Exhibt 99.1
Execution Copy
VARIABLE FUNDING LOAN AGREEMENT
[Three Pillars]
dated as of February 4, 2005
among
THREE PILLARS FUNDING LLC,
the Lender,
MID-STATE TRUST xiv,
the Borrower,
WACHOVIA BANK, NATIONAL ASSOCIATION,
the Custodian/Collateral Agent,
SUNTRUST CAPITAL MARKETS, INC.,
as the Agent, the Administrative Trustee and SunTrust Bank, as a Bank Investor
TABLE OF CONTENTS
PAGE
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ARTICLE 1
GENERAL
Section 1.1. Certain Defined Terms .........................................2
Section 1.2. Other Terms ...................................................2
Section 1.3. Computation of Time Periods ...................................2
ARTICLE 2
AMOUNT AND TERMS OF COMMITMENT
Section 2.1. Revolving Credit Facility .....................................3
Section 2.2. Loan Requests .................................................3
Section 2.3. Determination of Discount and Rate Periods ....................5
Section 2.4. Payment of Principal, Interest and Other Amounts ..............7
Section 2.5. Breach of Representation or Warranty ..........................8
Section 2.6. Mandatory and Optional Prepayments ............................8
Section 2.7. Proceeds ......................................................9
Section 2.8. Pledged Accounts ..............................................9
Section 2.9. Payments and Computations, Etc ...............................10
Section 2.10. Reports ......................................................10
Section 2.11. Sharing of Payments, Etc .....................................10
Section 2.12. Right of Setoff ..............................................11
Section 2.13. Assignment by Lender to Bank Investors .......................11
Section 2.14. Downgrade of Bank Investor ...................................12
Section 2.15. Non-Renewing Bank Investors ..................................14
Section 2.16. Commitment Renewal Request ...................................15
Section 2.17. Interest Rate Protection Agreements ..........................16
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Borrower ...............16
Section 3.2. Reaffirmation of Representations and Warranties
by the Borrower ..............................................18
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.1. Conditions to Effectiveness ..................................18
Section 4.2. Conditions to Each Loan ......................................20
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ARTICLE 5
COVENANTS
Section 5.1. Affirmative Covenants of Borrower ............................22
Section 5.2. Negative Covenants of Borrower ...............................25
ARTICLE 6
EVENTS OF DEFAULT AND FACILITY TERMINATION EVENTS
Section 6.1. Events of Default ............................................27
Section 6.2. Facility Termination Events ..................................28
Section 6.3. Remedies .....................................................29
ARTICLE 7
INDEMNIFICATION; EXPENSES; RELATED MATTERS
Section 7.1. Indemnities by the Borrower ..................................29
Section 7.2. Indemnity for Taxes, Reserves and Expenses ...................31
Section 7.3. Taxes ........................................................34
Section 7.4. Other Costs and Expenses; Breakage Costs .....................37
Section 7.5. Payment ......................................................38
ARTICLE 8
MISCELLANEOUS
Section 8.1. Term of Agreement ............................................38
Section 8.2. Waivers; Amendments ..........................................38
Section 8.3. Notices ......................................................39
Section 8.4. Governing Law; Submission to Jurisdiction; Integration .......41
Section 8.5. Severability; Counterparts ...................................42
Section 8.6. Successors and Assigns .......................................42
Section 8.7. Waiver of Confidentiality ....................................43
Section 8.8. Confidentiality Agreement ....................................44
Section 8.9. Liability of Owner Trustee ...................................44
Section 8.10. No Bankruptcy Petition Against the Lender ....................44
Section 8.11. No Recourse Against Lender ...................................45
Section 8.12. Assignment by Lender to Conduit Assignee .....................45
Section 8.13. Assignment by Lender to Program Support Provider .............46
ARTICLE 9
THE AGENT
Section 9.1. Appointment and Authorization of Agent .......................46
Section 9.2. Delegation of Duties .........................................46
Section 9.3. Liability of Agent ...........................................47
Section 9.4. Reliance by Agent ............................................47
Section 9.5. Notice of Potential Event of Default, Event of Default
Facility, Termination Event or Servicer Default ..............48
ii
Section 9.6. Credit Decision; Disclosure of Information by the Agent ......48
Section 9.7. Indemnification of the Agent .................................49
Section 9.8. Agent in Individual Capacity .................................49
Section 9.9. Resignation of Agent .........................................49
Section 9.10. Payments by the Agent ........................................50
Section 9.11. Notification by Agent ........................................50
Exhibit A - Form of Variable Funding Note ..................................A-1
Exhibit B - Form of Borrowing Request ......................................B-1
Exhibit C - Form of Borrower's Counsel Opinion .............................C-1
Exhibit D - Form of Assignment and Assumption Agreement ....................D-1
iii
VARIABLE FUNDING LOAN AGREEMENT
[THREE PILLARS]
VARIABLE FUNDING LOAN AGREEMENT (this "Loan Agreement"), dated as of
February 4, 2005, by and among THREE PILLARS FUNDING LLC, a Delaware limited
liability company (together with its successors and assigns, the "Lender"),
MID-STATE TRUST XIV, a Delaware statutory trust, as borrower (the "Borrower"),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
custodian and collateral agent (the "Collateral Agent") and SUNTRUST CAPITAL
MARKETS, INC., a Tennessee corporation, as agent and administrative trustee (in
such capacities, the "Agent" and "Administrative Trustee"), and SUNTRUST BANK,
as a bank investor (in such capacity, a "Bank Investor").
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has been established pursuant to the Trust
Agreement dated as of February 3, 2005, as amended or modified from time to
time;
WHEREAS, on the Closing Date, and from time to time pursuant to the
Depositor Account Transfer Agreement, dated as of the date hereof, as amended or
restated from time to time (the "DAT Agreement"), Xxx Xxxxxx Homes, Inc. (the
"Originator") and the Eligible Originators party thereto have agreed to convey
certain Accounts to Mid-State Homes, Inc. (the "Depositor"), and the Depositor,
pursuant to the Borrower Account Transfer Agreement dated as of the date hereof,
as amended or restated from to time (the "BAT Agreement"), has agreed to convey
certain Accounts to the Borrower;
WHEREAS, pursuant to the Custodian/Collateral Agent Agreement, dated as
of the date hereof (the "CCA Agreement"), and as collateral security for its
obligations under this Loan Agreement and the Variable Funding Note, the
Borrower has agreed to assign all Accounts purchased by it, all of its rights
under the DAT Agreement, the BAT Agreement, the Master Servicing Agreement, the
Back-up Servicing Agreement and the Subservicing Agreement, and all of its
right, title, interest in and to certain bank accounts and certain other
collateral, and to deliver any notes evidencing indebtedness and certain other
documents related to the Accounts, to the Collateral Agent for the benefit of
the Secured Parties and to take such other steps as set forth in the CCA
Agreement to create and perfect a first lien in all such rights in favor of the
Collateral Agent, for the benefit of the Secured Parties;
WHEREAS, the Borrower has requested that the Lender and/or Bank
Investors make Loans to the Borrower, from time to time, which will be secured
by the Collateral described above and evidenced by a Variable Funding Note, the
proceeds of which will be used to purchase the Accounts; and
WHEREAS, subject to the terms and conditions set forth herein, the Bank
Investors are willing to make the Loans to the Borrower:
NOW, THEREFORE, in consideration of the mutual benefits to be derived
and the representations and warranties, conditions and promises herein
contained, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
ARTICLE 1
GENERAL
Section 1.1 Certain Defined Terms. Capitalized terms used in this
Loan Agreement shall have the meanings given such terms in Annex A hereto,
unless otherwise defined herein.
Section 1.2 Other Terms. All terms defined directly or by
incorporation herein shall have the defined meanings when used in any
certificate or other document delivered pursuant thereto unless otherwise
defined therein. For purposes of this Loan Agreement and all such certificates
and other documents, unless the context otherwise requires: (a) accounting terms
not otherwise defined herein, and accounting terms partly defined herein to the
extent not defined, shall have the respective meanings given to them under, and
shall be construed in accordance with, GAAP; (b) 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; (c) references to any amount as on deposit
or outstanding on any particular date means such amount at the close of business
on such day; (d) the words "hereof", "herein" and "hereunder" and words of
similar import refer to this Loan Agreement (or other document in which they are
used) as a whole and not to any particular provision of this Loan Agreement (or
such certificate or document); (e) references to any Section, Schedule, Annex or
Exhibit are references to Sections, Schedules, Annexes and Exhibits in or to
this Loan Agreement (or the certificate or other document in which the reference
is made) and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (f) the
term "including" means "including without limitation"; (g) references to any Law
refer to that Law as amended from time to time and include any successor Law;
(h) references to any agreement refer to that agreement as from time to time
amended or supplemented or as the terms of such agreement are waived or modified
in accordance with its terms; (i) references to any Person include that Person's
successors and permitted assigns; and (j) headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 1.3 Computation of Time Periods. Unless otherwise stated in this
Loan Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
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ARTICLE 2
AMOUNT AND TERMS OF COMMITMENT
Section 2.1 Revolving Credit Facility.
(a) Subject to the terms and conditions hereof, on the
Closing Date, and thereafter from time to time until the Facility Termination
Date, upon the request of the Borrower in accordance with Section 2.2 hereof,
the Lender may, in its sole discretion, or the Bank Investors shall, make loans
to the Borrower (each, a "Loan") from time to time as permitted by this Loan
Agreement in an aggregate amount outstanding at any time not to exceed the
Maximum Net Investment; provided, however, that in no event shall the Lender or
any Bank Investor make any Loan if, after giving effect to such Loan, either (a)
the Net Investment would exceed the Maximum Net Investment or (b) a Borrowing
Base Deficiency would exist.
(b) Variable Funding Note. The Loans shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A hereto
(the "VFN" or "Variable Funding Note"), payable to the order of the Agent for
the account of the Lender or Bank Investors, as applicable. The Agent shall
record the date and amount of each Loan made and the date and amount of each
payment of principal thereof, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded. The VFN shall (a)
be dated the date hereof, (b) be stated to mature on the Scheduled Termination
Date, and (c) provide for the payment of principal, interest and fees in
accordance with Section 2.4 and Section 2.6 hereof.
Section 2.2 Loan Requests.
(a) Notice. Prior to the Facility Termination Date, the
Borrower may request Loans on any Business Day by delivering to the Agent
irrevocable notice of each borrowing via facsimile in the form of Exhibit B
hereto (a "Borrowing Request") by 12:00 Noon (New York City time) (i) on the
related Determination Date with respect to Loans to be made on a Remittance
Date, (ii) at least one (1) Business Day prior to the proposed Loan Date with
respect to any Loan which is to be made on any other Loan Date and for which the
related Borrowing Request specifies the CP Rate as the desired Rate Type and
(iii) at least three (3) Business Days prior to the proposed Loan Date with
respect to any Loan which is to be made on any other Loan Date and for which the
related Borrowing Request specifies either the Offshore Rate or the Base Rate as
the desired Rate Type or for which such Borrowing Request is delivered when any
Tranche accruing Discount at either such Rate Type has a Rate Period that has
not yet then expired. The Borrowing Request shall specify (a) the proposed date
for such Loan (the "Loan Date"); (b) the amount of the Loan requested, which
shall be at least $1,000,000 (and integral multiples of $100,000 in excess
thereof); provided; however, that from and after the Interest Rate Protection
Date, the amount of each Loan shall be the greater of (i) $1,000,000 (and
integral multiples of $100,000 in excess thereof) and (ii) the minimum amount,
if any, required under the Interest Rate Protection Agreement; provided, that to
the extent that the then available unused portion of the Maximum Net Investment
is less than such amount, such lesser amount equal to such available unused
portion of the Maximum Net Investment, (c) the desired Rate Period and Rate Type
related thereto pursuant to Section 2.3 and (d) whether the request is to the
Lender or the Bank Investors. Each Borrowing Request shall be irrevocable and
binding on the Borrower
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and the Borrower shall indemnify the Lender, the Bank Investors and the Agent
against any loss, cost or expense incurred by the Lender, any Bank Investor or
the Agent, either directly or through any Program Support Agreement, as a result
of any failure by the Borrower to complete such borrowing, including, without
limitation, any loss, cost or expense incurred by the Lender, the Bank Investors
or the Agent, either directly or through any Program Support Agreement, by
reason of the liquidation or reemployment of funds acquired by the Lender, the
Bank Investors, the Agent or the Program Support Provider (including, without
limitation, funds obtained by issuing commercial paper or promissory notes or
obtaining deposits as loans from third parties) for the Lender to fund such
borrowing.
(b) Lender Acceptance or Rejection. The Agent will promptly
notify the Lender of the Agent's receipt of any Borrowing Request. If the
Borrowing Request is received prior to the Lender Investment Termination Date,
the Lender, in its sole discretion, shall instruct the Agent to accept or reject
such Borrowing Request by notice given to the Borrower and the Agent by
telephone or facsimile by no later than the close of business on the Business
Day the Lender receives any such Borrowing Request.
(c) Bank Investor's Commitment. At no time will the Lender
have any obligation to fund a Loan. Subject to the conditions set forth herein,
at all times on and after the Lender Investment Termination Date and prior to
the Facility Termination Date, all Loans shall be made by the Bank Investors. At
any time when the Lender has rejected a request for a Loan, the Agent shall so
notify the Bank Investors and the Bank Investors shall make such Loan, on a pro
rata basis, in accordance with their respective Pro Rata Shares. Notwithstanding
anything contained in this Section 2.2(c) or elsewhere in this Loan Agreement to
the contrary, no Bank Investor (including in its capacity as a Program Support
Provider pursuant to the Program Support Agreement to which it is a party) shall
be obligated to provide the Borrower with funds in connection with the Net
Investment in an amount that would result in the portion of the Net Investment
then funded by it exceeding the dollar amount of its Commitment then in effect.
The obligation of each Bank Investor to remit its Pro Rata Share of any such
Loan 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 Lender shall not
relieve any other Bank Investor of its obligation hereunder.
(d) Payment of Loans. On any Loan Date, the Lender or each
Bank Investor, as the case may be, shall remit its share of the aggregate amount
of such Loan (determined pursuant to Section 2.2(b) and (c) hereof) to the
account of the Agent specified therefor from time to time by the Agent by notice
to such Persons by wire transfer of same day funds. Following the Agent's
receipt of funds from the Lender or Bank Investors as aforesaid, the Agent shall
remit such funds received to the Borrower's account at the location indicated in
Section 8.3 by wire transfer of same day funds.
(e) Defaulting Bank Investor. If, by 2:00 p.m. (New York
City time) on any Loan Date, one or more Bank Investors (each, a "Defaulting
Bank Investor", and each Bank Investor other than any Defaulting Bank Investor
being referred to as a "Non-Defaulting Bank Investor") fails to make its Pro
Rata Share of any Loan available to the Agent pursuant to Section 2.2(d) or any
Assignment Amount payable by it pursuant to Section 2.13(a) (the aggregate
amount not so made available to the Agent being herein called in either case the
"Loan
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Deficit"), then the Agent shall, by no later than 2:30 p.m. (New York City
time) on the applicable Loan Date or the applicable Assignment Date, as the case
may be, instruct each Non-Defaulting Bank Investor to pay, by no later than 3:00
p.m. (New York City time), in immediately available funds, to the account
designated by the Agent, an amount equal to the lesser of (i) such
Non-Defaulting Bank Investor's proportionate share (based upon the relative
Commitments of the Non-Defaulting Bank Investors) of the Loan Deficit and (ii)
its unused Commitment. A Defaulting Bank Investor shall forthwith, upon demand,
pay to the Agent for the ratable benefit of the Non-Defaulting Bank Investors
all amounts paid by each Non-Defaulting Bank Investor on behalf of such
Defaulting Bank Investor, together with interest thereon, for each day from the
date a payment was made by a Non-Defaulting Bank Investor until the date such
Non-Defaulting Bank Investor has been paid such amounts in full, at a rate per
annum equal to the sum of the Base Rate, plus 2.00% per annum. In addition, if,
after giving effect to the provisions of the immediately preceding sentence, any
Loan Deficit with respect to any Assignment Amount continues to exist, each such
Defaulting Bank Investor shall pay interest to the Agent, for the account of the
Lender, on such Defaulting Bank Investor's portion of such remaining Investment
Deficit, at a rate per annum, equal to the sum of the Base Rate, plus 2.00% per
annum, for each day from the applicable Assignment Date until the date such
Defaulting Bank Investor shall pay its portion of such remaining Loan Deficit in
full to the Lender.
Section 2.3 Determination of Discount and Rate Periods.
(a) Tranches.
(i) The Net Investment shall be allocated to
tranches (each a "Tranche") having Rate Periods
and accruing Discount at the Rate Types
specified and determined in accordance with this
Section 2.3. At any time, each Tranche shall
have only one Rate Period and one Rate Type. In
addition, at any time when the Net Investment is
not divided into more than one portion,
"Tranche" means 100% of the Net Investment.
(ii) The Borrower shall give the Agent irrevocable
notice by telephone of each requested Rate
Period and Rate Type by 12:00 Noon (New York
City time) (i) at least one (1) Business Day
prior to the requested Loan Date or the
expiration of any then existing Rate Period, as
applicable, with respect to any Loan or Tranche
for which the Borrower specifies the CP Rate as
the desired Rate Type and (ii) at least three
(3) Business Days prior to the requested Loan
Date or the expiration of any then existing Rate
Period, as applicable, with respect to any Loan
or Tranche for which the Borrower specifies
either the Offshore Rate or the Base Rate as the
desired Rate Type or for which such notice is
delivered when any Tranche accruing Discount at
either such Rate Type has a Rate Period that has
not yet then expired, provided, however, that
the Agent may select, in its sole discretion,
any such Rate Period or Rate Type if (i) the
Borrower fails to provide such notice on a
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timely basis or (ii) the Agent determines, in
its sole reasonable discretion, that the Rate
Period or Rate Type requested by the Borrower is
unavailable or for any reason commercially
undesirable to the Lender, the Agent, the
Administrative Trustee or the Bank Investors.
(iii) The Lender confirms that its intention to
allocate all or substantially all of the Net
Investment held on its behalf to one or more
Rate Periods with respect to which the Discount
applicable thereto is calculated by reference to
the CP Rate; provided that the Agent may
determine, from time to time, in its sole
discretion, that funding such Net Investment by
means of one or more such Rate Periods or Rate
Types is not possible or is not desirable for
any reason.
(b) Net Investment funded pursuant to Program Support
Agreement. Each Rate Period applicable to any Tranche funded pursuant to a
Program Support Agreement shall be a period, selected by the Agent, and Discount
with respect thereto shall be calculated by reference to the Alternate Rate.
(c) Offshore Rate Protection; Illegality.
(i) If the Agent is unable to obtain on a timely
basis the information necessary to determine the
Offshore Rate for any proposed Rate Period, then
(A) the Agent shall forthwith notify the Lender or
the Bank Investors, as applicable, and the Borrower that the
Offshore Rate cannot be determined for such Rate Period, and
(B) while such circumstances exist, the Agent shall
not allocate any Tranches with respect to Loans made during such
period or reallocate any Tranches allocated to any then existing
Rate Period ending during such period, to a Rate Period with
respect to which Discount is calculated by reference to the
Offshore Rate. Discount related to any such Tranches shall be
calculated according to the Base Rate while such circumstances
exist.
(ii) If, with respect to any outstanding Rate Period,
the Lender or any of the Bank Investors on
behalf of which the Agent holds any Tranche
notifies the Agent that it is unable to obtain
matching deposits in the London interbank market
to fund its purchase or maintenance of such
Tranche or that the Offshore Rate applicable to
such Tranche will not adequately reflect the
cost to the Person of funding or maintaining
such Tranche for such Rate Period, then (A) the
Agent shall forthwith so notify the Borrower,
the Lender and the Bank Investors and (B) upon
such notice and thereafter while such
circumstances exist, the Agent shall not
allocate any
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other Tranche with respect to Investments made
during such period or reallocate any Tranche
allocated to any Rate Period ending during such
period, to a Rate Period with respect to which
Discount is calculated by reference to the
Offshore Rate. Discount related to any such
Tranches shall be calculated according to the
Base Rate while such circumstances exist.
(iii) Notwithstanding any other provision of this Loan
Agreement, if the Lender or any of the Bank
Investors, as applicable, shall notify the Agent
that such Person has determined (or has been
notified by any Program Support Provider) that
the introduction of or any change in or in the
interpretation of any Law makes it unlawful
(either for the Lender, such Bank Investor, or
such Program Support Provider, as applicable),
or any central bank or other Governmental
Authority asserts that it is unlawful, for the
Lender, such Bank Investor or such Program
Support Provider, as applicable, to fund or
maintain any Tranche accruing Discount
calculated by reference to the Offshore Rate,
then (A) as of the effective date of such notice
from such Person to the Agent, the obligation or
ability of the Lender or such Bank Investor, as
applicable, to fund the making or maintenance of
any Tranche accruing Discount calculated by
reference to the Offshore Rate shall be
suspended until such Person notifies the Agent
that the circumstances causing such suspension
no longer exist and (B) each Tranche made or
maintained by such Person shall either (1) if
such Person may lawfully continue to maintain
such Tranche accruing Discount calculated by
reference to the Offshore Rate until the last
day of the applicable Rate Period, be
reallocated on the last day of such Rate Period
to another Rate Period and shall accrue Discount
calculated by reference to the Base Rate or (2)
if such Person shall determine that it may not
lawfully continue to maintain such Tranche
accruing Discount calculated by reference to the
Offshore Rate until the end of the applicable
Rate Period, such Person's share of such Tranche
allocated to such Rate Period shall be deemed to
accrue Discount at the Base Rate from the
effective date of such notice until the end of
such Rate Period.
Section 2.4. Payment of Principal, Interest and Other Amounts.
The Borrower will duly and punctually pay or cause to be paid amounts
due in respect of principal and interest on the VFN in accordance with the terms
of this Loan Agreement, the Fee Letter, the VFN and the CCA Agreement. Without
limiting the foregoing, the Borrower will cause to be delivered to the
Collateral Agent all amounts on deposit in the Holding Account when and as
required by the Master Servicing Agreement for application as provided in the
CCA Agreement. The Borrower shall also pay or cause to be paid all other amounts
payable by or on behalf of the Borrower pursuant to this Loan Agreement, the Fee
Letter, the VFN and the CCA
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Agreement to the parties entitled thereto in accordance with the terms hereof
and in the manner and order of priority provided in the CCA Agreement.
Section 2.5. Breach of Representation or Warranty. If on any day any
of the representations or warranties with respect to eligibility set forth in
Section 3.1(j) hereof was or becomes untrue with respect to an Account (whether
on or after the date of the pledge thereof to the Collateral Agent, for the
benefit of the Secured Parties), the Borrower shall be deemed to have received
on such day a Collection of such Account in full and the Borrower shall on such
day pay to the Master Servicer from funds other than actual Available
Collections (other than actual Collections otherwise distributable to the
Borrower under Section 4.1(d) of the CCA Agreement) an amount equal to the
unpaid balance of such Account and such amount shall be allocated and applied by
as a Collection in accordance with Article II of the Master Servicing Agreement
and the CCA Agreement.
Section 2.6. Mandatory and Optional Prepayments.
(a) On each Remittance Date following the Facility
Termination Date, Available Collections shall be applied to reduce the Net
Investment in accordance with Section 4.1(d)(vii) of the CCA Agreement.
(b) Prior to the Facility Termination Date, upon the
occurrence of a Borrowing Base Deficiency, the Borrower shall either: (i) within
three (3) Business Days (the "Deficiency Cure Period") deliver or cause to be
delivered additional Eligible Accounts to the Collateral Agent or deposit or
cause to be deposited cash into the Principal Payment Account, in either case,
in an amount (based, in the case of Eligible Accounts, on the lesser of the APB
and AMV thereof on the date of delivery, as determined by the Agent) at least
equal to such Borrowing Base Deficiency or (ii) in the event that the Borrowing
Base Deficiency arises as a result of the determination of Market Value pursuant
to clause (ii) of the definition thereof, at the Borrower's option either (A)
follow the procedures set forth in clause (i) of this Section 2.6(b) or (B) may
employ the procedures set forth in the definition of Market Value, and upon a
final determination of Market Value as contemplated therein, to the extent that
a Borrowing Base Deficiency still exists after using the final determination of
Market Value, then, the Borrower shall follow the procedures set forth in clause
(i) of this Section 2.6(b); provided that in such event, the Deficiency Cure
Period shall be fifteen (15) Business Days following the occurrence of a
Borrowing Base Deficiency. Funds deposited in the Principal Payment Account
shall be applied to the reduction of the Net Investment in the manner and
subject to the priority of payments provided in Section 4.1(c) of the CCA
Agreement. Any cash deposited by the Borrower pursuant to this Section 2.6(b)
shall be made from funds other than Available Collections otherwise
distributable to the Borrower pursuant to Section 4.1(d) of the CCA Agreement,
which may be used by the Borrower for such purpose.
(c) The Borrower shall have the right on any date, upon
written notice to the Agent not later than two (2) Business Days prior to such
date, to deposit into the Principal Payment Account prepayments of principal on
the VFN. Any such prepayment (i) shall be at least $1,000,000 and integral
multiples of $100,000 in excess thereof and (ii) shall be made from funds other
than Available Collections, except for Available Collections otherwise
distributable
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to the Borrower pursuant to Section 4.1(d) of the CCA Agreement, which may be
used by the Borrower for such purpose.
(d) The Agent agrees that amounts paid to the Agent from
amounts deposited in the Principal Payment Account pursuant to the provisions of
the CCA Agreement shall be applied to repay: (i) maturing Tranches, Related
Liquidity Draw or Related Credit Support Disbursements as they mature or (ii)
upon the Borrower's request, with the approval of the Agent, in its sole
discretion (except with respect to amounts deposited prior to the Facility
Termination Date pursuant to Section 2.6(c) hereof as to which no such approval
shall be required), any other Tranche; provided that the Borrower shall pay any
costs incurred in connection with such repayment in accordance with Section
7.4(b) and (c) hereof. The Net Investment shall be reduced by any amounts
withdrawn and paid to or at the direction of the Agent from the Principal
Payment Account.
(e) The entire principal balance of the VFN shall be due and
payable on the Stated Maturity Date together with all accrued and unpaid
interest thereon.
Section 2.7. Proceeds. The proceeds of the Loans shall be used by
the Borrower solely to purchase Accounts and to pay other amounts expressly
permitted under the terms and conditions of the Operative Documents.
Section 2.8. Pledged Accounts.
(a) The Collateral Agent shall establish, on or prior to the
Closing Date, an Eligible Bank Account (No. 1076026223) at the Collateral Agent
in the name of the Collateral Agent (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Secured Parties.
(b) The Collateral Agent shall establish, on or prior to the
Closing Date, an Eligible Bank Account (No. 1076026232) at the Collateral Agent
in the name of the Collateral Agent (the "Reserve Account") bearing a
designation clearly indicating that the funds deposited therein are for the
benefit of the Secured Parties.
(c) The Collateral Agent shall establish, on or prior to the
Closing Day, an Eligible Bank Account (No. 1076026296) at the Collateral Agent
in the name of the Collateral Agent (the "Holding Account") bearing a
designation clearly indicating that the funds deposited therein are for the
benefit of the Secured Parties.
(d) The Collateral Agent shall establish, on or prior to the
Closing Date, an Eligible Bank Account (No. 1076026303) at the Agent in the name
of the Lender (the "Principal Payment Account") bearing a designation clearly
indicating that the funds deposited therein are for the benefit of the Secured
Parties.
(e) If at any time the Collection Account, the Reserve
Account, the Principal Payment Account or the Holding Account shall no longer be
an Eligible Bank Account, then the Borrower shall, within ten (10) Business Days
(or such longer period, not to exceed thirty (30) calendar days, as to which the
Controlling Party shall consent), cause such account and the funds on deposit
therein to be moved so that such account shall be an Eligible Bank Account. The
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Borrower shall immediately notify the Agent of the new location and account
number of such account. For purposes of this Loan Agreement, the term "Eligible
Bank Account" shall mean, if such bank account does not meet the requirements of
paragraphs (a) and (b) of such definition, a bank account otherwise acceptable
to the Controlling Party.
Section 2.9. Payments and Computations, Etc.
(a) On the second Business Day preceding a Determination
Date relating to a Loan Date, the Borrower shall request from the Agent, and the
Agent shall provide to the Borrower, the Market Discount Rate applicable to the
related Loan Date. On any other date on which the Agent requests the Borrower to
determine the Market Value of the Eligible Accounts, the Agent shall provide the
Market Discount Rate applicable to such date to the Borrower. On each
Determination Date, the Borrower shall calculate and deliver to the Agent the
APB, AMV and the Borrowing Base (each, a "Borrowing Base Report"), using in the
case of the AMV, the Market Discount Rate supplied by the Agent. Neither the
Lender, any Bank Investor nor the Agent shall be bound by any calculation of the
APB, the AMV or the Borrowing Base by the Borrower.
(b) All amounts to be paid or deposited by the Borrower
hereunder or under the CCA Agreement shall be paid or deposited in accordance
with the terms hereof or thereof no later than 11:00 a.m. (New York City time)
on the day when due in immediately available funds, payable to the Agent, on
behalf of the Lender or the Bank Investors, as applicable. Such payment shall be
paid or deposited in the account indicated under the heading "Payment
Information" in Section 8.3, until otherwise notified by the Agent. The Borrower
shall, to the extent permitted by Law, pay to the Agent, for the benefit of the
Lender or Bank Investors, as applicable, upon demand, interest on all amounts
not paid or deposited when due hereunder ("Default Interest") at a rate equal to
2.00% per annum, plus the Base Rate (the "Default Rate"). Default Interest shall
be paid in accordance with Section 4.1(d) of the CCA Agreement. All computations
of Discount 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 Borrower hereunder shall be binding upon the Borrower absent
manifest error.
Section 2.10. Reports. On each Determination Date, the Borrower shall
cause the Master Servicer to provide to the Agent (a) the Master Servicing
Certificate for the related Collection Period, (b) a Schedule of Accounts with
respect to all Accounts owned by the Borrower and (c) such other information as
the Agent may reasonably request.
Section 2.11. Sharing of Payments, Etc. If the Lender 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 the portion of the Net Investment funded
or maintained by it (other than pursuant to the Fee Letter, Section 2.15(b) or
Article VII and other than as a result of the differences in the timing of the
applications of Available Collections) in excess of its ratable share of
payments on account of the Net Investment obtained by the Recipient entitled
thereto, such Recipient shall forthwith purchase from the Lender or Bank
Investors entitled to a share of such amount participations in the portions of
the Net Investment funded or maintained by such Persons as shall be necessary to
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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 Recipient) of any interest or other amount paid or payable by the
Recipient in respect of the total amount so recovered.
Section 2.12. Right of Setoff. Without in any way limiting the
provisions of Section 2.11, each of the Agent, the Lender and each Bank Investor
is hereby authorized (in addition to any other rights it may have) at any time
after the occurrence of the Facility Termination Date due to the occurrence of
an Event of Default or Facility Termination Event or during the continuance of a
Potential Event of Default, Event of Default, Potential Facility Termination
Event or Facility Termination Event 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 Agent, the Lender
or such Bank Investor to, or for the account of, the Borrower. The Agent shall
cause any amounts so set-off to be deposited in the Collection Account, for
application by the Collateral Agent in accordance with Section 4.1(d) of the CCA
Agreement.
Section 2.13. Assignment by Lender to Bank Investors.
(a) Assignment Amounts. At any time on or prior to the
Scheduled Termination Date, if the Administrative Trustee on behalf of the
Lender so elects, by written notice to the Agent, the Borrower hereby
irrevocably requests and directs that the Lender assign, and the Lender does
hereby assign, effective on the Assignment Date referred to below, all or such
portions as may be elected by the Lender of its interest in the Net Investment
at such time to the Bank Investors pursuant to this Section 2.13 and the
Borrower hereby agrees to pay the amounts described in this Section 2.13;
provided, however, that unless such assignment is an assignment of all of the
Lender's interest in the Net Investment in whole on or after the Lender
Investment Termination Date, no such assignment shall take place pursuant to
this Section 2.13 if a Borrowing Base Deficiency shall then exist; and provided,
further, that no such assignment shall take place pursuant to this Section 2.13
at a time when an Event of Bankruptcy with respect to the Lender exists. No
further documentation or action on the part of the Lender or the Borrower shall
be required to exercise the rights set forth in the immediately preceding
sentence, other than the giving of the notice by the Administrative Trustee on
behalf of the Lender referred to in such sentence and the delivery by the Agent
of a copy of such notice to each Bank Investor (the date of the receipt by the
Agent of any such notice being the "Assignment Date"). Each Bank Investor hereby
agrees, unconditionally and irrevocably and under all circumstances, without
setoff, counterclaim or defense of any kind, to pay the full amount of its
Assignment Amount on such Assignment Date to the Lender in immediately available
funds to an account designated by the Agent. Upon payment of its Assignment
Amount, each Bank Investor shall acquire an interest in the Net Investment equal
to its pro rata share (based on the outstanding portions of the Net Investment
funded by it). Upon any assignment in whole by the Lender to the Bank Investors
on or after the Lender Investment Termination Date as contemplated hereunder,
the Lender shall cease to make any additional Loans hereunder. At all times
prior to the Lender
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Investment Termination Date, nothing herein shall prevent the Lender from making
a subsequent Loan hereunder, in its sole discretion, following any assignment
pursuant to this Section 2.13 or from making more than one assignment pursuant
to this Section 2.13.
(b) Bank Investor's Obligation to Pay Certain Amounts;
Additional Assignment Amount. The Bank Investors shall pay to the Agent, in
accordance with their Pro Rata Shares, for the account of the Lender, in
connection with any assignment by the Lender to the Bank Investors pursuant to
this Section 2.13 an aggregate amount equal to all Discount to accrue through
the end of each outstanding Rate Period to the extent attributable to the
portion of the Net Investment so assigned to the Bank Investors (as determined
immediately prior to giving effect to such assignment), plus all other Aggregate
Unpaids (other than the Net Investment and other than any Discount not described
above). Such amounts shall be 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.
(c) Administration of Agreement after Assignment from Lender
to Bank Investors following the Lender Investment Termination Date. After any
assignment in whole by the Lender to the Bank Investors pursuant to this Section
2.13 at any time on or after the Lender Investment Termination Date (and the
payment of all amounts owing to the Lender in connection therewith), all rights
of the Administrative Trustee set forth herein shall be given to the Agent on
behalf of the Bank Investors instead of the Administrative Trustee.
(d) Recovery of Net Investment. In the event that the
aggregate of the Assignment Amounts paid by the Bank Investors pursuant to this
Section 2.13 on any Assignment Date occurring on or after the Lender Investment
Termination Date is less than the Net Investment of the Lender on such
Assignment Date, then to the extent of amounts received by the Agent in respect
of the Net Investment in accordance with Section 4.1(d) of the CCA Agreement
exceed the aggregate of the unrecovered Assignment Amounts and Net Investment
funded by the Bank Investors, such excess shall be remitted by the Agent to the
Lender rather than to such Bank Investors.
Section 2.14. Downgrade of Bank Investor.
(a) Downgrades Generally. If at any time on or prior to the
Scheduled Termination Date, the short term debt rating of any Bank Investor
shall be "A-1" or "P-1" from S&P or Xxxxx'x, respectively, with negative credit
implications, such Bank Investor, upon request of the Agent, shall, within
thirty (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-1" or "P-1" from S&P or Xxxxx'x, respectively, and which shall
not be so rated with negative credit implications and which is acceptable to the
Lender, the Agent and the Borrower (in the Borrower's case, in its reasonable
discretion)). If the short term debt rating of an Bank Investor shall be "A-2"
or "P-2", or lower, from S&P or Xxxxx'x, respectively (or such rating shall have
been withdrawn by S&P or Xxxxx'x), such Bank Investor, upon request of the
Agent, shall, within five (5) 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-1" or "P-1", from S&P or Xxxxx'x,
respectively, and which shall not be so rated with
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negative credit implications and which is acceptable to the Lender, the Agent
and the Borrower (in the Borrower's case, in its reasonable discretion)). 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 (in either such case, the "Required Downgrade Assignment Period"), the
Administrative Trustee on behalf of the Lender shall have the right to require
such Bank Investor to pay upon one (1) Business Day's notice at any time after
the Required Downgrade Assignment Period (and each such Bank Investor hereby
agrees in such event to pay within such time) to the Agent an amount equal to
such Bank Investor's unused Commitment (a "Downgrade Draw") for deposit by the
Agent into an account, in the name of the Agent (a "Downgrade Collateral
Account"), which shall be in satisfaction of such Bank Investor's obligations to
make Loans and to pay its Assignment Amount upon an assignment from the Lender
in accordance with Section 2.13; provided, however, that if, during the Required
Downgrade Assignment Period, such Bank Investor delivers a written notice to the
Agent of its intent to deliver a direct pay irrevocable letter of credit
pursuant to this proviso in lieu of the payment required to fund the Downgrade
Draw, then such Bank Investor will not be required to fund such Downgrade Draw.
If any Bank Investor gives the Agent such notice, then such Bank Investor shall,
within one (1) Business Day after the Required Downgrade Assignment Period,
deliver to the Agent a direct pay irrevocable letter of credit in favor of the
Agent in an amount equal to the unused portion of such Bank Investor's
Commitment, which letter of credit shall be issued through an United States
office of a bank or other financial institution (i) whose short-term debt
ratings by S&P and Xxxxx'x are at least equal to the ratings assigned by such
statistical rating organization to the Commercial Paper and (ii) that is
acceptable to the Lender and the Agent. Such letter of credit shall provide that
the Agent may draw thereon for payment of any Loan or Assignment Amount payable
by such Bank Investor which is not paid hereunder when required, shall expire no
earlier than the Scheduled Termination Date and shall otherwise be in form and
substance acceptable to the Agent.
(b) Application of Funds in Downgrade Collateral Account. If
any Bank Investor shall be required pursuant to Section 2.14(a) to fund a
Downgrade Draw, then the Agent shall apply the monies in the Downgrade
Collateral Account applicable to such Bank Investor's Pro Rata Share of Loans
required to be made by the Bank Investors, to any Assignment Amount payable by
such Bank Investor pursuant to Section 2.13 and to any purchase price payable by
such Bank Investor pursuant to Section 2.15(b) at the times, in the manner and
subject to the conditions precedent set forth in this Loan Agreement. The
deposit of monies in such Downgrade Collateral Account by any Bank Investor
shall not constitute a Loan or the payment of any Assignment Amount (and such
Bank Investor shall not be entitled to interest on such monies except as
provided below in this Section 2.14, unless and until (and then only to the
extent that) such monies are used to fund Investments or to pay any Assignment
Amount or purchase price pursuant to Section 2.15(b) pursuant to the first
sentence of this Section 2.14. The amount on deposit in such Downgrade
Collateral Account shall be invested by the Agent in Eligible Investments and
such Eligible Investments shall be selected by the Agent in its sole discretion.
The Agent shall remit to such Bank Investor, on the last Business Day of each
month, the income actually received thereon. Unless required to be released as
provided below in this subsection, Available Collections received by the Agent
in respect of such Bank Investor's portion of the Net Investment shall be
deposited in the Downgrade Collateral Account for such Bank Investor. Amounts on
deposit in such Downgrade Collateral Account shall be released to such Bank
Investor (or the stated amount of the letter of credit delivered by such Bank
Investor
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pursuant to subsection (a) above may be reduced) within one (1) Business Day
after each Remittance Date following the Facility Termination Date to the extent
that, after giving effect to the distributions made and received by the Lender
or Bank Investors on such Remittance Date, the amount on deposit in such
Downgrade Collateral Account would exceed such Bank Investor's Pro Rata Share
(determined as of the day prior to the Facility Termination Date) of the sum of
all Tranches then funded by the Lender, plus the Interest Component. All amounts
remaining in such Downgrade Collateral Account shall be released to such Bank
Investor no later than the Business Day immediately following the earliest of
(i) the effective date of any replacement of such Bank Investor or removal of
such Bank Investor as a party to this Loan Agreement, (ii) the date on which
such Bank Investor shall furnish the Agent with confirmation that such Bank
Investor shall have short-term debt ratings of at least "A-1" or "P-1" from S&P
and Xxxxx'x, respectively, without negative credit implications, and (iii) the
Scheduled Termination Date (or if earlier, the Scheduled Termination Date in
effect prior to any renewal pursuant to Section 2.15 to which such Bank Investor
does not consent, but only after giving effect to any required purchase pursuant
to Section 2.15(b)). Nothing in this Section 2.14 shall affect or diminish in
any way any such downgraded Bank Investor's Commitment to the Borrower or the
Lender or such downgraded Bank Investor's other obligations and liabilities
hereunder and under the other Operative Documents.
(c) Program Support Agreement Downgrade Provisions.
Notwithstanding the other provisions of this Section 2.14, a Bank Investor shall
not be required to make a Downgrade Draw (or provide for the issuance of a
letter of credit in lieu thereof) pursuant to Section 2.14(a) at a time when
such Bank Investor has a downgrade collateral account (or letter of credit in
lieu thereof) established pursuant to the Program Support Agreement to which it
is a party in an amount at least equal to its Commitment, and the Agent may
apply monies in such downgrade collateral account in the manner described in
Section 2.15(b) as if such downgrade collateral account were a Downgrade
Collateral Account.
Section 2.15. Non-Renewing Bank Investors.
(a) If at any time the Borrower requests that the Bank
Investors renew their Commitments hereunder and some but less than all the Bank
Investors consent to such renewal within thirty (30) days of the Borrower's
request, but in any event, no later than twenty (20) days prior to the then
current Scheduled Termination Date, the Borrower may arrange for an assignment
to one or more financial institutions of all the rights and obligations
hereunder of each such non-consenting Bank Investor in accordance with Section
8.6. Any such assignment shall become effective on the then-current Scheduled
Termination Date. Each Bank Investor which does not so consent to any renewal
shall cooperate fully with the Borrower in effectuating any such assignment. If
none or less than all the Commitments of the non-renewing Bank Investors are so
assigned as provided above the Agent shall so notify the Borrower, and the
Borrower shall notify the Agent if it desires to extend the then current
Scheduled Termination Date. In the event the Borrower and the Agent each elects
to extend the then current Scheduled Termination Date, (i) the extended
Scheduled Termination Date shall be effective with respect to the renewing Bank
Investors, (ii) the Facility Limit shall automatically be reduced to an amount
(rounded up to the nearest $1,000) equal to the excess of the Facility Limit
then in effect over the lesser of (A) the aggregate of the Commitments of all
non-renewing Bank Investors and (B) the product of (x) the Facility Limit, minus
the Net Investment, multiplied by (y) 1.02, and (iii) this
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Loan Agreement and the Commitments of the renewing Bank Investors shall remain
in effect in accordance with their terms notwithstanding the expiration of the
Commitments of the non-renewing Bank Investors.
(b) If at any time the Borrower requests that the Bank
Investors extend the Scheduled Termination Date hereunder and some but less than
all the Bank Investors consent to such extension within thirty (30) days after
the Borrower's request (but in any event, no later than twenty (20) days prior
to the then Scheduled Termination Date), and if none or less than all the
Commitments of the non-renewing Bank Investors are assigned as provided in
Section 2.15 and the Borrower and the Agent each has elected to extend the then
current Scheduled Termination Date, then (without limiting the obligations of
all the Bank Investors to make Loans and pay any Assignment Amount prior to the
Scheduled Termination Date in accordance with the terms hereof) the Lender may
sell an interest in the Net Investment hereunder for an aggregate purchase price
equal to the lesser of (i) the maximum aggregate Assignment Amounts which would
be payable if the Lender assigned its entire interest in the Net Investment at
that time under Section 2.13, and (ii) the aggregate available Commitments of
the non-renewing Bank Investors, which purchase price shall be paid solely by
the non-renewing Bank Investors, pro rata according to their respective
Commitments. Following the payment of such purchase price, (i) the extended
Scheduled Termination Date shall be effective with respect to the renewing Bank
Investors, (ii) the Facility Limit shall automatically be reduced by the
aggregate of the Commitments of all non-renewing Bank Investors, and (iii) this
Loan Agreement and the Commitments of the renewing Bank Investors shall remain
in effect in accordance with their terms notwithstanding the expiration of the
Commitments of the non-renewing Bank Investors. Prior to the Facility
Termination Date, all amounts which, under Section 4.1 of the CCA Agreement are
to be paid to the Agent and applied in reduction of the Net Investment, up to
the aggregate Net Investment sold to the non-renewing Bank Investors as
described above in this subsection, shall be distributed to the non-renewing
Bank Investors ratably according to the aggregate Net Investment held by them,
in reduction of their respective portions of Net Investment. On and after the
Facility Termination Date, each non-renewing Bank Investor shall be entitled to
receive distributions as provided in Section 4.1 of the CCA Agreement based on
its pro rata share of the Net Investment. When (after the expiration of the
Commitments of the non-renewing Bank Investors) the aggregate of the Net
Investment described above in this subsection shall have been reduced to zero
and all accrued Discount allocable thereto and all other Aggregate Unpaids owing
to such Bank Investors shall have been paid to such Bank Investors in full, then
such Bank Investors shall cease to be parties to this Loan Agreement for any
purpose.
Section 2.16. Commitment Renewal Request.
Except in the case of an early renewal as agreed upon by the Borrower
and the Agent, the Borrower may, not earlier than one hundred twenty (120) days
or later than sixty (60) days prior to the Scheduled Termination Date, request
that the Bank Investors renew their Commitments hereunder, provided that no such
renewal may be requested if it would cause the Scheduled Termination Date to be
later than 364 days after the then-current Scheduled Termination Date (or, if
the 364th day is not a Business Day, the immediately preceding Business Day) or
such fewer number of days as the Agent shall specify by notice to the Borrower.
Each Bank Investor shall notify the Borrower as to whether it consents to such
renewal within thirty (30) days of the
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Scheduled Termination Date, and the failure of any Bank Investor to so notify
the Borrower shall be deemed to mean that such Bank Investor does not consent to
such renewal.
Section 2.17. Interest Rate Protection Agreements.
Borrower agrees that (i) from and after the occurrence of an Interest
Rate Protection Date, it shall provide to the Agent for the benefit of the
Lender and the Bank Investors promptly, and in any event not later than three
(3) Business Days after such Interest Rate Protection Date, an Interest Rate
Protection Agreement and (ii) prior to the execution of any Interest Rate
Protection Agreement at any other time, it shall provide a copy of the proposed
Interest Rate Protection Agreement to the Agent for approval. Any such Interest
Rate Protection Agreement shall be provided and maintained at the Borrower's
sole cost and expense from funds other than Collections.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to each of the Secured Parties on the Closing
Date and each Loan Date that:
(a) Existence and Standing. The Borrower (i) is a statutory
trust duly organized, validly existing, and in good standing under the laws of
the State of Delaware, (ii) has all power and all material governmental
licenses, authorizations, consents, and approvals required to carry on its
business in each jurisdiction in which its business is now conducted, and (iii)
is duly qualified to do business and is in good standing under the laws of each
jurisdiction where the conduct of its business requires such qualification.
(b) Authorization and Contravention. The execution,
delivery, and performance by the Borrower of this Loan Agreement, the VFN, and
the other Operative Documents to which the Borrower is a party are within the
Borrower's powers, have been duly authorized by all necessary action, require no
action by or in respect of, or filing with, any Governmental Authority, and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or any other Operative Document to which the Borrower is a party,
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower, or result in the creation or imposition of any lien
on assets of the Borrower.
(c) Binding Effect. This Loan Agreement and the VFN
constitute the legal, valid, and binding obligations of the Borrower,
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting the rights of creditors.
(d) Perfection. At all times, the Borrower shall be the
owner of all of the Collateral, free and clear of all liens, encumbrances,
security interests, preferences, or other security arrangement of any kind or
nature whatsoever (other than those created or permitted by the Operative
Documents), and all mortgages, financing statements, and other documents
required to be recorded or filed in order to perfect and protect the Collateral
against all creditors
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of and purchasers from the Borrower will have been duly and timely 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.
(e) Good Title. At all times, the Collateral Agent, for the
benefit of the Secured Parties, shall have a valid and perfected first-priority
security interest in the Collateral free and clear of any Adverse Claim, other
than any Claims made through the Collateral Agent or the Secured Parties.
(f) Accuracy of Information. All information heretofore
furnished by the Borrower or any Affiliate of the Borrower (including, without
limitation, any information delivered pursuant to Sections 2.10 and 5.1 hereof)
to the Lender, any Bank Investor, the Agent or the Administrative Trustee for
purposes of or in connection with this Loan Agreement or any transactions
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Lender, any Bank Investor, the Agent or the Administrative
Trustee will be, true and accurate in every material respect on the date such
information is stated or certified.
(g) Tax Status. The Borrower has timely filed all tax
returns (federal, state, and local) required to be filed and has timely paid or
made adequate provision for the payment of all taxes, assessments, and other
governmental charges.
(h) Use of Proceeds. The proceeds of the Loans will be used
solely to purchase Accounts and to pay other amounts expressly permitted under
the terms and conditions of the Operative Documents.
(i) Place of Business. The chief place of business of the
Borrower is located at the address of the Borrower indicated in Section 8.3
hereof and all of the Borrower's Records are kept at the offices of the
Collateral Agent.
(j) Nature of Accounts. Each Account to be purchased with
the proceeds of a Loan is an Eligible Account and an "eligible asset" as defined
in Rule 3a-7 under the Investment Company Act of 1940, as amended.
(k) No Event of Default or Facility Termination Event. No
event has occurred and is continuing and no condition exists which constitutes
an Event of Default or Facility Termination Event or, to the knowledge of the
Borrower, a Potential Event of Default or Potential Facility Termination Event.
(l) Not an Investment Company. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or is exempt from all provisions of such Act.
(m) ERISA. The Borrower is in compliance in all material
respects with ERISA and no lien in favor of the Pension Benefit Guaranty
Corporation on any of the Accounts exists.
(n) Beneficial Ownership. The Depositor holds a 100%
beneficial ownership in the Borrower.
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(o) Debt for Tax. The Borrower will treat the Loans as
indebtedness for federal income tax purposes.
(p) Unacceptable Investment. The Borrower has no knowledge
of any material circumstance or condition with respect to the Accounts, the
Obligors, or the credit standing of the Obligors that could reasonably be
expected to cause an Account to be an unacceptable investment or adversely
affect the value of any Account.
(q) Action, Error, Omission, Etc. To the knowledge of the
Borrower, no material action, error, omission, misrepresentation, negligence,
fraud, or similar occurrence with respect to an Account has taken place on the
part of any Person, including, without limitation, any Obligor, the Depositor,
the Originator or any Eligible Originator, any appraiser, any builder, or
developer, or any other party involved in the origination of the Accounts or in
the application of insurance in relation to such Accounts.
(r) No Litigation. There are no actions, suits, or
proceedings pending, or to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Affiliate of the Borrower or their respective
properties, in or before any court, arbitrator, or other body which question the
validity of this Loan Agreement or the transactions contemplated herein, or
which could be reasonably expected to have a materially adverse effect on the
financial condition of the Borrower or its ability to perform its obligations
under this Loan Agreement.
(s) Monthly Payments. All Monthly Payments (net of the Fees
withdrawn pursuant to Section 2.15 of the Master Servicing Agreement) on the
Accounts to be purchased with the proceeds of a Loan due after the applicable
Cut-Off Date and received more than three (3) Business Days prior to the Loan
Date, plus the proceeds of each Full Prepayment of any such Account (including
any related payment of interest) received by the Master Servicer after the
Cut-Off Date but more than three (3) Business Days prior to the Loan Date, will
have been deposited in the Holding Account in accordance with Section 2.7 of the
Master Servicing Agreement.
Any document, instrument, certificate or notice delivered to the
Agent or the Administrative Trustee under this Loan Agreement shall be deemed a
representation and warranty by the Borrower.
Section 3.2. Reaffirmation of Representations and Warranties by the
Borrower. On each day that a Loan is made hereunder, the Borrower, by accepting
the proceeds of such Loan, shall be deemed to have certified that all
representations and warranties described in Section 3.1 are true and correct on
and as of such day as though made on and as of such day.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.1. Conditions to Effectiveness. On or prior to the Closing
Date, the Agent shall have received the following documents, instruments, and
fees, all of which shall be in a form and substance acceptable to each of them,
or the following actions shall have occurred:
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(a) the Agent shall have received a Good Standing
Certificate for (i) the Borrower issued by the Secretary of State of Delaware;
(ii) the Depositor issued by the Secretary of State of Florida; (iii) the
Originator, issued by the Secretary of State of Florida; and (iv) each Eligible
Originator, issued by the Secretary of State of each respective jurisdiction of
incorporation, the certificates of qualification in all foreign jurisdictions
where such qualification is material to the transactions contemplated by this
Loan Agreement or the other Operative Documents;
(b) the Agent shall have received an Opinion of Counsel of
special counsel to the Borrower, covering the matters set forth in Exhibit C
hereto;
(c) (i) the Agent shall have received this Loan Agreement,
the BAT Agreement, the DAT Agreement, the Master Servicing Agreement, the
Back-up Servicing Agreement, the Subservicing Agreement and the CCA Agreement,
duly executed by the parties thereto and a certified copy of the Trust Agreement
duly executed by the Depositor, as Grantor, and the Owner Trustee and (ii) the
Agent shall have received the VFN, duly executed by the Borrower;
(d) (i) the Agent shall have received the Fee Letter duly
executed by the parties thereto; and (ii) the Borrower shall have paid or caused
to be paid to the Agent all amounts to be paid on the Closing Date pursuant to
the Fee Letter;
(e) a certificate of the secretary or assistant secretary of
each of the Borrower, Depositor, each Eligible Originator and Originator
certifying and (in the case of clauses (i) through (iii)) attaching as exhibits
thereto, among other things:
(i) the articles of incorporation of such entity
(certified by the Secretary of State or other
similar official of the such entity's
jurisdiction of incorporation or organization,
as applicable, as of a recent date);
(ii) the by-laws of such entity;
(iii) resolutions of the board of directors or other
governing body of such entity authorizing the
execution, delivery and performance by it of
each Operative Document to be delivered by it
hereunder or thereunder and all other documents
evidencing necessary corporate action (including
shareholder consents) and government approvals,
if any; and
(iv) the incumbency, authority and signature of each
officer of such entity executing the Operative
Documents or any certificates or other documents
delivered hereunder or thereunder on behalf of
it;
(f) the Agent shall have received an Opinion of Counsel to
the Originator, Eligible Originators and the Depositor (i) addressing the true
sale of the Accounts (A) from the Originator and each Eligible Originator to the
Depositor and (B) from the Depositor to the Borrower and (ii) to the effect
that, in the event of the insolvency of the Originator, any Eligible
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Originator or the Depositor, the Borrower would not be substantively
consolidated with any such Person for purposes of the Bankruptcy Code;
(g) the Agent shall have received lien searches in the State
of Florida with respect to the Originator and the Depositor, the State of its
incorporation with respect to any Eligible Originator, and in the State of
Delaware with respect to the Borrower, in form and substance satisfactory to the
Agent;
(h) the Agent shall have received an opinion of counsel to
the Collateral Agent, in form and substance satisfactory to the Agent;
(i) all amounts, fees and expenses required to be paid on or
prior to the Closing Date pursuant to the Fee Letter (to the extent not covered
pursuant to clause (d) of this Section 4.1) and Section 7.4 hereof;
(j) the Agent shall have received (i) financing statements
on Form UCC-3 terminating all existing security interests in the Collateral and
(ii) financing statements on Form UCC-1 (A) naming each of the Originator and
Eligible Originator as Debtor/Seller and the Depositor as Secured
Party/Purchaser; (B) naming the Depositor as Debtor/Seller and the Borrower as
Secured Party/Purchaser; and (C) naming the Borrower as Debtor and the
Collateral Agent as Secured Party; and
(k) the Agent shall have received such other approvals,
documents, instruments, certificates and opinions as it shall reasonably
request.
Section 4.2. Conditions to Each Loan. No Loan shall be made
hereunder, and the Bank Investors shall have no obligation to make any Loan,
unless the following conditions have been satisfied:
(a) the Agent shall have received an Officers' Certificate
from the Borrower stating that:
(i) no Event of Default, Potential Event of Default,
Potential Facility Termination Event or Facility
Termination Event shall have occurred and the
Loan to be made on such date will not result in
any breach of any of the terms, conditions or
provisions of, or constitute a default under any
of the Operative Documents to which the Borrower
is a party, or any indenture, mortgage, deed of
trust or other agreement or instrument to which
the Borrower is a party or by which it is bound,
or any order of any Governmental Authority
entered in any proceeding to which the Borrower
is a party or by which it may be bound or to
which it may be subject, and all conditions
precedent provided in this Loan Agreement
relating to the Loan to be made on such date
have been complied with;
(ii) the Borrower is the owner of and has good title
to each Account, has not assigned any interest
or participation in any such Account
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(or, if any such interest or participation has
been assigned, it has been released) and has the
right to Grant each such Account to the
Collateral Agent, and no other Person has any
lien on, security interest in or other rights to
any such Account;
(iii) the Borrower has Granted to the Collateral Agent
all of its right, title, and interest in and to
each Account Granted to the Collateral Agent by
it to secure the VFN and the amounts owed
hereunder;
(iv) the information set forth in the Schedule of
Accounts delivered to the Collateral Agent and
the Agent is correct in all material respects;
(v) (A) no Material Adverse Effect shall have
occurred in the affairs of (I) the Borrower
since the date of its formation or (II) the
Master Servicer since April 1, 2004 and (B) no
material adverse change has occurred in the
value of any Account since the date of
origination of such Account; and
(vi) the representations and warranties set forth in
Section 3.1 are true and correct on and as of
such day as though made on and as of such day.
(b) all of the Account Documents relating to the Accounts to
be purchased on such date have been delivered to the Collateral Agent within the
time periods specified in Section 3.1 of the CCA Agreement, except that (i) in
lieu of delivering the Account Documents for any Account which has been the
subject of a Full Prepayment received by the Master Servicer after the Cut-Off
Date but no later than three (3) Business Days prior to the Loan Date, the
Borrower may deliver, or cause to be delivered, as indicated in the Officers'
Certificate from the Master Servicer delivered pursuant to paragraph (a) of this
Section 4.2, the cash proceeds of such Full Prepayment and (ii) in lieu of
delivering the Account Documents for any Account with respect to which
foreclosure proceedings have been commenced and such Account Documents are
required in connection with the prosecution of such proceedings, the Master
Servicer may deliver a trust receipt pursuant to Section 3.2 of the CCA
Agreement;
(c) the Borrower shall have delivered a Borrowing Request to
the Agent pursuant to Section 2.2 hereof;
(d) the Agent and the Collateral Agent shall have received
the Schedule of Accounts relating to the Accounts to be purchased with the
proceeds of such Loan;
(e) the Agent shall have received acknowledgment copies of
proper financing statements, duly filed under the Uniform Commercial Code of all
jurisdictions that the Lender may deem necessary or desirable in order to
perfect the ownership interest of the Depositor created by the DAT, the
ownership interest of the Borrower created by the BAT Agreement and the security
interest in favor of the Collateral Agent created by the CCA Agreement and all
other filings, notifications, consents and recordings necessary to consummate
the transactions contemplated hereunder and under the other Operative Documents
shall be accomplished and the
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Agent shall have received evidence of such filings, notifications, consents and
recordings satisfactory in form and substance to the Agent;
(f) the Agent shall have received copies of all consents,
licenses and approvals, if any, required in connection with the execution,
delivery and performance by it and the validity and enforceability against it of
the Operative Documents to approvals shall be in full force and effect;
(g) the Depositor shall have continued to purchase or
otherwise acquire all or substantially all of the Accounts originated by the
Originator (or originated by an Eligible Originator and sold to the Depositor)
on an ongoing basis;
(h) after giving effect to any requested Loan, no Borrowing
Base Deficiency shall exist;
(i) the Facility Termination Date shall not have occurred;
(j) no Servicer Default or default under any Subservicing
Agreement shall have occurred and be continuing, and no condition that with the
giving of notice or the passage of time world constitute a Servicer Default or a
default under any Subservicing Agreement shall have occurred and be continuing;
(k) no more than 7% of the Accounts then owned by the
Borrower may be in arrears for sixty (60) days or more as of the last day of any
month preceding the Borrowing Date;
(l) no more than 10% of the Accounts to be purchased by the
Borrower may be in arrears for 30-59 days as of the last day of any month
preceding such Borrowing Date;
(m) if the Interest Rate Protection Date has occurred, the
Borrower has delivered to the Agent an Interest Rate Protection Agreement;
(n) on such date, the weighted average interest rate of all
Eligible Accounts, after giving effect to all Eligible Accounts to be added on
such date, shall be greater than or equal to 7.25% per annum; and
(o) on such date, the weighed average FICO score of all
Eligible Accounts, after giving effect to all Eligible Accounts to be added on
such date, shall be greater than 530.
ARTICLE 5
COVENANTS
Section 5.1. Affirmative Covenants of Borrower. At all times from the
date hereof to the date on which all amounts due and owing to any of the Secured
Parties under the Operative Documents have been paid in full and this Loan
Agreement has terminated unless the Controlling Party shall otherwise consent in
writing:
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(a) Agreed Upon Procedures Report. Prior to the date one
year from the Closing Date and on each anniversary thereafter beginning in
calendar year 2005, the Borrower shall deliver to the Agent, at its expense, an
Agreed Upon Procedures Report with respect to all Accounts owned by the Borrower
and such other matters as the Agent reasonably requests; provided, however, so
long as no Event of Default, Potential Event of Default, Facility Termination
Event or Potential Facility Termination Event has occurred, the Borrower shall
only be required to deliver one Agreed Upon Procedures report at its expense in
any calendar year.
(b) Other Information. The Borrower shall deliver to the
Agent (i) a copy of all financial documents and reports provided to the Borrower
by the Depositor, the Originator, any Eligible Originator or any other Person in
any capacity pursuant to the Operative Documents, (ii) any material notices with
respect to any Mortgaged Property and (iii) such other information (including
non-financial information) as the Agent may from time to time reasonably
request.
(c) Compliance Certificate. The Borrower shall deliver to
the Agent within ninety (90) days after the close of the Borrower's fiscal year,
a compliance certificate signed by an authorized signatory of the Borrower
stating that no Event of Default or Potential Event of Default exists, or if any
Event of Default or Potential Event of Default exists, stating the nature and
status thereof.
(d) Notice of Borrowing Base Deficiency, Event of Default,
Potential Event of Default, Facility Termination Event or Potential Facility
Termination Event. As soon as possible and in any event within two (2) Business
Days after the Borrower receives notice or has actual knowledge of the
occurrence of a Borrowing Base Deficiency, an Event of Default, a Potential
Event of Default, Facility Termination Event or Potential Facility Termination
Event, the Borrower shall provide to the Agent a statement setting forth details
of such Borrowing Base Deficiency, Event of Default, Potential Event of Default,
Potential Facility Termination Event or Facility Termination Event, and the
action which the Borrower proposes to take with respect thereto. The Borrower
shall notify the Agent when the Borrower receives notice or has actual knowledge
of the occurrence of any event of default or event, which, due to the giving of
notice or lapse of time, or both, could become an event of default by itself,
the Master Servicer, the Back-up Servicer, the Depositor, any Eligible
Originator or the Originator in any capacity under any of the Operative
Documents of which it becomes aware.
(e) Conduct of Business. The Borrower will carry on and
conduct its business in substantially the same manner as it is presently
conducted and do all things necessary to remain duly organized, validly
existing, and in good standing as a statutory trust in the State of Delaware and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(f) Compliance with Laws. The Borrower will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees, or
awards to which it may be subject.
(g) Furnishing of Information and Inspection of Records. The
Borrower will furnish to the Agent from time to time such information with
respect to the Accounts as the
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Agent may reasonably request, including, without limitation, a schedule
identifying the Obligor and the Principal Balance for each Account.
(h) Payment of Obligations. The Borrower shall pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its obligations of whatever nature.
(i) Further Assurances. The Borrower shall do such further
acts and things and execute and deliver to the Agent such assignments
(including, without limitation, assignments in blank), agreements, powers and
instruments as are reasonably required by the Agent to carry into effect the
purposes of this Loan Agreement and the other Operative Documents or to better
assure and confirm unto the Secured Parties their respective rights, powers and
remedies hereunder and under the other Operative Documents, including, without
limitation, to obtain such consents and give such notices, and to file and
record all such documents and instruments, and renew each such consent, notice,
filing and recordation, at such time or times, in such manner and at such
places, as may be necessary or desirable to preserve and protect the position of
the Secured Parties hereunder and under the other Operative Documents. This
covenant shall survive the termination of this Loan Agreement.
(j) Access. The Borrower shall allow, and cause the
Depositor to allow, the Agent and their representatives full and complete access
during normal business hours and upon reasonable notice to the books, records,
documents, and facilities of the Borrower and the Depositor, and will on the
same conditions make the officers, employees, attorneys, agents, independent
accountants, and actuaries of the Borrower and the Depositor available to
discuss such aspects of the business, financial condition, or prospects of the
Borrower and the Depositor as may be reasonably necessary.
(k) Reliance Letters. Upon the request of the Agent, the
Borrower shall provide to the Agent within five (5) Business Days, reliance
letters with respect to all legal opinions delivered on the Closing Date (or new
legal opinions addressing the same matters covered in the original legal
opinions) addressed to any entity which becomes a Program Support Provider after
the Closing Date, to the extent such legal opinions did not permit reliance when
delivered.
(l) Amendments; Miscellaneous.
(i) The Borrower shall furnish to the Collateral
Agent and the Agent copies of the form of each
proposed amendment to the Trust Agreement, the
Master Servicing Agreement, the Back-up
Servicing Agreement or the Subservicing
Agreement at least sixty (60) days prior to the
proposed date of adoption of any such proposed
amendment.
(ii) The Borrower will at all times hold itself out
to the public under the Borrower's own name and
as a separate and distinct entity from Xxxxxx
Industries, Inc. and any of its Affiliates.
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(iii) The Borrower will at all times be responsible
for the payment of all its obligations and
indebtedness, will at all times maintain a
business office, records, books of account, and
funds separate from the Depositor and will
observe all customary formalities of independent
existence.
(iv) To the extent such compliance involves questions
of law, the Borrower shall be deemed in
compliance with the requirements of any
provision of this paragraph (l) if it is acting
in accordance with an opinion of counsel as to
such requirements.
(m) Weighted Average. The weighted average interest rate of
all Eligible Accounts shall not be less than 7.25% per annum. The Borrower shall
take all necessary steps (including, without limitation, the addition or removal
of Accounts) as frequently as necessary (and in any event within two (2)
Business Days after the Borrower receives notice or has actual knowledge of
noncompliance with this Section 5.1(m)) to ensure that in no event shall the
weighted average interest rate of all Eligible Accounts be less than 7.25% per
annum.
(n) Assignments. The Borrower shall prepare and execute
Assignments in recordable form at the reasonable request of the Agent.
(o) Due Diligence Review. Prior to the date one year from
the Closing Date and on each anniversary thereafter, the Borrower shall
complete, at its expense, a Due Diligence Review with respect to all Accounts
owned by the Borrower and such other matters as the Agent reasonably requests;
provided, however, so long as no Event of Default, Potential Event of Default,
Facility Termination Event or Potential Facility Termination Event has occurred,
the Borrower shall only be required to complete one Due Diligence Review at its
expense in any calendar year.
Section 5.2. Negative Covenants of Borrower. At all times from the
date hereof to the date on which all amounts due and owing to any of the Secured
Parties under the Operative Documents have been paid in full and this Loan
Agreement has terminated, unless the Controlling Party shall otherwise consent
in writing:
(a) No Extension or Amendment of Accounts. Except as
permitted by Section 2.1(j) of the Master Servicing Agreement or Section 3.4 of
the CCA Agreement, the Borrower will not extend, amend, or otherwise modify the
terms of any Account, or amend, modify, or waive any term or condition of any
Account Document related thereto.
(b) No Sale. The Borrower shall not sell, transfer, exchange
or otherwise dispose of any portion of the Collateral (other than any Accounts
which are not Eligible Accounts or otherwise excluded from the Borrowing Base)
except as expressly permitted by the Operative Documents.
(c) No Insurance. The Borrower shall not obtain or carry
insurance relating to the Accounts separate from that required by the Master
Servicing Agreement, unless the Collateral Agent shall have the same rights with
respect thereto as it has with respect to the insurance required by the Master
Servicing Agreement.
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(d) Other Business. The Borrower shall not engage in any
business or activity other than in connection with, or relating to, the issuance
of the VFN or the preservation of the Collateral and the release of assets
therefrom pursuant to this Loan Agreement, and the other Operative Documents to
which the Borrower is a party.
(e) Dissolution. The Borrower shall not dissolve or
liquidate in whole or in part.
(f) Liens. The Borrower shall not (i) permit the validity or
effectiveness of this Loan Agreement or the CCA Agreement to be impaired, or
permit the lien of the CCA Agreement to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any covenants
or obligations under this Loan Agreement or, (ii) except as may be expressly
created or permitted by the Operative Documents, permit any lien, charge,
security interest, mortgage or other encumbrance (other than the lien of the CCA
Agreement) to be created on or extend to or otherwise arise upon or burden the
Collateral or any part thereof or any interest therein or the Proceeds thereof,
or (iii) except as permitted by the Operative Documents, permit the lien of the
CCA Agreement not to constitute a valid and perfected first priority security
interest in the Collateral.
(g) No Amendment. The Borrower shall not amend the Trust
Agreement without the consent of the Controlling Party.
(h) No Mergers, Etc. The Borrower will not consolidate or
merge with or into any other Person.
(i) Change of Name, Etc. The Borrower will not change its
name, identity, or structure or its chief executive office or the jurisdiction
under which it has been organized, unless at least ten (10) days prior to the
effective date of any such change the Borrower delivers to the Collateral Agent
UCC financing statements, executed by the Borrower, necessary to reflect such
change and to continue the perfection of the Collateral Agent's (for the benefit
of the Secured Parties) security interest in the Accounts.
(j) Borrowing Base Deficiency. The Borrower shall at all
times be in compliance with Section 2.6(b) hereof.
(k) Pledged Accounts. The Borrower shall not move any
Pledged Account from the institution at which it is maintained on the Closing
Date, except as permitted in accordance with Section 2.8.
(l) Successor Master Servicer and Back-up Servicer. The
Borrower shall not permit any change of master servicer or back-up servicer,
except in accordance with the Master Servicing Agreement or the Back-up
Servicing Agreement, as applicable.
(m) Eligible Originators. The Borrower shall not make any
request for a Loan hereunder unless all criteria set forth in the definition of
"Eligible Originator" have been satisfied.
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(n) No Debt. The Borrower shall not incur any debt except as
contemplated by the Operative Documents.
(o) Amendments. Neither the Borrower nor the Master Servicer
will amend, modify, supplement restate or replace any of the Trust Agreement,
the Master Servicing Agreement, the Backup Servicing Agreement or the
Subservicing Agreement or any provision of any of the foregoing without the
prior written consent of the Agent.
ARTICLE 6
EVENTS OF DEFAULT AND FACILITY TERMINATION EVENTS
Section 6.1. Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default:
(a) A default in the payment of any interest on the VFN at
the applicable Discount rate when the same becomes due and payable;
(b) A default in the payment of any principal of the VFN in
reduction of the Net Investment when due and payable;
(c) Any representation, warranty, certification, or
statement made by the Borrower in this Loan Agreement or in any other document
delivered pursuant hereto or other Operative Document shall prove to have been
incorrect in any material respect when made or deemed made (other than any
representation or warranty of the Borrower with respect to the Accounts or the
eligibility thereof);
(d) Failure of the Borrower to pay or deposit any amounts
(other than interest or principal due in respect of the VFN) when required
hereunder or under any other Operative Document and such default shall continue
unremedied for five (5) Business Days;
(e) The default by the Borrower in the performance of any
material covenant or undertaking (i) to be performed or observed under Sections
5.1(d), 5.2(b), (d), (e), (f), (g), or (h) or (ii) to be performed or observed
by the Borrower under any other provision hereof (other than described in
paragraph (b) of this Section 6.1) or under any other Operative Document and
such default in the case of this clause (ii) shall continue for thirty (30)
days;
(f) Any Event of Bankruptcy shall occur with respect to the
Borrower;
(g) The Collateral Agent, for the benefit of the Secured
Parties, shall fail to have a valid and first priority perfected security
interest in the Collateral;
(h) There shall have occurred any material adverse change in
the operations of the Borrower since the Closing Date which would have or
reasonably could be expected to have a material adverse effect on the Secured
Parties or any other event shall have occurred which materially and adversely
affects the Borrower's ability to perform under this Loan Agreement or the
collectibility of the Accounts;
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(i) The amount on deposit in the Reserve Account fails to
reach the Specified Reserve Account Requirements on or prior to the fifteenth
(15th) Remittance Date following the Closing Date or on or prior to the sixth
(6th) Remittance Date following a Reserve Account Event; provided that for the
period extending six (6) Remittance Dates following each Take-Out, there shall
be no Event of Default under this clause (i) unless the amount on deposit in the
Reserve Account shall fail to be equal to or greater than the sum of (A) the
Scheduled Reserve Account Payment for such Remittance Date and (B) $1,000,000;
(j) The Delinquency Ratio with respect to the Accounts owned
by the Borrower averaged for any three (3) consecutive Collection Periods
exceeds 3.5%;
(k) A Borrowing Base Deficiency shall exist beyond the cure
period set forth in Section 2.6(b) hereof;
(l) The Default Ratio with respect to the Accounts owned by
the Borrower averaged for any three (3) consecutive Collection Periods exceeds
6%;
(m) The Borrower shall become subject to an entity level tax
or to registration as an investment company under the Investment Company Act;
and
(n) The default by the Borrower in the performance of any
material covenant or undertaking to be performed or observed under Section
5.1(a) hereof shall continue for ten (10) Business Days.
Section 6.2. Facility Termination Events. The occurrence of any one
or more of the following events shall constitute a Facility Termination Event:
(a) Any representation, warranty, certification, or
statement made by the Depositor, any Eligible Originator or the Originator in
any of the Operative Documents, shall prove to have been incorrect in any
material respect when made or deemed made (other than any representation or
warranty with respect to the Accounts or the eligibility thereof);
(b) Failure of the Originator, any Eligible Originator or
the Depositor to pay or deposit any amounts when required hereunder or under any
other Operative Document;
(c) The default by any Eligible Originator, the Originator
or the Depositor, in the performance of any covenant or undertaking, (other
than, with respect to the Depositor, in its capacity as Master Servicer) to be
performed or observed under any Operative Document and such default continues
unremedied for thirty (30) days;
(d) A Servicer Default or an event of default under the
Subservicing Agreements shall have occurred;
(e) any Person shall institute steps to terminate any
Pension Plan if the assets of such Pension Plan are insufficient to satisfy all
of its benefit liabilities (as determined under Title IV of ERISA), or a
contribution failure occurs with respect to any Pension Plan which is sufficient
to give rise to a lien under Section 302(f) of ERISA;
- 28 -
(f) any material provision of this Loan Agreement or any
other Operative Document to which the Originator, any Eligible Originator or the
Depositor is a party shall cease to be in full force and effect or the
Originator, any Eligible Originator or the Depositor shall so state in writing;
or
(g) an Event of Default shall occur.
Section 6.3. Remedies.
(a) If an Event of Default described in Section 6.1(f)
hereof shall occur, then the entire unpaid principal amount of the VFN, together
with accrued and unpaid interest thereon, shall automatically, without any
notice, declaration or any other action become immediately due and payable. If
any other Event of Default shall occur and be continuing, then and in every such
case the Controlling Party may declare the entire principal of and accrued
interest on the VFN to be immediately due and payable and the Facility
Termination Date to have occurred, by a notice in writing to the Borrower and
the Agent, and upon such declaration the entire unpaid principal amount of the
VFN, together with accrued and unpaid interest thereon, shall become immediately
due and payable and the Facility Termination Date shall have occurred. Upon the
occurrence of an Event of Default, the Collateral Agent may, and if directed by
the Controlling Party, shall, proceed to protect and enforce its rights and the
rights of the Secured Parties, including its and their rights under the
Operative Documents, and to enforce any other proper remedy or legal or
equitable right vested in the Collateral Agent by this Loan Agreement, the CCA
Agreement or any other Operative Document or by law, by such appropriate actions
and proceedings as the Collateral Agent shall deem most effective or as so
directed. Upon the declaration of an Event of Default, the Controlling Party, in
addition to all other rights and remedies it has under the Operative Documents,
shall have all other rights and remedies provided under the UCC and all other
applicable laws. The Facility Termination Date shall be deemed to have occurred
automatically upon the occurrence of any event described in clause (f) of
Section 6.1 with respect to the Borrower.
(b) If a Facility Termination Event shall have occurred, the
Controlling Party may declare the Facility Termination Date to have occurred and
upon such declaration, the Facility Term shall terminate.
ARTICLE 7
INDEMNIFICATION; EXPENSES; RELATED MATTERS
Section 7.1. Indemnities by the Borrower. Without limiting any other
rights which the Indemnified Parties may have hereunder or under applicable Law,
the Borrower hereby agrees to indemnify the Lender and any commercial paper
issuer that finances the Lender, the Bank Investors, the Agent, the
Administrative Trustee and their respective officers, directors, employees,
counsel and other agents (collectively, "Indemnified Parties") from and against
any and all damages, losses, claims, liabilities, costs and expenses, including
reasonable attorneys' fees (which such attorneys may be employees of the Bank
Investors, the Agent, the Lender and any commercial paper issuer that finances
the Lender or the Administrative Trustee, as applicable) and disbursements (all
of the foregoing being collectively referred to as "Indemnified
- 29 -
Amounts") awarded against or incurred by any of them in any action or proceeding
between the Borrower 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 Loan Agreement, the other Operative Documents, the funding or
maintenance, either directly or indirectly, by the Agent, the Lender (including
through any Program Support Provider) or any Bank Investor of the Net Investment
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 such Indemnified Party, or (ii) recourse
(except as otherwise specifically provided in this Agreement) for uncollectible
Accounts. Without limiting the generality of the foregoing, the Borrower shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(a) any representation or warranty made by the Borrower,
under or in connection with this Loan Agreement, any of the other Operative
Documents or any other information or report delivered by the Borrower pursuant
hereto, or pursuant to any of the other Operative Documents which shall have
been incomplete, false or incorrect in any respect when made or deemed made;
(b) the failure by the Borrower to comply with any
applicable Law with respect to any Account, or the nonconformity of any Account
with any such applicable Law;
(c) the failure to create and maintain a valid and perfected
first priority security interest in favor of the Collateral Agent, for the
benefit of the Secured Parties, in the Collateral, free and clear of any Adverse
Claim;
(d) the failure to file or record, or any delay in filing or
recording, financing statements, continuation statements, mortgages 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;
(e) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any Account (including
a defense based on such Account not being the legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms),
or from any breach or alleged breach of any provision of the Accounts
restricting assignment of any Accounts;
(f) reserved;
(g) reserved;
(h) the failure by the Borrower to comply with any term,
provision or covenant contained in this Loan Agreement or any of the other
Operative Documents to which it is a party or to perform any of its respective
duties or obligations under the Accounts required to be paid by the Borrower;
(i) the existence of a Borrowing Base Deficiency;
- 30 -
(j) the failure of the Borrower to pay when due any taxes,
including, without limitation, any sales, excise or personal property taxes
payable in connection with any of the Accounts required to be paid by the
Borrower;
(k) 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;
(l) the commingling by the Borrower of Available Collections
at any time with any other funds;
(m) any investigation, litigation or proceeding related to
this Loan Agreement, any of the other Operative Documents, the use of proceeds
of any Loan by the Borrower, the security interest in the Collateral, or any
Affected Asset;
(n) 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 the Borrower to qualify to do business or
file any notice of business activity report or any similar report;
(o) any attempt by any Person to void, rescind or set-aside
any transfer by the Depositor to the Borrower of any Account or Related Security
under statutory provisions or common law or equitable action, including any
provision of the Bankruptcy Code or other insolvency law;
(p) any action taken by the Borrower in the enforcement or
collection of any Account;
(q) any liability under the Georgia Fair Lending Act as in
effect from October 1, 2002 through March 6, 2003; or
(r) any liability under the Home Ownership and Equity
Protection Act of 1994, as amended, or similar federal state or local laws or
regulations relating to "high cost" or "predatory" Accounts and otherwise
unacceptable Accounts for secondary market transactions rated by the Rating
Agencies.
Section 7.2. Indemnity for Taxes, Reserves and Expenses.
(a) If after the Closing Date, the adoption of any Law or
bank regulatory guideline or any amendment or change in the administration,
interpretation or application of any existing or future Law or bank regulatory
guideline by any Governmental Authority charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Governmental Authority (in the case of any bank regulatory guideline,
whether or not having the force of Law):
(i) shall subject any Indemnified Party (or its
Applicable Lending Office) to any tax, duty or
other charge (other than Excluded Taxes, as
defined below) with respect to this Loan
Agreement,
- 31 -
the other Operative Documents, the maintenance
or financing of the Net Investment, or payments
of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified
Party of amounts payable in respect of this Loan
Agreement, the other Operative Documents, the
maintenance or financing of the Net Investment,
or payments of amounts due hereunder or its
obligation to advance funds hereunder, either
directly or through a Program Support Agreement
or the credit or liquidity support furnished by
a Program Support Provider or otherwise in
respect of this Loan Agreement, the other
Operative Documents, the maintenance or
financing of the Net Investment (except for
changes in the rate of general corporate,
franchise, net income or other income tax
imposed on such Indemnified Party by the
jurisdiction in which such Indemnified Party's
principal executive office is located);
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement
(including any such requirement imposed by the
Board of Governors of the Federal Reserve
System) against assets of, deposits with or for
the account of, or credit extended by, any
Indemnified Party or shall impose on any
Indemnified Party or on the United States market
for certificates of deposit or the London
interbank market any other condition affecting
this Loan Agreement, the other Operative
Documents, the maintenance or financing of the
Net Investment, or payments of amounts due
hereunder or its obligation to advance funds
hereunder, either directly or through a Program
Support Agreement or the credit or liquidity
support provided by a Program Support Provider
or otherwise in respect of this Loan Agreement,
the other Operative Documents, the maintenance
or financing of the Net Investment; or
(iii) imposes upon any Indemnified Party any other
condition or expense (including any loss of
margin, reasonable attorneys' fees and expenses,
and expenses of litigation or preparation
therefor in contesting any of the foregoing)
with respect to this Loan Agreement, the other
Operative Documents, the maintenance or
financing of the Affected Assets or Net
Investment, or payments of amounts due hereunder
or its obligation to advance funds, either
directly or through a Program Support Agreement
or the credit or liquidity support furnished by
a Program Support Provider or otherwise in
respect of this Loan Agreement, the other
Operative Documents, the maintenance or
financing of the Net Investment,
and the result of any of the foregoing is to increase the cost to or to reduce
the amount of any sum received or receivable by such Indemnified Party with
respect to this Loan Agreement, the other Operative Documents, the maintenance
or financing of the Net Investment, the Accounts,
- 32 -
the obligations hereunder, the funding of any Loans hereunder or through Program
Support Agreement, by an amount deemed by such Indemnified Party to be material,
then, within ten (10) days after demand by such Indemnified Party through the
Agent, the Borrower 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 or administration thereof by any Governmental
Authority, or any request or directive regarding capital adequacy (in the case
of any bank regulatory guideline, whether or not having the force of law) of any
such Governmental Authority, has or would have the effect of reducing the rate
of return on capital of such Indemnified Party (and in the case of the Lender,
any Program Support Provider) (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 (and in the case of the Lender, any
Program Support Provider) (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 Borrower shall pay to the Agent,
for the benefit of such Indemnified Party, such additional amount or amounts as
will compensate such Indemnified Party (and in the case of the Lender, any
Program Support Provider) (or its parent) for such reduction. For the avoidance
of doubt, any interpretation of Accounting Research Bulletin No. 51 by the
Financial Accounting Standards Board shall constitute an adoption, change,
request or directive subject to this Section 7.2(b).
(c) The Agent shall promptly notify the Borrower in writing
of any event of which it has knowledge, occurring after the date hereof, which
will entitle an Indemnified Party to compensation pursuant to this Section 7.2;
provided that no failure to give or any delay in giving such notice (so long as
such notice is given before the day which is one day and a year after the
payment in full of all outstanding Commercial Paper of the Lender or other
Indebtedness of the Lender) shall affect the Indemnified Party's right to
receive such compensation. A notice 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. The
Indemnified Party shall provide the Borrower with reasonably detailed
calculations supporting such amounts.
(d) Anything in this Section 7.2 to the contrary
notwithstanding, if the Lender enters into agreements for the acquisition of
interests in receivables from one or more Other Transferors, the Lender shall
allocate the liability for any amounts under this Section 7.2 which are in
connection with a Program Support Agreement or the credit or liquidity support
provided by a Program Support Provider ("Additional Costs") to the Borrower and
each Other Transferor; provided, however, that if such Additional Costs are
attributable to the Borrower, the Originator, any Eligible Originator, the
Master Servicer or the Back-up Servicer and not attributable to any Other
Transferor, the Borrower shall be solely liable for such Additional Costs or if
such Additional Costs are attributable to Other Transferors and not attributable
to the Borrower, the
- 33 -
Originator, the Master Servicer or the Back-up Servicer,
such Other Transferors shall be solely liable for such Additional Costs. The
Lender shall provide the Borrower with written notice of any such Additional
Costs accompanied by reasonably detailed calculations supporting such Additional
Costs.
Section 7.3. Taxes.
(a) Any and all payments by the Borrower under or in respect
of this Loan Agreement or any other related document to which the Borrower is a
party shall be made free and clear of, and without deduction or withholding for
or on account of, any and all present or future income, excise, stamp, or
franchise taxes and any other taxes, levies, fees, duties, imposts, deductions,
charges or withholdings, and all liabilities (including penalties, interest and
additions to tax) with respect thereto, whether now or hereafter imposed,
levied, collected, withheld or assessed by any taxation authority or other
Governmental Authority (collectively, "Taxes"), unless required by law. If the
Borrower shall be required under any applicable law to deduct or withhold any
Taxes from or in respect of any sum payable under or in respect of this Loan
Agreement or any of the other related documents to an Indemnified Party, then
the Borrower shall:
(i) make all such deductions and withholdings in respect of the
Taxes;
(ii) pay directly to the relevant Government Authority the full
amount required to be deducted or withheld in respect of such
Taxes in accordance with applicable law; and
(iii) pay to the applicable Indemnified Party such additional
amount or amounts as necessary to ensure that the net amount
actually received by the recipient will equal the full amount
such Indemnified Party would have received had no withholding or
deduction for Taxes other than Excluded Taxes been required
(including deductions and withholdings applicable to additional
sums payable under this Section 7.3(a)).
For purposes of this Loan Agreement, "Excluded Taxes" shall mean franchise
taxes, branch profits taxes and taxes imposed on or measured by the Indemnified
Party's net income or gross receipts.
Moreover, if any Taxes are directly asserted against any Indemnified
Party with respect to any payment received by such Indemnified Party hereunder,
the Indemnified Party may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any related penalties, interest or expenses) as
shall be necessary in order that the net amount received by the Indemnified
Party after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount such Indemnified Party would have received had
such Taxes not been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the applicable Indemnified Party the
required receipts or other required documentary evidence, the Borrower shall
indemnify the applicable Indemnified Party for any incremental Taxes, interest,
or penalties that may become payable by any Indemnified Party as a result of any
such failure.
- 34 -
(b) In addition, the Borrower hereby agrees to pay any
present or future stamp, recording, documentary, excise, property or similar
taxes, charges or levies that arise from any payment made under or in respect of
this Loan Agreement or any other related documents or from the execution,
delivery or registration of, any performance under, or otherwise with respect
to, this Loan Agreement or any other related documents (collectively, "Other
Taxes").
(c) The Borrower hereby agrees to indemnify the applicable
Indemnified Parties for, and to hold the applicable Indemnified Parties harmless
against, the full amount of Taxes and Other Taxes, and the full amount of Taxes
of any kind imposed by any jurisdiction on amounts payable under this Section
7.3, imposed on or paid by such Indemnified Party, as the case may be, and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. The indemnity by the Borrower provided for in
this Section 7.3 shall apply and be made whether or not the Taxes or Other Taxes
for which indemnification hereunder is sought have been correctly or legally
asserted. Amounts payable by the Borrower under the indemnity set forth in this
Section 7.3 shall be paid within 30 days from the date on which the applicable
Indemnified Party makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Borrower (or any Person making such payment on behalf of
Borrower) shall furnish to the applicable Indemnified Party a certified copy of
the original official receipt evidencing payment thereof.
(e) Each Indemnified Party that either (i) is not a United
States Person (as such term is defined in Section 7701(a)(30) of the Code (a "US
Person")) for United States federal income tax purposes or (ii) whose name does
not include "Incorporated," "Inc.," "Corporation," "Corp." "P.C.," "insurance
company'" or "assurance company" (each, a "Non-Exempt Party") shall deliver or
caused to be delivered to the Borrower and the Agent the following properly
completed and duly executed documents;
(i) two properly completed and executed (x) U.S.
Internal Revenue Forms W-8BEN (or any successor
forms thereto) with respect to an income tax
treaty providing for a reduced or a zero rate of
withholding tax on interest, or (y) U.S.
Internal Revenue Service Forms W-8ECI (or any
successor forms thereto);
(ii) (x) two properly completed and executed U.S.
Internal Revenue Service Forms W-8BEN (or any
successor forms thereto), including all
appropriate attachments, documenting the status
of such Indemnified Party as a Non-U.S. Person
or (y) a properly completed and executed U.S.
Internal Revenue Service Form W-8IMY (with all
appropriate attachments) (or any successor forms
thereto);
(iii) two properly completed and executed (x) Internal
Revenue Service Forms W-9 (or any successor
forms thereto), including all appropriate
attachments or (y) if such Non-Exempt Party is
disregarded for federal income tax purposes, the
documents that would be required by clause (i),
(ii), (iii), or (iv) with respect to its
- 35 -
beneficial owner if such beneficial owner were
the applicable Indemnified Party; or
(iv) two properly completed and executed (x) Internal
Revenue Service Forms W-8IMY (or any successor
forms thereto) (including all required documents
and attachments) and (y) without duplication,
with respect to each of its beneficial owners
and the beneficial owners of such beneficial
owners looking through chains of owners to
individuals or entities that are treated as
corporations for U.S. federal income tax
purposes (all such owners, "beneficial owners"),
the documents that would be required by clause
(i), (ii), (iii), and/or (iv) with respect to
each such beneficial owner if such beneficial
owner were the applicable Indemnified Party;
provided, however, that no such documents will
be required with respect to a beneficial owner
to the extent the actual Indemnified Party is
determined to be in compliance with the
requirements for certification on behalf of its
beneficial owner as may be provided in
applicable U.S. Treasury Regulations, or the
requirements of this clause (iv) are otherwise
determined to be unnecessary, all such
determinations under this clause (iv) to be made
in the reasonable discretion of Borrower.
Such documents shall be delivered by each Indemnified Party on or before
the date it becomes a party to this Loan Agreement and on or before the date, if
any, such Indemnified Party changes its Applicable Lending Office by designating
a different lending office. In addition, each Indemnified Party shall deliver to
cause to be delivered such Forms and /or Certificates promptly upon or before
the expiration, obsolescence or invalidity of any document previously delivered
by such Indemnified Party. Notwithstanding any other provision of this Section
7.3, no Indemnified Party shall be required to deliver any document pursuant to
this Section 7.3 that such Indemnified Party is not legally able to deliver.
(f) For any period with respect to which any Indemnified
Party has failed to provide the Borrower with the appropriate form, certificate
or other document described in Section 7.3(e) (other than (i) if such failure is
due to a change in any applicable law, or in the interpretation or application
thereof, occurring after the date on which a form, certificate or other document
originally was required to be provided, (ii) if such form, certificate or other
document otherwise is not required under Section 7.3(e) or (iii) if it is
legally inadvisable or otherwise commercially disadvantageous for such
Indemnified Party to deliver such form, certificate or other document), such
Indemnified Party shall not be entitled to payment or indemnification under
Section 7.3(a), (b) or (c) with respect to Taxes imposed by the United States by
reason of such failure. Should an Indemnified Party become subject to Taxes
because of its failure to deliver a form, certificate or other document required
by Section 7.3(e), the Borrower shall take such steps as such Indemnified Party
shall reasonably request to assist such Indemnified Party in recovering such
Taxes.
(g) The Lender hereby agrees that, upon the occurrence of
any circumstances entitling such Lender to additional amounts pursuant to this
Section 7.3, such Lender shall use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions), at the
- 36 -
sole expense of the Borrower, to designate a different Applicable Lending Office
if the making of such a change would avoid the need for, or materially reduce
the amount of, any such additional amounts that may thereafter accrue and would
not be, in the sole judgment of such Lender, legally advisable or commercially
or otherwise disadvantageous to such Lender in any respect.
(h) An applicable Indemnified Party shall take all
reasonable actions (consistent with its internal policy and legal and regulatory
restrictions) requested by Borrower to assist Borrower, as the case may be, at
the sole expense of Borrower, to recover from the relevant taxation authority or
other Governmental Authority any Taxes in respect of which amounts were paid by
Borrower pursuant to Section 7.3(a), (b) or (c). However, the applicable
Indemnified Party will not be required to take any action that would not be, in
the sole judgment of such Indemnified Party, legally advisable, or would be
commercially or otherwise disadvantageous to such Indemnified Party in any
respect, and in no event shall such Indemnified Party be required to disclose
any tax returns or any other information that, in the sole judgment of such
Indemnified Party, is confidential.
(i) The Borrower shall not be required to indemnify any
Indemnified Party or to pay any additional amounts to any Indemnified Party in
respect of any U.S. federal income or withholding tax pursuant to this Section
7.3 to the extent that the obligation to withhold any amounts with respect to
U.S. federal income tax existed on the date such Indemnified Party became a
party to this Loan Agreement (unless such withholding would not occur if the
forms and/or certificates in Section 7.3(e) were provided) or is incurred
because of the merger or consolidation of the applicable Indemnified Party,
after which such merger or consolidation the applicable Indemnified Party no
longer exists.
Section 7.4. Other Costs and Expenses; Breakage Costs.
(a) The Borrower agrees, upon receipt of a written invoice,
to cause to be paid, and to save the Lender, the Bank Investors and the Agent
harmless against liability for the payment of, all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and expenses, any filing fees and
expenses incurred by officers or employees of the Lender, any Bank Investor
and/or the Agent) or intangible, documentary or recording taxes incurred by or
on behalf of the Lender, any Bank Investor or the Agent (i) in connection with
the preparation, negotiation, execution and delivery of this Loan Agreement, the
other Operative Documents and any documents or instruments delivered pursuant
hereto and thereto and the transactions contemplated hereby or thereby
(including the perfection or protection of the Collateral) and (ii) from time to
time (A) relating to any amendments, waivers or consents under this Loan
Agreement and the other Operative Documents, (B) arising in connection with the
Lender's, any Bank Investor's or the Agent's enforcement or preservation of
rights (including the perfection and protection of the Collateral under the CCA
Agreement and this Loan Agreement) or (C) arising in connection with any audit,
dispute, disagreement, litigation or preparation for litigation involving this
Loan Agreement or any of the other Operative Documents (all of such amounts,
collectively, "Transaction Costs").
(b) The Borrower shall pay the Lender or the Bank Investors,
as applicable, on demand an Early Collection Fee due on account of the reduction
of the Net Investment on a day prior to a Remittance Date.
- 37 -
(c) The Borrower shall pay the Agent for the account of the
Lender and the Bank Investors, as applicable, on demand, such amount or amounts
as shall compensate the Lenders and any Bank Investors for any loss, cost or
reasonable expense incurred by the Lender or Bank Investors (as reasonably
determined by the Agent) as a result of any reduction of any portion of any Loan
other than on the maturity date of the Commercial Paper (or other financing
source) funding such portion of any Loan, such compensation to be (i) limited to
an amount equal to any loss or expense suffered by the Lender or the Bank
Investors during the period from the date of receipt of such repayment to (but
excluding) the maturity date of such Commercial Paper (or other financing
source) and (ii) net of the income, if any, received by the recipient of such
reductions from investing the proceeds of such reductions of such portion of any
Loan. The determination by the Agent of the amount of any such loss or expense
shall be set forth in a written notice to the Borrower in reasonable detail and
shall be conclusive, absent manifest error and shall be accompanied by
reasonably appropriate back-up materials with respect to such amounts.
(d) The Lender, or its agent, shall maintain a register (the
"Register") on which it will record the Lender's rights hereunder, and each
Assignment and Assumption Agreement. The Register shall include the names and
addresses of the Lender (including all assignees and successors) and the
percentage or portion of such rights and obligations assigned.
Section 7.5. Payment. All amounts required to be paid by the Borrower
under this Article VII (other than legal fees to be paid on the Closing Date
pursuant to Section 7.4(a)(i)) shall be paid from the funds specified in and in
accordance with Section 4.1(d)(viii) and (ix) of the CCA Agreement.
ARTICLE 8
MISCELLANEOUS
Section 8.1. Term of Agreement. This Loan Agreement shall terminate
following the Facility Termination Date when the Net Investment has been reduced
to zero, all accrued Discount has been paid in full, all other amounts due under
this Loan Agreement have been paid in full and all other Aggregate Unpaids have
been paid in full; provided, however, that (i) the rights and remedies of the
Agent, the Administrative Trustee, the Bank Investors or the Lender with respect
to any representation and warranty made or deemed to be made by Borrower
pursuant to this Loan Agreement, (ii) the indemnification and payment provisions
of Article VII and (iii) the agreement set forth in Sections 8.9, 8.10 and 8.11
hereof, shall be continuing and shall survive any termination of this Loan
Agreement.
Section 8.2. Waivers; Amendments.
(a) No failure or delay on the part of the Agent, the
Administrative Trustee, any Bank Investor or the Lender in exercising any power,
right, or remedy under this Loan Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right, or remedy
preclude any other further exercise thereof or the exercise of any other power,
right, or remedy. The rights and remedies herein provided shall be cumulative
and nonexclusive of any rights or remedies provided by law.
- 38 -
(b) Any provision of this Loan Agreement may be amended or
waived if, but only if, such amendment is in writing and is signed by the
Borrower, the Agent, the Majority Investors and the Lender; 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 Discount 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 Discount with respect
thereto or any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments 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 Loan Agreement, (v) release
all or substantially all of the property with respect to which a security or
ownership interest therein has been granted hereunder to the Agent or the Bank
Investors or (vi) extend or permit the extension of the Scheduled Termination
Date (it being understood that a waiver of an Event of Default shall not
constitute an extension or increase in the Commitment of any Bank Investor). In
the event the Agent requests a Bank Investor's consent pursuant to the foregoing
provisions and the Agent does not receive a consent (either positive or
negative) from such Bank Investor within ten (10) Business Days of such Bank
Investor's receipt of such request, then such Bank Investor (and its percentage
interest hereunder) shall be disregarded in determining whether the Agent shall
have obtained sufficient consent hereunder.
Section 8.3. Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including facsimile or
electronic transmission or similar writing) and shall be given to the other
party at its address or facsimile number set forth below or at such other
address or facsimile number as such party may here-after specify for the
purposes of notice to such party. Each such notice or other communication shall
be effective (a) if given by facsimile, when such facsimile is transmitted to
the facsimile number specified in this Section and confirmation is received, (b)
if given by mail three (3) Business Days following such posting, (c) if given by
overnight courier, one (1) Business Day after deposit thereof with a national
overnight courier service, or (d) if given by any other means, when received at
the address specified in this Section 8.3, provided that a Borrowing Request
shall only be effective upon receipt by the Agent. However, anything in this
Section 8.3 to the contrary notwithstanding, the Borrower hereby authorizes the
Agent, the Bank Investors and the Lender to effect Loans and Rate Period
selections and to make Eligible Investments based on telephonic notices made by
any Person which the Agent in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an Authorized Officer of the
Borrower. 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 Agent, the records of the Agent shall
govern absent manifest error.
If to the Lender:
Three Pillars Funding LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
- 39 -
Attention: Xxxxxx X. Xxxxxx
Telephone: (000)000-0000
Telecopy: (000)000-0000
(with a copy to the Administrative Trustee)
If to the Borrower:
Mid-State Trust XIV
c/o Wilmington Trust Company, Owner Trustee
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telephone: (000)000-0000
Telecopy: (000)000-0000
Payment Information:
Bank: Wachovia
ABA # : 000000000
Acct. Name: Mid-State Trust XIV
Acct. #: 2050000577196
Ref: Mid-State Trust XIV / Three Pillars Funding LLC
with a copy to:
Mid-State Homes, Inc.
0000 X. Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Collateral Agent:
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Corporate Trust Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent, Administrative Trustee or Bank Investor:
SunTrust Capital Markets, Inc.
000 Xxxxxxxxx Xxxxxx
Mail Code 0000
- 00 -
Xxxxxxx, Xxxxxxx 00000
Attention: Asset Surveillance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
E-mail: XXXX.XxxxxXxxxxxxxxx@xxxxxxxx.xxx
Payment Information:
Bank: SunTrust Banks
ABA# 000000000
Acct# 8800171236
Acct. Name: Three Pillars Funding LLC
Attn: Xxxxxx Xxxxxx
Reference: Mid-State Trust XIV
Section 8.4. Governing Law; Submission to Jurisdiction; Integration.
(a) THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE BORROWER HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS LOAN AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECTION 8.4
SHALL AFFECT THE RIGHT OF THE AGENT, THE ADMINISTRATIVE TRUSTEE, THE LENDER OR
ANY BANK INVESTOR TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER, OR ANY
OF ITS PROPERTY 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 RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS LOAN
AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS.
(c) This Loan Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire Agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.
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Section 8.5. Severability; Counterparts. This Loan Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Loan Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Delivery by facsimile of an executed signature page of this
Loan Agreement shall be effective as delivery of an executed counterpart hereof.
Section 8.6. Successors and Assigns.
(a) This Loan Agreement shall be binding on the parties
hereto and their respective successors and assigns; provided, however, that the
Borrower may not assign any of its rights or delegate any of its duties
hereunder without the prior written consent of the Agent. Except as set forth in
clause (b) below, no provision of this Loan Agreement shall in any manner
restrict the ability of the Lender or any Bank Investor to assign, participate,
grant security interests in, or otherwise transfer any portion of its interest
under the Operative Documents.
(b) Any Bank Investor may assign all or any portion of its
Commitment and its interest in the Net Investment and its other rights and
obligations hereunder to any Person with the written approval of the
Administrative Trustee, on behalf of the Lender, the Agent and, if such assignee
is not an Affiliate of the Agent, the reasonable consent of the Borrower. Such
Person shall, upon the execution of the Assignment and Assumption Agreement
referred to below, become a Bank Investor hereunder. In connection with any such
assignment, the assignor shall deliver to the assignee(s) an Assignment and
Assumption Agreement, duly executed, assigning to such assignee a pro rata
interest in such assignor's Commitment and other obligations hereunder and in
the Net Investment and other rights hereunder, and such 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 such interest
and to enable the Agent, on behalf of such assignee, to exercise or enforce any
rights hereunder and under the other Operative 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 Operative Documents to which such
assignor is or, immediately prior to such assignment, was a party with respect
to such assignor's Commitment and interest in the Net Investment for all
purposes of this Loan Agreement and under the other Operative Documents to which
such assignor is or, immediately prior to such assignment, was a party and (ii)
the assignor shall have no further obligations with respect to the portion of
its Commitment which has been assigned and shall relinquish its rights with
respect to the portion of its interest in the Net Investment which has been
assigned for all purposes of this Loan Agreement and under the other Operative
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 Borrower. Upon execution, the Agent shall deliver a copy of the
related Assignment and Assumption Agreement to the Collateral Agent. All costs
and expenses of the
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Agent incurred in connection with any assignment hereunder shall be borne by the
Bank Investor and such assignee. No Bank Investor shall assign any portion of
its Commitment hereunder without also simultaneously assigning an equal portion
of its interest in the Program Support Agreement to which it is a party or under
which it has acquired a participation.
(c) 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 Loan Agreement,
the other Operative Documents or any other instrument or document furnished
pursuant hereto or thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value or this Loan Agreement, the other Operative
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 Borrower, any Eligible Originator, the Originator,
the Depositor, the Back-up Servicer or the Master Servicer or the performance or
observance by the Borrower, any Eligible Originator, the Originator, the
Depositor, the Master Servicer or the Back-up Servicer of any of their
respective obligations under this Loan Agreement, the other Operative Documents
or any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Loan Agreement, each other
Operative Document 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 Loan Agreement
and the other Operative 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 Loan Agreement, the other Operative 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 Loan Agreement, the other Operative Documents and the Affected
Assets; (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Loan Agreement and the
other Operative 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 Lender any proceeding of the type referred to in Section 8.10 prior to the
date which is one year and one day after the payment in full of all Commercial
Paper issued by the Lender.
Section 8.7. Waiver of Confidentiality. The Borrower hereby
consents to the disclosure of any non-public information with respect to it
received by the Lender, the Agent, any Bank Investor or the Administrative
Trustee (A) to any of the Lender, any nationally recognized rating agency rating
the Lender's commercial paper, the Agent, the Liquidity Provider, the Dealers,
or the Credit Support Provider, any other Bank Investor, any dealer or placement
agent of or depositary for the Lender's Commercial Paper or any of such Person's
counsel or accountants in relation to this Loan Agreement or (B) to such other
Persons in connection with the enforcement by any such Person of its rights
hereunder or under any other
- 43 -
Operative Document. Such consent shall not extend to information concerning any
Affiliate of the Borrower.
Section 8.8. Confidentiality Agreement.
(a) The Borrower hereby agrees that it will not disclose the
contents of this Loan Agreement or any other proprietary or confidential
information of the Lender, any Bank Investor, the Agent, the Collateral Agent,
the Administrative Trustee, the Liquidity Provider or the Credit Support
Provider 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.
(b) The Lender, the Bank Investors, the Agent, the
Collateral Agent and the Administrative Trustee each hereby agrees that it will
not disclose the contents of this Loan Agreement or any other proprietary or
confidential information of the Borrower or any Affiliate of the Borrower 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, (ii) as otherwise required by applicable law or order of a court of
competent jurisdiction or (iii) as permitted pursuant to Section 8.7.
Section 8.9. Liability of Owner Trustee. It is expressly understood
and agreed by the parties hereto that (a) this Loan Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but solely
as Owner Trustee under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it as the Owner Trustee, (b) each of the
representations, undertakings and agreements herein made on the part of the
Borrower is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Borrower, (c) nothing herein contained shall be construed
as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the other parties
hereto and by any Person claiming by, through or under such parties and (d)
under no circumstances shall Wilmington Trust Company be personally liable for
the payment of any indebtedness or expenses of the Borrower or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Borrower under this Loan Agreement.
Section 8.10. No Bankruptcy Petition Against the Lender. The Borrower
hereby covenants and agrees that, prior to the date which is one (1) year and
one (1) day after the payment in full of all outstanding Commercial Paper or
other indebtedness of the Lender, it will not institute against, or join any
other Person in instituting against, the Lender any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
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Section 8.11. No Recourse Against Lender. Notwithstanding anything to
the contrary contained in this Loan Agreement, the obligations of the Lender
under this Loan Agreement and all other Operative Documents are solely the
corporate obligations of the Lender and shall be payable solely to the extent of
funds received from the Borrower in accordance herewith or from any party to any
Operative Document in accordance with the terms thereof in excess of funds
necessary to pay matured and maturing Commercial Paper.
Section 8.12. Assignment by Lender to Conduit Assignee.
(a) Without limiting Section 2.13 or 8.6 hereof, the Lender
may, from time to time, with prior or concurrent notice to the Borrower 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 Loan
Agreement and any other Operative Documents to which it is a party to a Conduit
Assignee. Upon and to the extent of such assignment by the Lender to a Conduit
Assignee, (i) such Conduit Assignee shall be the owner of the assigned portion
of the Net Investment, (ii) the related administrator for such Conduit Assignee
will act as the Administrative Trustee for such Conduit Assignee, with all
corresponding rights and powers, express or implied, granted to the
Administrative Trustee hereunder or under the other Operative 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 Lender and its Program Support Provider(s)
herein and in the other Operative Documents (including 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 Lender's obligations, if any,
hereunder or any other Operative Document, and the Lender shall be released from
such obligations, in each case to the extent of such assignment, and the
obligations of the Lender 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 Trustee, as applicable, on behalf of the
Lender 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
Lender from time to time shall be determined in the manner set forth in the
definition of "CP Rate" applicable to the Lender on the basis of the interest
rate or discount applicable to commercial paper issued by such Conduit Assignee
(rather than the Lender), (vii) the defined terms and other terms and provisions
of this Loan Agreement and the other Operative Documents shall be interpreted in
accordance with the foregoing, and (viii) if requested by the Agent or
Administrative Trustee 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 Administrative Trustee may reasonably request to
evidence and give effect to the foregoing. No assignment by the Lender 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 2.3 to fund any
Investment not funded by the Lender or such Conduit Assignee or to acquire from
the Lender or such Conduit Assignee all or any portion of the Net Investment
pursuant to Section 2.13. The Agent shall promptly notify the Collateral Agent
of any such assignment.
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(b) In the event that the Lender makes an assignment to a
Conduit Assignee in accordance with clause (a) above, the Bank Investors: (i) if
requested by the Agent, shall terminate their participation in the applicable
Program Support Agreement to the extent of such assignment, (ii) if requested by
the Agent, shall execute (either directly or through a participation agreement,
as determined by the Administrative Trustee) the program support agreement
related to such Conduit Assignee, to the extent of such assignment, the terms of
which shall be substantially similar to those of the participation or other
agreement entered into by such Bank Investor with respect to the applicable
Program Support Agreement (or which shall be otherwise reasonably satisfactory
to SunTrust Capital Markets, Inc. and the Bank Investors), (iii) if requested by
the Lender, shall enter into such agreements as requested by the Lender pursuant
to which they shall be obligated to provide funding to the Conduit Assignee on
substantially the same terms and conditions as is provided for in this Loan
Agreement in respect of the Lender (or which agreements shall be otherwise
reasonably satisfactory to the Lender and the Bank Investors), and (iv) shall
take such actions as the Agent shall reasonably request in connection therewith.
Section 8.13. Assignment by Lender to Program Support Provider. The
Borrower hereby agrees and consents to the assignment by the Lender from time to
time of all or any part of its rights under, interest in and title to this Loan
Agreement and the Net Investment to any Program Support Provider.
ARTICLE 9
THE AGENT
Section 9.1. Appointment and Authorization of Agent. Each Bank
Investor and the Lender hereby irrevocably appoints, designates and authorizes
the Agent to take such action on its behalf under the provisions of this Loan
Agreement and each other Operative Document and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Loan Agreement and any other Operative Document, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere in this Loan Agreement or in any other Operative
Document, the Agent shall not have any duties or responsibilities, except those
expressly set forth in this Loan Agreement, nor shall the Agent have or be
deemed to have any fiduciary relationship with the Lender or any Investor, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Loan Agreement or any other Operative
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Loan Agreement
with reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable
Law. Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.
Section 9.2. Delegation of Duties. The Agent may execute any of its
duties under this Loan Agreement or any other Operative Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to
- 46 -
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.
Section 9.3. Liability of Agent. No Agent-Related Person shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Loan Agreement or any other Operative Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any Investor for any
recital, statement, representation or warranty made by the Borrower, any
Eligible Originator, the Originator, the Depositor, the Master Servicer or the
Back-up Servicer, or any officer thereof, contained in this Loan Agreement or in
any other Operative Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Loan Agreement or any other Operative Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this Loan
Agreement or any other Operative Document, or for any failure of the Borrower,
any Eligible Originator, the Originator, the Depositor, the Master Servicer, or
the Back-up Servicer or any other party to any Operative Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to the Lender or any Bank Investor to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Loan Agreement or any other Operative Document, or to
inspect the properties, books or records of the Borrower, any Eligible
Originator, the Originator, the Depositor, the Master Servicer, the Back-up
Servicer or any of their respective Affiliates.
Section 9.4. Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrower, any Eligible Originator, the Originator, the Depositor,
the Master Servicer and the Back-up Servicer), independent accountants and other
experts selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Loan Agreement or any other Operative
Document unless it shall first receive such advice or concurrence of the
Majority Investors as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lender and the Bank Investors
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Loan
Agreement or any other Operative Document in accordance with a request or
consent of the Majority Investors or, if required hereunder, all Investors and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Investors.
(b) For purposes of determining compliance with the
conditions specified in Article V, the Lender and each Bank Investor that has
executed this Loan Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter either sent by
the Agent to the Lender or such Bank Investor for consent, approval, acceptance
or satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lender or such Bank Investor.
- 47 -
Section 9.5. Notice of Potential Event of Default, Event of Default
Facility, Termination Event or Servicer Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of a Potential Event of Default,
an Event of Default, Facility Termination Event or a Servicer Default, unless
the Agent has received written notice from the Lender, a Bank Investor or the
Borrower referring to this Loan Agreement, describing such Potential Event of
Default, an Event of Default, Facility Termination Event or Servicer Default and
stating that such notice is a "Notice of Potential Event of Default," "Notice of
Event of Default", "Notice of Facility Termination Date" or "Notice of Servicer
Default," as applicable. The Agent will notify the Bank Investors and the
Borrower of its receipt of any such notice. The Agent shall (subject to Section
9.4) take such action with respect to such Potential Event of Default, Event of
Default, Facility Termination Event or Servicer Default as may be requested by
the Majority Investors, provided, however, that, unless and until the Agent
shall have received any such request, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Potential Event of Default, Event of Default or Servicer Default as it shall
deem advisable or in the best interest of the Lender and the Bank Investors.
Section 9.6. Credit Decision; Disclosure of Information by the Agent.
Each Bank Investor and the Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any consent to and acceptance of any
assignment or review of the affairs of the Borrower, the Master Servicer, the
Back-up Servicer, the Originator, any Eligible Originator, the Depositor or any
of their respective Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank Investor or the Lender as to
any matter, including whether the Agent-Related Persons have disclosed material
information in their possession. Each Bank Investor and the Lender, including
any Bank Investor by assignment, represents to the Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower,
the Master Servicer, the Back-up Servicer, the Originator, each Eligible
Originator, the Depositor or their respective Affiliates, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Loan Agreement and to extend credit to the
Borrower hereunder. Each Bank Investor and the Lender also represents that it
shall, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Loan Agreement and the other Operative
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower, the Master Servicer, the Back-up
Servicer, each Eligible Originator, the Depositor or the Originator. Except for
notices, reports and other documents expressly herein required to be furnished
to the Bank Investors and the Lender by the Agent herein, the Agent shall not
have any duty or responsibility to provide any Investor with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Borrower, the Master Servicer,
the Back-up Servicer, the Originator, each Eligible Originator, the Depositor or
their respective Affiliates which may come into the possession of any of the
Agent-Related Persons.
- 48 -
Section 9.7. Indemnification of the Agent. Whether or not the
transactions contemplated hereby are consummated, the Bank Investors shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of the Borrower and without limiting the obligation of the Borrower
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Amounts incurred by it; provided, however, that
no Bank Investor shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Amounts resulting from such Person's gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Majority Investors shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Bank Investor shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including attorney's fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Loan
Agreement, any other Operative Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Borrower. The undertaking in this Section 9.7
shall survive payment of all Aggregate Unpaids and the resignation or
replacement of the Agent.
Section 9.8. Agent in Individual Capacity. SunTrust Capital Markets,
Inc. (and any successor acting as Agent) and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with any of the Borrower, the
Originator, any Eligible Originator, the Depositor, the Master Servicer and the
Back-up Servicer or any of their Subsidiaries or Affiliates as though SunTrust
Capital Markets, Inc. were not the Agent or a Bank Investor hereunder and
without notice to or consent of the Lender or the Bank Investors. The Bank
Investors acknowledge that, pursuant to such activities, SunTrust Capital
Markets, Inc. or its Affiliates may receive information regarding the Borrower,
the Originator, the Master Servicer, each Eligible Originator, the Depositor or
their respective Affiliates (including information that may be subject to
confidentiality obligations in favor of such Person) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Commitment, SunTrust Capital Markets, Inc. (and any successor
acting as Agent) in its capacity as a Bank Investor hereunder shall have the
same rights and powers under this Loan Agreement as any other Bank Investor and
may exercise the same as though it were not the Agent or a Bank Investor, and
the term "Bank Investor" or "Bank Investors" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
Section 9.9. Resignation of Agent. The Agent may resign as Agent upon
thirty (30) days' notice to the Borrower, the Bank Investors and the Lender. If
the Agent resigns under this Loan Agreement, the Majority Investors shall
appoint, with the consent of the Borrower, which consent shall not unreasonably
be withheld, from among the Bank Investors a successor agent for the Bank
Investors. If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the Bank
Investors a successor agent from among the Bank Investors and, with the consent
of the Borrower, which consent shall not unreasonably be withheld. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring
- 49 -
Agent's appointment, powers and duties as Agent shall be terminated. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
9.9 and Sections 9.3 and 9.7 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Agent under this Loan Agreement.
If no successor agent has accepted appointment as Agent by the date which is
thirty (30) days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Bank Investors shall perform all of the duties of the Agent hereunder until
such time, if any, as the Majority Investors appoint a successor agent as
provided for above.
Section 9.10. Payments by the Agent. Unless specifically allocated to
a Bank Investor pursuant to the terms of this Loan 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) pro rata in accordance with
their respective outstanding funded portions of the Net Investment on the
Business Day received by the Agent, unless such amounts are received after 12:00
Noon (New York City time) 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
not later than the following Business Day.
Section 9.11. Notification by Agent.
The Agent agrees, upon its receipt of notice of a Facility Termination
Date described in clause (b), (d) or (e) of the definition thereof, to promptly
notify the Borrower of any such occurrence; provided, however, that no failure
to give or any delay in giving such notice shall affect the occurrence of the
Facility Termination Date.
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