity Lender shall not be
obligated to make any Liquidity Loan:
(i) to the extent that, after giving effect to such Liquidity
Loan and the application of all amounts which are received by such
Liquidity Lender on or prior to the day of such Liquidity Loan in
respect of all Liquidity Loans made by such Liquidity Lender under this
Agreement, the aggregate principal amount of its Liquidity Loans then
outstanding under this Agreement would exceed such Liquidity Lender's
Liquidity Commitment; or
(ii) if, on the date of the funding of such Liquidity Loan,
any of the following events shall have occurred: (a) a payment default
by the Commonwealth of Pennsylvania under the Settlement Agreement,
which remains uncured for 90 days; (b) the Issuer or the Commonwealth of
Pennsylvania commences any Insolvency Proceeding with respect to itself;
or (c) any involuntary Insolvency Proceeding is commenced or filed
against the Issuer, or the Commonwealth of Pennsylvania and any such
proceeding or
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petition shall not be dismissed within 60 days after commencement or
filing.
(b) As collateral security for payment in full of the unpaid
principal amount of and interest on the Liquidity Loans made or to be made by
the Liquidity Lenders hereunder, the Issuer hereby pledges to the Liquidity
Agent, for the benefit of the Liquidity Lenders, a first priority security
interest in an undivided portion, equal to the Liquidity Funded Percentage in
effect from time to time, of all of the Issuer's right, title and interest in
(whether now existing and owned by the Issuer or hereafter arising or
acquired) the Purchased Interest (the "Collateral Interest").
The Collateral Interest may constitute all or a portion of the
Purchased Interest. The Collateral Interest shall include the right to
receive (x) a portion of the distributions with respect to Capital and
Discount made to the Issuer in connection with the Purchased Interest and (y)
certain related payments, as more fully described in Sections 4(c) and 4(f)
hereof. The rights of the Liquidity Lenders to receive payment from the
Issuer of principal of the Liquidity Loans shall be limited to the Collateral
Interest, and, except to the extent of the Collateral Interest, the Liquidity
Agent and the Liquidity Lenders shall have no recourse against the Issuer for
payment of such amounts. The rights of the Liquidity Lenders to receive
payment from the Issuer of interest on the Liquidity Loans shall be limited
to such Liquidity Lenders' claims against the Issuer and the Collateral
Interest and, except to the extent of the Collateral Interest, the Liquidity
Agent and the Liquidity Lender shall have no recourse against the Issuer for
payment of such amounts. The Liquidity Agent agrees not to exercise its
rights of foreclosure with respect to the Collateral Interest until such time
as the Administrator shall have confirmed in writing to the Liquidity Agent
that the Issuer is no longer funding or maintaining its interest in the
Purchased Interest with outstanding Notes.
(c) Each Liquidity Lender's obligation hereunder shall be several,
such that the failure of any Liquidity Lender to make payment to the
Liquidity Agent in connection with any Liquidity Loan requested hereunder
shall not relieve any other Liquidity Lender of its obligation hereunder to
make its Liquidity Loan. Further, in the event any Liquidity Lender fails to
satisfy its obligation to make any Liquidity Loan as required hereunder, upon
receipt of notice of such failure from the Liquidity Agent (which the
Liquidity Agent agrees to provide), subject to the limitations provided in
Section 2(a), the non-defaulting Liquidity Lenders shall make Liquidity Loans
in an aggregate principal amount equal to the principal amount of the
Liquidity Loan that was to be made by such defaulting Liquidity Lender, pro
rata in proportion to their relative Percentages (determined
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without regard to the Percentage of the defaulting Liquidity Lender).
(d) Unless the Liquidity Agent shall have received notice from a
Liquidity Loan prior to 3:30 P.M. (New York City time) on the date of any
proposed Borrowing, that such Liquidity Lender 'will not make available to
the Liquidity Agent the amount of that Liquidity Lender's Percentage of such
Borrowing. the Liquidity Agent may assume that each Liquidity Lender has made
such amount available to the Liquidity Agent on the date of such Borrowing
and the Liquidity Agent may (but shall not be so required), in reliance upon
such assumption. make available to the Issuer on such date a corresponding
amount. If and to the client any Liquidity Lender shall not have made its
full amount available to the Liquidity Agent, and the Liquidity Agent in such
circumstances has made available to the Issuer the corresponding amount, that
Liquidity Lender shall on the next Business Day following the date of such
Borrowing make such amount available to the Liquidity Agent, together with
interest M the Federal Funds Rate for each day during such period. A
certificate of the Liquidity Agent submitted to any Liquidity Lender with
respect to amounts owing under this clause (d) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Liquidity Agent shall constitute a Liquidity Loan of such Liquidity Lender
and, for all purposes of this Agreement, shall deemed to have been made on
the date of such Borrowing. If such amount is not made available to the
Liquidity Agent on the next Business Day following the date of such Borrowing
(including from amounts funded by the non-defaulting Liquidity Lenders
pursuant to Section 2(c)), the Liquidity Agent shall notify the Issuer of
such failure to fund and, upon demand by the Liquidity Agent, the Issuer
shall pay such amount to the Liquidity Agent for the Liquidity Agent's
account, together with interest thereon for each day elapsed since the date
of such Borrowing, at a rate per annum equal to the Federal Funds Rate.
(e) Each Liquidity Lender's Liquidity Commitment shall be
irrevocable and, subject to the limitations provided in Section 2(a),
unconditional from the effective date of this Agreement or as set forth in
the applicable Assignment, as the case may be, until the earliest of (i) the
Liquidity Termination Date, (ii) the date on which the Liquidity Agent
notifies the Liquidity Lender that the Receivables Purchase Agreement has
been terminated, the Capital has been reduced to zero and the Discount for
the Purchased Interest has been paid in full and (iii) the date on which the
Liquidity Lender's obligation to make Liquidity Loans is terminated pursuant
to Section 11(h).
(f) Within 10 days after the first Borrowing under this Agreement,
the Liquidity Agent shall arrange for the filing of Uniform Commercial Code
financing statements, in form and substance satisfactory to the Liquidity
Agent, in all
16
jurisdictions that the Liquidity Agent may deem necessary or desirable in
order to perfect the security interest of the Liquidity Agent for the benefit
of the Liquidity Lenders contemplated by this Agreement. Upon request, the
Liquidity Agent shall furnish to any Liquidity Lender copies of such
financing statements (at such Liquidity Lender's sole expense).
(g) This is a revolving loan facility. Accordingly,
notwithstanding that any Liquidity Lender may have made Liquidity Loans
hereunder for an aggregate principal amount up to such Liquidity Lender's
Liquidity Commitment, if and to the extent that such Liquidity Lender shall
thereafter have received payments in respect of the outstanding principal
amount of its Liquidity Loans pursuant to Section 4(a), such Liquidity Lender
shall, subject to the limitations provided in Section 2, and the other terms
and provisions of this Agreement, be obligated to make additional Liquidity
Loans in accordance with the provisions of Section 2(a) until the Liquidity
Termination Date in an amount equal at any time to the excess of its
Liquidity Commitment Amount over the aggregate unpaid principal amount of all
its Liquidity Loans then outstanding.
(h) The Issuer shall pay to the Liquidity Agent for the account of
each Liquidity Lender a commitment fee of .10% per annum on 102% of the Face
Amount of outstanding Notes issued to finance the Purchased Interest,
computed on an annual basis in arrears, on (i) July 31, 1997 for the period
from the Closing Date until July 31, 1997 and (ii) each July 31 (or, if such
day is not a Business Day, the next subsequent Business Day) thereafter
through the term of this Agreement and (iii) on the Liquidity Termination
Date based upon the daily utilization since the previous July 31 on which
such a payment was made, as calculated by the Liquidity Agent.
(i) The Issuer shall use the proceeds of the Liquidity Loans
solely (x) to repay Notes, or to make provision for the payment of unmatured
Notes (and any unsecured indebtedness constituting discretionary advances
owed by the Issuer to the Administrator incurred to repay Notes), (y) to fund
the Purchased Interest, and (z) to repay any advances outstanding under any
other liquidity facility which were used for the purposes described in
clauses x) and/or (y) of this Section 2(i). Any proceeds of Liquidity Loans
that are to be used to repay Notes that have not then matured shall be
invested by the Administrator for the account of the Issuer in investments
permitted pursuant to the documents governing the Issuer's securitization
program.
(j) The Issuer shall have the right, upon not less than one
Business Day's notice to the Liquidity Agent (with a copy to the
Administrator), to terminate in whole or reduce ratably in part the unused
portion of the Liquidity Commitment Amounts; provided, that no such reduction
or termination shall be
17
permitted if, (i) after giving effect thereto and to any prepayments of the
Liquidity Loans made on the effective date thereof, the then outstanding
principal amount of all Liquidity Loans of all Liquidity Lenders would exceed
the aggregate amount of the Liquidity Commitment of all Liquidity Lenders
then in effect or (ii) if after giving effect to such reduction or
termination the aggregate Liquidity Commitment Amounts of the Liquidity
Lenders would be less than the outstanding Capital of the Purchased Interest
together with Discount accrued or to accrue thereon during the current Fixed
Periods provided that, after giving effect to any such reduction the
aggregate of such Liquidity Commitment Amounts hereunder shall at least equal
the Purchase Limit multiplied by 1.02. All accrued commitment fees to, but
not including, the effective date of any reduction or termination of the
Liquidity Commitments, shall be paid on the effective date of such reduction
or termination.
(k) Any Lender may, if it so elects, fulfill its obligations to
make or continue Liquidity Loans hereunder by causing one of its branches,
agencies or Affiliates to make or maintain such Liquidity Loan; provided,
however, that such election shall not relieve such Liquidity Lender of its
obligation to make and continue Liquidity Loans hereunder; and provided,
further, that such Liquidity Loan shall nonetheless be deemed to have been
made and to be held by such Liquidity Lender, and the obligation of the
Issuer to repay such Liquidity Loan shall nevertheless be to such Liquidity
Lender for the account of such branch, agency or Affiliate.
3. Register; Information Regarding Liquidity Lenders.
(a) The Liquidity Agent will maintain, at its address set forth on
the signature page hereof, a copy of this Agreement and all counterpart
signature pages hereto, each Assignment delivered to and accepted by it, each
notice of revision to the allocation of each Liquidity Lender's Liquidity
Commitment Amount and a register (the "Register") for the recordation of the
names and addresses of the Liquidity Lenders, their respective Percentages
and effective dates, and the Liquidity Termination Date, and the aggregate
outstanding Capital ended by Liquidity Loans and the aggregate unpaid
principal amount of the Liquidity Loans of each Liquidity Lender from time to
time outstanding. The entries in the Register shall be conclusive and binding
for all purposes absent manifest error, and the Liquidity Agent, the Issuer,
the Administrator and the Liquidity Lenders may treat each Person whose name
is recorded in the Register as a Liquidity Lender hereunder for all purposes
of this Agreement. The Register shall be available for inspection by the
Administrator or any Liquidity Lender at any reasonable time and from time to
time upon reasonable prior notice.
18
(b) Each Liquidity Lender acknowledges that, in connection with
the sale of the Notes, certain documents containing information relating to
the Liquidity Lenders may be prepared and distributed to purchasers or
prospective purchasers of the Notes. To provide the basis for the preparation
of such documents and to assist the Placement Agents in their normal credit
review procedures, each Liquidity Lender agrees to provide the Administrator
and the Liquidity Agent (and through the Administrator, the Placement Agents)
with the following documents, promptly upon request therefor by the
Administrator: (i) such Liquidity Lender's quarterly and fiscal-year-end
financial statements for its last three years, and (ii) such Liquidity
Lender's publicly available quarterly and fiscal-year-end financial
statements for any fiscal year ending during the term of this Agreement. In
addition, each Liquidity Lender agrees to provide to the Administrator and
Liquidity Agent any other information that the Administrator or Liquidity
Agent reasonably requests for the purpose of the ongoing review of the Issuer
and such Liquidity Lender.
4. Distribution of Payments.
(a) The Issuer shall repay the principal amount of each Loan from
distributions of amounts received in respect of the Capital in accordance
with Section 4(c). The Issuer shall also pay interest on the principal amount
of each Liquidity Loan from time to time outstanding, at the Alternate Rate
on the principal amount of such Liquidity Loan. The Issuer shall repay all
the Liquidity Loans and accrued interest thereon on July 31, 1998 or such
later date on which the Purchase Limit is reduced to zero; provided, however,
that recourse for repayment of such amounts shall be limited to the
Collateral Interest.
(b) The Issuer may on any Business Day prepay the outstanding
principal amount of any or all of the Loans in whole or ratably in part,
together with accrued interest to the date of such prepayment on the
principal amount prepaid and all other payments payable in respect thereof
pursuant to this Agreement.
(c) Whenever any payment in respect of Capital or Discount is
remitted to the Issuer in connection with the Purchased Interest (including
payments made by the Seller on account of deemed collections, which will
include any indemnity payments made by the Seller to the Liquidity Agent the
Issuer or MSFC pursuant to Article VIII of the Receivables Sale Agreement
with respect to any amounts set-off by the Commonwealth against the
Settlement Receivable Assets) at any time when any portion of the principal
amount of or accrued interest on any Liquidity Loans hereunder remains
unpaid, (1) the Administrator shall promptly pay, or cause to be paid, to the
Liquidity Agent an amount equal to the sum of (i) the lesser of (x) the
amount of such payment in respect of Capital times the Liquidity Funded
19
Percentage, expressed as a decimal, and (y) the aggregate unpaid principal
amount of Liquidity Loans hereunder, plus (ii) the lesser of (x) the portion
of such payment representing the Discount on the Capital funded by Liquidity
Loans and (y) the amount of accrued interest on the Liquidity Loans, and (2)
the Liquidity Agent shall promptly pay, or cause to be paid, out of such
funds received by it, to each Liquidity Lender its Percentage of such amount;
provided, however, that each Liquidity Lender shall be entitled to interest
only from payments in respect of Discount which accrued from and after the
date it made a Liquidity Loan relating to such Purchased Interest or if any
Discount was included in the amount of such Liquidity Loan.
(d) If, after the Liquidity Agent has paid a Liquidity Lender its
Percentage of any such amount pursuant to subsection (a) above, all or any
portion of such amount must be returned for any reason (including any
Insolvency Proceeding), such Liquidity Lender will repay to the Liquidity
Agent promptly the amount the Liquidity Agent paid to such Liquidity Lender
and required to be returned, together with such Liquidity Lender's Percentage
of any related interest and penalties required to be paid by the Liquidity
Agent in connection with such repayment.
(e) After the outstanding principal amount of all Liquidity Loans
and accrued interest thereon and all other amounts owing hereunder to the
Liquidity Lender has been paid to the Liquidity Lenders (excluding any
repayment referred to in subsection (d) above), each Liquidity Lender
acknowledges and agrees that any remaining amounts paid in respect of Capital
or Discount shall be paid to or retained by the Issuer for its own account.
(f) (i) If the Liquidity Agent or any Liquidity Lender shall have
determined that the adoption or the implementation of, or any change in, any
applicable law, rule, treaty, regulation, policy, guideline, request or
directive, or any change in the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) occurring after the date
hereof, or the compliance by the Liquidity Agent or any Liquidity Lender (or
any lending office of the Liquidity Agent or any Liquidity Lender) with any
request or directive of any such Governmental Authority (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful), or the implementation of any change in any accounting
principles applicable to the Liquidity Agent or any Liquidity Lender required
by any governmental authority, shall (i) change the basis of taxation of
payment to the Liquidity Agent or any Liquidity Lender of any amounts payable
to the Liquidity Agent or any Liquidity Lender hereunder, (ii) impose, modify
or deem applicable any reserve, special deposit or similar
20
requirement against assets of or held by, deposits with or for the account
of, credit extended by, or commitments made by, the Liquidity Agent or any
Liquidity Lender in connection with payments by the Liquidity Agent or any
Liquidity Lender hereunder, or (iii) impose on the Liquidity Agent or any
Liquidity Lender any other condition regarding this Agreement, and the result
of any event referred to in clause (i), (ii) or (iii) above shall be to
increase the cost to the Liquidity Agent or any Liquidity Lender of making
any payment or maintaining its commitments hereunder, or to reduce the amount
of any sum received or receivable by the Liquidity Agent or any Liquidity
Lender hereunder (whether of principal, interest or otherwise) in respect
thereof, by an amount deemed by the Liquidity Agent to be material (which
increase in cost or reduction in amount shall be determined by the Liquidity
Agent's reasonable allocation of the aggregate of such increased costs or
reductions in amount resulting from such events), then and in any such case,
(x) the Liquidity Agent shall promptly notify the Seller in writing of the
happening of such event; (y) the Liquidity Agent shall promptly deliver to
the Seller a certificate stating the event which has occurred or the reserve
requirements or other conditions which have been imposed on the Liquidity
Agent or any Liquidity Lender, together with the date thereof, the amount of
such increased costs or reductions, and the way in which such amount has been
calculated; and (z) the Seller shall pay to the Liquidity Agent and each
Liquidity Lender, within 15 days after delivery of the certificate referred
to in clause (y) above, such amount or amounts as will compensate the
Liquidity Agent and each Liquidity Lender for such increased costs or
reductions in amount.
(ii) If the Liquidity Agent shall have determined (through its own
means or through notice received by it from a Liquidity Lender) that the
adoption of any capital guideline, or any change in any applicable capital
guideline, or any change in the interpretation or administration of any
capital guideline by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law and whether or not the failure to comply therewith would be unlawful)
occurring after the date hereof, or the compliance by the Liquidity Agent or
any Liquidity Lender (or any lending office of the Liquidity Agent or any
Liquidity Lender) with any request or directive (whether or not having the
force of law and whether or not the failure to comply therewith would be
unlawful) of any such Governmental Authority, or with any capital guideline,
or the implementation of any change in any accounting principles applicable
to the Liquidity Agent or any Liquidity Lender required by generally accepted
accounting principles, or by any governmental authority, either (i) increases
the amount of capital required to be maintained by the Liquidity Agent or any
Liquidity Lender as a direct or indirect consequence of its commitments
hereunder, or (ii) reduces the rate of return on the
21
Liquidity Agent's or any Liquidity Lender's capital as a direct or indirect
consequence of its commitments hereunder at a level below that which the
Liquidity Agent or such Liquidity Lender could have achieved but for such
capital guideline, implementation, change or compliance (taking into
consideration the Liquidity Agent's and each such Liquidity Lender's policies
with respect to capital adequacy), by an amount deemed by the Liquidity Agent
or such Liquidity Lender to be material, then and in any such case, (x) the
Liquidity Agent shall promptly notify the Seller in writing of the happening
of such event; (y) the Liquidity Agent shall promptly deliver to the Seller a
certificate stating the event which has occurred, together with the date
thereof, the amount of such increased capital or reduction in the rate of
return on the Liquidity Agent's and each such Liquidity Lender's capital, and
the way in which such amount has been calculated: and (z) the Seller shall
pay to the Liquidity Agent, within 15 days after delivery of the certificate
referred to in clause (y) above, such amount or amounts as will compensate
the Liquidity Agent and each such Liquidity Lender for the cost of
maintaining such increased capital or reduction in the rate of return on the
Liquidity Agent's and each such Liquidity Lender's capital.
(iii) All payments under this paragraph (f) shall bear interest
thereon at the Base Rate for each day after such payments fall due in
accordance with the provisions hereof until payment in full. A certificate
delivered by the Liquidity Agent as to the additional amounts payable
pursuant to this paragraph (f) shall, in the absence of manifest error, be
conclusive evidence of the amount thereof.
The Liquidity Agent and each Liquidity Lender shall also, to the
extent related to the portion of the Collateral Interest securing such
Liquidity Lender's Liquidity Loans, be entitled to the costs and expenses of
the enforcement of the Seller's obligations hereunder.
(g) If any Liquidity Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Liquidity Loans made by it (other than any
payment of a type described in subsection (f) above and any repayment in
accordance with Section 10(b) of Liquidity Loans made by a non-renewing
Liquidity Lender pursuant to such Section 10(b)) in excess of its ratable
share of payments on account of the Liquidity Loans obtained by all the
Liquidity Lenders, such Liquidity Lender shall forthwith (i) notify the
Liquidity Agent (who shall promptly thereafter notify each of the other
Liquidity Lenders) of such receipt and (ii) purchase from the other Liquidity
Lenders, such participation in Liquidity Loans made by them as shall be
necessary to cause such purchasing Liquidity Lender to share the excess
payment ratably with each of them; provided, however, that, if all or any
portion
22
of such excess payment is thereafter recovered from such purchasing Liquidity
Lender, such purchase from each Liquidity Lender shall be rescinded and such
Liquidity Lender shall repay to the purchasing Liquidity Lender the purchase
price to the extent of such recovery together with an amount equal to such
Liquidity Lender's ratable share (according to the proportion of (i) the
amount of such Liquidity Lender's required repayment to (ii) the total amount
so recovered from the purchasing Liquidity Lender) of any interest or other
amount paid or payable by the purchasing Liquidity Lender in respect of the
total amount so recovered. The Issuer agrees that any Liquidity Lender so
purchasing a participation from another Liquidity Lender pursuant to this
Section 4(g) may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Liquidity Lender were the direct creditor
of the Issuer in the amount of such participation.
5. Representations and Warranties. (a) None of the Liquidity
Agent, the Administrator or the Issuer makes any representation or warranty
or assumes any responsibility with respect to:
(i) any statements, warranties or representations made in or
in connection with the Receivables Purchase Agreement or the execution,
legality, validity, enforceability, genuineness or sufficiency of the
Receivables Purchase Agreement or any instrument or document furnished
pursuant thereto;
(ii) the value or collectibility of the Purchased Interest;
(iii) the financial condition of the Seller Sub or the ability
of the Seller Sub to perform its obligations under, or the performance
or observance by the Seller Sub of any of its obligations under, the
Receivables Purchase Agreement or any instrument or document furnished
pursuant thereto; or
(iv) the financial condition of the Seller or the ability of
the Seller to perform its obligations under the Receivables Sale
Agreement or any instrument or document furnished pursuant thereto.
(b) The Issuer represents and warrants that:
(i) the Issuer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
and is duly qualified to do business and is in good standing in every
jurisdiction where the nature of its business requires it to be so
qualified, except where
23
the failure to so qualify would not have a material adverse effect on
its business, condition or operations;
(ii) the execution, delivery and performance by the Issuer of
this Agreement are within the Issuer's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (A)
the Issuer's charter or by-laws, (B) any law, rule or regulation
applicable to the Issuer, (C) any contractual restriction binding on the
Issuer or its property or, to the best knowledge of the Issuer,
affecting the Issuer or its property or (D) any order, writ, judgment
award, injunction or decree binding on the Issuer or its property or, to
the best knowledge of the Issuer, affecting the Issuer or its property;
(iii) there is no pending or, to the best knowledge of the
Issuer, threatened action or proceeding affecting the Issuer before any
court, governmental agency or arbitrator which may materially adversely
affect the financial condition or operations of the Issuer or the
ability of the Issuer to perform its obligations under this Agreement,
or which purports to affect the legality, validity or enforceability of
this Agreement;
(iv) no consent of any other Person (including, without
limitation, stockholders or creditors of the Issuer), and no consent,
license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with any governmental
authority, is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement by or against
the Issuer, except for the filing of Uniform Commercial Code financing
statements as contemplated by Section 2(f);
(v) this Agreement has been duly executed and delivered on
behalf of the Issuer; and
(vi) this Agreement constitutes a legal, valid and binding
obligation of the Issuer enforceable against the Issuer in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity.
(c) Each Liquidity Lender represents and warrants that:
(i) it is an Eligible Institution duly incorporated or
organized, validly existing and in good
24
standing under the laws of its jurisdiction of incorporation or
organization;
(ii) the execution, delivery and performance by it of this
Agreement are within its corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (A) its charter,
by-laws, or other organizational documents, or (B) any law, rule or
regulation applicable to it (including, without limitation, any such
law, rule or regulation regarding per-customer lending limits);
(iii) no consent, license, permit, approval or authorization
of, or registration, filing or declaration with any governmental
authority, is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement by or against
it;
(iv) this Agreement has been duly executed and delivered by
it; and
(v) this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
receivership, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by general principles of
equity.
(d) Each Liquidity Lender confirms that such Liquidity Lender has
received such documents and information as such Liquidity Lender has deemed
appropriate to make its own credit analysis and decision independently and
without reliance on the Liquidity Agent, the Administrator or the Issuer, to
enter into this Agreement and will, independently and without reliance on
PNC, the Liquidity Agent, the Administrator or the Issuer and based on such
documents and information as such Liquidity Lender shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action hereunder. The Administrator shall furnish to the Liquidity Agent, and
the Liquidity Agent shall thereafter furnish to each Liquidity Lender, copies
of any financial or other documents that the Administrator receives from time
to time in connection with the Receivables Purchase Agreement, but neither
the Administrator nor the Liquidity Agent assumes any responsibility for the
authenticity, validity, accuracy or completeness thereof.
6. The Liquidity Agent and the Administrator. (a) Each Liquidity
Lender hereby irrevocably appoints, designates and authorizes the Liquidity
Agent to take such action on its behalf under the provisions of this
Agreement and the Receivables Purchase Agreement and to exercise such powers
and perform such
25
duties as are expressly delegated to it by the terms of this Agreement or the
Receivables Purchase Agreement, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in the Receivables Purchase Agreement, the
Liquidity Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Liquidity Agent have or be deemed
to have any fiduciary relationship with any Liquidity Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or the Receivables Purchase Agreement or
otherwise exist against the Liquidity Agent.
(b) The Liquidity Agent may execute any of its duties under this
Agreement or the Receivables Purchase Agreement by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Liquidity Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
(c) None of the Liquidity Agent, the Administrator or any of their
respective Affiliates or any of the officers, directors, employees, agents or
attorneys-in-fact of the Liquidity Agent, the Administrator or any of their
respective Affiliates (each, an "Agent-Related Person") shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or the Receivables Purchase Agreement or the
transactions contemplated hereby or thereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Liquidity Lenders for any recital, statement, representation or
warranty made by the Issuer or any Affiliate of the Issuer, or any officer
thereof, contained in this Agreement or in the Receivable Purchase Agreement,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Liquidity Agent or the Administrator
under or in connection with, this Agreement or the Receivables Purchase
Agreement, or for the value of or title to the Purchased Interest, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Receivables Purchase Agreement, or for any failure of the
Issuer or any other party to the Receivables Purchase Agreement to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be
under any obligation to any Liquidity Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained -in, or
conditions of, this Agreement or the Receivables Purchase Agreement, or to
inspect the properties, books or records of the Issuer or any of the Issuer's
Affiliates.
26
(d) The Liquidity Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Issuer), independent accountants and other experts selected by
the Liquidity Agent. The Liquidity Agent shall be fully justified in failing
or refusing to take any action under this Agreement or the Receivables
Purchase Agreement, unless it shall first receive such advice or concurrence
of the Majority Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Liquidity Lenders
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Liquidity Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or the Receivables Purchase Agreement in
accordance with a request or consent of the Majority Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Liquidity Lenders.
(e) The Liquidity Agent shall not be deemed to have knowledge or
notice of the occurrence of any Termination Event, unless the Liquidity Agent
shall have received written notice from a Liquidity Lender or the Issuer
referring to this Agreement, describing such Termination Event and stating
that such notice is a "Notice of Termination Event."
(f) Each Liquidity Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Liquidity Agent hereinafter taken, including any review of the
affairs of the Issuer, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Liquidity Lender. Each Liquidity
Lender represents to the Liquidity Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and credit-worthiness of the Issuer, the value of and
title to the Purchased Interest, and all applicable bank regulatory laws
relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend its Liquidity Commitment to the
Issuer hereunder. Each Liquidity Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and to make such investigations as
it
27
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Issuer.
Except for notices, reports and other documents expressly herein required to
be furnished to the Liquidity Lenders by the Liquidity Agent, the Liquidity
Agent shall not have any duty or responsibility to provide any Liquidity
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Issuer which may come into the possession of any of
the Agent-Related Persons.
(g) None of the Liquidity Agent, the Administrator or the Issuer
shall be liable to any Liquidity Lender in connection with (x) the
administration of the Receivables Purchase Agreement or (y) this Agreement or
any Borrowings hereunder (except in the case of the Issuer, pursuant to the
Issuer's representations in Section 5(b) hereof)), in either case, except for
its own gross negligence or willful misconduct. Without limiting the
foregoing, the Liquidity Agent, the Administrator and the Issuer:
(i) may consult with legal counsel (including counsel for the
Seller), independent public accountants or other experts and shall not
be liable for any action taken or omitted to be taken in good faith in
accordance with the advice of such counsel, accountants or other
experts:
(ii) shall not be responsible for the performance or
observance by the Seller Sub of any of the terms, covenants or
conditions of the Receivables Purchase Agreement or any instrument or
document furnished pursuant thereto;
(iii) shall incur no liability by acting upon any notice,
consent, certificate or other instrument or writing, or any other
communication believed to be genuine and signed, sent or made by the
proper party; and
(iv) shall not be deemed to be acting as any Liquidity
Lender's trustee or otherwise in a fiduciary capacity hereunder or under
or in connection with the Receivables Purchase Agreement or the
Purchased Interest.
(h) The Liquidity Agent shall be fully justified in failing or
refusing to take any action that is discretionary under this Agreement, the
Receivables Purchase Agreement or any other agreement related thereto unless
it shall first receive such advice or concurrence of the Majority Liquidity
Lenders as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Liquidity Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Liquidity Agent shall in all cases be
fully protected in acting,
28
or in refraining from acting, under this Agreement, the Receivables Purchase
Agreement or any other agreement in accordance with a request or consent of
the Majority Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Liquidity Lenders.
(i) Whether or not the transactions contemplated hereby shall
be consummated, the Liquidity Lenders shall indemnify upon demand the
Agent-Related Persons ratably from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of
any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the
Receivables Purchase Agreement or any document contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby, and with respect to any investigation, litigation or proceeding
(including any insolvency proceeding or appellate proceeding) related to
this Agreement, the borrowing of Liquidity Loans or the use of the
proceeds thereof, whether or not any Agent-Related Person is a party
thereto (all of the foregoing, collectively, the "Indemnified
Liabilities"); provided, however, that no Liquidity Lender shall be
liable for the payment to the Agent-Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing,
each Liquidity Lender shall reimburse the Liquidity Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Liquidity Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, the Receivables Purchase
Agreement or any document contemplated by or referred to herein to the
extent that the Liquidity Agent is not reimbursed for such expenses by
or on behalf of the Issuer. The agreements in this subsection (i) shall
survive termination of this Agreement, the repayment of all Liquidity
Loans and payment of all other obligations hereunder.
(j) PNC and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Issuer, the
Seller, the Seller Sub and their respective Affiliates as though PNC
were not the Liquidity Agent hereunder and without notice to or consent
of the Liquidity Lenders. The Liquidity Lenders
29
acknowledge that, pursuant to such activities, PNC or its Affiliates may
receive information regarding the Issuer, the Seller, the Seller Sub or
their respective Affiliates (including information that may be subject
to confidentiality obligations in favor of the Issuer, the Seller, the
Seller Sub or such Affiliate) and acknowledge that the Liquidity Agent
shall be under no obligation to provide such information to them. With
respect to its purchases, PNC shall have the same rights and powers
under this Agreement as any other Liquidity Lender and may exercise the
same as though it were not the Liquidity Agent, and the terms "Liquidity
Lender" and "Liquidity Lenders" include PNC in its individual capacity.
(k) The Liquidity Agent may resign at any time by giving 30
days' prior written notice thereof to the Liquidity Lenders, the
Administrator and the Issuer. The Liquidity Agent may be removed at any
time by the affirmative vote of the Majority Lenders upon 30 days' prior
written notice thereof to the Liquidity Agent, the Administrator and the
Issuer if the Liquidity Agent shall have engaged in willful misconduct
or shall have been grossly negligent in the performance of its duties as
Liquidity Agent. Such resignation or removal shall become effective upon
the acceptance of appointment by a successor Liquidity Agent as set
forth below. The Majority Lenders shall have the right to appoint a
successor Liquidity Agent, which shall be an Eligible Agent; provided,
that the Issuer shall have the right to approve the successor Liquidity
Agent, such approval not to be unreasonably withheld. If no successor
Liquidity Agent shall have been so appointed by the Majority Lenders and
approved by the Issuer, and shall have accepted such appointment, within
30 days after the prior Liquidity Agent's giving of notice of
resignation or the Majority Liquidity Lenders' removal of the prior
Liquidity Agent, then the prior Liquidity Agent may, on behalf of the
Liquidity Lenders, appoint a successor Liquidity Agent, which shall be
an Eligible Agent. In the event the Liquidity Agent ceases to be an
Eligible Agent, the Administrator shall appoint an Eligible Agent to
succeed such existing Liquidity Agent. Upon the acceptance of any
appointment as Liquidity Agent hereunder by a successor Liquidity Agent,
such successor Liquidity Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the prior
Liquidity Agent, and the prior Liquidity Agent shall be discharged from
its duties and obligations under this Agreement. After any Liquidity
Agent's resignation or removal hereunder as Liquidity Agent, the
provisions of this Section 6 and Section 11 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Liquidity Agent under this Agreement. If no successor agent has
30
accepted appointment as Liquidity Agent by the date which is 30 days
following a retiring Liquidity Agent's notice of resignation, the
retiring Liquidity Agent's resignation shall nevertheless thereupon
become effective and the Liquidity Lenders shall perform all of the
duties of the Liquidity Agent hereunder until such time, if any, as the
Majority Liquidity Lenders appoint a successor agent as provided for
above. The Issuer (or the Administrator on its behalf) shall promptly
notify each Rating Agency and the Placement Agents of its receipt of any
such notice from the Majority Lenders or the Liquidity Agent with
respect to such resignation or removal of the Liquidity Agent.
7. Rights of the Issuer and the Administrator. The Issuer (or the
Administrator on behalf of the Issuer) shall retain the exclusive right, in
its sole discretion (subject to the next sentence) to exercise any rights and
remedies available under the Receivables Purchase Agreement or pursuant to
applicable law, including the right to approve any amendment, modification or
waiver of the Receivables Purchase Agreement or any instrument or document
delivered pursuant thereto. Notwithstanding the foregoing, the Issuer agrees
that it shall not (and the Administrator agrees that it shall not, on behalf
of the Issuer) without the prior written consent of all Liquidity Lenders,
amend, modify or waive any provision of the Receivables Purchase Agreement
which would:
(i) reduce the amount of Capital or Discount that is payable
on account of the Purchased Interest or delay any scheduled date for
payment thereof; or
(ii) modify any yield protection or indemnity provision which
expressly inures to the benefit of assignees or participants of the
Issuer.
The Issuer (or the Administrator on behalf of the Issuer) agrees to
provide to the Liquidity Agent and the Liquidity Agent agrees to provide to
the Liquidity Lenders notice of any amendment of or waiver or consent in
connection with the Receivables Purchase Agreement promptly after the
effectiveness of the same.
8. Obligations of the Liquidity Lenders, Including
Confidentiality. Each Liquidity Lender agrees to abide by any obligations set
forth in the Receivables Purchase Agreement on the part of an owner of the
Purchased Interest, including without limitation any obligations to maintain
confidentiality. Furthermore, each Liquidity Lender understands that the
Receivables Purchase Agreement itself is a confidential document and such
Liquidity Lender agrees that it will not disclose it to any other Person
except (a) with the Administrator's prior written consent, (b) to such
Liquidity Lender's legal counsel or
31
auditors if such counsel or auditors agree to hold it confidential, (c) to
any regulatory authority having jurisdiction over such Liquidity Lender or
(d) as required by law or any court of law in connection with any litigation.
Notwithstanding the foregoing, any Liquidity Lender may, in connection with
any assignment or proposed assignment pursuant to Section 9 hereof, disclose
to the assignee or proposed assignee the Receivables Purchase Agreement or
any information relating to the Seller furnished to such Liquidity Lender by
or on behalf of the Seller or by the Liquidity Agent or the Administrator;
provided, that prior to any such disclosure, the assignee or proposed
assignee agrees to preserve the confidentiality of any confidential
information (including the Receivables Purchase Agreement) relating to the
Seller Sub or the Receivables Purchase Agreement received by it from any of
the foregoing entities. The agreements in this Section 8 shall survive
termination of the Agreement and payment of all obligations hereunder.
9. Assignability and Purchase Limit. (a) A Person (other than
PNC) shall become a party hereto and shall become a Liquidity Lender
hereunder upon satisfaction of the conditions set forth in Section 9(b),
acceptance and recording of an Assignment by the Liquidity Agent in the
Register and the occurrence of the effective date of such Liquidity
Commitment (as set forth in such Assignment) and subject to the approval of
such Liquidity Lender by the Liquidity Agent and, if required by the
Receivables Purchase Agreement, the Seller.
(b) Each Liquidity Lender may assign to any Eligible Assignee all
or a portion of its rights and obligations under this Agreement: provided,
however, that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of the aggregate rights and obligations of the
assigning Liquidity Lender under this Agreement (including, without
limitation, its Liquidity Commitment and Liquidity Loans),
(ii) the amount of the assigning Liquidity Commitment being
assigned pursuant to such assignment shall in no event be less than
$20,000,000.00 and shall be in an integral multiple of $10,000,000.00,
and, unless such assigning Liquidity Lender is assigning its entire
Liquidity Commitment, such assigning Liquidity Lender's retained
Liquidity Commitment after giving effect to such assignment shall in no
event be less than $20,000,000.00,
(iii) the parties to each such assignment shall execute and
deliver an Assignment to the Liquidity Agent, for its acceptance and
recording in the Register, and
32
(iv) the assignee shall deliver to the Liquidity Agent (A) not
later than the effective date specified in the Assignment, an
enforceability opinion of counsel for such assignee, addressed to the
Liquidity Agent, the Administrator, the Issuer and each Rating Agency
(and a copy of which may be given to each Placement Agent), in form and
substance reasonably satisfactory to such addressees (and the Liquidity
Agent shall promptly deliver copies of the same to each of such
addressees), and (B) at least five days prior to the effective date
specified in the applicable Assignment, the information and financial
statements, if any, regarding such assignee described in Section 3(b)(i)
hereof and requested to be delivered by the Administrator.
Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in the Assignment, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to this Agreement,
have the rights and obligations of a Liquidity Lender hereunder and (y) the
Liquidity Lender which is the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to this
Agreement, relinquish its rights (other than the right to receive payments
which accrued in favor of such Liquidity Lender pursuant to Section 4(d)
hereof prior to such assignment) and be released from its obligations under
this Agreement (and, if such Assignment provides for an assignment of all
such assigning Liquidity Lender's Liquidity Commitment, such Liquidity Lender
shall cease to be a party hereto).
(c) Upon receipt by the Liquidity Agent of an Assignment executed
by an assigning Liquidity Lender and by an assignee who is an Eligible
Assignee and the satisfaction of the other conditions set forth in Sections
9(a) and (Lb, the Liquidity Agent shall (i) accept such Assignment, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Administrator, the Issuer, the Seller and each
Rating Agency. The assigning Liquidity Lender shall pay to the Liquidity
Agent an assigning fee equal to $2,500 for each assignment hereunder.
(d) The Liquidity Agent, the Administrator and the Liquidity
Lenders acknowledge and agree that the Issuer shall be entitled to assign its
rights, title, interests and obligations under this Agreement to MSFC. All
references to the Issuer in this Agreement shall be deemed to include such
assignee to the extent of such assignment.
(e) If the Purchase Limit shall be reduced, the Percentage of each
Liquidity Lender shall remain the same and each Liquidity Lender's Liquidity
Commitment Amount shall be deemed to be proportionately reduced; provided,
however, that no
33
such reduction shall be effective unless and until such time as the
outstanding Capital of the Purchased Interest together with Discount accrued
and to accrue thereon during the current Fixed Periods are less than or equal
to the aggregate of the Liquidity Commitment Amounts of all Liquidity Lenders
as so reduced.
10. Liquidity Termination Date: Extension of Liquidity Termination
Date. (a) Subject to earlier termination of a Liquidity Commitment pursuant
to Section 2(e) or Section 11(h) hereof, the Liquidity Lenders' Liquidity
Commitments under this Agreement shall expire at the close of business on
November _____, 1997 (such date being the "Liquidity Termination Date"). If
at any time the Issuer requests that the Liquidity Lenders renew their
Liquidity Commitments hereunder and less than all the Liquidity Lenders
consent to such renewal within 30 days of the Issuer's request, the Issuer
may arrange for an assignment to one or more Eligible Assignees of all the
rights and obligations hereunder of each such nonconsenting Liquidity Lender
in accordance with Section 9. Any such assignment shall become effective on
the then current Liquidity Termination Date. Each Liquidity Lender agrees
that if it does not so consent to any such renewal, it shall cooperate fully
with the Issuer in effectuating any such assignment. The Liquidity Agent will
provide written notice to the Liquidity Lenders of any proposed modifications
to this Agreement requested in connection with any renewal hereof and the
Liquidity Lenders shall each have the right to elect not to renew this
Agreement in light of such modifications.
(b) If at any time the Issuer requests that the Liquidity Lenders
renew their Liquidity Commitments hereunder and less than all the Liquidity
Lenders consent to such renewal within 30 days of the Issuer's request, and
if none or less than all the Liquidity Commitments of the nonrenewing
Liquidity Lenders are assigned to one or more Eligible Assignees as provided
in subsection (a), then (without limiting the Issuer's right to borrow
Liquidity Loans at any time prior to the Liquidity Commitment Termination
Date in accordance with the terms hereof) the Issuer may borrow Liquidity
Loans hereunder in an amount equal to the least of (i) the maximum amount of
Liquidity Loans that 'it could borrow at that time under Section 2(a), (ii)
the aggregate Liquidity Commitments of the nonrenewing Liquidity Lenders and
(iii) the excess, if any, of (A) the Face Amount of Notes issued to fund the
Purchased Interest over (B) the aggregate Liquidity Commitments other than
those of the nonrenewing Lenders, which Liquidity Loans shall be made solely
by the nonrenewing Liquidity Lenders, pro rata according to their respective
Liquidity Commitments. Following the making of such Liquidity Loans, this
Agreement and the Liquidity Commitments of the renewing Liquidity Lenders
shall remain in effect in accordance with their terms notwithstanding the
expiration of the Liquidity Commitments of the nonrenewing Liquidity Lenders.
All
34
amounts which, under the Receivables Purchase Agreement, are received by the
Issuer in reduction of the Capital of the Purchased Interest, up to the
outstanding principal amount of the Liquidity Loans described above in this
subsection (b), shall be distributed to the nonrenewing Liquidity Lenders,
ratably according to the principal amount of such Liquidity Loans made by
them, in payment of the principal amount of such Liquidity Loans. When (after
the expiration of the Liquidity Commitments of the nonrenewing Liquidity
Lenders) the principal amount of and interest on the Liquidity Loans
described above in this subsection (b) shall have been paid in full, then
such Liquidity Lenders shall cease to be parties to this Agreement for any
purpose, provided they shall remain entitled to receive any payments under
Section 4(f) accrued in favor of such Liquidity Lenders while they were
Liquidity Lenders hereunder.
11. Miscellaneous. (a) Amendments, Etc. No amendment or waiver of
any provision of this Agreement, nor consent to any departure by the Issuer
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders and, in the case of an amendment,
the Issuer, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Liquidity Lenders and the Issuer, amend the last paragraph
of Section 2(a), Section 4(a), Section 4(d) or Section 7 hereof or amend the
formula for calculating the amount of each Liquidity Loan set forth in
Section 2(a) hereof; provided, further, that no material amendment of this
Agreement (other than an amendment to extend the scheduled Purchase
Termination Date) shall be effective unless the Issuer (or the Administrator
on its behalf) shall have received written confirmation by the Rating
Agencies that such amendment shall not cause the rating on the then
outstanding Notes to be downgraded or withdrawn and provided, further, that
no amendment, waiver or consent shall affect the rights or duties of the
Administrator or the Liquidity Agent under this Agreement unless the same is
in writing and signed by the Administrator or the Liquidity Agent, as the
case may be, in addition to the other parties required above to take such
action. The Administrator shall provide each Rating Agency with a copy of
each amendment to or waiver or consent under this Agreement promptly
following the effective date thereof.
(b) Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including facsimile communication) and
mailed, telecopied or delivered, if to PNC, the Liquidity Agent, the Issuer
or the Administrator, at its address specified on the signature page hereof;
if to any other Liquidity Lender, at its address specified in the Assignment
pursuant to which it became a Liquidity Lender; if to any Placement Agent, at
its address specified in the commercial paper
35
placement agreement to which it is a party; or, as to PNC, the Liquidity
Agent, the Issuer or the Administrator, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party
in a written notice to the Administrator and the Liquidity Agent. All such
notices and communications shall, when mailed or telecopied (receipt
confirmed), be effective when deposited in the mails or telecopied,
respectively, except that notices and communications to the Liquidity Agent
shall not be effective until received by the Liquidity Agent.
(c) Costs and Expenses of the Administrator. Each Liquidity Lender
will on demand reimburse the Administrator its Percentage of any and all
reasonable costs and expenses (including Attorney Costs), which may be
incurred in connection with collecting payments relating to the Purchased
Interest at a time when a Liquidity Lender has Liquidity Loans outstanding
hereunder or enforcing related rights, for which the Administrator is not
promptly reimbursed by the Seller. Should the Administrator later be
reimbursed by the Seller or the Issuer for any such amount paid pursuant to
the foregoing sentence, the Administrator shall immediately pay to each
Liquidity Lender its pro rata share of such amount.
(d) Costs and Expenses of the Liquidity Agent. Each Liquidity
Lender will on demand reimburse the Liquidity Agent its Percentage of any and
all reasonable costs and expenses (including Attorney Costs), which may be
incurred by the Liquidity Agent in connection with administering or enforcing
rights under this Agreement.
(e) Compensation of the Liquidity Agent. In consideration of and
as compensation for all services to be rendered by the Liquidity Agent as
described in this Agreement, the Issuer will pay such reasonable fees to the
Liquidity Agent as may be mutually agreed upon from time to time.
(f) Binding Effect. This Agreement shall become effective when it
shall have been executed and delivered by each of the parties hereto and
thereafter shall be binding upon and inure to the benefit of the Issuer, the
Administrator, the Liquidity Agent and each Liquidity Lender and their
respective successors and assigns. The provisions of Section 11(o) shall also
inure to the benefit of the Persons specified therein. The Issuer shall not
assign any portion of the Purchased Interest to another Person, unless the
Notes issued to fund or maintain the Purchased Interest shall concurrently be
paid in full, and if any such assignment shall be made, the Liquidity
Commitments of the Liquidity Lenders hereunder shall not inure to the benefit
of such other Person. In connection with any assignment by the Issuer of the
Purchased Interest (or any portion thereof), the
36
Issuer shall comply with any applicable legal requirements, including the
Securities Act of 1933, as amended.
(g) Taxes. Any taxes due and payable on any payments to be made to
any Liquidity Lender hereunder shall be such Liquidity Lender's sole
responsibility. Each Liquidity Lender warrants that it is not subject to any
taxes, charges, levies or withholdings with respect to payments under this
Agreement that are imposed by means of withholding by any applicable taxing
authority ("Withholding Tax"). Each Liquidity Lender agrees to provide the
Liquidity Agent, from time to time upon the Liquidity Agent's request,
completed and signed copies of any documents that may be required by an
applicable taxing authority to certify such Liquidity Lender's exemption from
Withholding Tax with respect to payments to be made to such Liquidity Lender
under this Agreement; and each Liquidity Lender agrees to hold the Liquidity
Agent harmless from any Withholding Tax imposed due to such Liquidity
Lender's failure to establish that it is not subject to Withholding Tax.
(h) Termination of a Liquidity Lender's Rights and Obligations.
(i) The Majority Lenders and the Issuer each shall have the
right, in their or its sole discretion, to terminate the right and
obligation of any Liquidity Lender to make Liquidity Loans hereunder in
the event that the short-term debt ratings of such Liquidity Lender by
any Rating Agency shall cease to be at least equal to the ratings
assigned by the Rating Agencies to the Notes. Such termination shall be
effective upon the delivery of written notice to such effect delivered
by the Liquidity Agent to the Issuer and such Liquidity Lender (in the
case of a termination by the Majority Lenders) or by the Issuer (or the
Administrator on its behalf) to the Liquidity Agent and such Liquidity
Lender (in the case of a termination by the Issuer), subject to the next
following sentence. Upon such termination, (i) such Liquidity Lender
shall cease to have any rights or obligations with respect to future
Liquidity Loans under this Agreement but shall continue- to have the
rights and obligations of a Liquidity Lender (including, without
limitation, rights to payments described in Section 4(d) hereof) with
respect to any Liquidity Loans made by it pursuant to the terms of this
Agreement prior to such termination and shall continue to be bound by
the provisions of Section 8 and Section 11(i), and (ii) effective on the
date of termination, either (x) the Liquidity Agent shall arrange for
such Liquidity Lender's rights and obligations hereunder to be assigned
to an Eligible Assignee pursuant to Section 9 hereof or (y) if such an
assignment cannot be arranged on or before such date, the Liquidity
Commitment of such Liquidity Lender hereunder shall be reduced to zero;
provided, however, that no such reductions shall be
37
effective unless and until such time as the outstanding Capital of the
Purchased Interest together with Discount accrued and to accrue thereon
during the current Fixed Periods are less than or equal to the aggregate
of the Liquidity Commitment Amounts of all other Liquidity Lenders;
provided that, after giving effect to such reduction, the aggregate of
such Liquidity Commitment Amounts hereunder shall at least equal the
Purchase Limit multiplied by 1.02.
(ii) If the short-term debt ratings of a Liquidity Lender by
any Rating Agency shall cease to be at least equal to the ratings
assigned by the Rating Agencies to the Notes, then the Issuer may, in
its sole discretion, if such Liquidity Lender's Liquidity Commitment has
not theretofore been terminated pursuant to clause (i) above, require
such Liquidity Lender to fund (and each Liquidity Lender hereby agrees
in such event to fund) any unused portion of its Liquidity Commitment by
payment of such amount to the Administrator (a "Liquidity Downgrade
Draw") for deposit in an account in the name of the Issuer, maintained
at the Administrator's office in Pittsburgh, Pennsylvania or such other
office of the Administrator as the Administrator may specify by notice
to the Issuer (a "Downgrade Collateral Account").
(iii) If any Liquidity Lender shall be required pursuant to
clause (ii) above to fund a Liquidity Downgrade Draw, then the Issuer
shall instruct the Administrator to apply the monies in the Downgrade
Collateral Account applicable to such Liquidity Lender's Percentage of
requested Liquidity Loans at the times, in the manner and subject to the
conditions precedent of such requested purchases. The deposit of monies
in such Downgrade Collateral Account by any Liquidity Lender shall not
constitute a Liquidity Loan (and such Liquidity Lender shall not be
entitled to interest on such monies except as provided below in this
clause (iii)) unless and until (and then only to the extent that) such
monies are used to fund a Liquidity Loan pursuant to the first sentence
of this clause (iii)). Proceeds in such Downgrade Collateral Account
shall be invested in investments permitted pursuant to the documents
governing the Issuer's securitization program (as notified by the
Administrator), as directed by the applicable Liquidity Lender by
written notice to the Issuer and the Administrator, the income of which
shall be for the account of such Liquidity Lender. The income that has
accrued from such investments and received by the Issuer shall be
released to such Liquidity Lender on the last Business Day of each
month. Unless required to be released by the following sentence, any
payments with respect to Capital or Discount received by the Issuer or
the Liquidity Agent that are required to be applied to the repayment or
38
prepayment of Liquidity Loans made by such Liquidity Lender pursuant to
Section 4 shall be deposited in the Downgrade Collateral Account for
such Liquidity Lender. All amounts remaining in such Downgrade
Collateral~Account shall be released to such Liquidity Lender no later
than the Business Day immediately following the earliest of (x) the
effective date of any replacement of such Liquidity Lender or removal of
such Liquidity Lender as a party to this Agreement, (y) the date on
which such Liquidity Lender shall furnish the Liquidity Agent with
confirmation that such Liquidity Lender shall have short-term debt
ratings by each Rating Agency at least equal to the ratings assigned by
the Relevant Rating Agencies to the Notes, and (z) the Liquidity
Termination Date.
(i) No Proceedings; Waiver of Set-Off. (i) Each of the
Liquidity Agent, the Administrator and each Liquidity Lender hereby
covenants and agrees that it shall not institute against, or join any
other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law,
for one year and a day after the latest maturing commercial paper note
issued by the Issuer is paid. The agreements in this subsection (i)
shall survive termination of this Agreement.
(ii) Each of the Liquidity Agent, the Administrator and each
Liquidity Lender hereby waives any right to set-off and to appropriate
and apply any and all deposits and any other indebtedness at any time
held or owing thereby to or for the credit or the account of the Issuer
against and on account of the obligations and liabilities of the Issuer
to such Person under this Agreement; provided, however, that such right
of set-off is hereby waived by such Person only until one year and one
day shall have elapsed after the latest maturing commercial paper issued
by the Issuer is paid.
(j) Limitation on Payments. Notwithstanding any provisions
contained in this Agreement to the contrary, the Issuer shall not, and
shall not be obligated to, pay any amount pursuant to this Agreement
unless (i) the Issuer has received funds which may be used to make such
payment and which funds are not required to repay the Notes when due and
(ii) after giving effect to such payment, either (x) the Issuer could
issue Notes to refinance all outstanding Notes (assuming such
outstanding Notes matured at such time) in accordance with the program
documents governing the Issuer's securitization program or (y) all Notes
are paid in full; provided, however, that the foregoing limitations on
payments by the Issuer shall not apply to any distributions
39
of funds received by the Issuer pursuant to Section 4. Any amount which
the Issuer does not pay pursuant to the operation of the preceding
sentence shall not constitute a claim (as defined in Section 101 of the
Bankruptcy Code) against or corporate obligation of the Issuer for any
such insufficiency unless and until the Issuer satisfies the provisions
of clauses (i) and (ii) above.
(k) Limitation on Issuance of Notes. Notwithstanding any
provisions contained in this Agreement, the Issuer hereby covenants and
agrees that it shall not issue any Notes that have a maturity date later
than the 75th day following any Scheduled Payment Date until the full
amount of the payment due on such Scheduled Payment Date has been paid.
The Issuer also covenants not to Issue Notes which mature later than the
seventy-fifth day following July 31, 1998.
(l) Indemnification of Issuer. The Liquidity Agent hereby
agrees to indemnify the Issuer for any broken funding costs and any swap
breakage costs of the Issuer relating to interest rate hedging
agreements effected in connection with the transactions contemplated by
this Agreement, the Receivables Purchase Agreement and the Receivables
Sale Agreement, to the extent such funds have not provided by the Seller
pursuant to Article VIII of the Receivables Sale Agreement.
(m) GOVERNING LAW; JURISDICTION. THIS AGREEMENT AND EACH
ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY ASSIGNMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT AND ANY ASSIGNMENT, EACH OF THE
ISSUER, THE ADMINISTRATOR, THE LIQUIDITY AGENT AND EACH LIQUIDITY LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE ISSUER, THE
ADMINISTRATOR, THE LIQUIDITY AGENT AND EACH LIQUIDITY LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT, ANY ASSIGNMENT OR ANY
DOCUMENT RELATED HERETO. EACH OF THE ISSUER, THE ADMINISTRATOR, THE
LIQUIDITY AGENT AND EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
40
(n) Execution in Counterparts. This Agreement and each
Assignment may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page to this Agreement or an
Assignment by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement or an Assignment, as applicable.
(o) No Recourse. The obligations of the Issuer under this
Agreement are solely the corporate obligations of the Issuer. No
recourse shall be had for the payment of any amount owing by the Issuer
under this Agreement, or for the payment by the Issuer of any other
obligation or claim of or against the Issuer arising out of or based on
this Agreement, against any stockholder, employee, officer, director,
agent or incorporator of the Issuer provided, further, that nothing in
this subsection (o) shall relieve any of the foregoing Persons from any
liability which such Person may otherwise have in such capacity for
his/her or its gross negligence or willful misconduct. The agreements in
this Section shall survive the termination of this Agreement and payment
of all obligations hereunder.
(p) WAIVER OF JURY TRIAL. THE ISSUER, THE ADMINISTRATOR, THE
LIQUIDITY AGENT AND EACH LIQUIDITY LENDER EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY ASSIGNMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST THE OTHER PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
ISSUER, THE ADMINISTRATOR, THE LIQUIDITY AGENT AND EACH LIQUIDITY LENDER
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY OF THIS AGREEMENT, ANY ASSIGNMENT OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY
ASSIGNMENT.
41
Exhibit A
Assignment of Liquidity Commitment
with respect to
ES Funding Corporation
Liquidity Loan Agreement
Dated _________, 199__
Section 1.
Percentage assigned: ________%
Assignor's remaining Percentage: ________%
Outstanding principal amount of Liquidity
Loans assigned: $________
Section 2.
Assignee's Liquidity Commitment Amount $________
Assignor's remaining
Liquidity Commitment Amount $________
Section 3.
Effective Date of this Assignment: ______,19__
Upon execution and delivery of this Assignment by Assignor and Assignee,
satisfaction of the other conditions to assignment specified in Section 9 of
the Liquidity Loan Agreement referred to below and acceptance and recording
of this Assignment by PNC BANK, National Association, as Liquidity Agent,
from and after the effective date specified above, Assignee shall become a
party to, and have the rights and obligations of a Liquidity Lender under,
the Liquidity Loan Agreement dated as of _________, 19 among the Liquidity
Lenders referred to therein, PNC BANK, National Association, as Liquidity
Agent, Envirotest Partners Market Street Capital Corporation and PNC BANK,
National Association, as Administrator.
ASSIGNOR: [NAME OF ASSIGNOR]
By: ________________________
Title:_________________
By: ________________________
Name:
Title:
Address:
Attention:
Telephone:
Telecopy
42
THE LIQUIDITY LENDERS
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
Address:
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Percentage: 100%
Amount: $80993821 Liquidity
Commitment
ENVIROTEST PARTNERS, as Seller
By its partners:
ENVIROTEST SYSTEMS CORP.
By: /s/ C. Xxxxxxx Xxxxxx
----------------------------
Name: C. Xxxxxxx Xxxxxx
Title: Vice President
ENVIROTEST TECHNOLOGIES, INC.
By: /s/ C. Xxxxxxx Xxxxxx
----------------------------
Name: C. Xxxxxxx Xxxxxx
Title: Vice President
00
XXXXXX XXXXXX XXXXXXX XXXX.
as Issuer
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Address:
c/o Amacor Group Llc
0000-X Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
44
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
PNC BANK, NATIONAL ASSOCIATION
as Liquidity Agent
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
Address:
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By:
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
Address:
One PNC Plaza
Fifth Avenue and Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
45
