AMENDED AND RESTATED SECURITY AGREEMENT
among
MF RECEIVABLES CORP. IV
(as Borrower)
and
THE CHASE MANHATTAN BANK
(as Collateral Agent)
Dated as of July 29, 1999
MF RECEIVABLES CORP. IV
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as
of July 29, 1999, made by and among MF RECEIVABLES CORP. IV, a Delaware
corporation, as borrower (the "Borrower"), MONACO FINANCE, INC., a Colorado
corporation ("Monaco"), as servicer (the "Servicer") and The Chase Manhattan
Bank as collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the parties hereto entered into a Security Agreement, dated
as of December 22, 1997 (as previously amended, the "Existing Security
Agreement") in connection with a Credit Agreement, of even date therewith, among
the Borrower, Monaco and Daiwa Finance Corporation (the "Initial Lender"), as
lender (the "Existing Credit Agreement"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, Monaco and the Initial Lender are entering into the
Amended and Restated Credit Agreement, of even date herewith (the "Credit
Agreement"), which amends, restates and supersedes the Existing Credit Agreement
in its entirety; and
WHEREAS, the parties hereto intend that the security interests
granted under the Existing Security Agreement remain in full force and effect
and are executing and delivering this Agreement to ensure continuity of such
security interests and to make certain conforming changes;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged, the parties hereto agree that from and after the effective date
of the Credit Agreement, the Existing Security Agreement shall be deemed to be
amended and restated in its entirety as follows and the Borrower hereby agrees
with the Collateral Agent, for the benefit of the Secured Parties, as follows:
DEFINED TERMS.
The terms "goods", "accounts", "contract rights", "chattel paper",
"general intangibles", "checks", "instruments", "securities" and "documents"
have the respective meanings ascribed in the UCC.
Capitalized terms used herein shall, unless otherwise defined herein,
have the respective meanings ascribed in the Credit Agreement; and the following
terms shall have the following meanings:
"Accounts" means the Lockbox Account and the Collateral
Account.
"Amount Financed" means, with respect to any Sold Auto Loan, the
meaning ascribed thereto in the applicable disclosure documents given to the
obligor in satisfaction of the requirements of the Federal Truth-in-Lending Act.
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Doc #8K999.DOC
"Approval Date" means, with respect to any Auto Loan, the date on
which Monaco made its written credit approval with respect to the obligor under
such Auto Loan.
"Approved Contract/Policy Provider" means any provider of credit
default or vendor's single interest insurance approved by the Initial Lender.
"BT" means Bankers Trust Company.
"Collateral" has, subject to Section 2(b), the meaning
specified in Section 2(a).
"Collateral Account" has the meaning specified in Section
6.01 hereof.
"Collateral Agent Fee and Expenses" means the fees payable in
accordance with the fee letter between the Collateral Agent and the Borrower.
"Lockbox" means the segregated lockbox and account established in
the name of the Collateral Agent on behalf of the Lenders for the sole purpose
of receiving collections on the Designated Auto Loans, pursuant to the Lockbox
Agreement.
"Lockbox Agreement" means the Lockbox Agreement, dated as of _____
__, 1999, among the Initial Lender, the Servicer and the Collateral Agent.
"Lockbox Processor" means a Person designated from time to time by
the Initial Lender to perform the functions of the Lockbox Processor.
"MF3 Collateral" means all Collateral (as defined in the
MF3 Credit Agreement).
"Proceeds" has the meaning assigned such term under the UCC of the
States of Delaware, Colorado and New York, and of each other jurisdiction whose
law governs the grant or perfection of the Collateral Agent's interest in the
particular proceeds of the Collateral and shall also include (to the extent not
already included): (a) any and all proceeds of any insurance, indemnity,
warranty, guaranty or letter of credit payable to the Borrower from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or rights to amounts payable to the Borrower from time to time
in connection with any requisition, confiscation, condemnation seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), (c) any and all other amounts, products, off spring, rents or
profits from time to time paid or payable under or in connection with the
Collateral and (d) all additions to or substitutions or replacements for any of
the Collateral.
"Responsible Officer" means, when used with respect to the Collateral
Agent, any officer within the corporate trust department (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers.
"Secured Parties" means the Lenders from time to time in
respect of the Advance.
"Servicer Fee and Expenses" means all fees payable to SST under the
Supplementary Servicing Agreement.
"Sold Auto Loans" has the meaning assigned thereto in the
Loan Acquisition Agreement.
"Subservicer" has the meaning set forth in Section 8.07.
SECURITY INTERESTS.
As security for the prompt, complete and unconditional payment and
performance of all obligations of the Borrower in respect of the Advance, the
Borrower hereby pledges, assigns, transfers and delivers to the Collateral Agent
for the benefit of the Secured Parties, and grants to the Collateral Agent for
the benefit of the Secured Parties, a continuing first lien on, and first and
prior security interest in, all of the Borrower's right, title and interest in,
to and under the following (collectively, the "Collateral"):
each Designated Auto Loan, including, without limitation, all rights
to payments thereunder, purchased by or otherwise conveyed to or at the
direction of the Borrower pursuant to the Loan Acquisition Agreement;
each Financed Vehicle and all other Property, now or hereafter
acquired, securing or evidenced by, each Designated Auto Loan, including,
without limitation, the certificate of title relating to each Financed
Vehicle, any Insurance Proceeds with respect to any such Financed Vehicle
or Designated Auto Loan, the proceeds of any repossession and liquidation
of any such Financed Vehicle, rights under judgments with respect to
defaulted obligors, rights to deficiency judgments with respect to
defaulted obligors and rights under any service contracts with respect to
any such Financed Vehicle;
the Collateral Account and all moneys, checks, instruments,
documents, securities, investments, deposits and other credits (whether or
not permitted by the Program Documents) credited to the Collateral
Account, or otherwise held by the Collateral Agent;
the Acquisition Agreement the NAFCO Loan Purchase Agreement
and the Advantage Loan Purchase Agreement (as each term is
defined in the Acquisition Agreement), the Loan Acquisition
Agreement, the Credit Agreement, the Lockbox Agreement and the
Servicing Agreement;
the MF3 Collateral; and
all proceeds of any of the foregoing excluding Specified
Distributions (as hereinafter defined).
Notwithstanding the foregoing, "Collateral" shall in no event include
any of the Borrower's right, title or interest in the Loan Loss Reimbursement
Agreement or the Letters of Credit (as each term is defined in the Acquisition
Agreement) or any proceeds thereof, any other amounts payable to the Borrower
under the Loan Loss Reimbursement Agreement, any amounts paid to the Borrower
under Section 4 hereof, any account in which any of the foregoing is deposited,
maintained or held, any interest in such amounts and all proceeds of the
foregoing.
All rights of the Collateral Agent and the Secured Parties and all
liens and security interests granted hereunder shall be absolute, unconditional
and irrevocable unless and until released pursuant to the Program Documents,
irrespective of any condition or circumstance whatsoever.
The grant of the security interest to the Collateral Agent pursuant
to this Section 2 shall not: (i) relieve the Borrower from the performance of
any term, covenant, condition or agreement on the Borrower's part to be
performed or observed under or in connection with the Collateral, (ii) impose
any obligation on the Collateral Agent or the Secured Parties to perform or
observe any such term, covenant, condition or agreement on the Borrower's part
to be so performed or observed or (iii) impose any liability on the Collateral
Agent or the Secured Parties for any act or omission on the part of the
Borrower, or any Person acting as agent for or on behalf of the Borrower,
relative to or for any breach of any representation or warranty on the part of
the Borrower in connection with the Collateral.
CERTAIN RIGHTS OF SECURED PARTIES WITH RESPECT TO COLLATERAL.
The Borrower hereby irrevocably authorizes the Collateral Agent to
execute and deliver, as the attorney-in-fact of the Borrower, any consent,
waiver or amendment which, under the terms of any Program Document, is or may be
executed and delivered by the Borrower with respect to the Collateral, subject
to the provisions of the Program Documents; provided, however, that the
Collateral Agent shall have no duty or obligation to execute and deliver any
such consent, waiver or amendment unless directed in writing to take the actions
specified therein by the Initial Lender; and provided, further, that the
Collateral Agent shall not be required to take any action which the Collateral
Agent reasonably believes may be contrary to applicable law or which would
expose the Collateral Agent to financial liability if the Collateral Agent has
reasonable grounds to believe that repayment of such financial liability is not
reasonably assured to it. The Borrower hereby agrees to remit to the Collateral
Agent for deposit in accordance with this Agreement any and all Proceeds of any
Collateral received by the Borrower (other than any amounts received by the
Borrower pursuant to Section 6.04 hereof).
REMEDIES
(i) If at any time a Default shall have occurred and be continuing,
the Initial Lender may, without demand of performance or other demand,
advertisement or notice of any kind (except for any notice required by law and
subject to receipt of notice of default as provided in Section 8.04 hereof) to
or, upon the Borrower or any other Person (all of which demands, advertisements
and/or notices are hereby expressly waived), and in its own name or in the name
of the Borrower, forthwith demand, collect, receive, xxx for, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, grant an option or options to purchase, contract to sell or otherwise
dispose of and deliver said Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at any location or locations at the
option of the Initial Lender, all upon such terms and conditions and at such
prices as the Initial Lender may deem advisable, with the right of the Initial
Lender or any Secured Party upon any such public sale or sales to purchase the
whole or any part of said Collateral so sold, free of any right of redemption in
the Borrower, which right is hereby expressly waived and released. At the
instruction of the Lenders in respect of a majority in aggregate principal
amount of the Advance outstanding, the Initial Lender may, without notice or
publication, adjourn any public or private sale or the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be so adjourned.
If a Default shall have occurred and be continuing, then the Initial
Lender may, at any time thereafter, without demand of performance or other
demand, succeed to the Borrower's rights and privileges with respect to
the Loan Acquisition Agreement, the Credit Agreement, the Lockbox
Agreement and the Servicing Agreement; provided that the Initial Lender
will not have assumed and will not be obligated to perform any of the
duties, obligations, covenants or agreements of the Borrower under any
such agreement.
Notwithstanding anything to the contrary set forth herein or in any
Program Document (including any Program Document under the MF3 Credit
Agreement), except when a Default has occurred and is continuing:
(A) The Initial Lender may sell all or any portion of the
Collateral at any time (such sale, a "Collateral Disposition") in
accordance with the provisions in this Section 4(a)(iii). With
respect to any Collateral Disposition which is consummated (1) on or
prior to December 31, 2000, the Initial Lender will remit or cause to
be remitted to the Borrower an amount equal to the product of (x) the
Applicable Disposition Percentage (as defined below) and (y) the
Specified Amount (as defined below)and (2) from and after January 1,
2001, the Initial Lender will (x) comply with its obligations as a
secured party under the UCC with respect to such Collateral
Disposition, (y) not less than five days prior to such Collateral
Disposition, provide the Borrower with: (I) written notice (a
"Disposition Notice") specifying the proposed purchase price for the
Collateral being sold and (II) deliver to the Borrower a fairness
opinion from a reputable investment bank, accounting firm or
valuation firm as to the fairness of the purchase price for the
Collateral (the cost of such opinion to be an expense of the Initial
Lender payable from the proceeds of such sale). The Borrower (or any
Affiliate thereof) shall have five days after receipt of a
Disposition Notice to notify the Initial Lender that it wishes to
purchase the Collateral at the proposed purchase price by delivering
to the Initial Lender its unconditional commitment unconditionally
guaranteed by Pacific USA Holdings Corp., a Texas corporation (each
in form and substance reasonably acceptable to the Initial Lender) to
effectuate such purchase within 45 days following the Borrower's
receipt of such Disposition Notice.
(B) On the date that is the earlier of the date upon which all
amounts owed to the Initial Lender under the Program Documents
(including the Program Documents under the MF3 Credit Agreement) are
paid in full and the date of the Collateral Disposition of all of the
remaining Designated Auto Loans, the Initial Lender shall (x) remit
or cause to be remitted to the Borrower the Residual Amount (as
defined below) and (y) release to the Borrower all remaining
Collateral, free and clear of all Liens created by the Secured
Parties.
For purposes of this Section 4(a)(iii), the following terms
shall have the following meanings:
"Applicable Disposition Percentage" means, with respect to a
Collateral Disposition, a fraction the numerator of which is the
aggregate principal balance of the Designated Auto Loans subject to
such Collateral Disposition on the date of such Collateral
Disposition and the denominator of which is the aggregate principal
balance of all Designated Auto Loans on the date of such Collateral
Disposition before giving effect to such Collateral Disposition.
"Loan Amount" means, on any date, the aggregate amount, without
duplication, owed the Initial Lender under the Program Documents
(including the Program Documents under the MF3 Credit Agreement) on
the Effective Date plus any amounts chargeable to the Borrower or
payable from the Collateral from and after the Effective Date to and
including such date less any amounts paid hereunder on or prior to
such date to or for the account of the Lender other than proceeds of
any Collateral Disposition.
"Residual Amount" means, on any date of determination thereof,
an amount equal to the difference, if positive, between (x) the net
proceeds of all Collateral Dispositions made on or prior to such date
less (y) the sum of (a) the Loan Amount on such date and (b) the
aggregate Specified Distributions made on or prior to such date.
"Specified Amount" means, with respect to any Collateral
Disposition occurring (x) on or prior to December 31, 1999,
$3,500,000 less the aggregate Specified Distributions made prior to
the date of such Collateral Disposition and (y) from and after
January 1, 2000 but on or prior to December 31, 2000, $1,000,000 less
the aggregate Specified Distributions made prior to the date of such
Collateral Disposition.
"Specified Distribution" means a remittance made to the Borrower
under Section 4(a)(iii)(A)(1) hereof.
Subject to Section 4(a)(iii) above, if any notification of a proposed
disposition of the Collateral is required by law, such notification shall be
deemed reasonably and properly given if made in any manner provided in Section
10 hereof at least ten Business Days before such disposition.
In addition to the rights, powers and remedies granted to it in this
Security Agreement and in any other instrument or agreement securing, evidencing
or relating to the Advance, upon the occurrence and during the continuance of a
Default, the Collateral Agent shall have all of the rights, powers and remedies
now or hereafter permitted in law or equity, including, without limitation,
those of a secured party under the UCC of the States of New York, Colorado and
any other applicable jurisdiction.
The Collateral Agent shall apply the net proceeds of any collection,
recovery, receipt, appropriation, realization or sale referred to in this
Section 4 in accordance with the provisions of Section 6.04 hereof; provided,
that the Borrower shall not be liable for the amount, if any, by which the
amount due under the Advance exceeds the proceeds of any such collection,
recovery, receipt, appropriation, realization or sale.
The Borrower shall provide written payment instructions (including
the account number of the bank account to which payments are to be directed and
the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such party by the wire transfer of
immediately available funds) to the Collateral Agent and the Initial Lender.
Failure to provide such notice shall not affect the Borrower's right to receive
any funds to which it is otherwise entitled in accordance with the Program
Documents, but failure to deliver such notice may result in a delay in the
receipt of such funds.
REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Borrower represents, warrants and agrees that:
No security agreement, financing statement, equivalent security or
lien instrument or continuation statement listing the Borrower as debtor
covering all or any part of the Collateral is on file or of record in any
jurisdiction, except such as may have been filed, for the benefit of the Secured
Parties recorded or made by the Borrower in favor of the Collateral Agent
pursuant to this Security Agreement or the Credit Agreement.
Except to the extent that Monaco or BT remains the prior lienholder
with respect to each Financed Vehicle securing a Designated Auto Loan in
accordance with the terms of the Credit Agreement, this Security Agreement is
effective to create a valid and continuing Lien on the Collateral in favor of
the Collateral Agent for the benefit of the Secured Parties, which Lien is prior
to all other Liens except Permitted Liens, and is enforceable as such as against
creditors of and purchasers from the Borrower. All action necessary or desirable
to protect and perfect such security interest has been duly taken.
The Borrower's chief executive office is at 000 00xx Xxxxxx, Xxxxx
0000X, Xxxxxx, Xxxxxxxx 00000 and there have been no other office locations
except to the extent the Borrower has provided written notice thereof in
accordance with Section 10.01 of the Credit Agreement. The Borrower will not
change its name and will not change its principal place of business or chief
executive office unless the Borrower shall have given the Collateral Agent at
least 30 days prior written notice thereof and the Borrower shall have taken all
action necessary to assure continuous perfection of the security interest held
by the Collateral Agent in the Collateral as evidenced by an opinion of counsel
addressed to the Collateral Agent and the Lenders to the effect that the lien
and security interest created by this Security Agreement with respect to such
Collateral will continue to be maintained, and that the priority thereof will
not be affected, after giving effect to such action or actions.
At any time and from time to time, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as the
Lenders in respect of a majority in aggregate principal amount of the Advance
outstanding may reasonably deem desirable in obtaining the full benefits of this
Security Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
liens and security interests granted hereby. The Borrower also hereby authorizes
the Collateral Agent to file any such financing or continuation statement
without the signature of the Borrower to the extent permitted by applicable law;
provided, however, that such authorization shall not be deemed to create a duty
in the Collateral Agent. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note or other
instrument, or any chattel paper, the Borrower shall immediately notify the
Collateral Agent and shall duly endorse such note, instrument or chattel paper
to the order of the Collateral Agent and deliver such note, instrument or
chattel paper to the Collateral Agent promptly, and shall take such other
actions and execute such other documents as may be required by law to perfect
the Collateral Agent's interest in such note, instrument or chattel paper.
The Borrower will warrant and defend the Collateral Agent's right,
title and interest in and to the Collateral, for the benefit of the Secured
Parties against the claims and demands of all Persons whomsoever.
All authorizations in this Security Agreement for the Collateral
Agent to endorse checks, instruments and securities and to execute, deliver and
file financing statements, continuation statements, security agreements and
other instruments with respect to the Collateral are powers coupled with an
interest and are irrevocable so long as the Advance is outstanding; provided,
however, the foregoing authorizations shall not create any duty or obligation on
the part of the Collateral Agent other than those obligations set forth in this
Agreement.
COLLATERAL ACCOUNT.
Establishment and Maintenance of Lockbox and Collateral Account. The
Collateral Agent shall possess all right, title and interest in all
funds on deposit from time to time in the Lockbox and in all proceeds
thereof. The Lockbox shall be under the sole dominion and control of
the Collateral Agent on behalf of the Secured Parties. The Collateral
Agent agrees to cause the Lockbox Processor to sweep funds on an as
available basis, from the Lockbox to the Collateral Account at least
once each week. The Collateral Agent has established the following
segregated account entitled "XX XX Corp. Collection Account, The
Chase Manhattan Bank, as Collateral Agent" (the "Collateral
Account"). The Collateral Account shall be maintained in the State of
New York in either (i) segregated trust accounts with the corporate
trust department of The Chase Manhattan Bank or any replacement
collateral agent or (ii) segregated deposit accounts with banks or
trust companies (which may include the Collateral Agent or a
replacement collateral agent) the short-term debt obligations of
which are rated "A-1+" by S&P and the short-term deposits of which
are rated no less than "Baa3" by Xxxxx'x. The Borrower shall have no
right of withdrawal from the Collateral Account.
Required Deposits to the Accounts. (a) The following amounts
shall be paid to the Collateral Agent and deposited as
follows:
all amounts representing payments in respect of Designated Auto Loans
(including, without limitation, all Recoveries, all late charges, all
payments in respect of the Repurchase Price of Designated Auto Loans
repurchased by Monaco in accordance with the Loan Acquisition Agreement
and, subject to Section 4(a)(iii), all other Proceeds of the Collateral)
shall be deposited in the Collateral Account;
all amounts in respect of principal of Permitted
Investments shall be deposited in the Collateral Account;
all amounts representing Insurance Proceeds in respect of
Designated Auto Loans shall be deposited in the Collateral
Account;
all amounts representing repossession proceeds in respect
of Designated Auto Loans shall be deposited in the Collateral
Account; and
all other amounts paid to the Borrower under the Program Documents,
other than indemnity payments made to the Borrower in respect of
Designated Auto Loans, and all investment earnings on Permitted
Investments shall be deposited in the Collateral Account.
The Collateral Agent is hereby irrevocably authorized and empowered,
as the Borrower's attorney-in-fact, to endorse any check or any other instrument
or security presented for deposit in the Collateral Account requiring the
endorsement of the Borrower; provided, however, the foregoing authorizations
shall not create any duty or obligation on the part of the Collateral Agent.
Notwithstanding the foregoing provisions of this Section 6.02, if at
any time the Borrower, Monaco or any Person on behalf of the Borrower or Monaco
(including the Servicer under the Servicing Agreement), receives any payments
required to be deposited in the Collateral Account, all such amounts shall be
held by the Borrower, Monaco or such other Person as the agent of, and in trust
for, the Collateral Agent and shall, forthwith upon receipt by and in any event
no later than two Business Days following receipt by the Borrower, Monaco or
such other Person, be turned over to the Collateral Agent for deposit to the
Collateral Account, in the same form as received by the Borrower, Monaco or such
other Person (and, if received in the form of a check, instrument or security
requiring endorsement, duly endorsed on behalf of the Borrower, Monaco or such
other Person to the order of the Collateral Agent).
Rightof Withdrawal from the Collateral Account. In furtherance of the
security interest provided in Section 2, the Collateral Agent, acting
on behalf of the Secured Parties, and the Borrower, agree that (a)
the Collateral Account shall be maintained in the name of the
Collateral Agent, (b) the Collateral Account shall be subject to the
exclusive dominion and control of the Collateral Agent and (c) the
Collateral Agent shall have the sole right of withdrawal from the
Collateral Account. The Borrower, the Lender and the Servicer shall
timely provide written remittance information to the Collateral Agent
specifying payment instructions with respect to amounts payable
pursuant to each provision of Section 6.04. The Collateral Agent
shall have no liability to the Borrower, any Lender or any other
Person for failure to pay funds to any Person in accordance with
Section 6.04 in the absence of timely receipt of such written
remittance instructions or in the event of any errors in such written
remittance instructions.
Application of Funds in the Collateral Account; Application of
Proceeds of Realization on Collateral. (a) [reserved]
(b) [reserved]
Except as specified in Section 4(a)(iii) above, the Collateral Agent
shall apply all amounts held in the Collateral Account and the proceeds of any
collection, recovery, receipt, appropriation, realization or sale of any
Collateral (after deducting all reasonable costs and expenses of every kind
incurred in any way relating to the exercise of rights of the Collateral Agent
or the Initial Lender with respect to the Collateral, including reasonable
attorneys' fees and expenses) in the following order of priority (in accordance
with the Monthly Servicer Report):
to the Collateral Agent, an amount equal to all fees, costs
and expenses owing to the Collateral Agent under this Agreement;
to the Initial Lender, an amount equal to reasonable out-of-pocket
costs and expenses incurred by the Initial Lender in its administration of
the Program Documents;
to the Servicer, an amount equal to all fees, costs and
expenses owing to the Servicer under the Servicing Agreement;
to the Lenders, pro rata, in the following order of
priority: (A) an amount equal to all unpaid interest (calculated
at the applicable Interest Rate as provided in the Credit
Agreement) on and (B) principal of, the Advance;
to the discharge of all other obligations of the Borrower which are
then due (or, to the extent such obligations have not yet matured, to be
set aside and held in trust solely to satisfy such obligations, as and
when they mature or otherwise become due) in an amount equal to such
obligations; and
to the Borrower, an amount equal to any funds remaining in
the Collateral Account.
Investment of Funds Deposited in Collateral Account. The Collateral Agent
shall, in accordance with the provisions of this Section 6.05, invest
and reinvest, at the written direction of the Borrower, in the
Collateral Agent's own name or in the name of the Collateral Agent's
nominee, collected funds in the Collateral Account in Permitted
Investments which shall mature, or be redeemed at the option of the
holder, prior to the respective dates when the money invested in such
Permitted Investments is required for application in accordance with
this Section 6. If there is no written direction from the Borrower
collected funds in the Collateral Account will remain uninvested.
DISPOSITIONS OF AUTO LOANS.
The Collateral Agent at the written direction of the Initial Lender
shall release from the lien of this Agreement any of the Designated Auto Loans
held as Collateral upon a Collateral Disposition, a prepayment of the Advance or
a repurchase by the Borrower in accordance with the terms of the Credit
Agreement and Monaco in accordance with the Loan Acquisition Agreement;
provided, that the proceeds of any such Collateral Disposition, voluntary
prepayment or repurchase (net of expenses and costs) have been deposited into
the Collateral Account for application in accordance with Section 6.04(c);
provided, however, that, upon satisfaction of the conditions set forth in this
Section 7, the Collateral Agent will release to or at the direction of SST the
certificate of title with respect to a Designated Financed Vehicle subject to a
Collateral Disposition within three Business Days of such request by SST. In
addition, the Collateral Agent shall release Designated Auto Loans that have
been repaid in full as provided in Sections 8.01 and 8.08(ii) hereof.
THE COLLATERAL AGENT.
Appointment. By accepting the benefits of the security interest granted
herein, each Secured Party hereby irrevocably designates and appoints
The Chase Manhattan Bank as the Collateral Agent of such Secured
Party under this Security Agreement, and each such Secured Party
irrevocably authorizes The Chase Manhattan Bank as the Collateral
Agent for such Secured Party, to take such action on its behalf under
the provisions of this Security Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Collateral
Agent by the terms of this Security Agreement together with such
other powers as are reasonably incidental thereto but in each
instance solely at the written instruction of the Lenders in respect
of at least a majority in aggregate principal amount of the Advance
outstanding. Notwithstanding any provision to the contrary elsewhere
in this Security Agreement, the Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein
and in the Servicing Agreement, or any fiduciary relationship with
any Secured Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Security Agreement or otherwise exist against the
Collateral Agent. The Chase Manhattan Bank hereby accepts its
appointment as Collateral Agent, subject to, and in reliance upon,
the provisions of this Section 8.01.
Exculpatory Provisions. Neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with
this Security Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to
any of the Secured Parties for any recitals, statements,
representations or warranties made by the Borrower or any officer
thereof contained herein or in the Loan Acquisition Agreement, the
Servicing Agreement, the Credit Agreement or in any certificate,
report, statement or other document referred to or provided for in,
or received by the Collateral Agent under or in connection with, this
Agreement, the Loan Acquisition Agreement, the Servicing Agreement or
the Credit Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency (except with respect to
enforceability of this Agreement and the Servicing Agreement as it
relates to the Collateral Agent) of this Agreement, the Loan
Acquisition Agreement, the Servicing Agreement, the Lockbox
Agreement, the Credit Agreement, the Advance or the Collateral or for
any failure of the Borrower to perform its obligations hereunder or
under the Loan Acquisition Agreement, the Servicing Agreement, the
Lockbox, the Credit Agreement or the Advance. The Collateral Agent
shall not be under any obligation to any Secured Party to ascertain
or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, any of the Program
Documents, or to inspect the properties, books or records of the
Borrower or the Servicer. Except for its duty to maintain possession
of the Auto Loans and as set forth in this Agreement, the Collateral
Agent shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any
security interest in any Financed Vehicle or any Auto Loan, or the
perfection or priority of such a security interest or the maintenance
of any such perfection or priority or for or with respect to the
ability of the Auto Loans to generate the payments to be distributed
to the Lender under the Credit Agreement, including, without
limitation, the existence, condition, location and ownership of any
Financed Vehicle; the existence of any insurance thereon; the
compliance by the Borrower, the Servicer or the Collection Agent with
any covenant or the breach by the Borrower, the Servicer or the
Collection Agent of any warranty or representation made under this
Agreement or the Servicing Agreement or in any related document; the
accuracy of any such warranty or representation; any investment of
monies by the Collateral Agent in accordance with the terms of this
Agreement or the Servicing Agreement or any loss resulting therefrom;
the acts or omissions of the Borrower, the Servicer, the Collection
Agent or any obligor; or any action of the Servicer or the Collection
Agent taken in the name of the Collateral Agent.
Reliance by Collateral Agent. The Collateral Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, letter, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper
person or Persons or upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or Monaco),
independent accountants and other experts selected by the Collateral
Agent not at its own expense. The Collateral Agent shall be fully
justified in failing or refusing to take any action under this
Security Agreement unless it shall first receive such written advice
or concurrence as it deems appropriate or it shall first be
indemnified to its satisfaction (by one or more Secured Parties)
against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The
Collateral Agent shall be under no duty to inquire into or
investigate the validity, accuracy or context of any such
aforementioned document. The Collateral Agent may from time to time
consult with legal counsel, independent accountants or other experts
of its own selection, and not at its own expense, in the event of any
disagreement, controversy, question or doubt as to the construction
of any provision of this Agreement or any of its duties hereunder,
and the Collateral Agent shall be fully protected in acting in good
faith in reliance upon the advice or opinion of any such counsel,
independent accountants or other expert.
Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default under the Credit
Agreement unless a Responsible Officer has received written notice
from the Lenders of a majority in aggregate principal amount of
Advance outstanding or the Borrower referring to this Security
Agreement and describing such Default.
Non-Reliance on Collateral Agent. Neither the Collateral Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to the Secured
Parties, and no act by the Collateral Agent hereafter taken,
including any review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by the Collateral Agent
to any Secured Party. Each Secured Party represents (or will be
deemed to have represented at such time as such party becomes a
Secured Party hereunder) to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent, and
based on such documents and information as it has deemed appropriate,
made its own appraisal of investigation into the business,
operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to extend
credit to the Borrower. Each Secured Party will, independently and
without reliance upon the Collateral Agent, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Security Agreement, and to
make such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished by the Collateral
Agent hereunder, the Collateral Agent shall have no duty or
responsibility to provide any Secured Party with any credit or other
information concerning the business, operations, property, financial
and other condition or creditworthiness of the Borrower which may
come into the possession of the Collateral Agent or any of its
officers, directors, employees, agencies, attorneys-in-fact or
affiliates.
Successor Collateral Agent. The Collateral Agent may resign as collateral
agent hereunder and under the Servicing Agreement upon 30 days'
notice to the Borrower, the Servicer and the Lenders. The Collateral
Agent may be removed at any time by the Borrower acting at the
direction of, or with the consent of, the Lenders in respect of the
majority in aggregate principal amount of the Advance outstanding if
at any time the Collateral Agent shall fail to comply with its
obligations under this Security Agreement. No such resignation or
removal shall be effective unless and until a successor collateral
agent has accepted appointment as such pursuant to this Agreement and
in the case of a removal, any and all amounts then due to the
Collateral Agent hereunder have been paid in full. If the Collateral
Agent shall resign or be removed as collateral agent, then the
Borrower shall appoint a commercial bank having a combined capital
and surplus of at least $250,000,000, subject to supervision or
examination by federal or state authority and having an established
place of business in the United States as successor collateral agent
for the Secured Parties upon (a) acceptance of such appointment by
such successor collateral agent, (b) the approval of such appointment
by the Lenders in respect of a majority in aggregate principal amount
of the Advance outstanding, and (c) the filing of any necessary
amendments to any UCC financing statements to reflect such
appointment. Such successor collateral agent shall succeed to the
rights, powers and duties of the Collateral Agent, and the term
"Collateral Agent" shall mean such successor collateral agent
effective upon its appointment, and the former Collateral Agent's
rights, powers and duties as Collateral Agent shall be terminated,
without any other or further act or deed on the part of such former
Collateral Agent. Such successor collateral agent shall be entitled
to amend any UCC financing statements and any other filings,
recordation and declarations it deems advisable or necessary in
connection with such termination and cancellation. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Section 8 and Section 14 shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Security Agreement.
Notwithstanding the foregoing, if no successor collateral agent shall
be appointed as aforesaid, or if appointed, such successor shall not
have accepted its appointment within thirty (30) days after
resignation of the Collateral Agent, the Collateral Agent may
petition a court of competent jurisdiction to make such appointment.
Delivery of Collateral and Permitted Investments. All certificates
representing or evidencing the Collateral and Permitted Investments
from time to time shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto and shall, in the case of the
Collateral, be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank. Each Secured Party hereby appoints the Collateral Agent as its
agent for the purpose of holding any Auto Loans and Permitted
Investments. The Collateral Agent shall be the agent solely of the
Secured Parties and shall not be the agent of the Borrower. The
Collateral Agent shall not release possession of any Auto Loans or
any documents related thereto except (a) upon receipt of a trust
receipt substantially in the form attached hereto as Exhibit B
obligating the Servicer to return same when the need therefor no
longer exists, (b) upon receipt of written notification from the
Servicer that the Designated Auto Loan has been paid in full, (c) in
connection with a Collateral Disposition or prepayment in full of the
Advance or (d) in connection with any repurchase by Monaco in
accordance with the terms of the Loan Acquisition Agreement upon the
receipt by the Collateral Agent of the Repurchase Price.
Notwithstanding anything set forth in this Agreement or in any
Program Document, the Collateral Agent shall follow the instructions
of the Initial Lender and SST in delivering to SST, as agent for the
Collateral Agent, any and all documents relating to the Designated
Auto Loans (including certificates of title) and, upon such delivery,
shall be relieved of its custodial responsibilities hereunder to hold
such documents.
Duties and Covenants of Collateral Agent.(a) The Collateral Agent
undertakes to perform the duties as are set forth in this Agreement,
including, without limitation:
upon the written request of the Borrower and/or the Servicer,
providing information reasonably within its possession and within
reasonable time constraints regarding payments and receipt of funds from
and to the Borrower and the Servicer;
acting as custodian of all documents delivered to it
related to the Collateral;
depositing funds received by it, whether as proceeds of the Advance,
as collections on Designated Auto Loans, as proceeds of repossession or
otherwise in accordance with the terms of this Agreement;
making payments from amounts held in the Collateral Account, whether
to the Servicer, to the Borrower or otherwise based solely upon timely
receipt of remittance information from the Borrower, the Lenders or the
Servicer in accordance with the terms of this Agreement;
upon the request of the Servicer, providing information reasonably
within its possession and within reasonable time constraints regarding
servicing, repossession and insurance with respect to the Auto Loans to
the Servicer;
providing the collateral agent report to the Initial Lender,
substantially in the form of Exhibit C hereto, with respect to the
Designated Auto Loans on or before the fifteenth day of each month (or if
such fifteenth day is not a Business Day, the next succeeding business
day), except in the case where the seventh Business Day of such month
falls on or after the eleventh day of the month, in which case, the
collateral agent report shall be provided on or before the seventeenth day
of such month (or if such seventeenth day is not a Business Day, on the
next succeeding Business Day); and
performing the duties contained in Section 2.05(a) and
2.05(b) of the Credit Agreement.
(b) The Collateral Agent covenants and agrees that it will:
not directly or indirectly create, incur, assume or suffer to exist
any Lien against the Collateral or any part thereof other than as set
forth herein;
upon receipt of written notice and request for release in the form of
Exhibit B of the Servicing Agreement from the Servicer that a Designated
Auto Loan has been paid in full (to the extent such amounts have been
deposited in the Collateral Account), or as otherwise permitted pursuant
to (b), (c) and (d) of Section 8.07 hereof, execute and return to the
Servicer documents prepared and furnished to the Collateral Agent by the
Servicer as shall be necessary to release the lien over the Designated
Financed Vehicle;
upon receipt pursuant to the Servicing Agreement of the Servicer
Report, annual financial statements or monthly compliance statements,
promptly forward a copy of such documents to the Lender;
determine whether officer's certificates and opinions of counsel
delivered pursuant to the Servicing Agreement comply in form with the
Servicing Agreement and in making such determination the Collateral Agent
may request timely direction from the Lender (or, if multiple Lenders, the
Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding);
upon the written direction of a Lender, request from the Servicer
certification evidencing the fidelity bond and insurance coverage required
by the Servicing Agreement and upon receipt shall forward such
certification to the Lender and the Borrower;
upon receipt from the Servicer of a written notice of cancellation or
modification of the fidelity bond and insurance coverage required by the
Servicing Agreement, promptly forward a copy of such notice to the Lender
and the Borrow;
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding), consent to a change in business, merger,
consolidation or disposition of assets of the Servicer;
upon a Responsible Officer obtaining actual knowledge of the
occurrence of a change in business, merger, consolidation or disposition
of assets by the Servicer, promptly give notice of such event to the
Lender and the Borrower and, if notified by the Lender (or, if multiple
Lenders, the Lenders in respect of a majority in aggregate principal
amount of the Advance outstanding), that such occurrence constitutes a
breach or default by the Servicer under the terms of the Program Documents
and directed to do so by the Initial Lender terminate the responsibilities
of the Servicer, in accordance with the Servicing Agreement; and
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding), deliver notice to the Servicer stating that a
Servicer Event of Default has occurred and thereby terminate the
responsibilities of the Servicer under the Servicing Agreement.
Annual Report and Quarterly Certificate. (a) If the Collateral Agent's
rating should fall below A+, the Collateral Agent shall deliver to
the Lender as soon as available, but in any event within 120 days
after the end of each of its fiscal years, a consolidated and
consolidating balance sheet of it or its parent and its subsidiaries,
if any, as at such last day of the fiscal year, consolidated
statements of income and retained earnings and statements of cash
flow, for each such fiscal year, each prepared in accordance with
generally accepted accounting principles, in reasonable detail, and
as to the consolidated statements, certified without qualification by
an independent public accountant, who may also render other services
to the Collateral Agent or any of its affiliates, and certified, as
to the consolidating statements, by the chief financial officer of
the Collateral Agent, as fairly presenting the financial position and
the results of operations of the Collateral Agent as at and for the
year ending on its date and as having been prepared in accordance
with generally accepted accounting principles.
If the Collateral Agent's rating should fall below A+, the Collateral
Agent shall deliver to the Lender by the fifth Business Day following the end of
each fiscal year an Officer's Certificate stating, as to each signer thereof,
that (a) a review of the activities of the Collateral Agent during the preceding
fiscal quarter and of performance under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Collateral Agent has fulfilled all its obligations under this
Agreement throughout such fiscal quarter, or, if there has been a default in the
fulfillment of any such obligation, or if an event has occurred that with notice
or lapse of time or both would become a default under this Agreement specifying
each such default or event known to such officer and the nature and status
thereof and remedies therefor being pursued.
Reserved.
Instructions of the Lender. Whenever the Collateral Agent is required to
consent to any action hereunder or under the Servicing Agreement, the
Collateral Agent shall so notify the Lenders and shall act in
accordance with the written instructions of Lenders holding 51% of
the Advance outstanding.
Appointment of Subcollateral Agent. The Collateral Agent may appoint one
or more Subcollateral Agents to hold all or a portion of the
Collateral on behalf of the Secured Parties. Such appointment is
subject to the prior written consent of the Initial Lender. Following
such appointment, to the extent the context requires, all references
to the Collateral Agent shall be deemed to include the Subcollateral
Agent.
AMENDMENTS AND WAIVERS.
With the written consent of the Lenders in respect of a majority in
aggregate principal amount of the Advance outstanding, the Collateral Agent and
the Borrower may, from time to time, enter into written amendments, supplements
or modifications hereto for the purpose of adding any provision to this Security
Agreement or changing in any manner the rights of the Collateral Agent or the
Borrower hereunder, and, with the written consent of the Lenders in respect of
at least a majority in aggregate principal amount of the Advance outstanding,
the Collateral Agent on behalf of the Secured Parties may execute and deliver to
the Borrower a written instrument waiving, on such terms and conditions as may
be specified in such instrument, any of the requirements of this Security
Agreement; provided, however, that no such waiver and no such amendment,
supplement or modification shall (a) amend the definition of Secured Parties or
amend, modify or waive any provision of Section 6 hereof or this Section 9
without the written consent of each Secured Party whose rights under this
Security Agreement would be affected thereby or (b) amend, modify or waive any
provision of Section 8 or otherwise alter the duties, rights or obligations of
the Collateral Agent without the written consent of all the Secured Parties. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Secured Parties and shall be binding upon the Borrower,
the Secured Parties and the Collateral Agent.
In executing any supplement, amendment or modification of this
Security Agreement, the Collateral Agent shall be entitled to receive and shall
be fully protected in relying upon an opinion of counsel stating that the
execution of such supplement, amendment or modification is authorized or
permitted by this Section 9. The Collateral Agent may, but shall not be
obligated to, enter into any such supplement, amendment or modification that
affects the Collateral Agent's own rights, duties or immunities under this
Security Agreement or otherwise.
The Borrower and the Secured Parties agree not to execute any
supplement, amendment or modification to any Program Document to which the
Collateral Agent is not a party, without the prior written consent of the
Collateral Agent, if the effect of such supplement, amendment or modification
would be to affect the Collateral Agent's rights, duties, or immunities under
this Security Agreement, and they agree to promptly forward to the Collateral
Agent any such supplement, amendment or modification.
NOTICES.
Unless otherwise expressly provided herein, all notices,
instructions, requests and demands to or upon the respective parties hereto to
be effective shall be in writing and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or when deposited in the mail, postage prepaid, or in the case of telegraphic
notice, when delivered to the telegraph company, or, in the case of facsimile
notice, when sent, confirmation received, addressed as follows, or to such other
addresses as may be hereafter notified by the respective parties hereto:
The Borrower:
MF Receivables Corp. IV
000 00xx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
The Collateral Agent:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Services
Telecopy: (000) 000-0000
To the Lenders at the address as the Lenders shall have furnished to the
Borrower (with a copy to the Collateral Agent) in writing;
provided, that any notice to or upon the Borrower shall be deemed to have been
duly given or made as aforesaid when so given or made to the Borrower whether or
not any other party indicated above as the recipient of a copy thereof shall
have received a copy of each notice.
LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF COLLATERAL.
Except as set forth herein and beyond the safe custody thereof, the
Collateral Agent shall not have any duty as to any Collateral in its possession
or control or the possession or control of any agent or nominee of it or any
income thereof or as to the preservation of rights against prior parties or any
other rights pertaining thereto. The Collateral Agent shall not in any way be
liable by reason of any insufficiency in the Collateral Account unless it is
determined by a court of competent jurisdiction that the Collateral Agent's
gross negligence or willful misconduct was the primary cause of such
insufficiency.
SEVERABILITY.
Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidation of
the remaining provisions hereof and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
NO WAIVER; CUMULATIVE REMEDIES.
Neither the Collateral Agent nor the Secured Parties shall by any
act, delay, omission or otherwise be deemed to have waived any of its or their
rights or remedies hereunder and no waiver shall be valid unless in writing,
signed by the Collateral Agent on behalf of the Secured Parties, and then only
to the extent therein set forth. A waiver by the Collateral Agent of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or the Secured Parties would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Collateral Agent or the Secured Parties any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently and are not exclusive of any rights and remedies provided by law.
PAYMENT OF EXPENSES AND TAXES.
The Borrower hereby agrees to pay to the Collateral Agent a fee for
its services hereunder equal to the Collateral Agent Fee. The Borrower agrees to
pay, indemnify and to hold the Collateral Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Security Agreement, and any such other documents, and to pay,
indemnify, and hold the Collateral Agent and its officers, directors,
shareholders, employees, agents and representatives harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Security Agreement and any such other documents
(including, but not limited to, those incurred by any negligent actor negligent
omission to act of the Collateral Agent) (all the foregoing, collectively, the
"indemnified liabilities"); provided, that the Borrower shall not be liable to
the Collateral Agent for any (i) losses incurred by the Collateral Agent as a
result of the fraudulent actions, misrepresentations, gross negligence or
willful misconduct of the Collateral Agent or (ii) losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Collateral Agent with respect to its
receipt of the Collateral Agent Fee hereunder (including any liabilities, costs
or expenses with respect thereto). Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent be liable for special,
indirect or consequential loss or damages whatsoever (including but not limited
to lost profits). The obligations of the Borrower under this Section 14 shall
survive the termination of this Security Agreement and the discharge of the
other obligations of the Borrower hereunder and also shall survive the
resignation or removal of the Collateral Agent hereunder.
Promptly after receipt by the Collateral Agent of notice of the
commencement of any action, such Collateral Agent shall, if a claim in respect
thereof is to be made against the Borrower under this Section 14, notify the
Borrower in writing of the commencement thereof; but the omission so to notify
the Borrower will not relieve the Borrower from any liability which it may have
to the Collateral Agent except to the extent the Borrower is prejudiced thereby.
In case any action is brought against the Collateral Agent, and it notifies the
Borrower of the commencement thereof, the Borrower will be entitled to appoint
counsel satisfactory to the Collateral Agent to represent the Collateral Agent
in such action; provided, however, that, if the defendants in any action include
both the Collateral Agent and the Borrower and the Collateral Agent shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the Borrower, the Collateral
Agent shall have the right to select separate counsel to defend such action on
behalf of it. Upon receipt of notice from the Borrower to the Collateral Agent
of its election so to appoint counsel to defend such action and approval by the
Collateral Agent of such counsel, the Borrower will not be liable to the
Collateral Agent under this Section 14 for any legal or other expenses
subsequently incurred by the Collateral Agent in connection with the defense
thereof unless (i) the Collateral Agent shall have employed separate counsel in
accordance with the proviso to the next preceding sentence, (ii) the Borrower
shall not have employed counsel satisfactory to the Collateral Agent to
represent the Collateral Agent within a reasonable time after notice of
commencement of the action or (iii) the Borrower has authorized the employment
of counsel for the Collateral Agent at the expense of the Borrower; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
If the indemnification provided for in this Section 14 is unavailable
or insufficient to hold harmless the Collateral Agent under subsection (a) or
(b) above, then the Borrower shall contribute to the amount paid or payable by
the Collateral Agent as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Borrower on the one
hand and the Collateral Agent on the other from the transactions contemplated by
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Borrower on the one hand and the Collateral Agent on the other in
connection with the actions or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable considerations.
The Collateral Agent and the Borrower agree that it would not be just and
equitable if contributions pursuant to this subsection (c) were to be determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (c). The amount payable by the Borrower as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by the Collateral Agent in connection with investigating or defending
any action or claim which is the subject of this subsection (c). No person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The obligations of the Borrower and the Collateral Agent under this
Section 14 shall be in addition to any liability which each of them may
otherwise have.
The agreement, indemnities and other statements of the parties hereto
in or made pursuant to this Section 14 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14. The provisions of this
Section 14 shall survive the termination or cancellation of this Agreement.
SUCCESSORS AND ASSIGNS; GOVERNING LAW.
This Security Agreement and all obligations of the Borrower hereunder
shall be binding upon the successors and assigns of the Borrower, and shall,
together with the rights and remedies of the Collateral Agent hereunder, inure
to the benefit of the Collateral Agent, the Secured Parties and their respective
successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
RESERVED
BANKRUPTCY PETITION AGAINST THE BORROWER.
The Collateral Agent hereby covenants and agrees that, until the date
which is one year and one day after the payment in full of the Advance, it will
not institute against, or join any other Person in instituting against, the
Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other similar proceeding under the laws of the United States or
any state of the United States.
MISAPPLICATION OF FUNDS.
The Collateral Agent agrees that any funds incorrectly paid to it by
the Borrower shall be promptly returned to the Borrower upon receipt of written
notice from the Borrower that such funds were incorrectly paid to the Collateral
Agent prior to the Collateral Agent's transfer of such funds in accordance with
this Agreement. The Collateral Agent shall be completely protected against any
liability for returning such funds in reliance on such written notice that funds
were incorrectly paid.
COUNTERPART SIGNATURES.
This Agreement may be executed and delivered to you simultaneously in
two (2) or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.
THIRD PARTY BENEFICIARY.
For all purposes of this Agreement, each of the Lenders shall be a
third party beneficiary of the agreements and covenants herein contained.
STATUS OF COLLATERAL AGENT.
The parties hereto acknowledge and agree that upon payment in full of
all amounts owing under the Credit Agreement and the release of the Secured
Parties' security interest in the Collateral, the rights of the Collateral Agent
to indemnification and payment of its fees and expenses under this Agreement
shall continue.
ACTS OF LENDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Lender may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the Lender in person or by agents duly
appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments is or are
delivered to the Collateral Agent. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 22.
The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Collateral Agent
deems sufficient.
