Exhibit 10(p)
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ASSET ASSIGNMENT AGREEMENT
By and Between
XXXXXX COMMERCIAL PAPER INC.,
as Lender,
and
GREEN TREE RESIDUAL FINANCE CORP. I,
as Borrower
Dated as of February 13, 1998
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TABLE OF CONTENTS
Section 1. Definitions...................................................-1-
Section 2. Loan..........................................................-9-
Section 3. Purpose of this Agreement....................................-13-
Section 4. Pledge and Security..........................................-14-
Section 5. Representations and Warranties...............................-14-
Section 6. Collateral Amount Maintenance................................-18-
Section 7. Borrower Covenants...........................................-19-
Section 8. Events of Default............................................-25-
Section 9. Remedies Upon Default........................................-27-
Section 10. Indemnification..............................................-28-
Section 11. Power of Attorney............................................-29-
Section 12. Participation; Assignments...................................-29-
Section 13. Notices......................................................-30-
Section 14. No Oral Modifications; Successors and Assigns................-30-
Section 15. Severability of Provisions...................................-31-
Section 16. No Waiver....................................................-31-
Section 17. Governing Law; Agreement Constitutes Security Agreement......-31-
Section 18. Jurisdiction.................................................-31-
Section 19. Waiver of Jury Trial.........................................-31-
Section 20. Integration..................................................-31-
Section 21. Advice from Independent Counsel..............................-32-
Section 22. Judicial Interpretation......................................-32-
Exhibits:
Exhibit A Instruction Letter
Exhibit B Secured Note
Exhibit C Projected Cash Receipts and Minimum Monthly Principal Payment
Schedule
Exhibit D Certificates, Fees, Release Amounts
Exhibit E Inside Refinance Payment Factors
Schedule 1 Securitization Trusts
ii
ASSET ASSIGNMENT AGREEMENT
This ASSET ASSIGNMENT AGREEMENT (this "Agreement"), dated as of
February 13, 1998, by and between XXXXXX COMMERCIAL PAPER INC., a New York
corporation (the "Lender"), and GREEN TREE RESIDUAL FINANCE CORP. I, a Minnesota
corporation (the "Borrower").
WHEREAS, the Lender wishes to lend, and the Borrower wishes to borrow,
subject to certain terms and conditions, moneys in connection with the financing
of the Certificates, Fees and Release Amounts owned by the Borrower, and certain
other collateral described herein and pledged pursuant hereto;
WHEREAS, Green Tree Financial Corporation will fully and
unconditionally guarantee the obligations of Borrower hereunder pursuant to a
separate Guaranty Agreement; and;
WHEREAS, the parties desire to agree upon the terms and conditions
governing such financing facility;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used in this Agreement shall
have the meanings set forth below.
"Additional Assets" has the meaning specified in Section 2(h).
"Adjusted Net Equity" means the shareholders' equity of the Guarantor
and its consolidated subsidiaries, determined in accordance with GAAP (less
goodwill and similar amounts).
"Affiliate" means, when used with respect to any specified Person, any
other Person directly or indirectly controlling, controlled by, or under common
control with, such Person. Control shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and in any event shall refer to the ownership of more than
10% of the common equity of such Person and "controlling" and "controlled" shall
have meanings correlative the foregoing. For purposes of the definitions of
"ERISA Violation" and "Plan" and the notice requirements of Section 7(g)(ix),
"Affiliate" shall include any Person who is part of the controlled group or
under common control with the Borrower within the meaning of Section 414 of the
Code or Section 4001 of ERISA.
"Applicable Percentage" means for the first twelve Distribution Dates,
50%, for the next twelve Distribution Dates, 75% and thereafter 100%.
"Business Day" means any day other than (a) a Saturday or a Sunday,
and (b) any day on which the Lender or banking institutions in the State of New
York are authorized or required by law or regulation, executive order or
governmental decree to be closed.
"Cash Receipts" has the meaning specified therefor in Section 2(d).
"Certificates" means the residual certificates with respect to
Securitization Trusts identified in Exhibit D hereto, as amended from time to
time in accordance with the provisions hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any collateral pledged by the Borrower to the
Lender as described in Section 4.
"Collection Account" means an account in the name of the Lender
established and maintained by the Borrower with a depository institution
acceptable to Lender.
"Contract" means, with respect to each Securitization Trust as of any
date of determination, any home equity, home improvement, manufactured housing
or retail installment loan or other receivable held by such trust and
securitized pursuant thereto.
"Default" means any event which, with the giving of notice or the
lapse of time or both, would become an Event of Default.
"Determination Period" means, in connection with the calculation of
the LIBOR Rate, one month.
"Distribution Date" means the 15th day of each calendar month, or if
such 15th day is not a Business Day, the next succeeding Business Day,
commencing on March 15, 1998.
"Due Period" means for each Securitization Trust, the monthly period
for which collections on the Contracts for a particular payment or distribution
date are aggregated for application on such date.
"EBIT" means earnings before income taxes, as interpreted in
accordance with generally accepted accounting principles.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and rulings thereunder.
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"ERISA Violation" means the occurrence of any of the following events
or conditions with respect to any Plan or Multiemployer Plan if, as a result of
such event or condition, Borrower or any Affiliate shall incur, or in the
determination of the Lender shall be reasonably likely to incur a liability to a
Plan, a Multiemployer Plan, or the PBGC that, individually or in the aggregate,
would constitute a Material Adverse Change:
(i) any reportable event, as defined in Section 4043(c) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to which the
PBGC has not by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the occurrence of such
event (provided that a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of
ERISA, shall be a reportable event regardless of the issuance of any
waivers in accordance with Section 412(d) of the Code), and any
request for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice of intent to
terminate any Plan or any action taken by the Borrower or an Affiliate
to terminate nay Plan;
(iii) the institution by PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Borrower or any Affiliate of a notice
from a Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan by the
Borrower or any Affiliate that results in liability under Section 4201
or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt by the
Borrower or any Affiliate of notice from a Multiemployer Plana that it
is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under Section
4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against the Borrower or any Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, would result in the
loss of tax-exempt status of the trust of which such Plan is a part if
the Borrower or an Affiliate fails to timely provide security to the
Plan in accordance with the provisions of said Sections.
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"Event of Default" has the meaning specified therefor in Section 8.
"Facility Balance" means, as of any date, the sum of (a) the Loan
Balance plus any unpaid interest expense, and (b) any other fees or expenses
owing to Lender hereunder.
"Fees and Release Amounts" means the guarantee fees and excess cash
release amounts with respect to the Securitization Trusts identified in Exhibit
D hereto, as amended from time to time in accordance with the provisions hereof.
"Funding Date" means the date hereof, or such later date on which the
initial advance on the Loan is made after all conditions hereunder to the making
of the Loan have been satisfied as determined by the Lender in its sole
discretion.
"GAAP" means United States generally accepted accounting principles,
consistently applied, as in effect from time to time.
"Guarantor" means Green Tree Financial Corporation, and any successor
thereto.
"Guaranty Agreement" means the Guaranty Agreement, dated the date
hereof, among the Guarantor, the Borrower and the Lender pursuant to which the
Guarantor unconditionally guarantees the full performance of the Borrower's
obligations hereunder.
"Hedging Contract" means any instrument or agreement acquired or
entered into by Borrower from time to time for the purpose of hedging risks
associated with the Pledged Assets.
"Hypothecation" has the meaning specified in Section 12(a).
"Indebtedness" has the meaning specified in Section 9(i).
"Indemnified Amounts" has the meaning specified in Section 10.
"Indemnified Parties" has the meaning specified in Section 10.
"Independent Accountants" means a nationally recognized independent
certified public accounting firm or other accounting firm acceptable to Lender
in its sole discretion.
"Inside Refinancing Payment" means with respect to each Contract
refinanced by an Obligor through Guarantor or an Affiliate thereof, an amount
equal to the unpaid balance of such Contract multiplied by a factor applicable
to such Contract, based on the month in which such refinancing occurs and the
Securitization Trust in which such Loan was included, as specified in Exhibit E
hereto.
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"Instruction Letter" has the meaning specified in Section 2(a)(viii).
"Interest Amount" means, with respect to any Distribution Date, the
aggregate amount of interest on the Facility Balance computed on a daily basis
for the related Monthly Period computed as the product of (i) the Interest Rate
in effect on each day of such period, and (ii) the Facility Balance on each day
of such Monthly Period.
"Interest Rate" means, as of any date of determination, to the extent
permitted by applicable law, the per annum percentage rate, calculated daily,
equal to the sum of the LIBOR Rate and two percentage points (2.00%), computed
on the basis of the actual days elapsed and a 360 day year; provided, however,
that upon the occurrence and during the continuation of an Event of Default, the
Interest Rate shall be equal to the sum of the LIBOR Rate and four percentage
points (4.00%).
"Interest Reset Period" means the period commencing on and including a
Distribution Date (or commencing on and including the Funding Date in the case
of the initial Interest Reset Period) to but excluding the next succeeding
Distribution Date. The final Interest Reset Period shall terminate on and shall
include the date of the final payment to the Lender of all amounts due
hereunder.
"Lender Value" means the price at which the Pledged Assets could be
sold as of a particular date of determination, to be determined by the Lender at
its sole discretion.
"LIBOR Rate" means, with respect to each Interest Reset Period, the
London interbank offered rate for United States dollar deposits having a
duration equal to the Determination Period determined by Lender on the Rate
Determination Date immediately preceding the commencement of such Interest Reset
Period as follows:
(a) On each Rate Determination Date, Lender shall determine
the LIBOR Rate as of 11:00 A.M. (London time) on such Rate
Determination Date on the basis of the quotations thereof which
appears on Telerate Page 3750;
(b) If on any Rate Determination Date, the LIBOR Rate does
not appear on Telerate Page 3750, Lender shall determine the LIBOR
Rate on the basis of quotations provided by Reference Banks on such
Rate Determination Date to prime banks in the London interbank market.
The LIBOR Rate as determined by Lender is the arithmetic mean of such
quotations;
(c) If on any Rate Determination Date at least two of the
Reference Banks provide quotations, the LIBOR Rate shall be determined
in accordance with clause (b) above on the basis of the offered
quotations of those Reference Banks providing such quotations; and
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(d) If on the Rate Determination Date only one or none of
the Reference Banks provides such offered quotations, the LIBOR Rate
shall be:
(i) the rate per annum (rounded, as aforesaid) that Lender
determines to be either (A) the arithmetic mean of the
offered quotations that leading banks in the City of New
York selected by Lender are quoting at or about 11:00 A.M.
New York City time on the relevant Rate Determination Date
for loans in U.S. Dollars to leading banks active in the
London interbank eurodollar market for a period equal to the
related Determination Period or those of them (being at
least two in number) to which such offered quotations are,
in the opinion of Lender, being so quoted, or (B) in the
event that Lender can determine no such arithmetic mean, the
arithmetic mean of the offered quotations that leading banks
in the City of New York selected by Lender are quoting at or
about 11:00 A.M. (London time) on such Rate Determination
Date to leading banks active in the London interbank
eurodollar market for Dollar deposits having a duration
equal to the Determination Period; or
(ii) if the banks selected as aforesaid by Lender are not quoting
as described in clause (i) above, the LIBOR Rate for such
Distribution Date shall be the LIBOR Rate as determined on
the previous Rate Determination Date.
"Lien" means any interest in property securing an obligation owed to,
or claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, civil law, statute, civil code or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien, privilege, security interest or other
encumbrance arising from a mortgage, deed of trust, hypothecation, cession,
transfer, assignment, pledge, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment or bailment for security purposes.
"Loan" has the meaning specified therefor in Section 2(a).
"Loan Amount" means the lesser of (a) $500,000,000 or (b) 50% of the
Lender Value of the Pledged Assets.
"Loan Balance" means, as of any date, (a) the Loan Amount as of the
Funding Date plus any amounts borrowed pursuant to Section 2(h) or Section 2(i)
hereof, less (b) payments of principal applied hereunder with respect thereto.
"London Business Day" means any day on which dealings in deposits in
United States dollars are transacted in the London interbank market.
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"Margin Deficit" has the meaning specified in Section 6(a).
"Material Adverse Change" means a material adverse change in or effect
upon any of (i) the condition (financial or otherwise), business, performance,
operations, properties, profits or prospects of the Borrower or the Guarantor,
(ii) the legality, validity or enforceability of this Agreement, the Secured
Note or any Related Documents, or (iii) the Collateral.
"Maturity Date" means February 15, 2000 or such earlier date on which
this Agreement shall terminate in accordance with the provisions thereof;
provided, however, that the maturity date may be extended for a period of 12
months to February 15, 2001 upon agreement of the Lender, Borrower and the
Guarantor, subject to the terms hereof.
"Monthly Period" means, with respect to any Distribution Date, the
period from and including the preceding Distribution Date (or in the case of the
first Distribution Date, from and including the Funding Date) to and excluding
the applicable Distribution Date.
"Monthly Principal Payment" means, with respect to each Distribution
Date, (a) the Applicable Percentage of the greater of (i) Cash Receipts for the
related Monthly Period and (ii) Projected Cash Receipts for such Monthly Period.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
"Participant" has the meaning specified in Section 12(a).
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor thereto.
"Person" means any legal person, including any individual,
corporation, limited liability company, partnership, joint venture, estate,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Borrower or any of its Affiliates
or with respect to which the Borrower or any of its Affiliates may have any
liability.
"Pledged Assets" means the Certificates and the Fees and Release
Amounts.
"Projected Cash Receipts" means those amounts scheduled on Exhibit C
hereto.
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"Rate Determination Date" means, with respect to any day in an
Interest Reset Period, the second London Business Day prior to such day.
"Reference Banks" means two major banks in the London interbank market
as selected by Lender. Each Reference Bank shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
with an established place of business in London and which has been designated as
such by Lender and is able and willing to provide such quotations to Lender on
each Rate Determination Date. If any Reference Bank designated by Lender fails
to meet the qualifications of a Reference Bank, Lender will use its best effort
to designate an alternative Reference Bank.
"Related Document" means, as applicable, any document executed in
connection herewith (including the Guaranty Agreement, the Warrant, Warrant
Agreement and the Side Letter) or with the Repurchase Facility or with the
Securitization Trusts, or related hereto or thereto.
"Repurchase Facility " means that repurchase facility created (a)
pursuant to the Amended and Restated Master Repurchase Agreement, dated February
4, 1998 and (b) the Master Repurchase Agreement, dated October 15, 1992, each
between Lender and Green Tree Finance Corp. -- Five, as the same may be amended,
supplemented or otherwise modified from time to time.
"Restricted Payment" means, as applied to any Person,
(i) any dividend or other distribution (including any
distribution of properties, assets, cash, rights,
obligations or securities), direct or indirect, on account
of any shares of capital stock of such Person now or
hereafter outstanding or any securities convertible into or
exercisable or exchangeable for such shares of capital
stock, except for a dividend payable to all of the holders
of such Person's common stock solely in shares of common
stock; and
(ii) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of capital stock of such
Person now or hereafter outstanding or any securities
convertible into or exercisable or exchangeable for such
shares of capital stock.
"Secured Note" means the promissory note in the form attached hereto
as Exhibit B hereto.
"Securitization Trusts" means, collectively, the trusts listed in
Schedule 1 hereto, as such schedule may be amended from time to time in
accordance with the terms hereof.
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"Side Letter" means that certain Letter Agreement between Guarantor
and Lender dated the date hereof.
"Telerate Page 3750" means the display so designated on the Dow Xxxxx
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).
"Trust Agreement" means the trust or other agreement with respect to
the related Securitization Trust pursuant to which a Pledged Asset is issued.
"Trustees" means, collectively, the trustees of the Securitization
Trusts whose duties include administering distributions on the Pledged Assets.
"Warrant" means the common stock warrant of the Guarantor issued to
the Lender on or prior to the date of funding of the Loan.
"Warrant Agreement" means, collectively, the Common Stock Warrant
Agreement and Registration Rights Agreement, each dated the date hereof and each
between the Lender and Guarantor pursuant to which the Warrant is issued.
"Withdrawal Liability" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
Section 2. Loan. (a) Subject to the terms and conditions of this
Agreement, Borrower hereby agrees to borrow from Lender and Lender hereby agrees
to lend to Borrower the Loan Amount (the "Loan"). The Loan shall be evidenced by
the Secured Note. The Loan shall be collateralized by, among other things the
Pledged Assets, as set forth in Section 4. Prior to making the Loan, the
Borrower shall fulfill the following conditions precedent:
(i) The representations and warranties of the Borrower
in Section 5 hereof and of the Guarantor in
Section 2 of the Guaranty Agreement shall be true
and correct;
(ii) No Default or Event of Default shall have occurred
and be continuing;
(iii) The Borrower shall have delivered to the Lender
the certificates evidencing the Certificates with
all necessary bond powers or transfer instruments
executed in blank or in the name specified by the
Lender by the appropriate officers of the
Borrower, and such other documents as may be
required to transfer the Certificates of record
pursuant to the applicable Trust operative
agreements and/or as the Lender shall require to
perfect its first priority
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security interest in such Certificates, including,
without limitation, signature guarantees;
(iv) The Lender shall have received a certificate of
the Secretary of each of the Borrower and the
Guarantor certifying as to the following: (A) its
certificate of incorporation, (B) its bylaws, (C)
the resolutions of its board of directors
approving the definitive agreements, documents,
and instruments necessary to consummate the
transactions contemplated hereby, and (D) the
names and true signatures of the officers
authorized on its behalf to sign the definitive
agreements, documents and instruments;
(v) The Lender shall have received a good standing
certificate (or its equivalent) for each of the
Borrower and the Guarantor issued by the Secretary
of State of the jurisdiction of each such entity's
incorporation;
(vi) The Related Documents shall be in full force and
effect and in form and substance satisfactory to
Lender.
(vii) The Lender shall have received a search report
provided in writing to the Lender by one of the
national UCC search firms, listing all effective
financing statements that name the Borrower or any
entity that conveyed Pledged Assets to the
Borrower as debtor or seller and that are filed in
the jurisdiction of the Borrower's chief executive
offices and in such other jurisdictions as the
Lender shall request;
(viii) (A) The Borrower shall have (1) notified each of
the Trustees in connection with the Securitization
Trusts of the pledge of the related Pledged Assets
hereunder, and (2) instructed each of the
Trustees, as applicable, to pay all amounts
payable to the holder of the related Certificates
and to pay all related Fees and Release Amounts to
the Collection Account, and (B) each of the
Trustees shall have acknowledged in writing the
instructions set forth in clause (A) above, and a
copy of the fully executed Instruction Letter
shall be delivered to the Lender. Such
notification and instruction shall be in the form
of Exhibit A hereto (each, an "Instruction
Letter");
(ix) The Lender shall have received an original fully
executed copy of this Agreement and the Secured
Note and notice that the Collection Account has
been established;
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(x) The Lender shall have received acknowledgment
copies of effective financing statements of the
Borrower (Form UCC-1 or Form UCC-3, as
appropriate), filed on or prior to the date of the
Loan and naming the Borrower, as "debtor," the
Lender, as "secured party," and describing the
Collateral as the "collateral";
(xi) The Lender shall have received payment of a
structuring fee pursuant to the Side Letter;
(xii) The Lender shall have received the Warrant in form
and substance satisfactory to it;
(xiii) The Lender shall have received such other and
further documents and legal opinions as the Lender
in its sole discretion shall require; and
(xiv) The Lender shall receive the following, each dated
as of such date and in form and substance
satisfactory to the Lender and its counsel:
(1) Favorable authority and enforceability
opinions of counsel to the Borrower and
the Guarantor concerning this Agreement,
the Secured Note and the Guaranty
Agreement; and
(2) Favorable security interest opinions of
counsel to the Borrower concerning the
Collateral pledged hereunder.
(b) The Loan shall mature and shall be due and payable in full,
together with accrued and unpaid interest thereon at the Interest Rate, on the
Maturity Date. The Maturity Date may be extended for a period of twelve months
from February 15, 2000, subject to mutual agreement between Borrower and Lender
as to any additional conditions or provisions of such extension, acceptance of
which shall be without any obligation on the part of Lender and subject to its
sole discretion, and subject to payment to Lender of an extension fee as set
forth in the Side Letter.
(c) The Borrower shall timely make any payment of interest and
principal and any other sum which becomes due and payable, whether by
acceleration or otherwise (including any mandatory prepayment), under the terms
of this Agreement and the Secured Note.
(d) If no Event of Default shall have occurred, on each Distribution
Date all amounts received (i) from the Trustees with respect to the Pledged
Assets or during the related
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Monthly Period or (ii) by the Borrower in connection therewith during the
related Monthly Period (in either case, the "Cash Receipts") shall be applied
without duplication, as follows:
(i) first, to the Lender the amount required to pay or
reimburse the Lender for any fees or expenses
owing to Lender hereunder;
(ii) second, to the Lender the amount required to pay
the Interest Amount;
(iii) third, to the Lender the amount required to pay
the Monthly Principal Payment;
(iv) fourth, if the Loan Balance is greater than zero
and there exists a Margin Deficit, to the Lender
in reduction of the Loan Balance, the Margin
Deficit (provided, however, that nothing herein
shall alter the requirements specified in Section
6 hereof); and
(v) fifth, to the Borrower (by wire transfer on such
Distribution Date pursuant to instructions
provided to the Lender at least one (1) Business
Day prior to such Distribution Date) any and all
remaining amounts, if any; provided, however, that
if the Borrower does not notify the Lender at
least one (1) Business Day prior to such
Distribution Date as to the amount to be remitted
to the Borrower pursuant to this clause fifth and
Cash Receipts for the related Monthly Period for
each Securitization Trust from the Trustees are
not received by noon, New York City time, on such
Distribution Date, the Lender shall make such
remittance on the Business Day following the date
on which the Lender receives all such Cash
Receipts and reconciliation of such assets.
Lender and Borrower acknowledge that certain of the Pledged Assets have
payment dates on the first day of each month. It is agreed that the amount due
on each Distribution Date pursuant to this clause (d) will be prepaid by
applying Cash Receipts, as and to the extent received with respect to the first
day of the month of such Distribution Date, to the amounts scheduled to be due
on such Distribution Date, in the order set forth in this clause (d).
(e) In the event that the Cash Receipts on any Distribution Date are
not sufficient to make a full payment of the amounts set forth in clauses (i)
through (iv) of Section 2(d), the Borrower shall immediately pay to the Lender
on the applicable Distribution Date the amount of such deficiency (which amount
shall be treated hereunder as a Cash Receipt).
(f) In addition to and not in lieu of all other payments due to Lender
hereunder, Borrower shall be required to make a mandatory principal payment in
reduction of
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the Loan Balance (i) upon any securitization of any of the Pledged Assets in an
amount equal to 100% of the proceeds of the securitization of such Pledged
Assets and (ii) in an amount equal to 100% of any Inside Refinancing Payment.
(g) If the Borrower shall have paid or agreed to pay any interest on
the Facility Balance in excess of that permitted by law, then it is the express
intent of the parties hereto with respect thereto that (i) to the extent
possible given the term of the Facility Balance, all excess amounts previously
paid or to be paid by the Borrower be applied to reduce the Facility Balance and
the provisions thereof immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the then applicable law, but so as to permit
the recovery of the fullest amount otherwise called for thereunder, and (ii) to
the extent that the reduction of the Facility Balance and the reformation of the
provisions thereof described in the immediately preceding clause (i) are not
possible given the term of the Facility Balance, such excess amount shall be
deemed to have been paid with respect to the Facility Balance as a result of an
error and upon the Lender obtaining actual knowledge of an error, such amount
shall be refunded to the Borrower.
(h) If at any time prior to the Maturity Date the Borrower desires to
pledge additional residual certificates, fees and/or release amounts
("Additional Assets"), Borrower may borrow an amount hereunder up to 50% of the
Lender Value of the Additional Certificates, but in no event more than the
difference between $500,000,000 and the then current Loan Balance, subject to
mutual agreement between Borrower and Lender as to any additional conditions or
provisions of such borrowing, acceptance of which shall be without any
obligation on the part of Lender and subject to its sole discretion. Any such
borrowing shall be subject to revising Exhibit C hereto taking into account the
cash flows of the Additional Certificates.
(i) The parties hereto acknowledge that in addition to the conditions
precedent set forth in Section 2(a), prior to the making of the Loan, Lender
must have completed such due diligence with respect to the Pledged Assets as it
shall in its sole discretion deem necessary. To the extent that on the Funding
Date, Lender has not completed its due diligence with respect to all of the
Pledged Assets, the principal amount of the Loan advanced on such Distribution
Date will be equal to 50% of the Lender Value of the Pledged Assets as to which
due diligence has been completed. Thereafter, during the period commencing on
the Funding Date until Lender completes such due diligence with respect to all
of the Pledged Assets, as due diligence with respect to additional Pledged
Assets is completed, Lender will make one or more additional advances on the
Loan (i) at such times and in such amounts as Lender and Borrower may agree,
(ii) in each case, in an amount such that the Loan Balance after giving effect
to such advance does not exceed 50% of the Lender Value of the Pledged Assets as
to which due diligence has been completed, with the aggregate amount of all such
advances together with the amount advance on the Funding Date in no event to
exceed $500,000,000 and (iii) so long as on the date of each such advance, (x)
the representations and warranties of the Borrower in Section 5 hereof and of
the Guarantor in Section 2 of the
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Guaranty Agreement shall be true and correct and (y) no Default or Event of
Default shall have occurred and be continuing. Lender agrees to use commercially
reasonable efforts to complete its due diligence within 10 Business Days of the
date of this Agreement.
(j) With the prior written consent of Lender at Lender's sole
discretion, Borrower may substitute other Certificates, Fees and Release Amounts
for any of the Pledged Assets. Such substitution shall be made by transfer to
Lender (such transfer to be reflected on Exhibit D hereto) of the Pledged Assets
in the same manner as the initial pledge of the Pledged Assets hereunder,
including but not limited to the execution of an appropriate assignment,
delivery of any Certificates in the manner described herein to Lender and the
filling of appropriate UCC financing statements.
Section 3. Purpose of this Agreement.
(a) The Borrower agrees that the Loan shall be used for general
corporate purposes as permitted hereunder.
(b) The Borrower does not own, and will not, and will not permit any
subsidiary to, directly or indirectly, use any part of the proceeds of the Loan
for the purpose of purchasing or carrying any "margin stock" within the meaning
of Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called a "margin security") or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause the Loan
to be considered a "purpose credit" within the meaning of said Regulation G or
cause this Agreement or any of the other Related Documents to violate Regulation
G or any other regulation of the Board of Governors of the Federal Reserve
System, or any other applicable law, statute, regulation, rule or order.
Section 4. Pledge and Security. The Borrower hereby pledges all of its
right, title, and interest in, to and under and grants a first lien on, and
security interest in, all of the following property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located
(collectively, the "Collateral") to the Lender to secure the repayment of
principal and interest on the Loan and payment and performance of all other
amounts or obligations owing to the Lender pursuant to this Agreement, the
Secured Note and any Related Documents:
(a) the Certificates;
(b) the Fees and Release Amounts;
(c) Collection Account; and
(d) all proceeds, payments, income and profits of, and records and
files relating to any and all of any of the foregoing.
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Section 5. Representations and Warranties.
(a) The Borrower represents and warrants to the Lender as follows, as
of the date hereof (which representations and warranties shall be deemed
repeated on the Funding Date and at all times thereafter until the Borrower has
satisfied in full all of its obligations hereunder as though made on and as of
such date or times):
(i) it has the corporate power and authority and the legal right
to execute and deliver, to perform its obligations under,
and to grant the Lien on the Collateral pursuant to this
Agreement, the Secured Note and all Related Documents to
which it is a party and has taken all necessary action to
authorize its execution, delivery and performance of, and
grant of the Lien on the Collateral pursuant to, this
Agreement, the Secured Note and all such Related Documents;
(ii) this Agreement, the Secured Note and all Related Documents
to which it is party constitute its legal, valid and binding
obligation, enforceable against it in accordance with its
terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally;
(iii) the consummation of the transactions contemplated by this
Agreement, the Secured Note and all Related Documents and
the fulfillment of the terms hereof and thereof will not (i)
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or
lapse of time or both) a default under, its related
certificate of incorporation or bylaws, or any contract,
agreement, indenture, loan agreement, mortgage, deed of
trust, or other agreement or instrument to which it is a
party or by which it or any of its assets is bound and which
would result in a Material Adverse Change, (ii) result in
the creation or imposition of any Lien, adverse claim or
other encumbrance upon any of its assets pursuant to the
terms of any such contract, agreement, indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than as
expressly created under this Agreement, or (iii) violate any
law or order, rule, or regulation applicable to it of any
court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality
having jurisdiction over it or any of its assets and which
would result in a Material Adverse Change;
(iv) it is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal,
state, municipal or governmental agency;
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(v) no litigation, proceeding or investigation is pending or, to
the best of its knowledge, threatened against it which
litigation, proceeding or investigation is likely to have
consequences that could prohibit its entering into this
Agreement, the Secured Note and all Related Documents to
which it is party or that which is likely to cause a
Material Adverse Change;
(vi) all actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations,
rights and licenses required to be taken, given or obtained,
as the case may be, by or from any federal, state or other
governmental authority or agency, that are necessary or
advisable in connection with its execution, delivery and
performance of this Agreement, the Secured Note and all
Related Documents, have been duly taken, given or obtained,
as the case may be, are in full force and effect on the date
hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either
the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are
adequate to authorize the consummation of the transactions
contemplated by this Agreement, the Secured Note and all
Related Documents and the performance of its obligations
hereunder and thereunder;
(vii) it is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the character of
the assets owned or leased or the nature of the activities
conducted makes such qualification or licensing necessary,
except for those jurisdictions in which the failure to be so
qualified or licensed or to be in good standing has not
resulted in, and could not be expected to cause a Material
Adverse Change;
(viii) there has been no change in its assets, liabilities or
financial condition which have been in the aggregate,
materially adverse to it, and no condition or event has
occurred which has resulted in, or could reasonably be
expected to result in, a Material Adverse Change, and it is
solvent as of the date hereof; and it will neither be
rendered insolvent by the transactions contemplated by this
Agreement, the Secured Note and all Related Documents, nor
be left with an unreasonably small amount of capital with
which to engage in its business. The Borrower does not
intend to incur, or believe that it has incurred, debts
beyond its ability to pay such debts as they mature. The
Borrower does not contemplate the commencement of
insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the
Borrower or any of its assets;
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(ix) its principal place of business, chief executive office and
location of books and records regarding Collateral is set
forth in Section 13;
(x) it has good and valid title to all of its properties and
assets. It enjoys peaceful and undisturbed possession under
all leases under which it will operate on and all of such
leases are valid, subsisting and in full force and effect;
(xi) it has all licenses as are adequate for the conduct of its
businesses as now conducted and now proposed to be
conducted. Each such license is in full force and effect,
and it has performed all obligations with respect thereto
required of it. No default in its performance or observance
of its obligations thereunder has occurred which permits, or
after notice or lapse of time or both would permit, the
revocation or termination of any such license or which has
resulted in, or could reasonably be expected to result in, a
Material Adverse Change;
(xii) none of this Agreement, the Secured Note, and all Related
Documents, or any financial statements, reports,
certificates or other information furnished by the Borrower
or any of its officers to the Lender in connection with this
Agreement, the Secured Note or any Related Documents contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
contained herein or therein not misleading in the light of
the circumstances under which such statements were made. All
such financial statements have been prepared in accordance
with GAAP. There is no fact known to its executive officers
which has resulted in, or could reasonably be expected to
result in, a Material Adverse Change which has not been set
forth in this Agreement, the Secured Note and all Related
Documents or otherwise disclosed to the Lender;
(xiii) no dispute involving its employees or any of its
relationships with its employees has resulted in, or could
reasonably be expected to result in, a Material Adverse
Change;
(xiv) the Pledged Assets have been offered, issued and sold in
compliance with all applicable laws and (A) there are no
outstanding rights, options, warrants or agreements for the
purchase from, or sale or issuance, in connection with the
Pledged Assets; (B) there are no agreements on the part of
the Borrower to issue, sell or distribute the Pledged
Assets; and (C) the Borrower has no obligation (contingent
or otherwise) to purchase, redeem or otherwise acquire any
securities or any interest therein or to pay any dividend or
in respect of the Pledged Assets; the
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Certificates have been validly issued, and are fully paid
and non-assessable and not subject to preemptive rights;
(xv) the Borrower is the record and beneficial owner of, and has
good and marketable title to the Collateral, free of any and
all Liens or options in favor of, or claims of, any other
Person other than the Lender, except the Lien created by
this Agreement;
(xvi) on the Funding Date, the Lien granted pursuant to this
Agreement will constitute a valid, perfected first priority
Lien on the Collateral, enforceable as such against all
creditors of the Borrower and any Persons purporting to
purchase any Collateral from the Borrower;
(xvii) all of the representations and warranties of any Affiliate
of the Borrower in any Trust Agreement are true and correct;
(xviii) each of the Borrower and its Affiliates has operated and
administered each Plan in compliance with all applicable
laws. Neither the Borrower nor any of its Affiliates has
incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in section 3 of ERISA),
and no event, transaction or condition has occurred or
exists that could be expected to result in the incurrence of
any such liability by the Borrower or any of its Affiliates,
or in the imposition of any Lien on any of the rights or
assets of the Borrower or any of its Affiliates, in either
case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to section 401(a)(29) or 412 of
the Code. The Borrower and its Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA
in respect of Multiemployer Plans. The Borrower and its
Affiliates have made all required contributions to
Multiemployer Plans. Neither the Borrower nor any of its
Affiliates has incurred, nor would expect to incur, any
Withdrawal Liability upon a complete or partial withdrawal
from any Multiemployer Plan. No Multiemployer Plan is, or is
expected to be, insolvent, in reorganization or terminated
within the meaning of Title IV of ERISA; and
(xix) the Borrower is not, and will not become as a result of the
transactions contemplated hereby, an "investment company" or
a company "controlled" by an "investment company," within
the meaning of the Investment Company Act of 1940, as
amended.
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(b) Upon discovery by the Borrower of any breach of any of the
representations and warranties listed in this Section 5, the Borrower shall
promptly give notice of such discovery to the Lender.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 5 or deemed to be made hereunder shall
survive the execution of this Agreement.
Section 6. Collateral Amount Maintenance.
(a) The Lender shall xxxx to market the Pledged Assets from time to
time in its sole discretion, but at least monthly. If at any time the aggregate
Lender Value of the Pledged Assets is less than 200% of the Facility Balance (a
"Margin Deficit"), then Lender may by notice to Borrower require Borrower to
cure such Margin Deficit by delivering cash or such other additional collateral
as is acceptable to the Lender in its sole discretion, to Lender within one (1)
Business Day of notice thereof.
(b) Notice required pursuant to subsection (a) may be given by any
means of telecopier or telegraphic transmission. A notice for the payment of a
Margin Deficit received before 9:00 a.m. on a Business Day, local time, of the
party receiving the notice, must be met not later than 5:00 p.m. on the Business
Day on which the notice was given, local time, of the party receiving the
notice. Any notice given on a Business Day after 9:00 a.m., local time, of the
party receiving the notice, shall be met not later than 2:00 p.m. (New York
time) on the following Business Day. The failure of Lender, on any one or more
occasions, to exercise its rights under subsection (a) of this Section 6 shall
not change or alter the terms and conditions to which this Agreement is subject
or limit the right of the Lender to do so at a later date. A failure or delay by
Lender to exercise its rights under subsection (a) of this Section 6 shall not
limit Lender's rights under this Agreement or otherwise existing by law or in
any way create additional rights for the Borrower.
Section 7. Borrower Covenants.
(a) The Borrower shall promptly deliver to the Lender (i) any report
delivered to security holders pursuant to the Securitization Trusts, including,
without limitation, any trustee's or servicer's report and any reports delivered
to related surety companies; (ii) any notice of transfer of servicing; and (iii)
any other such document or information as the Lender may reasonably request from
time to time, including for each Monthly Period, the related servicing reports
in a readable electronic format by the 15th day of the month.
(b) The Borrower shall permit the Lender to inspect its books and
records relating to the Securitization Trusts, the Pledged Assets and other
matters relating to the transactions contemplated hereby, upon reasonable prior
notice and during normal business hours.
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(c) If the Borrower shall, as a result of its ownership of the Pledged
Assets, become entitled to receive or shall receive any rights, whether in
addition to, in substitution of, as a conversion of, or in exchange for the
Pledged Assets, or otherwise in respect thereof, the Borrower shall accept the
same as the Lender's agent, hold the same in trust for the Lender and deliver
the same forthwith to the Lender in the exact form received, duly endorsed by
the Borrower to the Lender, if required, together with an undated bond power
covering such certificate duly executed in blank and with, if the Lender so
requests, signature guaranteed, to be held by the Lender hereunder as additional
collateral security for the Indebtedness. If any sums of money or property so
paid or distributed in respect of the Pledged Assets shall be received by the
Borrower, the Borrower shall, until such money or property is paid or delivered
to the Lender, hold such money or property in trust for the Lender, segregated
from other funds of the Borrower, as additional collateral security for the
Indebtedness.
(d) Without the prior written consent of the Lender, the Borrower will
not (i) vote to enable, or take any other action to permit, any rights afforded
it as holder of the Pledged Assets under any Trust Agreement, or (ii) sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, or (iii) create, incur or permit to exist any
indebtedness, Lien or option in favor of, or any claim of any Person other than
the Lender with respect to, any of the Collateral, or any interest therein,
except for the Lien provided for by this Agreement and the Secured Note, or (iv)
guarantee or otherwise in any way become liable with respect to the obligations
or liabilities of any other Person; provided, however, that Borrower may sell
all or any portion of the Pledged Assets pursuant to a securitization free and
clear of the Lien of this Agreement upon payment of the principal payment
required pursuant to Section 2(f) hereof, so long as no Margin Deficit shall
exist after giving effect to such sale or any such Margin Deficit is cured
concurrently. The Borrower will defend the right, title and interest of the
Lender in and to the Collateral against the claims and demands of all Persons
whomsoever.
(e) At any time and from time to time, upon the written request of the
Lender, and at the sole expense of the Borrower, the Borrower will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as the Lender may reasonably request for the purposes of
obtaining or preserving the full benefits of this Agreement, the Secured Note
and all Related Documents and of the rights and powers herein granted. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Lender,
duly endorsed in a manner satisfactory to the Lender, to be held as Collateral
pursuant to this Agreement, the Secured Note and all Related Documents.
(f) The Borrower agrees to pay, and to save the Lender harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this
-20-
Agreement, the Secured Note and all Related Documents, other than income taxes
of the Lender.
(g) Borrower and Guarantor shall each deliver to the Lender:
(i) with respect to the Guarantor only, as soon as
available and in any event within 45 days after
the end of each quarterly accounting period in
each fiscal year (other than the last quarterly
accounting period of each such fiscal year), its
balance sheet as of the end of such period and the
related statements of operations, shareholders'
equity, and cash flows for such period and for the
portion of such fiscal year ended on the last day
of such period, in each case setting forth in
comparative form the corresponding figures for the
same period and portion of the next preceding
fiscal year, all in reasonable detail and
certified by its chief financial officer to fairly
present the financial position and the results of
its operations, shareholders' equity and cash
flows as of the respective dates and for the
respective period indicated and to have been
prepared in accordance with GAAP, subject to
normal year-end and audit adjustments (and the
absence of footnote presentation);
(ii) with respect to the Guarantor only, as soon as
available and in any event within 90 days after
the end of each of its fiscal years, its balance
sheet as of the end of such year and the related
statements of operations, shareholders' equity,
and cash flows for such year, in each case setting
forth in comparative form the corresponding
figures for the next preceding fiscal year, all in
reasonable detail and accompanied by the standard
unqualified report (which shall not contain any
additional explanatory paragraph concerning
uncertainties or other matters) on such financial
statements of its Independent Accountants,
together with a separate certificate of such
accountants which shall state whether or not their
examination has disclosed the existence, during or
at the end of the fiscal year covered by such
financial statements and/or the date of such
certificate, of any "reportable condition" (as
defined in Statement on Auditing Standards No. 60
issued by the Auditing Standards Board of the
American Institute of Certified Public
Accountants) in its internal control structure or
any of its subsidiaries;
(iii) on the first day of each month, a certificate
signed by the chief financial officer or treasurer
of the Guarantor which shall state that, after due
inquiry, the signer does not have knowledge of the
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existence, during such period or as at the date of
such certificate, of any default or event of
default under this Agreement, the Secured Note and
all Related Documents, or, if such is not the
case, specifying in reasonable detail the nature
and period of existence thereof and what action it
or the Borrower has taken, is taking and proposes
to take with respect thereto;
(iv) as promptly as practicable following any request
of the Lender therefor, copies of all reports or
written comments (including, without limitation,
audit reports, management letters and any other
reports or communications with respect to the
internal control structure) submitted by the
Independent Accountants;
(v) as promptly as practicable (but in any event not
later than three (3) Business Days) after it
becomes aware of the occurrence of any condition
or event which has resulted in, or could
reasonably be expected to result in, a Material
Adverse Change, a certificate of a responsible
officer specifying in reasonable detail the nature
and period of existence thereof, what action it
has taken, is taking and proposes to take with
respect thereto and the date, if any, on which it
is estimated the same will be remedied;
(vi) not later than 11:00 a.m., New York City time, on
the Business Day after it becomes aware thereof, a
report setting forth any material changes or
developments in its business, taken as a whole,
including, without limitation, any material
changes, developments or defaults under any
uncured payment default;
(vii) as promptly as practicable (but in any event not
later than three (3) Business Days after filing),
copies of all materials filed with respect to the
Guarantor thereof with the Securities and Exchange
Commission along with any materials relating to
the Guarantor sent to the Guarantor's
shareholders; and
(viii) on the Business Day prior to the Distribution
Date, on a monthly basis, an analysis of the
amounts received in the Collection Account and the
application thereof pursuant to Section 2 hereof;
(ix) as promptly as practicable, and in any event
within ten days after the Borrower or Guarantor
knows or has reason to believe that any of the
events or conditions described in paragraphs (i)
through (vi) of the definition of "ERISA
Violation" has occurred or exists with respect to
any Plan or Multiemployer Plan,
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including in such notice a description of the
event or condition, a description of the action
that the Borrower or any Affiliate proposes to
take with respect to the event or condition, and a
copy of any report or notice required to be filed
with or given to PBGC by the Borrower or such
Affiliate with respect to such event or condition;
and
(x) such other information as, from time to time, may
reasonably be requested by the Lender.
(h) The Borrower and Guarantor shall each (i) at all times keep proper
books of record and account in which full, true and correct entries shall be
made of its transactions in accordance with GAAP; and (ii) set aside on its
books from its earnings for each fiscal year all such proper reserves as shall
be required in accordance with GAAP.
(i) The Borrower and Guarantor shall each:
(i) pay and discharge promptly as they become due and
payable all taxes, assessments and other governmental charges or
levies of a material nature imposed upon it or its income or upon any
of its assets as well as all claims of any kind which, if unpaid,
might by law become a Lien upon its property; provided, however, that
shall it not be required to pay any such tax, assessment, charge, levy
or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings and if
it shall have set aside on its books such reserves, if any, with
respect thereto as are required by GAAP and deemed adequate by it and
its Independent Accountants; provided, further, that it shall pay any
such tax, assessment, charge, levy or claim prior to the commencement
of any proceeding to foreclose any Lien securing the same;
(ii) do or cause to be done all things necessary to preserve
and maintain in full force and effect its corporate existence, and all
licenses material to its business;
(iii) maintain and keep its assets in good repair, working
order and condition, ordinary wear and tear excepted, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; and
(iv) comply with the requirements of all applicable laws,
statutes, rules, regulations and orders of, and all applicable
restrictions imposed by, all governmental authorities having
jurisdiction over its operations respect of the conduct of its
business and the ownership of its property; provided, however, that it
shall not be required by reason of this Section 7(i)(iv) to comply
therewith at any time while its shall be contesting its obligation to
do so in good faith by appropriate proceedings, and if it shall have
set aside on its books such reserves, if any, with respect thereto as
are required by GAAP.
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(j) The Borrower shall not, without the consent of the Lender, which
consent may be withheld in its sole discretion, directly or indirectly, make or
commit to make any Restricted Payment which would cause a Default or an Event of
Default.
(k) Guarantor on a consolidated basis with its Subsidiaries shall: (i)
at all times after the date hereof, maintain an Adjusted Tangible Net Worth of
at least $1,422,292,000; (ii) for the twelve-month period ending on each Fiscal
Quarter, maintain a Fixed Charge Coverage Ratio of not less than 1.25:1.0; and
(iii) at all times after the date hereof, maintain a Debt to Equity Ratio of not
more than 5.0:1.0.
For purposes of this clause (k):
"Adjusted EBIT" means, for any applicable computation
period, the Guarantor's and Subsidiaries' Net Income on a consolidated
basis, plus (a) income and franchise taxes paid or accrued during such
period and (b) Interest Expense, minus (a) income derived from
discontinued operations of the Guarantor and its Subsidiaries and (b)
extraordinary gains of the Guarantor and its Subsidiaries resulting
from changes in the application of Agreement Accounting Principles.
"Adjusted Tangible Net Worth" means, at any date, (i) Net
Worth plus (ii) Subordinated Indebtedness minus (iii) Intangible
Assets.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect on the date hereof, applied in a
manner consistent with those used in preparing Guarantor's financial
statements.
"Consolidated Debt" means, at any time, the aggregate
principal amount of indebtedness outstanding at such time of the
Guarantor and its Subsidiaries as reflected on the consolidated
balance sheet of the Guarantor and its Subsidiaries, prepared in
accordance with Agreement Accounting Principles.
"Debt to Equity Ratio" means, at any time, the ratio of (a)
Consolidated Debt to (b) Net Worth.
"Fiscal Quarter" means each of the four quarterly accounting
periods comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period
commencing on January 1 and ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, for any applicable
computation period, the ratio of (a) Adjusted EBIT to (b) Interest
Expense.
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"indebtedness" of Guarantor means Guarantor's (a)
obligations for borrowed money, (b) obligations representing the
deferred purchase price of property (whether real or personal,
tangible or intangible) or services (other than accounts payable
arising in the ordinary course of such Guarantor's business payable on
terms customary in the trade), (c) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production
from Property now or hereafter owned or acquired by Guarantor, (d)
obligations which are evidenced by notes, acceptances, or similar
instruments, (e) capitalized lease obligations, (f) rate hedging
obligations, (g) contingent obligations of any type, (h) obligations
for which Guarantor is obligated pursuant to or in respect of a letter
of credit or similar instrument and (i) repurchase obligations or
liabilities of Guarantor with respect to accounts or notes receivable
and chattel paper sold by such Person.
"Interest Expense" means, for any applicable computation
period, all interest paid or accrued during such period by the
Guarantor and its Subsidiaries on a consolidated basis, determined in
accordance with Agreement Accounting Principles.
"Intangible Assets" means, at any date, the assets of the
Guarantor and its consolidated Subsidiaries which would be treated as
intangibles in accordance with Agreement Accounting Principles.
"Net Income" means, for any computation period, with respect
to the Guarantor on a consolidated basis with its Subsidiaries (other
than any Subsidiary which is restricted from declaring or paying
dividends or otherwise advancing funds to its parent whether by
contract or otherwise), cumulative net income earned during such
period as determined in accordance with Agreement Accounting
Principles.
"Net Worth" means, at any date, the consolidated common
stockholder's equity of the Guarantor and its consolidated
subsidiaries determined in accordance with Agreement Accounting
Principles.
"Subordinated Indebtedness" means, at any time, any
indebtedness of the Guarantor the payment of which is contractually
subordinated to payment of the obligations represented by the Guaranty
to the written satisfaction of the Lender. Subordinated Indebtedness
shall include, without limitation, (i) the indebtedness in respect of
those certain 10-1/4% Senior Subordinated Notes due June 1, 2002
issued pursuant to that certain Indenture by and between the Guarantor
and First Wisconsin Trust Company dated as of March 15, 1992 and (ii)
any other indebtedness of the Guarantor issued on substantially
similar subordination terms and on other terms reasonably satisfactory
to the Lender.
"Subsidiary" of means (a) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall
at the time be owned or controlled, directly or indirectly, by
Guarantor or by one or more of its Subsidiaries or
-25-
by Guarantor and one or more of its Subsidiaries, or (b) any
partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
(l) Without the Lender's prior written consent, the Borrower shall not
consummate any merger or consolidation with any Person or sell all or
substantially all of its assets, unless the surviving entity by law or by
agreement in favor of the Lender assumes the Borrower's obligations under this
Agreement, the Secured Note, the Repurchase Facility and all Related Documents
and such transaction would not result in or cause a Default or an Event of
Default.
(m) The Borrower shall promptly give to the Lender notice of all legal
or arbitration proceedings affecting or that could cause a Material Adverse
Change.
(n) The Borrower shall not amend any Trust Agreement or any Related
Documents, or any organizational document pertaining to it or any Securitization
Trust without first obtaining the written consent of the Lender.
(o) The Borrower shall notify the Lender as soon as possible, but in
no event later than one (1) Business Days after obtaining actual knowledge
thereof, if any event has occurred that constitutes a Default or an Event of
Default.
(p) At any time after the Funding Date, if the Borrower enters into
one or more Hedging Contracts, the Borrower and shall assign the benefit thereof
to Lender.
Section 8. Events of Default. Each of the following shall constitute
an "Event of Default" hereunder:
(a) Failure of the Borrower and Guarantor to make any payment of
interest or principal or any other fee, expense, or any other amount owing to
the Lender, which has become due whether by acceleration or otherwise under the
terms of the Secured Note or this Agreement which failure is not remedied within
one (1) Business Day, in the case of the failure to make any payment of
principal or, interest or to cure any Margin Deficit, or two (2) Business Days,
in the case of the failure to make any other payment.
(b) Assignment or attempted assignment by the Borrower of this
Agreement or by the Guarantor of the Guaranty Agreement or any rights hereunder
or thereunder or the granting by the Borrower of any security interest, lien or
other encumbrance on any Collateral to other than the Lender.
(c) The filing against the Borrower or Guarantor of a petition for
liquidation, reorganization, arrangement or adjudication as a bankrupt or
similar relief under the bankruptcy, insolvency or similar laws of the United
States or any state or territory thereof
-26-
or of any foreign jurisdiction as to which the Borrower or Guarantor, as the
case may be, fails to secure dismissal within 60 days of such filing, or the
appointment of a receiver, conservator, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Borrower or Guarantor,
or, in the case of either Borrower or Guarantor, of any substantial part of its
property, the ordering or the winding-up or liquidation of its affairs, or the
entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Borrower or Guarantor, in any involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect.
(d) Commencement by the Borrower or Guarantor of a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Borrower or Guarantor, to the entry
of an order for relief in an involuntary case under any such law or to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Borrower or
Guarantor or, in the case of either Borrower or Guarantor, of any substantial
part of its property, or the making by the Borrower or Guarantor of any general
assignment for the benefit of creditors, or the failure of the Borrower or
Guarantor generally to pay its debts as such debts become due, or the taking of
corporate action by the Borrower or Guarantor in furtherance of any of the
foregoing.
(e) Any material and adverse change in the financial condition or
operations of the Borrower or Guarantor, or the existence of any other condition
which, in Lender's sole discretion, constitutes an impairment of the Borrower's
or Guarantor's ability to perform its obligations under this Agreement, under
the Secured Note or under the Guaranty Agreement and which condition is not
remedied within one Business Day.
(f) An Event of Default under the Repurchase Facility.
(g) A breach by the Borrower of any covenant set forth herein or by
Guarantor of any covenant set forth in the Guaranty Agreement, or of the terms
and provisions of any other agreement between the Borrower and Lender or
Guarantor and Lender, in any case, which condition is not remedied within five
(5) days, or in the case of a Margin Deficit, one (1) Business Day, other than
breaches otherwise referred to in this Section 8.
(h) Any change in the identity of the servicer of any of the
Securitization Trusts.
(i) A default by the Borrower or Guarantor on any of their debt
instruments, financing facilities, or other financing agreements or agreement
with any Person other than the Lender, if the then aggregate outstanding
principal amount thereof exceeds $5,000,000.
(j) A representation or warranty of the Borrower in this Agreement,
the Secured Note or any Related Document shall prove to be incorrect in any
material respect.
-27-
(k) A representation or warranty of the Guarantor in the Guaranty
Agreement shall prove to be incorrect in any material respect.
(l) An ERISA Violation occurs.
(m) The Guarantor shall terminate, revoke, rescind, disaffirm or fail
to honor any of its obligations or covenants under the Guaranty Agreement or
notice is received by Lender from Guarantor of its intention to take any of the
aforementioned actions.
(n) The failure of the Lender to have a perfected security interest in
first-priority position in any Collateral.
Section 9. Remedies Upon Default. Upon the happening of one or more
Events of Default:
(i) the Lender may immediately declare the principal of and
accrued and unpaid interest on the Secured Note, any and all amounts
due to the Lender under this Agreement and the Secured Note and
Related Documents or under any other agreement between Lender or any
Affiliate of Lender, and Borrower, the Guarantor or any Affiliate of
the Guarantor, to be immediately due and payable, together with all
fees and expenses due and payable to the Lender hereunder and
thereunder and, to the extent permitted by applicable law, interest on
all of the foregoing at the Interest Rate (collectively, the
"Indebtedness"); provided, however, that upon the occurrence of one of
the Events of Default referred to in Sections 8(c) and 8(d), such
amounts shall immediately and automatically become due and payable
without any further action by any person or entity; provided, further,
that upon such declaration or automatic acceleration, the balance of
all outstanding Indebtedness shall become immediately due and payable
without presentation, demand or further notice of any kind and Lender
may apply all Cash Receipts against all Indebtedness until it is paid
in full, in such order of priority as the Lender in its sole
discretion shall determine;
(ii) if an Event of Default shall occur and be continuing,
the Lender may exercise, in addition to all other rights and remedies
granted in this Agreement, the Secured Note and all Related Documents
and in any other instrument or agreement securing, evidencing or
relating to the Indebtedness, all rights and remedies of a secured
party under the Uniform Commercial Code as in effect in the State of
New York. Without limiting the generality of the foregoing, the
Lender, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower or any
other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give an option or
options to purchase or otherwise dispose of and deliver the Collateral
or any part thereof (or contract to do any of the foregoing), in one
or more parcels at
-28-
public or private sale or sales, in the over-the-counter market, at
any exchange, broker's board or office of the Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices
as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. The Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of
redemption of the Borrower, which right or equity is hereby waived or
released. The Lender shall apply any proceeds from time to time held
by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the
care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Lender hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Indebtedness, in such order as
the Lender may elect, and only after such application and after the
payment by the Lender of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Uniform
Commercial Code as in effect in the State of New York, need the Lender
account for the surplus, if any, to the Borrower. To the extent
permitted by applicable law, the Borrower waives all claims, damages
and demands it may acquire against the Lender arising out of the
exercise by the Lender of any of its rights hereunder. If any notice
of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The
Borrower shall remain liable for any deficiency if the proceeds of any
sale or other disposition of Collateral are insufficient to pay the
Indebtedness, the fees and disbursements of any attorneys employed by
the Lender in connection with the Indebtedness and all other expenses
of the Lender in connection therewith; and
(iii) the Lender may dispose of or otherwise deal with the
Collateral in such manner as the Lender, in its sole and absolute
discretion, deems necessary or desirable to maximize the likelihood of
repayment in full of the Indebtedness.
Section 10. Indemnification. (a) The Borrower hereby agrees to
indemnify the Lender, the Lender's designee and each of its officers, directors,
employees and agents ("Indemnified Parties") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
taxes (other than income taxes of the Lender), fees, costs, expenses (including
reasonable attorneys fees and disbursements) or disbursements (all of the
foregoing, collectively "Indemnified Amounts") which may at any time (including,
without limitation, such time as this Agreement, the Secured Note or any other
Related Document shall no longer be in effect and the Indebtedness shall have
been paid in full) be imposed on or asserted against any Indemnified Party in
any way whatsoever arising out of or in connection with, or relating to, this
Agreement, the Secured Note or any other Related Document or any transactions
thereunder or any action taken or omitted to be taken by any Indemnified Party
under or in connection with any of the foregoing; provided, that Borrower
-29-
shall not be liable for Indemnified Amounts resulting from the gross negligence
or willful misconduct of any Indemnified Party.
(b) Costs and Expenses. The Borrower hereby agrees to pay on demand
all costs and expenses incurred by the Lender in connection with (i)
negotiation, preparation, execution and delivery of this Agreement, the Secured
Note and the other Related Documents, (ii) the negotiation, preparation,
execution and delivery of any amendments to any of them, (iii) the
administration (including periodic auditing) of this Agreement, the Secured Note
and the other Related Documents and the transactions contemplated hereby and
thereby, and (iv) the enforcement of this Agreement, the Secured Note or any
other Related Documents, or any actual or claimed breach hereunder or
thereunder. Such costs and expenses shall include, without limitation, (A) the
reasonable fees and expenses of counsel to the Lender incurred in connection
with any of the foregoing or in advising the Lender as to its rights and
remedies under the Agreement, the Secured Note or any Related Document or any
such other documentation, (B) all reasonable out-of-pocket expenses incurred by
third parties retained by the Lender in connection with any review of the
Borrower's books and records and paid to third-parties engaged by the Lender,
(C) all out-of-pocket costs and expenses incurred by the Lender and its agents
in connection with the foregoing, and (D) all stamp or other taxes (other than
taxes based on income) incurred by any Indemnified Party in connection with this
Agreement, the Secured Note or any other Related Documents.
(c) The provisions of Sections 10 (a) and (b) shall survive the
termination of this Agreement.
Section 11. Power of Attorney. The Borrower hereby (a) authorizes the
Lender, at the Borrower's expense, to file such financing statement or
statements relating to the Collateral without the Borrower's signature thereon
as the Lender at its option may deem appropriate, and (b) appoints the Lender as
the Borrower's attorney-in-fact to execute any such financing statement or
statements in the Borrower's name and to perform all other acts which the Lender
deems appropriate to perfect and continue the security interest granted hereby
and to protect, preserve and realize upon the Collateral, including, but not
limited to, the right to endorse notes, complete blanks in documents and sign
assignments on behalf of the Borrower as its attorney-in-fact. This Power of
Attorney is coupled with an interest and is irrevocable without the Lender's
consent.
Section 12. Participation; Assignments. (a) The Lender may sell,
pledge, sell subject to a repurchase arrangement, or otherwise hypothecate (any
such event, a "Hypothecation") to one or more entities (each, a "Participant")
participating interests in (i) the Facility Balance owing to the Lender, (ii)
the Secured Note held by the Lender and (iii) any other interest of the Lender
hereunder or under the Guaranty Agreement, without notice to, or the consent of,
Borrower or Guarantor. In the event of any Hypothecation by the Lender of a
participating interest to a Participant, the Lender shall be obligated to act as
the sole representative of any and all Participants and shall be entitled to
unilaterally exercise all of the
-30-
rights, and perform all of the obligations of, the Lender hereunder. In no event
shall the number of Participants at any one time exceed 25.
(b) The Lender may assign this Agreement or any of its rights or
obligations hereunder without notice to, or the consent of, the Borrower. The
Borrower shall not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of the Lender.
Section 13. Notices. Except as otherwise specified in this Agreement,
all demands, notices and communications relating to this Agreement shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or by facsimile transmission or by
overnight courier, or, if by other means, when received by the other party or
parties at the address shown below, or such other address as may hereafter be
furnished to the other party or parties by like notice. Any such demand, notice
or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the
case of registered or certified mail, by the date noted on the return receipt).
If to the Borrower:
Green Tree Residual Finance Corp. I
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Lender:
Xxxxxx Commercial Paper Inc.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-31-
Section 14. No Oral Modifications; Successors and Assigns. No
provisions of this Agreement shall be waived or modified except by a writing
duly signed by the authorized agents of the parties hereto. This Agreement shall
be binding upon the successors and assigns of the parties hereto.
Section 15. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 16. No Waiver. No delay or omission of the Lender to exercise
any right or remedy accruing under this Agreement (including upon any Event of
Default) shall impair any such right or remedy or constitute a waiver of any
such right or remedy or an acquiescence therein. Every right and remedy given by
this Agreement or by law to the Lender may be exercised from time to time, and
as often as may be deemed expedient, as permitted under the terms hereof, by the
Lender.
Section 17. Governing Law; Agreement Constitutes Security Agreement.
This Agreement is intended by the parties hereto to be governed by the
laws of the State of New York, without regard to principles of conflicts of law,
and to constitute a security agreement within the meaning of the New York
Uniform Commercial Code.
Section 18. Jurisdiction.
The parties hereby irrevocably submit to the jurisdiction of any
federal court sitting in New York, New York in any action or proceeding arising
out of or relating to this Agreement, the Secured Note or any other Related
Document, and the parties hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in such federal court. The
parties hereby irrevocably waive, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of such action or
proceeding and irrevocably consent to the service of any summons and complaint
and any other process by the mailing of copies of such process to them at their
respective address specified in Section 13. The parties hereby agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 18 shall affect the right of the Lender
to serve legal process in any other manner permitted by law or affect the right
of the Lender to bring any action or proceeding against the Borrower or its
property in the courts of other jurisdictions.
-32-
Section 19. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT
DELIVERED HEREUNDER OR THEREUNDER.
Section 20. Integration. This Agreement, the Secured Note and the
other Related Documents together contain a final and complete integration of all
prior expressions by the parties with respect to the subject matter hereof and
thereof and shall constitute the entire agreement among the parties with respect
to such subject matter, superseding all prior oral or written understandings.
Section 21. Advice from Independent Counsel. The parties understand
that this Agreement, the Secured Note and each of the other Related Documents to
which it is a party is a legally binding agreement that may affect such party's
rights. Each party represents to the other that it has received legal advice
from counsel of its choice regarding the meaning and legal significance of this
Agreement, the Secured Note and each of the other Related Documents to which it
is a party and that it is satisfied with its legal counsel and the advice
received from it.
Section 22. Judicial Interpretation. Should any provision of this
Agreement, the Secured Note or any of the other Related Documents require
judicial interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be more
strictly construed against any Person by reason of the rule of construction that
a document is to be construed more strictly against the Person who itself or
through its agent prepared the same, it being agreed that all parties have
participated in the preparation of this Agreement, the Secured Note and each of
the Related Documents.
[SIGNATURE PAGE FOLLOWS]
-33-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
GREEN TREE RESIDUAL FINANCE CORP. I
By:_____________________________________
Name:
Title:
XXXXXX COMMERCIAL PAPER INC.
By:_____________________________________
Name:
Title:
-34-
Exhibit A
FORM OF INSTRUCTION LETTER
--------------------
--------------------
Dear Ladies and Gentlemen:
Pursuant to Section 2(a)(ix) of the Asset Assignment Agreement dated
as of February 13, 1998 (the "Agreement") by and between Xxxxxx Commercial Paper
Inc., as Lender (the "Lender") and Green Tree Residual Finance Corp. I, as
Borrower (the "Borrower"), the Borrower hereby notifies you under the Trust
Agreement, dated as of ___________, 1998, by and among _______________,
_______________ and you (the "Trust Agreement") that, pursuant to the Agreement,
the Borrower has pledged to the Lender all of the Borrower's right, title and
interest in and to the Certificates [Guarantee Fees] [Release Amounts] issued or
payable pursuant to the Trust Agreement.
Pursuant to Section 2(a)(ix) of the Agreement, the Borrower hereby
instructs you to pay by wire transfer all amounts to be received by it pursuant
to the Trust Agreement and payable thereunder to the registered owner of any of
such Certificates, to the Lender as specified below, unless otherwise instructed
by the Lender from time to time to you. Such payments to the Lender shall be
made by you on the same day on which such amounts would otherwise be payable by
you to such owner. The payment instructions contained herein shall remain
effective until the Lender otherwise instructs you.
The Lender's wire instructions for purposes of all payments related to
such Certificates are:
Citibank NYC ABA 0 21 000089
LCPI
Acct #40615659
Attention: Xxxxx Xxxxx, re: Green Tree Residual Financing
Very truly yours,
By:___________________________________
Name:
Title:
Acknowledged and Agreed by:
__________________________, as the Trustee
By:___________________________________
Name:
A-1
Title:
cc: Xxxxxx Commercial Paper Inc.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
A-2
Exhibit B
SECURED NOTE
February 13, 1998
FOR VALUE RECEIVED, the undersigned, GREEN TREE RESIDUAL FINANCE CORP.
I, a Minnesota corporation, whose address is 1100 Landmark Towers, 000 Xx. Xxxxx
Xxxxxx, Xx. Xxxx, XX 00000-0000 (the "Borrower"), promises to pay to the order
of XXXXXX COMMERCIAL PAPER INC., a New York corporation, whose address is 000
Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Lender") on or before
the Maturity Date, in lawful money of the United States of America, the
principal sum of $500,000,000 (or such lesser amount as may in the aggregate
have been advanced by Lender to Borrower pursuant to the Agreement referenced
below) plus interest, as follows:
DEFINITIONS. Unless otherwise defined, capitalized terms used herein
have the meanings assigned to them in the (a) Asset Assignment Agreement dated
as of February 13, 1998 (the "Agreement") by and between the Lender and Borrower
named therein.
GENERAL TERMS. (i) Principal is payable in accordance with the
Agreement, provided the Facility Balance outstanding on the Maturity Date shall
be due and payable on the Maturity Date.
(ii) Interest shall accrue daily on the Facility Balance a rate per
annum equal to the Interest Rate computed in accordance with the Agreement.
MAXIMUM RATE OF INTEREST: If the Borrower shall have paid or agreed to
pay any interest on the Facility Balance in excess of that permitted by law,
then it is intended with respect thereto that (i) to the extent possible given
the term of the Facility Balance, all excess amounts previously paid or to be
paid by the Borrower be applied to reduce the Facility Balance and the
provisions thereof immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the then applicable law, but so as to permit
the recovery of the fullest amount otherwise called for thereunder and (ii) to
the extent that the reduction of the Facility Balance and the reformation of the
provisions thereof described in the immediately preceding clause (i) are not
possible given the term of the Facility Balance, such excess amount shall be
deemed to have been paid with respect to the Facility Balance as a result of an
error and upon the Lender obtaining actual knowledge of such error, such amount
shall be refunded to the Borrower.
SECURITY: This Note is issued pursuant to the Agreement and is secured
by a pledge of the Collateral described therein.
DEFAULTS: Upon the happening of an Event of Default, the Lender shall
have all rights and remedies set forth in the Agreement.
B-1
The failure to exercise any of the rights and remedies set forth in
the Agreement shall not constitute a waiver of the right to exercise the same or
any other option at any subsequent time in respect of the same event or any
other event. The acceptance by the Lender of any payment hereunder which is less
than payment in full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the foregoing
rights and remedies at that time or at any subsequent time or nullify any prior
exercise of any such rights and remedies without the express consent of Lender,
except as and to the extent otherwise provided by law.
WAIVERS: The Borrower waives diligence, presentment, protest and
demand and also notice of protest, demand, dishonor and nonpayment of this Note,
and expressly agrees that this Note, or any payment hereunder, may be extended
from time to time, and consents to the acceptance of further Collateral, the
release of any Collateral for this Note, the release of any party primarily or
secondarily liable hereon, and that it will not be necessary for the Lender, in
order to enforce payment of this Note, to first institute or exhaust Lender's
remedies against the Borrower or any other party liable hereon or against any
collateral for this Note. None of the foregoing shall affect the liability of
the Borrower and any endorsers or guarantors hereof. No extension of time for
the payment of this Note, or any installment hereof, made by agreement by the
Lender with any Person now or hereafter liable for the payment of this Note,
shall affect the liability under this Note of the Borrower, even if the Borrower
is not a party to such agreement; provided, however, the Lender and the
Borrower, by written agreement between them, may affect the liability of the
Borrower.
TERMINOLOGY: Any reference herein to the Lender shall be deemed to
include and apply to every subsequent holder of this Note. Words of masculine or
neuter import shall be read as if written in the neuter or masculine or feminine
when appropriate.
GUARANTEE: Principal and interest and all other amounts due to Lender
by Borrower under this Note or under the Agreement are fully and unconditionally
guaranteed by Green Tree Financial Corporation (the "Guarantor") pursuant to a
Guaranty Agreement, dated the date hereof, between Guarantor and the Lender.
AGREEMENT: Reference is made to the Agreement for provisions as to
mandatory prepayments, collateral and acceleration.
THIS NOTE IS GOVERNED BY THE PROVISIONS OF THE AGREEMENT WHICH IS
INCORPORATED HEREIN BY REFERENCE, AND IN THE EVENT ANY TERMS OF THIS NOTE ARE
INCONSISTENT WITH THE TERMS OF THE AGREEMENT, THE TERMS OF THE AGREEMENT SHALL
GOVERN THIS NOTE. NOTWITHSTANDING THE FOREGOING SENTENCE, NO REFERENCE HEREIN TO
THE AGREEMENT AND NO PROVISION OF THIS NOTE OR OF THE AGREEMENT SHALL ALTER OR
IMPAIR THE OBLIGATION OF THE BORROWER, WHICH IS ABSOLUTE AND UNCONDITIONAL, TO
PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE AT THE RESPECTIVE TIMES AND AT
THE RATES HEREIN AND THEREIN PRESCRIBED.
B-2
APPLICABLE LAW: This Note shall be governed by and construed under the
laws of the State of New York, without regard to principles of conflicts of law,
whose laws the Borrower expressly elects to apply to this Note.
GREEN TREE RESIDUAL FINANCE CORP. I
By:______________________________
Name:
Title:
B-3
SCHEDULE OF LIQUIDITY LOANS AND
PAYMENTS OF PRINCIPAL UNDER LOAN
NOTE OF LEXINGTON XXXXXX CAPITAL COMPANY, L.L.C.,
DATED December 30, 1997
Principal Amount of Maturity of Principal Unpaid
Date Liquidity Loan Interest Period Amount Paid Balance
--------- ------------------- --------------- ----------- -------
B-4
Exhibit C
Monthly Principal Payment Schedule
Month Monthly Principal Amount
----- ------------------------
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
C-1
