EXHIBIT 4.24
Execution Copy
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LEASE RECEIVABLES TRANSFER AGREEMENT
among
STEELCASE FINANCIAL SERVICES INC.,
as Transferor and Servicer,
CORPORATE ASSET FUNDING COMPANY, INC.
as Conduit Transferee,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO,
as Committed Transferees
and
CITICORP NORTH AMERICA, INC.,
as Agent
Dated as of October 20, 1999
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TABLE OF CONTENTS
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Section Page
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ARTICLE I
DEFINITIONS................................................................................... 1
Section 1.01. Definitions and Rules of Construction........................................... 1
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES............................................................
Section 2.01. The Advances....................................................................
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Section 2.02. Making the Advances.............................................................
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(b) Notes............................................................................
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(c) Maturity of Advances.............................................................
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Section 2.03. Interest and Fees...............................................................
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Section 2.04. Settlement Procedures...........................................................
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Section 2.05. Payments and Computations, Etc..................................................
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Section 2.06. Yield Protection................................................................
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Section 2.07. Increased Capital...............................................................
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Section 2.08. Taxes...........................................................................
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Section 2.09. Additional Yield................................................................
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ARTICLE III
CONDITIONS OF ADVANCES........................................................................
Section 3.01. Conditions Precedent to Initial Advance.........................................
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Section 3.02. Conditions Precedent to All Advances............................................
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................................................
Section 4.01. Representations and Warranties of the Transferor and the Servicer...............
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ARTICLE V
GENERAL COVENANTS
Section 5.01. Affirmative Covenants of the Transferor and the Servicer........................
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Section 5.02. Reporting Requirements of the Transferor and the Servicer.......................
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Section 5.03. Negative Covenants of the Transferor and Servicer...............................
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ARTICLE VI
ADMINISTRATION OF RECEIVABLES..........................................................................
Section 6.01. Designation of Servicer.........................................................
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Section 6.02. Duties of the Servicer..........................................................
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Section 6.03. Rights of the Agent.............................................................
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Section 6.04. Responsibilities of the Transferor .............................................
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Section 6.05. Further Action Evidencing Agent's Interest......................................
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Section 6.06. Removal and Substitution of Pledged Assets......................................
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ARTICLE VII
EVENTS OF TERMINATION...........................................................
Section 7.01. Events of Termination....................................
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ARTICLE VIII
INDEMNIFICATION........................................................
Section 8.01. Indemnities by the Transferor............................
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ARTICLE IX
GRANT OF SECURITY INTEREST.............................................
Section 9.01. Security Interest........................................
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ARTICLE X
MISCELLANEOUS..........................................................
Section 10.01. Amendments, Etc.........................................
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Section 10.02. Notices, Etc............................................
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Section 10.03. No Waiver; Remedies.....................................
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Section 10.04. Binding Effect; Assignability...........................
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Section 10.05 GOVERNING LAW............................................
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Section 10.06. Costs and Expenses......................................
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Section 10.07. No Proceedings..........................................
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Section 10.08. Execution in Counterparts; Severability.................
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ARTICLE XI
THE AGENT..............................................................
SECTION 11.01. Authorization and Action................................
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SECTION 11.02. Agent's Reliance, Etc...................................
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SECTION 11.03. Agents and Affiliates...................................
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SECTION 11.04. Transferee's Credit Decision............................
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SECTION 11.05. Delegation of Duties ...................................
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SECTION 11.06. Successor Agent.........................................
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LIST OF EXHIBITS
EXHIBIT A Description of Credit and Collection Policy
EXHIBIT B Fiscal Months
EXHIBIT C Form of Interest Rate Hedge Assignment Acknowledgment
EXHIBIT D Form of Investor Report
EXHIBIT E Form of Funding Request
EXHIBIT F Form of Note
EXHIBIT G List of Closing Documents
EXHIBIT H List of Filing Locations
EXHIBIT I List of Offices of Transferor where Records Are Kept
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LEASE RECEIVABLES TRANSFER AGREEMENT
This LEASE RECEIVABLES TRANSFER AGREEMENT is entered into as
of October 20, 1999, among STEELCASE FINANCIAL SERVICES INC., a Michigan
corporation, as Transferor and as initial Servicer, CORPORATE ASSET FUNDING
COMPANY, INC., a Delaware corporation, as Conduit Transferee, THE FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTY HERETO, as Committed Transferees, and
CITICORP NORTH AMERICA, INC., a Delaware corporation, as Agent.
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Certain Defined Terms. The following terms shall
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have the following meanings (equally applicable to both singular and plural
forms):
"Adjusted Loss Ratio" means, for any Settlement Date, the
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product of (i) the highest Loss Ratio for any Collection Period during the
immediately preceding 36 Collection Periods and (ii) one plus the positive
percentage difference, if any, between (A) the average of the aggregate
outstanding Installment Payments of all Lease Receivables as of the last day of
each of the immediately preceding twelve Collection Periods (such twelve
Collection Periods being the "Most Recent Twelve Collection Periods") and (B)
the average of the aggregate outstanding Installment Payments of all Lease
Receivables as of the last day of each of the twelve Collection Periods
immediately preceding the Most Recent Twelve Collection Periods.
"Advance" means an advance of funds by the Conduit Transferee
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or the Committed Transferees in accordance with the terms of Sections 2.01 and
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2.02.
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"Affected Party" means the Transferees, CNAI, individually and
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in its capacity as Agent, any Liquidity Provider and any parent company
controlling any of the foregoing.
"Affiliate" means, with respect to any Person, any other
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Person directly or indirectly controlling, controlled by or under direct or
indirect common control with such specified Person and, without limiting the
generality of the foregoing, shall be presumed to include (a) any Person which
beneficially owns or holds 20% or more of any class of voting securities of such
specified Person or 20% or more of the equity interest in such specified Person
and (b) any Person of which such specified Person beneficially owns or holds 20%
or more of any class of voting securities or in which such specified Person
beneficially owns or holds 20% or more of the equity interest. For the purposes
of this definition, (i) "voting securities" of a Person means any securities
which confer upon the holder thereof a right to vote with respect to the
election of members of the board of directors or other analogous governing body
of such Person (excluding voting power arising only upon the occurrence of a
contingency), (ii) "control" when used with respect to any specified Person
means the power to direct the management and policies of such specified Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and (iii) the terms "controlling" and "controlled" have
meanings correlative to the foregoing clause (ii).
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"Agent" means CNAI, in its capacity as agent for the
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Transferees together with its successors and permitted assigns.
"Aggregate Adjusted Installment Payments" means, as of any
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Settlement Date, the aggregate unpaid Installment Payments (determined as of the
end of the immediately preceding Fiscal Month) of all Eligible Lease Receivables
minus the Overconcentration Amount as of such Settlement Date.
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"Aggregate Advances" means, at any time, the sum of the
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outstanding principal balances of all Advances at such time.
"Agreement" means this Lease Receivables Transfer Agreement,
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as the same may be amended, modified or supplemented from time to time.
"Asset Purchase Agreement" means any asset purchase or other
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agreements pursuant to which the Conduit Transferee may from time to time assign
part or all of its Advances to the Liquidity Providers, as such agreements may
be amended from time to time.
"Assignee Rate" for any Interest Period means a rate per annum
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equal to the LIBO Rate plus 1.25%; provided, however, that the Assignee Rate
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shall be equal to the Base Rate in effect from time to time (i) for any Interest
Period not equal to a month, (ii) with respect to any portion of Advances not
outstanding during an entire Interest Period and (iii) at any time when it is
unlawful for Citibank to obtain funds in, or Citibank is not offering deposits
in dollars in, the London interbank market. Following the occurrence, and during
the continuation, of any Event of Termination, the Assignee Rate for each
Interest Period shall be the sum of the applicable interest rate per annum
determined pursuant to provisions set forth above plus one percent (1.0%) per
annum.
"Bankruptcy Code" means Title 11 of the United States Code (11
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U.S.C. Section 101 et seq.), as amended from time to time, or any successor
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statute.
"Base Rate" means a fluctuating interest rate per annum equal
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to the rate of interest announced publicly by Citibank in New York, New York,
from time to time as Citibank's base rate.
"Breakage Amount" means, for any Interest Period prior to the
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Termination Date during which Advances are reduced on any day other than a
Settlement Date, the amount, if any, by which (i) the additional Interest
(calculated without taking into account any Breakage Amount) which would have
accrued on the reductions of such Advances during such Interest Period (as so
computed) if such reductions had remained as Advances, exceeds (ii) the income,
if any, received by the applicable Transferee or the applicable Liquidity
Provider from the investment by such Person of the proceeds of such reductions
of Advances (which investment the Transferee and the Liquidity Providers will
use reasonable efforts to make under the then applicable conditions and
circumstances).
"Business Day" means any day other than a Saturday, Sunday or
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public holiday or the equivalent for banks in New York City, New York and, if
the term "Business Day" is used in
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connection with the LIBO Rate, which day is a day on which dealings are carried
on in the London interbank market.
"Citibank" means Citibank, N.A., a national banking
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association.
"CNAI" means Citicorp North America, Inc., a Delaware
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corporation.
"Collateral" has the meaning given to such term in Section
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9.01.
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"Collection Account" means the account maintained in the name
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of Agent on behalf of the Transferees at Citibank, N.A. (ABA# 000000000),
account no. 00000000, account name: CAFCO Redemption, for the purpose of
receiving Collections.
"Collection Period" means a period equal to one Fiscal Month,
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provided, however, that the first Collection Period shall be the Transferor's
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October Fiscal Month, except that, for purposes of the calculation of the
Adjusted Loss Ratio, the Default Ratio and the Delinquency Ratio and the tests
thereof under Section 7.01(f), "Collection Period" shall also include the
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applicable number of Fiscal Months immediately preceding the Transferor's
October Fiscal Month.
"Collections" means, with respect to any Lease Receivable, any
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and all related cash collections and proceeds and any cash collections of
Related Security.
"Commitment" means, for any Committed Transferee, the maximum
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amount of Advances which may be advanced by such Committed Transferee as set
forth opposite such Committed Transferee's name on the signature pages to the
Agreement under the caption "Commitment", subject to assignment pursuant to
Section 10.04, as such amount may be reduced in accordance with Section 2.01(b).
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"Committed Transferee" means each of the financial
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institutions listed on the signature pages to the Agreement as "Committed
Transferees," together with their respective successors and permitted assigns.
"Conduit Transferee" means Corporate Asset Funding Company,
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Inc., a Delaware corporation, together with its successors and permitted assigns
(other than the Liquidity Providers).
"CP Note" means any commercial paper note issued by the
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Conduit Transferee.
"CP Rate" means, for any Interest Period, the per annum rate
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equal to the weighted average of the per annum rates paid or payable by the
Conduit Transferee from time to time as interest on or otherwise (by means of
interest rate xxxxxx or otherwise) in respect of the CP Notes that are
allocated, in whole or in part, by the Agent (on behalf of the Conduit
Transferee) to fund or maintain the Conduit Transferee's Advances during such
Interest Period, as determined by the Agent (on behalf of the Conduit
Transferee) and reported to the Transferor and the Servicer, which rates shall
reflect and give effect to the commissions of placement agents and dealers in
respect of CP Notes, to the extent such commissions are allocated, in whole or
in part, to such CP Notes by the Agent (on behalf of the Conduit Transferee);
provided, however,
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that if any component of such rate is a discount rate, in calculating the "CP
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Rate" for such Interest Period, the Agent shall for such component use the rate
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resulting from converting such discount rate to an interest bearing equivalent
rate per annum.
"Credit and Collection Policy" means those credit and
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collection policies and practices relating to the Lease Receivables and Obligors
described in Exhibit A.
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"Deemed Defaulted Lease Receivable" means a Lease Receivable
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which arises under a Lease with respect to which any Installment Payment
thereunder remains unpaid for more than 60 days and less than 90 days from the
original due date for such payment and which has been removed from the Pledged
Assets as a result of a Substitute Receivable becoming a Pledged Asset.
"Default Ratio" means, for any Collection Period, a fraction
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(expressed as a percentage) determined as of the last day of such Collection
Period equal to the sum of the aggregate unpaid Installment Payments under all
Lease Receivables which were Defaulted Lease Receivables or Deemed Defaulted
Lease Receivables as of such last day (net of any recoveries during such
Collection Period with respect to Defaulted Lease Receivables or Deemed
Defaulted Lease Receivables) divided by the aggregate unpaid Installment
Payments under all Lease Receivables as of the last day of such Collection
Period.
"Defaulted Lease Receivable" means a Lease Receivable at any
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time: (i) which arises under a Lease with respect to which any Installment
Payment thereunder remains unpaid for more than 90 days from the original due
date for such payment, (ii) as to which the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in Section
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7.01(e), (iii) as to which foreclosure proceedings have been initiated and are
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continuing, or (iv) which, in accordance with the Credit and Collection Policy,
has been or should be written off as uncollectible.
"Delinquency Ratio" means, for any Collection Period, a
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fraction (expressed as a percentage) determined as of the last day of such
Collection Period equal to (a) the sum of the aggregate unpaid Installment
Payments under all Lease Receivables which were Delinquent Lease Receivables on
the last day of such Collection Period divided by (b) the aggregate unpaid
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Installment Payments under all Lease Receivables as of the last day of such
Collection Period.
"Delinquent Lease Receivable" means a Lease Receivable that is
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not a Defaulted Lease Receivable and (i) as to which any Installment Payment
remains unpaid for more than 60 days from the original due date for such payment
or (ii) which, in accordance with the Credit and Collection Policy, has been or
should be classified as delinquent.
"Discount Rate" means, for each Lease Receivable on any date
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of the determination thereof, a per annum rate equal to the sum of (a) the per
annum rate that is specified as the fixed rate in the most recent confirmation
of the Interest Rate Hedge entered into by Transferor in connection with an
Advance hereunder (which reflects a blended rate with all prior Interest Rate
Xxxxxx), plus (b) the Margin Rate in effect at the time of the initial Advance
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with respect to such Lease Receivable.
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"Dynamic Loss Reserve Percentage" means, as of any Settlement
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Date, the higher of (i) a percentage calculated as the product of (A) the
Adjusted Loss Ratio for such Settlement Date, (B) the Weighted Average Remaining
Life at such time (expressed in years) and (C) 3 and (ii) a fraction (expressed
as a percentage) having as its numerator the higher of (x) the sum of the
aggregate unpaid Installment Payments under all Lease Receivables of the
Obligors that are rated Investment Grade having the two largest aggregate unpaid
Installment Payments under all Lease Receivables and (y) the sum of the
aggregate unpaid Installment Payments under all Lease Receivables of the
Obligors that are not rated or are rated less than Investment Grade having the
four largest aggregate unpaid Installment Payments under all Lease Receivables
and as its denominator the Receivables Balance at such time.
"E-Mail Servicer Report" has the meaning given to such term in
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Section 5.02(c).
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"Effective Date" means the first Business Day on which all of
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the conditions precedent to the first Advance, as described in Section 3.01,
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have been satisfied.
"Eligible Lease Receivable" means, with respect to a Lease
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Receivable as of the day it is initially included as a Pledged Asset:
(i) the Obligor of which is a United States resident;
(ii) which (A) has not been a Defaulted Lease Receivable or
(B) on the date of the initial Advance with respect thereto, has no payment
remaining unpaid for more than 30 days from the original due date for such
payment;
(iii) which, on the date of the initial Advance with respect
thereto, is due and payable in full no more than eighty-four (84) months
following such date, provided, that Eligible Lease Receivables may include Lease
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Receivables which are due and payable in full between sixty (60) and eighty-four
(84) months following such date up to an aggregate Outstanding Balance of such
Lease Receivables equal to 30% of the Receivables Balance at such time;
(iv) under which all scheduled payments are payable in equal
monthly installments and, except with respect to Lease Receivables arising under
Leases entered into during August and September, 1999, the first two such
Installment Payments thereon have been made;
(v) which is denominated and payable only in United States
dollars within the United States, the Obligor of which is domiciled in the
United States and the Equipment related thereto is located in the United States;
(vi) which, together with the Lease related thereto, does not
contravene, in any material respect, any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which the Transferor is not in violation of any such law, rule or regulation
applicable to such Lease Receivable if such violation would impair the
collectibility of such Lease Receivable;
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(vii) which does not require any consent or authorization or
approval of, or notice to, the Obligor thereof that has not been obtained or
accomplished in connection with the granting of the Lien thereon by the
Transferor in favor of the Agent;
(viii) which satisfies, in all material respects, all applicable
requirements of the Credit and Collection Policy;
(ix) the Obligor of which is not a governmental entity or, to
the knowledge of the Transferor, an Affiliate of any of the parties hereto;
(x) the Obligor of which has not been released, in whole or in
part, from any of its obligations thereunder;
(xi) the Obligor of which is not the Obligor under Defaulted
Lease Receivables having Outstanding Balances in the aggregate which exceed 20%
of the sum of the aggregate Outstanding Balances of all Lease Receivables of
such Obligor; and
(xii) which arises under a Lease:
(A) which is in full force and effect and constitutes
the legal, valid and binding obligation of the Obligor of such Lease enforceable
against such Obligor in accordance with its terms, except as may be limited by
the Enforceability Exceptions;
(B) which is "chattel paper", an "account" or a
"general intangible" within the meaning of Article 9 the UCC as enacted in any
applicable jurisdiction;
(C) which constitutes a Finance Lease or a True Lease
and the Obligor Filing Requirement has been satisfied with respect thereto;
(D) if a True Lease, the security interest in such
Equipment has been granted to the Agent hereunder, which security interest has
been perfected in the Filing Locations;
(E) as of the date of the initial Advance with respect
to the related Lease Receivable, (1) there was no default, breach, violation or
event (other than the failure to make a payment on the original due date for
such payment) that has occurred and is continuing permitting acceleration under
the terms of the Lease, and (2) no event (other than the failure to make a
payment on the original due date for such payment) had occurred and was
continuing that, with notice, the lapse of time, or both, would constitute a
default, breach, violation or event permitting acceleration under the terms of
such Lease;
(F) which was originated by the Transferor in the
ordinary course of its business;
(G) which constitutes a "hell or high-water" obligation
of the Obligor within the meaning of Article 2A of the UCC and requires the
Obligor to make all payments of Installment Payments thereunder regardless of
the condition of the Equipment to which such Lease relates;
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(H) which has not been amended, altered, extended or
modified in any way, except in accordance with the Credit and Collection Policy;
(I) which has not been satisfied, released, canceled,
subordinated or rescinded, nor has any instrument been executed by the
Transferor which would effect any such satisfaction, release, cancellation,
subordination or rescission;
(J) which is not subject to any right of rescission,
setoff, recoupment, counterclaim or defense (other than the Obligor's right of
quiet enjoyment), whether arising out of transactions concerning such Lease or
otherwise, and no such right has been asserted in writing by any person with
respect thereto;
(K) with respect to which all consents, licenses,
approvals and authorizations of any Governmental Authority required to be
obtained in connection with the granting of the Lien on the Leases, the Lease
Receivables, the Related Security and the Collections by the Transferor have
been obtained;
(L) which requires the Obligor thereunder to maintain
the Equipment in good and workable order and provides that, (x) in the event of
any damage to the Equipment covered by or the subject of such Lease (other than
ordinary wear and tear), the Obligor will repair such Equipment to the extent of
such damage and (y) in the event of the loss or destruction of the Equipment,
the Obligor will replace such Equipment with the same-or-better model Equipment
in same-or-better configuration or the Transferor will receive from an insurer
or from the Obligor as self-insurer, an amount not less than the Outstanding
Balance of the Lease Receivable;
(M) with respect to which, together with the related
Pledged Assets, all material taxes, assessments, fines, fees and other
liabilities have been paid before they became delinquent, and all filings in
respect of any such taxes, assessments, fines, fees and other liabilities have
been timely made;
(N) the Obligor thereof, if rated, is rated "1", "2",
"3", "4" or "8" under the Credit and Collection Policy and is not on the
Transferor's "watchlist report";
(O) which does not relate to an equipment upgrade
unless such equipment upgrade is set forth in an additional schedule to the
related Lease;
(P) a first priority Lien in all Lease Receivables
thereunder, all Related Security (other than in respect of Equipment) and
Collections with respect thereto has been granted by the Transferor to the Agent
and for which all UCC filings necessary to perfect such Lien have been
accomplished;
(Q) which contains enforceable provisions sufficient to
enable the Transferor (or its assigns) to realize against the Equipment related
thereto, subject to the Obligor's right to quiet enjoyment of the Equipment and
to the Enforceability Exceptions; and
(R) if such Lease has been extended beyond its original
term after the expiration thereof, such extension is in writing and for a
minimum term of 12 months.
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"Enforceability Exceptions" means exceptions to the
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enforceability of an obligation arising under (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally, and (ii) general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance, regardless of whether
considered in a proceeding at equity or at law.
"Equipment" means all office furniture and similar equipment
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leased or financed by the Transferor pursuant to a Lease, together with all
additions, replacements, substitutions, parts, repairs, accessories, upgrades,
accessions or attachments thereto.
"Eurocurrency Liabilities" has the meaning assigned to that term
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in Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Reserve Percentage" for any Interest Period means the
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reserve percentage applicable to Citibank during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for Citibank in
respect of liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Termination" has the meaning assigned to that term in
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Section 7.01.
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"Excess Discount Payment" means, with respect to any Settlement
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Date, the positive difference, if any, between (i) an amount equal to the
product of (A) the Discount Rate applicable to the Lease Receivables included in
the Pledged Assets, (B) the average daily outstanding Aggregate Advances during
the Interest Period ending on, or immediately prior to, such Settlement Date and
(C) a fraction, having as its numerator, the number of days during such Interest
Period and, as its denominator, 360 and (ii) the aggregate amount payable to the
Agent pursuant to clauses fourth and fifth of Section 2.04(b).
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"Facility Documents" means collectively, the Agreement, the Asset
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Purchase Agreements, the Fee Letter and all other agreements, documents and
instruments delivered pursuant thereto or in connection therewith.
"Facility Limit" means at any time $200,000,000, provided,
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however, that (i) at all times on and after the Termination Date, the "Facility
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Limit" shall mean the Aggregate Advances and (ii) the parties hereto may agree
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(each in its discretion) to increase the Facility Limit by executing a letter
agreement stating the amount of such increased Facility Limit.
"Fee Letter" means that certain Fee Letter dated as of the date
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hereof among the Agent and the Transferor.
"Filing Locations" means the Secretary of State of the State of
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Michigan.
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"Final Collection Date" means the date following the Termination
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Date on which the Aggregate Advances have been paid in full and the Affected
Parties have received all amounts payable to the Affected Parties (including
Interest) pursuant to this Agreement or any other Facility Document.
"Finance Lease" means a Lease whereby the Transferor has, for
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purposes of applicable state commercial law, made a loan to the Obligor, which
loan is secured by the Obligor's ownership interest in the related Equipment,
and the lease and installment payments thereon represent repayment of the
principal and interest of such loan.
"Fiscal Month" means each of the periods described on Exhibit B
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hereto for the fiscal years 1997 through 2002 (which Exhibit shall be updated by
the Transferor from time to time for subsequent years prior to the Final
Collection Date).
"Funding Base" means an amount, calculated on each Settlement
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Date, equal to the product of (i) the present value of the Aggregate Adjusted
Installment Payments, determined by discounting on a monthly basis (assuming a
calendar year consisting of twelve thirty-day months) such Aggregate Adjusted
Installment Payments at a rate equal to the Discount Rate and (ii) a percentage
equal to 100% minus the Required Loss Reserve Percentage with respect to such
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Settlement Date.
"Governmental Authority" means any federal, state, local or
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foreign government, any political subdivision of any of the foregoing and any
agency or instrumentality of any of the foregoing.
"Initial Funding Date" means the date on which the first Advance
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is made pursuant to the Agreement.
"Installment Payments" means, with respect to any Lease
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Receivable, the aggregate amount of installment payments payable by the Obligor
under the related Lease, excluding however, (i) all interim rent or payments and
(ii) all supplemental or additional payments, if any, required by the terms of
such Lease with respect to sales or use taxes, personal property taxes,
insurance, maintenance, purchase option payments, ancillary products and
services and other specific charges.
"Interest" means, for any Interest Period, an amount equal to:
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IR x A x ED/DCF
where:
A = the average daily Aggregate Advances during such Interest
Period
DCF = 360 or, in the case of Interest calculated by reference to
the Base Rate, 365
IR = the weighted average daily (calculated as a function of not
only the interest rate but also the portion of Aggregate
Advances allocated to such interest rate) Interest Rate for
such Interest Period
13
ED = the actual number of days elapsed during such Interest Period.
"Interest Period" means (i) with respect to outstanding Advances
---------------
that bear interest at the CP Rate, each period commencing on the date which is
the second Business Day immediately preceding each Settlement Date and ending on
the second Business Day immediately preceding the next Settlement Date (except
that the first such Interest Period shall commence on the Initial Funding Date)
and (ii) with respect to outstanding Advances that bear interest at the Assignee
Rate, the period commencing on, and including, each Settlement Date and ending
on, but excluding, the immediately succeeding Settlement Date (except that the
first such Interest Period shall commence on, and include, the Initial Funding
Date).
"Interest Rate" means, for any Interest Period (i) with respect
-------------
to Advances made by the Committed Transferees, a rate equal to the Assignee Rate
for such Interest Period, and (ii) with respect to Advances made by the Conduit
Transferee, (x) the CP Rate, or (y) a rate equal to the Assignee Rate for such
Interest Period if at any time and for any reason whatsoever, (1) the Conduit
Transferee shall not fund or maintain the relevant Advances during such Interest
Period through the issuance of CP Notes in the United States commercial paper
market, (2) the Agent shall have required that Settlement Dates occur more
frequently than monthly pursuant to the proviso in the definition of "Settlement
Date" or (3) the Conduit Transferee shall have assigned the relevant Advances to
a Liquidity Provider or to any other permitted assignee pursuant to Section
-------
10.04.
-----
"Interest Rate Xxxxxx" means interest rate swap or similar
--------------------
agreements entered into by the Transferor in connection herewith to provide
protection to, or minimize the impact upon, the Transferor of increasing
interest rates with respect to any Advances.
"Interest Rate Hedge Assignment Acknowledgment" means an
---------------------------------------------
acknowledgment in substantially the form of Exhibit B executed by a counterparty
---------
to an Interest Rate Hedge (if other than Citibank).
"Investment Grade" means, with respect to any Person, that the
----------------
long-term unsecured debt of such Person is rated at least BBB- by S&P and at
least Baa3 by Moody's, provided, that, if the long-term unsecured debt of such
--------
Person is only rated by one of S&P or Moody's, such debt is rated at least the
foregoing level from such rating agency.
"Investor Report" means a report, in substantially the form of
---------------
Exhibit C, furnished by the Servicer to the Agent for the Transferees pursuant
---------
to Section 5.02(c).
---------------
"Lease" means a contract in the form of a lease, installment
-----
sales contract, unsecured promissory note, promissory note/security agreement or
other similar type of agreement (and all rights with respect thereto, including
all guaranties and other agreements or arrangements of whatever character from
time to time supporting or securing payments of such lease), which is set forth
on a Lease Schedule delivered pursuant to Section 2.02 and has not been removed
------------
or released from the Pledged Assets in accordance with Section 6.06.
------------
"Lease Receivable" means, with respect to any Lease at any time,
----------------
all Installment Payments then or thereafter payable by the Obligor under such
Lease, or any supplemental or additional payment, if any, required by the terms
of such Lease with respect to insurance,
14
maintenance, ancillary products and services and other specific charges,
excluding any such payments or charges which constitute sales or use taxes,
personal property taxes, or the price for a purchase option payments.
"Lease Schedule" has the meaning given to such term in Section
-------------- -------
2.02.
----
"LIBO Rate" for any Interest Period in respect of a relevant
---------
Advance means the rate of interest per annum (rounded upwards, if necessary, to
the next higher one hundred-thousandth of a percentage point) for deposits in
U.S. Dollars for a period equal to one month which appears on Page 3750 of the
Telerate Service (or any successor page or successor service that displays the
British Bankers' Association Interest Settlement Rates for U.S. Dollar deposits)
as of 11:00 a.m. (London, England time) two Business Days before the
commencement of such Interest Period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, encumbrance, lien (statutory or otherwise), or preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever.
"Liquidity Fee" has the meaning given such term in the Fee
-------------
Letter.
"Liquidity Provider" means any of the financial institutions from
------------------
time to time party to any Asset Purchase Agreement.
"Loss Ratio" means, for any Collection Period, a fraction
----------
(expressed as a percentage) determined as of the last day of such Collection
Period equal to (a) the sum of the aggregate unpaid Installment Payments under
all Lease Receivables which became Written-Off Receivables during such
Collection Period and each of the preceding eleven Collection Periods (net of
aggregate recoveries during such twelve Collection Periods) divided by (b) the
----------
average of the aggregate unpaid Installment Payments under all Lease Receivables
as of the last day of such Collection Period and as of the last day of each of
the preceding eleven Collection Periods.
"Margin Rate" means, with respect to the Advance made with
-----------
respect to a Lease Receivable, the sum of (i) the per annum rate applicable from
time to time to calculate the Servicer Fee, (ii) 1.25% per annum representing
the spread set forth in the definition of "Assignee Rate," and (iii) the
pro-rated fees (expressed as a percentage of such Advance), if any, payable by
the Transferor with respect to Interest Rate Xxxxxx related to such Lease
Receivable.
"Material Adverse Effect" means a material adverse effect on (i)
-----------------------
the ability of the Transferor or the Servicer to perform its obligations under
any Facility Document, (ii) the legality, validity or enforceability of this
Agreement or any other Facility Document, (iii) the Transferor's, the Agent's,
the Transferees' or the Liquidity Providers' interests in the Pledged Assets, or
(iv) the collectibility of the Pledged Assets.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
-------
thereto.
"Note" means that promissory note described as such in Section
---- -------
2.02(b) hereof.
-------
15
"Notice of Funding" means a written notice, in substantially the
-----------------
form of Exhibit E, delivered by the Transferor to the Agent pursuant to Section
--------- --------
2.02(a).
-------
"Obligations" means all present and future indebtedness and other
-----------
liabilities and obligations of the Transferor to the Transferees (including any
Transferee in its capacity as a counterparty under an Interest Rate Hedge)
and/or any other Affected Party, arising under or in connection with this
Agreement and the other Facility Documents, and shall include, without
limitation, all liability for principal of the Advances, Interest, fees, expense
reimbursements, indemnifications, and other amounts due or to become due from
the Transferor to the Transferees (including any Transferee in its capacity as a
counterparty under an Interest Rate Hedge) and/or any other Affected Party under
this Agreement and under the Interest Rate Xxxxxx.
"Obligor" means, with respect to a Lease, the Person(s) obligated
-------
to make payments to the Transferor under such Lease.
"Obligor Filing Requirement" means, with respect to the
--------------------------
Transferor's interest in the Pledged Assets, the Servicer has filed all
financing statements against the Obligors in order to perfect the Transferor's
security interest in any Equipment covered by such financing statements which is
deemed to be owned by the Obligor (or, in the case of a True Lease, would be
owned by the Obligor if such Lease was a Finance Lease), and such financing
statements have not been terminated, released or assigned (except as provided
herein).
"Other Fees" means amounts owed by the Transferor hereunder
----------
pursuant to Sections 2.06, 2.07, 2.08, 8.01 and 10.06.
------------- ---- ---- ---- -----
"Outstanding Balance" means, with respect to any Lease Receivable
-------------------
on any date of determination thereof, an amount equal to the present value of
the Installment Payments relating to such Lease Receivable, determined by
discounting on a monthly basis (assuming a calendar year consisting of twelve
thirty-day months) such Installment Payments from the end of the calendar month
in which each such Installment Payment is due, at a rate equal to the Discount
Rate with respect thereto to such determination date. Notwithstanding anything
to the contrary contained in this Agreement, if any Installment Payment was not
paid when due and if such payment remains unpaid at the time the Outstanding
Balance of the related Lease Receivable is calculated for any purpose, then the
"Outstanding Balance" of such Lease Receivable shall include such unpaid
-------------------
payment.
"Overconcentration Amount" means, at any time, an amount equal to
------------------------
the sum of (a) an amount calculated for each Obligor equal to the amount by
which (i) the aggregate unpaid Installment Payments under all Eligible Lease
Receivables of such Obligor and its Affiliates exceeds (ii) 6.0% of the
aggregate unpaid Installment Payments under all Eligible Lease Receivables at
such time if such Obligor is rated Investment Grade or 3.0% of the aggregate
unpaid Installment Payments under all Eligible Lease Receivables at such time if
such Obligor is unrated or rated less than Investment Grade, (b) without
duplication of the other amounts described in this definition, the amount by
which (x) the aggregate unpaid Installment Payments under all Eligible Lease
Receivables of Obligors which, in accordance with the Credit and Collection
Policy, have a risk rating of "4" exceeds (y) 17.0% of the aggregate unpaid
16
Installment Payments under all Eligible Lease Receivables at such time (or, in
each case, such other percentage for any Obligor designated by the Agent in a
writing from time to time), and (c) without duplication of the other amounts
described in this definition, the amount by which (x) the aggregate unpaid
Installment Payments under all Eligible Lease Receivables of Obligors which, in
accordance with the Credit and Collection Policy, have a risk rating of "8"
exceeds (y) 7.5% of the aggregate unpaid Installment Payments under all Eligible
Lease Receivables at such time (or, in each case, such other percentage for any
Obligor designated by the Agent in a writing from time to time), provided, that
--------
in respect of each of (a), (b) and (c), the aggregate unpaid Installment
Payments will be determined as of the end of the immediately preceding Fiscal
Month.
"Permitted Liens" means any of the following:
---------------
(a) Liens for taxes and assessments (i) which are not yet due and
payable or (ii) the validity of which are being contested in good
faith by appropriate proceedings and with respect to which the
Transferor or, in the case of any Equipment, the relevant Obligor, is
maintaining adequate reserves in accordance with generally accepted
accounting principles;
(b) Liens in favor of the Transferees, any Liquidity Provider
(but only in connection with this Agreement) or the Agent;
(c) Liens related to storage, work, labor, usage or other Liens
of like general nature incurred in the ordinary course of business and
not in connection with the borrowing of money, provided in each case,
the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings the
effect of which is to stay the enforcement of any such Lien;
(d) imperfections in title or Liens arising by operation of law
not material in amount and which, individually or in the aggregate, do
not materially interfere with the rights hereunder of any Transferee
or the Agent in the Pledged Assets; and
(e) with respect to Equipment, the interest of an Obligor in such
Equipment under the related Lease (including the quiet enjoyment
rights of such Obligor).
"Parent" means Steelcase Inc., a Michigan corporation.
------
"Parent Performance Guaranty" means the Performance Guaranty of
---------------------------
even date herewith executed by Parent in favor of the Agent for the benefit of
the Transferees.
"Person" means an individual, partnership, corporation (including
------
a business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity.
"Pledged Assets" means, at any time, (i) all then outstanding
--------------
Leases, Lease Receivables, Related Security, payments owing to the Transferor or
the Agent on behalf of the Transferees (as applicable) under Interest Rate
Xxxxxx covering Lease Receivables and Collections with respect to, and other
proceeds of, such Lease Receivables, including, without
17
limitation, all Collections of Lease Receivables relating to payments due
thereunder at any time during the month in which such Lease Receivable was the
subject of an Advance hereunder and (ii) all Equipment.
"Pro Rata Share" means, for any Committed Transferee, a fraction
--------------
(expressed as a percentage) computed by dividing such Committed Transferee's
Commitment by the Facility Limit.
--
"Program Fee" has the meaning given such term in the Fee Letter.
-----------
"Receivables Balance" means, at any time, the sum of the
-------------------
Outstanding Balances of all Lease Receivables included in the Pledged Assets at
such time.
"Records" means all agreements, documents, instruments, books,
-------
records and other information maintained by or on behalf of the Transferor with
respect to the Lease Receivables, the related Obligors and the Related Security.
"Related Security" means, with respect to any Lease Receivable,
----------------
(i) all security interests or liens and property subject thereto from time to
time to the extent purporting to secure payment of such Lease Receivable,
whether pursuant to the related contract with the Obligor or otherwise, (ii) the
assignment to the Agent, for the benefit of the Transferees, of all UCC
financing statements or other filings covering any collateral to the extent
securing payment of such Lease Receivable, (iii) all guarantees, prepayment
penalties, indemnities, warranties, letters of credit, insurance policies and
proceeds and premium refunds thereof and other agreements or arrangements of
whatever character from time to time to the extent supporting or securing
payment of such Lease Receivable, (iv) all of the Transferor's right, title and
interest in and to any proceeds of the sale or lease of Equipment that was
repossessed from or returned by an Obligor of a Lease Receivable that was the
subject of such Lease, (v) all Records related to such Lease Receivable, and
(vi) all proceeds of the foregoing.
"Required Loss Reserve Percentage" means, with respect to any
--------------------------------
Settlement Date, the greater of (a) 12%, and (b) the Dynamic Loss Reserve
Percentage calculated as of such Settlement Date.
"Required Transferees" means Committed Transferees with aggregate
--------------------
Commitments totaling an amount greater than sixty-six and two thirds percent (66
K %) of the Facility Limit.
"Responsible Officer" means, with respect to any Person, the
-------------------
chief executive officer, the chief financial officer, any senior vice president,
the treasurer, controller, assistant treasurer or assistant controller, or such
other senior officers having titles or responsibilities comparable to such
officers, of such Person.
"S&P" means Standard & Poor's Rating Services, a division of The
---
XxXxxx-Xxxx Companies, Inc. or any successor thereto.
18
"Servicer" means at any time the Person(s) then authorized
--------
pursuant to Section 6.01 to service, administer, xxxx and collect Lease
------------
Receivables and for so long as the Transferor is so authorized Servicer shall
mean Transferor solely in its capacity as Servicer hereunder.
"Servicer Advance" has the meaning given to such term in Section
---------------- -------
2.04.
----
"Servicer Fee" means a fee with respect to each Collection
------------
Period, payable in arrears for the account of the Servicer, in an amount equal
to the product of (i) the aggregate Outstanding Balances of all Lease
Receivables as of the last day of the immediately prior Collection Period and
(ii) the per annum rate of (x) 1.0% if the Transferor or an Affiliate thereof is
the Servicer and (y) 110% of the reasonable costs and expenses of servicing the
Pledged Assets if a Person other than the Transferor or an Affiliate of the
Transferor is the Servicer.
"Servicer Default" means the occurrence of any of the following:
----------------
(a) The Servicer shall fail to make any payment or deposit to be
made by it hereunder when due and such failure shall remain unremedied for three
(3) Business Days; or
(b) The Servicer shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any other Facility Document
on its part to be performed or observed and any such failure shall remain
unremedied for fifteen (15) Business Days after the earlier of (i) written
notice from the Agent and (ii) knowledge thereof by a Responsible Officer of the
Servicer; or
(c) Any representation or warranty made or deemed to be made by
the Servicer (or any of its Responsible Officers) under this Agreement, any
Investor Report or any Notice of Funding shall prove to have been false or
incorrect in any material respect when made; or
(d) (i) The Servicer shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Servicer
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or (ii) the Servicer's Board of
Directors shall vote affirmatively to authorize any of the actions set forth in
clause (i).
----------
"Settlement Date" means the 15th day of each month, provided
--------------- --------
that, if such day is not a Business Day, the Settlement Date shall be the
immediately succeeding Business Day, and provided, further, that the Agent may,
-------- -------
in its discretion following the occurrence, and during the continuation of an
Event of Termination, by notice to the Transferor and the Servicer, require that
Settlement Dates occur more frequently than monthly.
"Specified Termination Date" means October 18, 2000, as such date
--------------------------
may be extended pursuant to Section 2.10.
------------
"Substitute Receivable" has the meaning assigned to such term in
---------------------
Section 6.06(b).
---------------
19
"Termination Date" means the earliest to occur of (i) the Specified
----------------
Termination Date, (ii) the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.01, and (iii) that Business Day which the
------------
Transferor designates as the Termination Date by notice to the Agent at least
two (2) Business Days prior to such Business Day.
"Transferee" means the Conduit Transferee or a Committed Transferee,
----------
as applicable, and "Transferees" means the Conduit Transferee and the Committed
-----------
Transferees.
"Transferor" means Steelcase Financial Services, Inc., and its
----------
successors.
"True Lease" means a Lease which is not a Finance Lease.
----------
"UCC" means, as to each applicable jurisdiction, the Uniform
---
Commercial Code as from time to time in effect in the specified jurisdiction.
"Watch List Ratio" means, for any Collection Period, a fraction
----------------
(expressed as a percentage) determined as of the last day of such Collection
Period equal to the sum of the aggregate unpaid Installment Payments under all
Lease Receivables that are not Defaulted Lease Receivables, Deemed Defaulted
Lease Receivables or Delinquent Lease Receivables and that were added to the
Servicer's "watch list" during such Collection Period (net of any recoveries
with respect to Deemed Defaulted Lease Receivables and Defaulted Lease
Receivables for such period) divided by the aggregate unpaid Installment
Payments under all Lease Receivables as of the last day of such Collection
Period.
"Weighted Average Remaining Life" means, at any time, a term
-------------------------------
(calculated in years) equal to:
E(P\\n\\ x T\\n\\)
n \\n\\
--------
ELRB
where:
E = The mathematical symbol for summation. The summation is computed
from 1 to n, where n is the number of remaining Installment
Payments which comprise all Eligible Lease Receivables at such
time.
P\\n\\ = The amount of the nth Installment Payment which comprises such
Eligible Lease Receivables.
T\\n\\ = The remaining period, in years, from such time until the
scheduled due date of such nth Installment Payment.
20
ELRB = The sum of the remaining Installment Payments on all Eligible Lease
Receivables.
"Written-Off Receivable" means a Lease Receivable (i) which arises
----------------------
under a Lease with respect to which any Installment Payment thereunder remains
unpaid for more than 210 days from the original due date for such payment or
(ii) which, in accordance with the Credit and Collection Policy, has been or
should be written off as uncollectible.
Section 1.02. Other Terms. All accounting terms not specifically
-----------
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
Section 1.03. Computation of Time Periods. Unless otherwise stated in
---------------------------
the Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01. Advances. On each Settlement Date during the period from
--------
the date hereof to the Termination Date, on the terms and conditions hereinafter
set forth, the Conduit Transferee may, in its sole discretion, make Advances,
and if the Conduit Transferee declines to so make Advances, the Committed
Transferees shall make Advances, in each case, upon the request of the
Transferor as reflected in a Notice of Funding. The Transferor may request
Advances on any Settlement Date subject to the limitation that, after giving
effect to such Advance the Aggregate Advances would not exceed the lesser of (i)
the Funding Base on such Settlement Date and (ii) the Facility Limit on such
Settlement Date.
(b) The Transferor may, upon at least five days' notice to the Agent,
terminate in whole or reduce in part (ratably among the Committed Transferees)
the unused portion of the Facility Limit; provided that each partial reduction
--------
of the Facility Limit shall be in an amount equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
Section 2.02. Making of Advances. (a) At least five Business Days
------------------
prior to a Settlement Date on which the Transferor desires the Transferees to
make an Advance, the Transferor shall deliver to the Agent a Notice of Funding.
Each such Notice of Funding shall include pro forma calculations of the Funding
Base in respect of the relevant Settlement Date and shall include a list of
Leases (each, a "Lease Schedule") under which the Lease Receivables included in
--------------
the Funding Base arise. Following receipt of a Notice of Funding, the Agent will
determine whether the Conduit Transferee will make the requested Advance. If the
Conduit Transferee declines to make such Advance, the Agent shall promptly
notify the Transferor and the Transferor may, on the Business Day on which it
receives such notice, if such notice is received at or prior to 1:00 p.m. (New
York time) on such day, or the following Business Day, if such notice is
received after 1:00 p.m. (New York time) on such day, either (x) cancel the
applicable Notice of Funding or (y) request that the Committed Transferees make
such Advance,
21
in each case by notice to the Agent. If the Transferor does not so notify the
Agent, then the applicable Notice of Funding shall be deemed canceled. On the
date of each Advance, upon satisfaction of the applicable conditions precedent
set forth in Article III, the Conduit Transferee or each Committed Transferee,
-----------
as applicable, shall make available to the Agent at its address referred to in
Section 2.05, in immediately available funds, an amount equal to (1) in the case
------------
of the Conduit Transferee, the amount of such Advance, and (2) in the case of a
Committed Transferee, such Committed Transferee's Pro Rata Share of the amount
of such Advance, in each case, net of the amount, if any, to be remitted to the
Transferor on the relevant Settlement Date pursuant to clause (vi) of Section
-------
2.04(b). After receipt by the Agent of such funds, the Agent will make such
-------
funds available to the Transferor by wire transfer to such account as shall have
been designated by the Transferor.
(b) Notes. All of the Advances shall be evidenced by a promissory note
-----
substantially in the form attached hereto as Exhibit F (the "Note")
--------- ----
appropriately completed, duly executed and delivered on behalf of the Transferor
and payable to the order of the Agent for the benefit of the Transferees in
accordance with the provisions hereof. The funding date and principal amount of
each Advance and each repayment or prepayment of principal thereof shall be
recorded in the Agent's internal records and, prior to any transfer of such
Note, on the grid schedule annexed thereto, and the Transferor hereby authorizes
the Agent to make such recordation; provided, however, that the failure of the
-------- -------
Agent to set forth any or all of such information on such schedule or any error
in such schedule shall not in any manner affect any payment obligation of the
Transferor in accordance with the terms hereof and of such Note. Such updated
grid schedules, or other proper records maintained by the Agent in lieu thereof,
shall, in the absence of demonstrable error, be presumptively correct evidence
of the Advances made by the Transferees to the Transferor. The Transferor shall
have no obligations in respect of the Advances except as expressly provided
herein.
(c) Maturity of Advances. The principal amount of each Advance shall
--------------------
be due and payable in accordance with the settlement procedures described in
Section 2.04.
------------
Section 2.03. Interest and Fees. (a) Interest shall accrue on the
-----------------
outstanding Advances on each day during an Interest Period at the applicable
Interest Rate. On each Settlement Date, an amount equal to accrued and unpaid
Interest with respect to the immediately preceding Interest Period shall be due
and payable to the Agent for the account of the Transferees from Collections in
accordance with the settlement procedures described in Section 2.04, provided,
------------ --------
that, if there are not sufficient amounts available for distribution under such
Section 2.04 to fully pay accrued and unpaid Interest as a result of Interest
------------
Rate Xxxxxx not having an aggregate notional amount equal to the Aggregate
Advances at such time, the Transferor shall pay to the Agent any such shortfall.
(b) On each Settlement Date, an amount equal to the sum of the Program
Fees, Liquidity Fees and Other Fees with respect to the immediately preceding
Interest Period shall be due and payable to the Agent for the account of the
Transferees from Collections in accordance with the settlement procedures
described in Section 2.04.
------------
Section 2.04. Settlement Procedures.
---------------------
22
(a) Collections and Other Amounts.
-----------------------------
(i) Lease Receivable Collections. On each day, both before and
----------------------------
after the Termination Date, the Servicer shall allocate all Collections of
Lease Receivables received on such day as follows:
(1) All amounts in respect of such Collections pertaining to
sales, use or personal property taxes attributable to the Leases and
related Equipment shall be remitted to the Transferor and used to pay
such taxes; and
(2) All remaining Collections shall be set aside and held in
trust by the Servicer (but, unless required under Section 6.02(b),
---------------
shall not be held in a segregated account), until the next Settlement
Date.
(ii) Payments Under Interest Rate Xxxxxx. Each payment from the
-----------------------------------
applicable counterparty under an Interest Rate Hedge shall be made on a
Settlement Date and set aside by the Servicer (or the Agent, as the case
may be) and held in trust for the Transferees, the Liquidity Providers and
the Transferor.
(iii) Servicer Advances. If the Servicer has not collected any
-----------------
scheduled Installment Payment due on a Lease Receivable since the last
Settlement Date and the Servicer reasonably believes that such Installment
Payment will be received in ordinary course, the Servicer may make an
advance ("Servicer Advance") in an amount equal to such payment and remit
the amount of such Servicer Advance to the Collection Account on the next
Settlement Date. The Servicer shall be reimbursed for any such Servicer
Advance from (i) subsequent Collections of such Installment Payment or (ii)
if such Servicer Advance is outstanding on the date on which the related
Lease Receivable becomes a Defaulted Lease Receivable, from Collections as
described in Section 2.04(b)(ii) hereof.
-------------------
(b) Settlement Dates. On each Settlement Date, the Servicer shall
----------------
(based upon the allocations specified in the applicable Investor Report) remit
from the amounts set aside for the Transferees, the Liquidity Providers and the
Transferor pursuant to Section 2.04(a)(i)(2) during or in respect of the
---------------------
immediately preceding Collection Period the following amounts for application to
the following in the following order of priority:
(i) first, to each counterparty under an Interest Rate Hedge, the
-----
net amount, if any, due to such counterparty thereunder as of such
Settlement Date;
(ii) second, to the Servicer the aggregate amount of any unreimbursed
------
Servicer Advances relating to prior Settlement Dates;
(iii) third, to the Servicer in payment of the Servicer Fee for such
-----
Settlement Date;
(iv) fourth, to the Agent for allocation to the Transferees and the
------
applicable Liquidity Providers for application to Interest due and payable
on such Settlement Date;
23
(v) fifth, to the Agent for allocation to itself, the Transferees
-----
and the Liquidity Providers in payment of the Program Fee and the Liquidity
Fee (as the case may be) due and payable on such Settlement Date;
(vi) sixth, to the Transferor an amount equal to the Excess Discount
-----
Amount for such Settlement Date;
(vii) seventh, to the Agent for allocation to the Transferees an
-------
amount equal to the Aggregate Advances, provided, that (A) if an Advance is
--------
being made on such Settlement Date, the amount otherwise distributable to
the Agent pursuant to this clause seventh in an amount up to the amount of
-------
such Advance shall be remitted to the Transferor and (B) if such Payment
Date occurs on or after the Termination Date, the amount payable to the
Agent under this clause seventh shall be capped at an amount such that,
-------
after giving effect to such reduction in the Aggregate Advances, the
Funding Base would equal 200% of the outstanding Aggregate Advances;
(viii) eighth, to the Agent for allocation to itself, the Transferees
------
and the Liquidity Providers in payment of the Other Fees due and payable on
such Settlement Date; and
(ix) ninth, to the Transferor all remaining amounts (if any)
-----
following the payment of the amounts set forth in clauses (i) through
-----------
(viii) above.
------
Section 2.05. Payments and Computations, Etc. All amounts to be paid
-------------------------------
or deposited by the Transferor or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 1:00 p.m. (New York
City time) on the day when due in lawful money of the United States of America
in immediately available funds to such account as the Agent may designate from
time to time in writing. The Transferor and the Servicer shall, to the extent
permitted by law, pay to the Agent interest on all amounts not paid or deposited
by such Person when due hereunder at 2% per annum above the Base Rate, payable
on demand. Such interest shall be retained by the Agent except to the extent
that such failure to make a timely payment or deposit has continued beyond the
date for distribution by the Agent of such overdue amount to the applicable
Transferee or the applicable Liquidity Provider, in which case such interest
accruing after such date shall be for the account of, and distributed by the
Agent to, such Transferee or such Liquidity Provider. All computations of
Interest, Liquidity Fees, Program Fees, Servicer Fees and Other Fees hereunder
shall be made on the basis of a year of 360 days (or, in the case of Interest
calculated by reference to the Base Rate, 365 days) for the actual number of
days (including the first but excluding the last day) elapsed. In no event shall
any provision of this Agreement require the payment or permit the collection of
Interest in excess of the maximum permitted by applicable law. In the event that
any payment hereunder (whether constituting a payment of Advances, Interest or
any other amount) is rescinded or must otherwise be returned for any reason, the
amount of such payment shall be restored and such payment shall be considered
not to have been made.
Section 2.06. Yield Protection. (a) If due to either: (i) the
----------------
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve
24
requirements) in or in the interpretation by any Governmental Authority of any
law or regulation (other than laws or regulations relating to taxes) after the
date hereof or (ii) the compliance by any Affected Party with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) imposed after the date hereof, (1) there shall be an
increase in the cost to such Affected Party of accepting, funding or maintaining
any Advance hereunder, (2) there shall be a reduction in the amount receivable
with regard to any Advance or (3) such Affected Party shall be required to make
a payment calculated by reference to the Advances made by it or Interest
received by it, then the Transferor shall, from time to time, within 15 days of
demand by the Agent, pay the Agent for the account of such Affected Party (as a
third party beneficiary, in the case of any Affected Party other than one of the
Transferees), that portion of such increased costs incurred, amounts not
received or required payment made or to be made, which the Agent reasonably
determines is attributable to accepting, funding and maintaining any Advance
hereunder, provided, that the Transferor shall have no obligation to pay any
--------
amount attributable to the period before ninety (90) days prior to the date of
such demand. In determining such amount, the Agent may use any reasonable
averaging and attribution methods. The applicable Affected Party shall submit to
the Transferor a certificate describing in reasonable detail the basis for and
the calculation of such increased costs incurred, amounts not received or
receivable or required payment made or to be made, which certificate shall, in
the absence of manifest error, be conclusive and binding for all purposes. Each
of the Agent, each Transferee and each Liquidity Provider agrees to use
reasonable efforts to promptly notify the Transferor upon learning that amounts
for which it is entitled to seek reimbursement under this Section 2.06 have
------------
begun to accrue.
(b) Prior to demand by any Affected Party of amounts owing under this
Section 2.06, the Affected Party agrees (in order to receive amounts due
------------
pursuant to this Section 2.06) that it will use reasonable efforts to reduce or
------------
eliminate any claim for compensation pursuant to said Section 2.06 including,
------------
subject to applicable law, a change in its applicable lending office for this
transaction; provided, however, that nothing herein contained shall obligate an
-------- -------
Affected Party to take any action which, in the sole opinion of such Affected
Party, is unlawful, otherwise adverse to its interests or results in any
unreimbursed cost or expense to such Affected Party, which cost or expense would
not have been incurred but for such action.
Section 2.07. Increased Capital. (a) If either (i) the introduction of
-----------------
or any change in or in the interpretation by any Governmental Authority of any
law or regulation after the date hereof or (ii) compliance by any Affected Party
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) after the date hereof affects
or would affect the amount of capital required or expected to be maintained by
such Affected Party or such Affected Party reasonably determines that the amount
of such capital is increased by or based upon the existence of any Transferee's
agreement, in its discretion, or commitment, as applicable, to make or maintain
Advances hereunder and other similar agreements or facilities, then, within 15
days of demand by such Affected Party or the Agent, the Transferor shall
immediately pay to such Affected Party (as a third party beneficiary, in the
case of any Affected Party other than one of the Transferees) or the Agent for
the account of such Affected Party from time to time, as specified by such
Affected Party or the Agent, additional amounts sufficient to compensate such
Affected Party in light of such circumstances, to the extent that such Affected
Party or the Agent on behalf of such Affected Party reasonably determines such
increase in capital to be allocable to the existence of the applicable
Transferee's
25
agreements hereunder, provided, that the Transferor shall have no obligation to
--------
pay any amount attributable to the period before ninety (90) days prior to the
date of such demand. A certificate describing in reasonable detail the basis for
and calculation of such amounts submitted to the Transferor by such Affected
Party or the Agent, shall, in the absence of manifest error, be conclusive and
binding for all purposes.
(b) If any Affected Party shall incur any loss, cost or expense as a
result of any reduction in Advances on any date other than a Settlement Date or
as a result of the failure of any Advances to be made on the date specified in
the applicable Notice of Funding for any reason, the Transferor shall, upon
demand by the Agent, pay the Agent for the account of such Affected Party the
amount of such losses, costs and expenses. Such Affected Party shall submit to
the Transferor and the Agent a certificate as to such amounts, which certificate
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
(c) Prior to demand by any Affected Party of amounts owing under this
Section 2.07, such Affected Party agrees (in order to receive amounts due
------------
pursuant to this Section 2.07) that it will use its reasonable efforts to reduce
------------
or eliminate any claim for compensation pursuant to said Section 2.07 including,
------------
subject to applicable law, a change in its applicable lending office for this
transaction; provided, however, that nothing herein contained shall obligate any
-------- -------
Affected Party to take any action which, in the sole opinion of such Affected
Party, is unlawful, otherwise adverse to its interests or results in any
unreimbursed cost or expense to such Affected Party, which cost or expense would
not have been incurred but for such action.
Section 2.08. Taxes. (a) Except to the extent required by applicable
-----
law, any and all payments and deposits required to be made hereunder or under
any instrument delivered hereunder by the Transferor hereunder shall be made, in
accordance with Section 2.05, free and clear of and without deduction for any
------------
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, except for net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on such Affected Party by the state or foreign
jurisdiction under the laws of which such Affected Party is organized or in
which it is otherwise doing business or any political subdivision thereof (such
excepted Taxes being "Excepted Taxes"). If the Transferor or the Servicer shall
--------------
be required by law to make any such deduction, (i) the Transferor shall make an
additional payment to such Affected Party, in an amount sufficient so that,
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08), other than deductions in
------------
respect of Excepted Taxes, such Affected Party receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Transferor
or the Servicer, as the case may be, shall make such deductions and (iii) the
Transferor or the Servicer, as the case may be, shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Transferor agrees to pay any present or future
stamp or other documentary taxes or any other excise or property taxes or
similar levies which arise from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any instrument delivered hereunder.
26
(c) Each Affected Party which is not organized under the laws of the
United States or any State thereof shall, within thirty (30) days after such
Affected Party becomes a party to or obtains rights under this Agreement, and
prior to any payment being made by the Transferor to such Affected Party,
deliver to the Transferor (i) two duly completed and executed copies of the IRS
Form 1001 or 4224 (or any successor form) as applicable; or (ii) an IRS Form W-8
(or any successor form), as applicable; and (iii) such other forms or
certificates as may be required under the laws of any applicable jurisdiction
(on or before the date that any such form expires or becomes obsolete), in order
to permit the Transferor to make payments to, and deposit funds to or for the
account of, such Affected Party hereunder and under the other Facility Documents
without any deduction or withholding for or on account of any tax. Each such
Affected Party shall submit to the Transferor (copied to the Agent) two updated,
completed, and duly executed versions of: (i) all forms referred to in the
previous sentence upon the expiry of, or the occurrence of any event requiring a
change in, the most recent form previously delivered by it to the Transferor or
the substitution of such form; and (ii) such extensions or renewals thereof as
may reasonably be requested by the Transferor Notwithstanding the provisions of
Section 2.08(a), the Transferor shall not be obligated to pay any additional
---------------
amounts resulting from the failure of an Affected Party to comply with this
Section 2.08(c).
---------------
Section 2.09. Additional Interest. To the extent Interest is
-------------------
calculated during any Interest Period by reference to the LIBO Rate, the
Transferor shall pay to the Agent for the account of the Transferees and the
Liquidity Providers (without duplication of amounts otherwise payable hereunder)
so long as Citibank shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional Interest ("Additional Interest") on outstanding Advances for each day
-------------------
during such Interest Period, at a rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBO Rate of such Interest Period from
(ii) the rate obtained by dividing such LIBO Rate by the percentage equal to
100% minus the Eurodollar Reserve Percentage for such Interest Period.
Section 2.10. Extension of Specified Termination Date. The Transferor
---------------------------------------
may, upon not less than 30 days (but not more than 45 days) notice prior to the
then current Specified Termination Date to the Agent (which shall notify each
Transferee of receipt of such request), proposed to extend the Specified
Termination Date for an additional 364 days measured from the Specified
Termination Date then in effect. Each Transferee shall endeavor to respond to
such request, whether affirmatively or negatively (such determination to be in
the sole discretion of such Transferee), by notice to the Transferor the
Servicer and the Agent no earlier than 30 days prior to the then current
Specified Termination Date (but in any event no later than 20 days prior to the
then current Specified Termination Date). Any Transferee which does not give
such notice to the Transferor, Servicer and Agent by the date 10 days prior to
the Specified Termination Date then in effect shall be deemed to have elected
not to extend as requested. In the event an extension of the Specified
Termination Date is not agreed to by each of the Transferees, the Specified
Termination Date shall not be extended.
27
ARTICLE III
CONDITIONS OF ADVANCES
Section 3.01. Conditions Precedent to First Advance. The Agent shall
-------------------------------------
have received each of the documents, instruments, opinions and other agreements
listed on Exhibit G as a condition precedent to the first Advance.
---------
Section 3.02. Conditions Precedent to All Advances. Each Advance
------------------------------------
(including the first Advance) by the Transferees to the Transferor shall be
subject to the further conditions precedent that on the date of each Advance,
each of the following shall be true and correct both before and after giving
effect to such Advance:
(i) The representations and warranties contained in Article IV are
----------
correct on and as of such day as though made on and as of such date (except
for those representations and warranties which are made as of a certain
date, which such representations and warranties shall be correct on and as
of the date made), and
(ii) No event has occurred and is continuing, or would result from
such Advance which constitutes an Event of Termination or would constitute
an Event of Termination but for the requirement that notice be given or
time elapse or both.
Each delivery of a Notice of Funding to the Agent, and the acceptance by the
Transferor of the proceeds of such Advance, shall constitute a representation
and warranty by the Transferor that, as of the date of such Advance, both before
and after giving effect thereto and the application of the proceeds thereof,
each of the foregoing statements are true and correct.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Transferor and the
--------------------------------------------------------
Servicer. Each of the Transferor and, except in respect of sub-paragraphs (g),
--------
(h), (i), (k) (l) and (m), the Servicer represents and warrants as to itself, on
and as of the date of each Advance, as follows:
(a) Due Formation and Good Standing. It is a corporation, duly
-------------------------------
organized, validly existing and in good standing under the laws of the state of
its organization and is duly qualified to do business, and is in good standing,
in every jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect.
(b) Due Authorization and No Conflict. The execution, delivery and
---------------------------------
performance by it of this Agreement and all other Facility Documents to which it
is a party are within its corporate powers, have been duly authorized by all
necessary corporate action on its part, do not contravene (i) its certificate or
articles of incorporation or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any material lease, contract, mortgage, financing
agreement, indenture or similar instrument binding on it or its property or (iv)
any order, writ, judgment, award, injunction or decree binding on it or its
property, and do not result in or require the
28
creation of any Lien upon or with respect to any of its properties, except, in
the case of clauses (ii) and (iv), where such contravention would not have a
Material Adverse Effect. This Agreement and the other Facility Documents to
which it is a party have been duly executed and delivered on its behalf.
(c) Governmental Consent. No authorization or approval or other
--------------------
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by it of this Agreement
or any other agreement, document or instrument to be delivered by it hereunder,
except for filings specified on Exhibit H hereto.
---------
(d) Enforceability of Facility Documents. This Agreement and each
------------------------------------
other Facility Document to be delivered by it constitute the legal, valid and
binding obligation of it enforceable against it in accordance with their
respective terms, subject to the Enforceability Exceptions.
(e) No Litigation. There are no actions, suits or proceedings
-------------
pending, or to its knowledge threatened in writing, against it, or its property,
in any court, or before any arbitrator of any kind, or before or by any
Governmental Authority, which (i) assert the invalidity of this Agreement or any
other Facility Document or any action to be taken by it in connection therewith,
or (ii) seek to prevent the consummation of the transactions contemplated by
this Agreement and the other Facility Documents. It is not in default with
respect to any order of any court, arbitrator or Governmental Authority where
such default would have a Material Adverse Effect.
(f) Accuracy of Information. No Investor Report, Notice of Funding,
-----------------------
certificate, report or other information (including any schedule hereto)
furnished or to be furnished by it to the Agent, any Transferee or any Liquidity
Provider in connection with this Agreement is or shall be inaccurate in any
material respect as of the date it is or shall be dated or (except as otherwise
disclosed to the Agent, the Transferees or the Liquidity Providers at such time)
as of the date so furnished.
(g) Perfection of Interest in Lease Receivables and Pledged Assets.
--------------------------------------------------------------
Each Lease Receivable is owned by the Transferor free and clear of any Lien
(other than Permitted Liens), and the Agent, for the benefit of the Transferees,
has acquired a valid and perfected first priority security interest in each
Lease Receivable and in the Related Security (other than the Equipment),
Collections and other Pledged Assets (other than the Equipment) with respect
thereto, in each case free and clear of any Liens (other than Permitted Liens);
and no effective financing statement or other instrument similar in effect, is
filed in any recording office listing the Transferor as debtor, covering any
Lease Receivable, Related Security, Collections or other Pledged Assets except
such as may be filed in favor of the Agent.
(h) Advances. The Aggregate Advances do not exceed the Funding Base
--------
(after giving effect to any Advances made on such date).
(i) Location of Chief Executive Office and Records. Its chief place
----------------------------------------------
of business and chief executive office are located at the address referred to in
Section 10.02 hereof and the locations of the offices where it keeps all the
-------------
Records are listed on Exhibit I (or at such other
---------
29
locations, notified to the Agent in accordance with Section 5.01(f), in
---------------
jurisdictions where all action required by Section 6.05 has been taken and
------------
completed).
(j) Taxes. It has filed or caused to be filed all Federal, state and
-----
local tax returns which are required to be filed by it, and has paid or caused
to be paid all taxes prior to such taxes becoming delinquent, other than any
taxes or assessments the validity of which are being contested in good faith by
appropriate proceedings, except where the failure to file or pay would not have
a Material Adverse Effect.
(k) Solvency. It is not "insolvent" (as such term is defined in
--------
Section 101(32)(A) of the Bankruptcy Code.
(l) Investment Company Act. It is not an "investment company" within
----------------------
the meaning of the Investment Company Act of 1940, as amended.
(m) Use of Proceeds. No proceeds of any Advance will be used by the
---------------
Transferor to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(n) Year 2000. It has reviewed and assessed all of its computer
---------
systems which are material to its business with respect to the ability of such
computer systems to recognize correctly references to, and abbreviations of, the
year 2000 (including without limitation, references to "00" as the year 2000 and
not the year 1900) and it reasonably believes, as a result of such reviews and
assessments, that its computer systems material to its business are year 2000
ready.
ARTICLE V
GENERAL COVENANTS
Section 5.01. Affirmative Covenants of the Transferor and the
------------------------------------------------
Servicer. From the Initial Funding Date until the later of the Termination Date
--------
or the Final Collection Date, each of the Transferor and, except in respect of
sub-paragraphs (d) (i), (e), and (g), the Servicer will, unless the Agent shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
-------------------------
all applicable laws, rules, regulations and orders with respect to all Leases
and the agreements and documents related thereto, except where the failure to so
comply would not have a Material Adverse Effect.
(b) Preservation of Corporate Existence. Observe all procedures
-----------------------------------
required by its certificate or articles of incorporation and by-laws and
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where the failure to
preserve and maintain such rights, franchises, privileges and qualifications
would have a Material Adverse Effect.
30
(c) Books and Records; Audits; Agreed Upon Procedures. (i) Maintain
-------------------------------------------------
and implement administrative and operating procedures (including an ability to
recreate records evidencing the Lease Receivables in the event of the
destruction of originals) and keep and maintain all documents, books, records
and other information as it may determine to be necessary or advisable for the
collection of all Lease Receivables; (ii) from time to time upon not less than
ten (10) Business Days' prior notice to it and during regular business hours,
permit the Agent, or the Agent's agents or representatives, (A) to have access
to all records, files, books of account, data bases and information pertaining
to all Lease Receivables and Related Security, including the Records, (B) to
discuss matters relating to the Lease Receivables with any of its officers or
employees having knowledge of such matters, and (C) permit such Persons to
inspect, audit and to make extracts therefrom at the Transferor's expense; and
(iii) on an annual basis, cause to be delivered to the Agent, a report prepared
and delivered by the Servicer's outside accountants with respect to agreed-upon
procedures in accordance with Statement on Standards for Attestation Engagements
No. 4, Agreed-Upon Procedures Engagements, comparing amounts set forth in the
Investor Reports to supporting underlying documentation with the specific
procedures and the adequacy thereof being agreed to by the Servicer and the
Agent.
(d) Performance and Compliance with Leases and Credit and Collection
----------------------------------------------------------------
Policy. At its expense timely and fully perform and comply, in all material
------
respects, with (i) all provisions, covenants and other promises required to be
observed by it under the Leases the failure with which to comply would have a
Material Adverse Effect, and (ii) the Credit and Collection Policy in regard to
each Lease Receivable.
(e) Location of Records. Keep its chief place of business and chief
-------------------
executive office, and the offices where it keeps the Records, at the address(es)
of the Transferor referred to in Section 4.01(i), or, in any such case, upon 10
---------------
days' prior written notice to the Agent, at such other locations within the
United States where all action required by Section 6.05 shall have been taken
------------
and completed.
(f) Obligor Filing Requirement. With respect to each Lease
--------------------------
Receivable, comply with the Obligor Filing Requirement.
(g) Interest Rate Xxxxxx. Maintain at all times Interest Rate Xxxxxx
--------------------
(i) between the Transferor and either Citibank and/or such other counterparties
as may be acceptable to the Agent and have a long-term rating of at least AA-
from S&P and Aa3 from Xxxxx'x and a short-term rating of at least A1 from S&P
and P1 from Xxxxx'x, (ii) with an aggregate notional amount not less than 95% of
the aggregate unpaid Installment Payments under the Lease Receivables included
in the Pledged Assets at such time, and not greater than 105% of the aggregate
unpaid Installment Payments under the Lease Receivables included in the Pledged
Assets at such time, and (iii) with respect to which periodic payments are made
to the applicable counterparty (solely on a net basis from funds available under
Section 2.04(b)(i)) by reference to a fixed rate and the counterparty makes
-------------------
periodic payments to the Transferor or (to the extent the Agent has required
such counterparty to remit such payments directly to the Agent) to the Agent (in
either case, solely on a net basis) by reference to a rate equal during any
Interest Period to the LIBO Rate for such Interest Period.
31
Section 5.02. Reporting Requirements of the Transferor and the
------------------------------------------------
Servicer. From the Initial Funding Date until the later of the Termination Date
--------
or the Final Collection Date, the Transferor and, except in respect of
sub-paragraphs (b) and (d), the Servicer will, unless the Agent shall otherwise
consent in writing, furnish to the Agent:
(a) Event of Termination. As soon as reasonably practicable and in
--------------------
any event within three (3) Business Days after a Responsible Officer has actual
knowledge thereof, notice of the occurrence of each Event of Termination or each
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Termination, which such notice shall include a statement
of such Responsible Officer setting forth details of such Event of Termination
or event and the action which such Person proposes to take with respect thereto.
(b) Financial Statements. Furnish to the Agent or cause to be
--------------------
furnished to the Agent: (i) promptly after being publicly disclosed, and in any
event within fifty-five (55) days after the end of the first, second and third
quarters in each fiscal year of Parent, copies of the consolidated financial
statements of Parent and its subsidiaries, including a balance sheet of Parent
and its subsidiaries on a consolidated basis as of the end of such quarterly
accounting period and related statements of net earnings and cash flows for the
portion of such fiscal year ended with the last day of such quarter, all in
reasonable detail, (ii) promptly after being publicly disclosed, and in any
event within one hundred (100) days after the end of each fiscal year of the
Parent copies of the consolidated financial statements of Parent and its
subsidiaries, including a balance sheet of Parent and its subsidiaries on a
consolidated basis as of the end of such fiscal year and related statements of
net earnings and cash flows for such fiscal year, all in reasonable detail and
prepared and certified by independent public accountants of nationally
recognized standing selected by the Parent, and stating in comparative form the
respective figures for the end of and for the previous fiscal year, and (iii) as
soon as available, and in any event promptly after filing thereof, a copy of any
filing made by Parent with the Securities and Exchange Commission, including,
without limitation, forms 10-Q and 10-K, or with any national securities
exchange.
(c) Investor Reports. Provide to the Agent, an Investor Report (i) on
----------------
or prior to the 15th day of any calendar month following the end of each
Collection Period with respect to such Collection Period, and (ii) after the
occurrence and during the continuation of an Event of Termination at such other
times as the Agent may from time to time reasonably request with respect to such
periods of time as the Agent may reasonably specify. The Servicer hereby agrees
that (A) it will submit each Investor Report by electronic mail (each an "E-Mail
------
Servicer Report"), (B) it will make arrangements with VeriSign, Inc. (or another
---------------
authenticating organization acceptable to the Agent) to enable the Servicer to
generate electronic signatures to be used on such E-Mail Servicer Reports, (C)
it will format each E-Mail Servicer Report in accordance with the directions of
the Agent, (D) it will send each E-Mail Servicer Report to the electronic mail
address designated by the Agent from time to time, (E) it authorizes the Agent
to rely on such E-Mail Servicer Report for all purposes related to this
Agreement to the same extent as if the contents thereof had been otherwise
delivered to the Agent and (F) it acknowledges that the Agent may at any time
require it to manually submit a written Investor Report instead of such E-Mail
Servicer Report.
32
(d) Reporting on Litigation and Adverse Effects. As soon as
-------------------------------------------
reasonably practicable and in any event within three (3) Business Days after a
Responsible Officer has actual knowledge thereof, notice of the occurrence of
any and all litigation or any other matters or events concerning the Transferor
which could have a Material Adverse Effect.
(e) Changes to Lock-Boxes. As soon as reasonably practicable, notice
---------------------
to the Agent of any change in the lock-boxes to which Obligors of Lease
Receivables remit Collections.
(f) Other Information. As soon as reasonably practicable, from time
-----------------
to time, such other information, documents, records or reports respecting the
Lease Receivables as the Agent may from time to time reasonably request in order
to protect the interests of the Agent or any Transferee under or as contemplated
by this Agreement.
Section 5.03. Negative Covenants of the Transferor and the Servicer.
-----------------------------------------------------
From the Initial Funding Date until the later of the Termination Date or the
Final Collection Date, neither the Transferor nor, except in respect of
sub-paragraph (d), the Servicer will, without the written consent of the Agent:
(a) Sales, Liens, Etc. Against Lease Receivables and Pledged Assets.
---------------------------------------------------------------
Except as otherwise provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist, any Lien other
than Permitted Liens (including, without limitation, any Lien arising under the
Employee Retirement Income Security Act of 1974, as amended from time to time,
or any successor statute, or otherwise in favor of the Pension Benefit Guaranty
Corporation) upon or with respect to, any Lease Receivable or other Pledged
Assets.
(b) Extension or Amendment of Lease Receivables. Except in accordance
-------------------------------------------
with the Credit and Collection Policy or as otherwise permitted in Section 6.02,
------------
extend, amend, or otherwise modify the terms of any Lease Receivable, or amend,
modify or waive any term or condition of any contract related thereto, in either
case, if such amendment, modification or waiver decreases the Outstanding
Balance of the applicable Lease Receivable or adversely affects the
collectibilty thereof.
(c) Change in Business or Credit and Collection Policy. Make any
--------------------------------------------------
change in the character of its business or in the Credit and Collection Policy
in any manner which would have a Material Adverse Effect.
(d) Change in Name. Make any change to its name or use any trade
--------------
names, fictitious names, assumed names or "doing business as" names unless the
Transferor shall have (i) given at least 30 days' prior written notice to the
Agent and (ii) taken and completed all action required by Section 6.05.
------------
(e) Terminate or Reject Contracts. Without limiting Section 6.03(b),
----------------------------- ---------------
terminate or reject any Lease under which a Lease Receivable has arisen prior to
the end of the term of such Lease, whether such rejection or early termination
is made pursuant to an equitable cause, statute, regulation, judicial proceeding
or other applicable law (including, without limitation, Section 365 of the
Bankruptcy Code), unless (i) with respect to Defaulted Lease Receivables, the
Transferor has determined in good faith that such termination or rejection will
maximize the
33
recovery thereon, or (ii) prior to, or simultaneously with, such termination or
rejection, the Transferor pays the Agent, for the benefit of the Transferees and
the Liquidity Providers, an amount equal to the Advance outstanding with respect
to such Lease Receivables together with all accrued and unpaid Interest on such
Advance, accrued and unpaid fees with respect thereto and all breakage costs
(but not gains, if any) incurred in connection with any reduction to the
notional amount of any Interest Rate Hedge resulting from such payment.
(f) Prepayments of Lease Receivables. Permit or accept the proceeds
--------------------------------
of any prepayment of a Lease Receivable, unless (i) upon the application of such
amounts pursuant to Section 2.04(b) hereof, the Transferor causes the aggregate
---------------
notional amount of Interest Rate Xxxxxx to be reduced by the amount of the
Advances outstanding with respect to such Lease Receivable, and (ii) the
Transferor is entitled to receive and apply such proceeds in an amount
sufficient to repay in full the Advances outstanding with respect to such Lease
Receivable and any interest (including interest through the end of the related
Collection Period), fees, costs or expenses (including early termination
payments) resulting from the reduction of the aggregate notional amount of the
Interest Rate Xxxxxx.
ARTICLE VI
ADMINISTRATION OF RECEIVABLES
Section 6.01. Designation of Servicer. The servicing, administering
-----------------------
and collection of the Lease Receivables shall be conducted by the Servicer so
designated from time to time in accordance with this Section 6.01. The Agent
------------
hereby designates the Transferor as Servicer with respect to the Pledged Assets
hereunder. Until the Agent gives notice to the Transferor and the Servicer of
the designation of a new Servicer as described below, the Transferor hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms hereof. The parties hereto acknowledge that Trinity Capital Corporation
and any other Person approved by the Agent may perform certain of the duties and
obligations of the Servicer as subservicers, provided, that the Servicer shall
--------
remain liable and responsible for the performance of any such duties and
obligations. The Agent may at any time following a Servicer Default designate as
Servicer any Person (including itself) to succeed the Transferor or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof. The Transferor agrees that, upon its replacement
as Servicer by the Agent, it will take such actions as the Agent may reasonably
require and otherwise cooperate with the Agent and the successor Servicer in
effecting the termination of its responsibilities and rights as Servicer
hereunder including, without limitation, (i) assisting the successor Servicer in
enforcing all rights under the Lease Receivables and Related Security, (ii)
transferring, promptly upon receipt, to the successor Servicer any Collections
or other amounts related to the Lease Receivables received by the Transferor,
(iii) transferring to the successor Servicer all Records held by or under the
control of the Transferor and (iv) following the replacement of the Transferor
as Servicer, permit the successor Servicer to have access to all tapes, discs,
diskettes and related property containing information concerning the Lease
Receivables and the Records and permit the successor Servicer to use all
computer software that may facilitate the Servicer's access to and use of such
information. Upon the replacement of the Transferor as Servicer, the Transferor
shall no longer be entitled to the Servicer Fee accruing from and after the
effective date of such replacement.
34
Section 6.02. Duties of the Servicer. (a) The Servicer shall take or cause
----------------------
to be taken all such actions as it deems necessary or advisable to collect each
Lease Receivable from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in accordance
with the Credit and Collection Policy. Each of the Transferor, each Transferee,
each Liquidity Provider and the Agent hereby appoints as its nominee the
Servicer, from time to time designated pursuant to Section 6.01, to enforce its
------------
respective rights and interests in and under the Leases, the Lease Receivables
and the Related Security. In no event shall the Servicer be entitled to make the
Agent, any Transferee or any Liquidity Provider a party to any litigation
without the Agent's express prior written consent.
(b) The Servicer shall set aside for the account of the Transferees and the
Liquidity Providers the Collections of Lease Receivables in accordance with
Section 2.04, provided, that, until the Agent notifies the Servicer to the
------------ --------
contrary (as described in the immediately succeeding sentence), neither the
Servicer nor the Transferor shall be required to segregate the funds
constituting Collections prior to the remittance or deposit thereof into the
Collection Account in accordance with Section 2.04. At any time following an
------------
Event of Termination or the downgrade of the Parent's unsecured long-term debt
to below BBB by S&P or below, Baa2 by Xxxxx'x, if such debt is rated by S&P or
Xxxxx'x, or below BBB+ if such debt is only rated under the Agent's debt rating
model, the Agent may require the Servicer and the Transferor to segregate and
deposit the Collections of Lease Receivables into the Collection Account or such
other account as shall have been designated by the Agent, set aside for the
Transferee and the Liquidity Providers, within two Business Days following
receipt by the Servicer of such Collections. At any time following an Event of
Termination, the Agent may require the Servicer and the Transferor to engage an
independent third-party acceptable to the Agent, to serve as trustee for the
receipt of all Collections and the subsequent allocation and distribution
thereof. The Transferor shall deliver to the Servicer, and the Servicer shall
hold in trust for the Transferor, the Transferees and the Liquidity Providers in
accordance with their respective interests, all Records. Notwithstanding
anything to the contrary contained herein, the Agent shall, upon the occurrence
and continuance of an Event of Termination, have the absolute and unlimited
right to direct the Servicer to commence or settle any legal action to enforce
collection of any Lease Receivable or to foreclose upon or repossess any Related
Security. The Servicer's authorization under this Agreement shall terminate on
the Final Collection Date.
Section 6.03. Rights of the Agent. At any time following the occurrence and
-------------------
continuance of an Event of Termination, (i) the Agent may notify (or may direct
the Servicer to notify) at any time the Obligors of Lease Receivables, or any of
them, of the Transferees and the Liquidity Providers' interest in Pledged Assets
and direct such Obligors, or any of them, that payment of all amounts payable
under any Lease Receivable be made directly to the Agent or its designee in
which case the Agent or its designee shall apply collections in accordance with
Section 2.04(b); (ii) the Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of the Transferees' and the Liquidity
Providers' interest in the Lease Receivables to each Obligor and direct that
payments be made directly to the Agent or its designee; and (iii) each of the
Transferor, each Transferee and the Liquidity Providers hereby authorizes the
Agent to take any and all steps in the Transferor's name and on behalf of the
Transferor, the Transferees and the Liquidity Providers necessary or desirable,
in the determination of the Agent, to collect all amounts due under any and all
Lease Receivables, including, without
35
limitation, endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Lease Receivables.
Section 6.04. Responsibilities of the Transferor. Anything herein to the
----------------------------------
contrary notwithstanding, the Transferor shall (i) perform all of its
obligations under the Leases to the same extent as if Pledged Assets had not
been subject to the Lien hereunder and the exercise by Agent of its rights
hereunder shall not relieve Transferor from such obligations and (ii) pay when
due any taxes, including without limitation, sales, excise and personal property
taxes payable in connection with the Pledged Assets. None of the Agent, the
Transferees or the Liquidity Providers shall have any obligation or liability
with respect to any of the Pledged Assets, nor shall any of them be obligated to
perform any of the obligations of the Transferor thereunder.
Section 6.05. Further Action Evidencing Agent's Interest. The Transferor
------------------------------------------
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the Agent may reasonably request in order to perfect, protect or more fully
evidence the interest of the Agent granted hereunder or enable the Agent to
exercise or enforce any of its rights hereunder. Without limiting the generality
of the foregoing, the Transferor will upon the request of the Agent (i) xxxx its
master data processing records evidencing such Lease Receivables with a legend,
acceptable to the Agent, evidencing that a Lien therein has been assigned to the
Agent under this Agreement, (ii) execute and file such financing statements,
continuation statements or amendments thereto or assignments thereof, and
execute and file such other instruments or notices, as may be necessary or
appropriate or as the Agent may reasonably request and (iii) following the
occurrence of an Event of Termination or a downgrade of the unsecured long-term
debt of Parent to below BBB by S&P or Baa2 by Xxxxx'x, if such debt is rated by
S&P or Xxxxx'x, or below BBB+ if such debt is only rated under the Agent's debt
rating model, remit the original copies of all chattel paper evidencing the
Lease Receivables to a custodian selected by the Agent. The Transferor hereby
authorizes the Agent to file one or more financing statements, continuation
statements and amendments thereto and assignments thereof, relative to all or
any of the Lease Receivables and the other Pledged Assets now existing or
hereafter arising without the signature of the Transferor where permitted by
law. A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Pledged Assets, or any part thereof, shall be
sufficient as a financing statement. If the Transferor fails to perform any of
its agreements or obligations under this Agreement, the Agent may (but shall not
be required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith shall
be payable by the Transferor upon the Agent's demand therefor.
Section 6.06. Removal and Substitution of Pledged Assets.
------------------------------------------
(a) On any Settlement Date prior to the occurrence of the Termination Date,
the Transferor may remove one or more Lease Receivables, together with the
related Leases and Related Security, from the Pledged Assets by listing such
Lease Receivables in the Investor Report delivered in connection with such
Settlement Date, provided, however, that (i) no such removal shall occur unless,
-------- -------
after giving effect thereto and the payments made on such Settlement Date, the
Funding Base equals or exceeds the Aggregate Advances and (ii) unless otherwise
agreed by the Agent, the aggregate Outstanding Balance of Lease Receivables
removed from the Pledged Assets pursuant to this Section 6.06(a) which
---------------
constitute Defaulted Lease Receivables
36
shall not exceed ten percent (10%) of aggregate Outstanding Balance of the Lease
Receivables which become Pledged Assets hereunder.
(b) On any Settlement Date prior to the occurrence of the Termination Date,
the Transferor may, subject to the conditions set forth in this Section 6.06(b),
---------------
replace any Lease Receivable included in the Pledged Assets with one or more
other Lease Receivables (each, a "Substitute Receivable"); provided, however,
--------------------- -------- -------
that no such replacement shall occur unless each of the following conditions is
satisfied as of the date of such replacement and substitution by the Substitute
Receivables to be substituted on such date (it being understood that for all
purposes hereunder the Outstanding Balance of a Substituted Receivable shall be
calculated using the same Discount Rate applicable to the Lease Receivable being
replaced):
(i) each Substitute Receivable is an Eligible Lease Receivable;
(ii) after giving effect to any such substitution, the Funding Base
equals or exceeds the Aggregate Advances;
(iii) such substitution does not cause an Event of Termination to
occur;
(iv) no selection procedure adverse to the Transferees was utilized
in selecting any such Substitute Receivable from those Leases owned by the
Transferor as of the date of such substitution;
(v) after giving effect to such substitution, the Transferor will be
in compliance with the requirements of Section 5.01(g); and
---------------
(vi) the Investor Report with respect to such Settlement Date shall
contain a certification by the Transferor that each of the foregoing is
true and correct as of such date.
(c) Each Substitute Receivable, together with the related Lease,
Related Security and Collections with respect thereto shall automatically become
Pledged Assets hereunder subject to the security interest granted to the Agent.
In connection with any removal or substitution of a Lease Receivable under this
Section 6.06, the Agent shall, automatically and without further action, be
------------
deemed to release its security interest in and lien on such Lease Receivable and
related Pledged Assets.
ARTICLE VII
EVENTS OF TERMINATION
Section 7.01. Events of Termination. If any of the following events
---------------------
("Events of Termination") shall occur:
---------------------
(a) The Transferor shall fail to make any payment or deposit to be
made by it hereunder when due and any such failure shall remain unremedied for
three (3) Business Days; or
37
(b) The Transferor shall fail to perform or observe any term, covenant
or agreement contained in (i) Section 5.02(a) or Section 5.03 of this Agreement
--------------- ------------
or (ii) any other provision of this Agreement or any other Facility Document on
its part to be performed or observed and, in the case of clause (ii), any such
failure shall remain unremedied for thirty (30) days; or
(c) Any representation or warranty made or deemed to be made by the
Transferor (or any of its Responsible Officers) under or in connection with this
Agreement, any Investor Report, any Notice of Funding or other information or
report delivered pursuant hereto shall prove to have been false or incorrect in
any material respect when made provided, however that if such representation
relates to a Lease Receivable, such Lease Receivable shall cease to be an
Eligible Lease Receivable and no Event of Termination shall occur under this
Section 7.01(c) if, after giving effect thereto, the Aggregate Advances do not
---------------
exceed the Funding Base; or
(d) Except to the extent permitted by the terms hereof, the
Transferees shall cease to own or have a valid and perfected security interest
in the Pledged Assets or, in the case of the Lease Receivables, such ownership
or security interest shall cease to be a first priority ownership or security
interest; or
(e) (i) The Transferor shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Transferor
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or; or (ii) the Transferor's
Board of Directors shall vote affirmatively to authorize any of the actions set
forth in clause (i) above in this subsection (e); or
--------- --------------
(f) As of the last day of any Collection Period, (1) the average of
the Delinquency Ratios for such Collection Period and the two immediately
preceding Collection Periods shall exceed 1.50%, (2) the average of the Default
Ratios for such Collection Period and the two immediately preceding Collection
Periods shall exceed 2.0%, (3) the Adjusted Loss Ratio shall exceed 1.50% or (4)
the Watch List Ratio shall exceed 6.0%; or
(g) A Servicer Default shall have occurred and be continuing; or
(h) (i) The Parent shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Parent
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or; or (ii) the Parent's Board
of Directors shall vote affirmatively to authorize any of the actions set forth
in clause (i) above in this subsection (h); or
--------- --------------
38
(i) The Parent shall fail to pay any principal of or premium or
interest on any indebtedness which is outstanding in a principal amount of
$25,000,000 or greater when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
any such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such indebtedness; or any
other default under any agreement or instrument relating to any such
indebtedness of the Parent or any other event shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument if the effect of such default or event is to accelerate, or to permit
the acceleration of, the maturity of such indebtedness; or any such indebtedness
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled required prepayment) prior to the stated maturity thereof
as a result of such default; or
(j) The long term unsecured debt obligations of Parent is rated less
than Investment Grade or, if not rated by S&P or Xxxxx'x, is rated less than BBB
under the Agent's internal ratings model; or
(k) There shall occur a breach of the Parent Performance Guaranty,
then, and in any such event, the Agent shall, at the request, or may
with the consent, of the Transferees, by notice to the Transferor declare the
Termination Date to have occurred, except that, in the case of any event
------
described in clause (i) of subsection (e) above, the Termination Date shall be
---------- --------------
deemed to have occurred automatically upon the occurrence of such event. Upon
any such declaration or automatic occurrence, the Agent and the Transferees
shall have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of the
applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Upon the occurrence of the Termination Date, (x) all Advances and
(y) Interest, fees, expense reimbursements, indemnifications, and other amounts
due or to become due under this Agreement shall be immediately due and payable
as provided in Section 2.04.
------------
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnities by the Transferor. Without limiting any
-----------------------------
other rights which any Affected Party may have hereunder or under applicable
law, the Transferor hereby agrees to indemnify any Transferee, CNAI,
individually and in its capacity as Agent, and any Liquidity Provider (the
"Indemnified Parties"), from and against any and all damages, losses, claims,
-------------------
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by such Indemnified Party to
-------------------
the extent relating to or arising from this Agreement or the pledge of the
Pledged Assets or in respect of any Lease Receivable or any Lease, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of any Indemnified Party or (ii) recourse for
an Obligor's inability for credit reasons to make payments of Lease Receivables.
Without limiting the foregoing Transferor, shall indemnify each Indemnified
Party for Indemnified Amounts relating to or resulting from:
39
(i) the inaccuracy of any representation or warranty made or
deemed made by the Transferor, including in its capacity as Servicer, (or any of
its officers) under this Agreement;
(ii) the failure by the Transferor, including in its capacity
as Servicer, to comply with any term, provision or covenant contained in this
Agreement or any Facility Document to which it is party or with any applicable
law, rule or regulation with respect to any Lease Receivable or the Related
Security;
(iii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of whatever
sort arising out of or in connection with services the sale or provision of
which gave rise to any Lease Receivable;
(iv) the failure to pay when due any taxes, including, without
limitation, sales, excise or personal property taxes payable by the Transferor
in connection with the Pledged Assets and taxes and other charges to be paid
under Section 2.08;
------------
(v) the failure of the Transferor to have a perfected first
priority Lien on any Related Security which secures the payment of a Lease
Receivable;
(vi) the failure to vest and maintain vested in the Agent, on
behalf of the Transferees and the Liquidity Providers, a first priority
perfected ownership or security interest in the Lease Receivables (including as
a result of any failure to file, or any delay in filing, financing statements or
other similar instruments or documents under the UCC or other applicable laws
against the Transferor with respect to any Pledged Assets), together with all
Collections and Related Security (other than Equipment), free and clear of any
Lien, whether existing at the time such Lease Receivable arose or at any time
thereafter;
(vii) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Lease Receivable (including, without limitation, a defense based on the related
Lease not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale or provision of any services related to such Lease or
the furnishing or failure to furnish such services;
(viii) the commingling of Collections at any time with other
funds, whether by the Servicer, the Transferor or any of their respective
affiliates; and
(ix) the inability of the Transferor to confirm that the first
two Installment Payments have been made on Lease Receivables arising under
Leases entered into during August and September, 1999.
Any amounts subject to the indemnification provisions of this Section 8.01 shall
------------
be paid by the Transferor to the Agent within five Business Days following
Agent's demand therefor.
40
ARTICLE IX
GRANT OF SECURITY INTEREST;
SECTION 9.01. Grant of Security Interest. To secure the prompt
--------------------------
and complete payment when due of the Obligations and the performance by the
Transferor of all of the covenants and obligations to be performed by it
pursuant to this Agreement, the Transferor hereby assigns as security and
pledges to the Agent, for the benefit of the Transferees and any successor and
assign thereof (including, without limitation, the Liquidity Providers), and
grants to the Agent, for the benefit of the Transferees, the counterparties to
any Interest Rate Xxxxxx and any successor and assign thereof (including,
without limitation, the Liquidity Providers), a security interest in all of the
Transferor's right, title and interest in and to all of the following property
and interests in property (collectively, the "Collateral"), whether now owned or
----------
existing or hereafter arising or acquired and wheresoever located:
(i) all Equipment and substitutions therefor and products and
proceeds thereof, including, without limitation, all payments under
insurance (whether or not the Agent is the loss payee thereof) or any
indemnity, warranty or guaranty, payable by reason of loss or damage
to or otherwise with respect to any of the foregoing;
(ii) all Lease Receivables;
(iii) all Related Security with respect to the Lease Receivables;
(iv) all Leases;
(v) all funds on deposit in the Collection Account;
(vi) all Collections; and
(vii) proceeds and other monies due and to become due to the
Transferor in respect of any of the foregoing.
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendments, Etc. No amendment to or waiver of any
---------------
provision of this Agreement nor consent to any departure by the Transferor,
shall in any event be effective unless the same shall be in writing and signed
by (i) the Transferor, the Agent and the Required Transferees (with respect to
an amendment) or (ii) the Agent and the Required Transferees (with respect to a
waiver or consent by them) or the Transferor (with respect to a waiver or
consent by it), as the case may be, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, modification or waiver (i)
-------- -------
shall affect the rights or duties of the Servicer hereunder without the prior
written consent of the Servicer or (ii) shall, without the prior written consent
of each Transferee (A) reduce the principal of, or Interest on, the Advances or
any fees or other amounts payable hereunder, (B) postpone any date fixed for any
payment of principal of, or
41
Interest on, the Advances or any fees or other amounts payable hereunder, (C)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Advances, or the number of Transferees, which shall be required
for the Transferees or any of them to take any action hereunder, (D) amend or
modify the calculation of the Required Loss Reserve Percentage, (E) release the
Parent from any of its obligations under the Performance Guaranty or (F) amend
this Section 10.01. This Agreement contains a final and complete integration of
all prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement (together with the exhibits
hereto) among the parties hereto with respect to the subject matter hereof,
superseding all prior oral or written understandings.
Section 10.02. Notices, Etc. All notices and other communications
------------
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and shall be
personally delivered or sent by first class mail, postage prepaid, or by courier
or by facsimile, to each party hereto, at its address set forth under its name
on the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective, upon receipt, or in the case of delivery by
mail, three days after being deposited in the mails, or, in the case of notice
by facsimile, when electronic communication of receipt is obtained, in each case
addressed as aforesaid.
Section 10.03. No Waiver; Remedies. No failure on the part of the
-------------------
Agent, any Transferee or any Liquidity Provider to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 10.04. Binding Effect; Assignability. (a) This Agreement
-----------------------------
shall be binding upon and inure to the benefit of the Transferor, the Servicer,
the Agent, the Transferees and their respective successors and permitted assigns
(which successors of the Transferor shall include a trustee in bankruptcy). This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the Final Collection Date; provided, however, that the rights and remedies
-------- -------
with respect to any breach of any representation and warranty made by the
Transferor pursuant to Article IV and the indemnification and payment provisions
----------
of Sections 2.06, 2.07, 2.08, Article VII and Article VIII shall be continuing
------------- ---- ---- ----------- ------------
and shall survive any termination of this Agreement.
(b) The Transferor may not assign any of its rights and
obligations hereunder or any interest herein without the prior written consent
of the Transferees and the Agent. The Conduit Transferee may, (i) without the
consent of the Transferor, assign at any time all or any portion of its rights
and obligations hereunder and interests herein to (a) CNAI, any affiliate of
CNAI or any special purpose receivables investment vehicle managed by CNAI or
any affiliate of CNAI, or (b) any Person pursuant to an Asset Purchase Agreement
and (ii) with the consent of the Transferor (such consent not to be unreasonably
withheld) and the Agent, assign at any time all or any portion of its rights and
obligations hereunder and interests herein to any Person not described in the
preceding clause (i). Any Committed Transferee may, with the consent of the
Transferor (such consent not to be unreasonably withheld) and the Agent, assign
at any time all
42
or any portion of its rights and obligations hereunder and interests herein to
any Person. Upon any such assignment, the assignee shall succeed to and become
vested with all the rights, powers, privileges and duties of such Transferee,
and the resigning Transferee shall be discharged from its duties and obligations
as Transferee hereunder. The Transferor and the Servicer agree to execute or
obtain such other documentation as may be reasonably requested by the assigning
Transferee in order to effectuate such assignment.
(c) Notwithstanding any other provisions of this Agreement, any
Transferee may at any time create a security interest in all or a portion of its
rights under this Agreement or any other Facility Document in favor of the
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
Section 10.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
-------------
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES), EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE INTERESTS OF THE TRANSFEROR IN THE PLEDGED ASSETS OR
REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 10.06. Costs and Expenses. The Transferor agrees to pay
------------------
on demand (i) all reasonable costs and expenses incurred in the periodic
auditing of the Transferor or the Servicer pursuant to Section 5.01(c) and (ii)
---------------
all reasonable costs and expenses of the Transferees and the Agent in connection
with the preparation, execution, amendment, waiver and enforcement of this
Agreement and the other agreements and documents to be delivered hereunder. In
addition, the Transferor shall pay on demand the reasonable fees and
out-of-pocket expenses of counsel for the Conduit Transferee or any counsel for
any general or limited partner or shareholder of the Conduit Transferee with
respect to (i) advising the Conduit Transferee or such general or limited
partner or shareholder as to its rights and remedies under this Agreement, (ii)
the enforcement of this Agreement and the other documents to be delivered
hereunder or (iii) advising the Conduit Transferee or such general or limited
partner or shareholder as to matters relating to the Conduit Transferee's
operations; provided, however, that if the Conduit Transferee enters into
agreements for the purchase of or the grant of a security interest in
receivables from one or more other Persons ("Other Transferors"), the Transferor
-----------------
and such Other Transferors shall each be liable for such Other Costs ratably in
accordance with the usage under the respective facilities of the Conduit
Transferee to acquire by purchase or as security receivables from the Transferor
and each Other Transferor; provided, further, that if such Other Costs are
attributable to the Transferor and not attributable to any Other Transferor, the
Transferor shall be solely liable for such Other Costs, but if such Other Costs
are attributable to any Other Transferor and not the Transferor, the Transferor
shall not be liable for such Other Costs.
Section 10.07. No Proceedings. The Transferor, each Liquidity
--------------
Provider and the Agent each hereby agrees that it will not institute against the
Conduit Transferee any proceeding of the type referred to in clause (i) of
----------
Section 7.01(e) so long as any CP Notes shall be
---------------
43
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such CP Notes shall have been outstanding.
Section 10.08. Execution in Counterparts; Severability. This
---------------------------------------
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 10.09 Confidentiality. The Agent, each Transferee and
---------------
each Liquidity Provider agrees, insofar as is legally possible, to use its
reasonable best efforts to keep in confidence all financial data and other
information relative to the affairs of the Transferor, the Servicer and the
Pledged Assets heretofore furnished or which may hereafter be furnished to it
pursuant to the provisions of this Agreement; provided, however, that this
-------- -------
Section 10.09 shall not be applicable to information which is or becomes
available to the Agent, a Transferee or a Liquidity Provider from a source other
than the Servicer or the Transferor; and provided further that such obligations
-------- -------
of each Agent, each Transferee and each Liquidity Provider shall be subject to
each Agent's, each Transferee's and each Liquidity Provider's (a) obligation to
disclose such information pursuant to a request or order under applicable laws
and regulations or pursuant to a subpoena or other legal process, (b) right to
disclose any such information to bank examiners, its affiliates, bank, auditors,
accountants and its counsel, and (c) right to disclose any such information, (i)
in connection with the transactions set forth herein including assignments and
sales of participation interests pursuant to Section 10.04 hereof or (ii) in or
in connection with any litigation or dispute involving the Agent, the
Transferees and the Transferor, provided that information disclosed pursuant to
this proviso shall be so disclosed subject to such procedures as are reasonably
calculated to maintain the confidentiality thereof.
ARTICLE XI
THE AGENT
Section 11.01. Authorization and Action. Each Transferee hereby
------------------------
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. The provisions of this Article XI are solely for the benefit of the
----------
Agent and the Transferees and the Transferor shall not have any rights as a
third-party beneficiary or otherwise under any of the provisions hereof. The
Agent shall distribute all Collections and other amounts received or acquired by
it hereunder on behalf of the applicable Transferees to such Transferees in
accordance with Article II hereof.
----------
Section 11.02. Agent's Reliance, Etc. Neither the Agent nor any
---------------------
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by the Agent under or in connection with this
Agreement, except for its or their own gross negligence
44
or willful misconduct. Without limiting the generality of the foregoing, the
Agent: (i) may consult with legal counsel (including counsel for the
Transferor), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Advance and shall not be responsible
to any Transferee for any statements, warranties or representations made in or
in connection with this Agreement; (iii) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Transferor or the Servicer or to
inspect the property (including the books and records) of the Transferor and the
Servicer; (iv) shall not be responsible to any Transferee for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (v)
shall incur no liability under or in respect of this Agreement by acting upon
any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by telex) believed by it to be genuine and
signed or sent by the proper party or parties.
Section 11.03. Agent and Affiliates. With respect to any Advance
--------------------
(or portion thereof) held by CNAI, CNAI shall have the same rights and powers
under this Agreement as would a Transferee if it were holding such Advance (or
portion thereof) and may exercise the same as though CNAI was not the Agent
hereunder. CNAI and its Affiliates may generally engage in any kind of business
with the Transferor or any Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of the Transferor or any
Obligor or any of their respective Affiliates, all as if CNAI was not the Agent
and without any duty to account therefor to any Transferee.
Section 11.04. Transferee's Credit Decision. Each Transferee
----------------------------
acknowledges that it has, independently and without reliance upon the Agent,
Citibank or any of their respective Affiliates or any other Transferee, and
based on such documents and information as it has deemed appropriate, made its
own evaluation and decision to enter into this Agreement and, if it so
determines, to make Advances hereunder. Each Transferee also acknowledges that
it will, independently and without reliance upon the Agent, Citibank or any of
their respective Affiliates, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under this Agreement.
Section 11.05. Delegation of Duties. The Agent may execute any of
--------------------
its duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
Section 11.06. Successor Agent. The Agent may, upon thirty (30)
---------------
days' notice to the Transferor, each Transferee and each other party hereto,
resign as Agent. If CNAI shall resign as Agent under this Agreement, then the
Required Transferees during such thirty-day period shall appoint a successor
agent, whereupon such successor agent shall succeed to the rights, powers and
duties of the Agent and references herein to the Agent shall mean such successor
agent, effective upon its appointment; and such former Agent's rights, powers
and duties in such capacity shall be terminated, without any other or further
act or deed on the part of
45
such former Agent or any of the parties to this Agreement. After any retiring
Agent's resignation hereunder as such agent, the provisions of Article VIII,
------------
this Article XI and Section 10.06 shall inure to its benefit as to any actions
---------- -------------
taken or omitted to be taken by it while it was Agent under this Agreement.
46
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TRANSFEROR/SERVICER: STEELCASE FINANCIAL SERVICES INC.
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name:
Title:
000 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, XX 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
AGENT: CITICORP NORTH AMERICA, INC., as Agent
By /s/ Xxxxx X. Free
------------------------------
Name: XXXXX XXXXXX FREE
Title: Vice President
000 Xxxxxxxxxx Xxx.
Xxxxxxxx, Xxx Xxxx 00000
Attn: Global Securitization
Telecopy: (000) 000-0000
47
CONDUIT TRANSFEREE: CORPORATE ASSET FUNDING COMPANY, INC.
By: Citicorp North America, Inc., as Attorney-
in-Fact
By /s/ Xxxxx X. Free
------------------------------
Name: XXXXX XXXXXX FREE
Title: Vice President
000 Xxxxxxxxxx Xxx.
Xxxxxxxx, Xxx Xxxx 00000
Attn: Global Securitization
Telecopy: (000) 000-0000
COMMITTED TRANSFEREES:
Commitment: CITIBANK, N.A.
----------
$200,000,000
By /s/ Xxxxx X. Free
------------------------------
Name: XXXXX XXXXXX FREE
Title: Vice President
000 Xxxxxxxxxx Xxx.
Xxxxxxxx, Xxx Xxxx 00000
Attn: Global Securitization
Telecopy: (000) 000-0000
48
EXHIBIT A
DESCRIPTION OF CREDIT AND COLLECTION POLICY
ON FILE WITH THE AGENT
EXHIBIT C
FORM OF INTEREST RATE HEDGE ASSIGNMENT ACKNOWLEDGMENT
[Attached]
EXHIBIT C
INTEREST RATE HEDGE ASSIGNMENT ACKNOWLEDGMENT
[Date]
[Name of Hedge Counterparty]
[Address of Hedge Counterparty]
Attention:___________________________
Re: ISDA Master Agreement dated as of _______, 19_ (the "Hedge Agreement")
between [Name of Hedge Counterparty] (the "Counterparty") and Steelcase
Financial Services Inc. ("Steelcase")
Steelcase hereby notifies you that Steelcase has assigned to
Citicorp North America, Inc., as agent under the "Lease Receivables Transfer
Agreement" identified below (the "Agent"), all of its right, title and interest
in and to any interest rate hedge transaction (each, a "Hedge") entered into
pursuant to the Hedge Agreement including, without limitation, (1) all rights of
Steelcase to receive moneys due and to become due under or pursuant to the
Xxxxxx, (ii) claims of Steelcase for damages arising out of or for breach or
default under the Xxxxxx, (iii) the right of Steelcase to terminate the Xxxxxx
or the Hedge Agreement, and to compel performance and otherwise exercise all
remedies thereunder, and (iv) all proceeds of any and all of the foregoing (the
assignment, right, title and interest of Steelcase in and to the Xxxxxx and the
Hedge Agreement being referred to as the "Assigned Rights").
As used herein, "Lease Receivables Transfer Agreement" shall mean
that certain Lease Receivables Transfer Agreement dated as of October 20,1999
among Steelcase, as "Transferor" and "Servicer," Corporate Asset Funding
Company, Inc., as "Conduit Transferee," the financial institutions from time to
time party thereto, as "Committed Transferees" and the Agent.
The Counterparty hereby agrees that, until the Counterparty receives
written notice from the Agent to the contrary, the Counterparty shall make all
payments under the Hedge Agreement and the Xxxxxx to Steelcase or as Steelcase
may from time to tine direct. Upon the Counterparty's receipt of written notice
from the Agent directing the same, (i) the Counterparty will cease to make any
such payments to or upon the direction of Steelcase, and shall make all such
payments only to the Agent or as the Agent may from time to time direct, and
(ii) the Agent shall be entitled to exercise any and all rights and remedies of
Steelcase under the Hedge Agreement and the Xxxxxx to receive such payments in
accordance with the terms hereof.
All payments to be made under the Hedge Agreement and the Xxxxxx by
the Counterparty shall be made by the Counterparty irrespective of, and without
deduction for, any counterclaim, defense, recoupment or set-off (other than
netting for payments owing by Steelcase thereunder in accordance with the terms
of the Hedge Agreement and the Xxxxxx) and shall be final, and the Counterparty
will not seek to recover from the Agent for any reason any such payment once
made.
Notwithstanding the foregoing, (a) Steelcase shall remain liable
under the Hedge Agreement and each Hedge to perform all of its duties and
obligations thereunder to the same extent as if this Acknowledgment had not been
executed, (b) the exercise by the Agent of any of the rights thereunder shall
not release Steelcase from any of its duties or obligations under the Hedge
Agreement or any Hedge, and (c) none of the Agent or any "Transferee" under (and
as defined in) the Lease Receivables Transfer Agreement shall have any
obligation or liability under the Hedge Agreement or any Hedge by reason of this
Acknowledgment, nor shall any of them be obligated to perform any of the
obligations or duties of Steelcase thereunder or to take any action to collect
or enforce any claim for payment thereunder.
Steelcase shall not, without the prior written consent of the Agent
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Assigned Rights, or create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Assigned Rights, except for the
assignment acknowledged hereby; (ii) cancel or exercise any right to terminate
the Hedge Agreement or any Hedge or consent to or accept any cancellation
thereof; (iii) amend or otherwise modify the Hedge Agreement or any Hedge or
give any consent, waiver or approval thereunder; (iv) waive any default under or
breach of the Hedge Agreement or any Hedge; or (v) take any other action in
connection with the Hedge Agreement or any Hedge which would impair the value of
the interest or rights of Steelcase thereunder or which would impair the
interests or rights of the Agent.
No amendment or waiver of any provision hereof, and no consent to
any departure by Steelcase herefrom shall in any event be effective unless the
same shall be in writing and signed by the Agent, Steelcase and the
Counterparty, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
This letter agreement may be executed in counterparts, each of which
when executed by the parties hereto shall be deemed an original and all of which
together shall be deemed the same instrument.
This letter agreement shall be binding upon Steelcase and the
Counterparty and their respective successors and assigns, and shall inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent and the "Transferees" under (and as defined in) the Lease Receivables
Transfer Agreement and their respective successors, transferees and permitted
assigns. This letter agreement shall be governed by and construed in accordance
with the laws (including Section 5-1401 of
Page 2
the General Obligations Laws of New York but otherwise without regard to
conflicts of law provisions) of the State of New York.
Very truly yours,
STEELCASE FINANCIAL SERVICES INC.
By: _____________________________
Name:
Title:
Acknowledged and agreed:
[NAME OF HEDGE COUNTERPARTY]
By: _____________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.
By: _____________________________
Name:
Title:
Page 3
EXHIBIT E
FORM OF FUNDING REQUEST
[Attached]
EXHIBIT E
FORM OF FUNDING REQUEST
[Date]
The undersigned, Steelcase Financial Services Inc. (the
"Transferor"), refers to the Lease Receivables Transfer Agreement (the
"Agreement;" capitalized terms used herein and not defined herein shall have the
meanings given to such terms in the Agreement) dated as of October 20,1999,
among the Transferor, Corporate Asset Funding Company, Inc. (the "`Conduit
Transferee"), the financial institutions from time to time party thereto (the
"Committed Transferees") and Citicorp North America, Inc. (the "Agent").
Transferor hereby gives you notice, pursuant to Section 2.02(a) of the
---------------
Agreement, that the undersigned wishes to request an Advance under the Agreement
and in that connection sets forth below the information relating to such
Advance:
(i) The Business Day of the requested Advance is
[________________].
(ii) The amount of the requested Advance is $_______________.
(iii) The Aggregate Advances after giving effect to the
requested Advance is $__________________.
(iv) Attached hereto as Schedule I is a Lease Schedule related
to the new Lease Receivables to be included in the Funding
Base.
(v) The Funding Base (after giving effect to the addition of
the Lease Receivables described in item (iv) above) is
$_________________.
With respect to the Advance occurring on the Initial Funding
Date, all conditions precedent pursuant to Section 3.01 have been satisfied and
------------
with respect to all other Advances, all conditions precedent pursuant to Section
-------
3.02 have been satisfied.
----
In accordance with the Agreement, the undersigned hereby
instructs the Agent remit the applicable proceeds to the undersigned.
Very truly yours,
STEELCASE FINANCIAL SERVICES INC.
By: _____________________________
Name:
Title:
EXHIBIT F
FORM OF NOTE
[Attached]
EXHIBIT F
FORM OF PROMISSORY NOTE
U.S.$200,000,000 Dated: October 20,1999
FOR VALUE RECEIVED, the undersigned, STEELCASE FINANCIAL SERVICES
INC., a Michigan corporation (the "Transferor"), HEREBY UNCONDITIONALLY PROMISES
TO PAY to the order of CITICORP NORTH AMERICA, INC., a Delaware corporation, as
agent for the "Transferees" (as defined in the Transfer Agreement referred to
below) (the "Agent"), or its registered assigns, in accordance with the
provisions of the Transfer Agreement referred to below the principal sum of TWO
HUNDRED MILLION DOLLARS AND 00/100 (U.S. $200,000,000), or, if less, the
aggregate unpaid principal amount of all Advances made to the undersigned under
the Transfer Agreement (as hereinafter defined). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Transfer Agreement.
Interest shall be paid on the unpaid principal amount of the Advances
in accordance with the provisions of the Transfer Agreement until such is paid
in full, at such interest rates and at such times, as are specified in the
Transfer Agreement.
All payments of principal and interest in respect of this Promissory
Note shall be made to the Agent in lawful money of the United States of America
in same day funds for the Agent's account at such address notified to the
Transferor by the Agent from time to time, Re: Payment for Steelcase Financial
Services Inc., or at such other place as shall be designated by the Agent for
such purpose.
This Promissory Note is the Note referred to in, and is entitled to
the benefits of, the Lease Receivables Transfer Agreement dated as of October
20, 1999 (the "Transfer Agreement") among the Transferor, Corporate Asset
Funding Company, Inc., as Conduit Transferee, the financial institutions party
thereto from time to time, as the Committed Transferees and the Agent and is
entitled to the benefit and security of the Transfer Agreement and the Facility
Documents referred to therein, to which Transfer Agreement reference is hereby
made for a statement of all of the terms and conditions under which the Advances
evidenced hereby are to be extended and repaid.
Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by the Transferor.
Should the indebtedness represented by this Promissory Note or any
part hereof be collected at law or in equity or in bankruptcy, receivership or
other court proceeding, or should this Promissory Note be placed in the hands of
attorneys for collection after default, the Transferor agrees to pay, in
addition to the principal, interest due and payable hereon and any other sums
due and payable hereon, all costs of collecting or attempting to collect this
Promissory Note, including reasonable attorneys' fees and expenses (including
those incurred in connection with any appeal.
This Promissory Note shall not require the payment nor permit
the collection of interest or any late payment charge in excess of the maximum
rate permitted by law. If any excess interest or late payment charge in such
respect is provided for under this Promissory Note or shall be adjudicated to
provide for such terms, neither the Transferor nor its successors or assigns
shall be obligated to pay such interest or late payment charge in excess of the
maximum amount permitted by law, and the right to demand the payment of any such
excess shall be and hereby is waived. In the event the Agent shall collect
monies which are deemed to constitute interest which would increase the
effective interest rate to a rate in excess of the maximum rate permitted by
law, all such sums deemed to constitute interest in excess of the maximum rate
permitted by law shall, upon such determination, at the option of the Agent, be
returned to the Transferor or credited against the principal balance of the
Transferor's obligation then outstanding under this Promissory Note. This
provision shall control any other provision of this Promissory Note.
This Promissory Note shall be interpreted, governed by and
construed in accordance with the internal laws (as opposed to conflicts of law
provisions) of the State of New York.
Whenever in this Promissory Note reference is made to the
Agent or the Transferor, such reference shall be deemed to include, as
applicable, a reference to their respective successors and assigns. The
provisions of this Promissory Note shall be binding upon and shall inure to the
benefit of said successors and assigns. The Transferor's successors and assigns
shall include, without limitation, a receiver, trustee or debtor in possession
of or for the Transferor.
Very truly yours,
STEELCASE FINANCIAL SERVICES INC.
By:
-----------------------------
Name:
Title:
EXHIBIT G
LIST OF CLOSING DOCUMENTS
[Attached)
LEASE RECEIVABLES CREDIT FACILITY
for
STEELCASE FINANCIAL SERVICES INC.
Dated as of October 20, 1999
A. CREDIT DOCUMENTS
----------------
1 . Lease Receivables Transfer Agreement (the "LRTA") among Steelcase Financial
Services Inc. ("SFSI"), as Transferor and Servicer, Corporate Asset Funding
Company, Inc. ("CAFCO"), as Conduit Transferee, the financial institutions
from time to time party thereto, as Committed Transferees and Citicorp North
America, Inc., as Agent (the "Agent").
EXHIBITS
--------
EXHIBIT A Description of Credit and Collection Policy
EXHIBIT B Fiscal Months
EXHIBIT C Form of Interest Rate Hedge Assignment Acknowledgment
EXHIBIT D Form of Investor Report
EXHIBIT E Form of Funding Request
EXHIBIT F Form of Note
EXHIBIT G List of Closing Documents
EXHIBIT H List of Filing Locations
EXHIBIT I List of Offices of Transferor where Records are Kept
2. Promissory Note executed by SFSI and payable to the Agent.
3. Performance Guaranty ("Performance Guaranty") executed by Steelcase Inc.
("Parent") in favor of the Conduit Transferee, the Committed Transferees and
the Agent.
B. SFSI CORPORATE DOCUMENTS
------------------------
4. Certificate of Incorporation of SFSI certified by the Secretary of State of
Michigan.
5. Good Standing Certificate for SFSI issued by the Secretary of State of
Michigan.
6. Certificates of the Secretary or an Assistant Secretary of SFSI certifying
(A) the resolutions adopted by the Board of Directors of SFSI, attached
thereto, approving each of the transactions and the documents executed in
connection
therewith, (ii) the names and true signatures of the representatives of
SFSI authorized on its behalf to sign the documents to be delivered by
SFSI and (iii) the accuracy and completeness of SFSI's by-laws attached
thereto.
C. PARENT CORPORATE DOCUMENTS
--------------------------
7. Articles of Incorporation of the Parent certified by the Secretary of
State of Michigan.
8. Good Standing Certificate for the Parent issued by the Secretary of
State of Michigan.
9. Certificates of the Secretary or an Assistant Secretary of the Parent
certifying (A) the resolutions adopted by the Board of Directors of the
Parent, attached thereto, approving each of the transactions and the
documents executed in connection therewith, (ii) the names and true
signatures of the representatives of the Parent authorized on its
behalf to sign the documents to be delivered by Parent and (iii) the
accuracy and completeness of Parent's by-laws attached thereto.
D. UCC LIEN SEARCHES AND FINANCING STATEMENTS
------------------------------------------
10. UCC Lien Search Reports listing all effective financing statements
which name SFSI as debtor and which were filed in the office of the
Secretary of State of Michigan.
11. Tax Lien and Judgment Search Reports relating to SFSI from the Register
of Deeds of Kent County, Michigan.
12. UCC-1 Financing Statement naming SFSI as the debtor and the Agent, as
secured party filed in the office of the Secretary of State of
Michigan.
13. Post-Filing UCC Lien Search Reports listing the financing statements
filed against SFSI as debtor and which were filed in the office of the
Secretary of State of Michigan.
E. OPINIONS
--------
14. Opinion of Xxxxxx X. Xxxxxx, Assistant General Counsel for SFSI.
15. Opinion of Xxxxx & XxXxxxxx, counsel to SFSI.
F. MISCELLANEOUS
-------------
16. Notice of Funding executed by SFSI.
17. Initial Investor Report.
18. ISDA Master Agreement between Citibank, N.A., New York and SFSI,
together with Schedule to Master Agreement.
19. Fee Letter.
EXHIBIT H
LIST OF FILING LOCATIONS
Secretary of State of Michigan
EXHIBIT I
LIST OF OFFICES OF TRANSFEROR WHERE
RECORDS ARE KEPT
000 00xx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
21
