1
Exhibit 4.02
EXECUTION COPY
--------------------------------------------------------------------------------
AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
among
KITTY HAWK FUNDING CORPORATION,
as Company
and
UCP QUALIFYING SPE 1998-1 LIMITED PARTNERSHIP
UCP OPERATING SPE 1998-1 LIMITED PARTNERSHIP
as Pledgors
and
UNICAPITAL OPERATIONS GROUP, INC.
individually and
as Master Servicer
and
BANK OF AMERICA, N.A.
as Agent and Bank Investor
Dated as of August 16, 1999
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
SECTION I.1 Certain Defined Terms................................................................ 1
SECTION I.2 Other Terms.......................................................................... 33
SECTION I.3 Computation of Time Periods.......................................................... 33
ARTICLE II
PLEDGES AND SETTLEMENTS
SECTION II.1 Facility............................................................................. 34
SECTION II.2 Pledges; Pledge Certificates; Eligible Receivables................................... 34
SECTION II.3 Selection of Tranche Periods and Tranche Rates....................................... 39
SECTION II.4 Discount, Fees and Other Costs and Expenses.......................................... 43
SECTION II.5 Settlement and Reinvestment Procedures............................................... 43
SECTION II.6 Liquidation Settlement Procedures.................................................... 46
SECTION II.7 Fees................................................................................. 47
SECTION II.8 Protection of the Interest of the Company and the Bank Investors; Releases........... 47
SECTION II.9 Deemed Collections; Reassignments; Prepayment Shortfalls; Application of Payments.... 49
SECTION II.10 Payments and Computations, Etc....................................................... 50
SECTION II.11 Reports.............................................................................. 50
SECTION II.12 Accounts............................................................................. 50
SECTION II.13 Sharing of Payments, Etc............................................................. 53
SECTION II.14 Right of Setoff...................................................................... 54
SECTION II.15 Hedging of Receivables............................................................... 54
SECTION II.16 Substitution of Receivables.......................................................... 55
SECTION II.17 Auction Procedure.................................................................... 57
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 Representations and Warranties of the Pledgors....................................... 58
SECTION III.2 Reaffirmation of Representations and Warranties by the Pledgor....................... 63
SECTION III.3 [Reserved.].......................................................................... 63
i
3
SECTION III.4 Representations and Warranties of the Master Servicer................................ 63
ARTICLE IV
CONDITIONS PRECEDENT
SECTION IV.1 Conditions to Closing................................................................ 66
ARTICLE V
COVENANTS
SECTION V.1 Affirmative Covenants of Pledgors.................................................... 70
SECTION V.2 Negative Covenants of the Pledgors................................................... 76
SECTION V.3 [Reserved.].......................................................................... 79
SECTION V.4 [Reserved.].......................................................................... 79
SECTION V.5 Affirmative Covenants of the Master Servicer......................................... 79
SECTION V.6 [Reserved.].......................................................................... 80
SECTION V.7 Negative Covenants of the Master Servicer............................................ 81
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION VI.1 Appointment of the Master Servicer................................................... 81
SECTION VI.2 Duties of the Master Servicer........................................................ 82
SECTION VI.3 Rights After Designation of New Master Servicer...................................... 88
SECTION VI.4 Master Servicer Default.............................................................. 89
SECTION VI.5 Responsibilities of the Pledgors and the Seller...................................... 90
SECTION VI.6 Limitation on Liability of the Master Servicer and Others............................ 91
SECTION VI.7 The Master Servicer Not to Resign.................................................... 91
SECTION VI.8 Acknowledgement of Guaranty.......................................................... 91
ARTICLE VII
TERMINATION EVENTS
SECTION VII.1 Termination Events................................................................... 92
SECTION VII.2 Termination.......................................................................... 95
ii
4
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION VIII.1 Indemnities by the Pledgors.......................................................... 96
SECTION VIII.2 Indemnity for Taxes, Reserves and Expenses........................................... 99
SECTION VIII.3 Taxes................................................................................102
SECTION VIII.4 Other Costs, Expenses and Related Matters............................................103
SECTION VIII.5 [Reserved.]..........................................................................104
SECTION VIII.6 Pledgor Liability....................................................................104
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION IX.1 Authorization and Action.............................................................104
SECTION IX.2 Agent's Reliance, Etc................................................................105
SECTION IX.3 Termination Events...................................................................105
SECTION IX.4 Rights as Bank Investor..............................................................106
SECTION IX.5 Indemnification of the Agent.........................................................106
SECTION IX.6 Non-Reliance.........................................................................107
SECTION IX.7 Resignation of Agent.................................................................107
SECTION IX.8 Payments by the Agent................................................................108
SECTION IX.9 Bank Commitment; Assignment to Bank Investors........................................108
ARTICLE X
MISCELLANEOUS
SECTION X.1 Term of Agreement....................................................................113
SECTION X.2 Waivers; Amendments..................................................................114
SECTION X.3 Notices..............................................................................115
SECTION X.4 Governing Law; Submission to Jurisdiction; Integration...............................118
SECTION X.5 Severability; Counterparts...........................................................119
SECTION X.6 Successors and Assigns...............................................................119
SECTION X.7 Waiver of Confidentiality............................................................121
SECTION X.8 Confidentiality Agreement............................................................121
SECTION X.9 No Bankruptcy Petition Against the Company...........................................122
SECTION X.10 No Recourse Against Stockholders, Officers or Directors..............................122
SECTION X.11 Characterization of the Transactions Contemplated by the Agreement...................122
EXHIBIT A FORM OF NOTICE OF CHANGE IN FACILITY LIMIT...........................................A-1
iii
5
EXHIBIT B CREDIT POLICY MANUAL AND CREDIT POLICY PROCEDURE MEMORANDA...........................B-1
EXHIBIT C [Reserved.]..........................................................................C-1
EXHIBIT D [Reserved.]..........................................................................D-1
EXHIBIT E FORM OF INVESTOR REPORT..............................................................E-1
EXHIBIT F FORM OF PLEDGE ......................................................................F-1
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT..........................................G-1
EXHIBIT H LIST OF ACTIONS AND SUITS............................................................H-1
EXHIBIT I LOCATION OF RECORDS..................................................................I-1
EXHIBIT J LIST OF SUBSIDIARIES AND TRADENAMES..................................................J-1
EXHIBIT K [Reserved.]..........................................................................K-1
EXHIBIT L-1 FORM OF OFFICER'S CERTIFICATE OF QUALIFYING PLEDGOR................................L-1-1
EXHIBIT L-2 FORM OF OFFICER'S CERTIFICATE OF OPERATING PLEDGOR.................................L-2-1
EXHIBIT L-3 FORM OF OFFICER'S CERTIFICATE OF SELLER............................................L-3-1
EXHIBIT L-4 FORM OF OFFICER'S CERTIFICATE OF THE GENERAL PARTNER...............................L-4-1
EXHIBIT L-5 FORM OF OFFICER'S CERTIFICATE OF THE PARENT........................................L-5-1
EXHIBIT L-6 FORM OF OFFICER'S CERTIFICATE OF THE MASTER SERVICER...............................L-6-1
EXHIBIT M FORM OF SECURED NOTE.................................................................M-1
EXHIBIT N ELIGIBLE ORIGINATORS.................................................................N-1
EXHIBIT O EXCEPTIONS TO BALLOON PAYMENT ELIGIBILITY REQUIREMENTS...............................O-1
iv
6
AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT
AMENDED AND RESTATED TRANSFER AND ADMINISTRATION AGREEMENT (this
"Agreement"), dated as of August 16, 1999, by and among UCP QUALIFYING SPE
1998-1 LIMITED PARTNERSHIP, a Nevada limited partnership, as a pledgor (in such
capacity, the "Qualifying Pledgor"), UCP OPERATING SPE 1998-1 LIMITED
PARTNERSHIP, a Nevada limited partnership, as a pledgor (in such capacity, the
"Operating Pledgor" and, collectively with the Qualifying Pledgor, the
"Pledgors"), UNICAPITAL OPERATIONS GROUP, INC., a Delaware corporation,
individually and as master servicer (in such capacity, the "Master Servicer"),
KITTY HAWK FUNDING CORPORATION, a Delaware corporation (the "Company") and BANK
OF AMERICA, N.A., a national banking association ("Bank of America"), as agent
for the Company and the Bank Investors (in such capacity, the "Agent") and as a
Bank Investor, and each other bank that is a party hereto in the capacity of a
Bank Investor.
PRELIMINARY STATEMENTS
WHEREAS, the parties hereto have entered into a Transfer and
Administration Agreement dated as of June 22, 1998 (as amended prior to the date
hereof, the "Original TAA") and desire to amend and restate the Original TAA in
its entirety; and
WHEREAS, the Pledgors may desire to pledge and assign, from time to
time, certain lease and secured loan receivables to secure a borrowing from the
Company and/or the Bank Investors, as applicable, and the Company may desire to,
and the Bank Investors, if requested, shall lend certain amounts to the
Pledgors, which amounts are secured by the Pledgors' pledge and assignment of
such receivables, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION I.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
7
"Accounts" means, collectively, the Collection Account, the Reserve
Account, the Fee Reserve Account, the Principal Collection Account and the
Interest Accrual Account.
"Administrative Agent" means Bank of America, N.A., as administrative
agent.
"Administrative Fee" means the fee payable to the Agent pursuant to
Section 2.7 hereof, the terms of which are set forth in the Fee Letter.
"Advance Amount" means with respect to any Pledge, the amount paid to
the Pledgors by the Company or the Bank Investors being the product of the
applicable Advance Percentage and the Outstanding Balance of the related
Receivables at the time of such Pledge.
"Advance Percentage" means (a) 93% with respect to any Pledge of a
Receivable other than a Receivable in Interim Funding and (b) 90% with respect
to any Pledge of a Receivable in Interim Funding.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any Person other than the Company and the Bank Investors (including any UCC
financing statement or any similar instrument filed against such Person's assets
or properties) and which is not a Permitted Lien.
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"Agent" means Bank of America, N.A., in its capacity as agent for the
Company and the Bank Investors, and any successor thereto appointed pursuant to
Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount with
8
respect to all Tranche Periods at such time, (ii) the Net Investment at such
time, and (iii) all other amounts owed (whether due or accrued) hereunder by the
Pledgors to the Company at such time.
"Assignment Amount" with respect to a Bank Investor shall mean at any
time an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of
the Net Investment at such time and (ii) such Bank Investor's unused Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Available Funds" means, for each Payment Date, all Collections
Available for the related Collection Period, plus all Servicing Advances for
such Payment Date, plus all amounts received under the Hedge Agreements with
respect to such Payment Date, plus all Finance Facility Release Amounts for such
Payment Date, plus all amounts on deposit in the Interest Accrual Account
immediately prior to such Payment Date.
"Bank Investors" shall mean Bank of America, N.A. and each other bank
that is party hereto in the capacity of a Bank Investor and their respective
successors and assigns.
"Bankruptcy Code" means the Federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Liquidity Provider (or, if there is
more than one Liquidity Provider, then by Bank of America) from time to time,
changing when and as said prime rate changes (such rate not necessarily being
the lowest or best rate charged by the Liquidity Provider (or Bank of America,
as applicable)) and (ii) the sum of (a) 1.50% and (b) the rate equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the Liquidity Provider
(or, if more than one Liquidity Provider, then by Bank of America)
3
9
from three Federal funds brokers of recognized standing selected by it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Pledgors, the Seller or any ERISA
Affiliate of the Pledgors, or the Seller is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York; Portland, Oregon; Miami, Florida; or
Charlotte, North Carolina are authorized or required by law to close, and, when
used with respect to the determination of any Eurodollar Rate or any notice with
respect thereto, any such day which is also a day for trading by and between
banks in United States dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is calculated at the
Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche, either (i)
prior to the Termination Date, a period of up to 30 days requested by the
Pledgors and agreed to by the Company, Bank of America on behalf of the
Liquidity Provider, or the Agent, as the case may be, commencing on a Business
Day requested by the Pledgors and agreed to by the Company, Bank of America or
the Agent, as the case may be, or (ii) after the Termination Date, a period of
one day. If such BR Tranche Period would end on a day which is not a Business
Day, such BR Tranche Period shall end on the next succeeding Business Day.
"Capitalized Lease" means any lease of property by a Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
"Carrying Costs" has the meaning provided in Section 2.5.
"Closing Date" means June 26, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means Bank of America, N.A., as collateral agent for
any Liquidity Provider, any Credit Support Provider, the holders of Commercial
Paper and certain other parties.
4
10
"Collection Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(a).
"Collection Period" means with respect to each Payment Date, the
immediately preceding calendar month (or, with respect to the first Payment
Date, the period beginning on the initial Cutoff Date and ending on the last day
of the month preceding such Payment Date).
"Collections" means, with respect to any Receivable, all cash
collections on and other cash proceeds of or recoveries on the related Contract,
including, without limitation, all interest charges, rental payments, and cash
proceeds of all Related Security and including all amounts received with respect
to any Deemed Collections or other reassignments of Receivables pursuant to
Section 2.9, but, in each case, other than any Excluded Amounts.
"Collections Available" means, for any Payment Date, all Collections
with respect to the related Collection Period, less any amounts allocated since
the preceding Payment Date, or since the initial Pledge Date in the case of the
first Payment Date, pursuant to Section 2.5(b).
"Commercial Paper" means the promissory notes issued by the Company in
the commercial paper market.
"Commitment" means (i) with respect to each Bank Investor party hereto,
the commitment of such Bank Investor to make loans to the Pledgors or to acquire
such loans from the Company in accordance herewith in an amount not to exceed
the dollar amount set forth opposite such Bank Investor's signature on the
signature page hereto under the heading "Commitment", minus the dollar amount of
any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement plus the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make loans to the Pledgors or to acquire such loans from the
Company not to exceed the amount set forth in such Assignment and Assumption
Agreement minus the dollar amount of any Commitment or portion thereof assigned
pursuant to an Assignment and Assumption Agreement prior to such time of
determination and (iii) with
5
11
respect to any assignee of an assignee referred to in clause (ii) above, the
commitment of such assignee to make loans to the Pledgors or to acquire such
loans from the Company not to exceed the amount set forth in an Assignment and
Assumption Agreement between such assignee and its assign.
"Commitment Termination Date" means August 14, 2000, or such later date
to which the Commitment Termination Date may be extended by the Pledgors, the
Agent and the Bank Investors not later than 90 days prior to the then current
Commitment Termination Date, any such extension to become effective on the then
current Commitment Termination Date and to be for a period not to exceed 364
days from the date of the then current Commitment Termination Date.
"Company" means Kitty Hawk Funding Corporation, and its successors and
assigns.
"Concentration Factor" means for any Obligor on any date of
determination, Receivables of such Obligor having an aggregate Outstanding
Balance not in excess of (a) if the Net Investment is $100,000,000 or more on
such date of determination, the greater of 2% of the Net Investment on such date
and $5,000,000 or, with respect to any Obligor whose long term unsecured debt
obligations are rated at least "Baa3" by Moody's and at least "BBB-" by Standard
& Poor's or, if only rated by one such rating agency, are rated by such rating
agency at least at the applicable rating set forth above, the greater of 5% of
the Net Investment on such date and $7,000,000, (b) if the Net Investment is
less than $100,000,000 on such date of determination, (x) for Obligors whose
Obligor Risk Rating is "5" or worse, $3,000,000 and (y) for Obligors whose
Obligor Risk Rating is "4" or better, $4,000,000; provided that Obligors whose
Obligor Risk Rating is "5" or worse may have pledged Receivables hereunder
having an Outstanding Balance in excess of $3,000,000 but not in excess of
$4,000,000 to the extent that the Transaction Risk Rating for those Receivables
is "4" or better or (c) in any event, such other greater amount that is
determined by the Agent in the reasonable exercise of its good faith judgment
and disclosed in a written notice delivered to the Pledgors or such other lesser
amount that is determined by the Agent with the mutual consent of the Pledgors.
"Conduit Assignee" means any commercial paper conduit designated by
Bank of America from time to time to accept an
6
12
assignment from the Company of all or a portion of the Net Investment.
"Contract" means any lease, conditional sale contract, loan contract or
security agreement with respect to any Equipment under which the Seller acts as
lessor or secured party to an Obligor.
"Contract Payment" means each periodic installment of rent or scheduled
payment or principal and interest payable by an Obligor under a Contract.
"Contract Schedule" means the schedule in the form attached hereto as
Schedule I to Exhibit F delivered by the Pledgors to the Agent with respect to
each Pledge or such other form as may be agreed to by the Agent from time to
time.
"CP Rate" means, with respect to any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper having a term equal to such CP Tranche Period
may be sold by any placement agent or commercial paper dealer selected by the
Company, provided, however, that if the rate (or rates) as agreed between any
such agent or dealer and the Company is a discount rate, then the rate (or if
more than one rate, the weighted average of the rates) resulting from the
Company's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is calculated at a CP
Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a period of
days not to exceed 90 days commencing on a Business Day requested by the
Pledgors and agreed to by the Company pursuant to Section 2.3. If a CP Tranche
Period would end on a day which is not a Business Day, such CP Tranche Period
shall end on the next succeeding Business Day.
"Credit and Collection Policy" shall mean the Parent's Credit Policy
Manual and Credit Policy and Procedure Memoranda, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the Company and
the Credit Support Provider evidencing the obligation
7
13
of the Credit Support Provider to provide credit support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company in connection with the issuance by the Company of
Commercial Paper.
"Cut-off Date" means, for each Receivable that is subject to a Pledge
hereunder, either (a) the first day of the month of such Pledge or, if later
than the first day of such month, the date of origination thereof or (b) such
other date as may be specified in the related Pledge Certificate.
"Dealer Fee" means the fee payable by the Pledgors to the Collateral
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Fee Letter.
"Deemed Collections" means any Collections on any Receivable deemed to
have been received pursuant to Section 2.9 hereof.
"Defaulted Receivable" means a Receivable: (i) as to which any payment
is delinquent for 180 consecutive days or more from the original due date for
such payment; (ii) as to which (x) an Event of Bankruptcy has occurred and is
continuing with respect to the Obligor thereof, (y) any payment is delinquent
for 60 consecutive days or more and (z) such Receivables has not been otherwise
re-affirmed in the applicable bankruptcy proceeding; (iii) which has been
identified by the Pledgors, the Seller or the Master Servicer as uncollectible;
or (iv) which, consistent with the Credit and Collection Policy, should be
written off as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
"delinquent" means with respect to any Receivable and specified period
of days, that more than 5% of any scheduled payment thereon has not been
received on or prior to the close of business on the last day of such period.
"Delinquent Receivable" means a Receivable: (i) as to which any payment
is delinquent for more than 30 days from the original
8
14
due date for such payment and (ii) which is not a Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon prior
notice to the Pledgors from the Agent, which notice shall be based in the
Agent's sole discretion on its assessment of the risk of loss posed by such
Obligor's Receivables and which notice shall be given 30 days prior to the date
such Obligor shall cease to be a Designated Obligor unless to do so would
materially adversely affect the interests of the Agent, the Company or the Bank
Investors hereunder.
"Determination Date" means the 10th day of each month or, if such 10th
day is not a Business Day, the immediately preceding Business Day.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
---------------
360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche Period.
provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Discount at a rate which is in excess of the maximum
amount permitted by applicable law; and provided, further, that Discount shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"Discount Rate" means for each Receivable, an amount equal to the sum
of (i) the Hedge Rate for such Receivable then in effect plus (ii) 2.00%.
"Early Collection Fee" means, for any Tranche Period (such Tranche
Period to be determined without regard to the last sentence in Section 2.3(a)
hereof) during which the portion of
9
15
the Net Investment that was allocated to such Tranche Period is reduced for any
reason whatsoever prior to the end of such Tranche Period, the excess, if any,
of (i) the additional Discount that would have accrued during such Tranche
Period if such reductions had not occurred, minus (ii) the income, if any,
received by the recipient of such reductions from investing the proceeds of such
reductions.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Xxxxx'x and S&P of at least "P-1" and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by Xxxxx'x and
by S&P; (iii) certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from Xxxxx'x and S&P of at
least "P-1" and "A-1", respectively; or (iv) investments in money market funds
rated in the highest investment category or otherwise approved in writing by the
applicable rating agencies; (b) demand deposits in any depositary institution or
trust company referred to in (a)(ii) above; (c) commercial paper (having
original or remaining maturities of no more than 30 days) having, at the time of
investment or contractual commitment to invest therein, a credit rating from
Xxxxx'x and S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time
deposits having a credit rating from Xxxxx'x and S&P of at least "P-1" and
"A-1", respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein, a
rating from Xxxxx'x and S&P of at least "P-1" and "A-1", respectively.
10
16
"Eligible Originators" means, at any time, any Subsidiary of the Parent
listed on Exhibit N hereto, as such list may be amended from time to time at the
reasonable discretion of the Agent upon prior notice to the Parent (which
notice, in the case of the removal of any such Subsidiary from those listed on
Exhibit N, shall be given 30 days' notice prior to the date of such amendment
unless to delay would materially adversely affect the interests of the Agent,
the Company or the Bank Investors hereunder).
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the Seller at the instruction
of, or was sold to the Seller by, and in either case was underwritten
by, the Parent or a Subsidiary of the Parent that, at the time of the
Pledge of such Receivable hereunder, was an Eligible Originator, and
has been sold to one or both Pledgors (and, in the case of all Related
Security relating to Equipment, to the Operating Lease Pledgor)
pursuant to and in accordance with the Receivables Purchase Agreement
and to which the applicable Pledgor or Pledgors have good title
thereto, free and clear of all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been, unless otherwise permitted herein, the
subject of the grant by the applicable Pledgor or Pledgors of a first
priority perfected security interest therein (and in the Collections
and Related Security related thereto), effective until the earlier of
the termination of this Agreement or the time at which the related
Contract is either paid in full or reacquired by the applicable Pledgor
or Pledgors pursuant to this Agreement;
(iii) the Obligor of which (A) is a United States resident,
(B) is a Designated Obligor on the related Pledge Date, (C) is not an
Affiliate of any of the parties hereto and (D) is not a government or a
governmental subdivision or agency; provided that Receivables which in
the aggregate do not have an Outstanding Balance that represents more
than 5.0% of the Net Investment or $8 million, whichever is greater,
may be backed by the full faith and credit of the United States or of a
governmental entity whose long term general obligations are rated
investment grade;
11
17
(iv) which is not a Defaulted Receivable on the related Pledge
Date;
(v) which is not a Delinquent Receivable on the related Pledge
Date;
(vi) which arises pursuant to a Contract with respect to which
each of the Seller, the related Eligible Originator and the Pledgor or
Pledgors, as applicable, has performed all obligations required to be
performed by it thereunder at the time of the related Pledge Date;
(vii) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(viii) which arises under a Contract that is "chattel paper"
within the meaning of Article 9 of the UCC of all applicable
jurisdictions and is (A) secured by a first priority perfected security
interest in the related Equipment (provided that Receivables as to
which in each case the related Equipment had at the origination of the
related Contract an original equipment cost of less than $35,000 and
which in the aggregate do not have an Outstanding Balance that
represents more than 20% of the Net Investment or $20 million,
whichever is greater, may be represented by Contracts as to which steps
to perfect such security interest have not been taken), (B) a Leveraged
Lease Loan secured by a first priority perfected security interest in
both the related lease and Equipment (subject to such lease), and which
related lease would be an Eligible Receivable had it been directly sold
to the Borrower pursuant to the Receivables Purchase Agreement and
pledged hereunder, or (C) a "true lease" as to which the related
Equipment is owned by the Operating Lease Pledgor free and clear of all
Adverse Claims;
(ix) which is denominated and payable only in United States
dollars in the United States by an Obligor with a billing address in
the United States and for which the related Equipment is located in the
United States;
(x) which, arises under a Contract that, is in full force and
effect and is and at all times will be the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to, nor has there been
asserted,
12
18
any litigation, right of recession, setoff, counterclaim or other
defense;
(xi) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) has been originated and serviced in accordance
with and otherwise satisfies all applicable requirements of the Credit
and Collection Policy and (B) is assignable without the consent of, or
notice to, the Obligor thereunder;
(xiii) which was generated in the ordinary course of the
Seller's and the related Eligible Originator's business;
(xiv) the Obligor of which has been directed to make all
payments to the Lock-Box Account;
(xv) as to which the Agent has not given at least 30 days'
notice to the Pledgor that such Receivable or class of Receivables is
not acceptable for pledge hereunder, based upon the reasonable
determination of the Agent, that a Material Adverse Effect with respect
to such class of Receivables may arise because of the nature of the
business of the Obligor;
(xvi) the assignment of which under the Receivables Purchase
Agreement by the Seller and the pledge of which hereunder by the
Pledgors do not violate, conflict or contravene any applicable laws,
rules, regulations, orders or writs or any contractual or other
restriction, limitation or encumbrance;
(xvii) to which the Obligor is responsible for the payment of
all expenses in connection with maintenance, repair, insurance, taxes
and otherwise with respect to the related Equipment and which requires
the Obligor to make periodic lease payments without condition
notwithstanding
13
19
damage to or destruction of the Equipment, or any other event,
including Equipment obsolescence;
(xviii) as to which the related Contract is not a lease on a
vehicle or other type of equipment which requires titling in the name
of the Operating Lease Pledgor in order to perfect the Operating Lease
Pledgor's interest, provided that certain Receivables may be leases on
vehicles or other types of equipment which require titling in the name
of the Operating Lease Pledgor, so long as the aggregate Outstanding
Balance of such Receivables does not represent more than 5.0% of the
Net Investment or $7 million, whichever is greater, and provided that
such vehicles are re-titled as required to perfect such interest within
90 days of the related Pledge Date;
(xix) which has a remaining term that does not exceed the
lesser of (A) 120 months and (B) if the remaining term thereof is
greater than 84 months the product of 0.80 and the number of months
which constitutes the "useful life" of the related Equipment as
determined by UniCapital Corporation's Credit and Risk Management Group
(or the appropriate credit officer) in accordance with the Credit and
Collection Policy, and rounded up to the nearest month;
(xx) which has a remaining Outstanding Balance on the related
Pledge Date equal to or less than $5,000,000;
(xxi) which contains customary and enforceable provisions
adequate for realization of the benefits of the related Equipment;
(xxii) which is not a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC;
(xxiii) which is not subject to any guaranty of the payment
obligation thereunder by the Seller, the related Eligible Originator,
the Parent or the Master Servicer and in respect of which neither the
Seller, the Parent nor the related Eligible Originator at the time of
Pledge hereunder has established any specific credit reserve with
respect to the related Obligor;
(xxiv) as to which the Seller or its assignee may accelerate
all remaining Contract Payments if the Obligor is
14
20
in default under any of its obligations under such Receivable;
(xxv) which has not been terminated as a result of the loss,
theft, damage beyond repair or governmental seizure of such item of
Equipment or for any other reason;
(xxvi) the Outstanding Balance of which does not include the
amount of any security deposit held by the Master Servicer, the Seller
or the Parent;
(xxvii) which provides that in the event of the loss, theft,
damage beyond repair or governmental seizure of the related Equipment,
the Obligor is required to repair or replace the related Equipment or
pay an amount not less than the Required Payoff Amount;
(xxviii) under which the Obligor has represented to the Seller
and/or the related Eligible Originator that such Obligor has accepted
the related Equipment or is contractually bound to accept such
Equipment upon shipment or delivery thereof;
(xxix) which does not permit prepayment except upon the
payment of an amount not less than the Required Payoff Amount or, if
the Contract is a conditional sale contract or a loan, upon the payment
of the outstanding principal amount thereof together with any accrued
but unpaid interest, penalties and fees thereon;
(xxx) the Pledge of such Receivable hereunder will not cause
the Concentration Factor with respect to the related Obligor to be
exceeded;
(xxxi) for which the related Contract and Records are in the
custody of the Master Servicer at one of the locations set forth in
Exhibit I, except that (1) for Receivables having an Outstanding
Balance not in excess of 3% of the Facility Limit, such Contract and
Records shall be delivered to the Master Servicer's custody not later
than the fifth Business Day after the date of the Pledge thereof
hereunder and (2) Contracts and Records during Interim Funding may be
at the location of the applicable Originator;
(xxxii) which is in Interim Funding; provided, that the
aggregate Outstanding Balance of Receivables in Interim
15
21
Funding will not exceed $50 million and Interim Funding will not
continue for any such Receivable for a period in excess of 12 months;
(xxxiii) which, if previously excluded from the calculation of
the Net Receivables Balance as a result of a Take-Out, such Receivable
is being re-Pledged on the first Pledge Date to occur following such
Take-Out;
(xxxiv) which, if such Receivable has a remaining term greater
than 84 months, such Receivable does not have a final scheduled payment
in an amount in excess of 20% of the original equipment cost of the
related Equipment, provided, that, any Receivable which has a remaining
term of 120 months and is not otherwise listed on Exhibit O hereto will
not constitute an Eligible Receivable if the final scheduled payment
thereunder exceeds the amount of the other scheduled payments
thereunder; and
(xxxv) which, if such Receivable constitutes a Participation
Receivable, is a Qualified Participation Receivable.
"Equipment" means each item of personal property, together with any
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a
Contract.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Rate" means, with respect to any Eurodollar Tranche Period,
a rate which is 0.75% in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the
16
22
next higher 1/100 of 1%) of (A) the rate obtained by dividing (i) the applicable
LIBOR Rate by (ii) a percentage equal to 100% minus the reserve percentage used
for determining the maximum reserve requirement as specified in Regulation D
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) that is applicable to the Agent during such Eurodollar
Tranche Period in respect of eurocurrency or eurodollar funding, lending or
liabilities (or, if more than one percentage shall be so applicable, the daily
average of such percentage for those days in such Eurodollar Tranche Period
during which any such percentage shall be applicable) plus (B) the then daily
net annual assessment rate (rounded upwards, if necessary, to the nearest 1/100
of 1%) as estimated by the Agent for determining the current annual assessment
payable by the Agent to the Federal Deposit Insurance Corporation in respect of
eurocurrency or eurodollar funding, lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is calculated
at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to one month requested by
the Pledgors and agreed to by the Company, Bank of America, on behalf of the
Liquidity Provider, or the Agent, as the case may be, commencing on a Business
Day requested by the Pledgors and agreed to by the Company, Bank of America or
the Agent, as applicable; provided, however, that if such Eurodollar Tranche
Period would expire on a day which is not a Business Day, such Eurodollar
Tranche Period shall expire on the next succeeding Business Day; provided,
further, that if such Eurodollar Tranche Period would expire on (a) a day which
is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Eurodollar Tranche Period shall expire on the
next preceding Business Day or (b) a Business Day for which there is no
numerically corresponding day in the applicable subsequent calendar month, such
Eurodollar Tranche Period shall expire on the last Business Day of such month.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall be unable to pay its debts generally as they become due, (b)
shall file a petition to take advantage of any insolvency statute, (c) shall
make an assignment for the benefit of its creditors, (d) shall commence a
proceeding for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property or (e) shall
file a petition or answer seeking liquidation,
17
23
reorganization or arrangement or similar relief under the federal bankruptcy
laws or any other applicable law or statute; or (ii)(a) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of such Person or of the whole or
any substantial part of its properties and such order, judgment or decree
continues unstayed and in effect for a period of sixty days, or approve a
petition filed against such Person seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state, which
petition is not dismissed within sixty days, (b) under the provisions of any
other law for the relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of such Person or of the whole or any
substantial part of its properties, which control is not relinquished within
sixty days, (c) there is commenced against such Person any proceeding or
petition seeking reorganization, arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state which proceeding or petition remains undismissed for a
period of sixty days or (d) such Person takes any action to indicate its consent
to or approval of any such proceeding or petition.
"Excluded Amounts" means any collections on a Receivable or the related
Contract or Related Security (a) attributable to any Taxes, fees or other
charges imposed by any Official Body, (b) representing reimbursements of
insurance premiums or payments for services that were not financed by the Seller
or the Eligible Originator, (c) with respect to a Receivable re-assigned or
substituted for as provided for in this Agreement, (d) with respect to Equipment
related to any Contract that has been paid in full and (e) attributable to any
costs expressly incurred to third parties, such as any UCC fees, maintenance
fees and the like.
"Excluded Taxes" shall have the meaning specified in Section 8.3
hereof.
"Facility Fee" means the fee payable by the Pledgors to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Facility
Fee Letter.
"Facility Fee Letter" means the letter agreement dated the date hereof
among the Pledgors and the Agent with respect to the Facility Fee.
18
24
"Facility Limit" means $450,000,000 prior to October 1, 1999 and
$300,000,000 from and after October 1, 1999; provided that such amount may not
at any time exceed the aggregate Commitments at any time in effect; and
provided, further, that the Agent will, from time to time, at the request of the
Pledgors, within three Business Days after the receipt by the Agent of a
certificate executed by the Pledgors in the form attached hereto as Exhibit A,
agree to changes in the Facility Limit without the approval of the Company or
the Bank Investors so long as (i) the Agent receives notice of such change at
least 5 Business Days prior to the date of such change, and (ii) any resulting
increase occurs simultaneously with an equivalent decrease, and any resulting
decrease occurs simultaneously with an equivalent increase, in the facility
limit under the Finance Facility Agreement, and (iii) after giving effect to any
such change, the aggregate of the Facility Limit under this Agreement and the
facility limit under the Finance Facility Agreement does not exceed $600,000,000
prior to October 1, 1999 and $400,000,000 from and after October 1, 1999.
"Facility Pledge Agreement" means that certain agreement, dated as of
June 22, 1998, among the Pledgors and the Finance Facility Pledgor pursuant to
which the Pledgors, on the one hand, and the Finance Facility Pledgor, on the
other, have made reciprocal pledges of certain amounts to be released to such
pledgors pursuant to this Agreement and the Finance Facility Agreement,
respectively.
"Facility Term" means the period commencing on the Closing Date and
ending on the Facility Termination Date.
"Facility Termination Date" means the earlier to occur of (a) the
Termination Date and (b) the Commitment Termination Date.
"Fee Letter" means the letter agreement dated the date hereof among the
Pledgors and the Company with respect to the Administrative Fee and the Program
Fee to be paid by the Pledgors or the Parent hereunder, as amended, modified or
supplemented from time to time.
"Fee Reserve Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(d).
19
25
"Finance Facility Agreement" means that certain Amended and Restated
Loan and Security Agreement, dated as of August 16, 1999, among the Finance
Facility Pledgor, the Agent, the Company, the Bank Investors, the Master
Servicer and the Parent.
"Finance Facility Pledgor" means UCP Borrowing SPE 1998-1 Limited
Partnership and its successors and assigns.
"Finance Facility Release Amounts" means, for any Payment Date, all
cash amounts released since the preceding Payment Date to and including such
Payment Date to the Finance Facility Pledgor pursuant to the Finance Facility
Agreement and pledged to the Pledgors pursuant to the Facility Pledge Agreement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
accounting profession, which are in effect as of the date of this Agreement.
"General Partner" means UCP GP SPE 1998-1 LLC, a Nevada limited
liability company and its successors and assigns.
"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"H.15" means Statistical Release No. H.15 (519) of the Federal Reserve
Board or any successor publication.
"Hedge Counterparty" means with respect to this Agreement, each party
which has entered into a Hedging Agreement with the Pledgors, the Parent or the
Seller (which Hedging Agreement has been assigned to the Agent), as to which
such party's (a) long-term unsecured debt obligations are rated not lower than
one of the two highest investment categories granted by S&P and Xxxxx'x
20
26
and (b) short-term unsecured debt obligations are rated at least "A-1" by S&P
and "P-1" by Xxxxx'x, or such party that has been approved in advance by the
Agent.
"Hedge Payments" means for each Payment Date, any and all amounts due
and payable to the Hedge Counterparty under each Hedging Agreement from but not
including the preceding Payment Date to and including such Payment Date.
"Hedge Rate" means, for any Receivable at any time for which a Hedging
Agreement is in effect, the per annum rate at which the Hedge Payments under the
related Hedging Agreement are calculated net of a percentage amount reflecting
the average daily spread between the yield on the related Treasury security and
the rate that reflects hedge payments with respect to such security as
determined for similar hedging agreements during the preceding calendar quarter;
provided that with respect to any Receivable for any period during which such
Receivable is not required to be hedged pursuant to Section 2.15 or is otherwise
unhedged with the consent of the Agent, the Hedge Rate with respect to such
Receivable shall be the Hedge Rate as determined above from the Hedging
Agreement most recently entered into pursuant to this Agreement.
"Hedged Amount" has the meaning specified in Section 2.15.
"Hedging Agreement" means, each hedging agreement entered into by the
Pledgors, the Parent or the Seller and a Hedge Counterparty the form of which
has been approved in writing in advance by the Agent.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section 8.1 hereof.
21
27
"Indemnified Parties" has the meaning specified in Section 8.1 hereof.
"Interest Accrual Account" means the account, established by the Agent
for the benefit of the Company and the Bank Investors, pursuant to Section
2.12(e).
"Interest Component" shall mean, (i) with respect to any Commercial
Paper issued on an interest-bearing basis, the interest payable on such
Commercial Paper at its maturity and (ii) with respect to any Commercial Paper
issued on a discount basis, the portion of the face amount of such Commercial
Paper representing the discount incurred in respect thereof.
"Interim Funding" means for any Receivable, with respect to which the
related Equipment is delivered in stages, a period during which Contract
Payments are based on the Equipment actually shipped or delivered, with the full
funding term of such Contract to commence pursuant to the terms thereof after
delivery of all such items of Equipment.
"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Pledgors and the Agent, furnished by the Master Servicer pursuant to Section
2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Leveraged Lease Loan" means a loan by the Seller or an Eligible
Originator to a third party lessor secured by all of such lessor's right, title
and interest in a lease (originated by the Seller or such Eligible Originator
and sold, together with the related Equipment, to such third party) and in the
related Equipment.
"LIBOR Rate" means, with respect to any Eurodollar Tranche Period, the
rate which appears on Telerate Page 3750 (as defined in the 1987 Interest Rate
and Currency Exchange Definitions published by the International Swap Dealers
Association, Inc.) (or such page as may replace Telerate Page 3750), at
approximately 11:00 a.m. (London time), two Business Days before the first day
of such Eurodollar Tranche Period in an amount approximately equal to the
Eurodollar Tranche to which the Eurodollar Rate is to apply and for a period of
time approximately equal to the applicable Eurodollar Tranche Period.
22
28
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
and the Liquidity Provider evidencing the obligation of the Liquidity Provider
to provide liquidity support to the Company in connection with the issuance by
the Company of Commercial Paper.
"Lock-Box Account" means, collectively, each account maintained by the
Master Servicer at the Lock-Box Bank for the purpose of receiving Collections.
"Lock-Box Bank" means Bank of America, N.A. or its designee.
"Majority Investors" shall mean, at any time, the Agent and those Bank
Investors which hold Commitments aggregating in excess of 50% of the Facility
Limit as of such date.
"Master Servicer" means at any time the Person then authorized pursuant
to Section 6.1 to service, administer and collect Receivables.
"Master Servicer Default" has the meaning specified in Section 6.4
hereof.
"Material Adverse Effect" means any event or condition which would have
a material adverse effect on (i) the general collectibility of the Receivables,
(ii) the ability of the Pledgors and the Parent to perform their collective
obligations under the Transaction Documents to which they are parties and (iii)
the interests of the Agent, the Company or the Bank Investors under the
Transaction Documents.
"Maximum Net Investment" means $450,000,000 prior to October 1, 1999
and $300,000,000 from and after October 1, 1999; provided that such amount shall
increase or decrease in an amount equal to any increase or decrease in the
Facility Limit.
"Maximum Percentage Factor" means 100%
"Moody's" means Xxxxx'x Investors Service, Inc.
23
29
"Monthly Costs" means for any Payment Date the amounts due on such
Payment Date pursuant to clauses (i) through (v) of Section 2.5(a) and for each
Tranche Period all amounts due pursuant to Section 2.5(b) or, after the
Termination Date, Section 2.6.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by a Pledgor, the Parent or any
ERISA Affiliate of a Pledgor or the Parent on behalf of its employees.
"Net Asset Test" shall mean a test that is met if, as of the time of
determination, the sum of the Net Receivables Balance and the amount on deposit
in the Accounts, exceeds the aggregate Net Investment plus the amount of any
outstanding Carrying Costs.
"Net Credit Loss" means, for any calendar quarter, the aggregate "Net
Credit Loss" for such calendar quarter with respect to the Parent's business
units referred to as the Technology and Finance Group and the Business Credit
Group as reported by the Parent to the investment community.
"Net Investment" means as of any time of determination the sum of the
cash amounts paid to the Pledgors (other than from amounts on deposit in the
Principal Collection Account) for each Pledge occurring prior to such date less
the aggregate amount of Collections received and applied by the Agent prior to
such date to reduce such Net Investment pursuant to Section 2.5 or 2.6 hereof;
provided that the Net Investment shall be restored and reinstated in the amount
of any Collections so received and applied if at any time the distribution of
such Collections is rescinded or must otherwise be returned for any reason; and
provided, further, that the Net Investment may be increased by the amount
described in Section 9.9(g) as described therein.
"Net Receivables Balance" means at any time the Outstanding Balance of
the Eligible Receivables at such time reduced by (i) the aggregate Outstanding
Balance of all Eligible Receivables which are Defaulted Receivables and (ii) the
aggregate Outstanding Balance of all Eligible Receivables having a Pledge Date
(and, if more than one Pledge Date, the first such Pledge Date) which occurred
more than 18 months prior to the date the Net Receivables Balance is being
determined, provided, that if such Receivable was subject to a Pledge hereunder
on the date of the first Take-Out to occur hereunder, the Net Receivables
24
30
Balance shall not be reduced by the Outstanding Balance of such Receivable until
12 months after the date of such first Take-Out.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Obligor Risk Rating" means, with respect to an Obligor, the numerical
"Obligor Rating" assigned pursuant to the Credit and Collection Policy.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Operating Lease Pledgor" means UCP Operating SPE 1998-1 Limited
Partnership and its successors and assigns.
"Other Conduit Participant" means any Person other than the Pledgors
that has entered into a receivables purchase or pledge agreement or transfer or
pledge and administration agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any date
of determination, an amount equal to the present value of all Contract Payments
(not including delinquent payments in respect of Delinquent Receivables) to
become due thereunder following such date (determined by discounting on a
monthly basis (assuming a calendar year consisting of twelve 30-day months), at
a rate equal to the then applicable Discount Rate for such Receivable, each such
Contract Payment from the last day of the Collection Period during which such
Contract Payment is due, to such date). The Outstanding Balance of any
Receivable in Interim Funding shall be equal to the related original Equipment
cost as set forth in the Contract Schedule, and such balance shall not decline
during Interim Funding based on Contract Payments made thereunder. In
determining the Outstanding Balance with respect to any date of determination,
the future remaining Contract Payments will be calculated after giving effect to
any payments received prior to such date of calculation to the extent such
payments relate to Contract Payments due and payable by the Obligors with
respect to the related Collection Period and any prior Collection Period.
25
31
"Parent" means UniCapital Corporation, a Delaware corporation, and its
successors and assigns.
"Participation Receivable" means a Receivable in which any Person other
than the Pledgors, the Agent, the Company, the Bank Investors or the Master
Servicer has any participation interest in such Receivable, the related
Equipment, or the proceeds of such Receivable or Equipment.
"Payment Date" means the 20th day of each month, or if such day is not
a Business Day the next succeeding Business Day, or such earlier date of the
related month as may be agreed upon by the Agent and the Pledgors, commencing in
the month following the initial Pledge under this Agreement.
"Percentage Factor" shall mean the fraction (expressed as a percentage)
computed at any time of determination by dividing (i) the Net Investment minus
the amount on deposit in the Principal Collection Account and the Reserve
Account by (ii) the product of the Net Receivables Balance and the Weighted
Average Advance Percentage, each at the time of such computation.
"Permitted Lien" means:
(i) any lien in favor of a third-party lessor for the
Equipment relating to a Leveraged Lease Loan;
(ii) any lien of the applicable Pledgor"s right, title and
interest in the Equipment or proceeds thereof that is expressly
subordinated to the interests of the lessor or lender (and their
assignees) under the related Lease; and
(iii) any lien on the applicable Pledgor"s right, title and
interest in any Equipment or proceeds thereof that is pari passu with
the interests of the lessor or lender (and their assignees) under the
related Lease, provided, that the Receivable relating to such Equipment
is a Qualified Participation Receivable.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Pledge" means a pledge and assignment by the Pledgors to the Company
or the Bank Investors of all of each Pledgor's
26
32
respective right, title and interest in, to and under the Receivables hereunder
and all Related Security (including, without limitation, as a result of any
reinvestment of Collections in Pledged Interests pursuant to Section 2.2(b) and
2.5).
"Pledge Certificate" has the meaning specified in Section 2.2(a)
hereof.
"Pledge Date" means, with respect to each Pledge, the Business Day on
which such Pledge is made.
"Pledgors" means the Qualifying Pledgor and the Operating Lease
Pledgor.
"Pledged Interest" means, at any time of determination, all right,
title and interest created hereunder in each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable.
"Pool Market Value" means, as of any date, the fair market value of all
Eligible Receivables (other than Defaulted Receivables and assuming that such
Eligible Receivables are current) as of such date as determined by the Agent and
notified in writing to the Master Servicer, provided, that, if within three
Business Days of receipt of the Agent's determination of the fair market value
of such Eligible Receivables, the Master Servicer provides the Agent in writing
with its determination of the fair market value of such Eligible Receivables
which is greater that the fair market value determined by the Agent, the Agent
and the Master Servicer shall promptly select a mutually acceptable investment
banking firm to determine the fair market value of such Eligible Receivables as
of the date requested and the "Pool Market Value" shall be the middle of the
fair market value determinations made by the Agent, the Master Servicer and such
investment banking firm.
"Prepayment Shortfall" has the meaning specified in Section 2.9.
"Principal Collection Account" means the account established by the
Agent, for the benefit of the Company and the Bank Investors pursuant to Section
2.12(c).
"Principal Deemed Amount" means, for any Payment Date, the excess of
the Outstanding Balance of the Receivables at the end
27
33
of the second preceding Collection Period (or for any Receivable for which the
Cut-off Date therefor occurred since the end of such Collection Period, the
Outstanding Balance of each such Receivable as of its Cut-off Date) over the
Outstanding Balance of the Receivables at the end of the preceding Collection
Period; provided, that, the Principal Deemed Amount will not be calculated for
any Receivables as to which a Take-Out occurred during such preceding Collection
Period.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of the UCC.
"Program Fee" means the fee payable to the Company pursuant to Section
2.7 hereof, the terms of which are set forth in the Fee Letter.
"Purchased Interest" means the interest in the Receivables acquired by
the Liquidity Provider through purchase pursuant to the terms of the Liquidity
Provider Agreement.
"Purchase Facility Differential" means for any Payment Date (i) the sum
of, for such Payment Date, all Collections Available for the related Collection
Period, plus all Servicing Advances for such Payment Date, plus all amounts
received under the Hedge Agreements with respect to such Payment Date plus all
amounts on deposit in the Interest Accrual Account immediately prior to such
Payment Date minus (ii) the amount required to be remitted on such Payment Date
pursuant to clauses (i) through (viii) of Section 2.5(a).
"Purchase Facility Free Cash Flow" means for any Payment Date any
positive Purchase Facility Differential for such Payment Date.
"Purchase Facility Shortfall" means for any Payment Date the absolute
value of any negative Purchase Facility Differential for such Payment Date.
"Purchase Termination Date" means the date upon which either Pledgor
shall cease, for any reason whatsoever, to make purchases of Receivables from
the Seller under the Receivables Purchase
28
34
Agreement or the Receivables Purchase Agreement shall terminate for any reason
whatsoever.
"Qualified Participation Receivable" means a Participation Receivable
as to which (a) the participation interest of any Person other than the
Pledgors, the Agent, the Company, the Bank Investors or the Master Servicer is
subordinated to the applicable Pledgor's participation interest in such
Receivable or (b) the participation interest of such other Person is pari passu
with the applicable Pledgor's participation interest in such Receivable, and
such other Person has acknowledged in writing that (i) the Master Servicer will
retain the servicing rights with respect to such Receivable, (ii) the Pledgor
shall have the right to take all enforcement action with respect to any default
which occurs under the related Lease, including, without limitation, the right
to accelerate the remaining payments under such Receivable or to agree to any
modification thereof in connection with any "work-out" with respect to such
default and (iii) any Collections of such Receivable are to be remitted to such
party on a pari passu basis as received.
"Qualifying Pledgor" means UCP Qualifying SPE 1998-1 Limited
Partnership and its successors and assigns.
"Receivable" means Contracts sold to the Pledgors under the Receivables
Purchase Agreement, whether constituting an account, chattel paper, instrument,
investment property or general intangible or arising in connection with the sale
or lease of Equipment, including all Contract Payments and other payment
obligations (but other than Excluded Amounts) owed thereunder on or after the
related Cut-off Date by the related Obligor, including the right to payment of
any finance charges and other obligations of such Obligor with respect thereto.
Notwithstanding the foregoing, once a Receivable has been deemed collected
pursuant to Section 2.9 hereof, it shall no longer constitute a Receivable
hereunder.
"Receivable Systems" has the meaning specified in Section 3.1(w)
hereof.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of June 22, 1998, among the Seller, as seller, the Pledgors,
as purchasers, and the Parent.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation,
29
35
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables and the
related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Pledgors of written notice that the Company
elects to commence the amortization of its interest in the Net Investment or
otherwise liquidate its interest in the Pledged Interest.
"Related Commercial Paper" shall mean Commercial Paper issued by the
Company the proceeds of which were used to acquire, or refinance the acquisition
of, an interest in Receivables.
"Related Security" means with respect to any Receivable: all of the
Pledgors' right, title and interest in and to:
(a) any collateral securing the Obligor's obligations under
such Contract (excluding security deposits) or any Guaranty thereof;
(b) all cash realizations on the related Equipment (including
returned and repossessed Equipment) and all loss and casualty insurance
maintained with respect to such Equipment, in each case to the extent
constituting recoveries on a Defaulted Receivable or otherwise
representing the amount necessary to pay in full all unpaid Contract
Payments and other amounts due on the related Receivable in the event
that it is a Defaulted Receivable;
(c) all Guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting,
securing or insuring any Equipment, to the extent of the cash
realizations set forth in clause (b) above;
(d) all Records related to such Contract; and
(e) all Proceeds of the foregoing;
excluding, however, in each case any Excluded Amounts.
"Required Payoff Amount" means with respect to any Collection Period
for any Receivable (a) if such Receivable is in the form of a lease, an amount,
without duplication, equal to the sum of (i) the Outstanding Balance as of the
close of business on the last day of the preceding Collection Period and (ii)
any Contract Payments due prior to the close of business on
30
36
the last day of such preceding Collection Period and not paid by an Obligor, (b)
if such Receivable is in the form of a conditional sales contract or a loan or a
Receivable originated by American Capital Resources, Inc., an amount equal to
the outstanding principal balance thereof together with any accrued but unpaid
interest, penalties and fees thereon, and (c) in either case, any breakage cost
associated with the applicable Hedging Agreement.
"Reserve Account" means the account, established by the Agent, for the
benefit of the Company and the Bank Investors, pursuant to Section 2.12(b).
"Revolving Credit Facility Agreement" means that certain credit
agreement, dated June 10, 1998, among the Parent, Bank of America and certain
lenders a party thereto from time to time.
"Revolving Credit Facility Default" means the occurrence of an Event of
Default, as defined in the Revolving Credit Facility Agreement.
"Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof.
"Secured Note" means the secured note issued to the Agent for the
benefit of the Company and the Bank Investors pursuant to Section 2.2(d) hereof.
"Seller" means UniCapital Funding Corporation and its successors and
assigns.
"Servicer Advance" has the meaning specified in Section 6.2(l) hereof.
"Servicing Fee" means the fees payable to the Master Servicer on each
Payment Date in an amount equal to 0.50% per annum on the amount of the
Outstanding Balance of all Receivables as of the beginning of the related
Collection Period.
"Specified Reserve Account Requirement" means the sum (without
duplication) of (a) 30% of the product of (i) the aggregate Outstanding Balance
of all Receivables which are 61 to 120 days delinquent and (ii) the Advance
Percentage applicable to each such Receivable and (b) 50% of the product of (i)
the aggregate Outstanding Balance of all Receivables which are 121 to
31
37
180 days delinquent and (ii) the Advance Percentage applicable to each such
Receivable.
"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Substitute Receivable" has the meaning specified in Section 2.16.
"Take-Out" means any reduction of the Net Investment resulting from an
auction of Receivables or a reassignment to one or both Pledgors of Receivables
in accordance with Section 2.17.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
"Termination Date" means the earliest of (i) the Business Day
designated by the Pledgors to the Agent as the Termination Date at any time
following 60 days' written notice to the Agent, (ii) the day upon which the
Termination Date is declared or automatically occurs pursuant to Section 7.2(a)
hereof, (iii) two Business Days prior to the Commitment Termination Date (unless
such date has been extended), or (iv) the Purchase Termination Date.
"Termination Event" means an event described in Section 7.1 hereof.
"Tranche" means a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.3 hereof.
"Tranche Period" means a CP Tranche Period, a BR Tranche Period or a
Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate or the Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section 8.4(a) hereof.
32
38
"Transaction Risk Rating" means, with respect to a Receivable, the
numerical "Transaction Rating" assigned pursuant to the Credit and Collection
Policy.
"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Facility Fee Letter, the Fee Letter, the
Secured Note, the Pledge Certificates and all of the other instruments,
documents and other agreements executed and delivered by the Seller or the
Pledgors in connection with any of the foregoing, in each case, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"Weighted Average Advance Percentage" means, as of any date of
determination, the average of the Advance Percentages for the Receivables
weighted for each Receivable by the Outstanding Balance of such Receivable.
"Year 2000 Compliant" has the meaning specified in Section 3.1(w)
hereof.
"Year 2000 Problem" has the meaning specified in Section 3.1(w) hereof.
SECTION I.2 Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION I.3 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including", the words
"to" and "until" each means "to but excluding", and the word "within" means
"from and excluding a specified date and to and including a later specified
date".
33
39
ARTICLE II
PLEDGES AND SETTLEMENTS
SECTION II.1 Facility. Upon the terms and subject to the conditions
herein set forth, (x) the Pledgors, jointly and severally, may, at their option,
obtain the proceeds of loans from the Company or the Bank Investors, as
applicable, in exchange for the pledge and assignment to the Agent, on behalf of
the Company or the Bank Investors, as applicable, without recourse except as
provided herein, of all of each Pledgor's respective right, title and interest
in, to and under the Receivables, together with all Related Security with
respect thereto, from time to time and (y) the Agent, on behalf of the Company,
provided that the Termination Date shall not have occurred and at the Company's
option, may, or the Agent, on behalf of the Bank Investors, provided that the
Termination Date shall not have occurred and that the Bank Investors shall have
previously accepted the assignment by the Company of all of its interest in the
Affected Assets, shall, if so requested, loan such proceeds, secured by such
pledge and assignment from the Pledgors. By accepting any pledge and assignment
hereunder, neither the Company, any Bank Investor nor the Agent assumes or shall
have any obligations or liability under any of the Contracts, all of which shall
remain the obligations and liabilities of the applicable Pledgor and of the
Seller, or with respect to any of the Equipment or the other Related Security.
SECTION II.2 Pledges; Pledge Certificates; Eligible Receivables.
(a) Pledges. Upon the terms and subject to the conditions
herein set forth from time to time (i) the Pledgors, jointly and
severally, may, at their option, borrow from the Company or the Bank
Investors, as applicable, amounts which are secured by the pledge and
assignment to the Agent, on behalf of the Company or the Agent, on
behalf of the Bank Investors, as applicable, without recourse except as
provided herein, of all of each Pledgor's respective right, title and
interest in, to and under the Receivables, together with Related
Security, Collections and Proceeds with respect thereto and (ii) the
Agent, provided that the Termination Date shall not have occurred and
at the Company's option, may, or the Agent, on behalf of the Bank
Investors, provided that the Termination Date shall not have occurred
and that the Bank Investors
34
40
shall have previously accepted the assignment by the Company of all of
its interest in such loans and the Affected Assets, shall, in each case
if so requested by the Pledgors, accept such pledge and assignment from
the Pledgors, without recourse except as provided herein, of all of
each Pledgor's respective right, title and interest in, to and under
the Receivables, together with Related Security Collections and
Proceeds with respect thereto; provided that the payment to the
Pledgors of the Advance Amount related thereto shall have been made
and, after giving effect to the payment to the Pledgors of such Advance
Amount, (x) the sum of the Net Investment plus, in the case where the
Pledged Interest is held by the Agent on behalf of the Company, the
Interest Component of all outstanding Related Commercial Paper, would
not exceed the Facility Limit and (y) the Net Investment would not
exceed the Maximum Net Investment; provided, further, that the
representations and warranties set forth in Section 3.1 shall be true
and correct both immediately before and immediately after giving effect
to any such Pledge.
The Pledgors may, by delivering to the Agent the Pledge Certificate via
telecopy in the form of Exhibit F attached hereto (the "Pledge
Certificate"), request to borrow from the Company or the Bank
Investors, as applicable, amounts which are secured by the pledge and
assignment to the Agent, on behalf of the Company or the Bank
Investors, as applicable, of all of each Pledgor's respective right,
title and interest in, to and under the Receivables and the other
Affected Assets relating thereto no later than (i) if the proposed Net
Investment associated with any Pledge is greater than $150,000,000, no
later than 12:00 p.m. (New York City time) on the third Business Day
prior to the proposed date of such Pledge, (ii) if the proposed Net
Investment associated with any Pledge is greater than $10,000,000 but
less than or equal to $150,000,000, no later than 12:00 p.m. (New York
City time) on the second Business Day prior to the proposed date of
such Pledge and (iii) if the proposed Net Investment associated with
any Pledge is less than or equal to $10,000,000 no later than 4:00 p.m.
(New York City time) on the Business Day prior to the proposed date of
such Pledge.
Each such notice shall specify (w) whether such request is made to the
Agent, on behalf of the Company or on behalf of the Bank Investors (it
being understood and agreed that once
35
41
any Pledged Interest hereunder is acquired on behalf of the Bank
Investors, the Agent, on behalf of Bank Investors, shall be required to
purchase all Pledged Interests held by the Agent on behalf of the
Company in accordance with Section 9.7 and thereafter that no
additional Pledges shall be funded on behalf of the Company hereunder),
(x) the desired Advance Amount (which shall be at least $1,000,000 or,
to the extent that the then available unused portion of the Facility
Limit is less than such amount, such lesser amount equal to such
available portion of the Facility Limit), (y) the desired date of such
Advance Amount and (z) the desired Tranche Period(s) and allocations of
the Net Investment of such Advance Amount thereto as required by
Section 2.3. The Agent will promptly notify the Company or each of the
Bank Investors, as the case may be, of the Agent's receipt of any
request for an Advance Amount to be made to the Agent on behalf of such
Person. To the extent that any such Advance Amount is requested of the
Agent, on behalf of the Company, the Company shall instruct the Agent
to accept or reject such offer by notice given to the Pledgors and the
Agent by telephone or telecopy by no later than the close of its
business on the Business Day of its receipt of any such request. Each
notice of proposed Pledge shall be irrevocable and binding on the
Pledgors and the Pledgors shall indemnify the Company and each Bank
Investor against any loss or expense incurred by the Company or any
Bank Investor, either directly or indirectly (including, in the case of
the Company, through the Liquidity Provider Agreement) as a result of
any failure by the Pledgors to complete such Pledge including, without
limitation, any loss or expense incurred by the Company or any Bank
Investor, either directly or indirectly (including, in the case of the
Company, pursuant to the Liquidity Provider Agreement) by reason of the
liquidation or reemployment of funds acquired by the Company, any Bank
Investor or the Liquidity Provider (including, without limitation,
funds obtained by issuing commercial paper or promissory notes or
obtaining deposits as loans from third parties) for the Company, any
Bank Investor or the Liquidity Provider to fund such Pledge. With
respect to any failure of either of the Pledgors for which the Company
or the Bank Investors are indemnified pursuant to the preceding
sentence, the applicable Bank Investor or the Company, as the case may
be, incurring any indemnified costs as a result of such failure, shall
take such steps as may be reasonable for avoiding or mitigating
(consistent with the internal policies and
36
42
governance and legal and regulatory restrictions of the Bank Investors
or the Company, as applicable, and without requiring the incurring of
any additional costs by, or otherwise being disadvantageous to, such
party) additional costs as a result of such failure.
On the date of each Pledge, the Agent, on behalf of the Company or the
Bank Investors, as applicable, shall deliver written confirmation to
the Pledgors and the Parent of the Advance Amount, the Tranche
Period(s) and the Tranche Rate(s) relating to such Pledge and the
Pledgors shall deliver to the Agent an original executed Pledge
Certificate. The Agent shall indicate the amount of such Pledge
together with the date thereof as well as any change in the Net
Investment on the grid attached to the Pledge Certificate. The Pledge
Certificate shall evidence the Pledges. Following each Pledge, the
Company or the Bank Investors, as the case may be, shall deposit to the
Pledgors' account at the location indicated in Section 10.3 hereof, in
immediately available funds, an amount equal to the Advance Amount for
such Pledge made to the Company or the Bank Investors, as the case may
be.
By no later than 11:00 a.m. (New York City time) on any Pledge Date,
the Company or each Bank Investor, as the case may be, shall remit its
share (which, in the case of a Pledge to the Bank Investors, shall be
equal to such Bank Investor's Pro Rata Share) of the aggregate Advance
Amount for such Pledge to the account of the Agent specified therefor
from time to time by the Agent by notice to such Persons. The
obligation of each Bank Investor to remit its Pro Rata Share of any
such Advance Amount shall be several from that of each other Bank
Investor, and the failure of any Bank Investor to so make such amount
available to the Agent shall not relieve any other Bank Investor of its
obligation hereunder. Following each Pledge and the Agent's receipt of
funds from the Company or the Bank Investors as aforesaid, the Agent
shall remit the Advance Amount to the Pledgors' account at the location
indicated in Section 10.3 hereof, in immediately available funds, in an
amount equal to the Advance Amount for such Pledge. The allocation of
the Advance Amount among each Pledgor shall be by agreement among the
Pledgors and neither the Agent, the Company nor the Bank Investors
shall have any obligations or responsibility related to the allocation
of the Advance Amount upon its remittance to the Pledgors' account as
set
37
43
forth in the preceding sentence. Unless the Agent shall have received
notice from the Company or any Bank Investor, as applicable, that such
Person will not make its share of any Advance Amount relating to any
Pledge available on the applicable Pledge Date therefor, the Agent may
(but shall have no obligation to) make the Company's or any such Bank
Investor's share of any such Advance Amount available to the Pledgors
in anticipation of the receipt by the Agent of such amount from the
Company or such Bank Investor. To the extent the Company or any such
Bank Investor fails to remit any such amount to the Agent after any
such advance by the Agent on such Pledge Date, the Company and the Bank
Investors shall be required to pay such amount, together with interest
thereon at a per annum rate equal to the Federal funds rate (as
determined in accordance with clause (ii) of the definition of "Base
Rate") to the Agent upon its demand therefor (provided that the Company
shall have no obligation to pay such interest amounts except to the
extent that it shall have sufficient funds to pay the face amount of
its Commercial Paper in full). Until such amount shall be repaid by the
defaulting Company or Bank Investor, as applicable, such amount shall
be deemed to be Net Investment paid by the Agent and the Agent shall be
deemed to be the owner of a Pledged Interest hereunder. Upon the
payment of such amount to the Agent by the Company or the Bank
Investors, such payment shall constitute such Person's payment of its
share of the applicable Advance Amount for such Pledge.
(b) [Reserved.]
(c) All Pledges. Each Pledge shall constitute a pledge to the
Agent, on behalf of the Company or the Bank Investors, as applicable,
of all of each Pledgor's respective right, title and interest in, to
and under each and every Receivable, together with all Related Security
with respect thereto. The Agent shall hold the Pledged Interests on
behalf of the Company and each Bank Investor in accordance with each of
the Company's and each Bank Investor's percentage interest in the
Pledged Interest (determined on the basis of the relationship that the
portion of the Net Investment funded by such Person bears to the
aggregate Net Investment of the Company and all of the Bank Investors
at such time).
38
44
(d) Secured Note. The Pledgors shall issue to the Agent the
Secured Note, in the form of Exhibit M, on or prior to the date hereof.
(e) Percentage Factor. The Percentage Factor shall be
initially computed as of the opening of business on the date of the
initial Pledge hereunder. Thereafter until the Termination Date, the
Percentage Factor shall be recomputed on each Determination Date as of
the last day of the related Collection Period and at such other times
as may be reasonably requested by the Agent.
(f) Finance Facility Release Amounts; Sale Agreements. As
additional security for the payment of all Monthly Costs due under this
Agreement, each Pledgor pledges and assigns all of its right, title and
interest in the Facility Pledge Agreement, including all Finance
Facility Collateral (as defined therein) to the Agent, which pledge and
assignment the Agent hereby accepts on behalf of the Company and the
Bank Investors, as applicable. Accordingly, Finance Facility Release
Amounts shall be available on each Payment Date as part of Available
Funds for such Payment Date. As additional security for the payment of
all Aggregate Unpaids, each Pledgor pledges and assigns all of its
right, title and interest in the Receivables Purchase Agreement and the
parties hereto acknowledge that the Agent, on behalf of the Company and
the Bank Investors, as applicable, may enforce such right, title and
interest directly as if it were party thereto.
(g) Limitations on Equipment. With respect to the interests in
Equipment that are subject to Pledges hereunder, such interests are
limited to those that constitute Related Security for the related
Receivable. Therefore, upon the payment in full of any Receivable, the
Agent, the Company and the Bank Investors shall have no further
interest hereunder in the related Equipment, and all such Equipment
shall be held by the Operating Lease Pledgor or its assignee free and
clear of any lien or other claim created or imposed pursuant to this
Agreement.
SECTION II.3 Selection of Tranche Periods and Tranche Rates.
39
45
(a) Prior to the Termination Date; Pledged Interest held on
behalf of the Company. At all times hereafter, but prior to the
Termination Date and not with respect to any portion of the Pledged
Interest held on behalf of the Bank Investors (or any of them), the
Pledgors may, subject to the Company's approval and the limitations
described below, request Tranche Periods and allocate a portion of the
Net Investment to each selected Tranche Period, so that the aggregate
amounts allocated to outstanding Tranche Periods at all times shall
equal the Net Investment held on behalf of the Company. The Pledgors
shall jointly give the Company irrevocable notice by telephone of the
new requested Tranche Period(s) at least three Business Days prior to
the expiration of any then existing Tranche Period; provided, however,
that in the event of a Tranche Period with respect to a Pledge Date,
such notice period shall not exceed the notice period pursuant to
Section 2.2 that applies to the related Pledge; provided, further, that
the Company may select, in its sole discretion, any such new Tranche
Period if (i) the Pledgors fail to provide such notice on a timely
basis or (ii) the Company determines, in its sole discretion, that the
Tranche Period requested by the Pledgors is unavailable or for any
reason commercially undesirable. The Company confirms that it is its
intention to allocate all or substantially all of the Net Investment
held on behalf of it to one or more CP Tranche Periods; provided that
the Company may determine, from time to time, in its sole discretion,
that funding such Net Investment by means of one or more CP Tranche
Periods is not possible or is not desirable for any reason. If the
Liquidity Provider acquires from the Company a Purchased Interest with
respect to the Receivables pursuant to the terms of the Liquidity
Provider Agreement, Bank of America, on behalf of the Liquidity
Provider, may exercise the right of selection granted to the Company
hereby. The initial Tranche Period applicable to any such Purchased
Interest shall be a period of not greater than 7 days and such Tranche
shall be a BR Tranche. Thereafter, provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall be
the BR Rate or the Eurodollar Rate, as determined by the Pledgors. In
the case of any Tranche Period outstanding upon the Termination Date,
such Tranche Period shall end on such date.
(b) After the Termination Date; Pledged Interest Held on
behalf of the Company. At all times on and after the
40
46
Termination Date, with respect to any portion of the Pledged Interest
which shall be held by the Agent on behalf of the Company, the Company
or Bank of America, as applicable, shall select all Tranche Periods and
Tranche Rates applicable thereto.
(c) Prior to the Termination Date; Pledged Interest Held on
Behalf of Bank Investors. At all times with respect to any portion of
the Pledged Interest held by the Agent on behalf of the Bank Investors,
but prior to the Termination Date, the initial Tranche Period
applicable to such portion of the Net Investment allocable thereto
shall be a period of not greater than 3 days and such Tranche shall be
a BR Tranche. Thereafter, with respect to such portion, and with
respect to any other portion of the Pledged Interest held on behalf of
the Bank Investors (or any of them), provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall
be, at the Pledgor's option, either a BR Tranche or a Eurodollar
Tranche. The Pledgor shall give the Agent irrevocable notice by
telephone of the new requested Tranche Period at least three (3)
Business Days prior to the expiration of any then existing Tranche
Period. In the case of any Tranche Period outstanding upon the
occurrence of the Termination Date, such Tranche Period shall end on
the date of such occurrence.
(d) After the Termination Date; Pledged Interest Held on
behalf of Bank Investors. At all times on and after the Termination
Date, with respect to any portion of the Pledged Interest held by the
Agent on behalf of the Bank Investors, the Agent shall select all
Tranche Periods and Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent
is unable to obtain on a timely basis the information necessary to
determine the LIBOR Rate for any proposed Eurodollar Tranche, then
(A) the Agent shall forthwith notify the Company or Bank
Investors, as applicable, and the Pledgors that the Eurodollar
Rate cannot be determined for such Eurodollar Tranche, and
(B) while such circumstances exist, neither the Company, the
Bank Investors nor the Agent shall allocate the Net Investment
of any additional Pledged
41
47
Interests pledged and assigned during such period or
reallocate the Net Investment allocated to any then existing
Tranche ending during such period, to a Eurodollar Tranche.
(ii) If, with respect to any outstanding Eurodollar Tranche,
the Company or any of the Bank Investors on behalf of which the Agent
holds any Pledged Interest herein notifies the Agent that it is unable
to obtain matching deposits in the London interbank market to fund its
purchase or maintenance of such Pledged Interest or that the Eurodollar
Rate applicable to such Pledged Interest will not adequately reflect
the cost to the Person of funding or maintaining its respective Pledged
Interest for such Tranche Period then the Agent shall forthwith so
notify the Pledgors, whereupon neither the Agent nor the Company or the
Bank Investors, as applicable, shall, while such circumstances exist,
allocate any Net Investment of any additional Pledged Interest pledged
and assigned during such period or reallocate the Net Interest
allocated to any Tranche Period ending during such period, to a
Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall
notify the Agent that such Person has determined (or has been notified
by any Liquidity Provider) that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful
(either for the Company, such Bank Investor, or such Liquidity
Provider, as applicable), or any central bank or other governmental
authority asserts that it is unlawful, for the Company, such Bank
Investor or such Liquidity Provider, as applicable, to fund Advances or
the maintenance of Pledged Interests at the Eurodollar Rate, then (x)
as of the effective date of such notice from such Person to the Agent,
the obligation or ability of the Company or such Bank Investor, as
applicable, to fund Advances or the maintenance of Pledged Interests at
the Eurodollar Rate shall be suspended until such Person notifies the
Agent that the circumstances causing such suspension no longer exist
and (y) the Net Investment of each Eurodollar Tranche in which such
Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Pledged Interest at the Eurodollar Rate until
the last day of the applicable Tranche Period, be
42
48
reallocated on the last day of such Tranche Period to another Tranche
Period in respect of which the Net Investment allocated thereto accrues
Discount at a Tranche Rate other than the Eurodollar Rate or (2) if
such Person shall determine that it may not lawfully continue to
maintain such Pledged Interest at the Eurodollar Rate until the end of
the applicable Tranche Period, such Person's share of the Net
Investment allocated to such Eurodollar Tranche shall be deemed to
accrue Discount at the Base Rate from the effective date of such notice
until the end of such Tranche Period.
SECTION II.4 Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1 hereof, the
Pledgors shall pay, as and when due in accordance with this Agreement, all
Carrying Costs, and the Servicing Fees. On the last day of each Tranche Period,
the Pledgors shall pay to the Agent, on behalf of the Company or the Bank
Investors, as applicable, an amount equal to the accrued and unpaid Discount for
such Tranche Period together with, in the event the Pledged Interest is held on
behalf of the Company, an amount equal to the discount accrued on the Company's
Commercial Paper to the extent such Commercial Paper was issued in order to fund
the Pledged Interest in an amount in excess of the Advance Amount of a Pledge.
The Pledgors shall pay to the Agent, on behalf of the Company, on each day on
which Related Commercial Paper is issued by the Company, the Dealer Fee.
Discount shall accrue with respect to each Tranche on each day occurring during
the Tranche Period related thereto. Nothing in this Agreement shall limit in any
way the obligations of the Pledgors, which shall be joint and several, to pay
the amounts set forth in this Section 2.4.
SECTION II.5 Settlement and Reinvestment Procedures.
(a) On each Payment Date, so long as no Termination Event has
occurred, all the Available Funds for such Payment Date will be
allocated by the Master Servicer in the following order of priority:
(i) first, to each Hedge Counterparty, on a pro rata
basis, any Hedge Payments then due;
(ii) second, to the Master Servicer, any unreimbursed
Servicer Advances;
43
49
(iii) third, to the Master Servicer, the accrued and
unpaid Servicing Fees, if the Master Servicer is not an
Affiliate of the Parent;
(iv) fourth, to the Agent, for the benefit of the
Company and the Bank Investors, as applicable, the sum of the
following, in each case, to the extent not previously paid and
without duplication: accrued and unpaid Dealer Fees on
Commercial Paper; the Program Fee, Facility Fee and
Administrative Fee; any accrued Discount (whether or not
payable on such Payment Date) and any Discount payable on or
prior to such Payment Date to the extent not previously paid;
any amounts due to the Credit Support Provider under the
Credit Support Agreement or the Liquidity Provider under the
Liquidity Provider Agreement, in each case to the extent
payable pursuant to the terms of this Agreement by the
Pledgors and not otherwise payable from any of the
above-referenced fees; and Section 8.2 Costs (all of these,
the "Carrying Costs"); provided that any amount allocated
pursuant to this clause (iv) on account of accrued and unpaid
Discount that is not yet payable shall be deposited into the
Interest Accrual Account;
(v) fifth, to the Agent, for the benefit of the
Company and the Bank Investors, an amount equal to the
Principal Deemed Amount for such Payment Date plus any unpaid
shortfall in the amount applied pursuant to this clause (v) to
pay the Principal Deemed Amount from prior Payment Dates, for
deposit to the Principal Collection Account, such amount to be
so deposited until the Percentage Factor is equal to the
Maximum Percentage Factor;
(vi) sixth, to the extent that after giving effect to
clause (v) above, and any Pledge of Receivables on such
Payment Date, the Percentage Factor exceeds the Maximum
Percentage Factor, to the Agent, for the benefit of the
Company and the Bank Investors, the amount necessary to cause
the Percentage Factor to equal the Maximum Percentage Factor,
such amount to be deposited into the Principal Collection
Account;
(vii) seventh, to the Master Servicer, the accrued
and unpaid Servicing Fee, if the Master Servicer is an
Affiliate of the Parent;
44
50
(viii) eighth, to the Reserve Account the amount, if
any, necessary to cause the balance on deposit therein to
equal the Specified Reserve Account Requirement;
(ix) ninth, to the Master Servicer, any amounts
collected during the related Collection Period in respect of
late fees, insufficient funds charges, extension fees and
other like amounts;
(x) tenth, to the Finance Facility Pledgor all
amounts required to be remitted thereto pursuant to the
Facility Pledge Agreement; and
(xi) eleventh, the balance, if any, to the Pledgors.
(b) On the last day of each Tranche Period, first, from
amounts on deposit in the Interest Accrual Account and, second, from
the Collections on deposit in the Collection Account, the Master
Servicer shall deposit to the Agent's account, for the benefit of the
Company or the Bank Investors, as applicable, an amount equal to the
accrued and unpaid Discount for such Tranche Period. The Agent, upon
its receipt of such amounts in the Agent's account, shall distribute
such amounts to the Company and/or the Bank Investors entitled thereto
as set forth above; provided that if the Agent shall have insufficient
funds to pay all of the above amounts in full on any such date, the
Agent shall pay such amounts ratably (based on the amounts owing to
each such Person) to all such Persons entitled to payment thereof. In
addition, on any Business Day, the Master Servicer shall remit to the
applicable Hedge Counterparty, any Hedge Payments then due.
(c) Amounts on deposit in the Principal Collection Account
will be applied by the Agent to repay the principal component (and not
the Discount related thereto) of the Commercial Paper or other
investments being used to fund the Net Investment as and when the same
mature; provided that so long as the Termination Date has not occurred,
the Agent may use amounts on deposit in the Principal Collection
Account to fund Pledges pursuant to Section 2.2 including Pledges to
the extent necessary to cause the Percentage Factor to not exceed the
Maximum Percentage Factor (so long as either the
45
51
Pledgors consent to the use thereof to fund Pledges or such use shall
not cause the Percentage Factor to increase).
SECTION II.6 Liquidation Settlement Procedures. On the last day of each
Tranche Period to occur on or after the Termination Date, the Master Servicer
shall deposit to the Agent's account to the extent not already so deposited, for
the benefit of the Company or the Bank Investors, as applicable, from amounts on
deposit in the Collection Account, the sum of (i) the accrued Discount for such
Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche
Period, and (iii) all other Aggregate Unpaids. On such day, the Master Servicer
shall deposit to its account, from amounts on deposit in the Collection Account
which remain after payment in full of the aforementioned amounts, the accrued
Servicing Fee for such Tranche Period. If there shall be insufficient funds on
deposit for the Master Servicer to distribute funds in payment in full of the
aforementioned amounts, the Master Servicer shall distribute funds first, in
payment of the accrued Discount, second, if the Parent or any Affiliate of the
Parent is not then the Master Servicer, to the Master Servicer's account, in
payment of the Servicing Fee payable to the Master Servicer, third, in reduction
of the Net Investment allocated to any Tranche Period ending on such date,
fourth, in payment of all fees payable by the Pledgors hereunder, fifth, in
payment of all other Aggregate Unpaids and sixth, if the Parent or any Affiliate
of the Parent is the Master Servicer, to its account as Master Servicer, in
payment of the Servicing Fee payable to such Person as Master Servicer. The
Agent, upon its receipt of such amounts in the Agent's account, shall distribute
such amounts to the Company and/or the Bank Investors entitled thereto as set
forth above; provided that if the Agent shall have insufficient funds to pay all
of the above amounts in full on any such date, the Agent shall pay such amounts
in the order of priority set forth above and, with respect to any such category
above for which the Agent shall have insufficient funds to pay all amounts owing
on such date, ratably (based on the amounts in such categories owing to such
Persons) among all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Discount and Servicing Fees have been paid in full and all
other Aggregate Unpaids have been paid in full, (i) the Agent, on behalf of the
Company and the Bank Investors, shall be deemed to have automatically
re-assigned to the Pledgors all of the Agent's right, title and interest in and
to the Affected Assets (including the Pledged Interest), (ii) the
46
52
Master Servicer shall pay to the Pledgors any remaining amounts on deposit in
the Collection Account and (iii) the Agent, on behalf of the Company and the
Bank Investors, shall execute and deliver to the Pledgors, at the Pledgors'
expense, such documents or instruments as are necessary to terminate the Agent's
interests in the Affected Assets. Any such documents shall be prepared by or on
behalf of the Pledgors.
SECTION II.7 Fees. Notwithstanding any limitation on recourse contained
in this Agreement pursuant to the Fee Letter or the Facility Fee Letter, the
Pledgors jointly and severally shall pay on each Payment Date the following
non-refundable fees: to the Company, the Program Fee, and to the Agent, the
Administrative Fee and the Facility Fee. If on any Payment Date, Available Funds
are not sufficient to pay the fees described in the immediately preceding
sentence, payment of such fees shall be made from the amounts on deposit in the
Fee Reserve Account.
SECTION II.8 Protection of the Interest of the Company and the Bank
Investors; Releases. (a) Each Pledgor agrees that it will, and will cause the
Seller to, from time to time, at its expense, promptly execute and deliver all
instruments and documents and take all actions as may be necessary or as the
Agent may reasonably request in order to perfect or protect the Pledged Interest
or to enable the Agent, the Company or the Bank Investors to exercise or enforce
any of their respective rights hereunder. Without limiting the foregoing, each
Pledgor will, and will cause the Seller to, upon the request of the Agent, the
Company or any of the Bank Investors, in order to accurately reflect this
transaction, (x) execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant to Section 10.6
hereof) as may be requested by the Agent, the Company or any of the Bank
Investors and (y) xxxx its respective master data processing records and other
documents with a legend describing the conveyance to the Pledgors of the
Receivables (in the case of the Seller) and to the Agent, for the benefit of the
Company and the Bank Investors, of the Pledged Interest. Each Pledgor shall, and
will cause the Seller to, upon the reasonable request of the Agent, the Company
or any of the Bank Investors obtain such additional search reports as the Agent,
the Company or any of the Bank Investors shall request. To the fullest extent
permitted by applicable law, the Agent shall be permitted to sign and file
continuation statements. Carbon, photographic or other reproduction of this
Agreement or any financing statement shall be sufficient as a financing
statement. The Pledgors shall not, and shall not
47
53
permit the Seller to, change its respective name, identity or corporate
structure (within the meaning of Section 9-402(7) of the UCC) nor relocate its
respective chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least thirty (30) days prior notice thereof
and (ii) prepared at the Pledgors' expense and delivered to the Agent all
financing statements, instruments and other documents necessary to preserve and
protect the Pledged Interest or reasonably requested by the Agent in connection
with such change or relocation. Any filings under the UCC or otherwise that are
occasioned by such change in name or location shall be made at the expense of
Pledgors.
(b) The Master Servicer shall instruct all Obligors to cause all
Collections to be deposited directly with the Lock-Box Bank. If the Pledgors,
the Seller or the Master Servicer receives any Collections, the Pledgors, the
Seller or the Master Servicer, as applicable, shall immediately, but in any
event within two Business Days of receipt, remit (and shall cause the Seller to
remit) such Collections to the Collection Account.
(c) With respect to Receivables and Related Security reassigned due to
Deemed Collections or otherwise reassigned pursuant to Section 2.9, substituted
for pursuant to Section 2.16 or subject to a Take-out, or with respect to
Equipment with respect to Receivables that have been paid in full, the Agent
shall execute such appropriate releases (without recourse) or termination
statements as may be reasonably requested by the Pledgors.
48
54
SECTION II.9 Deemed Collections; Reassignments; Prepayment Shortfalls;
Application of Payments. If on any day during any Collection Period any of the
representations or warranties in Article III is or has become untrue with
respect to a Receivable (whether on or after the date of any pledge of an
interest therein to the Agent, the Company or the Bank Investors as contemplated
hereunder), then any party hereto discovering the same shall so inform the other
parties hereto (provided that notice thereof shall be given to the Agent on
behalf of the Company and the Bank Investors), and unless the breach of such
representation or warranty shall have been cured on or prior to the related
Payment Date, the applicable Pledgor shall be deemed to have received during
such Collection Period a Collection of such Receivable in full and such Pledgor
shall on the related Payment Date pay to the Master Servicer an amount equal to
the Required Payoff Amount with respect to such Receivable and such amount shall
be allocated and applied by the Master Servicer as a Collection allocable to the
Pledged Interest in accordance with Section 2.5 or 2.6 hereof, as applicable;
provided that in lieu of such payment, to the extent permitted pursuant to
Section 2.16, the Pledgors may substitute a Substitute Receivable for any such
Receivable.
The Pledgors shall have the option, but shall not be required, to
accept the reassignment of Receivables that are not subject to a Deemed
Collection but that are 60 or more days past due at a price equal to the
Required Payoff Amount therefor. Also, the Pledgors will accept the reassignment
of Defaulted Receivables upon 5 Business Days' notice following the demand of
the Agent at a price equal to the Required Payoff Amount; provided that in lieu
of such payment, to the extent permitted pursuant to Section 2.16, the Pledgors
may substitute a Substitute Receivable for any such Defaulted Receivable. In
addition, to the extent any Contract that is a conditional sales contract or
other loan is prepaid by the related Obligor pursuant to its terms, the amount,
if any, by which the amount of such prepayment is less than the Required Payoff
Amount for such Receivable (any such amount, a "Prepayment Shortfall"), shall be
paid by the Pledgors to the Agent from their own account on the demand of the
Agent. Any amounts received in respect of such reassignments or in respect of
any Prepayment Shortfall shall be applied as a Collection in the manner set
forth in the preceding paragraph.
Notwithstanding the foregoing, the aggregate of (i) the Outstanding
Balance of Receivables reassigned to the Pledgors
49
55
pursuant to this Section 2.9 or substituted for Substitute Receivables pursuant
to Section 2.16 (and if any such Receivables are Defaulted Receivables, assuming
for purposes of determining the Outstanding Balance thereof that such
Receivables are not in fact Defaulted Receivables) plus (ii) the amount of
payments made in respect of Prepayment Shortfalls by or on behalf of the
Pledgors pursuant to this Section 2.9, in each case since the most recent
Take-Out hereunder (or since the initial Pledge, if no Take-Out has yet
occurred) shall in no event exceed 10% of the then Outstanding Net Investment;
provided that any Receivable reassigned to the Pledgors pursuant to this Section
2.9 or substituted for pursuant to Section 2.16, that at the time of such
reassignment or substitution was subject to a Deemed Collection shall not be
included in calculating such 10% limitation.
SECTION II.10 Payments and Computations, Etc. All amounts to be paid or
deposited by the Pledgors or the Master Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available funds; if such amounts
are payable to the Agent (whether on behalf of the Company or any Bank Investor
or otherwise) they shall be paid or deposited in the account indicated in
Section 10.3 hereof, until otherwise notified by the Agent. The Pledgors shall,
to the extent permitted by law, pay to the Agent, for the benefit of the Company
and the Bank Investors upon demand, interest on all amounts not paid or
deposited when due hereunder at a rate equal to 2% per annum plus the Base Rate.
All computations of Discount, interest and all per annum fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed. Any computations by the Agent of
amounts payable by the Pledgors hereunder shall be binding upon the Pledgors
absent manifest error.
SECTION II.11 Reports. (a) Prior to the fifteenth day of each month
(or, if such fifteenth day is not a Business Day, the immediately preceding
Business Day), the Master Servicer shall prepare and forward to the Agent and
the Administrative Agent (i) an Investor Report as of the end of the last day of
the immediately preceding month and (ii) such other information as the Agent or
the Administrative Agent may reasonably request.
SECTION II.12 Accounts. (a) Collection Account. There shall be
established on the day of the initial Pledge hereunder
50
56
and maintained with the Agent, a segregated account (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Agent, on behalf of the Company and the Bank
Investors. Funds on deposit in the Collection Account shall be invested by the
Agent in Eligible Investments that will mature so that such funds in the
necessary amount will be available prior to the last day of each successive
Tranche Period or Payment Date following such investment. On the last day of
each Tranche Period, all interest and earnings (net of losses and investment
expenses) on funds on deposit in the Collection Account shall be retained in the
Collection Account and be available to make any payments required to be made
hereunder (including Discount) by the Pledgors. On the date on which the Net
Investment is zero, all accrued Discount and Servicing Fees have been paid in
full and all other Aggregate Unpaids have been paid in full, any funds remaining
on deposit in the Collection Account shall be paid to the Pledgors.
(b) Reserve Account. There shall be established on the day of the
initial Pledge hereunder and maintained with the Agent, a segregated account
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Agent, on behalf of the
Company and the Bank Investors. Funds on deposit in the Reserve Account shall be
invested by the Agent in Eligible Investments that will mature so that such
funds will be available prior to the last day of each successive Tranche Period
or Payment Date following such investment. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Account shall
be retained in the Reserve Account and be available to make payments required to
be made therefrom. Funds on deposit in the Reserve Account shall be retained in
the Reserve Account and be available (i) to pay any Discount payable pursuant to
Section 2.5(b) to the extent amounts on deposit in the Interest Accrual Account
and the Collection Account are insufficient therefor, (ii) on any Payment Date
to make any payments required to be made under clauses (i) through (v) of
Section 2.5(a) to the extent that Available Funds are insufficient therefor and
(iii) on and after the Termination Date to the Agent to reduce the Net
Investment. On each Payment Date, after giving effect to the allocations set
forth in Section 2.5(a), any amounts on deposit therein that are in excess of
the Specified Reserve Account Balance will be released to the Pledgors. The
parties hereto agree that, upon the request of any Pledgor, this Agreement will
be amended to allow changes to the applicable Advance Percentages
51
57
and corresponding reductions to the Net Investment in replacement of the
requirement to deposit funds into the Reserve Account.
(c) Principal Collection Account. There shall be established on the day
of the initial Pledge hereunder and maintained with the Agent, a segregated
account (the "Principal Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. All interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Principal Collection Account shall be retained in the Principal Collection
Account and be available to make payments required to be made therefrom. Funds
on deposit in the Principal Collection Account shall be invested by the Agent in
Eligible Investments that will mature so that such funds will be available prior
to the last day of each successive Tranche Period or Payment Date following such
investment. Funds on deposit in the Principal Collection Account will be applied
as set forth in Section 2.5(c).
(d) Fee Reserve Account. There shall be established on the day of the
initial Pledge hereunder and maintained with the Agent, a segregated account
(the "Fee Reserve Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Agent, on behalf of the
Company and the Bank Investors. On or prior to the date of the initial Pledge
hereunder, an amount equal to the product of (a) 0.10% and (b) the Facility
Limit as of such Pledge Date will be deposited into the Fee Reserve Account.
Funds on deposit in the Fee Reserve Account shall be invested by the Agent in
Eligible Investments that will mature so that such funds will be available prior
to each Payment Date. All interest and earnings (net of losses and investment
expenses) on funds on deposit in the Fee Reserve Account shall be retained in
the Fee Reserve Account and be available to make payments required to be made
therefrom. Funds on deposit in the Fee Reserve Account shall be available on any
Pledge Date or the date of any Take-out to make any payments of the Program Fee,
the Facility Fee or the Administrative Fee that have become due and payable to
the extent that Available Funds are insufficient therefor. If on any Payment
Date (including after a Take-Out as described below) the Net Investment is equal
to or exceeds $100,000,000, and each of the above-referenced fees has been
paid-in-full as of such Payment Date, all funds on deposit in the Fee Reserve
Account will be released at such time to the Pledgors. If after giving effect to
the initial Pledge to occur after any Take-out, the Net
52
58
Investment is equal to less than $100,000,000, the Pledgors shall deposit into
the Fee Reserve Account an amount from the proceeds of such Pledge so that the
amount on deposit therein equals the product of (a) 0.10% and (b) the Facility
Limit as of such Pledge Date.
(e) Interest Accrual Account. There shall be established on the day of
the initial Pledge hereunder and maintained with the Agent, a segregated account
(the "Interest Accrual Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Agent, on behalf of
the Company and the Bank Investors. Funds on deposit in the Interest Accrual
Account shall be invested by the Agent in Eligible Investments that will mature
so that such funds will be available as needed prior to the last day of each
successive Tranche Period following such investment. All interest and earnings
(net of losses and investment expenses) on funds on deposit in the Interest
Accrual Account shall be retained in the Interest Accrual Account and be
available to make payments required to be made therefrom. Funds on deposit in
the Interest Accrual Account shall be available to make payments of accrued and
unpaid Discount pursuant to Section 2.5(b).
SECTION II.13 Sharing of Payments, Etc. If the Company or any Bank
Investor (for purposes of this Section only, being a "Recipient") shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Pledged Interest pledged to it (other
than pursuant to Section 2.7 or Article VIII and other than as a result of the
differences in the timing of the applications of Collections pursuant to Section
2.5 or 2.6) in excess of its ratable share of payments on account of Purchased
Interest funded by the Company and/or the Bank Investors entitled thereto, such
Recipient shall forthwith purchase from the Company and/or the Bank Investors
entitled to a share of such participations in the Pledged Interests pledged to
such Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such Recipient, such purchase from each such other Person shall be rescinded and
each such other Person shall repay to the Recipient the purchase price paid by
such Recipient for such participation to the extent of such recovery, together
with an amount equal to such other Person's ratable share (according to the
proportion of (a) the amount of such other Person's required payment to (b) the
total amount so recovered from the
53
59
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
SECTION II.14 Right of Setoff. Without in any way limiting the
provisions of Section 2.13, each of the Company and the Bank Investors is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence of the Termination Date, to set-off, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by the Company or such
Bank Investor to, or for the account of, the Pledgors against the amount of the
Aggregate Unpaids owing by the Pledgors to such Person or to the Agent on behalf
of such Person (even if contingent or unmatured).
SECTION II.15 Hedging of Receivables The Pledgors shall from time to
time enter into such Hedging Agreements as shall be necessary so that after
giving effect to any Pledge, the excess of the Outstanding Balance of the
Receivables over the aggregate Hedged Amount under all Hedging Agreements shall
not be equal to or in excess of $10,000,000; provided that if at any time the
aggregate Hedged Amount under all Hedging Agreements exceeds the Outstanding
Balance of the Receivables, the Pledgors shall reduce such excess to zero by
terminating or reducing by an appropriate amount the Hedge Agreements. Upon
entering into any Hedging Agreement the Pledgors shall assign to the Agent, on
behalf of the Company and the Bank Investors, as applicable, all of the
Pledgors' rights under such Hedging Agreement. Each Hedging Agreement shall (i)
have a scheduled termination date that coincides with the last Contract Payment
due to occur for the Receivables to which such Hedging Agreement relates; (ii)
provide for a notional amount equal to 100% of the Outstanding Balance of such
Receivables rounded to the nearest multiple of $100,000 (the "Hedged Amount");
(iii) provide that Hedge Payments be calculated based on the "constant maturity"
yield on U.S. Treasury securities with a maturity date equal or nearest to the
then expected remaining weighted average life (as determined by the Agent in its
sole discretion) of the related Receivables; (iv) provide that the Hedge
Counterparty's payment obligations shall be calculated by reference to the
Hedged Amount and a per annum rate determined by reference to H.15, as defined
in the 1991 ISDA Definitions published by the International Swaps and
Derivatives Association, Inc. and as determined in accordance with the
procedures in effect on the date of this Agreement (the "H.15"); (v) provide
that any payments to be paid with respect to each Payment Date and any early
termination date thereunder by the
54
60
Hedge Counterparty are to be deposited into the Collection Account, for
distribution in accordance with this Agreement; and (vi) be on such other terms
and subject to such other conditions as shall be reasonably acceptable to the
Agent. The "constant maturity" yield as described in clause (iii) above shall be
determined based on the average yield, in effect for the week ending on the last
Friday immediately preceding the related date of determination for U.S. Treasury
securities adjusted to a constant maturity, as published in H.15. In the event
the H.15 is no longer available, then the rates described in clauses (iii) and
(iv) above shall be reasonably agreed to between the Pledgors and the Hedge
Counterparty and reasonably acceptable to the Agent in order to effect an
economically equivalent business deal between such parties. The Master Servicer
will provide the Agent with written notice confirming the amounts, if any, to be
paid by or to the Hedge Counterparty on each Payment Date and any early
termination date.
Each Pledgor hereby assigns all of its rights under each Hedging
Agreement to the Agent, on behalf of the Company and the Bank Investors. In
addition, the parties hereto agree that all pledges, grants and assignments made
hereunder for the benefit of the Agent, the Company and the Bank Investors
(including, without limitation, Sections 2.2(a), 2.2(f) and 2.8), shall also be
for the ratable benefit of each Hedge Counterparty as if it were named in each
such pledge, as security and assurance to it of the payment in full of all
amounts due or to become due to it hereunder.
SECTION II.16 Substitution of Receivables. On any day prior to the
occurrence of the Termination Date, the Pledgors may, subject to the conditions
set forth in this Section 2.16, replace any Receivable with one or more other
Receivables (each, a "Substitute Receivable"); provided, however, that no such
replacement shall occur unless each of the following conditions is satisfied as
of the date of such replacement and substitution by the Substitute Receivables
to be substituted on such date (it being understood that for all purposes
hereunder the Outstanding Balance of a Substituted Receivable shall be
calculated using the same Discount Rate applicable to the Receivable being
replaced):
(a) each Substitute Receivable is an Eligible Receivable;
(b) after giving effect to any such substitution, (x) the sum
of the Net Investment plus, in the case where the
55
61
Pledged Interest is held by the Agent on behalf of the Company, the
Interest Component of all outstanding related Commercial Paper, would
not exceed the Facility Limit and (y) the Net Investment would not
exceed the Maximum Net Investment;
(c) the aggregate Outstanding Balance of such Substitute
Receivables shall be equal to or greater than the aggregate Required
Pay-off Amount as of the date of the substitution of the Receivables
being replaced;
(d) the sum of the Outstanding Balances as of the respective
dates of substitution of all of the Receivables substituted for under
this Agreement, other than any Receivable that at the time of
substitution was subject to a Deemed Collection pursuant to Section 2.9
shall not cause the 10% limitation set forth in the last paragraph of
Section 2.9 to be exceeded;
(e) all representations and warranties contained in Section
3.1 shall be true and correct with respect to each such Substitute
Receivable;
(f) such substitution does not cause a Termination Event to
occur;
(g) the Pledgors shall deliver to the Agent on the date of
such substitution a Pledge Certificate certifying that each of the
foregoing is true and correct as of such date;
(h) each Receivable substituted for (except for Receivables
subject to a Deemed Collection or that are not Eligible Receivables)
must be at least 60 days past due; and
(i) after giving effect to such substitution the Pledgors will
be in compliance with the requirements of Section 2.15.
In connection with any such substitution or any reassignment pursuant
to Section 2.9, the Agent shall, automatically and without further action, be
deemed to transfer to the appropriate Pledgors, free and clear of any Adverse
Claim created pursuant to this Agreement, all of the right, title and interest
of the Agent to and under such replaced Receivable and all Related Security, and
the Agent shall be deemed to represent and warrant that it
56
62
has the corporate authority and has taken all necessary corporate action to
accomplish such transfer, but without any other representation and warranty,
express or implied.
SECTION II.17 Auction Procedure.
On any Business Day, the Seller may request the Agent, on behalf of the
Company and the Bank Investors, to conduct an auction with respect to the
Pledged Interest and the interest in the Secured Note represented by all or a
specified portion (such portion to have been specified by the Pledgors) of the
Receivables and the Related Security on the terms and conditions set forth
herein. With respect to any such auction, the Agent shall accept the highest bid
submitted so long as (i) at least two bids are received, and at least one bid is
made by a Person that is not a Pledgor or an Affiliate of the Pledgors, (ii) the
highest such bid shall be at least equal to the amount necessary so that after
giving effect to the application of such proceeds to pay Net Investment and
other Aggregate Unpaids, the remaining Net Investment and Net Receivables
Balance will be such that the Percentage Factor will not exceed the Maximum
Percentage Factor and (iii) the highest such bid shall in addition not be less
than the principal component of the Company's maturing Commercial Paper which
was issued to fund the portion of the Net Investment relating to the Receivables
being auctioned or the principal component subject to the Tranche Period
otherwise utilized by the Company or the Bank Investors to fund such portion of
the Net Investment, as applicable plus all unreimbursed Servicer Advances and
all Discount associated with the Tranche Periods utilized to fund such portion
of the Net Investment, as well as all other Carrying Costs related to the
auctioned Contracts accrued through the date of such reassignment. The Pledgors
shall be entitled to notification of the amount of the highest qualifying bid
for any such auction and either or both Pledgors, or any Affiliate thereof,
shall be entitled to purchase the auctioned portion of the Pledged Interest for
an amount equal to such highest bid. The method, manner, time, place and terms
of any such auction shall be commercially reasonable.
The Pledgors shall also be obligated to pay to the Agent the Agent's
reasonable legal fees and expenses incurred in connection with any such auction
and any Early Collection Fees in connection with such auction.
Upon the deposit to the Collection Account and the payment to the
Company of the amounts described in this Section, the
57
63
Agent shall execute and deliver to the Person so acquiring the Receivables at
such Person's expense, such documents or instruments as are necessary to
terminate the Agent's interest in the Receivables and the Related Security.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1 Representations and Warranties of the Pledgors. Each
Pledgor represents and warrants to the Agent, the Company and the Bank Investors
that:
(a) Existence and Power. Such Pledgor is a limited partnership
duly organized, validly existing and in good standing under the laws of
the State of Nevada and has all limited partnership power and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. Each Pledgor is duly qualified to do
business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have
a Material Adverse Effect.
(b) Company and Governmental Authorization; Contravention. The
execution, delivery and performance by such Pledgor of this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Facility Fee
Letter, the Secured Note, the Pledge Certificates and the other
Transaction Documents to which such Pledgor is a party are within such
Pledgor's partnership powers, have been duly authorized by all
necessary action on behalf of such Pledgor, require no action by or in
respect of, or filing with, any Official Body or official thereof
(except as contemplated by Section 2.8 hereof), and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the Certificate of Limited Partnership of such Pledgor
or of any agreement, judgment, injunction, order, writ, decree or other
instrument binding upon such Pledgor or result in the creation or
imposition of any Adverse Claim on the assets of such Pledgor (except
as contemplated by Section 2.8 hereof).
58
64
(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter, the
Secured Note and the other Transaction Documents to which such Pledgor
is a party constitutes and each Pledge Certificate upon payment of the
Advance Amount set forth therein will constitute the legal, valid and
binding obligation of such Pledgor, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors generally.
(d) Perfection. Immediately preceding each Pledge hereunder,
each Receivable and any related Equipment shall be owned by a Pledgor
free and clear of all Adverse Claims, other than those which may be
simultaneously released and liens with respect to Leveraged Lease
Loans. On or prior to each Pledge, all financing statements and other
documents required to be recorded or filed in order to perfect and
protect the Agent's Pledged Interest against all creditors of and
purchasers from the Pledgors and the Seller will have been duly filed
in each filing office necessary for such purpose and all filing fees
and taxes, if any, payable in connection with such filings shall have
been paid in full. Notwithstanding the foregoing, it is understood
that, except with respect to Receivables that are Leveraged Lease
Loans, (i) no UCC-1 filing may have been made with respect to the
Equipment (other than vehicles as described in (ii) below) underlying
those Receivables that had at the origination of the related Contract
an original equipment cost of less than $35,000 (provided such
Receivables do not represent more than 20% of the Net Investment or $20
million of the Net Investment, whichever is greater) and (ii) certain
Receivables may be leases on vehicles or other types of equipment which
require titling in the name of the Pledgors, so long as the aggregate
Outstanding Balance of such Receivables does not represent more than
5.0% of the Net Investment or $7 million of the Net Investment,
whichever is greater, and provided that such vehicles are re-titled as
required to perfect such interest within 90 days of the related Pledge.
(e) Accuracy of Information. All information heretofore
furnished by such Pledgor (including without limitation, the Investor
Reports, any other reports delivered pursuant to Section 2.11 hereof
and the Pledgors' financial statements) to the Company, any Bank
Investors,
59
65
the Agent or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by such Pledgor to the Company,
any Bank Investors, the Agent or the Administrative Agent will be, true
and accurate in every material respect, on the date such information is
stated or certified.
(f) Tax Status. Such Pledgor has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge
of such Pledgor threatened, against or affecting such Pledgor or any
Affiliate of such Pledgor or their respective properties, in or before
any court, arbitrator or other body, which may, individually or in the
aggregate, have a Material Adverse Effect.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by
such Pledgor of this Agreement, the performance by such Pledgor of the
transactions contemplated by this Agreement, and the fulfillment of the
terms hereof and thereof by such Pledgor, have been obtained.
(i) Use of Proceeds. No proceeds of any Pledge will be used by
such Pledgor to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(j) Place of Business. The principal place of business and
chief executive office of such Pledgor is located at the address of
such Pledgor indicated in Section 10.3 hereof and the offices where
such Pledgor keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Company
in accordance with Section 2.8 hereof in jurisdictions where all action
required by Section 2.8 hereof has been taken and completed.
60
66
(k) Good Title. At the time of each Pledge, the Agent shall
acquire an assignment of a valid and perfected first priority security
interest to the extent of the Pledged Interest and in the Related
Security and Collections with respect thereto free and clear of any
Adverse Claim.
(l) Trade Names, Etc. Such Pledgor has no subsidiaries and
within the last five years, has operated under no trade names and has
not changed its name, merged with or into or consolidated with any
other corporation or been the subject of any proceeding under Xxxxx 00,
Xxxxxx Xxxxxx Code (Bankruptcy).
(m) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(n) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
(to the extent it is the Parent or any Subsidiary or Affiliate of the
Parent) to service and collect the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event.
(p) Not an Investment Company. Such Pledgor is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. Such Pledgor and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.
(r) Lock-Box Account. All Obligors have been instructed to
make payment to a Lock-Box Account.
(s) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales
act or similar law.
(t) Pledges Under Receivables Purchase Agreement. Each
Receivable has been purchased by a Pledgor (or the interests
represented thereby have been collectively
61
67
purchased by the Pledgors) from the Seller pursuant to, and in
accordance with, the terms of the Receivables Purchase Agreement.
(u) Preference; Voidability. The Pledgors shall have given
reasonably equivalent value to the Seller in consideration for the
transfer to the Pledgors of the Receivables and Related Security from
the Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the Seller to the Pledgors and no
such transfer is or may be voidable under any Section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. sections 101 et seq.), as amended.
(v) Eligible Receivables. Each Receivable listed on the
Contract Schedule is an Eligible Receivable as of the related Pledge
Date (or, if such Receivable is being re-Pledged immediately following
a Take-Out, as of the original Pledge Date).
(w) Year 2000 Compliance. Such Pledgor (i) initiated a review
and assessment of all areas within its business and operations
(including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by such Pledgor (or suppliers, vendors and
customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable, as such
timetable may be revised from time to time. Based on the foregoing,
such Pledgor believes that all computer applications (including those
of its suppliers and vendors) that are material to its business and
operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to
the extent that a failure to do so could not reasonably be expected (a)
to have a Material Adverse Effect, or (b) to result in a Termination
Event. Such Pledgor (i) has completed a review and assessment of all
computer applications, which are related to or involved in the
origination, collection, management or servicing of the Receivables
(the "Receivable Systems") and (ii) has determined that such Receivable
Systems are Year 2000 Compliant or will be Year 2000 Compliant on or
before August 31, 1999 and thereafter. The costs of all assessment,
remediation,
62
68
testing and integration related to such Pledgor's plan for becoming
Year 2000 Compliant will not have a material adverse effect on the
financial condition or operations of such Pledgor.
Any document, instrument, certificate or notice delivered to the
Company hereunder shall be deemed a representation and warranty by the Pledgors.
SECTION III.2 Reaffirmation of Representations and Warranties by the
Pledgor. On each day that a Pledge is made hereunder, the Pledgors, by accepting
the proceeds of the related Advance Amount, whether delivered to the Pledgors
pursuant to Section 2.2(a) or Section 2.5(c) hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are correct on and as of such day as though made on and as of such day.
SECTION III.3 [Reserved.]
SECTION III.4 Representations and Warranties of the Master Servicer.
The Master Servicer represents and warrants to the Company and the Bank
Investors that:
(a) Corporate Existence and Power. The Master Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Master Servicer is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Master Servicer of this
Agreement are within the Master Servicer's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Official Body or official
thereof, and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Incorporation or Bylaws of the Master Servicer or of any agreement,
judgment, injunction,
63
69
order, writ, decree or other instrument binding upon the Master
Servicer or result in the creation or imposition of any Adverse Claim
on the assets of the Master Servicer or any of its Subsidiaries.
(c) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors.
(d) Accuracy of Information. All information heretofore
furnished by the Master Servicer to the Agent, the Company, any Bank
Investor or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Master Servicer to the
Agent, the Company, any Bank Investor or the Administrative Agent will
be, true and accurate in every material respect, on the date such
information is stated or certified.
(e) Tax Status. The Master Servicer has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(f) Action, Suits. Except as set forth in Exhibit H, there are
no actions, suits or proceedings pending, or to the knowledge of the
Master Servicer threatened, against or affecting the Master Servicer or
any Affiliate of the Master Servicer or their respective properties, in
or before any court, arbitrator or other body, which may, individually
or in the aggregate, have a Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Master Servicer of this Agreement, the performance by the Master
Servicer of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof and thereof by the Master Servicer,
have been obtained.
(h) Nature of Receivables. Each Receivable included in the
calculation of the Net Receivables Balance in fact
64
70
satisfies at such time the definition of "Eligible Receivable".
(i) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(j) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
to service and collect the Receivables.
(k) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event.
(l) Not an Investment Company. The Master Servicer is not, and
is not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(m) ERISA. Each of the Master Servicer and its ERISA
Affiliates is in compliance in all material respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(n) Lock-Box Account. All Obligors have been instructed to
make payment to the Lock-Box Account.
(w) Year 2000 Compliance. The Master Servicer (i) initiated a
review and assessment of all areas within its business and operations
(including those affected by suppliers and vendors) that could be
adversely affected by the Year 2000 Problem, (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and
(iii) to date, implemented that plan in accordance with that timetable,
as such timetable may be revised from time to time. Based on the
foregoing, the Master Servicer believes that all computer applications
(including those of its suppliers and vendors) that are material to its
business and operations are reasonably expected on a timely basis to be
Year 2000 Compliant, except to the extent that a failure to do so could
not reasonably be expected (a) to have a Material Adverse Effect, or
(b) to result in a Termination Event. The Master Servicer (i) has
completed a review and assessment of all computer applications, which
are related to or involved in the Receivable Systems and (ii) has
65
71
determined that such Receivable Systems are Year 2000 Compliant or will
be Year 2000 Compliant on or before August 31, 1999 and thereafter. The
costs of all assessment, remediation, testing and integration related
to the Master Servicer's plan for becoming Year 2000 Compliant will not
have a material adverse effect on the financial condition or operations
of the Master Servicer.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION IV.1 Conditions to Closing. (a) On or prior to the date of
execution hereof, the Pledgors shall deliver to the Agent the following
documents, instruments and fees all of which shall be in a form and substance
acceptable to the Agent:
(i) A copy of the resolutions of the member of the General
Partner of each Pledgor approving the execution, delivery and
performance by such Pledgor of this Agreement, the Receivables Purchase
Agreement and the other Transaction Documents to be delivered by such
Pledgor hereunder or thereunder.
(ii) The Certificate of Limited Partnership or other
organizational document of each Pledgor certified by the Secretary of
State or other similar official of the State of Nevada dated a date
reasonably prior to the Closing Date.
(iii) The Articles of Incorporation or applicable
organizational document of the Seller certified by the Secretary of
State or other similar official of the State of Delaware dated a date
reasonably prior to the Closing Date.
(iv) The Articles of Organization or other organizational
document of the General Partner certified by the Secretary of State or
other similar official of the State of Nevada dated a date reasonably
prior to the Closing Date.
(v) The Articles of Organization or other organizational
document of the Parent certified by the Secretary of State or other
similar official of the State of Delaware dated a date reasonably prior
to the Closing Date.
66
72
(vi) The Certificate of Limited Partnership or other
organizational document of the Master Servicer certified by the
Secretary of State or other similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(vii) A Good Standing Certificate for each Pledgor from the
Secretary of State or other similar official of the State of Nevada
dated a date reasonably prior to the Closing Date.
(viii) A Good Standing Certificate for the Seller issued by
the Secretary of State or a similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(ix) A Good Standing Certificate for the Parent from the
Secretary of State or other similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(x) A Good Standing Certificate for the Master Servicer from
the Secretary of State or other similar official of the State of
Delaware dated a date reasonably prior to the Closing Date.
(xi) A Certificate of the Secretary of the General Partner of
each Pledgor substantially in the form of Exhibits L-1 and L-2 attached
hereto.
(xii) A Certificate of the Secretary of the Seller
substantially in the form of Exhibit L-3 attached hereto.
(xiii) A Certificate of the Secretary of the General Partner
substantially in the form of Exhibit L-4 attached hereto.
(xiv) A Certificate of the Secretary of the Parent
substantially in the form of Exhibit L-5 attached hereto.
(xv) A Certificate of the Secretary of the Master Servicer
substantially in the form of Exhibit L-6 attached hereto.
67
73
(xvi) An opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, special
counsel to the Parent, the Master Servicer and the Seller, covering
certain corporate and security interest matters in form and substance
satisfactory to the Agent and the Agent's counsel.
(xvii) An opinion of Xxxxx Xxxxxxxxxx LLP, special counsel to
the Pledgors and the Seller, covering certain bankruptcy and insolvency
matters (i.e. "true sale" and nonconsolidation) in form and substance
satisfactory to the Agent and the Agent's counsel.
(xviii) An opinion of Xxxxx Xxxxxxxxxx LLP, special counsel to
the Pledgors and the Seller covering certain tax matters in form and
substance satisfactory to the Agent and the Agent's counsel.
(xix) An opinion of Xxxxx Xxxxxxxxxx LLP, special counsel to
the Pledgors and the Seller covering certain corporate matters in form
and substance satisfactory to the Agent and the Agent's counsel.
(xx) An opinion of Xxxxxxxx and Wedge, special Nevada counsel
to the Pledgors and the Seller covering certain corporate matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xxi) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter and each of
the other Transaction Documents to be executed by the Seller or the
Pledgors.
(xxii) The Secured Note, duly executed by the Pledgors and
appropriately completed.
(xxiii) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
(xxiv) For each Pledgor, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
such Pledgor as the debtor in favor of the Agent, for the benefit of
the Company and the Bank Investors, as the secured party or other
similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all
68
74
appropriate jurisdictions or any comparable law to perfect the Agent's
interest in all of each Pledgor's respective right, title and interest
in, to and under all Receivables and the Related Security and
Collections relating thereto; provided that no such filings need be
made with respect to the related Equipment.
(xxv) For each Pledgor, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Seller as the debtor in favor of such Pledgor as secured party and
the Agent, for the benefit of the Company and the Bank Investors, as
assignee of the secured party or other similar instruments or documents
as may be necessary or in the reasonable opinion of the Agent desirable
under the UCC of all appropriate jurisdictions or any comparable law to
perfect the Pledgor's interest in all applicable Receivables and the
Related Security and Collections relating thereto; provided that no
such filings need be made with respect to the related Equipment.
(xxvi) Certified copies of request for information or copies
(Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Pledge listing all effective financing statements which name
either of the Pledgors or the Seller (under their respective present
names and any previous names) as debtor and which are filed in
jurisdictions in which the filings were made pursuant to items (xxiv)
or (xxv) above together with copies of such financing statements (none
of which shall cover any Receivables or Contracts).
(a) On or prior to the date of execution hereof and, on or prior to the
related Pledge Date, the Pledgors shall deliver to the Agent the following
documents and instruments all of which shall be in a form or substance
acceptable to the Agent:
(xxvii) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by Pledgors.
(xxviii) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by the Seller.
69
75
(xxix) A computer tape setting forth all Receivables and the
Outstanding Balances thereon and such other information as the Agent
may reasonably request.
(xxx) The Pledge Certificate, duly executed by the Pledgors.
(xxxi) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
ARTICLE V
COVENANTS
SECTION V.1 Affirmative Covenants of Pledgors. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) Financial Reporting. The Pledgors will, and will cause the
Parent and each of its Subsidiaries to, maintain, for itself and each
of its respective Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Agent:
(i) Annual Reporting. As soon as practical and in any
event within 90 days after the end of each fiscal year of the
Parent, (x) consolidated and unaudited consolidating balance
sheets of the Parent and its Subsidiaries as at the end of
such fiscal year, and the notes thereto, and the related
consolidated and unaudited consolidating statements of income,
stockholders' equity and cash flows, and the respective notes
thereto, for such fiscal year, setting forth (other than for
consolidating statements) comparative financial statements for
the preceding fiscal year, all prepared in accordance with
GAAP applied on a consistent basis and containing, with
respect to the consolidated financial statements, opinions of
Price Waterhouse L.L.P., or other such independent certified
70
76
public accountants selected by the Parent and approved by the
Agent, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of the Parent
and without any exception not acceptable to the Agent and (y)
annual consolidated financial statements, prepared in
accordance with GAAP and compiled by such accountants, for
each of the Pledgors;
(ii) Quarterly Reporting. As soon as practical and in
any event within 45 days after the end of each fiscal quarter
(except the last fiscal quarter of the fiscal year of the
Parent), consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for
such fiscal quarter and for the period from the beginning of
the then-current fiscal year through the end of such reporting
period, and accompanied by a certificate of the chief
financial officer of the Parent or any other Person expressly
designated by the Board of Directors of the Parent as an
authorized representative to the effect that such financial
statements present fairly the financial position of the Parent
and its Subsidiaries as of the end of such fiscal period and
the results of their operations and the changes in their
financial position for such fiscal period, in conformity with
the standards typically used in preparation of the interim
financial statements.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate signed by each Pledgor's or the Parent's, as
applicable, chief financial officer stating that to the best
of such Person's knowledge, no Termination Event exists and no
event which but for the lapse of time or the giving of notice,
or both, would constitute Termination Event exists, or if any
such event exists, stating the nature and status thereof.
(iv) Shareholders and Partners Statements and
Reports. Promptly upon the furnishing thereof to the partners
of the Pledgors or the shareholders of the Parent, copies of
all financial statements, reports and proxy statements so
furnished.
71
77
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports which Parent or any
subsidiary files with the Securities and Exchange Commission.
(vi) Notice of Termination Events. As soon as
possible and in any event within two (2) days after the
knowledge of the occurrence of each Termination Event or event
which but for the lapse of time or the giving of notice, or
both, would constitute a Termination Event, a statement of the
chief financial officer or chief accounting officer of both
Pledgors setting forth details of such event and the action
which the Pledgors propose to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt
Ratings. Within ten (10) days after the date any material
change in or amendment to the Credit and Collection Policy is
made, a copy of such amendment and, if requested by the Agent,
a copy of the Credit and Collection Policy then in effect.
Within five days after the date of any change in the Pledgors'
or Parent's public debt ratings (other than any asset-backed
ratings), if any, a written certification of the Pledgor's or
the Seller's public debt ratings (other than any asset-backed
ratings) after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety
(90) days after the close of each of the Parent's and each
Pledgor's fiscal years, a complete copy of the Credit and
Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which
either Pledgor, the Seller or any ERISA Affiliate of either
Pledgor or the Seller files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which either Pledgor, the
Seller or any ERISA Affiliates of either Pledgor or the Seller
receives from the Internal Revenue Service, the Pension
72
78
Benefit Guaranty Corporation or the U.S. Department of Labor.
(x) Other Information. Such other information
(including non-financial information) as the Agent or the
Administrative Agent may from time to time reasonably request
with respect to the Seller, the Pledgors or any Subsidiary of
any of the foregoing.
(b) Conduct of Business. Each Pledgor will carry on and
conduct its business in substantially the same fields of enterprise as
it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(c) Compliance with Laws. The Pledgors will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be
subject.
(d) Furnishing of Information and Inspection of Records. The
Pledgors will furnish to the Agent from time to time such information
with respect to the Receivables as the Agent may reasonably request,
including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. The Pledgors will at any time
and from time to time upon reasonable notice during regular business
hours permit the Agent, or its agents or representatives, (i) to
examine and make copies of and take abstracts from all Records and (ii)
to visit the offices and properties of the Pledgors for the purpose of
examining such Records, and to discuss matters relating to Receivables
or the Pledgors' performance hereunder and under the other Transaction
Documents to which such Person is a party with any of the officers,
directors, employees or independent public accountants of the Pledgors
having knowledge of such matters.
(e) Keeping of Records and Books of Account. The Pledgors will
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep
73
79
and maintain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Pledgors will give the
Agent notice of any material change in the administrative and operating
procedures of the Pledgors or the Seller, as applicable, referred to in
the previous sentence.
(f) Performance and Compliance with Receivables and Contracts.
Each Pledgor, at its expense, will timely and fully perform and comply
with all material provisions, covenants and other promises required to
be observed by such Pledgor or the Seller under the Contracts related
to the Receivables.
(g) Credit and Collection Policies. The Pledgors will comply
in all material respects with the Credit and Collection Policy in
regard to each Receivable and the related Contract.
(h) Collections Received. The Pledgors shall hold in trust,
and deposit, immediately, but in any event not later than within two
Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Pledgors or the Seller,
as the case may be.
(i) Accounting and Tax Treatment. The Pledgors will not (i)
account for (including for tax purposes), or otherwise treat, the
transactions contemplated by the Receivables Purchase Agreement in any
manner other than as a sale of Receivables by the Seller to the
Pledgors; provided, however, that the Operating Lease Pledgor will
treat the transfer of the Receivables transferred by the Seller to the
Operating Lease Pledgor pursuant to the Receivables Purchase Agreement
as a financing for accounting purposes or (ii) account for or otherwise
treat the transactions contemplated hereby in any manner other than as
a pledge of Receivables by the Pledgors to the Agent on behalf of the
Company or the Bank Investors, as applicable. In addition, the Pledgors
shall disclose (in a footnote or otherwise) in all of its respective
financial statements (including any such financial statements
consolidated with any other Persons' financial statements) the
existence and nature of
74
80
the transaction contemplated hereby and by the Receivables Purchase
Agreement and the interest of the Pledgors and the Agent, on behalf of
the Company and the Bank Investors, in the Affected Assets.
(j) Separate Business. Each Pledgor shall at all times (a) to
the extent such Pledgor's office is located in the offices of the
Seller or any Affiliate of the Seller, pay fair market rent for its
executive office space located in the offices of the Seller or any
Affiliate of the Seller, (b) have at all times at least two managers
which are not employees, officers or directors of the Seller or any
Affiliate of the Seller or of any major creditor of the Seller or any
Affiliate of the Seller and are persons who are familiar and have
experience with asset securitization, (c) maintain such Pledgor's
books, financial statements, accounting records and other corporate
documents and records separate from those of the Seller or any other
entity, (d) not commingle such Pledgor's assets with those of the
Seller or any other entity, (e) act solely in its corporate name and
through its own authorized officers and agents, (f) make investments
directly or by brokers engaged and paid by such Pledgor or its agents
(provided that if any such agent is an Affiliate of such Pledgor it
shall be compensated at a fair market rate for its services), (g)
separately manage such Pledgor's liabilities from those of the Seller
or any Affiliates of the Seller and pay its own liabilities, including
all administrative expenses, from its own separate assets, except that
Parent may pay the organizational expenses of such Pledgor, and (h) pay
from such Pledgor's assets all obligations and indebtedness of any kind
incurred by such Pledgor. Each Pledgor shall abide by all limited
partnership formalities, including the maintenance of current minute
books, and such Pledgor shall cause its financial statements to be
prepared in accordance with generally accepted accounting principles in
a manner that indicates the separate existence of such Pledgor and its
assets and liabilities. Each Pledgor shall (i) pay all its liabilities,
(ii) not assume the liabilities of the Seller or any Affiliate of the
Seller, (iii) not lend funds or extend credit to the Seller or any
affiliate of the Seller except pursuant to the Receivables Purchase
Agreement in connection with the purchase of Receivables thereunder and
(iv) not guaranty the liabilities of the Seller or any Affiliates of
the Seller other than, in the case of a guaranty by the Qualifying
Pledgor, the Operating Lease
75
81
Pledgor and, in the case of a guaranty by the Operating Lease Pledgor,
the Qualifying Pledgor, or with respect to either Pledgor, as otherwise
provided in the Facility Pledge Agreement. The officers and nonmembers
and members of each Pledgor (as appropriate) shall make decisions with
respect to the business and daily operations of such Pledgor
independent of and not dictated by any controlling entity. Each Pledgor
shall not engage in any business not permitted by its Agreement of
Limited Partnership as in effect on the Closing Date.
(k) Partnership Documents. Each Pledgor shall only amend,
alter, change or repeal Article 2, Section 16.1, Section 20.1, or
Section 21.6 of its Agreement of Limited Partnership with the prior
written consent of the Agent.
SECTION V.2 Negative Covenants of the Pledgors. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and in the Receivables Purchase Agreement, each Pledgor will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (or the filing of any
financing statement) or with respect to any of the Affected Assets or
any account which concentrates in a Lock-Box Bank to which any
Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, each Pledgor will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(c) No Change in Business or Credit and Collection Policy.
Each Pledgor will not make any material change in the Credit and
Collection Policy without providing the Agent with prior written notice
of the change; provided that each Pledgor will reverse any such change
if the Agent disapproves of such change within 30 days of receiving
prior
76
82
written notice of such change. Each Pledgor will not make any change in
the character of its business which would have a Material Adverse
Effect.
(d) No Mergers, Etc. Each Pledgor will not (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other Person unless, in
the case of the Seller, the Seller is the surviving entity. The
foregoing covenant shall not restrict Pledgors from (i) establishing,
in connection with their 1999-1 term securitization, UCP 99-1 LLC I and
UCP 99-1 LLC II as special purpose Nevada limited liability companies;
all of the membership interests in UCP 99-1 LLC I will be held by
UniCapital Funding Corporation, and all of the membership interests in
UCP 99-1 LLC II will be held by the Pledgors until the end of the
pre-funding period in such securitization, at which time they will be
distributed to UniCapital Funding Corporation; and (ii) transferring to
UCP 99-1 LLC I and UCP 99-1 LLC II the Receivables and related property
to be securitized.
(e) Change in Payment Instructions to Obligors. Each Pledgor
will not make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless such instructions
are to deposit such payments to another existing Lock-Box Account and
the Agent shall have received written notice of such change at least 30
days prior thereto.
(f) Change of Name, Etc. Each Pledgor will not change its
name, identity or structure or the location of its chief executive
office, unless at least 10 days prior to the effective date of any such
change such Pledgor delivers to the Agent such documents, instruments
or agreements, executed by such Pledgor, as are necessary to reflect
such change and to continue the perfection of the Agent's security or
other interests in the Affected Assets.
(g) Amendment to Receivables Purchase Agreement. Each Pledgor
will not amend, modify, or supplement the Receivables Purchase
Agreement or waive any provision thereof, in each case except with the
prior written consent of the Agent and the Administrative Agent; nor
shall the Pledgor take any other action under the Receivables Purchase
Agreement that shall have a Material Adverse Effect or which is
inconsistent with the terms of this Agreement.
77
83
(h) Other Debt. Except as provided for herein, each Pledgor
will not create, incur, assume or suffer to exist any indebtedness
whether current or funded, or any other liability other than (i)
indebtedness of the Pledgor representing fees, expenses and indemnities
arising hereunder or under the Receivables Purchase Agreement for the
purchase price of the Receivables under the Receivables Purchase
Agreement, and (ii) other indebtedness incurred in the ordinary course
of its business in an amount not to exceed $50,000 in any fiscal year;
provided, however, that each Pledgor may incur indebtedness in order to
finance the residual value of any Equipment related to a Receivable
hereunder, so long as such indebtedness is non-recourse, not subject to
petition and fully subordinated to the payment of the related
Receivable hereunder.
(i) ERISA Matters. Each Pledgor will not (i) engage or permit
any of its respective ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of
ERISA) for which an exemption is not available or has not previously
been obtained from the U.S. Department of Labor; (ii) permit to exist
any accumulated funding deficiency (as defined in Section 302(a) of
ERISA and Section 412(a) of the Code) or funding deficiency with
respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail
to make any payments to any Multiemployer Plan that such Pledgor or any
ERISA Affiliate of such Pledgor is required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto; (iv)
terminate any Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any reportable event described in
Title IV of ERISA which represents a material risk of a liability to
such Pledgor or any ERISA Affiliate of such Pledgor under ERISA or the
Code, if such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events occurring
within any fiscal year of such Pledgor, in the aggregate, involve a
payment of money or an incurring of liability by such Pledgor or any
ERISA Affiliate of such Pledgor, in an amount in excess of $1,000,000.
(j) Payment to the Seller. With respect to any Receivable sold
or contributed by the Seller to either Pledgor, the respective Pledgor
shall, and shall cause the Seller to, effect such sale or contribution
under, and
78
84
pursuant to the terms of, the Receivables Purchase Agreement,
including, without limitation, the payment by such Pledgor to the
Seller of an amount equal to the purchase price for each such
Receivable sold, as required by the terms of the Receivables Purchase
Agreement.
SECTION V.3 [Reserved.]
SECTION V.4 [Reserved.]
SECTION V.5 Affirmative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) Conduct of Business. The Master Servicer will carry on and
conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted.
(b) Compliance with Laws. The Master Servicer will comply in
all material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(c) Furnishing of Information and Inspection of Records. The
Master Servicer will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. The Master
Servicer will, at any time and from time to time upon reasonable notice
during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts
from all Records and (ii) to visit the offices and properties of the
Master Servicer for the purpose of examining such Records, and to
discuss
79
85
matters relating to Receivables or the Pledgors', the Seller's or the
Master Servicer's performance hereunder and under the other Transaction
Documents to which such Person is a party with any of the officers,
directors, employees or independent public accountants of the Master
Servicer having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Master
Servicer will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The
Master Servicer will give the Agent notice of any material change in
the administrative and operating procedures of the Master Servicer
referred to in the previous sentence.
(e) Notice of Agent's Interest. In the event that either
Pledgor or the Seller shall sell or otherwise transfer any interest in
accounts receivable, any computer tapes or files or other documents or
instruments provided by the Master Servicer in connection with any such
sale or transfer shall disclose the Pledgors' ownership of the
Receivables and the Agent's interest therein.
(f) Credit and Collection Policies. The Master Servicer will
comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Collections. The Master Servicer shall instruct all
Obligors to cause all Collections other than Collections remitted
directly to be deposited directly to a Lock-Box Account.
(h) Collections Received. The Master Servicer shall hold in
trust, and deposit, immediately, but in any event not later than within
two Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Master Servicer.
SECTION V.6 [Reserved.]
80
86
SECTION V.7 Negative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Master Servicer will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(b) No Change in Business or Credit and Collection Policy. The
Master Servicer will not make any material change in the Credit and
Collection Policy without providing the Agent with prior written notice
of such change; provided that the Master Servicer will reverse any such
change if the Agent disapproves of such change within 30 days of
receiving prior written notice of such change. The Master Servicer will
not make any change in the character of its business which would have a
Material Adverse Effect.
(c) No Mergers, Etc. The Master Servicer will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person
unless the Master Servicer is the surviving entity.
(d) Change in Payment Instructions to Obligors. The Master
Servicer will not make any change in its instructions to Obligors
regarding payments to be made to the Lock-Box Account, unless such
instructions are to deposit such payments to another existing Lock-Box
Account and the Agent shall have received written notice of such change
at least 30 days prior thereto.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION VI.1 Appointment of the Master Servicer. The servicing,
administering and collection of the Receivables shall
81
87
be conducted by the Person (the "Master Servicer") so designated from time to
time in accordance with this Section 6.1. Until the Company gives notice to the
Pledgors of the designation of a new Master Servicer, UniCapital Operations
Group, Inc. is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Master Servicer pursuant to the terms hereof. The Master
Servicer may not delegate any of its rights, duties or obligations hereunder, or
designate a substitute Master Servicer, without the prior written consent of the
Agent, provided that, it is understood that the Master Servicer's duties
hereunder with respect to particular Receivables may and shall be delegated to
the respective Eligible Originators thereof and provided, further, that the
Master Servicer shall continue to remain solely liable for the performance of
the duties as Master Servicer hereunder notwithstanding any such delegation
hereunder. The Agent may, and upon the direction of the Majority Investors the
Agent shall, after the occurrence of a Master Servicer Default or any other
Termination Event (other than those specified in clauses (k), (l), (q) and (r)
of Section 7.1) designate as Master Servicer any Person (including itself) to
succeed UniCapital Operations Group, Inc. or any successor Master Servicer, on
the condition in each case that any such Person so designated shall agree to
perform the duties and obligations of the Master Servicer pursuant to the terms
hereof. Following the occurrence and continuance of a Master Servicer Default or
any Termination Event (other than those specified above), the Agent may notify
any Obligor of the Pledged Interest.
SECTION VI.2 Duties of the Master Servicer.
(a) The Master Servicer shall take or cause to be taken all
such action as may be necessary or advisable to collect all payments
due under each Receivable and the related Contract from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy. The Master Servicer's duties will include, without
limitation, collection and posting of all payments, responding to
inquiries of Obligors regarding the Receivables and related Contracts,
investigating delinquencies and remitting payments to the Agent in a
timely manner. Each of the Pledgors, the Company, the Agent and the
Bank Investors hereby appoints as its agent the Master Servicer, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To
the extent
82
88
permitted by applicable law, each of the Pledgors and the Seller hereby
grants to any Master Servicer appointed hereunder an irrevocable power
of attorney to take any and all steps in the Pledgors' and/or the
Seller's name and on behalf of the Pledgors or the Seller necessary or
desirable, in the reasonable determination of the Master Servicer, to
collect all amounts due under any and all Receivables, including,
without limitation, endorsing the Pledgors' and/or the Seller's name on
checks and other instruments representing Collections and enforcing
such Receivables and the related Contracts. The Master Servicer shall
set aside for the account of the Pledgors and the Agent their
respective allocable shares of the Collections of Receivables in
accordance with Sections 2.5 and 2.6 hereof. The Master Servicer shall
segregate and deposit to the Agent's account the Agent's allocable
share of Collections of Receivables when required pursuant to Article
II hereof. So long as no Termination Event shall have occurred and be
continuing, the Master Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of Receivables; provided,
however, that such extension or adjustment shall not alter the status
of such Receivable as a Delinquent Receivable or a Defaulted
Receivable, as applicable. The Master Servicer may not otherwise waive,
modify or otherwise vary any provision of a Contract except as
consistent with the Credit and Collection Policy. The Master Servicer
may not permit a Receivable to be terminated prior to the scheduled
termination date thereof unless such termination results in a payment
at least equal to the Required Payoff Amount being deposited into the
Collection Account with respect to the related Payment Date. The
Pledgors shall deliver to the Master Servicer and the Master Servicer
shall hold in trust for the Pledgors and the Agent, on behalf of the
Company and the Bank Investors, in accordance with their respective
interests, all Records which evidence or relate to Receivables or
Related Security. The Master Servicer shall not make the Agent, the
Company or any of the Bank Investors a party to any litigation without
the prior written consent of such Person.
(b) If the Master Servicer commences a legal proceeding to
enforce a Defaulted Receivable or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or involving
a Contract, the Agent will be deemed to have automatically assigned its
security interest in the related Contract to the Master Servicer for
purposes of commencing or participating in any such
83
89
proceeding as a party or claimant, and the Master Servicer is
authorized and empowered by the Agent, the Company and the Bank
Investors, to execute and deliver, on behalf of itself and the Agent
for the benefit of the Company and Bank Investors, any and all
instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection
with any such proceedings. If in any enforcement suit or legal
proceeding it is held that the Master Servicer may not enforce a
Contract on the ground that it is not a real party in interest entitled
to enforce the Contract, then the Agent will, at the Master Servicer's
expense and direction, take steps on behalf of the Agent as agent for
the Company and the Bank Investors to enforce the Contract, including
bringing suit in the name of the Agent for the benefit of the Company
and the Bank Investors.
Upon termination of a Contract as a result of a default by the
Obligor thereunder, the Master Servicer will use best efforts to
repossess or otherwise comparably covert the ownership of and to
re-lease or otherwise dispose of any related Equipment. Without
limiting the generality of the foregoing, the Master Servicer may
dispose of any such Equipment by purchasing such Equipment or by
selling such Equipment at a public or private sale to any of its
Affiliates for a purchase price equal to the fair market value thereof.
(c) The Master Servicer shall take and retain custody of the
Contracts and other Records in accordance with the terms and conditions
of this Agreement, all for the benefit of the Company and the Bank
Investors and subject to the lien thereon in favor of the Agent, as
agent for the Company and the Bank Investors. Within five Business Days
of its receipt of any Records, the Master Servicer shall review the
related Contract to verify that such Contract has been executed and has
no mutilated pages and to confirm (in reliance on the related contract
number and Obligor name) that such Contract is referenced on the
related list of Receivables. In order to facilitate the foregoing
review by the Master Servicer, in connection with each delivery of
Records hereunder to the Master Servicer, the Master Servicer shall
maintain an electronic file, in EXCEL or a comparable format, that
contains the related list of Receivables or which otherwise contains
the Contract number
84
90
and the name of the Obligor with respect to each related Contract. If,
at the conclusion of such review, the Master Servicer shall determine
that such Contract is not executed or has mutilated pages, or that it
is not referenced on such list of Receivables, the Master Servicer
shall promptly notify the Seller, the Pledgors and the Agent of such
determination by providing a written report to such Persons setting
forth, with particularity, the lack of execution of such Contract, that
such Contract has mutilated pages, or the fact that such Contract was
not referenced on the related list of Receivables. In addition, unless
instructed otherwise by the Seller or the Agent within 10 days of the
Master Servicer's delivery of such report, the Master Servicer shall
return any Contract not referenced on such list of Receivables to the
Seller.
In taking and retaining custody of the Contracts and other
Records, the Master Servicer shall be deemed to be acting as the agent
of the Agent, as agent for the Company and as agent of the Bank
Investors. The Master Servicer shall clearly indicate that such Records
are the sole property of the applicable Pledgor and that such Pledgor
has granted a security interest therein to the Agent on behalf of the
Company. All Contracts shall be clearly segregated from any other
documents or instruments maintained by the Master Servicer and shall be
kept in fireproof vaults or cabinets at such locations as shall be
reasonably acceptable to the Agent. The Master Servicer shall notify
the Agent of any change in location by a written notice delivered at
least 45 days prior to such change.
(d) To the extent provided for in any Contract, the Master
Servicer will use its commercially reasonable efforts to collect all
payments with respect to amounts due for taxes and assessments relating
to the related Receivables or the Equipment and remit such amounts to
the appropriate governmental authority or insurer on or prior to the
date such payments are due.
(e) The Master Servicer will use its commercially reasonable
efforts to ensure that each Obligor maintains casualty insurance
coverage with respect to the related Equipment in an amount that is
consistent with prudent leasing industry standards. Additionally, the
Master Servicer will require that each Obligor maintain third-party
liability insurance for property damage during the term of
85
91
each Contract in amounts and against risks customarily insured against
by the Obligor on equipment owned by it. Notwithstanding the preceding
two sentences, the Master Servicer, in accordance with the Credit and
Collection Policy, may not require insurance or may allow Obligors to
self-insure. If an Obligor fails to maintain casualty or property
damage liability insurance, the Master Servicer may purchase and
maintain such insurance on behalf of, and at the expense of, the
Obligor. In connection with its activities as Master Servicer the
Master Servicer agrees to present, on behalf of the Agent as agent for
the Company and the Bank Investors, claims to the insurer under each
casualty insurance policy and any such property damage liability
policy, and to settle, adjust and compromise such claims, in each case,
consistent with the terms of each such Contract. Such Master Servicer's
insurance policies with respect to the related Equipment will insure
against liability for personal injury relating to such Equipment
thereunder, will name the Seller as an insured thereunder and will
contain a breach of warranty clause.
(f) The Master Servicer will be required to pay all expenses
incurred by it in connection with its activities under this Agreement,
including fees and disbursements of the Master Servicer, independent
accountants, Taxes imposed on the Master Servicer, and expenses
incurred in connection with payments and reports pursuant to this
Agreement. The Master Servicer will be required to pay all reasonable
fees and expenses owing to any bank or trust company in connection with
the maintenance of the Lock-Box Account. The Master Servicer shall be
required to pay such expenses for its own account and shall not be
entitled to any payment therefor other than the Servicing Fee.
(g) The Master Servicer shall, as soon as practicable
following receipt thereof, turn over to the Pledgors any collections
received hereunder or under any of the other Transaction Documents of
any indebtedness of any Person which is not on account of a Receivable.
(h) If the Master Servicer is not a Pledgor or the Seller or
an Affiliate of a Pledgor or the Seller, the Master Servicer, by giving
three Business Days' prior written notice to the Agent, may revise the
percentage used to calculate the Servicing Fee so long as the revised
86
92
percentage will not result in a Servicing Fee that exceeds 110% of the
current Servicing Fee.
(i) The Master Servicer, if other than a Pledgor or the Seller
or an Affiliate of a Pledgor or the Seller, shall as soon as
practicable upon demand, deliver to the Seller all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(j) The Master Servicer will provide to the Agent, on or prior
to March 31 of each year, commencing March 31, 1999, an annual report
signed by a officer of the Master Servicer certifying that (a) a review
of the activities of the Master Servicer, and the Master Servicer's
performance pursuant to this Agreement, for the period ending on the
last day of the immediately preceding fiscal year has been made under
such Person's supervision and (b) the Master Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year and no Master
Servicer Default has occurred and is continuing (or if a Master
Servicer Default has so occurred and is continuing, specifying each
such event, the nature and status thereof and the steps necessary to
remedy such event, and, if a Master Servicer Default occurred during
such year and no notice thereof has been given to the Agent, specifying
such Master Servicer Default and the steps taken to remedy such event).
The Master Servicer will provide to the Agent, on or prior to
June 30 of each year, commencing June 30, 2000, a report of an
independent accounting firm acceptable to the Agent, which report will
be addressed to the Master Servicer and/or UniCapital Corporation and
prepared in accordance with a form of an agreed upon procedures letter
reasonably acceptable to the Agent to be delivered by the Master
Servicer and such accounting firm no later than December 31, 1999.
(k) Notwithstanding anything to the contrary contained in this
Article VI, the Master Servicer, if not the Pledgor, the Seller or any
Affiliate of a Pledgor or the Seller, shall have no obligation to
collect, enforce or take any other action described in this Article VI
with respect to any indebtedness that is not included in the Pledged
Interest other than to deliver to the Pledgors
87
93
the collections and documents with respect to any such indebtedness as
described in Section 6.2 hereof.
(l) For each Payment Date the Master Servicer shall make an
advance (a "Servicer Advance") to the Collection Account in an amount
equal to any Contract Payment on any Receivable due during the
preceding Collection Period and not received on or prior to the
Determination Date immediately preceding such Payment Date.
Notwithstanding the preceding sentence, (i) the Master Servicer shall
be required to make a Servicer Advance if, and only if, the Master
Servicer determines (such determination to be conclusive and binding)
in good faith that such Servicer Advance will be recoverable from the
payment of future collections on, or the liquidation of, the Receivable
as to which such advance is to be made, and (ii) the Master Servicer's
obligation to make a Servicer Advance for any Receivable shall cease on
the day such Receivable becomes a Defaulted Receivable. The Master
Servicer will deposit any Servicer Advances into the Collection Account
on or prior to 11:00 a.m. (New York City time) on the related Payment
Date, in immediately available funds.
SECTION VI.3 Rights After Designation of New Master Servicer. At any
time following the designation of a Master Servicer (other than a Pledgor, the
Seller or any Affiliate of a Pledgor or the Seller) pursuant to Section 6.1
hereof:
(i) The Agent may direct that payment of all amounts payable
under any Receivable be made directly to the Agent or its designee.
(ii) The Pledgors shall, at the Agent's request and at the
Pledgors' expense, give notice of the Agent's, the Pledgors' and/or the
Bank Investors' interest in the Receivables to each Obligor and direct
that payments be made directly to the Agent or its designee.
(iii) The Pledgors shall, at the Agent's request, (A) deliver
all of the Records, to the Agent or its designee at a place selected by
the Agent or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections
of Receivables in a manner acceptable to the Agent and shall, promptly
upon
88
94
receipt, remit all such cash, checks and instruments, duly endorsed or
with duly executed instruments of transfer, to the Agent or its
designee.
(iv) The Pledgors and the Master Servicer hereby authorize the
Agent to take any and all steps in the Pledgors' or the Master
Servicer's name and on behalf of the Pledgors and the Master Servicer
necessary or desirable, in the sole determination of the Agent, to
collect all amounts due under any and all Receivables, including,
without limitation, endorsing the Pledgors' or the Master Servicer's
name on checks and other instruments representing Collections and
enforcing such Receivables and the related Contracts.
SECTION VI.4 Master Servicer Default. The occurrence of any one or more
of the following events shall constitute a Master Servicer Default:
(a) (i) the Master Servicer shall fail in any material respect
to observe or perform any term, covenant or agreement hereunder (other
than as referred to in clause (ii) of this Section 6.4(a)) or under any
of the other Transaction Documents to which the Master Servicer is a
party or by which the Master Servicer is bound, and such failure shall
remain unremedied for a period of thirty (30) days after the earlier of
(x) the date it first became known to any officer of the Master
Servicer or (y) the date on which written notice thereof shall have
been given to the Master Servicer by any other party hereto, or (ii)
the Master Servicer shall fail to make any payment or deposit required
to be made by it hereunder when due, and such failure shall continue
for 48 hours; or
(b) any representation or warranty made by the Master Servicer
in this Agreement, any of the other Transaction Documents or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made and
shall not have been cured and corrected for a period of 30 days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto; or
89
95
(c) any certification or statement made by the Master Servicer
in this Agreement, in any of the other Transaction Documents or in any
certificate or report delivered by it pursuant to any of the foregoing
shall prove to have been incorrect in any material respect when made or
deemed made, and a Material Adverse Effect shall result which shall not
have been cured and corrected for a period of 30 days after the earlier
of (x) the date it first became known to any officer of the Master
Servicer or (y) the date on which written notice thereof shall have
been given to the Master Servicer by any other party hereto; or
(d) failure of the Master Servicer or any of its Subsidiaries
to pay when due any amounts due under any agreement under which any
Indebtedness greater than $5 million is governed; or the default by the
Master Servicer or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness greater than $5 million was created or is governed,
regardless of whether such event is an "event of default" or "default"
under any such agreement; or any Indebtedness of the Master Servicer or
any of its Subsidiaries greater than $5 million shall be declared to be
due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to the
Master Servicer or any of its Subsidiaries; or
(f) there shall have occurred any material adverse change in
the operations of the Master Servicer since the end of the last fiscal
year ending prior to the date of its appointment as Master Servicer
hereunder which, in the commercially reasonably judgment of the Agent,
materially and adversely affects the Master Servicer's ability to
perform under this Agreement.
SECTION VI.5 Responsibilities of the Pledgors and the Seller. Anything
herein to the contrary notwithstanding, the Pledgors shall, and/or shall cause
the Seller to, (i) perform all of their obligations under the Contracts related
to the Receivables to the same extent as if interests in such Receivables had
not been pledged hereunder and under the Receivables Purchase Agreement and the
exercise by the Agent, the Company and the Bank Investors of their rights
hereunder
90
96
and under the Receivables Purchase Agreements shall not relieve the Pledgors or
the Seller from such obligations and (ii) pay, or cause the Obligor or the
Master Servicer to pay, when due any taxes, including without limitation, any
sales taxes payable in connection with the Receivables and their creation and
satisfaction. Neither the Agent, the Company nor any of the Bank Investors shall
have any obligation or liability with respect to any Receivable or related
Contracts, nor shall it be obligated to perform any of the obligations of the
Seller thereunder.
SECTION VI.6 Limitation on Liability of the Master Servicer and Others.
Except as provided herein, neither the Master Servicer nor any of the directors
of officers or employees or agents of the Master Servicer shall be under any
liability to the Agent, the Company, the Bank Investors or any other Person for
any action taken or for refraining from the taking of any action pursuant to
this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misconduct, bad faith or negligence in the
performance of duties or by reason of its willful misconduct hereunder.
SECTION VI.7 The Master Servicer Not to Resign. The Master Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) the performance of its duties hereunder is or
becomes impermissible under applicable law and (ii) there is no reasonable
action which the Master Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced as to
clause (i) above by an opinion of legal counsel to such effect delivered to the
Agent. No such resignation shall become effective until a successor Master
Servicer shall have assumed the responsibilities and obligations of the Master
Servicer in accordance with Section 6.1.
SECTION VI.8 Acknowledgment of Guaranty. The parties hereto hereby
acknowledge that the Parent has guaranteed the performance of the Master
Servicer under this Agreement.
91
97
ARTICLE VII
TERMINATION EVENTS
SECTION VII.1 Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) a Pledgor shall fail to make any payment or deposit to be
made by it hereunder or under the Receivables Purchase Agreement when
due hereunder or thereunder; or
(b) any representation or warranty made by a Pledgor, the
Seller or an Eligible Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when
made or deemed made and shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(c) any certification or statement made by a Pledgor, the
Seller or an Eligible Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any or any certificate or report delivered by it
pursuant to any of the foregoing shall prove to have been incorrect in
any material respect when made or deemed made and a Material Adverse
Effect shall result which shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(d) a Pledgor shall default in any material respect in the
performance of any payment or undertaking (other than those covered by
clause (a) above) (i) to be performed or observed under Section
5.1(a)(vi), 5.1(h), 5.1(l), 5.2(a), (c), (d), (e) or (f) or (ii) to be
performed or observed under any other provision hereof and such failure
shall remain unremedied for a period of thirty (30) days after the
earlier of (x) the date it first became known to any officer of a
Pledgor or (y) the date on which written notice thereof shall have been
given to the a Pledgor by any other party hereto; or
92
98
(e) failure of a Pledgor to pay when due any amounts due under
any agreement to which such Person is a party and under which any
Indebtedness is governed; failure of the Parent or the Seller to pay
when due any amounts due under any agreement to which any such Person
is a party and under which any Indebtedness greater than $5,000,000 is
governed; or the default by a Pledgor, the Parent or the Seller in the
performance of any term, provision or condition contained in any
agreement to which any such Person is a party and under which any
Indebtedness owing by a Pledgor, the Parent or the Seller was created
or is governed and for which in the case of the Parent or the Seller
the amount of such Indebtedness is greater than $5,000,000; or any
Indebtedness owing by a Pledgor, the Parent or the Seller greater than
$5,000,000 shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date
of maturity thereof; or
(f) any Event of Bankruptcy shall occur with respect to a
Pledgor, Parent or the Seller; or
(g) the Agent, on behalf of the Company and the Bank
Investors, shall, for any reason, fail or cease to have a valid and
perfected first priority security interest in the Affected Assets free
and clear of any Adverse Claims (except as otherwise contemplated
herein); or
(h) a Master Servicer Default shall have occurred; or
(i) the Receivables Purchase Agreement shall have terminated;
or
(j) a Revolving Credit Facility Default shall have occurred;
or
(k) a Pledgor or the Parent shall enter into any transaction
or merger whereby it is not the surviving entity and where, in the case
of the Parent, the surviving entity is not acceptable to the Agent; or
(l) there shall have occurred any Material Adverse Effect; or
(m) at any time, the Percentage Factor is greater than the
Maximum Percentage Factor and such imbalance is not cured on or prior
to the next succeeding Payment Date; or
93
99
(n) after giving effect to any Payment Date, the Percentage
Factor is greater than the Maximum Percentage Factor;
(o) the Net Investment is greater than the Maximum Net
Investment; or
(p) at any time, the Net Asset Test is not met; or
(q) at any time following the first Take-Out, the sum of (i)
the Pool Market Value as of its date of calculation, (ii) the amount,
if any, which would be due to the Pledgors in the event that each
outstanding Hedging Agreement was terminated on such date and (iii) the
aggregate amount on deposit in the Accounts (other than the Reserve
Account) on such date is less than 102% of the sum of (1) the Net
Investment, (2) the aggregate unpaid Servicer Advances, (3) all accrued
and unpaid Carrying Costs as of such date, (4) all Hedge Payments
(including any termination payments in the event that each outstanding
Hedging Agreement was terminated on such date) due on such date and (5)
an amount equal to the positive difference, if any, between the
Specified Reserve Account Requirement as of such date and the balance
of the Reserve Account as of such date, and such deficiency shall
continue unremedied for ten (10) Business Days; or
(r) A Take-Out which reduces the Net Investment to an amount
that is 30% or less of the Net Investment immediately prior to such
Take-Out has not occurred for a period of twelve consecutive months
(the first such twelve-month period commencing as of the closing of the
1999-1 term securitization); or
(s) at any time the Receivables are not subject to Hedging
Agreements in accordance with Section 2.15, and such failure is not
cured within five Business Days of the earlier of (x) the date it first
became known to any officer of a Pledgor or (y) the date on which
written notice thereof shall have been given to the a Pledgor by any
other party hereto; or
(t) the Net Credit Loss for any calendar quarter shall exceed
3.0% on an annualized basis; or the three-month rolling average
Delinquency Ratio shall exceed 11.0%;
94
100
provided, that such Delinquency Ratio test (i) shall not be effective
through and including the expiration of the first full three Collection
Periods following each Take-Out, (ii) for the fourth full Collection
Period following each Take-Out shall be the Delinquency Ratio for such
Collection Period and (ii) for the fifth full Collection Period
following each Take-Out shall be the average of the Delinquency Ratio
for such Collection Period and the immediately preceding Collection
Period; or
(u) on the date on which the first Take-Out is consummated the
amount on deposit in the Reserve Account is less than the Specified
Reserve Account Requirement (based upon the most recent available
data), provided, that a Termination Event shall not occur under this
Section 7.1(u) if on such date the Net Investment is reduced by an
amount equal to any such deficiency in the Reserve Account.
SECTION VII.2 Termination. (a) Upon the occurrence of any Termination
Event, the Agent may, or at the direction of the Majority Investors shall, by
notice to the Pledgors and the Master Servicer declare the Termination Date to
have occurred; provided that in the case of any event described in Section
7.1(f) or 7.1(g) above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.2(a), the Base Rate plus 2.00% shall be
the Tranche Rate applicable to the Net Investment for all existing and future
Tranches.
95
101
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION VIII.1 Indemnities by the Pledgors. Without limiting any other
rights which the Agent, the Company or each Bank Investors may have hereunder or
under applicable law, each Pledgor hereby agrees to indemnify the Company, the
Bank Investors, the Agent, the Administrative Agent, the Collateral Agent, the
Liquidity Provider and the Credit Support Provider and any successors and
permitted assigns and their respective officers, directors and employees
(collectively, "Indemnified Parties") from and against any and all damages,
losses, claims, liabilities, costs and expenses, including, without limitation,
reasonable external attorneys' fees (which such attorneys may be employees of
the Liquidity Provider, the Credit Support Provider, the Agent, the
Administrative Agent or the Collateral Agent, as applicable) and disbursements
(all of the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them in any action or proceeding between a
Pledgor, the Parent or the Master Servicer (if an Affiliate of the Pledgors) and
any of the Indemnified Parties or between any of the Indemnified Parties and any
third party or otherwise arising out of or as a result of this Agreement, the
other Transaction Documents, the ownership or maintenance, either directly or
indirectly, by the Agent, the Company or any Bank Investor of the Pledged
Interest or any of the other transactions contemplated hereby or thereby;
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party, (ii)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible or uncollected Receivables or (iii) any Indemnified Amounts
relating to actions or omissions on the part of the Seller which would otherwise
constitute Indemnified Amounts. Without limiting the generality of the
foregoing, each Pledgor shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from:
(i) any representation or warranty made by the Pledgors or the
Master Servicer (if an Affiliate of the Pledgors) or any officers of
the Pledgors or the Master Servicer under or in connection with this
Agreement, the Receivables Purchase Agreement, any of the other
Transaction Documents, any Investor Report or any other information or
report delivered by the Pledgors or the Master Servicer pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
96
102
(ii) the failure by either Pledgor or the Master Servicer (if
an Affiliate of the Pledgors) to comply with any applicable law, rule
or regulation with respect to any Receivable or the related Contract,
or the nonconformity of any Receivable or the related Contract with any
such applicable law, rule or regulation;
(iii) the failure to create or maintain a valid and perfected
first priority security interest in favor of the Agent, for the benefit
of the Company and the Bank Investors, in the Affected Assets as
contemplated pursuant to Section 10.11, free and clear of any Adverse
Claim;
(iv) the failure to file, or any delay in filing, financing
statements, continuation statements, or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being the legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of
merchandise or services related to such Receivable or the furnishing or
failure to furnish such merchandise or services; provided that the
indemnification provided hereby shall not extend to credit losses on
the Affected Assets or any payment failure resulting solely from such
credit losses;
(vi) any failure of the Master Servicer (if an Affiliate of
the Pledgors) to perform its duties or obligations in accordance with
the provisions hereof; or
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with Equipment which is
the subject of any Receivable;
97
103
(viii) the transfer of an interest in any Receivable other
than an Eligible Receivable;
(ix) the failure by a Pledgor or the Master Servicer (if an
Affiliate of the Pledgors) to comply with any term, provision or
covenant contained in this Agreement or any of the other Transaction
Documents to which it is a party or to perform any of its respective
duties under the Contracts; provided that the indemnification provided
hereby shall not extend to credit losses on the Affected Assets or any
payment failure resulting solely from such credit losses;
(x) the failure of either Pledgor to pay when due any taxes,
including without limitation, sales, excise or personal property taxes
payable in connection with any of the Receivables;
(xi) any repayment by any Indemnified Party of any amount
previously distributed in reduction of Net Investment which such
Indemnified Party believes in good faith is required to be made;
(xii) the commingling by the Pledgors or the Master Servicer
(if an Affiliate of the Pledgors) of Collections of Receivables at any
time with other funds;
(xiii) any investigation, litigation or proceeding related to
this Agreement, any of the other Transaction Documents, the use of
proceeds of Advance Amounts by the Pledgors, the ownership of Pledged
Interests, or any Receivable, Related Security or Contract;
(xiv) any inability to obtain any judgment in or utilize the
court or other adjudication system of, any state in which an Obligor
may be located as a result of the failure of a Pledgor to qualify to do
business or file any notice of business activity report or any similar
report;
(xv) any failure of a Pledgor to give reasonably equivalent
value to the Seller in consideration of the purchase by the Pledgor
from the Seller of any Receivable, or any attempt by any Person to
void,
98
104
rescind or set-aside any such transfer under statutory provisions or
common law or equitable action, including, without limitation, any
provision of the Bankruptcy Code; or
(xvi) any action taken by a Pledgor or the Master Servicer (if
an Affiliate of the Pledgors) in the enforcement or collection of any
Receivable;
provided, however, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Conduit Participants, the
Company shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Pledgors and each Other Conduit
Participant; and provided, further, that if such Indemnified Amounts are
attributable to the Pledgors, the Seller or the Master Servicer and not
attributable to any Other Conduit Participant, the Pledgors shall be solely
liable for such Indemnified Amounts or if such Indemnified Amounts are
attributable to Other Conduit Participants and not attributable to the Pledgors,
the Seller or the Master Servicer, such Other Conduit Participants shall be
solely liable for such Indemnified Amounts.
SECTION VIII.2 Indemnity for Taxes, Reserves and Expenses. (a) If after
the date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax, duty or
other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interest, the Receivables or payments of
amounts due hereunder, or shall change the basis of taxation of
payments to any Indemnified Party of amounts payable in respect of this
Agreement, the other Transaction Documents, maintenance or financing of
the Pledged Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds hereunder, under the
Liquidity Provider Agreement or the credit
99
105
support furnished by the Credit Support Provider or otherwise in
respect of this Agreement, the other Transaction Documents, maintenance
or financing of the Pledged Interest or the Receivables (except for
changes in the rate of general corporate, franchise, net income or
other income tax imposed on such Indemnified Party by any jurisdiction;
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System) against assets of, deposits with or for the account of,
or credit extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interest, the Receivables or payments of
amounts due hereunder or its obligation to advance funds hereunder,
under the Liquidity Provider Agreement or the credit support provided
by the Credit Support Provider or otherwise in respect of this
Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable external attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
other Transaction Documents, the maintenance or financing of the
Pledged Interest, the Receivables or payments of amounts due hereunder
or its obligation to advance funds hereunder under the Liquidity
Provider Agreement or the credit support furnished by the Credit
Support Provider or otherwise in respect of this Agreement, the other
Transaction Documents, the maintenance or financing of the Pledged
Interests or the Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Pledged Interest, the
Receivables, the obligations hereunder,
100
106
the funding of any purchases hereunder, the Liquidity Provider Agreement or the
Credit Support Agreement, by an amount deemed by such Indemnified Party to be
material, then, within ten (10) days after written demand (including an
explanation of the basis for such demand) by such Indemnified Party through the
Agent, the Pledgors shall pay to the Agent, for the benefit of such Indemnified
Party, such additional amount or amounts as will compensate such Indemnified
Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any
change in the interpretation thereof by any Official Body, or any
directive regarding capital adequacy (in the case of any bank
regulatory guideline, whether or not having the force of law) of any
such Official Body, has or would have the effect of reducing the rate
of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or
its parent) could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Indemnified Party to be
material, then from time to time, within ten (10) days after demand by
such Indemnified Party through the Agent, the Pledgors shall pay to the
Agent, for the benefit of such Indemnified Party, such additional
amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction.
(c) The Agent will promptly notify the Pledgors of any event
of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Section
8.2. A notice (including an explanation of the basis for such demand)
by the Agent or the applicable Indemnified Party claiming compensation
under this Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Agent or any applicable
Indemnified Party may use any reasonable averaging and attributing
methods consistent with those used for similar transactions.
101
107
(d) With respect to any liability to any Indemnified Party for
any amounts under this Section 8.2 ("Section 8.2 Costs"), the Agent
agrees that it shall, upon the incurring of any Section 8.2 Costs, take
such steps as may be reasonable, and consult with the Pledgors in good
faith with a view toward agreeing to alternative arrangements, for
avoiding or mitigating (consistent with the internal policies and
governance and legal and regulatory restrictions of the applicable
Indemnified Party and without requiring the incurring of any additional
costs by, or otherwise being disadvantageous to, such party) additional
Section 8.2 Costs.
(e) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the
acquisition of interests in receivables from one or more Other Conduit
Participants, the Company shall allocate any Section 8.2 costs which
are in connection with the Liquidity Provider Agreement, the Credit
Support Agreement or the credit support provided by the Credit Support
Provider to the Pledgors and each Other Conduit Participant; provided,
however, that if such Section 8.2 Costs are attributable to the
Pledgors, the Seller or the Master Servicer and not attributable to any
Other Conduit Participant, the Pledgors shall be solely liable for such
Section 8.2 Costs or if such Section 8.2 Costs are attributable to
Other Conduit Participants and not attributable to the Pledgors, the
Seller or the Master Servicer, such Other Conduit Participants shall be
solely liable for such Section 8.2 Costs.
SECTION VIII.3 Taxes. All payments made hereunder by the Pledgors or
the Master Servicer (each, a "payor") to the Company, any Bank Investor or the
Agent (each, a "recipient") shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
any other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority on any recipient (or any assignee of
such parties) (such non-excluded items being called "Taxes"), but excluding
franchise taxes and taxes imposed on or measured by the recipient's net income
or gross receipts ("Excluded Taxes"). In the event that any withholding or
deduction from any payment made by the payor hereunder is required in respect of
any Taxes, then such payor shall:
102
108
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.
SECTION VIII.4 Other Costs, Expenses and Related Matters. (a) The
Pledgors agree, upon receipt of a written invoice, to pay and to save the
Company, the Bank Investors (subject to Section 9.9(b)) and the Agent harmless
against liability for the payment of, all reasonable out-of-pocket documented
expenses (including, without limitation, reasonable attorneys', accountants' and
other third parties' fees and reasonable expenses, any filing fees and expenses
incurred by officers or employees of the Company, the Bank Investors and/or the
Agent) or intangible, documentary or recording taxes incurred by or on behalf of
the Company, any Bank Investor and the Agent (i) in connection with the
negotiation, execution, delivery and preparation of this Agreement, the other
Transaction Documents and any documents or instruments delivered pursuant hereto
and thereto and the transactions contemplated hereby or thereby (including,
without limitation, the perfection or protection of the Pledged Interest) and
(ii) from time to time
103
109
(a) relating to any amendments, waivers or consents under this Agreement and the
other Transaction Documents, (b) arising in connection with the Company's, any
Bank Investor's, the Agent's or the Collateral Agent's enforcement or
preservation of rights (including, without limitation, the perfection and
protection of the Pledged Interest under this Agreement), or (c) arising in
connection with any audit, dispute, disagreement, litigation or preparation for
litigation involving this Agreement or any of the other Transaction Documents
(all of such amounts, collectively, "Transaction Costs").
(b) The Pledgors shall pay the Agent, for the account of the Company
and the Bank Investors, as applicable, on demand any Early Collection Fee due on
account of the reduction of a Tranche on a day prior to the last day of its
Tranche Period.
SECTION VIII.5 [Reserved.]
SECTION VIII.6 Pledgor Liability. All amounts due or required to be
paid by, and all other obligations of the Pledgors under this Article VIII shall
be joint and several obligations of the Pledgors.
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION IX.1 Authorization and Action. The Company and each Bank
Investor hereby irrevocably appoints and authorizes the Agent to act as its
agent under this Agreement and the other Transaction Documents with such powers
and discretion as are specifically delegated to the Agent by the terms of this
Agreement and the other Transaction Documents, together with such other powers
as are reasonably incidental thereto. The Agent (which term as used in this
sentence and in Section 9.5 and the first sentence of Section 9.6 hereof shall
include its affiliates and its own and its affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee or
fiduciary for the Company or any Bank Investor; (b) shall not be responsible to
the Company or any Bank Investor for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Transaction
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Transaction Document, or for the value,
validity, effectiveness,
104
110
genuineness, enforceability, or sufficiency of any Transaction Document, or any
other document referred to or provided for therein or for any failure by any of
the Pledgor, the Seller or the Master Servicer or any other Person to perform
any of its obligations thereunder; (c) shall not be responsible for or have any
duty to ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any of the Pledgors, the Seller or the Master
Servicer or the satisfaction of any condition or to inspect the property
(including the books and records) of any of the Pledgor, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Transaction Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Transaction
Document, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
SECTION IX.2 Agent's Reliance, Etc. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Pledgors, the Seller or the Master
Servicer), independent accountants, and other experts selected by the Agent. As
to any matters not expressly provided for by this Agreement, the Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Investors, and
such instructions shall be binding on the Company and all of the Bank Investors;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Transaction
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Bank Investors against any and all liability and expense
which may be incurred by it by reason of taking any such action.
SECTION IX.3 Termination Events. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Termination Event or an event which
but for the lapse of time or
105
111
the giving of notice, or both, would constitute a Termination Event, unless the
Agent has received written notice specifying such event and stating that such
notice is a "Notice of Termination Event." In the event that the Agent receives
such a notice of the occurrence of a Termination Event or potential Termination
Event, the Agent shall give prompt notice thereof to the Company. The Agent
shall (subject to Section 9.2 hereof) take such action with respect to such
Termination Event or potential Termination Event as shall reasonably be directed
by the Majority Investors, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such
Termination Event or potential Termination Event as it shall deem advisable in
the best interest of the Company and the Bank Investors.
SECTION IX.4 Rights as Bank Investor. With respect to its Commitment,
Bank of America (and any successor acting as Agent) in its capacity as a Bank
Investor hereunder shall have the same rights and powers hereunder as any other
Bank Investor and may exercise the same as though it were not acting as the
Agent, and the term "Bank Investor" or "Bank Investors" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its affiliates may (without
having to account therefor to the Company or any Bank Investor) accept deposits
from, lend money to, make investments in, provide services to, and generally
engage in any kind of lending, trust, or other business with any of the
Pledgors, the Seller and the Master Servicer or any of their Subsidiaries or
affiliates as if it were not acting as Agent, and Bank of America (and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from any of the Pledgors, the Seller and the Master Servicer or
any of their Subsidiaries or affiliates for services in connection with this
Agreement or otherwise without having to account for the same to the Company or
any Bank Investor.
SECTION IX.5 Indemnification of the Agent. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Pledgors), ratably in
accordance with their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
(including by the Company or any Bank Investor) in any way relating to or
106
112
arising out of this Agreement or any other Transaction Document or the
transactions contemplated thereby or any action taken or omitted by the Agent
under this Agreement or any other Transaction Document, provided that no Bank
Investors shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person indemnified. Without
limitation of the foregoing, the Bank Investors agree to reimburse the Agent,
ratably in accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the 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 and the
other Transaction Documents, to the extent that such expenses are incurred in
the interests of or otherwise in respect of the Bank Investors hereunder and/or
thereunder and to the extent that the Agent is not reimbursed for such expenses
by the Pledgors. The agreements contained in this Section shall survive payment
in full of the Net Investment and all other amounts payable under this
Agreement.
SECTION IX.6 Non-Reliance. The Company and each Bank Investor agrees
that it has, independently and without reliance on the Agent or the Company or
any Bank Investor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Pledgors, the Seller, the
Eligible Originators and the Master Servicer and their Subsidiaries and decision
to enter into this Agreement and that it will, independently and without
reliance upon the Agent, the Company or any Bank Investor, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under the
Transaction Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Company and the Bank
Investors by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Company with any credit or other information
concerning the affairs, financial condition, or business of any of the Pledgors,
the Seller or the Master Servicer or any of their Subsidiaries or affiliates
that may come into the possession of the Agent or any of its affiliates.
SECTION IX.7 Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Company, the Bank Investors and the Pledgors. Upon
any such resignation, the Majority Investors shall have the right to appoint a
successor
107
113
Agent. If no successor Agent shall have been so appointed by the Majority
Investors and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Company and the Bank Investors, appoint a successor Agent
which shall be a commercial bank organized under the laws of the United States
of America having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article IX shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
SECTION IX.8 Payments by the Agent. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective Assignment
and Assumption Agreements) in accordance with their respective related pro rata
interests in the Net Investment on the Business Day received by the Agent,
unless such amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to the Bank
Investors on such Business Day, but, in any event, shall pay such amounts to the
Bank Investors in accordance with their respective related pro rata interests in
the Net Investment not later than the following Business Day.
SECTION IX.9 Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect a
Pledge as requested under Section 2.2(a), then at any time, the
Pledgors shall have the right to require the Company to assign its
interest in the Net Investment in whole to the Bank Investors pursuant
to this Section 9.9. In addition, if at any time on or prior to the
Commitment Termination Date (i) a Termination Event occurs that results
in the Termination Date or (ii) the Company elects to give notice to
the Pledgors of a Reinvestment Termination Date, the Pledgors hereby
request and direct
108
114
that the Company assign its interest in the Net Investment in whole to
the Bank Investors pursuant to this Section 9.9 and the Pledgors hereby
agree jointly and severally to pay the amounts described in Section
9.9(d) below. Provided that the Net Asset Test is satisfied, upon any
such election by the Company or any such request by the Pledgors, the
Company shall make such assignment and the Bank Investors shall accept
such assignment and shall assume all of the Company's obligations
hereunder. In connection with any assignment from the Company to the
Bank Investors pursuant to this Section 9.9, each Bank Investor shall,
on the date of such assignment, pay to the Company an amount equal to
its Assignment Amount. In addition, at any time on or prior to the
Commitment Termination Date, the Pledgors shall have the right to
request funding under this Agreement directly from the Bank Investors;
provided, however, that at such time all conditions precedent set forth
herein for an Advance shall be satisfied. In connection with such
funding by the Bank Investors, the Bank Investors shall accept the
assignment of all of the Company's interest in the Net Investment and
assume all of the Company's obligations hereunder concurrently with or
prior to any such Advance. Upon any assignment by the Company to the
Bank Investors contemplated hereunder, the Company shall cease to make
any additional Pledges hereunder.
(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Net Investment, the Receivables, and Related
Security with respect thereto and its rights and obligations hereunder
to any Person unless approved in writing by the Parent (which consent
will not be unreasonably withheld), the Administrative Agent, on behalf
of the Company, and the Agent (which consent will not be unreasonably
withheld). In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment,
the Receivables and Related Security with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall
promptly execute and deliver all further instruments and documents, and
take all further action, that the assignee may reasonably request, in
order to protect, or more fully evidence the assignee's right, title
and interest in and to
109
115
such interest and to enable the Agent, on behalf of such assignee, to
exercise or enforce any rights hereunder and under the other
Transaction Documents to which such assignor is or, immediately prior
to such assignment, was a party. Upon any such assignment, (i) the
assignee shall have all of the rights and obligations of the assignor
hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party with
respect to such interest for all purposes of this Agreement and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party (it being understood
that the Bank Investors, as assignees, shall (x) be obligated to fund
Pledges under Section 2.2(a) in accordance with the terms thereof,
notwithstanding that the Company was not so obligated and (y) not have
the right to elect the commencement of the amortization of the Net
Investment pursuant to the definition of "Reinvestment Termination
Date", notwithstanding that the Company had such right) and (ii) the
assignor shall relinquish its rights with respect to such interest for
all purposes of this Agreement and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party. No such assignment shall be effective unless a
fully executed copy of the related Assignment and Assumption Agreement
shall be delivered to the Agent and the Pledgor. All Transaction Costs
incurred in connection with the initial assignment hereunder of Bank of
America's Pro Rata Share of its interests as Bank Investor shall be
borne by the Pledgors, but the costs associated with any other such
assignment by Bank Investors shall not be borne by the Pledgors. No
Bank Investor shall assign any portion of its Commitment hereunder
without also simultaneously assigning an equal portion of its interest
in the Liquidity Provider Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or
document furnished
110
116
pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value or this Agreement,
the other Transaction Documents or any such other instrument or
document; (ii) the assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Pledgor, the Seller or the Master Servicer or the performance or
observance by the Pledgor, the Seller or the Master Servicer of any of
their respective obligations under this Agreement, the Receivables
Purchase Agreement, the other Transaction Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, the Receivables
Purchase Agreement and such other instruments, documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption
Agreement and to purchase such interest; (iv) such assignee will,
independently and without reliance upon the Agent, or any of its
Affiliates, or the assignor and based on such agreements, documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement and the other Transaction Documents; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement, the other
Transaction Documents and any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Agent by the terms
hereof or thereof, together with such powers as are reasonably
incidental thereto and to enforce its respective rights and interests
in and under this Agreement, the other Transaction Documents, the
Receivables, the Contracts and the Related Security; (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the
assignee of the assignor; and (vii) such assignee agrees that it will
not institute against the Company any proceeding of the type referred
to in Section 10.9 prior to the date which is one year and one day
after the payment in full of all Commercial Paper issued by the
Company.
(d) Pledgors' Obligation to Pay Certain Amounts; Additional
Assignment Amount. The Pledgors shall pay to the Agent, for the account
of the Company, from the sources set forth in Section 2.5, in
connection with any assignment by
111
117
the Company to the Bank Investors pursuant to this Section 9.9, an
aggregate amount equal to all Discount to accrue through the end of
each outstanding Tranche Period plus all other Aggregate Unpaids (other
than the Net Investment). To the extent that such Discount relates to
interest or discount on Related Commercial Paper, if the Pledgors fail
to make payment of such amounts at or prior to the time of assignment
by the Company to the Bank Investors, such amount shall be paid by the
Bank Investors (in accordance with their respective Pro Rata Shares) to
the Company as additional consideration for the interests assigned to
the Bank Investors and the amount of the "Net Investment" hereunder
held by the Bank Investors shall be increased by an amount equal to the
additional amount so paid by the Bank Investors.
(e) Administration of Agreement After Assignment. After any
assignment by the Company to the Bank Investors pursuant to this
Section 9.9 (and the payment of all amounts owing to the Company in
connection therewith), all rights of the Administrative Agent and the
Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.9, all payments to be made
hereunder by the Pledgors or the Master Servicer to the Company shall
be made to the Agent's account as such account shall have been notified
to the Pledgors and the Master Servicer.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 9.9, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or Moody's, respectively (or such
rating shall have been withdrawn by Standard & Poor's
112
118
or Moody's), such Bank Investor, upon request of the Agent, shall,
within five Business Days of such request, assign its rights and
obligations hereunder to another financial institution (which
institution's short term debt shall be rated at least "A-2" and "P-2"
from Standard & Poor's and Moody's, respectively, and which shall not
be so rated with negative credit implications). In either such case, if
any such Bank Investor shall not have assigned its rights and
obligations under this Agreement within the applicable time period
described above, the Company shall have the right to require such Bank
Investor to accept the assignment of such Bank Investor's Pro Rata
Share of the Net Investment; such assignment shall occur in accordance
with the applicable provisions of this Section 9.9. Such Bank Investor
shall be obligated to pay to the Company, in connection with such
assignment, in addition to the Pro Rata Share of the Net Investment, an
amount equal to the interest component of the outstanding Commercial
Paper issued to fund the portion of the Net Investment being assigned
to such Bank Investor, as reasonably determined by the Agent, such
amount when paid to constitute an addition to the Net Investment held
by such Bank Investor. Notwithstanding anything contained herein to the
contrary, upon any such assignment to a downgraded Bank Investor as
contemplated pursuant to the immediately preceding sentence, the
aggregate available amount of the Facility Limit, solely as it relates
to new Pledges by the Company, shall be reduced by the amount of unused
Commitment of such downgraded Bank Investor; it being understood and
agreed, that nothing in this sentence or the two preceding sentences
shall affect or diminish in any way any such downgraded Bank Investor's
Commitment to the Pledgors or such downgraded Bank Investor's other
obligations and liabilities hereunder and under the other Transaction
Documents.
ARTICLE X
MISCELLANEOUS
SECTION X.1 Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, in each case, in cash;
provided that (i) the rights and remedies of the Agent, the Company, the
113
119
Bank Investors and the Administrative Agent with respect to any representation
and warranty made or deemed to be made by the Pledgors pursuant to this
Agreement, (ii) the indemnification and payment provisions of Article VIII, and
(iii) the agreement set forth in Section 10.9 hereof, shall be continuing and
shall survive any termination of this Agreement.
SECTION X.2 Waivers; Amendments. (a) No failure or delay on the part of
the Agent, the Company, the Administrative Agent or any Bank Investor in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any other Transaction Document
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Pledgors, the Master Servicer, the Company and the Majority
Investors (and, if Article IX or the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall, unless
signed by each Bank Investor directly affected thereby, (i) increase the
Commitment of a Bank Investor, (ii) reduce the Net Investment or rate of
interest to accrue thereon or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled distribution in respect
of the Net Investment or interest with respect thereto or any fees or other
amounts payable hereunder or for termination of any Commitment, (iv) change the
percentage of the Commitments or the number of Bank Investors, which shall be
required for the Bank Investors or any of them to take any action under this
Section or any other provision of this Agreement, (v) release all or
substantially all of the property with respect to which a security or other
interest therein has been granted hereunder to the Agent or the Bank Investors
or (vi) extend or permit the extension of the Commitment Termination Date. In
the event the Agent requests the Company's or a Bank Investor's consent pursuant
to the foregoing provisions and the Agent does not receive a consent (either
positive or negative) from the Company or such Bank Investor within 10 Business
Days of the Company's or Bank Investor's receipt of such request, then the
Company or such Bank Investor (and its percentage ownership interest hereunder)
shall be disregarded in determining whether the Agent shall have obtained
sufficient consent hereunder.
114
120
SECTION X.3 Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 10.3 and confirmation is received,
(ii) if given by mail 3 Business Days following such posting, postage prepaid,
U.S. certified or registered, (iii) if given by overnight courier, one (1)
Business Day after deposit thereof with a national overnight courier service, or
(iv) if given by any other means, when received at the address specified in this
Section 10.3. However, anything in this Section to the contrary notwithstanding,
each Pledgor hereby authorizes the Company to effect Pledges, Tranche Period and
Tranche Rate selections based on telephonic notices made by any Person which the
Company in good faith believes to be acting on behalf of the Pledgor. The
Pledgors agree to deliver promptly to the Company a written confirmation of each
telephonic notice signed by an authorized officer of Pledgor. However, the
absence of such confirmation shall not affect the validity of such notice. If
the written confirmation differs in any material respect from the action taken
by the Company, the records of the Company shall govern absent manifest error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities
Two Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(with a copy to the Administrative Agent)
If to the Qualifying Pledgor:
UCP Qualifying SPE 1998-1 Limited Partnership
Xxx Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxx, Xxxxxx 00000
115
121
with a copy to:
UCP Qualifying SPE 1998-1 Limited Partnership
c/o Xxxxxx Xxxxx
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Information:
Bank: Bank of America, N.A.
ABA No.: [111 000 012]
Account Name: UCP Qualifying SPE 1998-1
Limited Partnership
Account No.: 37510 59378
If to the Operating Pledgor:
UCP Operating SPE 1998-1 Limited Partnership
Xxx Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxx, Xxxxxx 00000
with a copy to:
UCP Operating SPE 1998-1 Limited Partnership
c/o Xxxxxx Xxxxx
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
116
122
Payment Information:
Bank: Bank of America, N.A.
ABA No.: [111 000 012]
Account Name: UCP Operating SPE 1998-1
Limited Partnership
Account No.: 37510 59378
If to the Master Servicer
UniCapital Operations Group, Inc.
0000 XX Xxxxxxxx
Xxxxxxxx, Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Seller
UniCapital Funding Corporation
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Information:
Bank of America, N.A.
ABA [111 000 012]
Account 37510 33 747
Reference UniCapital Lease Funding
If to the Collateral Agent:
Bank of America, N.A.
Bank of America Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent:
Bank of America, N.A.
Bank of America Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
117
123
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Information:
Bank of America, N.A.
ABA [000-000-000]
Account No. 10822016511
Attn.: Xxxxxxx Xxxxxxxx
If to the Administrative Agent:
Bank of America, N.A.
Bank of America Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Bank Investors, at their respective addresses set
forth on the signature pages hereto or of the Assignment and
Assumption Agreement pursuant to which it became a party
hereto.
SECTION X.4 Governing Law; Submission to Jurisdiction; Integration. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. EACH PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each Pledgor hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Nothing in this Section 10.4 shall affect
the right of the Company to bring any action or proceeding against either
Pledgor or its respective properties in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE
118
124
RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire Agreement among the parties hereto with
respect to the subject matter hereof superseding all prior oral or written
understandings.
SECTION X.5 Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION X.6 Successors and Assigns. (a) This Agreement shall be binding
on the parties hereto and their respective successors and assigns; provided,
however, that neither the Pledgors nor Master Servicer may assign any of its
rights or delegate any of its duties hereunder or under the Receivables Purchase
Agreement or under any of the other Transaction Documents to which it is a party
without the prior written consent of the Agent. No provision of this Agreement
shall in any manner restrict the ability of the Company or any Bank Investor to
assign, participate, grant security interests in, or otherwise transfer any
portion of the Pledged Interest.
(b) Without limiting the foregoing, the Company may, from time to time,
with prior or concurrent notice to the Pledgors, the Parent and the Master
Servicer, in one transaction or a series of transactions, assign all or a
portion of the Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee; provided that if such Conduit Assignee is not administered by
Bank of America, the Company shall only make such assignment if the Pledgors
consent to such assignment. Upon and to the extent of such assignment by the
Company to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of
the
119
125
assigned portion of the Net Investment, (ii) the related administrative or
managing agent for such Conduit Assignee will act as the Administrative Agent
for such Conduit Assignee, with all corresponding rights and powers, express or
implied, granted to the Administrative Agent hereunder or under the other
Transaction Documents, (iii) such Conduit Assignee and its liquidity support
provider(s) and credit support provider(s) and other related parties shall have
the benefit of all the rights and protections provided to the Company and its
Liquidity Support Provider(s) and Credit Support Provider(s), respectively,
herein and in the other Transaction Documents (including, without limitation,
any limitation on recourse against such Conduit Assignee or related parties, any
agreement not to file or join in the filing of a petition to commence an
insolvency proceeding against such Conduit Assignee, and the right to assign to
another Conduit Assignee as provided in this paragraph), (iv) such Conduit
Assignee shall assume all (or the assigned or assumed portion) of the Company's
obligations, if any, hereunder or any other Transaction Document, and the
Company shall be released from such obligations, in each case to the extent of
such assignment, and the obligations of the Company and such Conduit Assignee
shall be several and not joint, (v) all distributions in respect of the Net
Investment shall be made to the applicable agent or administrative agent, as
applicable, on behalf of the Company and such Conduit Assignee on a pro rata
basis according to their respective interests, (vi) the definition of the term
"CP Rate" with respect to the portion of the Net Investment funded with
commercial paper issued by the Company from time to time shall be determined in
the manner set forth in the definition of "CP Rate" applicable to the Company on
the basis of the interest rate or discount applicable to commercial paper issued
by such Conduit Assignee (rather than the Company), (vii) the defined terms and
other terms and provisions of this Agreement and the other Transaction Documents
shall be interpreted in accordance with the foregoing, and (viii) if requested
by the Agent or the agent or administrative agent with respect to the Conduit
Assignee, the parties will execute and deliver such further agreements and
documents and take such other actions as the Agent or such agent or
administrative agent may reasonably request to evidence and give effect to the
foregoing. No Assignment by the Company to a Conduit Assignee of all or any
portion of the Net Investment shall in any way diminish the related Bank
Investors' obligation under Section 9.9 to fund any Pledge not funded by the
Company or such Conduit Assignee or to acquire from the Company or such Conduit
Assignee all or any portion of the Net Investment.
120
126
(c) Each of the Pledgors, the Seller and the Master Servicer hereby
agrees and consents to the assignment by the Company from time to time of all or
any part of its rights under, interest in and title to this Agreement and the
Pledged Interest to any Liquidity Provider or to any Conduit Assignee as set
forth in section 10.6(b). In addition, each of the Pledgors and the Seller
hereby consents to and acknowledges the assignment by the Company of all of its
rights under, interest in and title to this Agreement and the Pledged Interest
to the Master Servicer.
SECTION X.7 Waiver of Confidentiality. Each of the Pledgors, the Seller
and the Master Servicer hereby consents to the disclosure of any non-public
information (other than the identity of the Obligors and other information
relating to the identity of the Obligors with respect to it received by the
Company, the Agent, any Bank Investor or the Administrative Agent to any of the
Company, the Agent, any nationally recognized rating agency rating the Company's
Commercial Paper (informing such agency of the highly confidential nature of
such information), the Administrative Agent, the Collateral Agent, any Bank
Investor, the Liquidity Provider or the Credit Support Provider in relation to
this Agreement. Each of the Agent, the Company and each Bank Investor agrees
that, other than as set forth in the preceding sentence, it shall not disclose
such information to any other Person except (i) its auditors and attorneys and
employees, (ii) as otherwise required by applicable law or order of a court of
competent jurisdiction or (iii) to a potential Bank Investor upon its agreement
to abide by the provisions of this Section with respect to such information.
SECTION X.8 Confidentiality Agreement. Each of the Pledgors and the
Master Servicer hereby agrees that it will not disclose the contents of this
Agreement or any other proprietary or confidential information of the Company,
the Agent, the Administrative Agent, the Collateral Agent, any Liquidity
Provider or any Bank Investor to any other Person except (i) its auditors and
attorneys, employees or financial advisors (other than any commercial bank) and
any nationally recognized rating agency, provided such auditors, attorneys,
employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information or (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction.
121
127
SECTION X.9 No Bankruptcy Petition Against the Company. Each of the
Pledgors, the Master Servicer and the Seller hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
SECTION X.10 No Recourse Against Stockholders, Officers or Directors.
No recourse under any obligation, covenant or agreement of the Company contained
in this Agreement shall be had against Xxxxxxx Xxxxx Money Markets Inc. (or any
affiliate thereof), or any stockholder, officer or director of the Company, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the Company,
and that no personal liability whatsoever shall attach to or be incurred by
Xxxxxxx Xxxxx Money Markets Inc. (or any affiliate thereof), or the
stockholders, officers or directors of the buyer, as such, or any of them, under
or by reason of any of the obligations, covenants or agreements of the Company
contained in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by the Company of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or constitution, of
Xxxxxxx Xxxxx Money Markets Inc. (or any affiliate thereof) and every such
stockholder, officer or director of the Company is hereby expressly waived as a
condition of and consideration for the execution of this Agreement.
SECTION X.11 Characterization of the Transactions Contemplated by the
Agreement. It is the intention of the parties that this Agreement grants a
security interest in the Receivables, together with the Related Security with
respect thereto to secure payment of the amounts financed hereunder.
Accordingly, each Pledgor hereby grants to the Agent, on behalf of the Company
and the Bank Investors, a first priority perfected and continuing security
interest in all of such Pledgor's right, title and interest in, to and under the
Receivables, together with all Related Security with respect thereto, and
together with all of the Pledgor's rights under the Receivables Purchase
Agreement with respect to the Receivables and with respect to any obligations
thereunder of the Seller or any Eligible Originator
122
128
with respect to the Receivables, and that this Agreement shall constitute a
security agreement under applicable law. The Pledgors hereby assign to the
Agent, on behalf of the Company and the Bank Investors, all of their rights and
remedies under the Receivables Purchase Agreement with respect to the
Receivables and with respect to any obligations thereunder of the Seller or any
Eligible Originator with respect to the Receivables. The Pledgors, the Company,
the Agent and the Bank Investors acknowledge that the arrangement created
pursuant to this Agreement is a financing, and not a sale of Pledged Interest,
for Federal, state and local tax purposes, and agree to act for all purposes
hereof in accordance with the foregoing.
SECTION X.12 Term Securitization Amendments. Upon the request of the
Agent (which may be made in the Agent's discretion) or upon the request of the
Operating Pledgor and the consent of the Agent and the Majority Investors (which
consent shall not be unreasonably withheld), within 60 days following the
closing by Parent or any of its Subsidiaries of a term securitization involving
the Receivables and/or lease receivables similar to the Receivables, each of the
parties hereto agrees to execute an amendment to this Agreement which modifies
the definitions of "Eligible Receivable," "Advance Percentage" and/or "Specified
Reserve Account Requirement," in each case, to reflect the related eligibility
and enhancement criteria for such term securitization.
123
129
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amended and Restated Transfer and Administration Agreement as of the date first
written above.
KITTY HAWK FUNDING CORPORATION,
as Company
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
UCP QUALIFYING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Manager
UCP OPERATING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Manager
UNICAPITAL OPERATIONS GROUP, INC.,
as Master Servicer
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
130
Commitment: BANK OF AMERICA, N.A., as Agent
and a Bank Investor
$333,333,333 until
10/1/99 and $225,000,000
from and after 10/1/99
By: /s/ Xxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC.
as a Bank Investor
$66,666,667 until
10/1/99 and $75,000,000
from and after 10/1/99
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
131
EXHIBIT A
FORM OF NOTICE OF
CHANGE IN FACILITY LIMIT
[Date]
Bank of America, N.A.
Bank of America Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Dear Xx. Xxxxx:
Reference is made to the Amended and Restated Transfer and
Administration Agreement dated as of August 16, 1999 (such agreement as amended,
modified or supplemented from time to time, the "Agreement") among UCP
Qualifying SPE 1998-1 Limited Partnership, as Pledgor (in such capacity, the
"Qualifying Pledgor"), UCP Operating SPE 1998-1 Limited Partnership, as Pledgor
(in such capacity, the "Operating Lease Pledgor" and, collectively with the
Qualifying Pledgor, the "Pledgors"), UniCapital Operations Group, Inc.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), Bank of America, N.A., as agent for the Company and
the Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and
each other bank that is a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
Pursuant to the Agreement, the undersigned hereby request that the
Facility Limit be [increased][decreased] from $__________ to $_______________,
concurrently with an equivalent [decrease][increase] in the facility limit under
the Finance Facility Agreement. A separate request under that facility is being
made concurrently herewith. The undersigned request that such change be
effective as of [date], which is at least three Business Days from the date of
delivery hereof.
A-1
132
UCP QUALIFYING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
UCP OPERATING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
Confirmed and Accepted as of this
___ day of _______, ____
BANK OF AMERICA, N.A., as Agent
By:
-------------------------------
Name:
Title:
A-2
133
EXHIBIT B
CREDIT POLICY MANUAL AND CREDIT POLICY PROCEDURE MEMORANDA
Each of the Parent's Credit Policy Manual and Credit Policy and
Procedure Memoranda were delivered by the Pledgors in July 1999 to the
Agent and the receipt of which has been separately acknowledged by the
Agent.
B-1
134
EXHIBIT C
[Reserved.]
C-1
135
EXHIBIT D
[Reserved.]
D-1
136
EXHIBIT E
FORM OF INVESTOR REPORT
E-1
137
EXHIBIT F
FORM OF PLEDGE CERTIFICATE
Bank of America, N.A.
Bank of America Xxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx - Structured Finance
Reference is made to the Amended and Restated Transfer and
Administration Agreement dated as of August 16, 1999 (such agreement as amended,
modified or supplemented from time to time, the "Agreement") among UCP
Qualifying SPE 1998-1 Limited Partnership, as Pledgor (in such capacity, the
"Qualifying Pledgor"), UCP Operating SPE 1998-1 Limited Partnership, as Pledgor
(in such capacity, the "Operating Lease Pledgor" and, collectively with the
Qualifying Pledgor, the "Pledgors"), UniCapital Operations Group, Inc.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), Bank of America, N.A., as agent for the Company and
the Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and
each other bank that is a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
The Pledgors, pursuant to Section 2.3(a) of the Agreement, hereby
request that the Company make an advance to it pursuant to the following
instructions:
Borrowing Date:
-----------------------------------------------------------------
Borrowing request is made to: [Company] [Bank Investors]
Advance Amount:
-----------------------------------------------------------------
Tranche Period(s):
--------------------------------------------------------------
Account to be credited: [bank name]
--------------------------------
ABA No.
-------------------------------------------------------
Account No.
-------------------------------------------------------
Reference No.
-------------------------------------------------------
F-1
138
Please credit the above-mentioned account by 11:00 a.m. (New York City
time) on the Borrowing Date.
The Pledgors hereby certify as of the date hereof that $__________ is
available for additional Pledges based on the following calculation:
$__________ (Maximum Net Investment)
minus $__________ (Net Investment)
===========
$__________ (amount available for borrowing)
As of the date of the related borrowing, the Pledgors jointly and
severally pledge and assign to the Agent, on behalf of the Company and the Bank
Investors, as applicable, all of each Pledgor's respective right, title and
interest in, to and under the Receivables set forth on the Contract Schedule
hereto and made a part hereof (each, a "Pledge"), which such Pledges are further
described in Section 2.2(a) of the Agreement. Each Pledge by the Pledgors to the
Agent and each reduction or increase in the Net Investment in respect of each
Pledge evidenced hereby shall be indicated by the Agent on the grid attached
hereto as Annex 1, and which grid will be part of this Pledge Certificate.
The Pledgors hereby certify that as of the date hereof (a) the
conditions precedent pursuant to Section 4.1(b) of the Agreement have been
satisfied, (b) the representations and warranties made in Section 3.1 of the
Agreement are true and correct both immediately before and immediately after
giving effect to a borrowing pursuant to Section 2.2 and (c) no Event of Default
exists.
This Pledge Certificate is made without recourse except as otherwise
provided in the Agreement.
This Pledge Certificate shall be governed by, and construed in
accordance with, the laws of the State of New York.
F-2
139
This Pledge Certificate may be executed by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of the signature page to this
Pledge Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Pledge Certificate.
F-3
140
IN WITNESS WHEREOF, the undersigned has caused this Pledge Certificate
to be duly executed and delivered by its duly authorized officer as of the date
first above written.
UCP QUALIFYING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
UCP OPERATING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
Dated:
----------------------------
F-4
141
SCHEDULE I TO EXHIBIT F
CONTRACT SCHEDULE
[Spread Sheet to be attached]
F-5
142
ANNEX 1 TO EXHIBIT F
GRID
Date of Pledge:
Amount of Pledge:
Increase in Net Investment (Giving effect to Pledge):
Decrease in Net Investment (Giving effect to Pledge):
F-6
143
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Amended and Restated Transfer and
Administration Agreement dated as of August 16, 1999 (such agreement as amended,
modified or supplemented from time to time, the "Agreement") among UCP
Qualifying SPE 1998-1 Limited Partnership, as Pledgor (in such capacity, the
"Qualifying Pledgor"), UCP Operating SPE 1998-1 Limited Partnership, as Pledgor
(in such capacity, the "Operating Lease Pledgor" and, collectively with the
Qualifying Pledgor, the "Pledgors"), UniCapital Operations Group, Inc.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), Bank of America, N.A., as agent for the Company and
the Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and
each other bank that is a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
___________________ (the "Assignor") and _____________________ (the "Assignee")
agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee,
without recourse and without representation and warranty, and the
Assignee hereby purchases and assumes from the Assignor, that interest
in and to all of the Assignor's rights and obligations under the
Agreement and the other Transaction Documents, as of the date hereof.
Such interest is expressed as a percentage of all rights and
obligations of the Bank Investors being equal to the percentage
equivalent of a fraction the numerator of which is $________, and the
denominator of which is $________ the current Facility Limit. After
giving effect to such sale and assignment, the Assignee's Commitment
will be as set forth on the signature page hereto.
(b) [In consideration of the payment of $___________, being
___% of the existing Net Investment, and of $___________, being ___% of
the aggregate unpaid accrued Discount, receipt of which payment is
hereby acknowledged, the Assignor hereby assigns to the Agent for the
account of the Assignee, and the Assignee hereby purchases from the
G-1
144
Assignor, a ___% interest in and to all of the Assignor's right, title
and interest in and to the Net Investment purchased by the undersigned
on _______________, 1998 under the Agreement.][INCLUDE IF AN EXISTING
NET INVESTMENT IS BEING ASSIGNED.]
(c) The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or the Receivables,
any other Transaction Document or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any of the Pledgors, [the Master Servicer], the Agent or
the Seller or the performance or observance by any of the Pledgors,
[the Master Servicer], the Agent or the Seller of any of their
respective obligations under the Agreement, any other Transaction
Document, or any instrument or document furnished pursuant thereto.
(d) The Assignee (i) confirms that it has received a copy of
the Agreement, the related Receivables Purchase Agreement, the Secured
Note, the Facility Fee Letter and the Fee Letter, together with copies
of the financial statements referred to in Section 5.1 of the
Agreement, to the extent delivered through the date of this Agreement,
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this
Assignment and Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Agent, any of its
Affiliates, the Assignor or any other [Bank Investor], and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under the Agreement and/or any other Transaction Document; (iii)
appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Agreement
and/or the other Transaction Documents as are delegated to the Agent by
the terms
G-2
145
thereof, together with such powers and discretion as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Agreement
are required to be performed by it as a [Bank Investor]; and (vi)
specifies as its address for notices and its account for payments the
office and account set forth beneath its name on the signature pages
hereof[; and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the
Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the
Assignee under the Agreement or such other documents as are necessary
to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty]. [The Assignee also covenants with
each of the Agent and the Master Servicer that the Assignee will not
make a public offering of the interest being assigned to and accepted
by it hereby, and will not reoffer or resell such interest, in a manner
that would render the issuance and sale of such interest, whether
considered together with the resale or otherwise, a violation of the
Securities Act of 1933 or any state securities or "Blue Sky" laws or
require registration pursuant thereto.]
(e) The effective date for this Assignment and Assumption
Agreement shall be the later of (i) the date on which the Agent
receives this Assignment executed by the parties hereto and receives
the consent of [the Pledgors and] the Administrative Agent, on behalf
of the Company, and (ii) the date of this Assignment and Assumption
Agreement (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement and the consent of [the Pledgors
and] the Administrative Agent, on behalf of the Company, this
Assignment and Assumption Agreement will be delivered to the Agent for
acceptance and recording.
(f) Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Assumption Agreement,
shall have the rights and obligations of a Bank Investor thereunder;
and (ii) the Assignor shall, to the extent provided in this Assignment
and Assumption Agreement, relinquish its rights and be released from
its obligations under the Agreement.
G-3
146
(g) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make, or cause to be made, all payments
under the Agreement in respect of the interest assigned hereby
(including, without limitation, all payments in respect of such
interest in Net Investment, Discount and fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Agreement for periods prior to the Effective Date
directly between themselves.
(h) This Assignment and Assumption Agreement shall be governed
by, and construed in accordance with, the laws of the State of New
York.
(i) This Assignment and Assumption Agreement may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of the
signature page to this Assignment by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
G-4
147
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the ____ day of June , 1998.
Remaining [NAME OF ASSIGNOR]
Commitment
$ By:
------------- -------------------------------------------
Title:
Commitment [NAME OF ASSIGNEE]
$ By:
------------- -------------------------------------------
Title:
[Address]
Address for notices
[Account]
Account for payments:
Consented to this __ day
of _________, 1998
BANK OF AMERICA, N.A., as
Administrative Agent
By:
-------------------------------
Name:
Title:
BANK OF AMERICA, N.A.,
as Agent
By:
-------------------------------
Name:
Title:
G-5
148
EXHIBIT H
LIST OF ACTIONS AND SUITS
None.
H-1
149
EXHIBIT I
LOCATION OF RECORDS
UniCapital Operations Group, Inc.
0000 XX Xxxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
(Or in a third-party offsite storage facility in Portland, Oregon (e.g. Iron
Mountain)
K.L.C., Inc. (Keystone) - with respect to Receivables for which it is Eligible
Originator
000 Xxx Xxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxx
I-1
150
EXHIBIT J
LIST OF SUBSIDIARIES AND TRADENAMES
None.
J-1
151
EXHIBIT K
[Reserved.]
K-1
152
EXHIBIT L-1
FORM OF OFFICER'S CERTIFICATE OF QUALIFYING PLEDGOR
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, which is the general partner of UCP QUALIFYING SPE 1998-1
LIMITED PARTNERSHIP (the "Partnership"), a Nevada limited partnership, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-1-1
153
WITNESS my hand as of this ____ day of ________, 1998.
-----------------------------------------
Name:
Title:
I, the undersigned, __________________ of UniCapital Funding
Corporation, DO HEREBY CERTIFY that _____________________ is the duly elected
and qualified ___________________ of UniCapital Funding Corporation and the
signature above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-----------------------------------------
Name:
Title:
X-0-0
000
XXXXXXX X-0
FORM OF OFFICER'S CERTIFICATE OF OPERATING PLEDGOR
I, __________________, the undersigned ______________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, which is the general partner of UCP OPERATING SPE 1998-1
LIMITED PARTNERSHIP (the "Partnership"), a Nevada limited liability partnership,
DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-2-1
155
WITNESS my hand as of this ____ day of ________, 1998.
-----------------------------------------
Name:
Title:
I, the undersigned, of UniCapital Funding Corporation, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
_____________ of UniCapital Funding Corporation and the signature above is
his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-----------------------------------------
Name:
Title:
X-0-0
000
XXXXXXX X-0
FORM OF OFFICER'S CERTIFICATE OF SELLER
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation (the "Company"), a Delaware corporation, DO
HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of June 9, 1998 and June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
--------------------------
--------------------------
--------------------------
--------------------------
L-3-1
157
WITNESS my hand as of this ____ day of ________, 1998.
-----------------------------------------
Name:
Title:
I, the undersigned, ___________________ of UniCapital Funding
Corporation, DO HEREBY CERTIFY that _____________________ is the duly elected
and qualified ______________ of UniCapital Funding Corporation and the signature
above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-----------------------------------------
Name:
Title:
X-0-0
000
XXXXXXX X-0
FORM OF OFFICER'S CERTIFICATE OF THE GENERAL PARTNER
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, a Delaware limited liability company (the "Company"), DO
HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Articles of Organization of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Operating Agreement of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member adopted as of June 19, 1998, authorizing
the execution, delivery and performance of each of the documents mentioned
therein, which resolutions have not been revoked, modified, amended or rescinded
and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as the Managers of the Company and the signatures below set
opposite their names are their genuine signatures:
Name Signature
Xxxxx X. Xxxxx --------------------------
Xxxxxx X. Xxxxx --------------------------
Xxxxxxx X. Xxxxxx --------------------------
Xxxxxx X. Xxxxxxxx --------------------------
Xxxxxxxxxxx X. Xxxx --------------------------
L-4-1
159
WITNESS my hand as of this ____ day of ________, 1998.
By:
-----------------------------------------
Name:
Title:
I, the undersigned, ___________________ of the Company, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
______________ of the Company and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
By:
-----------------------------------------
Name:
Title:
X-0-0
000
XXXXXXX X-0
FORM OF OFFICER'S CERTIFICATE OF THE PARENT
I, __________________, the undersigned __________________ of
UniCapital Corporation (the "Company"), a Delaware corporation, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of May 24, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
--------------------------
--------------------------
--------------------------
--------------------------
L-5-1
161
WITNESS my hand as of this ____ day of ________, 1998.
-----------------------------------------
Name:
Title:
I, the undersigned, ___________________ of UniCapital Corporation, DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
______________ of UniCapital Corporation and the signature above is his/her
genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-----------------------------------------
Name:
Title:
X-0-0
000
XXXXXXX X-0
FORM OF OFFICER'S CERTIFICATE OF THE MASTER SERVICER
I, __________________, the undersigned ______________ of PFSC
Acquisition Corp., the general partner of UNICAPITAL OPERATIONS GROUP, INC. (the
"Company"), a Delaware Corporation, DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of the By-Laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Company adopted by consent as of [_________],
199[_], which resolutions have not been revoked, modified, amended or rescinded
and are still in full force and effect.
L-6-1
163
WITNESS my hand as of this ____ day of ________, 1998.
-----------------------------------------
Name:
Title:
I, the undersigned, __________________ of PFSC Acquisition Corp., DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
___________ of PFSC Acquisition Corp. and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
-----------------------------------------
Name:
Title:
L-6-2
164
EXHIBIT M
FORM OF SECURED NOTE
THIS NOTE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED EXCEPT IN ACCORDANCE WITH THE AMENDED AND RESTATED
TRANSFER AND ADMINISTRATION AGREEMENT REFERRED TO HEREIN. THIS NOTE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER ANY STATE SECURITIES LAWS AND NO TRANSFER HEREOF MAY BE MADE EXCEPT IN
ACCORDANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED AND ANY OTHER APPLICABLE
LAWS.
$[ ]
-------------
[Date]
This Note is secured solely by a pool of equipment lease and contract
receivables generated from time to time in the ordinary course of business by
UniCapital Funding Corporation (the "Seller") and acquired by UCP Qualifying SPE
1998-1 Limited Partnership and UCP Operating SPE 1998-1 Limited Partnership
(together, the "Pledgors") as further set forth in the Agreement (as defined
below).
(By way of clarification, this Note does not represent any interest (equity or
otherwise) in either of the Pledgors)
FOR VALUE RECEIVED, the Pledgors promise to pay to Bank of America,
N.A., on behalf of and as agent for Kitty Hawk Funding Corporation (the "Buyer")
and the Bank Investors (as defined in the Agreement) the principal sum of
$225,000,000 (Two hundred and twenty-five million dollars) or such other amount
as shall represent the outstanding Net Investment together with all other
Aggregate Unpaids, at the times and on the dates and all as more fully provided
in the Amended and Restated Transfer and Administration Agreement dated as of
August 16, 1999 among the Seller, the Buyer, each of the Pledgors, UniCapital
Operations Group, Inc., individually and as master servicer, Bank of America,
N.A. as agent for the Company and the Bank Investors, and certain financial
institutions that are a party thereto in the capacity of a Bank Investor (such
agreement as amended, supplemented or modified from time to time, the
"Agreement").
M-1
165
The Receivables consist of all receivables generated under the Contracts from
time to time hereafter, all monies due or to become due in payment of the
Receivables and the other assets and interests as provided in the Agreement.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned to such terms in the Agreement. This Note is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the holder hereof by virtue of
the acceptance hereof assents and by which the holder hereof is bound. In the
event of any inconsistency or conflict between the terms of this Note and the
terms of the Agreement, the terms of the Agreement shall prevail.
This Note is secured by the Receivables and Related Security, including
the right to receive Collections and other amounts at the times and in the
amounts specified in the Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of New York. This Note is issued
pursuant to, and is entitled to the benefits of, the Agreement.
M-2
166
IN WITNESS WHEREOF, the Pledgors have caused this Note to be duly
executed.
UCP QUALIFYING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
UCP OPERATING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:
-------------------------------------------
Name:
Title:
M-3
167
EXHIBIT N
ELIGIBLE ORIGINATORS
1. American Capital Resources, Inc.
2. Boulder Capital Group, Inc.
3. Jacom Computer Services, Inc.
4. K.L.C., Inc. (Keystone)
5. Merrimac Financial Associates
6. Varilease Corp.
7. Xxxxxx Asset Group, Inc.
8. Matrix Funding Corporation
9. HLC Financial, Inc.
10. Saddleback Financial Corporation
11. SFC Capital Group Corporation
12. The Xxxxxxx Companies, Inc.(d/b/a BSB Leasing)
N-1
168
EXHIBIT O
EXCEPTIONS TO BALLOON PAYMENT ELIGIBILITY REQUIREMENTS
Attached.
