Exhibit 4.F4
Execution Copy
LOAN PURCHASE AND SERVICING AGREEMENT
(Holdback Program)
dated as of
September 28, 1995
between
UNITED RESOURCES, INC.
as Seller and Servicer
and
NATIONAL CONSUMER COOPERATIVE BANK
as Buyer
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 General Principles Applicable to Definitions . . . . . .13
SECTION 1.03 Accounting Terms . . . . . . . . . . . . . . . . . . . .14
ARTICLE II
THE COMMITMENT
SECTION 2.01 Agreement to Purchase and Sell Loans. . . . . . . . . .15
SECTION 2.01A Incremental Purchase. . . . . . . . . . . . . . . . . .18
SECTION 2.02 Agreement to Accept Renewal Notes . . . . . . . . . . .19
ARTICLE III
CLOSING PROCEDURE; CONDITIONS TO PURCHASE
SECTION 3.01 Payment . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 3.02 Acceptance - Renewal Loans. . . . . . . . . . . . . . .20
SECTION 3.03 Effective Date. . . . . . . . . . . . . . . . . . . . .21
SECTION 3.04 Buyer's Conditions Precedent to Acceptance. . . . . ...21
SECTION 3.05 Additional Delivery Requirements for Initial
Closing Date. . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.06 Seller's Conditions Precedent to Sale . . . . . . . . .26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Seller's Corporate Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . .27
SECTION 4.02 Seller's Closing Date Representations and
Warranties with respect to Loans. . . . . . . . . . . .30
SECTION 4.03 Seller's Renewal Date Representations and
Warranties. . . . . . . . . . . . . . . . . . . . . . .34
SECTION 4.04 Buyer's Representations and Warranties. . . . . . . . .35
SECTION 4.05 Repurchase Upon Breach of Certain
Representations and Warranties. . . . . . . . . . . . .36
Page
ARTICLE V
SERVICING AND COLLECTION
SECTION 5.01 Servicing; Delegation of Authority to Buyer and
Servicer. . . . . . . . . . . . . . . . . . . . . . . . .37
SECTION 5.02 Maintenance of System; Collection and Maintenance
of Information. . . . . . . . . . . . . . . . . . . . . .38
SECTION 5.03 Maintenance of Lien Priority. . . . . . . . . . . . . . .38
SECTION 5.04 Obligor Inquiries; Credit and Collection Policies . . . .38
SECTION 5.05 Obligor Defaults. . . . . . . . . . . . . . . . . . . . .39
SECTION 5.06 Servicer Reports; Annual Compliance Report. . . . . . . .40
SECTION 5.07 Lockboxes . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 5.08 Payment of Guaranty Fees and Servicing Fees . . . . . . .41
SECTION 5.09 Applicable Rate . . . . . . . . . . . . . . . . . . . . .42
SECTION 5.10 Computation and Payment of Servicing Fees;
Servicer's Expenses . . . . . . . . . . . . . . . . . . .43
SECTION 5.11 Access to Certain Documentation and Certain
Information Regarding the Loans . . . . . . . . . . . . .43
SECTION 5.12 Concerning Renewal Notes. . . . . . . . . . . . . . . . .43
SECTION 5.13 Servicer Representations and Warranties . . . . . . . . .43
SECTION 5.14 Servicer's Resignation. . . . . . . . . . . . . . . . . .44
ARTICLE VI
SELLER'S AND SERVICER'S COVENANTS
SECTION 6.01 Covenants . . . . . . . . . . . . . . . . . . . . . . . .46
SECTION 6.02 Special Covenant of Seller. . . . . . . . . . . . . . . .51
ARTICLE VII
SELLER OBLIGATIONS AND REPURCHASE OPTIONS
SECTION 7.01 Purchase of Interest Rate Protection. . . . . . . . . . .52
SECTION 7.02 Optional Repurchase of Defaulted Loans and after
Obligor Default . . . . . . . . . . . . . . . . . . . . .52
SECTION 7.03 Minimal Balances. . . . . . . . . . . . . . . . . . . . .52
SECTION 7.04 Optional Repurchase of Special Loans. . . . . . . . . . .53
ARTICLE VIII
SERVICER DEFAULT
SECTION 8.01 Servicer Defaults . . . . . . . . . . . . . . . . . . . .54
SECTION 8.02 Buyer to Act; Appointment of Successor. . . . . . . . . .55
SECTION 8.03 Effects of Servicing Transfer . . . . . . . . . . . . . .56
Page
ARTICLE IX
TERMINATION EVENTS
SECTION 9.01 Termination Events. . . . . . . . . . . . . . . . . . . .57
SECTION 9.02 Consequences of Termination Event . . . . . . . . . . . .58
SECTION 9.03 Remedies of a Secured Party . . . . . . . . . . . . . . .59
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Further Assurances. . . . . . . . . . . . . . . . . . . .60
SECTION 10.02 Indemnities . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 10.03 No Waiver: Remedies Cumulative . . . . . . . . . . . . .61
SECTION 10.04 Governing Law . . . . . . . . . . . . . . . . . . . . . .61
SECTION 10.05 Consent to Jurisdiction: Waiver of Immunities. . . . . .61
SECTION 10.06 Notices . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 10.07 Assignment. . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 10.08 Capital Markets Funding . . . . . . . . . . . . . . . . .62
SECTION 10.09 Severability. . . . . . . . . . . . . . . . . . . . . . .62
SECTION 10.10 Attorney's Fees . . . . . . . . . . . . . . . . . . . . .62
SECTION 10.11 Setoff. . . . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 10.12 Limitation on Third Party Beneficiaries . . . . . . . . .62
SECTION 10.13 Term of Agreement . . . . . . . . . . . . . . . . . . . .63
SECTION 10.14 Entire Agreement; Amendment . . . . . . . . . . . . . . .63
SECTION 10.15 Headings. . . . . . . . . . . . . . . . . . . . . . . . .63
SECTION 10.16 Counterparts. . . . . . . . . . . . . . . . . . . . . . .63
Exhibit A - Lockbox Bank, Address and Account
Exhibit B - [Reserved]
Exhibit C - Notice of Assignment
Exhibit D - Form of Renewal Note
Exhibit E - Form of Notice of Incremental Purchase
Exhibit F - Recent Dates for Lien Searches
Exhibit G - Corporate and "Doing Business" Names of Seller
and Guarantor
Exhibit H - Information Regarding Litigation, Etc.
Exhibit I - Forms of Note and Related Documents
Exhibit J - Credit and Collection Policy
Exhibit K - Form of Officer's Certificate of Seller
(Incremental Purchase)
Exhibit L - Form of Officer's Certificate of Guarantor
(Incremental Purchase)
Exhibit M - Form of Officer's Certificate of Servicer
(Incremental Purchase)
LOAN PURCHASE AND SERVICING AGREEMENT
This LOAN PURCHASE AND SERVICING AGREEMENT (Holdback Program) is
executed as of September 28, 1995 between UNITED RESOURCES, INC., an Oregon
corporation, as Seller (in such capacity, the "Seller") and as Servicer (in
such capacity, the "Servicer") and NATIONAL CONSUMER COOPERATIVE BANK, a
financial institution organized under the laws of the United States (the
"Buyer").
NOW, THEREFORE, for full and fair consideration, the parties
hereto agree that this Loan Purchase and Servicing Agreement shall read as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. The following terms, as used
herein, have the following meanings:
"Affiliate" shall mean, with respect to a Person, any other Person
(or group of related Persons) which (i) directly or indirectly controls, is
controlled by or is under common control with, such Person, or (ii) directly
or indirectly owns more than 5% of such Person's voting stock, or (iii) is a
director or officer of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Aggregate Exposure" shall mean, for any Obligor Group, an amount,
without duplication, equal to the sum of (i) the aggregate Principal Balance
of all Loans with respect to which any member of such Obligor Group is an
Obligor or Loan Guarantor and (ii) the aggregate outstanding principal amount
of all promissory notes and evidences of indebtedness which are owed or
guaranteed by any member of the related Obligor Group to or for the benefit of
the Buyer or which give the Buyer exposure to the credit of any member of the
related Obligor Group.
"Applicable Rate" shall mean, for each Loan, during each Interest
Accrual Period, a per annum rate of 140 basis points in excess of LIBOR
determined on the related LIBOR Determination Date, each calculated on the
basis of actual days elapsed and a 360-day year.
"Available Funds" shall mean Collections, Principal Prepayments,
Payaheads, Net Liquidation Proceeds, Insurance Proceeds, Guaranty Payments,
Repurchase Proceeds and Advances.
"Bank Act" shall mean the National Consumer Cooperative Bank Act,
12 U.S.C. Sections 3001-3051, and any regulations and policies adopted
thereunder.
"Business Day" shall mean any day other than Saturday, Sunday and
a day on which banks in Washington, D.C. are authorized to close.
"Buyer" or "NCB" shall mean National Consumer Cooperative Bank, a
financial institution organized under the laws of the United States, and its
Successors and assigns.
"Cash Interest Expense" shall mean, for any period, gross interest
expense for such period determined in accordance with U.S. GAAP.
"Closing Date" shall mean the date of each Incremental Purchase.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all or any portion of the collateral,
whether real or personal, tangible or intangible, or otherwise, pledged by any
Obligor or Loan Guarantor to secure repayment of its Loan and the related Note
(other than Seller's capital stock and patronage dividends).
"Collections" shall mean any and all amounts received from or on
behalf of the Obligors in respect of Loans and related Notes or Related
Documents during any applicable Due Period regardless of how received and
including, without limitation, receipt of Monthly Payments and payments from
guarantors.
"Consolidated Net Worth" shall mean, with respect to any Person,
as of any date of determination, the consolidated balance sheet "net worth" of
such Person determined in accordance with U.S. GAAP.
"Consolidated Net Tangible Assets" shall have the meaning given in
clause (j) of Article IV of the Guaranty Agreement.
"Consolidated Tangible Net Worth" means, with respect to any
Person, at any date, Consolidated Net Worth less (i) all assets which should
be classified as intangible assets (such as good will, patents, trademarks,
copyrights, franchises and covenants not to compete) and (ii) to the extent
not already deducted from total assets, all reserves including those for
deferred income taxes, depreciation, obsolescence or amortization of
properties and (iii) all capital stock or other investments in any direct or
indirect subsidiary other than in (x) any offshore investment subsidiary, or
(y) a subsidiary having all or substantially all of its operations in the
United States.
"Controlled Group" means, with respect to any Person, all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which (1) together with such Person are
treated as a single employer under Section 414(b) or 414(c) of the Code or (2)
solely for purposes of potential liability under Section 302(c)(11) of ERISA
and Section 412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section 414(m) or (n) of
the Code, includes such Person as a member.
"CPLTD" shall mean, with respect to any Person, as of any date,
that portion of such Person's long-term Debt (that is, Debt with a term of
greater than one year) which matures and is due and payable within one year.
"Credit and Collection Policy" means, with respect to Seller and
Servicer, the credit, collection, enforcement and other policies and practices
of the Seller or Servicer, as the case may be, relating to Loans, related
Notes and Related Documents existing on the Initial Closing Date and as set
forth in Exhibit J hereto, as the same may be modified from time to time with
the consent of the Buyer, which consent will not be unreasonably withheld.
"Cut-Off Date" shall mean the first (1st) day of the month in
which each Incremental Purchase occurs.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments
or agreements (including obligations of the parties under this Agreement or
the Guaranty Agreement), (iii) all obligations of such Person to pay the
deferred purchase price of property or services other than trade receivables
and open accounts arising in the ordinary course, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all Debt secured by a lien on any asset owned of
such Person, whether or not such Debt is otherwise an obligation of such
Person which Debt, if Non-Recourse to such Person, shall be deemed to be in an
amount equal to the lesser of the principal amount of such obligations or the
aggregate fair market value of such assets, and (vi) all Guaranteed Debt
(including, in the case of the Guarantor, the Guarantor's obligations under
the Guaranty Agreement).
"Defaulted Loan" shall mean, as of any date, a Loan with respect
to which any of the following has occurred: (a) there has occurred an Obligor
Default with respect to such Loan and such Obligor Default has been continuing
for a period of 10 days, or (b) the Obligor under such Loan has sought
protection under the United States Bankruptcy Code or is the subject of an
involuntary bankruptcy.
"Due Date" shall mean the day of the month on which the Monthly
Payment is due from the Obligor on a Loan.
"Due Period" shall mean, with respect to any Payment Date, the
calendar month preceding the month in which such Payment Date occurs.
"EBITDA" means, for any Person, for any period, the consolidated
net income (or net loss) of such Person for such period as determined in
accordance with U.S. GAAP, plus (a) the sum of (i) depreciation expense, (ii)
amortization expense, (iii) Cash Interest Expense plus the amount of amortized
debt discount deducted in determining Cash Interest Expense and fees, (iv)
total income tax expense, and (v) extraordinary or unusual losses (and other
after-tax losses on sales of assets outside of the ordinary course of business
and not otherwise included in U.S. GAAP extraordinary or unusual losses), less
(b) the sum of (i) extraordinary or unusual gains (and other after tax gains
on sales of assets outside of the ordinary course of business and not
otherwise included in U.S. GAAP extraordinary or unusual gains) of the Person
for such period and (ii) the net income (or loss) of any Person that is
accounted for by the equity method of accounting, except to the extent of the
amount of dividends or distributions paid to such Person.
"Eligible Loan" shall mean a Loan as to which each applicable
representation and warranty in Section 4.02 is true and accurate on the
applicable Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Existing Guaranty" shall mean the "Guaranty" provided by the
Guarantor in accordance with Article VII of the Existing Loan Purchase
Agreement.
"Existing Loan Purchase Agreement" shall mean the Loan Purchase
and Servicing Agreement dated as of May 13, 1994 and amended as of July 15,
1994 and as of September 28, 1995, by and among United Resources, Inc., as
seller and servicer, United Grocers, Inc., as guarantor, and NCB, as buyer, as
the same may be amended from time to time.
"Funded Debt" means Debt which matures by its terms more than one
year from the date it was originally incurred, or is unconditionally renewable
or extendible at the option of the debtor to a date more than one year from
such date, or which arises under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit over a period of more than
one year from such date.
"Government Approval" means an approval, permit, license,
authorization, certificate or consent of any Governmental Authority.
"Governmental Authority" means the government of the United States
or any State or any foreign country or any political subdivision of any
thereof or any branch, department, agency, instrumentality, court, tribunal or
regulatory authority which constitutes a part or exercises any sovereign power
of any of the foregoing.
"Guaranteed Debt" shall mean, as applied to any debt, for any
Person (i) a guarantee by such Person (other than by endorsement for
collection in the ordinary course of business), direct or indirect, in any
manner, of any part or all of such debt or (ii) a similar agreement, direct or
indirect, contingent or otherwise, providing for the payment or performance
(or payment of damages in the event of non-performance) of such Person of any
part or all of such debt. The amount of any Guaranteed Debt of such Person
shall be deemed to be the maximum amount of the debt guaranteed for which the
guarantor could be held liable under such Guaranteed Debt.
"Guarantor" shall mean United Grocers, Inc., an Oregon
corporation, or its successors or assigns.
"Guarantor Default" shall have the meaning set forth in
Section 5.01 of the Guaranty Agreement.
"Guaranty" shall mean the first loss guaranty of Liquidation
Losses provided by Guarantor in accordance with the Guaranty Agreement.
"Guaranty Agreement" means the Guaranty Agreement (Holdback
Program) dated as of September 28, 1995, by and between Buyer and Guarantor,
as the same may be amended and supplemented from time to time.
"Guaranty Amount" shall have the meaning given in the Guaranty
Agreement.
"Guaranty Fee" shall have the meaning given in Section 2.02 of the
Guaranty Agreement.
"Guaranty Payments" shall mean the amounts paid by Guarantor to
the Buyer pursuant to the Guaranty or the Repurchase Guaranty as applicable.
"Incremental Purchase" shall have the meaning ascribed to such
term in Section 2.01A hereof.
"Initial Closing Date" shall mean September 28, 1995.
"Insurance Proceeds" shall mean proceeds paid by any insurer
pursuant to any insurance policy covering a Loan or Collateral, including but
not limited to title, hazard, life, health and/or accident insurance policies.
"Interest Accrual Period" shall mean, with respect to each Payment
Date, the period commencing on the first day of the month preceding such
Payment Date and ending on the last day of the month preceding such Payment
Date, except that, with respect to the first Payment Date, the initial
Interest Accrual Period shall commence on the Initial Closing Date.
"LIBOR" shall mean, for any Interest Accrual Period, the
reserve-adjusted London interbank rate for one-month EuroDollar deposits
determined by the Buyer for each Interest Accrual Period in accordance with
the provisions of Section 5.09.
"LIBOR Determination Date" shall mean the second Business Day
prior to the commencement of each Interest Accrual Period.
"Liquidated Loan" shall mean any Defaulted Loan as to which the
Servicer has determined that all amounts which it reasonably and in good faith
expects to recover have been recovered from or on account of such Loan;
provided, however, that a Defaulted Loan which has not been determined to have
become a Liquidated Loan within six months after becoming a Defaulted Loan
shall be deemed a Liquidated Loan on the sixth month anniversary date of such
Loan becoming a Defaulted Loan. A Loan deemed a Liquidated Loan shall be due
and payable on the date on which such Loan so deemed.
"Liquidation Losses" shall mean, with respect to any Liquidated
Loan, on any date of determination, the amount by which (A) the sum of (i) the
Principal Balance of such Loan, (ii) accrued and unpaid interest thereon at
the Applicable Rate and (iii) unreimbursed reasonable fees and expenses
incurred by NCB or the Servicer in servicing the liquidation of Defaulted
Loan, exceeds (B) the Net Liquidation Proceeds and Insurance Proceeds thereon,
if any.
"Liquidation Proceeds" shall mean, cash, other than Insurance
Proceeds, and any other amounts received in connection with the liquidation of
Defaulted Loans and related Collateral, whether through trustee's sale,
foreclosure sale or otherwise.
"Loan" shall mean each loan originated by Seller in the ordinary
course of its business and sold and transferred (in its entirety or through a
participation interest therein) to the Buyer pursuant to this Agreement,
together with the rights and obligations of a holder thereof, payments thereon
and proceeds therefrom, the Loans subject to this Agreement being identified
on the Loan Schedules. "Loan" shall also include any Renewal Loan accepted by
the Buyer under this Agreement.
"Loan File" means the documents pertaining to a Loan, including
the related Note and Related Documents delivered to the Buyer or its agent in
accordance with Section 2.01 of this Agreement in connection with the sale of
the Loan by Seller and the Renewal Note and Related Documents delivered to the
Buyer pursuant to Section 2.02 of this Agreement.
"Loan Guarantor" shall mean any Person who (i) guarantees an
Obligor's payment and/or other obligations under any Loan, (ii) co-signs, or
is a co-maker on, the related Note, or (iii) otherwise supports, either in a
primary or secondary position, an Obligor's obligations with respect to a
Loan, the related Note or other Related Documents.
"Loan Interest Rate" shall mean, with respect to any date of
determination, the then applicable annual rate of interest borne by a Loan,
pursuant to its terms, which, as of the applicable Closing Date, is shown on
the Loan Schedule.
"Loan Schedule" shall mean, the schedule of Loans delivered to the
Buyer at the time of each Incremental Purchase, such schedule identifying each
Loan to be purchased in such Incremental Purchase by the name and address of
the Obligor (and, if different from such address, the location of the grocery
store to which such Loan relates) and the following information with respect
to each such Loan: (i) the Principal Balance as of the close of business on
the applicable Closing Date, (ii) if a participation interest in such Loan is
being purchased hereunder, the percentage participation interest being
purchased, (iii) the account number on Seller's records, (iv) the original
principal amount of the Loan, (v) the date the Loan was made and original
number of months to maturity and the remaining number of months to maturity as
of the applicable Cut-Off Date, (vi) the Loan Interest Rate as of the
applicable Cut-Off Date and whether fixed or variable, (vii) when the first
Monthly Payment was due, (viii) the Monthly Payment as of the applicable
Cut-Off Date, (ix) the remaining number of months in the amortization period
as of the applicable Cut-Off Date, (x) if the Loan has a variable Loan
Interest Rate, the margin which is added to the Prime Rate or LIBOR, as
applicable, to determine the Loan Interest Rate, and the maximum and minimum
Loan Interest Rates, if applicable, the Loan Interest Rate adjustment
frequency and the Loan payment adjustment frequency, (xi) amortization method
and period, (xii) the Aggregate Exposure which relates to such Loan, (xiii)
whether such Loan has Renewal Loan provisions, and (xiv) whether such Loan is
secured by real estate Collateral.
"Lockbox Account" shall mean a demand deposit account identified
on Exhibit A to this Agreement maintained with a Permitted Lockbox Bank
pursuant to the Lockbox Agreement for the purpose of depositing payments made
by the Obligors or such other account as the Servicer and the Buyer may agree
upon from time to time.
"Lockbox Agreement" shall mean the agreement relating to lockbox
services in connection with a Permitted Lockbox and related Lockbox Account,
which have been executed and delivered by the Buyer and Servicer to a
Permitted Lockbox Bank.
"MAI" shall mean Member of the American Institute of Real Estate
Appraisers.
"Minimum Documentation" means, with respect to a Loan secured by
real estate Collateral, (i) a certification of Seller as to the assessed value
of the related mortgaged property (which certification shall be based on a tax
assessment dated no later than 9 months before the Closing Date on which such
Loan first purchased by the Buyer), (ii) a completed environmental
questionnaire in the form prescribed by the Seller and acceptable to Buyer,
and (iii) copies of any title search or report prepared by an attorney or
title company relating to the mortgaged property.
"Maximum Purchase Amount" shall mean $14,000,000, unless otherwise
increased or reduced by the parties hereto.
"Monthly Interest Amount" shall have the meaning given in
Section 5.08.
"Monthly Payment" shall mean the monthly payment of principal
and/or interest required to be made by an Obligor on the related Loan pursuant
to the terms of the related Note.
"Multiemployer Plan" shall mean, for any Person, a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA which is or was at any time
during the current year or the immediately preceding five years contributed to
by such Person or any member of a Controlled Group on behalf of its employees
and which is covered by Title V of ERISA.
"Net Liquidation Proceeds" shall mean Liquidation Proceeds net of
(i) any reimbursements to the Servicer made therefrom pursuant to Section 5.10
and (ii) amounts required to be released to the related Obligor pursuant to
applicable law.
"Non-Recourse Debt" means Debt or that portion of Debt of any
Person or a Subsidiary of such Person as to which (a) the holders of such Debt
agree that they will look solely to the property securing such Debt for
payment on or in respect of such Debt and (b) no default with respect to such
Debt would permit (after notice or passage of time or both) according to the
terms thereof, any holder of any Debt for money borrowed by such Person or a
Subsidiary of such Person to declare a default on such Debt or cause the
payment thereof to be accelerated or payable prior to stated maturity.
"Note" shall mean any promissory note evidencing the indebtedness
of an Obligor under a Loan, and shall include a Renewal Note accepted by the
Buyer under this Agreement.
"Notice of Assignment" shall mean a Notice of Assignment executed
by Seller in substantially the form of the annexed Exhibit C.
"Obligor" shall mean the Person or Persons primarily obligated to
repay the Loan and the indebtedness evidenced by the related Note including,
without limitation, all Persons executing such Note (regardless of whether
they have also executed all subsequent extension agreements relating to such
Note).
"Obligor Default" shall mean (a) the failure by a Obligor to pay
when due (whether a Monthly Payment, at maturity, upon required prepayment,
acceleration, demand or otherwise) the Loan and the indebtedness evidenced by
related Note or any Related Document, or any interest or premium thereon which
failure continues after the applicable grace period, if any, specified in such
Note or Related Document relating to such Loan; or (b) the failure by an
Obligor to perform any term or covenant on its part to be performed under any
Loan, related Note or Related Document which failure continues after the
applicable grace period, if any, specified in the Note or Related Document, if
the effect of such failure to perform is to accelerate or to permit the
acceleration of the maturity of the indebtedness evidenced by such Note or
Related Document; or (c) the occurrence of an event or condition whereby the
indebtedness related to the Loan of any Obligor shall be declared to be due
and payable or required to be prepaid (other than by regularly scheduled
required prepayment) prior to the stated maturity thereof.
"Obligor Group" shall include an Obligor and any of its Affiliates
and Subsidiaries.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Payaheads" shall mean, with respect to a Due Period, any amounts
received on a Loan in excess of the Monthly Payment due on the Due Date
relating to such Due Period which does not constitute either a Principal
Prepayment or payment with respect to an overdue amount. Payaheads are
payments of principal for purposes of this Agreement.
"Payment Date" shall mean the twentieth (20th) day of each
calendar month unless such day is not a Business Day, in which event, "Payment
Date" shall mean the next succeeding Business Day. The initial Payment Date
shall occur on the twentieth (20th) day of the month following the Initial
Closing Date.
"Pension Plan" means an "employee pension benefit plan" (as such
term is defined in ERISA) from time to time maintained by the Seller or a
member of the Controlled Group.
"Periodic Payment" shall have the meaning given in Section 5.08.
"Permitted Lockbox" shall mean a post office box or other mailing
location identified on Exhibit A to this Agreement maintained by a Permitted
Lockbox Bank pursuant to the Lockbox Agreement for the purpose of receiving
payments made by the Obligors for subsequent deposit into a related Lockbox
Account, or such other post office box or mailing location as the Buyer and
the Servicer may agree upon from time to time.
"Permitted Lockbox Bank" shall mean a bank identified on Exhibit A
to this Agreement or such other bank as the Servicer and the Buyer may agree
upon from time to time.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
"Plan" shall mean, for any Person, at any time, an employee
pension benefit plan, other than a Multiemployer Plan, which is covered by
Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by such Person or any
member of a Controlled Group for employees of such Person or any member of
such Controlled Group or (ii) maintained pursuant to collective bargaining
agreement or other arrangement under which more than one employer makes
contributions and to which such Person or any member of a Controlled Group is
then making or accruing an obligation to make contributions or has within the
preceding five (5) plan years made contributions.
"Primary Collateral" shall mean that portion of the Collateral in
which Seller had, prior to the sale and assignment hereunder, first priority
perfected security interests; provided that real estate Collateral shall not
be considered Primary Collateral unless the related Loan has Minimum
Documentation.
"Prime Rate" shall mean the "Prime Rate" from time to time
published in the "Money Rates" section of the Wall Street Journal; provided,
however, that if such rate is not published in the Wall Street Journal, the
Prime Rate shall be a substantially comparable index selected by the Seller
and approved by the Buyer.
"Principal Balance" shall mean, with respect to any Loan, at any
date of determination, (i) the principal balance of the Loan (or if a
participation interest in such Loan is being purchased hereunder, the product
of (a) the percentage applicable participation interest specified with respect
to such Loan in the applicable Loan Schedule times (b) the principal balance
of the Loan) outstanding as of the applicable Cut-Off Date, after application
of the principal payments received on or before such date, minus (ii) the sum
of (a) the principal portion of the Monthly Payments received during each Due
Period ending prior to the most recent Payment Date, which were distributed
pursuant to Section 5.03 on any previous Payment Date, and (b) all Principal
Prepayments, Payaheads, Insurance Proceeds, Net Liquidation Proceeds, Guaranty
Payments, payments under the Existing Guaranty and Repurchase Proceeds to the
extent applied by the Servicer as recoveries of principal in accordance with
the provisions hereof, which were distributed pursuant to Section 5.03 on any
previous Payment Date.
"Principal Prepayment" shall mean any payment or other recovery of
principal on a Loan equal to the Principal Balance thereof, received in
advance of the final scheduled Due Date which is intended to satisfy a Loan in
full. Principal Prepayment shall also include, with respect to a Loan that
has provisions for renewal, all or any portion of the Principal Balance of the
related Note that is greater than the Renewal Balance, if any.
"Prior Note" shall have the meaning given in the definition of
"Renewal Note".
"Property" shall mean the Loans, the related Notes, Related
Documents, Collateral pledged to secure the Loans, and other rights, title and
interest of the Seller conveyed and sold pursuant to Section 2.01(a) or
conveyed and accepted by Buyer pursuant to Section 3.02 hereof.
"Purchase Price" shall have the meaning given in Section 3.01.
"Rating Agency" shall mean Standard & Poor's, Xxxxx'x Investors
Service, Inc., or any Successor of either, or any other nationally-recognized
rating agency.
"Related Documents" shall mean with respect to each Loan and
related Note, a loan agreement, a security agreement, a mortgage, an
assignment of lease and all other documents, instruments or assignments
(including amendments or modifications thereof) executed by the Obligor or
other Person on obligor's behalf in respect of such Loan and related Note,
including, without limitation, general or limited guaranties.
"Renewal Balance" shall mean for each Renewal Note, the Principal
Balance evidenced thereby on its Renewal Date.
"Renewal Date" shall have the meaning given in the definition of
"Renewal Note."
"Renewal Loan" shall mean a loan evidenced by a Renewal Note.
"Renewal Note" shall mean a Note accepted by Buyer (i) which is
substantially in the form of the annexed Exhibit D (ii) which is executed by
all of the Obligors and Loan Guarantors of a note related to a Loan previously
sold to Buyer ("Prior Note") which Prior Note was to be paid in full on the
date the Renewal Note first becomes effective ("Renewal Date"); (iii) which
evidences an obligation to repay a principal amount equal to or less than the
principal amount required to be paid by the Obligor under the Prior Note on
the Renewal Date; (iv) which provides for monthly principal payments in
amounts not less than the monthly principal payments required pursuant to the
terms of the Prior Note; (v) which provides that on and after the first
Renewal Date after the purchase by the Buyer hereunder, the related Loan will
fully amortize over the remaining term to maturity; and (vi) which remains
subject to and secured by all of the Related Documents applicable to the Prior
Note (as the same may be amended and restated by the terms of the Renewal
Note).
"Repurchase Amount" shall mean the amount set forth as such in
Section 2.01(e).
"Repurchase Guaranty" shall mean the guaranty of Seller's
repurchase obligation provided by the Guarantor pursuant to the Guaranty
Agreement.
"Repurchased Loans" shall mean all Loans purchased by or on behalf
of the Seller, whether through a payment of Repurchase Proceeds by the Seller
pursuant to Sections 2.01(e), 2.02(c), 3.02, 4.05, 7.03 and 9.02, or through a
payment by the Guarantor on its Repurchase Guaranty pursuant to the Guaranty
Agreement.
"Repurchase Proceeds" shall mean the amounts received from Seller
with respect to a Repurchased Loan.
"Responsible Officer" shall mean when used with respect to the
Buyer, Servicer, Guarantor or Seller, the chairman of the Board of Directors,
any vice chairman of the Board of Directors, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any
vice president (whether or not designated by numbers or words added before or
after the title "vice president"), the secretary, the treasurer, any assistant
treasurer, or any other officer or assistant officer of the Buyer, the
Servicer, Guarantor or Seller customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively.
"Seller" shall mean United Resources, Inc., an Oregon corporation,
and its Successors and assigns.
"Servicer" means United Resources, Inc., an Oregon Corporation, or
its Successors or assigns.
"Servicer Default" shall mean any act or occurrence described as a
Servicer Default under Section 8.01 hereof.
"Servicing Fee" shall have the meaning given in Section 5.10
hereof.
"Servicing Officer" shall mean any officer of the Servicer, or any
agent of the Servicer involved in, or responsible for, the administration or
servicing of the Loan whose name appears on a list of servicing officers
furnished to the Buyer by the Servicer in a certificate pursuant to
Section 2.01(d), as such list may be from time to time amended.
"Subordinated Debt" means, with respect to any Person, Debt of
such Person which by its terms provides that no payments or distributions may
be made thereon or in respect thereto at any time when a default has occurred
and is continuing under any document providing for repayment of Debt of such
Person for borrowed money (other than such Subordinated Debt) or for the
payment by such Person of the purchase price of tangible property.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Successor" means, for any corporation or banking association, any
successor by merger or consolidation, or by acquisition of substantially all
of the assets of the predecessor.
"Successor Servicer" shall have the meaning specified in
Section 8.01 of this Agreement.
"Termination Date" shall mean the first date on which (i) all
Loans shall have been paid in full or, (ii) all Loans shall have been
repurchased by or on behalf of Seller pursuant to Section 2.01(e), 2.02(c),
3.02, 4.05, 7.02, 7.03 or 9.02 hereof or pursuant to the Guaranty Agreement.
"Termination Event" shall have the meaning given in Section 9.01.
"Unfunded Vested Liability" shall mean, with respect to any Person
and any Plan, at any time, the amount (if any) by which (a) the present value
of all vested nonforfeitable benefits under such Plan exceeds (b) the fair
market value of all Plan assets allocable to such benefits, all determined as
of the then most recent evaluation date for such Plan, but only to the extent
that such excess represents a potential liability of such Person or any member
of the Controlled Group to the PBGC of the Plan under Title IV of ERISA.
"U.S. GAAP" has the meaning specified in Section 1.03.
SECTION 1.02 General Principles Applicable to Definitions.
Definitions given in Section 1.01 shall be equally applicable to both singular
and plural forms of the terms therein defined and references herein to "he" or
"it" shall be applicable to Persons whether masculine, feminine or neuter.
References herein to any document including, without limitation, this
Agreement, a Loan, a Note and a Related Document shall be deemed a reference
to such document as it now exists, and as, from time to time hereafter, the
same may be amended.
SECTION 1.03 Accounting Terms. Except as otherwise provided
herein, accounting terms not specifically defined shall be construed, and all
accounting procedures shall be performed, in accordance with generally
accepted United States accounting principles ("U.S. GAAP") consistently
applied.
[End of Article I]
ARTICLE II
THE COMMITMENT
SECTION 2.01 Agreement to Purchase and Sell Loans. (a) At the
time of each Incremental Purchase pursuant to Section 2.01A hereof, Seller
does hereby assign, sell, set-over, transfer and otherwise convey to the
Buyer, without recourse (but subject to Seller's covenants, representations,
warranties and indemnities specifically provided herein), all of Seller's
right, title and interest in, to and under (i) each Loan purchased on the date
of such Incremental Purchase and any and all moneys of whatsoever nature
payable pursuant to each such Loan after the applicable Cut-Off Date,
including payments on the related Note, all Insurance Proceeds, any Net
Liquidation Proceeds, other Collections, and any other amounts payable in
connection with the termination of such Loan, (ii) all rights, powers, and
remedies of Seller under or in connection with each such Loan, whether arising
under the terms of such Loan, by statute, at law or in equity, or otherwise
arising out of any default by the Obligor under such Loan, including all
rights to exercise any election or option or to make any decision or
determination or to give or receive any notice, consent, approval or waiver
thereunder, (iii) all security interests and lien rights of Seller in each
item of Collateral pledged to secure any such Loan, all additions,
alterations, accessions or modifications thereto or replacement of any part
thereof, and all intangibles and other rights associated with the Collateral,
(iv) all rights of Seller under each Related Document, in each case as the
same may be modified, amended, supplemented or restated from time to time, (v)
all documents of title, books and records concerning the foregoing property
(including all computer programs, tapes, disks and related items containing
any such information), and (vi) all proceeds, products, rents or profits of
the foregoing of any nature whatsoever, including all Insurance Proceeds and
Net Liquidation Proceeds (with each Renewal Loan, related Renewal Note and
Related Documents conveyed by Seller and accepted by Buyer pursuant to
Section 3.02 hereof, collectively, the "Property"). The foregoing transfer,
sale, assignment and conveyance does not constitute and is not intended to
result in the creation, or an assumption by the Buyer, of any obligation of
Seller or any other Person in connection with any Loan, the related Note,
Related Documents or Collateral or under any agreement or instrument relating
thereto, including any obligation to any Obligor.
(b) In connection with each transfer, sale and assignment of
Loans, the Buyer hereby directs Seller to deliver to the Buyer as of the date
of each Incremental Purchase the Loan Files with respect to the Loans
transferred and sold on the date of each such Incremental Purchase, which
shall include, but not be limited to, the following:
(i) the original Notes, endorsed by Seller as follows:
"Pay to the order of National Consumer Cooperative Bank, without recourse" and
signed by a Responsible Officer of Seller, with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
Seller, if Seller was not the originator, together with all originals or
copies of Renewal Notes in Seller's possession;
(ii) executed original counterparts of the Related
Documents, together with executed originals of all modifications or amendments
thereof;
(iii) irrevocable power of attorney of Seller to the Buyer
to execute, deliver, file, record or otherwise deal with the Collateral for
the Loans in accordance with this Agreement. The power of attorney will be
delegated by the Buyer to the Servicer and will permit the Buyer (or Servicer
on its behalf) to prepare, execute and file of record UCC financing statements
and other notices;
(iv) documents evidencing or related to any insurance
policies;
(v) With respect to Loans secured by mortgages on real
property, Buyer shall have received (A) either: (i) the original mortgage,
with evidence of recording thereon, (ii) a copy of the mortgage certified as a
true copy by a Responsible Officer of Seller where the original has been
transmitted for recording until such time as the original is returned by the
public recording officer or duly licensed title or escrow officer or (iii) a
copy of the mortgage certified by the public recording office in those
instances where the original recorded mortgage has been lost; (B) either: (i)
the original assignment of mortgage from Seller endorsed as follows:
"National Consumer Cooperative Bank," with evidence of recording thereon
(provided, however, that where permitted under the laws of the jurisdiction
wherein the mortgaged property is located, the assignment of mortgage may be
effected by one or more blanket assignments for Loans secured by mortgaged
properties located in the same county), or (ii) a copy of such assignment of
mortgage certified as a true copy by a Responsible Officer of Seller where the
original has been transmitted for recording (provided, however, that where the
original assignment or mortgage is not being delivered to the Buyer, each such
Responsible Officer may complete one or more blanket certificates attaching
copies of one or more assignments of mortgage relating to the mortgages
originated by Seller); and (C) either: (i) originals of all intervening
assignments, if any, showing a complete chain of title from the originator to
Seller, including warehousing assignments, with evidence of recording thereon
if such assignments were recorded, (ii) copies of any assignments certified as
true copies by a Responsible Officer of Seller where the originals have been
submitted for recording until such time as the originals are returned by the
public recording officer, or (iii) copies of any assignments certified by the
public recording office in any instances where the original recorded
assignments have been lost; and (D) all available documentation relating to
appraisals and environmental surveys;
(vi) copies of all UCC-1 financing statements (or UCC-3
amendments to financing statements) identifying each Loan, related Collateral
and Related Documents and naming the Buyer as secured party and Seller as
debtor, to be filed in Oregon, Washington and California.
(c) In addition, concurrently with or prior to each Incremental
Purchase, Seller agrees to cause any UCC-1 financing statements, UCC-3
assignments or other instruments necessary to perfect the ownership or
security interests granted and assigned by Seller to the Buyer in the Loans
and other Property transferred and sold on the date of each such Incremental
Purchase (other than UCC-1 financing statements naming the Obligors under the
Loans as debtors) to be filed or recorded in all such appropriate places as
are required to protect the Buyer's interest in such Loans and such other
Property, and to deliver a file-stamped copy of such financing statements or
other evidence of such filings to the Buyer. Seller and Buyer agree that with
respect to each Loan, Related Document and item of Primary Collateral, Seller
will make all filings and take all such other actions necessary to perfect
Buyer's first priority security interest therein, and, with respect to each
item of Collateral which is not Primary Collateral, Seller will make all
filings and take all such other actions necessary to perfect Buyer's security
interest therein to the same level of priority enjoyed by the Seller at the
time of the Incremental Purchase of the related Loan.
(d) It is the intention of the parties to this Agreement that
each conveyance of Seller's right, title and interest in and to the Property
pursuant to this Agreement shall constitute a purchase and sale and not a
loan. If, notwithstanding the foregoing, the conveyance of the Property to
the Buyer hereunder is characterized by any third party as a pledge, the
parties intend that Seller shall be deemed hereunder to have granted to the
Buyer a first priority perfected security interest in all of Seller's right,
title and interest in, to and under the Loans, the Notes, the related
Collateral and Related Documents, and all monies due or to become due with
respect thereto after the applicable Cut-Off Date, and that this Agreement
shall constitute a security agreement under applicable law.
(e) If the Buyer determines that any documents or documents
constituting a part of a Loan File are missing or defective (that is,
mutilated, damaged, defaced, incomplete, improperly dated, clearly forged or
otherwise physically altered) with respect to any Loan in any respect which
materially and adversely affects the interests of the Buyer, then the Buyer
shall promptly notify Seller, whereupon Seller shall have a period of 30 days,
within which to correct or cure any such defect. If any such material defect
has not been corrected or cured in all material respects as described below,
notwithstanding any other provision of this Agreement, Seller will repurchase
the related Loan from the Buyer at a price equal to the sum (without
duplication) of (i) the difference between (A) the Purchase Price then paid
for such Loan and (B) the aggregate of the principal portion of the Monthly
Payments then received and retained by Buyer (after taking into account any
payment of principal made by the related Obligor on such day), (ii) an amount
equal to the interest accrued at the applicable Loan Interest Rate on such
Repurchased Loan through the last day of the Due Period during which such
repurchase occurs, to the extent such amount was not previously received
during such Due Period from the Obligor as a Monthly Payment (the "Repurchase
Amount"). The Repurchase Amount shall be paid by Seller to the Buyer in
immediately available funds by the last day of the Due Period during which
such repurchase obligation arises and, upon receipt by the Buyer of such
deposit, the Buyer shall release or cause to be released to Seller the related
Loan Files and shall execute and deliver or cause to be executed and delivered
such instruments of transfer or assignment of such Loan, the security interest
in the related Property, in each case without recourse, representation or
warranty, as Seller shall reasonably request (as shall be prepared by and at
the expense of Seller). It is understood and agreed that the obligation of
Seller to repurchase any Loan as to which a material defect in a constituent
document exists and to make the related payments as described in this
Section 2.01(e) shall, together with the indemnification rights contained in
Section 10.02 and the right of Buyer to be reimbursed for reasonable fees and
expenses incurred in effecting this repurchase, constitute the sole remedies
against Seller with respect to such defective Loan available to the Buyer.
SECTION 2.01A Incremental Purchase. (a) Subject to the terms
and conditions hereof, including Sections 3.04 and 3.05 hereof, the Seller may
at any time prior to December 31, 1995 (or such later date as is approved by
Buyer) sell to the Buyer and the Buyer shall purchase from the Seller certain
identified Loans and Property related thereto (each, an "Incremental
Purchase"); provided, however, that no Incremental Purchase shall be for a
principal amount of less than $2,000,000 (other than the final Incremental
Purchase which may be in such lesser amount as agreed to by Buyer or such
other lesser amount as is approved by Buyer) and provided further, that the
Buyer shall not be obligated to make an Incremental Purchase (or any portion
thereof) to the extent such Purchase (or any portion thereof), together with
all previous Incremental Purchases, would exceed the Maximum Purchase Amount.
(b) The Seller shall provide the Buyer with written notice of
its intention to request an Incremental Purchase in the form of Exhibit E
hereto no later than ten (10) Business Days before each Incremental Purchase
and shall provide the Buyer with at least five (5) Business Days to review the
Loan Files relating to each Incremental Purchase. Upon satisfaction of all
terms and conditions contained herein, Buyer shall pay to the Seller the
Purchase Price of each Incremental Purchase on the applicable Closing Date.
SECTION 2.02 Agreement to Accept Renewal Notes. (a) Subject
to the terms and conditions of this Agreement, including delivery of the
Renewal Notes and satisfaction of the other delivery and filing requirements
set forth in Section 2.01 hereof no later than five (5) Business Days before
the applicable Renewal Date, and upon at least 30 days' written notice from
Seller, the Buyer agrees to accept on any Renewal Date such Renewal Loans as
Seller shall have caused Obligors of the related Prior Notes to execute and
deliver.
(b) The parties to this Agreement intend that the conveyance of
each Renewal Loan and related Property by Seller and acceptance thereof by
Buyer shall constitute a purchase and sale and not a loan.
(c) If any document or documents constituting part of a Loan
File relating to a Renewal Loan are missing or defective as described in
section 2.01(e) hereof, the Buyer shall have the same rights against Seller as
provided in such Section 2.01(e).
[End of Article II]
ARTICLE III
CLOSING PROCEDURE; CONDITIONS TO PURCHASE
SECTION 3.01 Payment. The "Purchase Price" for each Loan
shall be paid as follows: (i) the Buyer shall pay to the Seller on the
applicable Closing Date, 75% of the Principal Balance of such Loan and (ii) on
each Payment Date following such Closing Date, the Buyer shall pay to the
Seller 25% of the sum of (a) the principal portion of the Monthly Payment
actually received from or on behalf of the related Obligor during the related
Due Period, (b) any Principal Prepayment and Payahead actually received during
the related Due Period and (c) Insurance Proceeds, Net Liquidation Proceeds,
Guaranty Payment with respect to the related Due Period, but only to the
extent the Buyer has received an amount equal to the total Purchase Price paid
on such Loan on or before such Payment Date together with interest accrued
thereon at the Applicable Rate to such Payment Date; provided, however, that
the Buyer shall not be obligated to pay any Purchase Price on the Closing Date
if the applicable conditions specified in Section 3.04 hereof have not been
satisfied and shall not be obligated to make any further payments to the
Purchase Price on and after (1) the occurrence of a Termination Event, a
Servicer Default or a Guarantor Default or an event which with the passage of
time would become a Termination Event, Servicer Default or Guarantor Default
or (2) the date on which the Guaranty Amount has been reduced to zero.
Notwithstanding the foregoing, the Buyer shall make further payments to the
Purchase Price of Loans on and after the occurrence of any of the events
specified in the preceding sentence at such time as the aggregate unpaid
Purchase Price of the Loans exceeds the aggregate Principal Balance of the
Loans (including Liquidated Loans as to which there remain unpaid Liquidation
Losses). Such further payments to the Purchase Price shall be made to the
extent of such excess on the Monthly Payment Dates from the amounts described
in clause (ii) of the first sentence of this Section 3.01.
SECTION 3.02 Acceptance - Renewal Loans. For each Loan with
provisions for renewal on a Renewal Date, no later than thirty (30) days
before the Renewal Date for such Loan, Seller shall provide Buyer with a
notice that (i) identifies the Loan and related Note by original dated date,
face amount, Loan Interest Rate, and name of Obligor, (ii) identifies the
Renewal Date of such Loan, and (iii) states whether all or any part of the
Principal Balance of such Loan will be renewed on the Renewal Date, and if the
Loan is to be renewed, the anticipated Renewal Balance. No later than five
(5) Business Days before the Renewal Date for any Loan to be renewed, the
Seller shall deliver to the Buyer the Renewal Note and other documents
required by Section 2.01 hereof. On the applicable Renewal Date for any Loan
which is to be renewed, Buyer shall, subject to satisfaction of the delivery
requirements of Section 2.02 and the conditions set out in Section 3.04,
accept a Renewal Note from Seller (in lieu of receiving the Renewal Balance)
as payment in full of a portion of the Outstanding Balance of the Prior Note
equal to the Renewal Balance. In the event that Seller has caused a Renewal
Note to be executed but the conditions precedent to acceptance thereof set out
in Section 3.04 have not been satisfied or waived by the Renewal Date, Seller
shall on such Renewal Date repurchase such Renewal Loan on the same terms as
stated in Section 2.01(e).
SECTION 3.03 Effective Date. Each sale made pursuant to
Sections 2.01 and 2.01A shall be effective, and all right, title and interest
in the Loans and the related Property so sold shall pass to the Buyer at such
time as Buyer shall pay the Purchase Price in respect thereof.
SECTION 3.04 Buyer's Conditions Precedent to Acceptance. The
obligation of Buyer to pay the applicable portion of the Purchase Price on
each Closing Date and to accept the Renewal Loans and Notes on any applicable
Renewal Date is subject to the fulfillment on such Closing Date or Renewal
Date, as the case may be, of each of the following conditions (relating only
to the Loans purchased or renewed on each such Date):
(a) Buyer shall have received the original Notes or Renewal
Notes, as the case may be, and such Notes shall have been duly endorsed by
Seller without recourse or warranty except as provided herein, and of the
Related Documents;
(b) Buyer shall have received the original executed counterpart
of the loan agreement, security agreement and other Related Documents with
respect to each Loan (or, to the extent more than one original counterpart
exists, all original executed counterparts of such agreements and Related
Documents that are in the possession of the Seller or any of its Affiliates),
and each such Document shall be in a form reasonably satisfactory to Buyer;
(c) The Buyer shall have received a duly executed Notice of
Assignment in the form annexed hereto as Exhibit C addressed to each Obligor
of a Note related to a Loan;
(d) With respect to Loans secured by mortgages on real property,
Buyer shall have received (A) either: (i) the original mortgage, with
evidence of recording thereon, (ii) a copy of the mortgage certified as a true
copy by a Responsible Officer of Seller where the original has been
transmitted for recording until such time as the original is returned by the
public recording officer or duly licensed title or escrow officer or (iii) a
copy of the mortgage certified by the public recording office in those
instances where the original recorded mortgage has been lost; (B) either: (i)
the original assignment of mortgage from Seller endorsed as follows:
"National Consumer Cooperative Bank," with evidence of recording thereon
(provided, however, that where permitted under the laws of the jurisdiction
wherein the mortgaged property is located, the assignment of mortgage may be
effected by one or more blanket assignments for Loans secured by mortgaged
properties located in the same county), or (ii) a copy of such assignment of
mortgage certified as a true copy by a Responsible Officer of Seller where the
original has been transmitted for recording (provided, however, that where the
original assignment or mortgage is not being delivered to the Buyer, each such
Responsible Officer may complete one or more blanket certificates attaching
copies of one or more assignments of mortgage relating to the mortgages
originated by Seller); and (C) either: (i) originals of all intervening
assignments, if any, showing a complete chain of title from the originator to
Seller, including warehousing assignments, with evidence of recording thereon
if such assignments were recorded, (ii) copies of any assignments certified as
true copies by a Responsible Officer of Seller where the originals have been
submitted for recording until such time as the originals are returned by the
public recording officer, or (iii) copies of any assignments certified by the
public recording office in any instances where the original recorded
assignments have been lost; and (D) all available documentation relating to
appraisals and environmental surveys;
(e) Seller has, or on the applicable Closing Date will have, (1)
a first priority perfected security interest in each item of Primary
Collateral, free from any lien, security interest, encumbrance or other right,
title or interest of any Person, and (2) a perfected security interest in each
other item of Collateral, subject to the prior liens, security interests and
encumbrances existing on, and identified to and approved by the Buyer on the
applicable Closing Date. Seller shall, on the applicable Closing Date,
transfer its security interest in the Primary Collateral and such other
Collateral as is governed by the Uniform Commercial Code or required by the
Buyer, Collateral subject to the rights of the holder of title in and to such
Collateral and of the Obligors in such Collateral under the Loans, related
Notes and Related Documents (and in the case of Collateral which is not
Primary Collateral, holders of prior liens), and the Seller, as agent for the
Buyer, shall defend Buyer's security interest in and to the Collateral related
to any Loan against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to that of obligors or Buyer;
(f) On each applicable Closing Date, at least 80% (determined on
the basis of aggregate Principal Balance) of the Loans purchased on such
Closing Date must be secured by Collateral which is (i) inventory and or
furniture, fixtures and equipment and (ii) Primary Collateral;
(g) On each applicable Closing Date, at least 80% (determined on
the basis of aggregate Principal Balance) of the Loans purchased on such
Closing Date must have a twenty-one month payment history and such history
must have been provided to the Buyer in a form acceptable to the Buyer;
(h) The Buyer shall have received an amendment to the Uniform
Commercial Code financing statement filed pursuant to Section 3.05(a), such
amendment on Form UCC-3 and amending the schedule of Loans to include the
Loans purchased on the applicable Closing Date;
(i) The Buyer shall have received Uniform Commercial Code
financing statements on Form UCC-3 executed by Seller as "Assignor" evidencing
the assignment to the Buyer by Seller of all security interests in personal
property, arising in favor of Seller under the Related Documents, on the
Collateral relating to the Loans (other than security interests in Seller's
capital stock and patronage dividends) in form and content sufficient for
filing with the applicable location for central filing in the state where the
related form UCC-1 is filed;
(j) The Buyer shall have received Assignments of Deeds of Trust
executed by Seller as "Assignor" evidencing the assignment to Buyer by Seller
of all security interests in real property arising in favor of Seller under
the Related Documents in form and content sufficient for filing in the real
property recording districts in which such real property is located;
(k) The Buyer shall have received evidence reasonably
satisfactory to Buyer that the security interests arising in favor of Seller
under the Related Documents and the Collateral therein described (other than
Seller's capital stock and patronage dividends) have been duly perfected by
the filing of all such Uniform Commercial Code financing statements and the
taking of all such other or additional acts as may be necessary to create a
valid and perfected lien enforceable against all third parties in all
jurisdictions to secure each Obligor's respective obligations to the Seller
under the Loans, related Notes and Related Documents and evidence reasonably
satisfactory to Buyer, which shall consist of the filing of amendments to
financing statements in appropriate jurisdictions necessary to evidence United
Grocers, Inc.'s and any other person's subordinate security interests in the
Loans, related Collateral and Related Documents, lien searches of "recent"
date and "sufficient" detail (as "recent" and "sufficient" are defined for
each purchased Loan in Exhibit F hereof) in appropriate jurisdictions and, in
the case of real estate Collateral, title policies and lien and title searches
by attorneys of title companies, that such lien is a perfected lien of first
priority in respect of the Primary Collateral and enforceable, in the case of
all other Collateral, against third parties whose interests are subordinate to
the interest of the Seller sold and assigned to Buyer hereunder;
(l) The Buyer shall have received evidence reasonably
satisfactory to Buyer that the security interests arising in its favor under
this Agreement in the Loans, related Notes, related Collateral (other than
Collateral which is not governed by the Uniform Commercial Code of the
applicable jurisdictions, unless Buyer, in its sole discretion, requires
otherwise), the Related Documents and the proceeds thereof has been duly
perfected by the filing of all such Uniform Commercial Code financing
statements and the taking of all such other or additional acts as may be
necessary to create a valid and perfected lien of first priority enforceable
against all third parties (other than (i) prior lien holders in the case of
Collateral which is not Primary Collateral and (ii) is Collateral which is not
governed by the Uniform Commercial Code) in all jurisdictions to secure all of
Seller's obligations to Buyer;
(m) No Termination Event, and no event which with the giving of
notice or passage of time or both would constitute a Termination Event shall
have occurred and be continuing, and a Responsible Officer of Seller shall
have so certified to Buyer in writing;
(n) Each representation and warranty of the Seller set forth in
Section 4.01, 4.02 or 4.03 shall be true and correct in all material respects,
and a duly Responsible Officer of Seller shall have so certified to Buyer in
writing in substantially the form of Exhibit K hereto;
(o) Each representation and warranty of Guarantor set forth in
Article 3.01 of the Guaranty Agreement hereof shall be true and correct in all
material respects, and a duly Responsible Officer of Guarantor shall have so
certified to Buyer in writing in substantially the form of Exhibit L hereto;
(p) Each representation and warranty of Servicer set forth in
Section 5.13 shall be true and correct in all material respects, and a duly
Responsible Officer of Servicer shall have so certified to Buyer in writing in
substantially the form of Exhibit M hereto;
(q) Buyer shall have received the Loan Schedule relating to the
Loans purchased on the applicable Closing Date required by this Agreement and
it shall be in a form reasonably acceptable to Buyer;
(r) Seller shall have paid all fees and expenses, including the
Buyer's out-of-pocket expenses and the fees of Buyer's counsel, incurred in
selling the Loans pursuant to this Agreement;
(s) Buyer shall have received an opinion of counsel for Seller
dated the applicable Closing Date in a form reasonably acceptable to Buyer;
(t) The Guaranty Amount shall not have been reduced to zero.
SECTION 3.05 Additional Delivery Requirements for Initial
Closing Date. The obligation of the Buyer to perform any of its obligations
under this Agreement shall be further subject to satisfaction of each of the
following delivery requirements on the Initial Closing Date (or on the date
specified below) to the reasonable satisfaction of Buyer:
(a) The Buyer shall have received a Uniform Commercial Code
financing statement on Form UCC-1 naming Buyer as "Secured Party" and executed
by Seller as "Debtor" covering the Loans sold on the Initial Closing Date,
related Notes, related Collateral, the Related Documents and the proceeds
thereof, in form and content sufficient for filing in the appropriate offices
in the States of Oregon, Washington and California;
(b) Buyer shall have received an opinion of counsel for Seller
dated such date and in a form reasonably acceptable to Buyer;
(c) Buyer shall have received an opinion of counsel for Servicer
dated such date and in a form reasonably acceptable to Buyer;
(d) Buyer shall have received an opinion of Counsel for
Guarantor dated such date and in a form reasonably acceptable to Buyer;
(e) Buyer shall have received in form and substance reasonably
satisfactory to it a certified copy of a resolution adopted by the Board of
Directors of Seller, authorizing the execution, delivery and performance of
this Agreement and the Assignments and the endorsement and sale of the Notes
hereunder, together with evidence of the authority and specimen signatures of
the persons who have signed this Agreement and who will endorse the Notes on
behalf of the Seller and such other evidence of corporate authority as Buyer
may reasonably require;
(f) Buyer shall have received in form and substance reasonably
satisfactory to it, a certified copy of a resolution adopted by the Board of
Directors of Guarantor, authorizing the execution, delivery and performance of
this Agreement;
(g) Buyer shall have received in form and substance satisfactory
to it, a certified copy of a resolution adopted by the Board of Directors of
Servicer, authorizing the execution, delivery and performance of this
Agreement;
(h) Buyer shall have received an origination fee from Seller of
$133,000;
(i) Buyer shall have received officers' certificates from
Seller, Servicer and Guarantor in forms reasonably acceptable to Buyer;
(j) Buyer shall have received an executed counterpart of a
certain Subordination Agreement in which United Grocers, Inc. agrees to
subordinate its interest in the Collateral (other than patronage and stock)
securing the Loans to the interest of the Seller therein;
(k) Buyer shall have received Exhibit G containing information
relating to the corporate and "doing business" names of the Seller and
Guarantor in the States of Oregon, Washington and California;
(l) Buyer shall have received the Guaranty Agreement duly
executed by the Guarantor;
(m) Buyer shall have received a duly executed counterpart of
that certain "Second Amendment to Loan Purchase and Servicing Agreement dated
as of May 13, 1994" dated September 28, 1995, together with opinions of
counsel to United Resources and United Grocers to the effect that such Second
Amendment is the legal, valid and binding obligation of United Resources and
United Grocers, enforceable against both such parties in accordance with its
terms.
SECTION 3.06 Seller's Conditions Precedent to Sale. The
obligation of Seller to sell Loans on each Closing Date shall be subject to
the fulfillment of each of the following conditions on such Closing Date to
the reasonable satisfaction of Seller:
(a) Seller shall have received the Purchase Price as provided in
Section 3.01; and
(b) Each representation and warranty of the Buyer set forth in
Section 4.04 shall be true and correct in all material respects, and a duly
authorized officer of Buyer shall have so certified to Seller in writing.
[End of Article III]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Seller's Corporate Representations and
Warranties. Seller represents and warrants to Buyer as of each Closing Date
and as of any Renewal Date as follows:
(a) Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Oregon, is doing business
only under the corporate and "doing business as" names listed in Exhibit G
hereto, and is qualified to do business in each other jurisdiction where the
conduct of its business or the ownership of its properties requires such
qualification, and has full corporate power, authority and legal right to
carry on its business as presently conducted, to own and operate its
properties and assets, to execute, deliver and perform this Agreement and to
sell the Loans and related Property.
(b) The execution, delivery and performance by the Seller of
this Agreement and any assignment, the endorsement the Notes and the sale of
any Loans, related Notes and Related Documents and the security interest in
the related Collateral hereunder have been duly authorized by all necessary
corporate action of Seller, do not require any shareholder approval or the
approval or consent of any trustee or the holders of any Debt of Seller,
except such as have been obtained (certified copies thereof having been
delivered to Buyer), do not contravene any law, regulation, rule or order
binding on it or its Articles of Incorporation or Bylaws and do not contravene
the provisions of or constitute a default under any indenture, mortgage,
contract or other agreement or instrument to which Seller is a party or by
which Seller or any of the Loans, related Notes or Related Documents may be
bound or affected.
(c) No Government Approval or filing or registration with any
Governmental Authority is required for the making and performance by Seller of
this Agreement or any assignment or the endorsement of the Notes or in
connection with the sale of the Loans and related Property contemplated
hereby, except such as have been heretofore obtained and are in full force and
effect (certified copies thereof having been delivered to Buyer).
(d) This Agreement has been duly executed and delivered by
Seller and constitutes, and any assignment and any endorsement of a Note when
duly executed and delivered will constitute, the legal, valid and binding
obligation of the Seller enforceable against Seller in accordance with its
terms.
(e) Except as described in Exhibit H hereto, there are no
actions, proceedings, investigations, or claims against or affecting Seller
now pending before any court, arbitrator or other Governmental Authority (nor
to the knowledge of Seller has any thereof been threatened nor does any basis
exist therefor) which if determined adversely to the Seller would be likely to
have a material adverse effect on the financial condition or operations of
Seller or on Seller's ability to perform its obligations under this Agreement,
or under an endorsement of any Note. With respect to the litigation described
in Exhibit H hereto, a determination in such litigation that is materially
adverse to the Seller or Guarantor would not have a material adverse effect on
the financial condition or operations of Seller or on Seller's ability to
perform its obligations under this Agreement, or under any assignment or
endorsement of any Note.
(f) The consolidated balance sheet of the Seller and its
Affiliates and Subsidiaries at October 1, 1994, and the related statements of
income and retained earnings of Seller and its Affiliates and Subsidiaries for
the fiscal year then ended, copies of which have been furnished to Buyer,
fairly present the financial condition of Seller and its Affiliates and
Subsidiaries as at such date and the results of operations of Seller and its
Affiliates and Subsidiaries for the fiscal year then ended, all in accordance
with U.S. GAAP consistently applied. Since that date, there has been no
material adverse change in the financial condition or operations of Seller or
any of its Subsidiaries or Affiliates.
(g) Seller has good and marketable title to each of the
properties and assets reflected in its balance sheet referred to in
Section 4.01(f) except such as have been since sold or otherwise disposed of
in the ordinary course of business.
(h) Neither Seller nor any of its Subsidiaries or Affiliates is
in material breach of or default under any agreement or agreements to which it
is a party or which are binding on it or any of its assets and which provide
for the payment of monies, the delivery of goods or the provision of services
in amounts or with values in the aggregate in excess of One Million Dollars
($1,000,000).
(i) The present value of all benefits vested under all Pension
Plans did not, as of the most recent valuation date of such Pension Plans,
exceed the value of the assets of the Pension Plans allocable to such vested
benefits by an amount which would represent a potential material liability of
Seller and its consolidated subsidiaries or affect materially the ability of
the Seller to perform this Agreement; no Plan or trust created thereunder, or
any trustee or administrator thereof, has engaged in a "prohibited
transaction" (as such term is defined in Section 406 or Section 2003(a) of
ERISA) which could subject such Plan or any other Plan, any trust created
thereunder, or any trustee or administrator thereof, or any party dealing with
any Plan or any such trust to the tax or penalty on prohibited transactions
imposed by Section 502 or Section 2003(a) of ERISA; no Pension Plan or trust
created thereunder has been terminated, and there have been no "reportable
events" (as that term is defined in Section 4043 of ERISA) since the effective
date of ERISA; no Pension Plan or trust created thereunder has incurred any
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA; and the
required allocations and contributions to Pension Plans will not violate
Section 415 of the Code.
(j) Uniform Commercial Code financing statements have been duly
filed in all places where filing is necessary and all other or additional acts
have been taken as are necessary to perfect the Buyer's interests arising
hereunder and under the assignments in and to the Loans and related Property
and the lien created hereby constitutes a valid and perfected lien of first
priority in and to all of the Loans and related Property (other than in
Collateral which is not Primary Collateral or not governed by the Uniform
Commercial Code, in which case the Buyer has only such interest as the Seller
had and disclosed to the Buyer on the applicable Closing Date and other than
Seller's security interest in its capital stock and patronage dividends) and
is enforceable against all third parties (other than third parties whose
interests in Collateral which is not Primary Collateral are prior to Seller's
interests therein on the applicable Closing Date) in all jurisdictions as
security for all obligations of the Seller to the Buyer under this Agreement.
(k) Seller has good and marketable title to the Loans and
related Notes designated for sale to the Buyer hereunder, the Related
Documents and the proceeds thereof, free and clear of all liens and
encumbrances and Seller has not transferred in any manner whatever to any
Person (other than Buyer) and has not created or permitted any lien, pledge,
charge, security interest, ownership interest, participation interest or any
other interest of any nature whatever (other than in favor of the Buyer) in
respect of the Loans, the related Notes, the Related Documents or the proceeds
thereof.
(l) Seller's chief executive offices and the offices where such
Seller keeps records concerning the Loans and related Property are located at
0000 X.X. Xxxx Xxxx, Xxxxxxxx, Xxxxxx or such other location to which such
offices are moved pursuant to Section 6.01(m) hereof.
(m) This Agreement, the financial statements referred to in
Section 4.01(f) and all other instruments, documents, certificates and
statements furnished to the Buyer by the Seller, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
(n) Seller is "eligible" to borrow from NCB under the provisions
of the Bank Act.
SECTION 4.02 Seller's Closing Date Representations and
Warranties with respect to Loans. Seller represents and warrants to Buyer as
of each Closing Date with respect to Loans transferred and sold on such
Closing Date as follows:
(a) The information with respect to each Loan set forth in the
applicable Loan Schedule, together with any documentation supporting such
information, is true and correct;
(b) With respect to each Loan, there exists only one original
Note. Such original Note and all of the other original or certified
documentation set forth in Sections 2.01 and 3.03 (including all material
documents related thereto) has been or will be delivered to the Buyer on the
applicable Closing Date;
(c) Each Loan was originated in the United States and Monthly
Payments on such Loan are payable on the first day of each month in U.S.
Dollars by an Obligor domiciled in the United States;
(d) Each Note will have a Loan Interest Rate that is either (i)
a variable rate based on the Prime Rate or LIBOR, adjusted at least annually,
or (ii) a fixed rate that has been approved by NCB in its sole discretion, and
each Note having a variable Loan Interest Rate will have a minimum Loan
Interest Rate (A) in the case of a variable rate based on the Prime Rate, the
Prime Rate minus 100 basis points and (B) in the case of a variable rate based
on LIBOR, LIBOR plus 175 basis points;
(e) Immediately prior to the transfer and assignment herein
contemplated, the applicable Seller held good and indefeasible title to, and
was the sole owner of, each Loan conveyed by Seller, subject to no liens,
charges, mortgages, encumbrances or rights of others or other liens which will
be released simultaneously with such transfer and assignment; and immediately
upon the transfer and assignment herein contemplated, the Buyer will hold good
and indefeasible title, to, and be the sole owner of, each Loan subject to no
liens, charges, mortgages, encumbrances or rights of others;
(f) No Obligor has been delinquent (after giving effect to any
grace period) in payments on its Loan, any other loan made by the Seller or
Buyer to such Obligor, or any open account at any time in the three months
preceding the applicable Closing Date;
(g) No Obligor has been delinquent in payments on its Loan, any
other loan made by Seller or Buyer to such Obligor, or any open account for a
period in excess of 45 days at any time during the year (or if originated less
than one year earlier, since the date of origination) preceding the applicable
Closing Date;
(h) The Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the related Note, Related Document or any
related Collateral, or the exercise of any right thereunder, render either the
related Note, Related Document or any related Collateral unenforceable in
whole or in part, or subject to any right of rescission, set-off, counterclaim
or defense, including the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto;
(i) Each Loan at the time it was made complied and, as of the
applicable Closing Date, complied in all material respects with applicable
state and federal laws and regulations, including, without limitation, usury,
equal credit opportunity, disclosure and recording laws;
(j) At least one of the Obligors with respect to each Loan (i)
is a member in good standing of United Grocers, Inc. and (ii) to the best of
Seller's knowledge, shall have provided to Seller complete and accurate
information relating to Obligor's financial condition and shall have suffered
no material adverse changes in its financial condition or otherwise since the
date the Loan was originated;
(k) Each Loan has a remaining term to maturity of no greater
than 10 years from the applicable Closing Date;
(l) The Note related to each Loan provides that the principal be
amortized monthly over the term of such Note with an amortization period of no
greater than 10 years and with either level monthly payments of principal and
interest or principal plus interest, provided that, in the case of a Loan with
(i) an amortization period longer than its term to maturity (but in no event
longer than a 10-year amortization period) and (ii) renewal provisions, a
balloon payment at maturity or on the Renewal Date, as applicable, is
permissible;
(m) Each Loan, related Note, related Collateral and Related
Documents pursuant to which Collateral is pledged to a Seller is the legal,
valid and binding obligation of the Obligor thereof and is enforceable in
accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in equity
or at law), none of which will prevent the ultimate realization of the
security provided by the Collateral or Related Document, and all parties to
each Loan had full legal capacity to execute all Related Documents and convey
the property therein purported to be conveyed;
(n) The terms of the Loan, related Note and each Related
Document pursuant to which Collateral was pledged have not been impaired,
altered or modified in any respect, except by written instrument which has
been recorded, if necessary, to protect the interest of the Buyer and which
has been delivered to the Buyer;
(o) The proceeds of the Loan have been fully disbursed, and
there is no obligation on the part of the Seller to make future advances
thereunder. Any and all requirements as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing or recording the Loans were paid;
(p) The Obligor with respect to each Loan and each other member
of its Obligor Group has a positive net worth as accounted for under U.S.
GAAP, consistently applied, and has no present intention to seek relief under
the federal bankruptcy laws;
(q) There is no default, breach, violation or event of
acceleration existing under the Loan, related Note or Related Document and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
of acceleration, and the Seller has not waived any such default, breach,
violation or event of acceleration;
(r) Each Loan requires each of the Obligor and Loan Guarantor
thereunder at its own costs and expense to maintain the Collateral pledged to
secure the related Loan in good repair, condition and working order, and to
the best knowledge of the Seller, each Obligor and Loan Guarantor under a Loan
is currently in compliance with this requirement;
(s) Seller has, or on the applicable Closing Date will have, (1)
a first priority perfected security interest in each item of Primary
Collateral, free from any lien, security interest, encumbrance or other right,
title or interest of any Person, and (2) a perfected security interest in each
other item of Collateral, subject to the prior liens, security interests and
encumbrances existing on, and identified to and approved by the Buyer on the
applicable Closing Date. Seller shall, on the applicable Closing Date,
transfer its security interest in the Primary Collateral and such other
Collateral as is governed by the Uniform Commercial Code or required by the
Buyer subject however to the rights of the holder of title in and to such
Collateral and of the Obligors in such Collateral pledged under the Related
Documents (and, in the case of Collateral which is not Primary Collateral,
holders of prior liens), and Seller, as agent for the Buyer, shall defend the
Buyer's security interest in and to Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein adverse
to that of the Obligors or the Buyer.
(t) Either (i) the Obligor and Loan Guarantor has, under the
terms of each Loan, consented to a sale and assignment of the Loan, the
related Note and Related Documents and the sale or grant of a security
interest in and to the Loan and the Collateral relating thereto, or (ii) none
of the Loan, the related Note or any Related Documents requires the consent of
approval of notice to the Obligor or Loan Guarantor with respect to the
assignment and transfer by Seller of Seller's right, title and interest in and
to the Loan, the related Note, any Related Document and Collateral;
(u) The Notes and Related Documents delivered to Buyer on the
applicable Closing Date are true, correct, and complete original counterparts
of all instruments and documents evidencing or in any way relating to the Loan
and related indebtedness referred to therein; except as approved by the Buyer,
such Notes and Related Documents are in substantially the form of the
documents attached hereto as Exhibit I; except as included with the
instruments and documents so delivered, such Notes and such Related Documents
have not been amended; and each such Note and Related Document to which
Obligor or Loan Guarantor is a party bears the original signature of such
Obligor and Loan Guarantor;
(v) Uniform Commercial Code financing statements have been duly
filed in all places where filing is necessary, and all other or additional
acts have been taken as are necessary to perfect Seller's security interests
arising pursuant to the Related Documents in the Primary Collateral and such
other Collateral as is governed by the Uniform Commercial Code or is required
by Buyer and such security interests constitute a valid and perfected lien in
and to all of the Collateral of first priority (subject to no prior or equal
liens or interests) in the case of all Primary Collateral and of the same
level of priority as that enjoyed by the Seller on the applicable Closing Date
in the case of all other Collateral as is governed by the Uniform Commercial
Code or required by Buyer, and will be enforceable against all third parties
in all jurisdictions as security for the respective obligations of Obligors to
Seller under their respective Notes and Related Documents;
(w) Seller has heretofore caused all copies of the Loans,
related Notes and Related Documents in its possession to be separately
identified and distinguished from Seller's other loans, and on the applicable
Closing Date, the Seller will cause each copy of each Note, related Collateral
and Related Document in its possession to be identified with an appropriate
legend clearly disclosing the fact that such Loan, the related Notes, Related
Documents and the Seller's security interest in the related Collateral have
been sold and assigned to the Buyer and the Buyer is the owner thereof, and
any original copies of any Note, related Collateral or Related Document coming
into the possession of the Seller will be delivered to the Buyer;
(x) With respect to any Loan secured by a mortgage on real
property, each mortgage is a valid and subsisting lien of record on the
mortgaged property subject only to a first mortgage lien on such mortgaged
property previously disclosed to Buyer and subject in all cases to such
exceptions that are generally acceptable to prudent and experienced lenders in
connection with their regular commercial lending activities, and such other
exceptions to which similar properties are commonly subject and which do not
individually, or in the aggregate, materially and adversely affect the
benefits of the security intended to be provided by such mortgage;
(y) With respect to each Loan secured by a mortgage on real
property, each original mortgage was recorded, and all subsequent assignments
of the original mortgage have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as against
creditors of Seller; and
(z) The Aggregate Exposure listed with respect to each Loan and
related Obligor Group in the applicable Loan Schedule is true and correct and
is in no case greater than $4,000,000;
SECTION 4.3 Seller's Renewal Date Representations and Warranties.
Seller represents and warrants to Buyer as of each Renewal Date on which the
Seller has designated any Renewal Note for acceptance as follows:
(a) As of the applicable Renewal Date, all applicable
representations and warranties in Section 4.02 hereof are confirmed as to such
Renewal Loan.
(b) As of the applicable Renewal Date, each Obligor of the
applicable Renewal Loan is not in default of its payment obligations under the
Prior Note or under the Related Documents, and is not in default of its
nonmonetary obligations under such Note or Related Documents.
(c) As of the applicable Renewal Date, no event has occurred and
is continuing which would permit the Seller to accelerate the maturity of any
Obligor's obligations under the applicable Renewal Loan or under the Prior
Note or the Related Documents.
(d) The Notes and Related Documents delivered to Buyer on or
prior to the applicable Renewal Date are true, correct, and complete original
counterparts of all instruments and documents evidencing or in any way
relating to the Loan and the related Indebtedness referred to therein; except
as included with the instruments and documents so delivered, such Notes and
Related Documents have not been amended; and each such Note and each such
Related Document to which an Obligor or Loan Guarantor is a party bears the
original signature of the Obligor or Loan Guarantor.
(e) The Loans and Notes designated by Seller as Renewal Loans
and Notes together with the Related Documents to which Obligors or Loan
Guarantors are parties have been duly executed by their respective Obligors or
Loan Guarantors and constitute the legal, valid and binding obligations of
their respective Obligors and Loan Guarantors enforceable against such
Obligors and Loan Guarantors in accordance with their respective terms.
(f) Each amount identified in a notice provided pursuant to the
terms of Section 3.02 as the "anticipated Renewal Balance" correctly
identifies the amount of the outstanding Principal Balance evidenced by the
Note to be accepted as of such Renewal Date and there are no offsets or
defenses to the payment of such amount that may be asserted against the Seller
either by way of defense or counterclaim.
(g) Uniform Commercial Code financing statements have been duly
filed in all places where filing is necessary, and all other or additional
acts have been taken as are necessary to perfect the Seller's security
interests arising pursuant to the Related Documents in the Collateral and such
security interests constitute a valid and perfected lien in and to all of the
Collateral of first priority (subject to no prior or equal liens or interests)
in the case of all Primary Collateral and of the same level of priority as
that enjoyed by the Seller on the Closing Date on which the Loan was first
sold and assigned hereunder in the case of all other Collateral, and will be
enforceable against all third parties in all jurisdictions as security for the
respective obligations of Obligors to the Seller under their respective Notes
and Related Documents.
(h) No Renewal Loan, related Renewal Note or any Related
Document, alone or in connection with Seller's prior course of conduct,
expressly or impliedly requires Seller or any other Person to make additional
advances thereunder.
(i) The Note related to the Renewal Note provides for full
amortization over its remaining term to maturity.
SECTION 4.04 Buyer's Representations and Warranties. Buyer
represents and warrants to Seller as follows:
(a) Buyer is a financial institution duly organized, validly
existing and in good standing under the laws of the United States of America,
and has full corporate power, authority and legal right to execute, deliver
and perform this Agreement and to purchase the Loans and related Property.
(b) Execution, delivery and performance by Buyer of this
Agreement and the purchase of the Loans and related Property hereunder have
been duly authorized by all necessary corporate action of Buyer, do not
require any shareholder approval or the approval or consent of any trustee or
the holders of any Indebtedness of Buyer, do not contravene any law,
regulation, rule or order binding on it or its Articles of Association or
Bylaws and do not contravene the provisions of or constitute a default under
any indenture, mortgage, contract or other agreement or instrument to which
Buyer is a party or by which Buyer or any of its properties may be bound or
affected.
(c) No Government Approval or filing or registration with any
Governmental Authority is required for the making and performance by Buyer of
this Agreement or in connection with any of the transactions contemplated
hereby.
(d) This Agreement has been duly executed and delivered by Buyer
and constitutes the legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms.
SECTION 4.05 Repurchase Upon Breach of Certain
Representations and Warranties. (a) The representations and warranties and
agreements of the Seller set forth in Sections 4.01, 4.02 and 4.03 with
respect to the Seller and each Loan and related Property shall continue so
long as such Loan remains outstanding. Upon discovery by either Seller or
Buyer that any of such representations or warranties was incorrect as of the
time made, the party making such discovery shall give prompt notice to the
other party. In the event any defect, misrepresentation or omission
materially and adversely affects the interest of the Buyer, the Seller shall
eliminate or cure the circumstance or condition causing the defect within 10
days of the discovery thereof or, repurchase such Loan and the related
Property.
(b) Any such repurchase of a Loan and the related Property by
Seller shall be accomplished in the manner set forth in Section 2.01(e) and at
a price equal to the Repurchase Amount.
[End of Article IV]
ARTICLE V
SERVICING AND COLLECTION
Subject to the provisions of Section 8.03, at all times prior to
the later of (a) the Termination Date or (b) the date on which all obligations
of the Seller under this Agreement have been performed in full, the following
terms and provisions of this Article V shall apply.
SECTION 5.01 Servicing; Delegation of Authority to Buyer and
Servicer. (a) The Buyer appoints the Servicer to act as the Buyer's
exclusive agent for performing all of the servicing and administrative
functions with respect to the Loans, the related Notes, the Related Documents
and the related Collateral not specifically reserved to the Buyer pursuant to
subsection (b) of this Section 5.01. The Servicer hereby accepts such
appointment and agrees to perform such Loan servicing and administrative
duties as are specifically enumerated herein as well as those not reserved to
the Buyer pursuant to subsection (b).
(b) The Buyer reserves the right to perform, and the Servicer
shall have no obligation to perform, the following servicing and
administrative functions with respect to the Loans and this Agreement: (i)
data services, including invoicing and billing Obligors, calculating Loan
Interest Rates, Monthly Payments and amortization schedules with respect to
the Notes, and posting Collections received from or on behalf of Obligors;
(ii) accounting services, including maintenance of the records relating to
Loan Collections and performance; (iii) bookkeeping services; (iv) determining
the Guaranty Amount and the Repurchase Amount due from time to time; and (v)
determining monthly, in connection with each Payment Date, the Available
Funds, the Periodic Payment, the Applicable Rate, the Servicing Fee and the
Guaranty Fee and (vi) maintaining the Account.
(c) The Servicer shall use the same diligence and practices in
servicing the Loans, the related Collateral and the Related Documents as it
uses in servicing and collecting indebtedness evidenced by notes and related
documents held for its own account and, in any event, shall endeavor to
collect or cause to be collected from each Obligor the amounts as and when due
and owing under such Obligor's Note and Related Documents. In performing its
duties hereunder, and subject to the specific limitations set forth herein,
Servicer shall act in accordance with its Credit and Collection Policy and
shall take such actions with respect to the Loans, Notes and Related Documents
as, in its reasonable business judgment, it may deem advisable to maintain or
enhance receipt of timely Collections thereunder. Promptly upon the request
of Servicer, Buyer agrees to execute and deliver such documents and take such
further acts (at Servicer's expense) as Servicer may reasonably request to
confirm and evidence the agency granted to Servicer pursuant to this
Section 5.01.
(d) Promptly after the execution and delivery of this Agreement,
the Servicer shall deliver to the Buyer a list certified by its secretary or
one of its assistant secretaries of the Servicing Officers and employees of
the Servicer involved in or responsible for, the administration and servicing
of the Loans, which list shall from time to time be updated by the Servicer
and which may be relied upon until so updated; provided that if the Servicer
has previously provided such a list to the Buyer and such list does not
require updating, the Servicer shall confirm the accuracy of the
previously-delivered list.
SECTION 5.02 Maintenance of System; Collection and
Maintenance of Information. (a) Servicer shall arrange and maintain with
respect to the Loans, related Notes and Related Documents, data processing,
accounting and related services adequate for the effective and timely
performance of its servicing obligations hereunder in accordance with good
business practices and in compliance with all applicable federal, state and
local laws and regulations.
(b) With respect to each Loan and related Obligor, Servicer
shall collect the following information: (i) within 120 days of the end of
each fiscal year of such Obligor, annual financial statements; (ii) within 50
days of the end of each fiscal quarter of such Obligor, interim financial
statements, together with a certificate of an authorized officer of such
Obligor, to the effect that the accompanying interim financial statements are
true and correct in all material respects; and (iii) evidence of continued
perfection of Buyer's security interest in the related Collateral. Servicer
shall maintain the foregoing information and shall make the same available to
the Buyer or its nominees or agents upon reasonable request.
SECTION 5.03 Maintenance of Lien Priority. So long as
Servicer is required to act as Buyer's agent for performing certain servicing
obligations with respect to the Loans, Servicer agrees to take all actions,
including lien searches and continuation statement filings, necessary or
desirable to ensure that the liens arising pursuant to the Related Documents
and securing repayment of any Obligor's indebtedness evidenced by a related
Note will be maintained as continuously perfected first priority (except in
the case of Collateral which is not Primary Collateral, in which event the
Servicer shall take all actions to maintain the priority sold and assigned
hereunder) security interests (except as otherwise approved by Buyer) in all
applicable jurisdictions.
SECTION 5.04 Obligor Inquiries; Credit and Collection
Policies. (a) Servicer agrees to accept primary responsibility for
telephonic and face-to-face communications with Obligors concerning the Loans,
related Notes and Related Collateral. In the event Obligor inquiries require
consideration by the Buyer, the Servicer agrees to coordinate with the Buyer
and the Obligors so as to provide prompt and appropriate responses to
Obligors' inquiries or concerns.
(b) Servicer agrees to follow, maintain and apply the credit,
extension and collection policies identified in the Credit and Collection
Policy in all material respects unless any order of any court, arbitrator or
other Governmental Authority or any determination of or change in any
applicable federal, state or local law or regulation should require otherwise
or unless Buyer shall otherwise consent in writing, which consent will not be
unreasonably withheld. Notwithstanding anything herein to the contrary,
Servicer is not authorized to and agrees that it will not without the Buyer's
prior written consent, (i) amend, extend, release, modify, or waive the terms
or conditions of any Loan, related Note or of any Related Document; (ii)
release any Collateral pledged in support of any Obligor's obligations under a
Note or Related Document (other than Seller's capital stock and patronage
dividends); or (iii) grant or permit to be granted any rebate, refund, credit
or other adjustment in respect of a Obligor's obligation under any Note or any
Related Document.
SECTION 5.05 Obligor Defaults. Upon the Servicer's becoming
aware of any Obligor Default, Servicer agrees to promptly give any notice to
Obligor required to commence the running of any applicable cure period
following a default in the performance by Obligor of its obligations under the
Loan, the related Note and Related Documents. If an Obligor Default shall
occur and be continuing or if a Loan shall otherwise become a Defaulted Loan,
Servicer shall promptly undertake the collection of such Obligor's
indebtedness in accordance with its Credit and Collection Policy. Without
limiting the foregoing the Servicer shall commence liquidation of the
Collateral pledged to secure such Obligor's obligations under its Loan within
thirty (30) days after the occurrence of such Obligor's Default or upon a Loan
becoming a Defaulted Loan, unless Servicer receives notice from the Seller of
its election to repurchase such Loan pursuant to Section 7.02 of this
Agreement. Buyer shall promptly notify Servicer of any payment default by an
Obligor under the related Note and Servicer shall promptly notify Buyer,
Seller and Guarantor of the occurrence of any other Obligor Default or of a
Loan becoming a Defaulted Loan for a reason other than a payment default. In
its efforts to collect the indebtedness evidenced by any Note, Servicer shall
in all events proceed in good faith and in a commercially reasonable manner
and when seeking to realize on Collateral pledged by any Obligor, shall
proceed in such a fashion as to preserve to Buyer its rights to seek
collection of a deficiency against such Obligor if the sale of the Collateral
is insufficient to pay such Obligor's obligations in full.
Notwithstanding any other provision in this Agreement to the
contrary, Buyer shall have the right, at its sole discretion, to assume the
servicing obligations of the Servicer hereunder in connection with the
liquidation of a Defaulted Loan and related Property and Servicer shall
cooperate with Buyer in effecting such transfer of obligations and liquidation
of Collateral. If Buyer assumes the servicing obligations with respect to the
liquidation of a Defaulted Loan, Buyer shall proceed as a prudent and
experienced servicer would under the circumstances and shall be entitled to
reimbursement for its reasonable fees and expenses in performing such
obligations in accordance with Section 5.10 hereof.
SECTION 5.06 Servicer Reports; Annual Compliance Report. (a)
On the Business Day preceding each Payment Date, Servicer shall deliver to
Buyer a report relating to the Loans identifying any event occurring during
the preceding Due Period of which Servicer has actual knowledge which
materially impairs or might reasonably be expected materially to impair any
Obligor's ability to repay the Debt relating to any Loan and evidenced by a
Note or to perform its obligations under any Related Document or which has or
might reasonably be expected to substantially reduce the value of the
Collateral or to impair the Buyer's lien thereon. In addition to the
foregoing, from time to time upon request of Buyer, the Servicer will deliver
to Buyer such other statements, lists, reports and other information as the
Buyer may reasonably request, and, to the extent any such information must be
obtained by Servicer from a third party, as the Servicer may reasonably be
expected to obtain.
(b) At the time of delivery of its annual audited financial
statements pursuant to Section 6.01(e) hereof, the Servicer shall also deliver
to the Buyer a certificate of a Responsible Officer to the effect that a
review of the activities of the Servicer during the same annual period as that
covered by the annual financial statements, and of its performance under this
Agreement during such period has been made under the supervision of the
officers executing such certificate with a view to determining whether during
such period the Servicer had performed and observed all of its obligations
under this Agreement, and either (i) stating that based on such review no
Servicer Default under this Agreement has occurred, or (ii) if a Servicer
Default has occurred, specifying such Servicer Default and the nature and
status thereof.
(c) Within 120 days after the end of each fiscal year of
Servicer, unless Buyer has in its sole discretion waived this delivery
requirement for any year, Servicer shall deliver to Buyer a report of a firm
of independent public accountants selected by the Servicer, which firm is
either of nationally recognized standing or acceptable to Buyer, to the effect
that such firm has examined certain documents and records relating to the
servicing of the Loans and related Property under this Agreement and that, on
the basis of such examination conducted substantially in compliance with
generally accepted audit standards, nothing came to their attention which
caused them to believe that the Servicer has not serviced the Loans and
related Property in accordance with its Credit and Collection Policy or
otherwise in accordance with this Agreement, except for such insignificant
exceptions or errors on records that, in the opinion of such firm, it is not
required to report. The Servicer shall provide a copy of such accountant's
reports to Buyer.
SECTION 5.07 Lockboxes. The Servicer hereby agrees (i) to
instruct all Obligors to cause all Monthly Payments, Payaheads and Principal
Prepayments on account of Loans to be mailed directly to a Permitted Lockbox;
and (ii) to use its best effort not to suffer or permit any funds other than
such Monthly Payments, Payaheads and Principal Prepayments to be mailed to
Permitted Lockboxes or deposited into related Lockbox Accounts;
SECTION 5.08 Payment of Guaranty Fees and Servicing Fees.
(a) On each Payment Date, the Buyer shall remit (i) to Servicer the Servicing
Fee and (ii) to Guarantor the Guaranty Fee; provided, however, that upon the
occurrence and continuation of a Servicer Default or a Guarantor Default, the
Buyer shall not be required to remit the Servicing Fee to the Servicer and
provided further, that if there shall have occurred and be continuing a
Servicer Default under Section 8.01 (other than under Section 8.01(b)) or a
Guarantor Default, the Buyer shall not be required to remit the Guaranty Fee
to the Guarantor.
(b) The Buyer shall be entitled to retain on each Payment Date
from amounts received as (i) Collections and other Available Funds (other than
Guaranty Payments) during the related Due Period and (ii) Guaranty Payments on
or before such Payment Date, the Periodic Payment; provided, however, that
upon the occurrence and continuation of a Servicer Default (other than a
Servicer Default under Section 8.01(b), in which event Buyer or a Successor
Servicer shall retain the Servicing Fee) or a Guarantor Default, the Buyer
shall be entitled to retain all Collections and other Available Funds.
(c) Buyer shall determine the Periodic Payment for each Payment
Date using the following methodology.
(1) As used herein and in the Guaranty Agreement,
"Periodic Payment" means for any Payment Date the sum of, for each Loan,
(a) the principal portion of the Monthly Payment actually received
during the related Due Period, other than the portion of the Principal
Balance of a Prior Note which, at the time it became due, constituted
the Renewal Balance under a Renewal Note; (b) any Principal Prepayment,
Payahead, Insurance Proceeds and Net Liquidation Proceeds actually
received during the related Due Period; (c) the principal portion of any
Guaranty Payment or Repurchase Proceeds with respect to the related Due
Period; and (d) the Monthly Interest Amount for the related Interest
Accrual Period.
(2) As used herein, in the Servicing Agreement and the
Guaranty Agreement, "Monthly Interest Amount" on any Payment Date shall
mean an amount equal to the sum of, for each Loan the product of (i) the
Principal Balance of such Loan during the related Due Period, times (ii)
the Applicable Rate times (iii) a fraction, the denominator of which is
three hundred sixty (360), and the numerator of which is the actual
number of days in the related Interest Accrual Period.
SECTION 5.09 Applicable Rate. As used in this Agreement and
the Guaranty Agreement, "Applicable Rate" for each Loan shall be determined as
follows. The Applicable Rate shall be established as of each LIBOR
Determination Date and shall be applicable for the next succeeding Interest
Accrual Period without regard to changes thereafter occurring during such
Interest Accrual Period in the principal amounts outstanding under the Notes,
in the Principal Balance of Loans purchased, or in LIBOR. Buyer shall, after
the determination of the Applicable Rate on each LIBOR Determination Date,
notify Seller, Servicer and Guarantor of such Applicable Rate; provided,
however, that any failure of Buyer to give such notice shall not affect
Seller's, Servicer's or Guarantor's obligations hereunder or under the
Guaranty Agreement.
The Applicable Rate for each Loan shall be computed and applied on
the basis of a year of three hundred sixty (360) days for the actual number of
days occurring in the applicable Interest Accrual Period. For each Interest
Accrual Period, the Applicable Rate shall mean an interest rate per annum
equal to the sum of (a) 140 basis points and (b) LIBOR in effect on the
applicable LIBOR Determination Date. For purposes hereof, the Buyer will
determine LIBOR by 12:00 noon, Eastern Standard Time, on each LIBOR
Determination Date on the basis of quotations provided by four Reference Banks
as of 11:00 A.M. (London time) on such LIBOR Determination Date as such
quotations appear on the display designated as page "LIBO" on the appropriate
display on the Bloomberg Financial Markets System (or such other page as may
replace the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks). LIBOR as determined by Buyer is the
arithmetic mean of such quotations (rounded, if necessary, to the nearest
whole multiple of 0.0625% per annum). If on any LIBOR Determination Date at
least two but fewer than all of the Reference Banks provide quotations, LIBOR
will be determined in accordance with the provisions set forth above on the
basis of the offered quotations of those Reference Banks providing such
quotations. If on the LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR will be: (i) the rate
per annum (rounded, as aforesaid) that the Buyer determines to be either (x)
the arithmetic mean of the offered quotations that leading banks in the City
of New York selected by Buyer are quoting at or about 11:00 A.M. London time
on the relevant LIBOR Determination Date for one month Dollar deposits to the
principal London office of each of the Reference Banks or those of them (being
at least two in number) to which such offered quotations are, in the opinion
of Buyer, being so quoted or (y) in the event that Buyer can determine no such
arithmetic mean, the arithmetic mean of the offered quotations that leading
banks in the City of New York selected by Buyer are quoting at or about
11:00 A.M. London time on such LIBOR Determination Date to leading European
banks for one month Dollar deposits; or (ii) if the banks selected as
aforesaid by Buyer are not quoting as described in clause (i) above, LIBOR for
such Interest Accrual Period will be LIBOR as determined on the previous LIBOR
Determination Date. "Reference Banks" shall mean four major banks in the
London interbank market selected by Buyer.
SECTION 5.10 Computation and Payment of Servicing Fees;
Servicer's Expenses. The Servicing Fee for each Payment Date shall be an
amount equal to the sum of, for each Loan, the product of .50% times (ii) the
average outstanding Principal Balance of such Loan during the related Due
Period, times (iii) a fraction, the denominator of which is 360 and the
numerator of which is the actual number of days in the related Due Period.
In addition, as additional compensation for performing its
obligations hereunder, the Servicer will be entitled to be paid all late
payment charges, to the extent collected from Obligors. The Servicer shall
pay all expenses incurred by it in connection with its servicing activities as
herein provided, including expenses of any repossession or remarketing of
Collateral, payment of the premiums for any insurance policy, real property,
personal property and sales taxes on the Collateral, payment of fees and
disbursements of independent certified public accountants and payment of
expenses incurred in connection with reports to Buyer and shall be entitled to
reimbursement for such expenses out of Collections and other Available Funds,
and to the extent such moneys are insufficient, from a remittance from the
Buyer.
SECTION 5.11 Access to Certain Documentation and Certain
Information Regarding the Loans. The Servicer will provide to the Buyer
access to the documentation in its possession regarding the Loans, such access
being afforded without charge but only during normal business hours at the
offices of the Servicer or its designee or agent, as designated by the
Servicer.
SECTION 5.12 Concerning Renewal Notes. The Servicer may on
behalf of Buyer, and except as otherwise restricted by this Section 5.12,
permit Obligors to execute and deliver Renewal Notes in renewal of all or a
portion of the Principal Balance under a Prior Note. Servicer may not permit
any Renewal Note to become effective more than ten (10) days prior to the
Renewal Date and further, shall not permit any Renewal Note to be executed and
delivered and become effective at any time when Servicer knows that the
conditions set out in Sections 2.02, 3.02 and 3.04 to Buyer's acceptance of
such Renewal Note on the Renewal Date will not be satisfied.
SECTION 5.13 Servicer Representations and Warranties. The
Servicer hereby represents and warrants to, and agrees as of the date of
execution of this Agreement as follows:
(a) The Servicer is duly organized and is validly existing and
in good standing as an Oregon corporation, with corporate power and authority
to own its properties and to transact the business in which it is now engaged,
and the Servicer is duly qualified to do business and is in good standing in
each State of the United States where the nature of its business requires it
to be so qualified.
(b) The execution, delivery and performance of the Servicer's
obligations under this Agreement, and the consummation of the transactions
herein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of the Servicer or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement or other
agreement (other than this Agreement) or instrument to which it or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries is bound or
to which any of its property or assets is subject, nor will such action result
in any violation of the provisions of its Certificate of Incorporation or
By-Laws or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body is required for the consummation of the other
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized, executed and
delivered by the Servicer and this Agreement is the valid and legally binding
obligation of the Servicer, enforceable against the Servicer in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other similar laws of general applicability relating to or
affecting creditors' rights and to general principles of equity.
(d) No event with respect to the Servicer has occurred and is
continuing which would constitute a Servicer Default under Section 8.01 or an
event that with notice or lapse of time or both would become a Servicer
Default under this Agreement.
(e) The Servicer is "eligible" to borrow from NCB pursuant to
the provisions of the Bank Act.
SECTION 5.14 Servicer's Resignation. (a) The Servicer may
resign from the duties and obligations hereby imposed with the consent of the
Buyer.
(b) The Servicer may not assign this Agreement or any of its
rights, powers, duties or obligations hereunder, provided that the Servicer
may assign this Agreement in connection with a consolidation, merger,
conveyance, transfer or lease made in compliance with Section 6.01(i).
(c) Except as provided in Sections 5.14(a), 8.01 and 8.02(b),
the duties and obligations of the Servicer under this Agreement shall continue
until the Termination Date, and shall survive the exercise of any right or
remedy under this Agreement by the Seller or Buyer of any provision of this
Agreement, and notwithstanding the provisions of Sections 5.14(a), 8.01 and
8.02(b), prior to the Termination Date, the Servicer shall continue to serve
as Servicer hereunder until the Buyer accepts the duties of Servicer or a
Successor Servicer shall be appointed and assume the duties of Servicer
hereunder.
[End of Article V]
ARTICLE VI
SELLER'S AND SERVICER'S COVENANTS
SECTION 6.01 Covenants. At all times prior to the later of
(i) the Termination Date or (ii) the date on which all obligations of the
Seller under this Agreement and of the Guarantor under the Guaranty Agreement
have been performed in full, Seller and Servicer agree to do all of the
following unless the Buyer shall otherwise consent in writing.
(a) Preservation of Corporate Existence, Etc. To preserve and
maintain its corporate existence, rights, and privileges in the jurisdiction
of its incorporation and will qualify and remain qualified as a foreign
corporation in each jurisdiction where such qualification is necessary or
advisable in view of the business and operations of Seller or Servicer, as the
case may be, or the ownership of its properties.
(b) Compliance with Laws. To comply in all material respects
with all laws, regulations, rules and orders of Governmental Authorities
applicable to Seller or Servicer, as the case may be, or to its operations or
property, except any thereof whose validity is being contested in good faith
by appropriate proceedings upon stay of execution of the enforcement thereof.
(c) Other Obligations. To pay and discharge before the same
shall become delinquent (after giving effect to all applicable grace periods)
all Debt, taxes and other obligations for which Seller or Servicer, as the
case may be, is liable or to which its income or property is subject and all
claims for labor and materials or supplies which, if unpaid, might become by
law a lien upon the assets of Seller or Servicer, as the case may be, except
any thereof whose validity or amount is being contested in good faith by the
Seller or Servicer, as the case may be, in appropriate proceedings, and except
other Debt, taxes and other obligations which, in the aggregate do not exceed
One Million Dollars ($1,000,000); provided, however, the covenant included in
this Section 6.01(c) shall not extend to any obligation of Seller or Servicer,
as the case may be, identified in Section 6.01(k), 8.01(f) or 9.01(f).
(d) Visitation: Records. At any reasonable time and from time
to time, to permit Buyer to examine and make copies of and abstracts from
Seller's or Servicer's records, as the case may be and books of accounts
relating to the Loans, the related Notes and Related Documents and to visit
the properties of the Seller or Servicer, as the case may be, and to discuss
the affairs, finances and accounts of the Seller or Servicer, as the case may
be, as they relate to the transactions contemplated by this Agreement with any
of its officers. The Seller or Servicer, as the case may be, will keep
adequate records and books of accounts in which complete entries will be made,
in accordance with U.S. GAAP, reflecting all financial transactions of the
Seller or Servicer, as the case may be, as they relate to the transactions
contemplated by this Agreement. Without limiting the foregoing, the Seller or
Servicer, as the case may be, shall establish and maintain manual or computer
records reflecting all receipts or disbursements made or received in respect
of the Loans, the related Notes which records will be maintained separate from
Seller's or Servicer's records, as the case may be relating to Loans, the
related Notes which are not Loans and will be clearly marked with a legend to
the effect that such records pertain to Loans sold to Buyer.
(e) Financial Information. To deliver to Buyer (i) as soon as
available and in any event within one hundred twenty (120) days after the end
of each fiscal year of the Seller or Servicer, as the case may be, the balance
sheet of the Seller or Servicer, as the case may be, as of the end of such
fiscal year and the related statements of income and retained earnings and
statement of changes in the financial position of the Seller or Servicer, as
the case may be, for such year, accompanied by the audit report thereon by
independent certified public accountants (which report shall be prepared in
accordance with U.S. GAAP and shall not be qualified by reason of restricted
or limited examination of any material portion of the Seller's or Servicer's
records, as the case may be and shall contain no disclaimer of opinion or
adverse opinion); (ii) as soon as available and in any event within sixty (60)
days after the end of each fiscal quarter of the Seller or Servicer, as the
case may be, the unaudited balance sheet and statement of income and retained
earnings of the Seller or Servicer, as the case may be, as of the end of such
fiscal quarter (including the fiscal year to the end of such fiscal quarter),
accompanied by a certificate of the chief financial officer of the Seller or
Servicer, as the case may be, that such unaudited balance sheet and statement
of income and retained earnings have been prepared in accordance with U.S.
GAAP and present fairly the financial position and the results of operations
of the Seller or Servicer, as the case may be, as of the end of and for such
fiscal quarter and setting forth calculations demonstrating that at the end of
such quarter the Seller was in compliance with Section 6.01(j); (iii) within
one hundred twenty (120) days after the close of each fiscal year of the
Seller or Servicer, as the case may be, a certificate signed by the chief
financial officer of the Seller, stating that as of the close of such fiscal
year no Termination Event or other event which, with notice or lapse of time
or both would have become a Termination Event had occurred and was continuing;
(iv) within one hundred twenty (120) days after the end of each fiscal year of
Seller or Servicer, as the case may be, a report setting forth information
relating to Seller's or Servicer, as the case may be portfolio, s the case may
be of loans originated or acquired in the ordinary course of its business and
owned by Seller or Servicer, as the case may be, during the related fiscal
year, including loan balances by types of loans, numbers of loans by types of
loans, interest rates of loans by type and loss and delinquency experience;
and (v) such other statements, reports and other information as Buyer may
reasonably request concerning the financial condition and the servicing and
collection operations of the Seller or Servicer, as the case may be.
(f) Notification. Promptly after learning thereof, to notify
Buyer of (i) the details of any action, proceeding, investigation or claim
against or affecting the Seller or Servicer, as the case may be instituted
before any court, arbitrator or Governmental Authority or, to the Seller's or
Servicer's knowledge, as the case may be, threatened to be instituted, which,
after taking into account the likelihood of success, might reasonably result
in a judgment or order against the Seller or Servicer, as the case may be (in
excess of insurance coverage and when combined with all other pending or
threatened claims), of more than One Million Dollars ($1,000,000); (ii) if the
Seller or Servicer, as the case may be, or any member of the Controlled Group
gives or is required to give notice to the PBGC of any "reportable event" (as
defined in subsections (b)(1)(2)(5)(6) of Section 403 of ERISA) with respect
to any Plan (or the Internal Revenue Service gives notice to the PBGC of any
"Reportable Event" as defined in subsection (c)(2) of Section 4043 of ERISA
and the Seller or Servicer, as the case may be, attains knowledge thereof)
which might constitute grounds for termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (iii) any
representation or warranty set forth in Section 4.02 or 4.03 (with respect to
Seller and Loans) and Section 5.12 (with respect to Servicer) which proves to
have been incorrect in any material respect when made; (iv) Seller's or
Servicer's material breach of its obligations under this Agreement; (v) any
Obligor Default (other than a payment default); (vi) any Loan that has become
a Defaulted Loan (other than by a payment default); (vii) any circumstance or
event of which Seller has actual knowledge which materially impairs or might
reasonably be expected to impair an Obligor's ability to repay or perform its
obligations under, the related Loan; or (viii) the occurrence of any Servicer
Default or Termination Event or other event which, with notice or lapse of
time or both, would constitute a Servicer Default or Termination Event.
(g) Additional Payments; Additional Acts. From time to time, to
(i) pay or reimburse the Buyer on request for all taxes imposed on this
Agreement or the sale of any Loans hereunder (other than taxes based on
Buyer's net income, items of tax preference, or gross receipts) and for all
expenses, including reasonable legal fees, actually incurred by Buyer in
connection with the preparation or modification of this Agreement, or the sale
of any Loans, related Notes and Related Documents or the security interest in
the related Collateral hereunder or the enforcement by judicial proceedings or
otherwise of any rights of the Buyer hereunder; and (ii) obtain and promptly
furnish to Buyer evidence of all such Government Approvals as may be required
to enable the Seller or Servicer, as the case may be to comply with its
obligations under this Agreement.
(h) Liens. Not to create, assume or suffer to exist any lien,
security interest or other encumbrance except (i) liens on the Seller's or
Servicer's properties securing mortgage indebtedness relating to such
properties, as the case may be, and any extensions, refinancing or renewals
thereof in an amount not exceeding the amount of such indebtedness prior to
such extension, refinancing or renewal; (ii) capital lease obligations; (iii)
liens to secure indebtedness for the deferred price of property acquired after
the date hereof, but only if such liens are limited to such property and its
proceeds; (iv) liens imposed by law (such as mechanic's liens) incurred in
good faith in the ordinary course of business which are not delinquent or
which remain payable without penalty or the validity or amount of which are
being contested in good faith by appropriate proceeding upon stay of execution
of the enforcement thereof; or (v) deposits or pledges under workmen's
compensation, unemployment insurance, social security or similar laws or made
to secure the performance of bids, tenders, contracts (except for the
repayment of borrowed money) or leases, or to secure statutory obligations or
surety or appeal bonds or to secure indemnity, performance or other similar
bonds given in the ordinary course of business.
(i) Liquidation, Merger, Sale of Assets, Etc. To not liquidate,
dissolve or enter into any merger, consolidation, joint venture, partnership
or other combination nor sell, lease, dispose of such portion of its business
or assets (excepting sales of goods in the ordinary course of business and
excepting sales of the Loans to the Buyer) as constitutes a substantial
portion thereof provided, however, so long as no Servicer Default or
Termination Event or event which with the passage of time or the giving of
notice or both would constitute a Servicer Default or Termination Event shall
have occurred and be continuing or will occur as a result of such merger or
consolidation, Seller or Servicer as the case may be, may merge or consolidate
with any Person or sell all or substantially all of its business or assets to
any other Person so long as (A)(i) the Seller or Servicer, as the case may be,
shall be the surviving or continuing corporation or (a), if the Seller or
Servicer, as the case may be, shall not be the surviving or continuing
corporation or shall sell all or substantially all of its assets to a Person
such surviving, continuing or purchasing Person shall be incorporated under
the laws of the United States or any jurisdiction thereof, shall assume in
writing all obligations of the Seller or Servicer, as the case may be, under
this Agreement, shall be eligible to borrow from NCB pursuant to the
provisions of the Bank Act and shall have a Consolidated Net Tangible Assets
not less than the Seller or Servicer, as the case may be, prior to the merger
or consolidation, and (B) at the time of such consolidation, merger or sale
and after giving effect thereto no Servicer Default or Termination Event shall
have occurred and be continuing.
(j) Transactions with Affiliates. To not directly or indirectly
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property) with any of Seller's or
Servicer's Affiliates as the case may be, on terms that are less favorable to
Seller or Servicer, as the case may be, than those which might be obtained at
the time from Persons who are not Affiliates.
(k) ERISA Compliance. To not and not allow any member of its
Controlled Groups or any Plan of any of them to: (i) engage in any "prohibited
transaction" as such term is defined in Section 4.06 or Section 2003(a) of
ERISA; (ii) incur any "accumulated funding deficiencies" (as such term is
defined in Section 3.02 of ERISA) whether or not waived; (iii) terminate any
Pension Plan in a manner which could result in the imposition of a lien on any
property of the Seller or Servicer, as the case may be, or any member of their
respective Controlled Groups pursuant to Section 4068 of ERISA; or (iv)
violate state or federal securities laws applicable to any Plan.
(l) No Name Change, Etc. To not change its name, identity or
corporate structure in any manner which could make any financing or
continuation statement filed hereunder seriously misleading within the meaning
of Section 9-402(7) of any applicable enactment of the Uniform Commercial Code
without giving Buyer at last sixty (60) days prior written notice thereof.
(m) Relocation of Offices. To give Buyer at least sixty (60)
days prior written notice of any relocation of its chief executive offices or
the offices where records concerning the Loans and related Property are kept.
(n) Limitation on Transfers, Etc. To not transfer or attempt to
transfer in any manner whatsoever to any Person other than the Buyer pursuant
to the terms of this Agreement, and except in favor of the Buyer hereunder
shall not create, cause to be created or permit any lien, pledge, charge,
security interest, ownership interest, participation interest or any other
interest of any nature whatever in respect of the Loans and related Property.
(o) Bank Act Eligibility. To remain "eligible" to borrow from
NCB pursuant to the provisions of the Bank Act.
(p) No Changes. To make no change in the Credit and Collection
Policy, which change would impair the collectibility of any material amount of
the Loans; make no material change in the Credit and Collection Policy or in
its current payment terms with respect to Loans without prior written consent
of the Buyer, or change its name, identity or corporate structure in any
manner which would make any financing statement or continuation statement
filed in connection with this Agreement or the transactions contemplated
hereby seriously misleading within the meaning of Section 9-402(7) of the UCC
of any applicable jurisdiction or other applicable Laws unless it shall have
given the Buyer at least 45 days' prior written notice thereof and unless
prior thereto it shall have caused such financing statement or continuation
statement to be amended or a new financing statement to be filed such that
such financing statement or continuation statement would not be seriously
misleading; to make no material change in the terms of the Notes and Related
Documents relating to the Loans without the prior written notice to and
consent of the Buyer.
(q) Security Interest. To transfer to Buyer, at Buyer's
request, a security interest in all or any specified portion of that
Collateral securing any Loan which was not transferred to Buyer on the
applicable Closing Date (transferring to the Buyer the same interest as the
Seller had and disclosed to the Buyer on the applicable Closing Date) and to
provide evidence reasonably satisfactory to Buyer that all actions as are
necessary or appropriate to perfect Buyer's security interest in such
Collateral have been taken.
SECTION 6.02 Special Covenant of Seller. At all times prior
to the later of (i) the Termination Date or (ii) the date on which all
obligations of the Seller under this Agreement and Guarantor under the
Guaranty Agreement have been performed in full, Seller agrees not to (a) make
or own (including a participation in) any loan to any Obligor or member of its
Obligor Group unless such Obligor's or member's obligation, as the case may
be, to repay such loan is subordinate to such Obligor's or member's
obligation, as the case may be, to repay the Loan or Loans made to such
Obligor and sold to the Buyer under this Agreement and (b) own a corporation
or other business entity that makes loans to an Obligor or member of its
Obligor Group if such Obligor's or member's repayment obligation on such loan
is senior to its obligation to repay the Loan or Loans made to Obligor or its
member and sold to the Buyer hereunder.
[End of Article VI]
ARTICLE VII
SELLER OBLIGATIONS AND REPURCHASE OPTIONS
SECTION 7.01 Purchase of Interest Rate Protection. Seller
hereby agrees to provide interest rate protection for Buyer, in the form of a
swap agreement, hedge, cap, guaranteed rate contract or other similar device
or agreement (each, an "Interest Rate Agreement"), or any combination of the
foregoing, or any other plan acceptable to Buyer (an "Interest Rate Protection
Plan"), if, for any three (3) consecutive months during the term of this
Agreement, the Prime Rate in effect on the LIBOR Determination Date for each
such month is equal to or less than the sum of the LIBOR on such Date and 150
basis points. An Interest Rate Agreement, if any, must satisfy the following
requirements: (i) have a term of 36 months (or such fewer number of months as
remain in the term of this Agreement); (ii) be provided by a party or parties
who is or are either rated "A" or higher by a Rating Agency or acceptable to
Buyer; (iii) be accompanied by an opinion of counsel to provider to the effect
that the Interest Rate Agreement is a legal, valid and binding Agreement of
provider, enforceable in accordance with its terms; (iv) provide for an
interest payment during each Interest Accrual Period at least equal to the
related LIBOR plus 150 basis points; and (v) be delivered by the Servicer
Payment Date in the month immediately following the month in which the
requirement of this Section 7.01 takes effect. An Interest Rate Protection
Plan must be coterminous with this Agreement.
SECTION 7.02 Optional Repurchase of Defaulted Loans and after
Obligor Default. In addition to the other repurchase obligations contained
herein, Seller will have the option to repurchase any Loan sold by Seller to
Buyer if (i) such Loan is a Defaulted Loan or (ii) an Obligor Default has
occurred and has then been continuing for at least thirty (30) days or (iii)
Buyer has received notice of any adverse event as described in Section 5.06 or
Section 6.01(f) hereof. Such Loan shall be repurchased by Seller from Buyer
by the last day of the Due Period during which Seller receives notice of any
such Defaulted Loan or the occurrence and continuation of an Obligor Default
or notice of adverse event, as the case may be. Such repurchase shall be
accomplished on the same terms as set forth in Section 2.01(e) and at the
Repurchase Amount.
SECTION 7.03 Minimal Balances. On any Payment Date, Seller
may elect to repurchase all Loans for their aggregate Principal Balance, if as
of such Payment Date, the aggregate Principal Balance is less than
five percent (5%) of the Maximum Purchase Amount. If Seller elects to
repurchase the Loans pursuant to this Section 7.03, Seller shall provide Buyer
with thirty (30) days prior written notice. The Repurchase Amount shall be
paid by Seller to Buyer in immediately available funds prior to 12:00 noon,
Washington, D.C. time. Immediately upon the payment of the required
Repurchase Amount, all right, title and interest in the Loans being
repurchased shall pass to Seller and such Loans shall cease to be "Loans" for
all purposes of this Agreement. Any resale of a Loan and related Property
pursuant to the terms of this Section 7.03 shall constitute the simultaneous
resale by Buyer and repurchase by Seller of all Loans and related Property.
Any resale of a Loan and related Property pursuant to this Section 7.03 shall
be without recourse or warranty of any kind except that Buyer shall be deemed
to have warranted that such Loans and related Property are free and clear of
all liens or claims resulting from or arising out of its acts or omissions
(other than acts of Buyer resulting from Seller's failure to perform as
required by this Agreement or Servicer's failure to perform as required by
this Agreement) or claims of Buyer's creditors.
SECTION 7.04 Optional Repurchase of Special Loans. United
Resources, Inc., as Seller and Servicer, United Grocers, Inc., as Servicer and
NCB entered into a Loan Purchase and Servicing Agreement dated as of May 13,
1994 and amended as of July 15, 1994 and September 28, 1995 (as amended and as
the same may be amended from time to time, the "Existing Loan Purchase and
Servicing Agreement") which provides for United Resources, Inc. to sell and
NCB to purchase loans satisfying the loan eligibility requirements of the
Existing Loan Purchase and Servicing Agreement, including certain Loans
initially expected to be sold and purchased pursuant to this Agreement. In
the event that any of the Loans relating to the Rays'/C&K Markets purchased by
the Buyer pursuant to this Agreement satisfy the loan eligibility requirements
of the Existing Loan Purchase and Servicing Agreement, Seller shall have the
right to repurchase any such Loans having aggregate Principal Balance of not
greater than $2,000,000 at the time and Repurchase Amount described in
Section 7.02. Pursuant to the terms of the Existing Loan Purchase and
Servicing Agreement, Seller will have the right to sell and Buyer will have
the obligation to purchase the Loans relating to the Rays'/C&K Markets on the
terms specified in such Agreement.
[End of Article VII]
ARTICLE VIII
SERVICER DEFAULT
SECTION 8.01 Servicer Defaults. Any of the following acts or
occurrences shall constitute "Servicer Defaults" under this Agreement.
(a) Payment Default. Any failure by the Servicer to make any
required payment, transfer, withdrawal or deposit or to give instructions or
notice to the Buyer or Seller to make any required payment, transfer,
withdrawal or deposit on or before the date occurring five Business Days after
the date such payment, transfer, deposit or withdrawal or such notice or
instruction is required to be made or given, as the case may be, under the
terms of this Agreement;
(b) Performance Default. Failure on the part of the Servicer
duly to observe or perform in any material respect any of the other covenants
or agreements, including the providing of accurate and timely reports as
required in Article V hereof, to be performed under this Agreement which
failure continues unremedied for a period of 30 days after the date on which
written notice of such failure requiring the same to be remedied, shall have
been given to the Servicer by the Buyer;
(c) Involuntary Bankruptcy, Etc. The entry of a decree or order
for relief by a court having jurisdiction in respect of the Servicer or any
Affiliate or Subsidiary thereof in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Servicer or any Affiliate or Subsidiary thereof or of
any substantial part of the property of the Servicer or any Affiliate or
Subsidiary thereof, or ordering the winding up or liquidation of the affairs
of the Servicer or any Affiliate or Subsidiary thereof and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(d) Voluntary Bankruptcy, Etc. The commencement by the
Servicer or any Affiliate or Subsidiary thereof of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other present
or future federal or state bankruptcy, insolvency or similar law, or the
consent by the Servicer or any Affiliate or Subsidiary thereof, as the case
may be, to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Servicer or any Affiliate or Subsidiary thereof or of any substantial part of
the property of the Servicer or any Affiliate or Subsidiary thereof or the
making by the Servicer or any Affiliate or Subsidiary thereof of an assignment
for the benefit of creditors or the failure by the Servicer or any Affiliate
or Subsidiary thereof, as the case may be, generally to pay its debts as such
debts become due or the taking of corporate action by the Servicer or any
Affiliate or Subsidiary thereof, as the case may be, in furtherance of any of
the foregoing; or
(e) Insolvency, Etc. Servicer or any Affiliate or Subsidiary
thereof shall (i) make a general assignment for the benefit of its creditors
or (ii) consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, or custodian of all or a substantial part of
the property of Servicer or any Affiliate or Subsidiary thereof, or (iii)
admit its insolvency or liability to pay its debts generally as they become
due, or (iv) fail generally to pay its debts as they become due, or (v) take
any action (or suffer any action to be taken by its directors or shareholders)
looking to the dissolution or liquidation of Servicer or any Affiliate or
Subsidiary thereof; or
(f) ERISA. Servicer or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of One Million
Dollars ($1,000,000) which it shall have become liable to pay to the PBGC or
to a Plan under Section 515 of ERISA or Title IV of ERISA; or notice of intent
to terminate a Plan or Plans (other than a multi-employer plan, as defined in
Section 4001(3) or ERISA), having aggregate Unfunded Vested Liabilities in
excess of Five Million Dollars ($5,000,000) shall be filed under Title IV of
ERISA by the Servicer, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate any such Plan or Plans;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, the Buyer may, by notice given to the Servicer,
terminate all of the rights and powers of the Servicer under this Agreement,
including without limitation all rights of the Servicer to receive the
Servicing Fee. Upon the giving of such notice, all rights and powers of the
Servicer under this Agreement shall vest in the Buyer, and the Buyer is hereby
authorized and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Obligors deemed necessary or advisable by the Buyer), and to do
or accomplish all other acts or things necessary or appropriate to effect such
vesting, and the Servicer agrees to cooperate with the Buyer in effecting the
termination of the Servicer's rights and responsibilities hereunder and shall
promptly provide to the successor servicer appointed under Section 8.02 (the
"Successor Servicer") all documents and records (electronic and otherwise)
reasonably requested to enable it to assume the servicing functions hereunder.
SECTION 8.02 Buyer to Act; Appointment of Successor. On and
after the time the Servicer receives a notice of termination pursuant to
Section 8.01 or in the event of a resignation of the Servicer pursuant to
Section 5.11, the Buyer shall be the successor in all respects to the Servicer
in its capacity as Servicer under this Agreement and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms
and provisions hereof, however, that the Buyer shall have no obligation
whatsoever in respect of any liability incurred by the Servicer at or prior to
the time of receipt by the Servicer of said notice. As compensation therefor
the Buyer shall be entitled to receive any and all funds, including the
Servicing Fee, which the Servicer would have been entitled to receive if the
Servicer had continued to act hereunder. However, if the Buyer is unable or
unwilling to act as Successor Servicer hereunder, the Buyer may appoint any
Person with a net worth of at least $10,000,000 and whose regular business
includes the servicing of loans similar to the Loans as the Successor Servicer
hereunder in the assumption of all or part of the servicing functions
hereunder. In connection with such appointment and assumption, the Buyer may
make such arrangements for the compensation of such Successor Servicer from
payments on the Loans and related Property as the Buyer and such Successor
Servicer shall agree; provided, that no such compensation shall be in excess
of that permitted the Servicer hereunder or such amount as is commercially
reasonable at the time in question. The Buyer and such Successor Servicer
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession.
SECTION 8.03 Effects of Servicing Transfer. (a) Upon any
termination of the rights and powers of the Servicer pursuant to either
Section 5.14 or Section 8.01 and the Buyer's succeeding to the rights and
obligations of the Servicer hereunder, the Buyer can unilaterally terminate
this Agreement.
(b) Upon any termination of the rights and powers of the
Servicer pursuant to either Section 5.14 or Section 8.01 and the vesting in
either the Buyer or a Successor Servicer of the rights and obligations of the
Servicer as described in Section 8.01 and 8.02, the Servicer shall have no
additional obligations or liabilities for acts or omissions of the Successor
Servicer or otherwise relating to its performance of its obligations under
this Agreement after the date of such termination.
(c) Upon the occurrence and continuation of any Servicer
Default, the Buyer shall not be required to pay the Servicer the Servicing
Fee. Further, upon the occurrence and continuation of a Servicer Default
(other than a Servicer Default under Section 8.01(b)), the Buyer shall not be
required to pay the Guarantor the Guaranty Fee.
[End of Article VIII]
ARTICLE IX
TERMINATION EVENTS
SECTION 9.01 Termination Events. The occurrence of any of
the following events shall constitute a "Termination Event" hereunder.
(a) Breach of Covenant. Seller shall fail to perform or observe
any covenant, obligation or term of Articles VI or X or of Section 2.01(e),
2.02, 3.02, 4.05 or 7.01 of this Agreement and, except in the case of a breach
of Section 6.01(c) or Section 6.01(f)(iii), (iv) or (v), such failure shall
remain unremedied for thirty (30) days after written notice thereof shall have
been given to Seller by the Buyer; or
(b) Guarantor Defaults. Guarantor shall fail to perform or
observe any obligation, covenant or term of the Guaranty Agreement and such
failure shall remain unremedied for thirty (30) days after written notice
thereof shall have been given to Guarantor by Buyer; or
(c) Voluntary Bankruptcy, Etc. Either Seller, Guarantor or any
Subsidiary or Affiliate of Seller or Guarantor shall: (1) file a petition
seeking relief for itself under Title 11 of the United States Code, as now
constituted or hereafter amended, or file an answer consenting to, admitting
the material allegations of or otherwise not controverting, or fail timely to
controvert a petition filed against it seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended; or (2) file such
petition or answer with respect to relief under the provisions of any other
now existing or future applicable bankruptcy, insolvency, or other similar law
of the United States of America or any State thereof or of any other country
or jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or an arrangement, composition, extension or adjustment with
creditors; or
(d) Involuntary Bankruptcy, Etc. An order for relief shall be
entered against either Seller, Guarantor or any Subsidiary or Affiliate of
Seller or Guarantor under Title 11 of the United States Code, as now
constituted or hereafter amended, which order is not stayed; or upon the entry
of an order, judgment or decree by operation of law or by a court having
jurisdiction in the premises which is not stayed adjudging it a bankrupt or
insolvent under, or ordering relief against it under, or approving as properly
filed a petition seeking relief against it under the provisions of any other
now existing or future applicable bankruptcy, insolvency or other similar law
of the United States of America or any State thereof or of any other country
or jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or any arrangement, composition, extension or adjustment with
creditors, or appointing a receiver, liquidator, assignee, sequestrator,
trustee or custodian of the Seller, Guarantor or any Affiliate or Subsidiary
of Seller or Guarantor, or of any substantial part of the property of Seller,
Guarantor, or any Affiliate or Subsidiary, as the case may be, or ordering the
reorganization, winding-up or liquidation of its affairs, or upon the
expiration of one hundred twenty (120) days after the filing of any
involuntary petition against it seeking any of the relief specified in
Section 9.01(c) or this Section 9.01(d) without the petition being dismissed
prior to that time; or
(e) Insolvency, Etc. Either Seller, Guarantor or any Affiliate
or Subsidiary of the Seller or Guarantor shall (i) make a general assignment
for the benefit of its creditors or (ii) consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, or custodian
of all or a substantial part of the property of Seller, Guarantor, or any
Affiliate or Subsidiary, as the case may be, or (iii) admit its insolvency or
liability to pay its debts generally as they become due, or (iv) fail
generally to pay its debts as they become due, or (v) take any action (or
suffer any action to be taken by its directors or shareholders) looking to the
dissolution or liquidation of Seller, Guarantor, or any Affiliate or
Subsidiary, as the case may be; or
(f) ERISA. Either Seller or Guarantor or any member of the
Controlled Group shall fail to pay when due an amount amounts aggregating in
excess of One Million Dollars ($1,000,000) which it shall have become liable
to pay to the PBGC or to a Plan under Section 515 of ERISA or Title IV of
ERISA; or notice of intent to terminate a Plan or Plans (other than a
multi-employer plan, as defined in Section 4001(3) or ERISA), having aggregate
Unfunded Vested Liabilities in excess of Five Million Dollars ($5,000,000)
shall be filed under Title IV of ERISA by Seller or Guarantor, as the case may
be, any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate any such Plan or Plans.
(g) Servicer Default. A Servicer Default shall occur and such
Servicer Default would materially and adversely affect the interest of the
Buyer.
(h) Termination Event under Existing Loan Purchase Agreement. A
Termination Event under the Existing Loan Purchase Agreement shall have
occurred and be continuing.
SECTION 9.02 Consequences of Termination Event. If any
Termination Event shall occur and be continuing, then in any such case and at
any time thereafter so long as any such Termination Event shall be continuing,
the Buyer may, at its option, immediately terminate the Buyer's commitment to
accept Renewal Notes and to make any Incremental Purchases hereunder.
In addition, upon the occurrence of any Termination Event
specified in (c), (d) or (e) of Section 9.01 or a Termination Event arising
out of Servicer's or Guarantor's insolvency or involvement in a voluntary or
involuntary bankruptcy proceeding, subject to the provisions of Section 10.13,
this Agreement shall automatically and immediately terminate.
Thereafter, and before exercising any other remedies provided
herein or by applicable law, Buyer may, at its option, require that Seller
repurchase all Loans and related Property Notes for the Repurchase Amount
within two 2 Business Days of receipt of notice from the Buyer of its election
to cause the repurchase of all Loans. In addition, Buyer may pursue all other
rights and remedies available herein and by applicable law including, without
limitation, its rights to pursue collection from the Seller in an amount equal
to the applicable Repurchase Amount.
SECTION 9.03 Remedies of a Secured Party. Following the
occurrence of a Termination Event, the Buyer shall have all remedies provided
by law and without limiting the generality of the foregoing shall have the
following remedies: (a) the remedies of a secured party under the Uniform
Commercial Code; (b) the right to make notification and pursue collection or,
at Buyer's option, to sell or cause Servicer, as agent for the Buyer, to sell
all or any part of the Loans and related Property; (c) the right to exercise
all of owner's or secured party's rights under the Loans and related Property;
and (d) to the extent that notice shall be required by law to be given, Seller
agrees that a period of twenty (20) days from the time the notice is sent
shall be a reasonable period of notification of a sale or other, disposition
of the Loans and related Property.
[End of Article IX]
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Further Assurances. Each party hereto agrees to
execute and deliver to the other party and to perform all such other acts as
the other party may reasonably request to carry out the transactions
contemplated by this Agreement. Without limiting the foregoing, Buyer agrees
to endorse without recourse the Note related to any Loan being resold to
Seller pursuant to Articles II, IV or VII, and to execute assignments and
related Uniform Commercial Code financing statements to evidence the
assignment of the Related Documents to Seller.
SECTION 10.02 Indemnities. (a) Seller will defend and
hereby indemnify Buyer and its successors, assigns, servants and agents
(hereinafter "Indemnitees") against and agree to protect, save and keep
harmless and make whole each thereof, from any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs
(including any net increase in the tax liability of an Indemnitee resulting
from its receipt of indemnity payments made under this Section 10.02),
expenses and disbursements, including reasonable attorneys' fees, of
whatsoever kind and nature imposed on, incurred by or asserted against any
Indemnitee in any way relating to or arising out of (i) this Agreement or any
of the documents entered into in connection herewith; (ii) the Buyer's
interest in the Loans or related Property purchased or accepted hereunder or
the enforcement of any claims thereunder; (iii) any claim made by any Obligor,
or any other party, related to the Loans or related Property purchased or
accepted hereunder, or the administration of the transactions evidenced by
such Loans and related Property or related to any other transactions between
the Obligors or their affiliates and the Seller or its affiliates; or (iv) any
environmental claim or liability relating to any real property securing any
Loans.
(b) The foregoing indemnities with regard to any particular
Indemnitee shall not extend to any liability, obligation, loss, damage,
penalty, claim, action, suit, cost, expense or disbursement (i) that results
from the willful misconduct or gross negligence of such Indemnitee or from any
breach of any representation or warranty made by such Indemnitee herein; (ii)
that constitutes any tax based on any Indemnitee's net income, items of tax
preference or gross receipts (except with respect to indemnity payments
hereunder); or (iii) that consists of the failure of any Obligor to pay its
obligations under the Notes as they become due unless such failure results
from a claim of such Obligor against Seller, Guarantor, Servicer or any
Subsidiary or Affiliate of any of them, or Buyer otherwise indemnified against
hereunder. Any indemnity payments required under this Section 10.02 shall be
paid within thirty (30) days following notice thereof from the Indemnitee to
Seller (which notice shall describe in reasonable detail the matter with
respect to which indemnification is required and shall set forth the
computation used in determining the amount of the indemnity payment). All of
the rights and privileges of each Indemnitee under this Section 10.02, and the
rights, privileges and obligations of Seller hereunder, shall survive the
expiration or other termination of this Agreement.
SECTION 10.03 No Waiver: Remedies Cumulative. No failure by
the Seller or Buyer to exercise, and no delay in exercising, any right, power
or remedy under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or remedy under this
Agreement preclude any other or further exercise thereof or the exercise of
any other right, power, or remedy. The rights and remedies provided herein
are cumulative and not exclusive of any right or remedy provided by law.
SECTION 10.04 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 10.05 Consent to Jurisdiction: Waiver of Immunities.
The Buyer and Seller hereby irrevocably submit to the jurisdiction of any
state or federal court sitting in the District of Columbia or the State of
Oregon in any action or proceeding brought to enforce or otherwise arising out
of or relating to this Agreement and irrevocably waive to the fullest extent
permitted by law any objection which they may now or hereafter have to the
laying of venue in any such action or proceeding in any such forum, and hereby
further irrevocably waive any claim that any such forum is an inconvenient
forum. The parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law.
SECTION 10.06 Notices. All notices and other communications
provided for in this Agreement shall be in writing or (unless otherwise
specified) by telex, telegram or cable and shall be sent for next Business Day
delivery to each party at the address set forth under its name on the
signature page hereof, or at such other address as shall be designated by such
party in a written notice to each other party. Except as otherwise specified,
all such notices and communications if duly given or made shall be effective
upon receipt.
SECTION 10.07 Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective Successors
and assigns. Notwithstanding the foregoing, no party may assign or otherwise
transfer all or any part of its rights or obligations hereunder without the
prior written consent of the other parties, and any such assignment or
transfer purported to be made without such consent shall be ineffective. In
addition, Buyer may not sell the Loans and related Property or participations
therein without the consent of the Seller, except that by executing this Loan
Purchase and Servicing Agreement, Seller shall be deemed to have consented to
the sale and assignment of the Loans and related Property to NCB Retail
Finance Corporation, a special purpose corporation established by Buyer.
SECTION 10.08 Capital Markets Funding. Seller hereby agrees
to cooperate with Buyer in making such modifications to this Agreement and the
Related Documents, in executing such other documents and certificates, in
causing to be prepared and delivered such opinions, certificates, financial
reports and letters, and in taking such other actions, including changing
accounting firms, as are reasonably necessary to achieve capital markets
funding of the Loans and the related Property or to improve the execution of
such funding.
SECTION 10.09 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
SECTION 10.10 Attorney's Fees. In the event it is necessary
for any party hereto or its Successors or assigns to institute suit in
connection with this Agreement or the breach thereof, the prevailing party in
such suit shall be entitled to reimbursement for its reasonable costs,
expenses and attorney's fees incurred including fees incurred on any appeal.
SECTION 10.11 Setoff. In addition to any rights now or
hereafter granted under applicable law, upon the occurrence of any Termination
Event or Servicer Default, Buyer is hereby authorized by Seller at any time,
without notice to Seller, to set off and to appropriate and to apply to the
amounts then owed by Seller or Servicer hereunder or by Guarantor under the
Guaranty Agreement, as the case may be, to Buyer any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other indebtedness at any time held or owing by Buyer to
Seller.
SECTION 10.12 Limitation on Third Party Beneficiaries. No
provision, warranty, representation, or agreement herein, whether express or
implied, is intended to or shall be construed as conferring upon any Person
not a party hereto (including, without limitation, any Obligor) any rights or
remedies whatsoever.
SECTION 10.13 Term of Agreement. This Agreement shall
terminate upon the earlier to occur of (i) the reduction of the aggregate
Principal Balance of the Loans (including Liquidated Loans as to which there
remain unpaid Liquidation Losses) to zero or (ii) the date on which this
Agreement is automatically terminated following the occurrence of any of the
specified Termination Events pursuant to Section 9.02; provided, however, that
(a) the rights accrued to the Buyer prior to such termination, (b) the
obligations of the Guarantor under the Guaranty Agreement and (c) the
indemnification provisions set forth in Section 10.02 shall be continuing and
shall survive any termination of this Agreement.
SECTION 10.14 Entire Agreement; Amendment. This Agreement
comprises the entire agreement of the parties and may not be amended or
modified except by written agreement of the parties hereto. No provision of
this Agreement may be waived except in writing and then only in the specific
instance and for the specific purpose for which given.
SECTION 10.15 Headings. The headings of the various
provisions of this Agreement are for convenience of reference only, do not
constitute a part hereof, and shall not affect the meaning or construction of
any provision hereof.
SECTION 10.16 Counterparts. This Agreement may be executed in
any number of identical counterparts, any set of which signed by all parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
[End of Article X]
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Purchase and Servicing Agreement (Holdback Program) to be executed by their
respective officers or agents thereunto duly authorized as of the date first
above written.
UNITED RESOURCES, INC., as Seller
and Servicer
By /s/ Xxxxxx X. Xxxxxxx
Its President
By /s/ Xxxx X. Xxxxx
Its Xxxx X. Xxxxx, V. P.
Notice Address:
0000 X.X. Xxxx Xxxx
Xxxxxxxx, Xxxxxx 00000
Attention: President
NATIONAL CONSUMER COOPERATIVE BANK,
as Buyer
By
Its
By
Its
Notice Address:
0000 Xxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
ACKNOWLEDGEMENTS:
UNITED GROCERS, INC.,
as Guarantor
By /s/ Xxxx X. Xxxxx
Its Xxxx X. Xxxxx, President
By /s/ Xxxxxx X. Xxxxxxx
Its Asst. Secretary
Execution Copy
GUARANTY AGREEMENT
(Holdback Program)
dated as of
September 28, 1995
between
UNITED GROCERS, INC.
as Guarantor
and
NATIONAL CONSUMER COOPERATIVE BANK
as Buyer
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GUARANTOR AND GUARANTY
Section 2.01 Guarantor's Guaranty and Repurchase
Guaranty . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02 Computation and Payment of Guaranty
Fees . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
GUARANTOR REPRESENTATIONS AND WARRANTIES
Section 3.01 Guarantor Representations and
Warranties . . . . . . . . . . . . . . . . . . . . 3
ARTICLE IV
COVENANTS OF GUARANTOR
ARTICLE V
GUARANTOR DEFAULTS
Section 5.01 Guarantor Defaults . . . . . . . . . . . . . . . . 10
ARTICLE VI
MISCELLANEOUS
Section 6.01 Further Assurances . . . . . . . . . . . . . . . . 12
Section 6.02 Indemnities. . . . . . . . . . . . . . . . . . . . 12
Section 6.03 No Waiver: Remedies Cumulative . . . . . . . . . . 13
Section 6.04 Governing Law. . . . . . . . . . . . . . . . . . . 13
Section 6.05 Consent to Jurisdiction: Waiver of
Immunities . . . . . . . . . . . . . . . . . . . . 13
Section 6.06 Notices. . . . . . . . . . . . . . . . . . . . . . 13
Section 6.07 Assignment . . . . . . . . . . . . . . . . . . . . 13
Section 6.08 Capital Markets Funding. . . . . . . . . . . . . . 14
Section 6.09 Severability . . . . . . . . . . . . . . . . . . . 14
Section 6.10 Attorney's Fees. . . . . . . . . . . . . . . . . . 14
Section 6.11 Setoff . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.12 Limitation on Third Party Beneficiaries. . . . . . 14
Section 6.13 Continuing Agreement . . . . . . . . . . . . . . . 15
Section 6.14 Entire Agreement: Amendment. . . . . . . . . . . . 15
Section 6.15 Headings . . . . . . . . . . . . . . . . . . . . . .15
Section 6.16 Counterparts . . . . . . . . . . . . . . . . . . . .15
Exhibit A - Information Regarding Litigation, Etc.
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (Holdback Program) is executed as of
September 28, 1995 between UNITED GROCERS, INC., an Oregon corporation, as
guarantor (the "Guarantor") and NATIONAL CONSUMER COOPERATIVE BANK, a
financial institution organized under the laws of the United States ("Buyer").
PREAMBLES
WHEREAS, United Resources, Inc., as Seller and Servicer ("United
Resources"), and the Buyer are entering into as of the date hereof a certain
Loan Purchase and Servicing Agreement (Holdback Program) (the "Holdback Loan
Purchase Agreement") which provides for United Resources to sell and Buyer to
purchase loans (the "Loans" or "Holdback Loans") satisfying the loan
eligibility and other requirements of the Holdback Loan Purchase Agreement;
and
WHEREAS, United Resources, as Seller and Servicer, the Guarantor
and the Buyer entered into a certain Loan Purchase and Servicing Agreement
dated as of May 13, 1994 and amended as of July 15, 1994 and as of
September 28, 1995 (as amended and as the same may be from time to time
amended, the "Existing Loan Purchase Agreement") which provides for United
Resources to sell and Buyer to purchase loans ("Existing Agreement Loans")
satisfying the loan eligibility and other requirements of the Existing Loan
Purchase Agreement; and
WHEREAS, in order to induce the Buyer to enter into the Holdback
Loan Purchase Agreement and the Existing Loan Purchase Agreement, the
Guarantor agreed to provide certain guaranties with respect to the Loans and
the Seller's obligations under the Holdback Loan Purchase Agreement and the
Existing Loan Purchase Agreement; and
WHEREAS, the guaranty provisions relating to the Existing Loan
Purchase Agreement are currently included in Article VII of the Existing Loan
Purchase Agreement; and
WHEREAS, the parties have determined to enter into this Guaranty
Agreement (this "Agreement") in which the guaranty provisions relating to the
Holdback Loan Purchase Agreement will be set out; and
WHEREAS, the Guarantor has agreed to make available to the Buyer
the "Guaranty Amount" under the Existing Loan Purchase Agreement (herein, the
"Existing Guaranty Amount") to the extent the "Guaranty Amount" provided in
this Agreement is exhausted and conversely, to make available to the Buyer,
the Guaranty Amount provided in this Agreement to the extent the Existing
Guaranty Amount is exhausted; and
WHEREAS, the Buyer has agreed to accept the guaranty provisions
described in these Preambles and the Buyer, Guarantor and Seller have executed
an amendment to the Existing Loan Purchase Agreement to, among other things,
reflect such provisions and the Buyer and Guarantor desire to execute this
Agreement to reflect such provisions.
NOW, THEREFORE, for full and fair consideration, the parties
hereto agree that this Guaranty Agreement shall read as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Terms used herein and not
otherwise defined shall have the meanings given in Article I of the Holdback
Loan Purchase Agreement. In addition, the following terms, as used herein,
have the following meanings:
"Consolidated Net Tangible Assets" shall have the meaning given in
clause (j) of Article IV.
"Existing Guaranty" shall mean the "Guaranty" provided by the
Guarantor in accordance with Article VII of the Existing Loan Purchase
Agreement.
"Existing Guaranty Amount" shall mean the "Guaranty Amount"
available under the Existing Loan Purchase Agreement.
"Fixed Charge Coverage" shall have the meaning provided in clause
(i) of Article IV.
"Guaranty" shall mean the first loss guaranty of Liquidation
Losses provided by Guarantor in accordance with Section 2.01(a) of this
Agreement.
"Guaranty Amount" shall mean, at any time, an amount equal to (a)
the sum of forty nine percent (49%) of the Principal Balance of each Loan as
of the applicable Closing Date, minus (b) all amounts previously paid
hereunder by Guarantor to Buyer pursuant to the Guaranty or the Existing
Guaranty.
"Guaranty Fee" shall have the meaning given in Section 2.02 of
this Agreement.
"Guaranty Payments" shall mean the amounts paid by Guarantor to
the Buyer pursuant to the Guaranty or the Repurchase Guaranty, as applicable.
"Repurchase Guaranty" shall mean the guaranty of Seller's
repurchase obligation provided by the Guarantor pursuant to Section 2.01(b) of
this Agreement.
ARTICLE II
GUARANTOR AND GUARANTY
Section 2.01 Guarantor's Guaranty and Repurchase Guaranty.
In order to induce Buyer to purchase the Loans, Guarantor hereby agrees to
provide the following guaranties:
(a) Guarantor hereby agrees to provide to the Buyer a Guaranty
of Liquidation Losses, equal at any time to the then current Guaranty Amount.
Following (i) the earlier of (A) the collection of all Liquidation Proceeds,
Insurance Proceeds and other amounts with respect to a Defaulted Loan and (B)
a Defaulted Loan being deemed a Liquidated Loan, and (ii) determination of
Liquidation Loss thereon (which in the case of a Defaulted Loan deemed a
Liquidated Loan may be the full Principal Balance of such Loan), the Buyer
shall notify Guarantor of the amount of Liquidation Loss and, within five (5)
Business Days of receipt of such notice, Guarantor shall make a Guaranty
Payment to the Buyer in the amount of such Liquidation Loss; provided,
however, that Guarantor's obligation to make a Guaranty Payment shall be
limited to first, the then available Guaranty Amount, and if the Guaranty
Amount is exhausted, the then available Existing Guaranty Amount.
(b) Guarantor hereby agrees to provide to the Buyer a Repurchase
Guaranty of Seller's repurchase obligation pursuant to Section 2.01(e),
2.02(c), 3.02, 4.05 and 9.02 of the Holdback Loan Purchase Agreement. If the
Buyer shall not have received the Repurchase Amount on the day on which due
and shall have so notified the Guarantor and the Seller, within two Business
Days of receipt of such notice, Guarantor shall make a Guaranty Payment to the
Buyer in the amount of such Repurchase Amount.
Section 2.02 Computation and Payment of Guaranty Fees. On
each Payment Date, the Buyer shall remit to the Guarantor as a guaranty fee
(the "Guaranty Fee"), the amount, if any, by which (a) the amount to the sum
of total Collections and other Available Funds received during, or
attributable to, the related Due Period exceeds (b) the sum of the Periodic
Payment and the Servicing Fee. Upon the occurrence and continuation of a
Servicer Default under the Holdback Loan Purchase Agreement (other than a
Servicer Default under Section 8.01(b) thereof) or a Guarantor Default, the
Guarantor shall no longer be entitled to receive the Guaranty Fee.
ARTICLE III
GUARANTOR REPRESENTATIONS AND WARRANTIES
Section 3.01 Guarantor Representations and Warranties. The
Guarantor hereby represents and warrants to, and agrees as follows as of each
Closing Date and as of the date of execution of this Agreement:
(a) The Guarantor is duly organized and is validly existing and
in good standing as an Oregon corporation, with corporate power and authority
to own its properties and to transact the business in which it is now engaged;
the Guarantor is duly qualified to do business and is in good standing in each
State of the United States where the nature of its business requires it to be
so qualified; and the Guarantor is doing business only under the corporate and
"doing business as" names listed on Exhibit F to the Holdback Loan Purchase
Agreement.
(b) The performance of Guarantor's obligations under this
Agreement, and the consummation of the transactions herein contemplated will
not conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of Guarantor or
any of its Subsidiaries pursuant to the terms of, any indenture, mortgage,
deed of trust, loan agreement or other agreement (other than this Agreement)
or instrument to which it or any of its Subsidiaries is a party or by which it
or any of its subsidiaries is bound or to which any of its property or assets
is subject, nor will such action result in any violation of the provisions of
its Certificate of Incorporation or By-Laws or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over it or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any court or any such
regulatory authority or other governmental agency or body is required for the
consummation of the other transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized, executed and
delivered by Guarantor and this Agreement is the valid and legally binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
(d) The Guarantor is "eligible" in Section 3015 to borrow from
NCB pursuant to the provisions of the Bank Act.
(e) Except as described in Exhibit A hereto, there are no
actions, proceedings, investigations, or claims against or affecting Guarantor
now pending before any court, arbitrator or other Governmental Authority (nor
to the knowledge of Guarantor has any thereof been threatened nor does any
basis exist therefor) which if determined adversely to the Guarantor would be
likely to have a material adverse effect on the financial condition or
operations of Guarantor or on Guarantor's ability to perform its obligations
under this Agreement. With respect to the litigation described in Exhibit A
hereto, a determination in such litigation that is materially adverse to the
Guarantor would not have a material adverse effect on the financial condition
or operations of Guarantor or on Guarantor's ability to perform its
obligations under this Agreement.
ARTICLE IV
COVENANTS OF GUARANTOR
At all times prior to the later of (i) the Termination Date or
(ii) the date on which all obligations of the Seller under the Holdback Loan
Purchase Agreement and Guarantor under this Agreement and the Existing Loan
Purchase Agreement have been performed in full, Guarantor agrees to do all of
the following unless the Buyer shall otherwise consent in writing.
(a) Preservation of Corporate Existence, Etc. To preserve and
maintain its corporate existence, rights, and privileges in the jurisdiction
of its incorporation and will qualify and remain qualified as a foreign
corporation in each jurisdiction where such qualification is necessary or
advisable in view of the business and operations of Guarantor or the ownership
of its properties.
(b) Compliance with Laws. To comply in all material respects
with all laws, regulations, rules and orders of Governmental Authorities
applicable to Guarantor or to its operations or property, except any thereof
whose validity is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof.
(c) Other Obligations. To pay and discharge before the same
shall become delinquent (after giving effect to all applicable grace periods)
all Debt, taxes and other obligations for which Guarantor is liable or to
which its income or property is subject and all claims for labor and materials
or supplies which, if unpaid, might become by law a lien upon the assets of
Guarantor, except any thereof whose validity or amount is being contested in
good faith by the Guarantor in appropriate proceedings, and except other Debt,
taxes and other obligations which, in the aggregate do not exceed One Million
Dollars ($1,000,000); provided, however, that this covenant shall not extend
to any obligation of Guarantor identified in clause (n) below.
(d) Financial Information. To deliver to Buyer (i) as soon as
available and in any event within one hundred twenty (120) days after the end
of each fiscal year of the Guarantor, the consolidated balance sheet of the
Guarantor as of the end of such fiscal year and the related statements of
income and retained earnings and statement of changes in the financial
position of the Guarantor for such year, accompanied by the audit report
thereon by independent, certified public accountants (which report shall be
prepared in accordance with U.S. GAAP and shall not be qualified by reason of
restricted or limited examination of any material portion of the Guarantor's
records and shall contain no disclaimer of opinion or adverse opinion) and an
Annual Report on Form 10-K for such year filed by the Guarantor with the
Securities and Exchange Commission; (ii) as soon as available and in any event
within sixty (60) days after the end of each fiscal quarter of the Guarantor,
the unaudited balance sheet and statement of income and retained earnings of
the Guarantor as of the end of such fiscal quarter (including the fiscal year
to the end of such fiscal quarter), accompanied by a certificate of the chief
financial officer of the Guarantor, that such unaudited balance sheet and
statement of income and retained earnings have been prepared in accordance
with U.S. GAAP and present fairly the financial position and the results of
operations of the Guarantor, as of the end of and for such fiscal quarter and
setting forth calculations demonstrating that at the end of such quarter the
Guarantor was in compliance with clauses (h) through (l) and (n) of this
Article IV, inclusive; (iii) within one hundred twenty (120) days after the
close of each fiscal year of the Guarantor, a certificate signed by the chief
financial officer of the Guarantor stating that as of the close of such fiscal
year no Termination Event or Servicer Default or other event which, with
notice or lapse of time or both would have become a Termination Event or
Servicer Default had occurred and was continuing; (iv) within one hundred
twenty (120) days after the end of each fiscal year of Guarantor, a report
setting forth information relating to the portfolio of loans originated or
acquired by Guarantor and each of its Subsidiaries and Affiliates (other than
United Resources, Inc.) in the ordinary course of their respective businesses
and owned by Guarantor and each of its Subsidiaries and Affiliates (other than
United Resources, Inc.) during the related fiscal year, including loan
balances by types of loans, numbers of loans by types of loans, interest rates
of loans by type and loss and delinquency experience; and (v) such other
statements, reports and other information as Buyer may reasonably request
concerning the financial condition and the servicing and collection operations
of the Guarantor; provided, however, that if either the Guarantor or any of
its Subsidiaries or Affiliates (as specified) does not originate and/or
service loans of the kind sold and assigned by Seller pursuant to the Holdback
Loan Purchase Agreement, the covenants in subsections (iv) and (v) of this
subsection (d) shall be satisfied by a certification of a Responsible Officer
to the effect that during the preceding fiscal year, Guarantor or the
specified Subsidiary or Affiliate did not originate or service loans.
(e) Notification. Promptly after learning thereof, to notify
Buyer of (i) the details of any action, proceeding, investigation or claim
against or affecting the Guarantor instituted before any court, arbitrator or
Governmental Authority or, to the Guarantor's knowledge threatened to be
instituted, which, after taking into account the likelihood of success, might
reasonably result in a judgment or order against Guarantor (in excess of
insurance coverage and when combined with all other pending or threatened
claims) of more than One Million Dollars ($1,000,000); (ii) if the Guarantor
or any member of the Controlled Group gives or is required to give notice to
the PBGC of any "reportable event" (as defined in subsections (b)(1)(2)(5)(6)
of Section 403 of ERISA) with respect to any Plan (or the Internal Revenue
Service gives notice to the PBGC of any "Reportable Event" as defined in
subsection (c)(2) of Section 4043 of ERISA and the Guarantor attains knowledge
thereof) which might constitute grounds for termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC;
(iii) any representation or warranty set forth in Article III of this
Agreement which proves to have been incorrect in any material respect when
made; (iv) Seller's material breach of its obligations under the Holdback Loan
Purchase Agreement, Guarantor's material breach of its obligations under this
Agreement or Servicer's material breach of its obligations under the Servicing
Agreement; or (v) the occurrence of any Servicer Default or Termination Event
or other event which, with notice or lapse of time or both, would constitute a
Servicer Default or Termination Event.
(f) Additional Acts. From time to time, to obtain and promptly
furnish to Buyer evidence of all such Government Approvals as may be required
to enable the Guarantor to comply with its obligations under this Agreement.
(g) Working Capital. To maintain, on a consolidated basis, a
ratio of current assets to current liabilities of at least 1.3 to 1.0. For
purposes of this subsection current assets shall not include (i) any deferred
assets other than prepaid items such as insurance, taxes or other similar
items; (ii) any amounts due from corporations which are subsidiaries of or
otherwise affiliated with the Guarantor; and (iii) an amount equal to the
appropriate deduction for depreciation, depletions, obsolescence,
amortization, valuation, contingency or other reserves determined in
accordance with generally accepted accounting principles. For purposes of
this subsection, current liabilities shall not include Funded Debt maturing
within one year from the date of determination whether or not extendable at
the option of the Guarantor.
(h) Member Notes Receivable Ratio. To maintain on a
consolidated basis at all times, the Guarantor Member Portfolio at less than
150% of Consolidated Tangible Net Worth. "Guarantor Member Portfolio" means
the sum of (i) all Debt of members to Guarantor or any of its Subsidiaries,
including Seller, which have not been sold; plus (ii) all investments by
Guarantor or any of its Subsidiaries, including Seller, in Guarantor's
members; plus (iii) all indebtedness of members to Guarantor or any of its
Subsidiaries, including Seller, which have been sold with recourse to
Guarantor or any of its Subsidiaries, including Seller, at 50% or greater.
(i) Fixed Charge Coverage. To maintain on a consolidated basis
a ratio of Fixed Charge Coverage (for the four most recent fiscal quarters) of
at least 1.4 to 1.0. "Fixed Charge Coverage" means for any period the ratio
derived from dividing (a) the sum of net income for such period (before income
taxes, patronage dividends, and extraordinary items) plus Fixed Charges by (b)
Fixed Charges. "Fixed Charges" means the sum of (a) interest expense on
Funded Debt, (b) the amortization of any discount applied in advancing Funded
Debt to Guarantor and (c) gross rental expense net of any lease or sublease
entered into by Guarantor if Guarantor has in turn subleased the related
leased or subleased property to any of Guarantor's Subsidiaries, Affiliates or
members for a payment obligation at least equal to Guarantor's on the first
lease or sublease and the Subsidiary, Affiliate or member is current on its
payment obligations on the sublease.
(j) Liens and Sales. Not to create, assume or suffer to exist
any lien, security interest or other encumbrance except (i) liens on the
Guarantor's properties securing mortgage indebtedness relating to such
properties, as the case may be, and any extensions, refinancing or renewals
thereof in an amount not exceeding the amount of such indebtedness prior to
such extension, refinancing or renewal; (ii) capital lease obligations; (iii)
liens to secure indebtedness for the deferred price of property acquired after
the date hereof, but only if such liens are limited to such property and its
proceeds; (iv) liens imposed by law (such as mechanic's liens) incurred in
good faith in the ordinary course of business which are not delinquent or
which remain payable without penalty or the validity or amount of which are
being contested in good faith by appropriate proceeding upon stay of execution
of the enforcement thereof; or (v) deposits or pledges under workmen's
compensation, unemployment insurance, social security or similar laws or made
to secure the performance of bids, tenders, contracts (except for the
repayment of borrowed money) or leases, or to secure statutory obligations or
surety or appeal bonds or to secure indemnity, performance or other similar
bonds given in the ordinary course of business. Notwithstanding the
foregoing, the total amount secured by all such liens, security interests or
other encumbrances shall not at any time exceed 15% of Guarantor's
Consolidated Net Tangible Assets as of such time. "Consolidated Net Tangible
Assets" shall be, on a consolidated basis, the difference between total assets
and current liabilities, excluding, however, from the determination of total
assets (i) all assets which should be classified as intangible assets (such as
good will, patents, trademarks, copyrights and franchises) and (ii) to the
extent not already deducted from total assets, all reserves including those
for deferred income taxes, depreciation, obsolescence or amortization of
properties and (iii) all capital stock or other investments by the Guarantor
in any direct or indirect subsidiary of Guarantor other than in (x) any
offshore investment subsidiary, or (y) a subsidiary having all or
substantially all of its operations in the United States.
(k) Minimum Capital and Subordinated Debt. To maintain the sum
of Subordinated Debt and Consolidated Tangible Net Worth at a total of not
less than $70,000,000.
(l) Liquidation, Merger, Sale of Assets, Etc. To not liquidate,
dissolve or enter into any merger, consolidation, joint venture, partnership
or other combination nor sell, lease, dispose of such portion of its business
or assets (excepting sales of goods in the ordinary course of business and
sales of Loans under this Agreement) as constitutes a substantial portion
thereof provided, however, so long as no Termination Event or event which with
the passage of time or the giving of notice or both would constitute a
Termination Event shall have occurred and be continuing or will occur as a
result of such merger or consolidation, Guarantor may merge or consolidate
with any Person or sell all or substantially all of its business or assets to
any other Person so long as (A)(1) the Guarantor shall be the surviving or
continuing corporation, or (2) if the Guarantor shall not be the surviving or
continuing corporation or shall sell substantially all of its assets to a
Person, such surviving, continuing or purchasing Person shall be incorporated
under the laws of the United States or any jurisdiction thereof and shall
assume in writing all obligations of the Guarantor under this Agreement, shall
be eligible to borrow form NCB under the provisions of the Bank Act and shall
satisfy the financial covenants set forth in clauses (g), (h), (i) and (k) of
this Article IV, and (B) at the time of such consolidation, merger or sale and
after giving effect thereto, no Termination Event shall have occurred and be
continuing. Without limitation on the foregoing, the Guarantor, and its
consolidated subsidiaries, will not during any four consecutive calendar
quarters sell in excess of 10% of their Consolidated Net Tangible Assets
unless the proceeds of such sale or sales are reinvested within 12 months in
assets to be owned and utilized by the Guarantor in the ordinary course of its
business; provided, however, in determining compliance with the foregoing
requirement, sales of the following assets will be disregarded: (a)
individual assets having a book value of less than $25,000 and (b)
indebtedness of Guarantor's members to Guarantor sold under this Agreement.
(m) Transactions with Affiliates. To not directly or indirectly
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property) with any of Guarantor's
Affiliates, on terms that are less favorable to Guarantor than those which
might be obtained at the time from Persons who are not Affiliates.
(n) ERISA Compliance. To not and not allow any member of its
Controlled Groups or any Plan of any of them to: (i) engage in any "prohibited
transaction" as such term is defined in Section 4.06 or Section 2003(a) of
ERISA; (ii) incur any "accumulated funding deficiencies" (as such term is
defined in Section 3.02 of ERISA) whether or not waived; (iii) terminate any
Pension Plan in a manner which could result in the imposition of a lien on any
property of the Guarantor, or any member of its Controlled Group pursuant to
Section 4068 of ERISA; or (iv) violate state or federal securities laws
applicable to any Plan.
(o) Subordinate Position. To (i) make or own (including a
participation) no loan to any Obligor or member of its Obligor Group unless
such Obligor's or member's obligations, as the case may be, to repay such loan
is subordinate to such Obligor's or member's obligation, as the case may be,
to repay the Loan or Loans made to such Obligor and sold by the Seller to the
Buyer under the Holdback Loan Purchase Agreement and (ii) own no corporation
or other business entity that makes loans to any Obligor or member of its
Obligor Group if such Obligor's or members repayment obligation on such loan
is senior to its payment obligation to the Loan or Loans made to Obligor or
its member and sold to Buyer under the Holdback Loan Purchase Agreement.
(p) NCB Borrower Eligibility. To maintain its status as an
"eligible" borrower under the provisions of the Bank Act.
ARTICLE V
GUARANTOR DEFAULTS
Section 5.01 Guarantor Defaults. Any of the following acts
or occurrences shall constitute "Guarantor Defaults" under this Agreement.
(a) Guaranty Default. Guarantor shall fail to make any payments
due under the Guaranty, Repurchase Guaranty or Existing Guaranty and such
failure shall remain unremedied for five (5) Business Days after written
notice thereof shall have been given to Guarantor by Buyer; or
(b) Performance Default. Guarantor shall fail to perform or
observe any other obligation, covenant or term of this Agreement and such
failure shall remain unremedied for thirty (30) days after written notice
thereof shall have been given to Guarantor by Buyer; or
(c) Voluntary Bankruptcy, Etc. Guarantor shall: (1) file a
petition seeking relief for itself under Title 11 of the United States Code,
as now constituted or hereafter amended, or file an answer consenting to,
admitting the material allegations of or otherwise not controverting, or fail
timely to controvert a petition filed against it seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended; or (2)
file such petition or answer with respect to relief under the provisions of
any other now existing or future applicable bankruptcy, insolvency, or other
similar law of the United States of America or any State thereof or of any
other country or jurisdiction providing for the reorganization, winding-up or
liquidation of corporations or an arrangement, composition, extension or
adjustment with creditors; or
(d) Involuntary Bankruptcy, Etc. An order for relief shall be
entered against Guarantor under Title 11 of the United States Code, as now
constituted or hereafter amended, which order is not stayed; or upon the entry
of an order, judgment or decree by operation of law or by a court having
jurisdiction in the premises which is not stayed adjudging it a bankrupt or
insolvent under, or ordering relief against it under, or approving as properly
filed a petition seeking relief against it under the provisions of any other
now existing or future applicable bankruptcy, insolvency or other similar law
of the United States of America or any State thereof or of any other country
or jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or any arrangement, composition, extension or adjustment with
creditors, or appointing a receiver, liquidator, assignee, sequestrator,
trustee or custodian of the Guarantor, or of any substantial part of the
property of Guarantor, or ordering the reorganization, winding-up or
liquidation of its affairs, or upon the expiration of one hundred twenty (120)
days after the filing of any involuntary petition against it seeking any of
the relief specified in Section 5.01(c) or this Section 5.01(d) without the
petition being dismissed prior to that time; or
(e) Insolvency, Etc. Guarantor shall (i) make a general
assignment for the benefit of its creditors or (ii) consent to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, or
custodian of all or a substantial part of the property of Guarantor or (iii)
admit its insolvency or liability to pay its debts generally as they become
due, or (iv) fail generally to pay its debts as they become due, or (v) take
any action (or suffer any action to be taken by its directors or shareholders)
looking to the dissolution or liquidation of Guarantor then, in the event of
any Guarantor Default specified in (a) above, so long as the Guarantor Default
shall not have been remedied, the Buyer may, by notice to the Servicer,
terminate all of the rights of the Guarantor under this Agreement, and, in the
event of a Guarantor Default specified in (b), (c) or (d) above, the Buyer
shall immediately and automatically terminate the rights of the Guarantor
under this Agreement. In addition, the Buyer shall have the right, upon the
occurrence of a Guarantor Default, to pursue all legal remedies available to
it.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Further Assurances. Each party hereto agrees to
execute and deliver to the other party and to perform all such other acts as
the other party may reasonably request to carry out the transactions
contemplated by this Agreement.
Section 6.02 Indemnities. (a) Guarantor will defend and
hereby indemnify Buyer and its successors, assigns, servants and agents
(hereinafter "Indemnities") against and agree to protect, save and keep
harmless and make whole each thereof, from any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs
(including any net increase in the tax liability of an Indemnitee resulting
from its receipt of indemnity payments made under this Section 5.02), expenses
and disbursements, including reasonable attorneys' fees, of whatsoever kind
and nature imposed on, incurred by or asserted against any Indemnitee in any
way relating to or arising out of (i) this Agreement, the Holdback Loan
Purchase Agreement, or any of the documents entered into in connection with
any of them; (ii) the Buyer's interest in the Loans or related Property
purchased or accepted under the Holdback Loan Purchase Agreement or the
enforcement of any claims thereunder; (iii) any claim made by any Obligor, or
any other party, related to the Loans or related Property purchased or
accepted hereunder, or the administration of the transactions evidenced by
such Loans and related Property or related to any other transactions between
the Obligors or their affiliates and the Seller or its affiliates; or (iv) any
environmental claim or liability relating to any real property securing any
Loans.
(b) For any claims arising against United Resources, Inc. in its
capacity as the Servicer, the Guarantor will defend and hereby indemnify the
Buyer, its directors, officers, employees and agents, against any and all
costs, expenses, losses, damages, claims and liabilities in respect of any
grossly negligent action taken by, or grossly negligent omission of, the
Servicer with respect to its servicing obligations under the Loan Purchase
Agreement.
(c) The foregoing indemnities with regard to any particular
Indemnitee shall not extend to any liability, obligation, loss, damage,
penalty, claim, action, suit, cost, expense or disbursement (i) that results
from the willful misconduct or gross negligence of such Indemnitee or from any
breach of any representation or warranty made by such Indemnitee herein; (ii)
that constitutes any tax based on any Indemnitee's net income, items of tax
preference or gross receipts (except with respect to indemnity payments
hereunder); or (iii) that consists of the failure of any Obligor to pay its
obligations under the Notes as they become due unless such failure results
from a claim of such Obligor against Seller, Guarantor, Servicer or any
Subsidiary or Affiliate of any of them, or Buyer otherwise indemnified against
hereunder. Any indemnity payments required under this Section 6.02 shall be
paid within thirty (30) days following notice thereof from the Indemnitee to
Guarantor (which notice shall describe in reasonable detail the matter with
respect to which indemnification is required and shall set forth the
computation used in determining the amount of the indemnity payment). All of
the rights and privileges of each Indemnitee under this Section 6.02, and the
rights, privileges and obligations of Guarantor hereunder, shall survive the
expiration or other termination of this Agreement.
Section 6.03 No Waiver: Remedies Cumulative. No failure by
the Guarantor or Buyer to exercise, and no delay in exercising, any right,
power or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy under this
Agreement preclude any other or further exercise thereof or the exercise of
any other right, power, or remedy. The rights and remedies provided herein
are cumulative and not exclusive of any right or remedy provided by law.
Section 6.04 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
Section 6.05 Consent to Jurisdiction: Waiver of Immunities.
Guarantor and Buyer hereby irrevocably submit to the jurisdiction of any state
or federal court sitting in the District of Columbia or the State of Oregon in
any action or proceeding brought to enforce or otherwise arising out of or
relating to this Agreement and irrevocably waive to the fullest extent
permitted by law any objection which they may now or hereafter have to the
laying of venue in any such action or proceeding in any such forum, and hereby
further irrevocably waive any claim that any such forum is an inconvenient
forum. The parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law.
Section 6.06 Notices. All notices and other communications
provided for in this Agreement shall be in writing or (unless otherwise
specified) by telex, telegram or cable and shall be sent for next Business Day
delivery to each party at the address set forth under its name on the
signature page hereof, or at such other address as shall be designated by such
party in a written notice to the other party. Except as otherwise specified,
all such notices and communications if duly given or made shall be effective
upon receipt.
Section 6.07 Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective Successors
and assigns. Notwithstanding the foregoing, the Guarantor may not assign or
otherwise transfer all or any part of its rights or obligations hereunder
without the prior written consent of the other parties, and any such
assignment or transfer purported to be made without such consent shall be
ineffective. In addition, Buyer may, however, sell, assign or transfer the
Loans and related Property which are the subject of the guaranties provided
herein without the consent of the Guarantor. Further, the Guarantor agrees to
recognize any such buyers or assignees as successors and assigns of the Buyer
hereunder, with all rights of the Buyer hereunder.
Section 6.08 Capital Markets Funding. Guarantor hereby
agrees to cooperate with Buyer in making such modifications to this Agreement,
in executing such other documents and certificates, in causing to be prepared
and delivered such opinions, certificates, financial reports and letters, and
in taking such other actions, including changing accounting firms, as are
reasonably necessary to achieve capital markets funding of the Loans and the
related Property or to improve the execution of such funding.
Section 6.09 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
Section 6.10 Attorney's Fees. In the event it is necessary
for any party hereto or its Successors or assigns to institute suit in
connection with this Agreement or the breach thereof, the prevailing party in
such suit shall be entitled to reimbursement for its reasonable costs,
expenses and attorney's fees incurred including fees incurred on any appeal.
Section 6.11 Setoff. In addition to any rights now or
hereafter granted under applicable law, upon the occurrence of any Termination
Event or Servicer Default, Buyer is hereby authorized by Guarantor at any
time, with notice to Guarantor, to set off and to appropriate and to apply to
the amounts then owed by Guarantor hereunder or the Seller or Servicer under
the Holdback Loan Purchase Agreement, as the case may be, to Buyer any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other indebtedness at any time held or owing
by Buyer to Guarantor.
Section 6.12 Limitation on Third Party Beneficiaries. No
provision, warranty, representation, or agreement herein, whether express or
implied, is intended to or shall be construed as conferring upon any Person
not a party hereto (including, without limitation, any Obligor) any rights or
remedies whatsoever.
Section 6.13 Continuing Agreement. This Guaranty Agreement
is a continuing agreement and shall remain in full force and effect until the
Holdback Loan Purchase Agreement and the Existing Loan Purchase Agreement
shall have terminated and all of United Resources' obligations under the
Holdback Loan Purchase Agreement and the Existing Loan Purchase Agreement have
been satisfied; provided, however, that if the Holdback Loan Purchase
Agreement and the Existing Loan Purchase Agreement are terminated pursuant to
Section 9.02 of the Holdback Loan Purchase Agreement and Section 10.02 of the
Existing Loan Purchase Agreement, respectively, then the Guarantor's
obligations under this Guaranty Agreement shall survive the termination of the
Holdback Loan Purchase Agreement and the Existing Loan Purchase Agreement; and
provided further, that (a) the rights accrued to the Buyer prior to
termination of this Agreement and (b) the indemnification rights set forth in
Section 6.02 hereof shall be continuing and shall survive termination of this
Guaranty Agreement.
Section 6.14 Entire Agreement; Amendment. This Agreement
comprises the entire agreement of the parties and may not be amended or
modified except by written agreement of the parties hereto. No provision of
this Agreement may be waived except in writing and then only in the specific
instance and for the specific purpose for which given.
Section 6.15 Headings. The headings of the various
provisions of this Agreement are for convenience of reference only, do not
constitute a part hereof, and shall not affect the meaning or construction of
any provision hereof.
Section 6.16 Counterparts. This Agreement may be executed in
any number of identical counterparts, any set of which signed by the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
IN WITNESS WHEREOF, the parties hereto have caused this Amended
and Restated Guaranty Agreement to be executed by their respective officers or
agents thereunto duly authorized as of the date first above written.
UNITED GROCERS, INC., as Guarantor
By /s/ Xxxx X. Xxxxx
Its President
By /s/ Xxxxxx X. Xxxxxxx
Its Assistant Secretary
Notice Address:
0000 X.X. Xxxx Xxxx
Xxxxxxxx, Xxxxxx 00000
Attention: President
NATIONAL CONSUMER COOPERATIVE BANK,
as Buyer
By
Its
By
Its
Notice Address:
0000 Xxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
ACKNOWLEDGMENT:
UNITED RESOURCES, INC.
as Seller and Servicer
By /s/ Xxxxxx X. Xxxxxxx
Its President
By /s/ Xxxx X. Xxxxx
Its Vice President
