Exhibit 4.1
EXECUTION COPY
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RECEIVABLES FINANCING AGREEMENT
dated as of March 1, 2001
among
MFN FUNDING LLC,
as Borrower,
MERCURY FINANCE COMPANY LLC,
as Servicer,
MFN FINANCIAL CORPORATION,
individually and as Performance Guarantor,
THE LENDERS PARTIES HERETO,
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Agent,
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Backup Servicer, Custodian
and Collateral Agent,
and
SYSTEMS & SERVICES TECHNOLOGIES, INC.,
as Designated Backup Subservicer
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ARTICLE I................DEFINITIONS .........................................1
SECTION 1.1 Defined Terms...........................................1
SECTION 1.2 Other Definitional Provisions..........................37
ARTICLE II...............THE FACILITY, ADVANCE PROCEDURES AND NOTES
38
SECTION 2.1 Facility...............................................38
SECTION 2.2 Advance Procedures.....................................38
SECTION 2.3 Funding................................................39
SECTION 2.4 Representation and Warranty............................39
SECTION 2.5 Voluntary Termination of Facility; Reduction
and Increase of Facility Limit ........................39
SECTION 2.6 Notes..................................................40
ARTICLE III..............YIELD, FEES, ETC. ..................................40
SECTION 3.1 Yield..................................................40
SECTION 3.2 Yield Payment Dates....................................41
SECTION 3.3 Yield Allocations; Selection of Fixed Periods, etc.....41
SECTION 3.4 Fees...................................................42
SECTION 3.5 Computation of Yield and Fees..........................42
ARTICLE IV...............REPAYMENTS AND PREPAYMENTS .........................42
SECTION 4.1 Repayments and Prepayments.............................42
ARTICLE V................PAYMENTS; TAXES ....................................43
SECTION 5.1 Making of Payments; Taxes..............................43
SECTION 5.2 Due Date Extension.....................................45
ARTICLE VI...............INCREASED COSTS, ETC. ..............................45
SECTION 6.1 Increased Costs........................................45
SECTION 6.2 Additional Yield on Advances Bearing
a Eurodollar Rate.................46
SECTION 6.3 Funding Losses.........................................46
SECTION 6.4 Replacement of Affected Person.........................47
ARTICLE VII..............EFFECTIVENESS; CONDITIONS TO ADVANCES ..............47
SECTION 7.1 Effectiveness..........................................47
SECTION 7.2 Initial Advance........................................48
SECTION 7.3 All Advances...........................................50
ARTICLE VIII.............ADMINISTRATION AND SERVICING .......................51
SECTION 8.1 Duties of the Servicer.................................51
SECTION 8.2 Collection of Receivable Payments;
Modification and Amendment of
Receivables; Lockbox Agreements;
Blocked Account Agreements.................53
SECTION 8.3 Realization Upon Receivables...........................56
SECTION 8.4 Insurance..............................................57
SECTION 8.5 Maintenance of Security Interests in Financed Vehicles.58
SECTION 8.6 Covenants, Representations and Warranties of the
Servicer...................................59
SECTION 8.7 Purchase Upon Breach of Covenant or Representation
and Warranty................................68
SECTION 8.8 Total Servicing Fee; Payment of Certain
Expenses by Servicer.......................68
SECTION 8.9 Servicer's Certificate.................................69
SECTION 8.10 Annual Statement as to Compliance;
Notice of Servicer Termination Event......69
SECTION 8.11 Annual Independent Accountants' Report................70
SECTION 8.12 Access to Certain Documentation; Portfolio Review.....70
SECTION 8.13 Monthly Tape..........................................71
SECTION 8.14 Retention of Servicer.................................72
SECTION 8.15 Fidelity Bond.........................................73
SECTION 8.16 Insurance.............................................73
SECTION 8.17 Accounts..............................................73
SECTION 8.18 Collections...........................................73
SECTION 8.19 Application of Collections ...........................74
ARTICLE IX................GRANT OF SECURITY INTERESTS .......................74
SECTION 9.1 Borrower's Grant of Security Interest..................75
SECTION 9.2 Delivery of Collateral.................................76
SECTION 9.3 Borrower Remains Liable................................76
SECTION 9.4 Covenants of the Borrower and Servicer
Regarding the Collateral...................77
SECTION 9.5 Release of Borrower Collateral.........................79
ARTICLE X................REPRESENTATIONS AND WARRANTIES OF THE BORROWER......81
SECTION 10.1 Organization and Good Standing........................81
SECTION 10.2 Due Qualification.....................................81
SECTION 10.3 Power and Authority...................................81
SECTION 10.4 Security Interest, Binding Obligations................82
SECTION 10.5 No Violation..........................................82
SECTION 10.6 No Proceedings........................................82
SECTION 10.7 No Consents...........................................83
SECTION 10.8 Use of Proceeds.......................................83
SECTION 10.9 Chief Executive Office................................83
SECTION 10.10 Solvency..............................................83
SECTION 10.11 Tax Treatment.........................................80
SECTION 10.12 Compliance With Laws..................................83
SECTION 10.13 Taxes.................................................83
SECTION 10.14 Certificates..........................................84
SECTION 10.15 No Liens, Etc.........................................84
SECTION 10.16 Purchase and Sale.....................................84
SECTION 10.17 Information True and Complete.........................84
SECTION 10.18 ERISA Compliance......................................84
SECTION 10.19 Financial or Other Condition..........................85
SECTION 10.20 Investment Company Status.............................85
SECTION 10.21 No Trade Names........................................85
SECTION 10.22 Separate Existence....................................85
SECTION 10.23 Investments..........................................85
SECTION 10.24 Representations and Warranties True and Correct.......85
SECTION 10.25 Transaction Documents.................................85
SECTION 10.26 Ownership of the Borrower.............................86
SECTION 10.27 Eligibility..........................................86
ARTICLE XI...............COVENANTS OF THE BORROWER ..........................86
SECTION 11.1 Protection of Security Interest of the Secured Parties.87
SECTION 11.2 Reporting Requirements................................88
SECTION 11.3 Preservation of Existence.............................89
SECTION 11.4 Keeping of Records and Books of Account...............89
SECTION 11.5 Separate Existence....................................89
SECTION 11.6 Interest Rate Xxxxxx..................................90
SECTION 11.7 Tangible Net Worth....................................91
SECTION 11.8 Collection Policies....................................91
SECTION 11.9 Sales, Liens, Etc., Against Receivables
and Related Assets.........................91
SECTION 11.10 Stock Merger, Consolidation, Etc......................91
SECTION 11.11 Change in Name........................................91
SECTION 11.12 Indebtedness..........................................91
SECTION 11.13 Guarantees............................................91
SECTION 11.14 Limitation on Transactions with Affiliates............91
SECTION 11.15 Documents.............................................92
SECTION 11.16 LLC Agreement.........................................92
SECTION 11.17 Accounting Treatment..................................92
SECTION 11.18 Limitation on Investments.............................92
SECTION 11.19 Other Liens or Interests..............................92
SECTION 11.20.Payments on Receivables...............................92
SECTION 00.00.Xxxxxxxx..............................................93
ARTICLE XII..............THE SERVICER .......................................93
SECTION 12.1 Liability of Servicer; Indemnities.....................93
SECTION 12.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer, Backup Servicer,
or Designated Backup Subservicer.......................94
SECTION 12.3.Limitation on Liability of Servicer, Backup Servicer,
Designated Backup Subservicer and Others..............95
SECTION 12.4. Delegation of Duties..................................96
SECTION 12.5. Servicer, Backup Servicer and Designated
Backup Subservicer Not to Resign......................97
SECTION 12.6 Administrative Duties of Servicer......................98
ARTICLE XIII.............SERVICER TERMINATION EVENTS ........................98
SECTION 13.1. Servicer Termination Event t..........................99
SECTION 13.2. Consequences of a Servicer Termination Event.........100
SECTION 13.3. Appointment of Successor Servicer....................101
ARTICLE XIV..............FACILITY TERMINATION EVENTS; THEIR EFFECT .........103
SECTION 14.1 Facility Termination Events..........................103
SECTION 14.2 Effect of Facility Termination Event.................106
SECTION 14.3 Certain Rights Upon Facility Termination Event.......106
ARTICLE XV...............THE AGENT .........................................107
SECTION 15.1 Appointment..........................................108
SECTION 15.2 Delegation of Duties.................................108
SECTION 15.3 Exculpatory Provisions...............................108
SECTION 15.4 Reliance by Agent....................................108
SECTION 15.5 Action Upon Certain Events: Reports and Notices......109
SECTION 15.6 Non-Reliance on Agent................................109
SECTION 15.7 Indemnification......................................110
SECTION 15.8 Successor Agent......................................110
SECTION 15.9 Liability of the Agent...............................110
SECTION 15.10 Agent and Affiliates.................................111
ARTICLE XVI..............ASSIGNMENTS .......................................111
SECTION 16.1 Restrictions on Assignments...........................112
SECTION 16.2 Documentation.........................................112
SECTION 16.3 Rights of Assignee....................................112
SECTION 16.4.Notice of Assignment..................................112
SECTION 16.5.Registration: Registration of Transfer and Exchange...112
SECTION 16.6.Mutilated, Destroyed, Lost and Stolen Notes...........114
SECTION 16.7.Persons Deemed Owners.................................114
SECTION 16.8.Cancellation..........................................115
SECTION 16.9.Participations........................................115
ARTICLE XVII.............INDEMNIFICATION ...................................115
SECTION 17.1 General Indemnity....................................115
SECTION 17.2 Contribution .......................................117
ARTICLE XVIII............MISCELLANEOUS .....................................117
SECTION 00.0.Xx Waiver; Remedies...................................117
SECTION 18.2.Amendments, Waivers...................................118
SECTION 18.3.Notices, Etc..........................................119
SECTION 18.4.Costs, Expenses and Taxes.............................119
SECTION 18.5.Binding Effect; Survival..............................120
SECTION 18.6.Captions and Cross References.........................120
SECTION 18.7.Severability..........................................120
SECTION 18.8.GOVERNING LAW.........................................120
SECTION 18.9.Counterparts..........................................120
SECTION 18.10.WAIVER OF JURY TRIAL.................................120
SECTION 18.11 Conflict Waiver......................................121
SECTION 18.12 No Proceedings.......................................121
SECTION 18.13 Limited Recourse to the Lenders......................122
SECTION 18.14 Collateral Agent.....................................122
SECTION 18.15 Custodian............................................122
SECTION 18.16 ENTIRE AGREEMENTS....................................122
ARTICLE XIX..............PERFORMANCE GUARANTY ..............................123
SECTION 19.1 Terms of Performance Guaranty.........................123
SECTION 19.2 Covenants of the Performance Guarantor................124
SECTION 19.3.Representations and Warranties
of the Performance Guarantor.............127
EXHIBIT A ........- Form of Advance Request
EXHIBIT B.........- Form of Note
EXHIBIT C.........- Form of Interest Rate Hedge Assignment Acknowledge
EXHIBIT D.........- Form of Borrowing Base Confirmation
EXHIBIT E.........- Form of Servicer's Certificate
EXHIBIT F.........- Form of Joinder Supplement
RECEIVABLES FINANCING AGREEMENT
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THIS RECEIVABLES FINANCING AGREEMENT is made and entered into as of
March 1, 2001, among MFN FUNDING LLC, a Delaware limited liability company, as
Borrower (the "Borrower"), MERCURY FINANCE COMPANY LLC, a Delaware limited
liability company, as the initial Servicer (the "Servicer"), MFN FINANCIAL
CORPORATION, a Delaware corporation, individually ("MFN") and as Performance
Guarantor (the "Performance Guarantor"), each NONCOMMITTED LENDER (as
hereinafter defined) from time to time party hereto, each COMMITTED LENDER (as
hereinafter defined) from time to time party hereto, DEUTSCHE BANK AG, NEW YORK
BRANCH ("DBNY"), as agent (the "Agent") for the Lenders (as hereinafter
defined), XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association as Custodian, Backup Servicer and Collateral Agent, and SYSTEMS &
SERVICES TECHNOLOGIES, INC., a Delaware corporation, as initial Designated
Backup Subservicer (the "Designated Backup Subservicer").
BACKGROUND
1. Borrower desires that the Lenders extend financing to the Borrower
on the terms and conditions set forth herein.
2. The Lenders are willing to provide such financing on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accountants' Report" has the meaning set forth in Section 8.11.
"Accrued Expenses" means, on any day, the aggregate of all Yield, Usage
Fee, Backup Servicer Fee and Servicing Fee accrued and unpaid on such day.
"Add-on Balance" means, on any date, and with respect to any
Receivable, any Insurance Add-On Amount included in the principal amount of the
obligation of any Obligor.
"Adjusted Commitment Percentage" means, for a Committed Lender with
respect to a specific Noncommitted Lender, the Commitment of such Committed
Lender as a percentage of the Maximum Purchase Amount of such Noncommitted
Lender.
"Advance" means any Advance made by any Lender to the Borrower under
this Agreement.
"Advance Date" means the date any Advance is made under Section 2.3.
"Advance Request" has the meaning set forth in Section 2.2.
"Adverse Claim" means any claim of ownership or any Lien, title
retention, trust or other charge or encumbrance, or other type of preferential
arrangement having the effect or purpose of creating a Lien, other than the
security interest created under this Agreement.
"Affected Person" has the meaning set forth in Section 6.1(a).
"Affiliate" of any Person means any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan). A Person shall be deemed to be
"controlled by" any other Person if such other Person controls such Person
within the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Exchange Act.
"Agent" has the meaning set forth in the Preamble.
"Agent's Account" has the meaning set forth in Section 5.1(a).
"Aggregate Outstanding Principal Balance" means, with respect to any
group of Receivables as of any day, the sum of the outstanding Principal
Balances of all such Receivables as at the close of business on the immediately
preceding day.
"Agreement" means this Receivables Financing Agreement (including the
Fee Letter and the Joinder Supplements hereto), as it may be amended,
supplemented or otherwise modified from time to time.
"Allocations" has the meaning set forth in Section 3.3(a).
"Alternate Base Rate" means a fluctuating rate per annum as shall be in
effect from time to time, which rate shall be at all times equal to the higher
of:
(a) the rate of interest announced publicly by DBNY in New York,
New York, from time to time as DBNY's base commercial lending rate;
and
(b) 1/2 of one percent above the Federal Funds Rate.
"Amount Financed" means, with respect to a Receivable, the aggregate
amount of credit extended under such Receivable to pay, or to refinance, the
purchase price of the Financed Vehicle and related costs, including amounts
advanced in respect of accessories, insurance
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premiums (subject to Section 8.4(c)), service and warranty contracts, other
items customarily financed as part of retail automobile installment sale
contracts or promissory notes, and related costs.
"Annual Percentage Rate" or "APR" means, with respect to a Receivable,
the rate per annum of finance charges stated in such Receivable as the "annual
percentage rate" (within the meaning of the Federal Truth-in-Lending Act). If,
after the applicable Purchase Date, the rate per annum with respect to a
Receivable as of such Purchase Date is reduced as a result of (a) an insolvency
proceeding involving the relevant Obligor or (b) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, the "Annual Percentage Rate" or "APR" shall
refer to such reduced rate.
"Available Purchase Amount" of a Noncommitted Lender means the
aggregate of the unutilized Commitments of the Committed Lenders with respect to
such Noncommitted Lender.
"Average Servicing Portfolio" means as of any date, the average of the
Servicing Portfolio for the three preceding Collection Periods.
"Backup Servicer" means Xxxxx Fargo solely in its capacity as Backup
Servicer and its permitted successors and assigns in such capacity.
"Backup Servicer Fee" means, for any Distribution Date, the amount
payable to the Backup Servicer as its regular fee on such Distribution Date
pursuant to the Xxxxx Fargo Fee Letter.
"Bank Rate" for any Advance means a rate per annum above the Eurodollar
Rate for such Advance or portion thereof equal to (i) 1.50%, until June 30, 2001
or until the Required Initial Take-Out Securitization has occurred, if prior to
June 30, 2001 and (ii) 1.30%, at all times after the occurrence of the Required
Initial Take-Out Securitization and prior to the time any Required Subsequent
Take-Out Securitization has failed to timely occur, and (iii) 2.25% at all times
(A) from June 30, 2001 until such time as the Required Initial Take-Out
Securitization has occurred, in the case where such Required Initial Take-Out
Securitization has not timely occurred, and (B) from the six month anniversary
of the occurrence of the immediately preceding Take-Out Securitization until the
occurrence of the next Take-Out Securitization, in the case where the Required
Subsequent Take-Out Securitization has not timely occurred; provided, however,
that in the case of
(a) any Fixed Period on or after the first day on which a
Committed Lender shall have notified the Agent that the introduction
of or any change in or in the interpretation of any law or regulation
makes it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for such Committed Lender to fund such
Advance at the Bank Rate set forth above (and such Committed Lender
shall not have subsequently notified the Agent that such circumstances
no longer exist),
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(b) any Fixed Period of one to (and including) 29 days, in the
event the Eurodollar Rate is not reasonably available to the Agent for
such a Fixed Period,
(c) any Fixed Period as to which the related Advance will not be
funded by issuance of commercial paper, as determined by the Agent (on
behalf of a Noncommitted Lender) later than 12:00 noon (New York City
time) on the second Business Day preceding the first day of such Fixed
Period, or
(d) any Fixed Period for an Advance the principal amount of which
allocated to the Committed Lenders in the aggregate is less than
$1,000,000,
the "Bank Rate" shall be a floating rate per annum equal to the Alternate Base
Rate in effect on each day of such Fixed Period; provided, further, that the
Agent (with the consent of the Lenders) and the Borrower may agree in writing
from time to time upon a different "Bank Rate."
"Bank Rate Allocation" has the meaning set forth in Section 3.3(a).
"Bankruptcy Code" means the Bankruptcy Code, 11 U.S.C.ss.101, et seq.,
as amended.
"Blocked Account Agreements" means the Xxxxxx Blocked Account
Agreement, the LaSalle Blocked Account Agreement and such other blocked account
agreements with any other depository institution in form and substance
acceptable to the Agent.
"Blocked Account Banks" means Xxxxxx Trust and Savings Bank, LaSalle
Bank National Association and any other depository institution party to a
Blocked Account Agreement.
"Blocked Accounts" means the Xxxxxx Blocked Account, the LaSalle
Blocked Account and any other account maintained pursuant to a Blocked Account
Agreement.
"Borrower" has the meaning set forth in the Preamble.
"Borrower Account Collateral" has the meaning set forth in Section
9.1(c).
"Borrower Assigned Agreements" has the meaning set forth in Section
9.1(b).
"Borrower Collateral" has the meaning set forth in Section 9.1.
"Borrower LLC Agreement" means the Limited Liability Company Agreement
of the Borrower, dated as of March 1, 2001 by and among the Seller, as sole
equity member and the independent directors named therein, including all
permitted amendments, modifications and supplements thereto.
"Borrowing Base" means, on any day, the excess of (a) the sum of (i)
the Aggregate Outstanding Principal Balance as of such day of all Transferred
Receivables which are Eligible Receivables (excluding the Add-On Balances
associated with such Eligible Receivables) on such
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day, plus (ii) the amount on deposit in the Collateral Account on such day, plus
(iii) (without duplication) the aggregate of the amount on deposit in the
Collection Account available for distribution pursuant to Section 3 of the
Security Agreement on such day, over (b) the Required Holdback in effect on such
day.
"Borrowing Base Confirmation" has the meaning set forth in Section
7.3(g).
"Borrowing Base Deficiency" has the meaning set forth in Section
14.1(e).
"Borrowing Base Delinquent Receivable" means a Receivable (other than a
Defaulted Receivable) with respect to which more than 5% of a Scheduled Payment
is more than 30 days past due.
"Branch Collections" means during any Collection Period, the quotient
of (x) the number of all Open Accounts with respect to which payments by or on
behalf of Obligors were received directly by a Contributing Subsidiary or
Servicer during such Collection Period divided by (y) the total number of Open
Accounts at the commencement of such Collection Period. Notwithstanding the
foregoing, (a) Branch Collections shall not include Fort Xxxx Collections for
any Collection Period ending on or prior to August 31, 2001 and (b) Branch
Collections shall include Fort Xxxx Collections for any Collection Period ending
after August 31, 2001, except to the extent that the Servicer shall have caused
Fort Xxxx Collections to be deposited in a Blocked Account on terms and
conditions reasonably satisfactory to the Agent.
"Branch Collections Adjustment Amount" has the meaning set forth in
Section 8.2(f).
"Branch Collections Limit" means 38% of all Open Accounts with respect
to the March 2001 Collection Period; provided that such limit shall decrease by
3% on every subsequent Determination Date through and including the November
2001 Collection Period and shall thereafter remain constant.
"Business Day" shall mean any day on which (a) commercial banks in Xxx
Xxxx Xxxx, Xxx Xxxx, Xxxxxxx, Xxxxxxxx or Minneapolis, Minnesota are not
authorized or required to be closed, and (b) in the case of a Business Day which
relates to a Eurodollar Advance, dealings are carried on in the London interbank
Eurodollar market.
"Cash Equivalents" means cash on hand and any investments described in
the definition of Permitted Investments.
"Change of Control" means a change resulting when any Unrelated Person
or any Unrelated Persons, acting together, that would constitute a Group
together with any Affiliates or Related Persons thereof (in each case also
constituting Unrelated Persons) shall at any time either (i) Beneficially Own
more than 50% of the aggregate voting power of all classes of Voting Stock of
MFN or (ii) succeed in having sufficient of its or their nominees elected to the
Board of Directors of MFN such that such nominees when added to any existing
director remaining on the
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Board of Directors of MFN after such election who is an Affiliate or Related
Person of such Person or Group, shall constitute a majority of the Board of
Directors of MFN. As used herein, (a) "Beneficially Own" shall mean
"beneficially own" as defined in Rule 13d-3 of the Exchange Act, or any
successor provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates until such tendered securities are accepted for
purchase or exchange; (b) "Group" shall mean a "group" for purposes of Section
13(d) of the Exchange Act; (c) "Unrelated Person" shall mean at any time any
Person other than MFN or any of its Subsidiaries and other than any trust for
any employee benefit plan of MFN or any of its Subsidiaries; (d) "Related
Person" of any Person shall mean any other Person owning (1) 5% or more of the
outstanding common stock of such Person or (2) 5% or more of the Voting Stock of
such Person; and (e) "Voting Stock" of any Person shall mean the capital stock
or other indicia of equity rights of such Person which at the time has the power
to vote for the election of one or more members of the Board of Directors (or
other governing body) of such Person.
"Closing Date" means the Effective Date.
"Code" means the U.S. Internal Revenue Code of 1986, as amended from
time to time, or any successor law and the regulations promulgated and the
rulings issued thereunder.
"Collateral" means the Transferred Receivables in the Total Receivables
Pool and the Other Conveyed Property.
"Collateral Account" means the account designated as the Collateral
Account in, and which is established and maintained pursuant to, Section
8.17(c).
"Collateral Agent" means Xxxxx Fargo solely in its capacity as
Collateral Agent, together with its permitted successors and assigns in such
capacity.
"Collateral Insurance" means a vendor's single interest or other
collateral protection insurance policy with respect to Financed Vehicles, which
policy by its terms insures against physical damage in the event any Obligor
fails to maintain physical damage insurance with respect to the related Financed
Vehicle.
"Collateral Receipt" means a Custodian's Acknowledgment in the form of
Schedule A to the Custodian Agreement.
"Collected Funds" means, with respect to any Determination Date, the
amount of funds in the Collection Account on such date representing collections
on the Total Receivables Pool during the related Collection Period, including
all Recoveries with respect thereto collected during the related Collection
Period (but excluding any Purchase Amounts).
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"Collection Account" means the account designated as the Collection
Account in, and which is established and maintained pursuant to, Section
8.17(a).
"Collection Period" means any calendar month and, with respect to a
Determination Date or a Distribution Date, the calendar month preceding the
month in which such Determination Date or Distribution Date occurs (such
calendar month being referred to as the "related" Collection Period with respect
to such Determination Date or Distribution Date) or, in the case of the initial
Distribution Date and Determination Date, the period commencing at the opening
of business on the Closing Date and ending at the end of the calendar month
following the calendar month in which the Closing Date occurs. Any amount stated
"as of the close of business on the last day of a Collection Period" shall give
effect to the following calculations as determined as of the end of the day on
such last day: (i) all applications of Collected Funds and Purchase Amounts, and
(ii) all distributions.
"Collection Records" means all manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Transferred Receivables.
"Commercial Paper Rate" for any Advance means, to the extent a
Noncommitted Lender funds such Advance by issuing commercial paper, the sum of
(a) the weighted average of the rates at which commercial paper notes of such
Noncommitted Lender issued to fund such Advance may be sold by any placement
agent or commercial paper dealer selected by such Noncommitted Lender, as agreed
in good faith between each such agent or dealer and such Noncommitted Lender;
provided if the rate (or rates) as agreed between any such agent or dealer and
such Noncommitted Lender is a discount rate (or rates), then such rate shall be
the rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate per annum plus (b) any and all commissions of placement agents and
commercial paper dealers in respect of commercial paper issued to fund the
making or maintenance of such Advance plus (c) any and all reasonable costs and
expenses of any issuing and paying agent or other Person responsible for the
administration of such Noncommitted Lender's commercial paper program in
connection with the preparation, completion, issuance, delivery or payment of
commercial paper issued to fund the making or maintenance of any Advance plus
(d) (i) 1.25%, until June 30, 2001 or until the Required Initial Take-Out
Securitization has occurred, if prior to June 30, 2001, (ii) 1.05%, at all times
after the occurrence of the Required Initial Take-Out Securitization and prior
to the time any Required Subsequent Take-Out Securitization has failed to timely
occur, or (iii) 2.00%, at all times (A) from June 30, 2001 until such time as
the Required Initial Take-Out Securitization has occurred, in the case where
such Required Initial Take-Out Securitization has not timely occurred, and (B)
from the six month anniversary of the occurrence of the immediately preceding
Take-Out Securitization until the occurrence of the next Take-Out
Securitization, in the case where the Required Subsequent Take-Out
Securitization has not timely occurred. Each Noncommitted Lender shall notify
the Agent of its Commercial Paper Rate applicable to any Advance promptly after
the determination thereof.
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"Commitment" means, for any Committed Lender, the maximum amount of
such Committed Lender's commitment to fund Advances hereunder, as set forth on
the Joinder Supplement or in the assignment documentation by which such
Committed Lender became a party to this Agreement or assumed the Commitment (or
a portion thereof) of another Committed Lender, as such amount may be adjusted
from time to time pursuant to Section 2.5 or pursuant to assignment
documentation executed by such Committed Lender and its assignee and delivered
pursuant to Section 16.2 of this Agreement. In the event that a Committed Lender
maintains a portion of its Commitment hereunder with respect to more than one
Noncommitted Lender, such Committed Lender shall be deemed to hold separate
Commitments hereunder in each such capacity.
"Commitment Percentage" means, for a Committed Lender, such Committed
Lender's Commitment as a percentage of the aggregate Commitments of all
Committed Lenders.
"Commitment Termination Date" means March 19, 2002, as such date may be
extended from time to time as agreed in writing between the Borrower, the
Servicer, the Agent and the Lenders.
"Committed Lender" means, with respect to a Noncommitted Lender, each
financial institution party to a Joinder Supplement which Joinder Supplement
designates such financial institution as a "Committed Lender" with respect to
such Noncommitted Lender, and any assignee of such Committed Lender pursuant to
Article XVI to the extent such assignee has assumed a portion of the Commitment
of such Committed Lender.
"Consolidated Total Adjusted Equity" of any Person means, with respect
to any fiscal quarter, the sum of (x) the total shareholders' equity of such
Person and its consolidated Subsidiaries that, in accordance with GAAP, is
reflected on the consolidated balance sheet of such Person and its consolidated
Subsidiaries for such fiscal quarter and (y) the amount of goodwill of such
Person and its consolidated Subsidiaries as a liability that, in accordance with
GAAP, is reflected on the consolidated balance sheet of such Person and its
consolidated Subsidiaries for such fiscal quarter, minus the aggregate amount of
such Person's intangible assets, including without limitation, goodwill,
franchises, licenses, patents, trademarks, tradenames, copyrights and service
marks.
"Consolidated Total Funded Debt" of any Person means, with respect to
any fiscal quarter, all obligations of such Person and its consolidated
Subsidiaries for borrowed money and all obligations of such Person and its
consolidated Subsidiaries evidenced by bonds, debentures, notes or other similar
instruments, including, with respect to the Borrower, all amounts due under the
Note.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
8
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum outstanding principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Contributing Subsidiary" has the meaning ascribed to such term in the
Contribution Agreement.
"Contribution Agreement" means the Contribution Agreement, dated as of
March 1, 2001, by and among the Seller Subsidiaries and the Seller, including
all permitted amendments, modifications and supplements thereto.
"CP Allocation" has the meaning set forth in Section 3.3(a).
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the scheduled payments to be made on such Receivable, an amount
equal to (i) the excess of the outstanding balance of such Receivable
immediately prior to such order, over the outstanding balance of such Receivable
as so reduced and/or (ii) if such court shall have issued an order reducing the
effective rate of interest on such Receivable, the excess of the outstanding
balance of such Receivable immediately prior to such order over the net present
value (using as the discount rate the higher of the Annual Percentage Rate on
such Receivable or the rate of interest, if any, specified by the court in such
order) of the Scheduled Payments as so modified or restructured. A "Cram Down
Loss" shall be deemed to have occurred on the date of issuance of such order.
"Custodian" means Xxxxx Fargo in its capacity as Custodian under the
Custodian Agreement, and its permitted successors and assigns in such capacity.
"Custodian Agreement" means the Custodian Agreement dated as of the
date hereof among the Custodian, the Servicer and the Agent, including all
permitted amendments, modifications and supplements thereto.
"DBAB Side Letter" means the letter agreement, dated as of the
Effective Date, entered into by Deutsche Bank Alex. Xxxxx Inc., MFN, the
Borrower and the Servicer relating to Take-Out Securitizations.
"DBNY" has the meaning set forth in the Preamble.
"DBNY Roles" has the meaning set forth in Section 18.11.
9
"Dealer" means a seller of new or used automobiles, light duty trucks,
minivans, sport utility vehicles or recreational vehicles that originated one or
more of the Receivables in the Total Receivables Pool and sold the respective
Receivable, directly or indirectly, to a Contributing Subsidiary or the Seller.
"Dealer Agreement" means an agreement by and among a Contributing
Subsidiary or Seller and a Dealer relating to the sale of Receivables to such
Contributing Subsidiary or Seller and all documents and instruments relating
thereto.
"Dealer Assignment" means, with respect to a Transferred Receivable,
the executed assignment executed by a Dealer conveying such Receivable to the
Contributing Subsidiary or Seller.
"Default Rate" means a rate per annum equal to the Alternate Base Rate
(but not less than the Yield (if any) in effect for the related monetary
obligation), plus a margin of 3%.
"Defaulted Receivable" means, with respect to a Transferred Receivable
as of any date, a Receivable with respect to which (i) all or any portion in
excess of 5% of a Scheduled Payment is more than 150 days past due, or (ii) such
Receivable is in default and the Servicer has charged-off such Receivable in
accordance with its standard policies or otherwise has determined in good faith
that payments thereunder are not likely to be resumed.
"Deficiency Amount" means, as of any date, an amount equal to the
product of (x) the Deficiency Percentage, (y) the Aggregate Outstanding
Principal Balance of Eligible Receivables in the Total Receivables Pool as of
such date and (z) 1.0, if such day is prior to the Required Initial Take-Out
Securitization or 1.5, if such day is after the Required Initial Take-Out
Securitization.
"Deficiency Percentage" means, as of any date, the positive excess
(rounded upward to the nearest 0.25%), if any, of (a) the sum of (i) 9.75% plus
(ii) the Total Expense Percentage plus (iii) the weighted (on the basis of
notional amounts) average Interest Rate Cap Strike Prices for the Interest Rate
Xxxxxx in effect on such date plus (iv) 1.10%, over (b) the weighted average APR
for all Eligible Receivables (which, on such date, are not Delinquent
Receivables) in the Total Receivables Pool.
"Delinquent Receivable" means a Receivable (other than a Defaulted
Receivable) with respect to which more than 5% of a Scheduled Payment is more
than 30 days past due.
"Designated Backup Subservicer" means SST and its permitted successors
and assigns in such capacity.
"Designated Backup Servicer Fee" means, for any Distribution Date, the
amount payable to the Designated Backup Subservicer as its regular fee on such
Distribution Date pursuant to the Designated Backup Subservicer Fee Letter.
10
"Designated Backup Subservicer Fee Letter" means (i) that certain
letter pertaining to fees and certain transition arrangements dated March 20,
2001 among the Agent, the Backup Servicer, and SST, as amended or otherwise
modified from time to time or (ii) any fee letter agreements among the Agent,
the Borrower and any Designated Backup Subservicer, as amended or otherwise
modified from time to time.
"Designated Backup Subservicer Fee Rate" means with respect to any
date, the quotient, expressed as a percentage of (x) the sum of all compensation
payable to the Designated Backup Subservicer pursuant to the Designated Backup
Subservicer Fee Letter for the immediately preceding Collection Period divided
by (y) the Aggregate Outstanding Principal Balance of Eligible Receivables as of
such date.
"Determination Date" means, with respect to a Collection Period, the
second Business Day prior to the related Distribution Date.
"Distribution Date" means the 17th day of each calendar month, or if
such 17th day is not a Business Day, the next succeeding Business Day,
commencing April 17, 2001.
"Dollar(s)" and the sign "$" mean lawful money of the United States of
America.
"Effective Date" has the meaning set forth in Section 7.1.
"Eligible Account" means (i) a segregated trust account in the
corporate trust department or (ii) a segregated direct deposit account, in each
case, maintained with a depository institution or trust company organized under
the laws of the United States of America, or any of the States thereof, or the
District of Columbia, having a certificate of deposit, short term deposit or
commercial paper rating of at least A-1+ by Standard & Poor's and P-1 by
Moody's. In either case, such depository institution or trust company shall (x)
be DBNY or Xxxxx Fargo or (y) have been approved by the Agent, acting in its
discretion, by written notice to the Servicer.
"Eligible Assignee" has the meaning set forth in Section 16.1.
"Eligible Receivables" means, at any time, Receivables:
(i) that were originated directly by a Contributing Subsidiary or
Seller with the consumer or were originated by a Dealer in the ordinary course
of such dealer's business, and such Dealer or such Contributing Subsidiary or
Seller had all necessary licenses and permits to originate Receivables, and, if
originated by a Dealer, were purchased by a Contributing Subsidiary or Seller
from such Dealer under an existing Dealer Agreement with a Contributing
Subsidiary or Seller and were validly assigned by such Dealer to such
Contributing Subsidiary or Seller, (ii) were fully and properly executed by the
parties thereto and contain customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for realization
against the collateral security, and (iii) are fully amortizing Simple Interest
Receivables or Pre-Computed Receivables which provide for level monthly payments
(provided
11
that the payment in the first collection period and the final collection period
of the life of the Receivable may be minimally different from the level payment)
which, if made when due, shall fully amortize the amount financed over the
original term,
(ii) that if originated by a Dealer, were sold by such Dealer to a
Contributing Subsidiary or Seller without any fraud or material
misrepresentation on the part of such Dealer or on the part of the related
Obligor,
(iii) with respect to which all requirements of applicable
federal, state and local laws, and regulations thereunder (including, without
limitation, usury laws, the Federal Truth-in- Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission Act, the
Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's Regulations "B" and "Z",
the Soldiers' and Sailors' Civil Relief Act of 1940, and state adaptations of
the National Consumer Act and of the Uniform Consumer Credit Code and other
consumer credit laws and equal credit opportunity and disclosure laws) in
respect of all of such Receivables, and each and every sale or refinancing of
the related Financed Vehicles, have been complied with in all material respects,
(iv) that are Dollar denominated obligations of Obligors domiciled
in the United States of America at the time of origination,
(v) which represent the genuine, legal, valid and binding payment
obligation of the Obligors thereunder, enforceable by the holders thereof in
accordance with their terms, except (A) as enforceability may be limited by
bankruptcy, reorganization or similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivables may be modified by
the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended; and all parties to each Receivable had full legal capacity to execute
and deliver such Receivable and all other documents related thereto and to grant
the security interest purported to be granted thereby,
(vi) which are not due from the United States of America or any
State or from any agency, department, subdivision or instrumentality thereof,
(vii) which (a) as of the relevant Advance Date, (i) have an
original maturity of at least 6 months but not more than 60 months, (ii) have an
original Amount Financed of at least $500 and not more than $25,000, (iii) have
an Annual Percentage Rate of at least 8% and not more than 40%, and (iv) were
not more than 30 days past due, and (b) with respect to which no funds have been
advanced by the Borrower, a Contributing Subsidiary, the Seller, the Servicer,
any Dealer, or anyone acting on behalf of any of them in order to cause such
Receivables to qualify under subclause (a)(iv) of this clause (vii),
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(viii) with respect to which the information pertaining to such
Receivables set forth in each Schedule of Receivables submitted to the Agent and
the Custodian is true and correct in all material respects,
(ix) with respect to which, by the related Advance Date and on
each relevant date thereafter, the Servicer will have caused the portions of the
Sub-Servicer's servicing records relating to such Receivables to be clearly and
unambiguously marked to show that such Receivables constitute part of the
Collateral and are subject to a first priority security interest,
(x) with respect to which the computer tape or listing to be made
available by the Servicer to the Agent from time to time was complete and
accurate as of the related Advance Date and includes a description of the same
Receivables that are described in Schedule A to the Sale and Contribution
Agreement and any Supplements thereto,
(xi) which constitute chattel paper within the meaning of the UCC,
(xii) of which there is only one original executed copy,
(xiii) respect to each of which there exists a Receivable File in
the possession of the Custodian and such Receivable File contains (i) the fully
executed original of such Receivable (ii) the original Lien Certificate
(indicating the applicable Contributing Subsidiary's or Seller's interest as
first lienholder) or application therefor (including a confirmation from the
recording state that a Lien Certificate has been issued or recorded
electronically (a "Confirmation")) or a letter from the applicable Dealer
agreeing unconditionally to repurchase the related Receivable if the certificate
of title or Confirmation is not received by the Servicer within 210 days
(provided that the Lien Certificate or Confirmation is delivered to the
Custodian within 210 days); each of such documents which is required to be
signed by the Obligor has been signed by the Obligor in the appropriate spaces;
and all blanks on any form have been properly filled in and each form has
otherwise been correctly prepared,
(xiv) with respect to which there exists a Servicer File in the
possession of the Servicer and such Servicer File contains a certificate of
insurance, an application form for insurance signed by the related Obligor, or a
signed representation letter from the Obligor named in such Receivable pursuant
to which such Obligor has agreed to obtain physical damage insurance for the
related Financed Vehicle, or copies thereof, of a documented verbal confirmation
by an insurance agent for such Obligor of a policy number for an insurance
policy for the Financed Vehicle; each of such documents which is required to be
signed by the Obligor has been signed by the Obligor in the appropriate spaces;
and all blanks on any form have been properly filled in and each form has
otherwise been correctly prepared,
(xv) which have not been satisfied, subordinated or rescinded, and
the Financed Vehicles securing such Receivables have not been released from the
Lien of such Receivables in whole or in part,
13
(xvi) which were not originated in, or subject to the laws of, any
jurisdiction the laws of which would make unlawful, void or voidable the sale,
transfer and assignment of such Receivables and which is not subject to any
agreement with any account debtor that prohibits, restricts or conditions the
assignment of any portion of such Receivables,
(xvii) which have not been sold, transferred, assigned or pledged
by the Borrower to any Person (except to the Secured Parties) and with respect
to which none of the Contributing Subsidiary, the Seller or any Dealer has a
participation in, or other right to receive, proceeds of any such Receivable and
with respect to which the Borrower has not taken any action to convey any right
to any Person that would result in such Person having a right to payments
received under the related insurance policy or the related Dealer Agreement or
loan assignment or Dealer Assignment or to payments due under such Receivables,
(xviii) which have created, or will create when all required
procedures are completed by the Servicer, a valid, subsisting and enforceable
first priority perfected security interest in the related Financed Vehicle in
favor of the Contributing Subsidiary or Seller as secured party, and such
security interest is, or will be upon the completion of all required procedures
by the Servicer, prior to all other Liens upon and security interests in such
Financed Vehicle that now exist or may hereafter arise or be created (except, as
to priority, for any tax liens or mechanic's liens that may arise after the
closing date with respect to the initial Receivables or after the applicable
transfer date with respect to all other Receivables),
(xix) as to which all filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Collateral Agent, on
behalf of the Secured Parties, a first priority perfected lien on, or ownership
interest in, such Receivables and the proceeds thereof and the related security
have been made, taken or performed,
(xx) as to which none of the Contributing Subsidiary, the Seller,
a Dealer or the Borrower has done anything to convey any right to any Person
that would result in such person having a right to payments due under such
Receivables or otherwise to impair the rights of the Agent, the Collateral
Agent, the Custodian or the Lenders in such Receivables or the proceeds thereof,
(xxi) which are not assumable by another Person in a manner which
would release any Obligor thereof from such Obligor's obligations with respect
to such Receivables,
(xxii) which are not subject to any right of rescission, setoff,
counterclaim or defense and no such right has been asserted or threatened with
respect to any such Receivable,
(xxiii) (i) if determined on any day, as to which there has been
no default, breach, violation or event permitting acceleration under the terms
of such Receivables (other than payment delinquencies of not more than 30 days)
and no condition exists or event has occurred and is continuing that with
notice, the lapse of time or both would constitute a default, breach,
14
violation or event permitting acceleration under the terms of such Receivables,
and there has been no waiver of any of the foregoing, and (ii) with respect to
which the related Financed Vehicle had not been repossessed,
(xxiv) at the time of the origination of which, the related
Financed Vehicle was covered by a comprehensive and collision insurance policy
(i) in an amount at least equal to the lesser of (a) its maximum insurable value
and (b) the principal amount due from the Obligor under the related Receivable,
(ii) naming the Contributing Subsidiary or Seller and its successors and assigns
as loss payee and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive and
collision coverage and with respect to which the obligor is required to maintain
physical loss and damage insurance, naming the Contributing Subsidiary or Seller
and its successors and assigns as additional insured parties, and such
Receivables permit the holders thereof to obtain physical loss and damage
insurance at the expense of the related Obligor if such Obligor fails to do so,
(xxv) with respect to which the following is true: The Lien
Certificates for the related Financed Vehicles show, or if new or replacement
Lien Certificates are being applied for with respect to any such Financed
Vehicles the Lien Certificates will be received within 210 days of the Purchase
Date and will show, the Contributing Subsidiary or Seller named as the original
secured party under such Receivables and, accordingly, such Contributing
Subsidiary or Seller will be the holder of a first priority security interest in
such Financed Vehicles. With respect to each Receivable for which the Lien
Certificate has not yet been returned from the registrar of titles, the
Contributing Subsidiary or Seller has received written evidence from the related
Dealer or the Obligor that such Lien Certificate showing such Contributing
Subsidiary or Seller as first lienholder has been applied for. If the Receivable
was originated in a State in which a filing or recording is required of the
secured party to perfect a security interest in motor vehicles, such filings or
recordings have been duly made to show the Contributing Subsidiary or Seller
named as the original secured party under the related Receivable,
(xxvi) as to which no selection procedures adverse to the Secured
Parties have been utilized in selecting such Receivables from all other similar
Receivables owned or originated by MFN or its Affiliates,
(xxvii) that, if determined on any day were not Defaulted
Receivables as of the last day of the immediately preceding Collection Period,
(xxviii) that, if determined on any day were not Borrowing Base
Delinquent Receivables as of the last day of the immediately preceding
Settlement Period,
(xxix) that are not secured by vehicles which are financed
repossessions,
(xxx) the Obligor is not a debtor in any state or federal
bankruptcy or insolvency proceeding, nor is the Receivable subject to any
bankruptcy plan,
15
(xxxi) which bears interest at a fixed rate and is not convertible
to an adjustable interest rate,
(xxxii) with respect to which all applicable intangible taxes and
documentary stamp taxes were paid as to such Receivable, and
(xxxiii) which is not a "restructured" or "rewritten" Receivable
pursuant to the Servicing Procedures and Credit Manual.
For purposes of this Agreement (including the computation from
time to time of the Borrowing Base), the eligibility of Receivables will be
determined from time to time, such that a Receivable that was an Eligible
Receivable at one time but that subsequently fails to meet all applicable
eligibility requirements will no longer be an Eligible Receivable (unless and
until it again meets all applicable eligibility requirements).
"Eligible Servicer" means Mercury Finance Company LLC, as the Initial
Servicer, Xxxxx Fargo, SST or another Person which at the time of its
appointment as Servicer (i) is servicing a portfolio of motor vehicle retail
installment sales contracts and/or motor vehicle installment loans, (ii) is
legally qualified and has the capacity to service the Transferred Receivables,
(iii) has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sales contracts and/or motor
vehicle installment loans similar to the Transferred Receivables with reasonable
skill and care, and (iv) is qualified and entitled to use, pursuant to a license
or other written agreement, and agrees to maintain the confidentiality of, the
software which the Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has available software which
is adequate to perform its duties and responsibilities under this Agreement.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor law and the regulations
promulgated and the rulings issued thereunder.
"ERISA Affiliate" means, at any time, with respect to any Person or
entity, any member of such Person's or entity's "controlled group," within the
meaning of Section 4001 of ERISA or Section 414(b), (c), (m), or (o) of the
Code.
"ERISA Plan" means an employee benefit plan as defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) which is covered by Title I or IV of
ERISA or subject to minimum funding standards under Section 412 of the Code or
Section 302 of ERISA, any "plan" described by Section 4975(e)(1) of the Code,
and any entity deemed to hold plan assets of the foregoing under 29 C.F.R.
2510.3-101.
"Eurocurrency liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
16
"Eurodollar Advance" means any Advance (or portion thereof) that bears
Yield computed by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for any Fixed Period, a rate per annum equal
to the rate for deposits in Dollars for a term equal to such Fixed Period
(commencing on the first day of such Fixed Period) which appears on Telerate
Page 3750 as of 11:00 A.M. (London time) on the second Business Day prior to the
commencement of such Fixed Period. If such rate does not appear on Telerate Page
3750, a rate per annum at which deposits in Dollars are offered by the principal
office of Deutsche Bank AG in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Fixed Period for delivery on such first day and for a period equal
to such Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Lender for any Fixed Period
in respect of which Yield is computed by reference to the Eurodollar Rate means
the reserve percentage applicable two Business Days before the first day of such
Fixed Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) (or if more than one
such percentage shall be applicable, the daily average of such percentages for
those days in such Fixed Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for such Lender with respect to liabilities or assets consisting of or including
Eurocurrency liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the yield rate on Eurocurrency
liabilities is determined) having a term equal to such Fixed Period.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(e) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all
of its assets, or any similar action with respect to such Person under
any law relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of
60 consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect; or
(f) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for such Person or
17
for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail to, or admit in
writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall
vote to implement any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Senior Debt" means (a) the 10% Senior Secured Notes Due 2001,
Series A, issued pursuant to the First Supplemental Trust Indenture dated as of
March 23, 1999 between MFN and Xxxxx Fargo and (b) the Senior Secured Notes Due
2001, Series B, issued pursuant to the Second Supplemental Trust Indenture dated
as of March 23, 1999 between MFN and Xxxxx Fargo.
"Face Amount" means, with respect to outstanding commercial paper, (i)
the face amount of any such commercial paper issued on a discount basis, and
(ii) the principal amount of, plus the amount of all interest accrued and to
accrue thereon to the stated maturity date of, any commercial paper issued on an
interest-bearing basis.
"Facility" has the meaning set forth in Section 2.1(a).
"Facility Fee Rate" has the meaning set forth in the Fee Letter.
"Facility Limit" means, on any day, the lesser of (x) $300,000,000, as
such amount may be reduced pursuant to Section 2.5(b) and (y) the Total
Commitment in effect on such day, as such Total Commitment may be reduced
pursuant to Section 2.5(a) or increased pursuant to Section 2.5(c). References
to the unused portion of the Facility Limit shall mean, at any time, the
Facility Limit in effect at such time, minus the sum of the then outstanding
principal amount of Advances under this Agreement.
"Facility Overcollateralization Percentage" means, on any day, the
ratio (expressed as a percentage) of (x) the Required Holdback on such day plus
the Required Reserve Account Amount on such day (without giving effect to clause
(b) of the definition of Required Reserve Account Amount) divided by (y) the
Aggregate Outstanding Principal Balance of the Eligible Receivables on such day.
"Facility Termination Date" means the earliest to occur of (i) the date
of any termination of the Total Commitment, in whole, by the Borrower pursuant
to Section 2.5, (ii) the effective date on which the Facility is terminated
pursuant to Section 14.2, and (iii) the Commitment Termination Date.
"Facility Termination Event" means any of the events described in
Section 14.1.
"Federal Funds Rate" means, for any period, a fluctuating rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as
18
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"Fee Letter" has the meaning set forth in Section 3.4.
"Fees" means all fees and other amounts payable to the Agent, on behalf
of itself, the Lenders and the Liquidity Providers, pursuant to the Fee Letter.
"Financed Vehicle" means any automobile, light duty truck, van,
minivan, sport utility vehicle or recreational vehicle, together with all
accessories, additions and parts constituting a part thereof and all accessions
thereto.
"Fixed Period" means with respect to any Advance (or portion thereof):
(g) the period commencing on the date of the initial funding of
such Advance (or such portion) and ending such number of days
thereafter as the Agent shall select in accordance with Section
3.3(b), after consultation to the extent practicable with the
Borrower; and
(h) thereafter, each period commencing on the last day of the
immediately preceding Fixed Period for such Advance (or such portion)
and ending such number of days thereafter as the Agent shall then
select in accordance with Section 3.3(b), after consultation to the
extent practicable with the Borrower;
provided, however, that:
(i) any Fixed Period in respect of which Yield is computed
by reference to the Bank Rate shall be a period of from one to
and including 29 days (if reasonably available to the Agent), or
a period of one, two or three months (or such longer period as is
agreed to by the Borrower and the Agent), as the Borrower may
select by written notice to the Agent furnished not later than
12:00 noon (New York City time) on the second Business Day
preceding the first day of such Fixed Period;
(ii) any such Fixed Period (other than a Fixed Period
consisting of one day) that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding
Business Day (unless the related Advance shall be accruing Yield
at a rate determined by reference to the Eurodollar Rate, in
which case if such succeeding Business Day is in a different
calendar month, such Fixed Period shall instead be shortened to
the next preceding Business Day);
19
(iii) in the case of Fixed Periods of one day, (A) the
initial Fixed Period shall be the day of the initial funding of
such Advance, and (B) any subsequently occurring Fixed Period
that is one day shall, if the immediately preceding Fixed Period
is more than one day, be the last day of such immediately
preceding Fixed Period, and if the immediately preceding Fixed
Period is one day, shall be the next day following such
immediately preceding Fixed Period; and
(iv) if any Fixed Period for any Advance that commences
before the Facility Termination Date would otherwise end on a
date occurring after the Facility Termination Date, such Fixed
Period shall end on the Facility Termination Date and the
duration of each such Fixed Period that commences on or after the
Facility Termination Date, if any, shall be of such duration as
shall be selected by the Agent.
"Force-Placed Insurance" has the meaning set forth in Section 8.4(b).
"Fort Xxxx Collections" means, during any Collection Period, the
quotient of (x) the number of all Open Accounts with respect to which payments
by or on behalf Obligors were made pursuant to "true pay," "true collect" or
military allotment programs (as defined in the Servicing Procedures and Credit
Manual) during such Collection Period, divided by (y) the total number of Open
Accounts at the commencement of such Collection Period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of any date of
determination.
"Xxxxxx Blocked Account" means the account maintained by Xxxxxx Trust
and Savings Bank pursuant to the Xxxxxx Blocked Account Agreement.
"Xxxxxx Blocked Account Agreement" means the Blocked Account Agreement,
dated as of the Closing Date, by and among the Collateral Agent, the Borrower
and Xxxxxx Trust and Savings Bank.
"Indebtedness" of any Person means, without duplication:
(i) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(j) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
20
(k) all obligations of such Person as lessee under leases that
have been or should be, in accordance with GAAP, recorded as
capitalized lease liabilities;
(l) all other items that, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(m) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse; and
(n) all Contingent Liabilities of such Person in respect of any
of the foregoing.
"Indemnified Amounts" has the meaning set forth in Section 17.1.
"Indemnified Party" has the meaning set forth in Section 17.1.
"Independent Accountants" has the meaning set forth in Section 8.11(a).
"Insurance Add-On Amount" means the premium charged to the Obligor if
the Servicer obtains Force-Placed Insurance pursuant to Section 8.4.
"Insurance Policies" means, with respect to a Receivable, any insurance
policy (including the insurance policies described in clause (xxiii) of the
definition of "Eligible Receivable") benefitting the holder of the Receivable
providing loss or physical damage, credit life, credit disability, theft,
mechanical breakdown or similar coverage with respect to the Financed Vehicle or
the Obligor.
"Insurer Commitment Letter" means the letter from a monoline insurer,
in form and substance satisfactory to MFN and the Agent, that sets forth the
terms and conditions upon which such monoline insurer agrees to insure the
payment of amounts due to the holders of certain securities issued in a Take-Out
Securitization.
"Insurer Required Overcollateralization Percentage" means the sum
(expressed as a percentage) of (x) the reserve amount percentage required in the
Insurer Commitment Letter plus (y) 100% minus the advance rate set forth in the
Insurer Commitment Letter.
"Interest Rate Cap Strike Price" means, with respect to an Interest
Rate Hedge, the "strike price" set forth in such Interest Rate Hedge.
21
"Interest Rate Hedge" means any interest rate cap or other hedging
mechanism which satisfies the requirements of Section 11.6.
"Interest Rate Hedge Assignment Acknowledgment" means an acknowledgment
in substantially the form of Exhibit C hereto executed by a counterparty to an
Interest Rate Hedge (if other than DBNY) in favor of the Agent and the
Collateral Agent.
"Interim Distribution Date" means any Settlement Date, other than a
Distribution Date, on which the Collateral Agent shall pay principal, Yield and
certain other amounts in accordance with this Agreement and the Security
Agreement.
"Investor" means (i) all Lenders, (ii) all other owners by assignment
(in accordance with Section 16.1) of an Advance and, to the extent of the
undivided interests so purchased, all Participants (in accordance with Section
16.9) and (iii) the Agent and any subsequent holders of a Note (in accordance
with Section 16.5).
"Joinder Supplement" means an agreement among a Noncommitted Lender or
Committed Lender (as the case may be), the Borrower, MFN and the Agent in the
form of Exhibit F hereto (appropriately completed).
"LaSalle Blocked Account" means the account maintained by LaSalle Bank
National Association pursuant to the LaSalle Blocked Account Agreement.
"LaSalle Blocked Account Agreement" means the Blocked Account
Agreement, dated as of the Closing Date, by and among the Collateral Agent, the
Borrower and LaSalle Bank National Association.
"Lender" means any Noncommitted Lender or Committed Lender, and
"Lenders" means, collectively, all Noncommitted Lenders and Committed Lenders.
"Level I Trigger Event" means, as of any date, so long as a Level II
Trigger Event is not in effect, that (x) a Portfolio Trigger Event has occurred
on or prior to such date or (y) a Portfolio Default has occurred prior to such
date and such Portfolio Default has been cured or waived in accordance with the
related transaction documents.
"Level II Trigger Event" means, as of any date, the existence of a
Portfolio Default on such date. A "Level II Trigger Event" shall be deemed to
exist so long as the underlying Portfolio Default is not cured or waived in
accordance with the related transaction documents.
"Level III Trigger Event" means, on any date, that the Servicer
Delinquency Ratio exceeds 3.85% on such date and a Level IV Trigger Event is not
in effect on such date; provided that such 3.85% shall be reduced to 3.65% with
respect to computations of the Servicer Delinquency Ratios as of the last day of
the March through September (inclusive) Collection Periods.
22
"Level IV Trigger Event" means, on any date, that the Servicer
Delinquency Ratio (computed for this purpose using Borrowing Base Delinquent
Receivables in lieu of Delinquent Receivables) exceeds 4.15% on such date;
provided that such 4.15% shall be reduced to 3.95% with respect to computations
of the Servicer Delinquency Ratios as of the last day of the March through
September (inclusive) Collection Periods.
"Level V Trigger Event" means, on any date, on or before June 30, 2001,
that the Portfolio Net Loss Ratio exceeds 13.0% on such date and on any date
after June 30, 2001, that the Portfolio Net Loss Ratio exceeds 12.50% on such
date and, in either case, a Level VI Trigger Event is not in effect on such
date.
"Level VI Trigger Event" means, on any date, that the Portfolio Net
Loss Ratio exceeds 14.00% on such date.
"Level VII Trigger Event" means on any date, that any Required Initial
Take-Out Securitization or a Required Subsequent Take-Out Securitization has not
timely occurred on or prior to such date.
"Leverage Ratio" means, on any date, the ratio of (a) the Consolidated
Total Funded Debt of MFN divided by (b) the Consolidated Total Adjusted Equity
of MFN.
"Lien" means any security interest, lien, charge, pledge, preference,
equity or encumbrance of any kind, including tax liens, mechanics' liens and any
liens that attach by operation of law.
"Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
"Liquidity Provider" means each Person who provides liquidity, credit
enhancement (including any insurer under an insurance policy or surety bond for
the benefit of a Noncommitted Lender, either directly or indirectly through
support of one or more of its Committed Lenders, with respect to all or a
portion of the Facility) or a "back-stop" purchase facility to a Noncommitted
Lender under a Noncommitted Lender Liquidity Arrangement.
"Lockbox" means the lockbox maintained by Mellon Bank National
Association pursuant to the Lockbox Agreement.
"Lockbox Agreement" means the Lockbox Agreement, dated as of the
Closing Date, by and among Mellon Financial Services Corporation #1, the
Borrower and the Collateral Agent.
23
"Lockbox Bank" means Mellon Bank National Association or any other
depository institution named by the Servicer and acceptable to the Agent.
"Master Collection Account" means the account maintained by the
Collateral Agent pursuant to the Master Collection Account Agreement.
"Master Collection Account Agreement" means the Master Collection
Account, dated as of the Closing Date, by and among the Collateral Agent, the
Servicer, the Agent and such other Persons as may become parties thereto.
"Maximum Interest Rate Cap Strike Price" means, at any time, such rate
as will result in a Deficiency Percentage of zero at such time.
"Maximum Purchase Amount" of a Noncommitted Lender means the aggregate
Commitment of the Committed Lenders with respect to such Noncommitted Lender.
"Membership Pledge Agreement" means the Membership Pledge Agreement
dated as of the date hereof made by the Seller to the Collateral Agent,
including all permitted amendments, modifications and supplements thereto.
"MFN" has the meaning set forth in the Preamble.
"MFN Entities" means MFN, the Seller Subsidiaries, the Seller and the
Borrower.
"MFN Guaranty" means the Guaranty dated as of the date hereof made by
MFN to the Collateral Agent, including all permitted amendments, modifications
and supplements thereto.
"Minimum Consolidated Adjusted Equity Amount" means, at any time, the
sum of (a) $145,000,000 plus (b) at any time after March 31, 2001, 50% of the
aggregate of the cumulative positive consolidated net income of MFN and its
consolidated Subsidiaries less the amortization of the excess of revalued assets
over liabilities and stockholders' investment reported for each fiscal quarter
ending on and after March 31, 2001, as set forth in the financial statements
delivered pursuant to Section 11.2.
"Minimum Reserve Account Amount" means, on any date, the greatest of
(a) $750,000, (b) 1.0% of the Facility Limit and (c) the product of (x) 1.0% and
(y) the sum of (i) the aggregate unpaid principal amount of all Advances on such
date plus (ii) the Required Holdback in effect on such date.
"Monthly Extension Rate" means, with respect to any Determination Date,
the fraction, expressed as a percentage, the numerator of which is the Aggregate
Outstanding Principal
24
Balance of all Receivables in the Servicing Portfolio whose payments are
extended during the related Collection Period and the denominator of which is
the Aggregate Outstanding Principal Balance of all Receivables in the Servicing
Portfolio as of the close of business on the last day of the Collection Period
immediately preceding such related Collection Period.
"Monthly Financial Statement" means a statement containing the
unaudited consolidated financial statements of MFN and its consolidated
Subsidiaries as of the end of the applicable month, certified by the chief
financial officer or chief accounting officer of MFN identifying such document
as being the Monthly Financial Statement and stating that the information
contained therein fairly presents the financial condition of MFN and its
consolidated Subsidiaries in accordance with GAAP, consistently applied, for
such month. Each Monthly Financial Statement shall also contain
(o) a comparison of any material differences between (i) the
items set forth in the consolidated financial statement information in
the Monthly Financial Statement for such month and (ii) the
corresponding items in the projected or budgeted consolidated
financial statement information for such month; and
(p) a certification that MFN and its consolidated Subsidiaries
are in compliance with the financial covenants
applicable to it in this Agreement.
"Monthly Receivables Report" means the Monthly Receivables Report
setting forth the following information: (1) Updated Loss Curves, (2) Updated
"Deutsche Performance Package" which is the data from pages 45-50 of the
Presentation Book, (3) Repo information in the format set out on page 47 of the
Presentation Book, (4) average days from last payment to repo and (5)
Origination Trend Report monthly trend of originations broken out by credit
grade.
"Monthly Records" means all records and data maintained by the Servicer
with respect to the Transferred Receivables, including the following with
respect to each Transferred Receivable: the account number; the originating
Dealer; Obligor name; Obligor address; Obligor home phone number; Obligor
business phone number; original Principal Balance; original term; Annual
Percentage Rate; current Principal Balance; origination date; first payment
date; next payment due date; date of most recent payment; new/used
classification; collateral description; days currently delinquent; number of
contract extensions (months) to date; amount of Scheduled Payment; collection
notes; current remaining term; and past due late charges.
"Monthly Tape" means the computer tape, listing or electronic file
generated on behalf of the Borrower which contains the information set forth in
the definition of "Monthly Records" above and in a format acceptable to the
Backup Servicer.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any multiemployer plan as defined in Section
3(37) or 4001(a)(3) of ERISA.
25
"No Consent Notice" means, with respect to any Proposed MFN
Transaction, a written notice delivered to MFN by the Agent that withholds the
Agent's consent to such Proposed Transaction.
"Noncommitted Lender" means each Structured Lender which shall become a
party hereto pursuant to a Joinder Supplement duly executed by all parties
thereto.
"Noncommitted Lender Liquidity Arrangement" means each liquidity,
credit enhancement or "back-stop" purchase or loan facility for a Noncommitted
Lender relating to this Agreement.
"Noncommitted Percentage" means, for a Noncommitted Lender, such
Noncommitted Lender's Maximum Purchase Amount as a percentage of the Facility
Limit.
"Note" means the promissory grid note, in the form of Exhibit B, of the
Borrower payable to the order of the Agent on behalf of the Investors.
"Note Register" has the meaning set forth in Section 16.5(a).
"Note Registrar" has the meaning set forth in Section 16.5(a).
"Notice of Firm Take-Out Commitment" means, with respect to any
Proposed Transaction, a written notice delivered to MFN by the Agent
acknowledging receipt by the Agent from MFN or a proposed lender to an MFN
Entity of a firm written commitment in form and substance acceptable to the
Agent in its sole discretion that provides for financing of the Receivables and
repayment to each Secured Party of all amounts to which it is entitled under the
Transaction Documents.
"Notice of Transaction Consent" means, with respect to any Proposed MFN
Transaction, a written notice delivered to MFN by the Agent that grants the
Agent's consent to such Proposed Transaction.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower to the Lenders, the Agent, the Collateral Agent or any other Affected
Person arising under or in connection with this Agreement, each Note and each
other Transaction Document.
"Obligor" means a Person obligated to make payments with respect to a
Transferred Receivable.
"Officer's Certificate" means, with respect to any Person which is not
an individual, a certificate signed by the President, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer or any Vice President of such
Person.
26
"Official Body"means any government or political subdivision or any
agency, authority, regulatory body, bureau, central bank, commission, department
or instrumentality of any such government or political subdivision, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Open Accounts" has the meaning set forth in the Servicing Procedures
and Credit Manual.
"Opinion of Counsel" means a written opinion of counsel reasonably
acceptable to the Agent which, unless otherwise provided herein, may be an
employee of the Person delivering such opinion.
"Other Conveyed Property" has the meaning set forth in the Sale and
Contribution Agreement.
"Overcollateralization Differential Amount" on any date means the
product of (i) Overcollateralization Differential Percentage times (ii) the
Aggregate Outstanding Principal Balance of the Eligible Receivables on such
date.
"Overcollateralization Differential Percentage" means the excess
(expressed as a percentage), if any, of the Insurer Required
Overcollateralization Percentage and the Facility Overcollateralization
Percentage.
"Participant" has the meaning set forth in Section 16.9(a).
"Performance Guarantor" has the meaning set forth in the Preamble.
"Permitted Investment" means any one or more of the following types of
investments:
(q) (i) direct interest-bearing obligations of, and
interest-bearing obligations guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality of the United States, the obligations of which are
backed by the full faith and credit of the United States; and (ii)
direct interest bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest
by, the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation, but only if, at the time of investment, such
obligations are assigned the highest credit rating by each Rating
Agency;
(r) demand or time deposits in, certificates of deposit of, or
bankers' acceptances issued by any depository institution or trust
company organized under the laws of the United States or any State
thereof (including any federal or state branch or agency of a foreign
depository institution or trust company) and subject to supervision
and examination by federal and/or state banking authorities
(including, if applicable, the Collateral Agent, the Agent or any
agent thereof acting in its commercial capacity);
27
provided that the short-term unsecured debt obligations of such
depository institution or trust company at the time of such
investment, or contractual commitment providing for such investment,
are assigned the highest credit rating by each Rating Agency;
(s) repurchase obligations pursuant to a written agreement (i)
with respect to any obligation described in clause (a) above, where
the Collateral Agent has taken actual or constructive delivery of such
obligation, and (ii) entered into with (x) DBNY or (y) banks organized
under the laws of the United States or any State thereof, the deposits
of which are insured by the Federal Deposit Insurance Corporation and
the short-term unsecured debt obligations of which are rated "A-1+" by
Standard & Poor's and "P-1" by Moody's (including, if applicable, the
Collateral Agent, the Agent or any agent thereof acting in its
commercial capacity);
(t) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or
any State whose long-term unsecured debt obligations are assigned the
highest credit rating by each Rating Agency at the time of such
investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that an
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held in the Collection
Account and the Reserve Account to exceed 10% of the value of
Permitted Investments held in such accounts (with Permitted
Investments held in such accounts valued at par);
(u) commercial paper that (i) is payable in United States dollars
and (ii) is rated in the highest credit rating category by each Rating
Agency;
(v) units of money market funds rated in the highest credit
rating category by each Rating Agency; or
(w) any other demand or time deposit, obligation, security or
investment (including, without limitation, a hedging arrangement) as
may be acceptable to the Agent, as evidenced by a writing to that
effect (with a copy to each Rating Agency).
Permitted Investments may be purchased by or through the Collateral
Agent or any of its Affiliates. All Permitted Investments shall be held in the
name of the Collateral Agent. No Permitted Investment shall have a "r"
highlighter affixed to its S&P rating.
"Person" means an individual, partnership, corporation, limited
liability company, joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.
"Portfolio Default" means the occurrence, with respect to the issuance
of securities which are backed by automobile installment sales contracts
("receivables") and with respect to which MFN or any Affiliate of MFN is the
servicer, of an "event of default" or similar event under any
28
applicable enhancement or insurance agreement or an "amortization event",
"pay-out event" or similar event under any applicable sale and servicing
agreement or indenture which event has the potential consequence, inter alia,
under the related agreements of requiring the acceleration or early amortization
of the related securities or permitting the realization upon the receivables
and/or other collateral.
"Portfolio Net Losses" means with respect to any Collection Period, the
aggregate amount of gross charge-offs of Receivables in the Servicing Portfolio
during such Collection Period net of all Recoveries with respect to any such
Receivables (including post-disposition amounts received on previously
charged-off Receivables), calculated in a manner consistent with the
calculations of net losses in MFN's quarterly report on Form 10-Q for the period
ended September 30, 2000.
"Portfolio Net Loss Ratio" means, as of any date, a fraction, expressed
as a percentage, the numerator of which equals the product of 4.0 times the sum
of the Portfolio Net Losses for the three (3) preceding Collection Periods and
the denominator of which equals the Average Servicing Portfolio as of such date.
The Portfolio Net Loss Ratio shall be determined on each Determination Date and
shall remain in effect until recalculated on the next succeeding Determination
Date.
"Portfolio Trigger Event" means the occurrence of a "trigger event" or
any other event however denominated, with respect to the issuance of securities,
which are backed by automobile installment sales contracts ("receivables") and
with respect to which MFN or any Affiliate of MFN is the servicer, which event
is based on the performance of such receivables and has the potential
consequence under the related agreements of causing the amount required to be
retained in any related spread or reserve account or the level of any other
enhancement to be increased.
"Pre-Computed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related Receivable as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances or the
sum of monthly balances or any equivalent method or are monthly actuarial
receivables.
"Presentation Book" means the presentation book, dated January 19,
2001, distributed to potential credit enhancers.
"Principal Balance" means, with respect to any Receivable, as of any
date, the sum of the Amount Financed minus that portion of all amounts received
by the Servicer with respect to such Receivable on or prior to such date and
allocable to principal in accordance with the terms of such Receivable minus any
Cram Down Loss in respect of such Receivable plus the accrued and unpaid
interest on such Receivable.
29
"Proposed MFN Transaction" means, any transaction contemplated by MFN
that entails either (x) a Change in Control of MFN or (y) a merger,
consolidation or asset disposition transaction subject to Section 19.2(g). Any
notice of a Proposed Transaction shall describe such transaction in reasonable
detail and, if a refinancing or repayment of amounts due under the Facility is
contemplated thereby, include a copy of any related firm financing commitment
provided by any lending institution.
"Purchase Amount" means, with respect to a Warranty Receivable
purchased by the Servicer or the Seller pursuant to Section 8.7 or under the
Sale and Contribution Agreement, the Principal Balance of such Receivable
(including all accrued and unpaid interest on such Receivable) as of the date of
such purchase.
"Purchase Date" has the meaning assigned to the term "Transfer Date" in
the Sale and Contribution Agreement.
"Rating Agencies" means Standard & Poor's and Moody's.
"Receivable" means any right to payment from a Person secured by a
Financed Vehicle and classified as "50" or "51" on MFN's computer system, and
includes without limitation the right to payment of any interest or finance
charges and other obligations of such Person with respect thereto.
"Receivable File" means, with respect to each Receivable in the Total
Receivables Pool, the documents, electronic entries, instruments and writings
set forth in clause (xiii) of the definition of "Eligible Receivable" herein.
"Record Date" means, with respect to any Determination Date or
Distribution Date, the last day of the immediately preceding calendar month.
"Recoveries" means, with respect to any Defaulted Receivable, monies
collected in respect thereof (other than Scheduled Payments collected from the
related Obligor which cause such Receivable to be no longer a Defaulted
Receivable), from whatever source, during any Collection Period, net of the sum
of any reasonable expenses incurred by the Servicer in connection with the
collection, repossession and disposition of the related Financed Vehicle and any
amounts required by law to be remitted to the related Obligor; provided that
Recoveries with respect to any Defaulted Receivable shall in no event be less
than zero.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.
"Replacement Person" has the meaning set forth in Section 6.4.
30
"Required Cash Balance" means, on any date, $10,000,000 in unencumbered
cash and Cash Equivalents; provided, however, that the Required Cash Balance is
(x) $40,000,000 in unencumbered cash or Cash Equivalents on the Closing Date and
on the last business day of any month prior to and including the initial
Take-Out Securitization, and (y) $25,000,000 on the last business day of any
month during which a subsequent Take-Out Securitization has occurred.
"Required Holdback" means, as of any date, the sum of (i) the greater
of (a) the sum of (x) the product of the Required Holdback Percentage times the
Aggregate Outstanding Principal Balance of Eligible Receivables in the Total
Receivables Pool on such date plus (y) the product of 4% times the amount on
deposit in the Collection Account on such date, and (b) $1,500,000; plus (ii)
the Deficiency Amount for such date.
"Required Holdback Percentage" means 29% at all times. Notwithstanding
the foregoing, the Required Holdback Percentage shall increase by 0.50% per
month or portion thereof at any time after the failure of the Required Initial
Take-Out Securitization or any Required Subsequent Take-Out Securitization to
timely occur, returning to 29% at such time as the Required Initial Take-Out
Securitization or the next Required Subsequent Take-Out Securitization has
occurred.
"Required Initial Take-Out Securitization" means a Take-Out
Securitization closing on or before June 30, 2001.
"Required Lenders" means, at any time, (a) Noncommitted Lenders holding
Advances aggregating at least 51% of all Advances then owing to Noncommitted
Lenders, and (b) Committed Lenders having Commitments or, if no Commitments are
in effect, Advances, aggregating at least 51% of the Total Commitment or
Advances owing to Committed Lenders (as the case may be).
"Required Reserve Account Amount" means, on any date, the sum of:
(x) the greater of (i) the Minimum Reserve Account Amount and
(ii) the product of (x) the Stated Percentage in effect on such date
and (y) the sum of (A) the aggregate unpaid principal amount of all
Advances on such date plus (B) the Required Holdback in effect on such
date; plus
(y) the Overcollateralization Differential Amount; plus
(z) the Branch Collections Adjustment Amount.
"Required Subsequent Take-Out Securitization" means a Take-Out
Securitization closing within six months after the closing of the immediately
prior Take-Out Securitization.
"Reserve Account" means the account designated as the Reserve Account
in, and which is established and maintained pursuant to, Section 8.17(b).
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"Reserve Account Shortfall" means, as of any date, an amount (if
positive) equal to the Required Reserve Account Amount on such date minus the
amount on deposit in the Reserve Account on such date.
"Responsible Officer" means, with respect to any Person that is not an
individual, the President, any Vice-President or Assistant Vice-President, the
Treasurer or Assistant Treasurer, or the Controller or Assistant Controller or
Warehouse Manager of such Person, or any other officer or employee having
similar functions.
"Sale and Contribution Agreement" means the Sale and Contribution
Agreement, dated as March 1, 2001, by and among the Borrower, the Seller and the
Collateral Agent, including all permitted amendments, modifications and
supplements thereto.
"Schedule" has the meaning ascribed to such term in the Sale and
Contribution Agreement.
"Schedule of Receivables" means a Schedule with respect to Receivables.
"Scheduled Payment" means with respect to any Receivable, the periodic
payment set forth in such Receivable (excluding, however, any portion of such
payment that represents late payment charges and payments in respect of taxes,
licenses or similar items).
"Secured Parties" means, collectively, the Agent, each Lender, the
Collateral Agent, each other Affected Person and their respective successors and
assigns.
"Security Agreement" means the Security and Collateral Agent Agreement
dated as of the date hereof among the Agent, the Collateral Agent, the Seller,
MFN and the Borrower, including all amendments, modifications and supplements
thereto.
"Seller" means Mercury Finance Company LLC in its capacity as the
Seller under the Sale and Contribution Agreement.
"Seller Guaranty" means the Seller Guaranty dated as of the date hereof
made by the Seller to the Collateral Agent, including all permitted amendments,
modifications and supplements thereto.
"Seller LLC Agreement" means the Limited Liability Company Agreement of
the Seller, dated March 1, 2001 by and among the Contributing Subsidiaries, as
Members, including all permitted amendments, modifications and supplements
thereto.
"Servicer" means the Seller or, as applicable, any successor servicer
appointed pursuant to Section 13.3.
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"Servicer Delinquency Ratio" means, as of the last day of a Collection
Period, the ratio, expressed as a percentage, computed by dividing (i) the
Aggregate Outstanding Principal Balance on such date of each Receivable in the
Servicing Portfolio which is a Delinquent Receivable or a Receivable for which
the Financed Vehicle has been repossessed and the proceeds thereof have not been
realized by the Servicer by (ii) the Aggregate Outstanding Principal Balance of
all Receivables in the Servicing Portfolio on the last day of such Collection
Period.
"Servicer Extension Notice" has the meaning set forth in Section 8.14.
"Servicer File" means, with respect to each Receivable in the Total
Receivables Pool, the documents, electronic entries, instruments and writings
set forth in clause (xiv) of the definition of "Eligible Receivable" herein.
"Servicer Termination Event" has the meaning set forth in Section 13.1.
"Servicer's Certificate" means, with respect to each Determination
Date, a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 8.9, substantially in the form attached hereto as
Exhibit E.
"Servicing Fee" means, as of any Distribution Date, an amount equal to
the product of (i) 1/12 of the Servicing Fee Rate and (ii) the average Aggregate
Outstanding Principal Balance of Receivables in the Total Receivables Pool for
each day during the Collection Period immediately preceding such Distribution
Date.
"Servicing Fee Rate" means 5%.
"Servicing Portfolio" means as of any date, the Aggregate Outstanding
Principal Balance of all Receivables (whether or not thereafter sold or disposed
of) which are serviced by the Servicer or any of its Affiliates at such time,
calculated in a manner consistent with the calculation of the components of
Average Servicing Portfolio in the most recent Form 10-K or Form 10-Q of MFN.
"Servicing Procedures and Credit Manual" means MFN's written credit,
servicing and collections procedures delivered to the Agent prior to the Closing
Date, as amended from time to time in accordance herewith.
"Settlement Date" means, with respect to any Advance, (a) each
Distribution Date, (b) at the option of the Agent or the Borrower, the last day
of the current Fixed Period of such Advance or (c) the date on which the
Borrower shall prepay such Advance pursuant to Section 4.1 hereof.
"Simple Interest Method" means the method of allocating a fixed level
payment on an obligation between principal and interest, pursuant to which the
portion of such payment that is allocated to interest is equal to the product of
the fixed rate of interest on such obligation
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multiplied by the period of time (expressed as a fraction of a year, based on
the actual number of days in the calendar month and 365 days in the calendar
year) elapsed since the preceding payment under the obligation was made.
"Simple Interest Receivable" means a Receivable under which the portion
of the payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"SST" means Systems & Services Technologies, Inc.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
"Stated Percentage" means, on any date, the sum of (a) 1.0% plus (b)
the aggregate of each Percentage Add-On in effect on such date (if any) as
computed below:
If on such date (i) a Level I Trigger Event exists, the Percentage
Add-On related thereto shall be 2.0%; (ii) a Level II Trigger Event exists, the
Percentage Add-On related thereto shall be 5.0%; (iii) a Level III Trigger Event
exists, the Percentage Add-On related thereto shall be 2.0%; (iv) a Level IV
Trigger Event exits, the Percentage Add-On related thereto shall be 5.0%; (v) a
Level V Trigger Event exists, the Percentage Add-On related thereto shall be
2.0%; (vi) a Level VI Trigger Event exists, the Percentage Add-On related
thereto shall be 5.0%; and (vii) a Level VII Trigger Event exists, the
Percentage Add-On related thereto shall be 2.0%.
In the event that the sum of clauses (a) and (b) above exceeds 7%, the
Stated Percentage shall be 7%.
"Structured Lender" shall mean any Person whose principal business
consists of issuing commercial paper, medium term notes or other securities to
fund its acquisition and maintenance of receivables, accounts, instruments,
chattel paper, general intangibles and other similar assets or interests therein
and which is required by any nationally recognized rating agency which is rating
such securities to obtain from its principal debtors an agreement such as that
set forth in Section 18.12(a) of this Agreement in order to maintain such
rating.
"Sub-Servicer" has the meaning set forth in Section 12.4(c).
"Subsidiary" means, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors.
"Supplement" has the meaning ascribed to such term in the Sale and
Contribution Agreement.
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"Take-Out Securitization" means (a) a financing transaction of any sort
undertaken by the Borrower or any Affiliate of the Borrower secured, directly or
indirectly, by any Transferred Receivables or (b) any other asset
securitization, secured loans or similar transactions involving any Transferred
Receivables or any beneficial interest therein. Notwithstanding the foregoing,
no transaction shall be a Take-Out Securitization unless at least 90% of the
Aggregate Outstanding Principal Balance of Eligible Receivables as of the
cut-off date of such Take-Out Securitization are financed by such Take-Out
Securitization.
"Tangible Net Worth" means, with respect to any Person, the net worth
of such Person calculated in accordance with GAAP after subtracting therefrom
the aggregate amount of such Person's intangible assets, including, without
limitation, goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights and service marks.
"Taxes" has the meaning set forth in Section 5.1(b).
"Total Commitment" means the aggregate of the Commitments of all
Committed Lenders.
"Total Expense Percentage" means, as of any date, the sum of (a) the
Servicing Fee Rate plus (b) the Xxxxx Fargo Fee Rate plus (c) the Facility Fee
Rate plus (d) the Designated Backup Subservicer Fee Rate.
"Total Receivables Pool" means, on any day, all Receivables which were
sold or contributed to the Borrower pursuant to the Sale and Contribution
Agreement and owned by the Borrower on such day.
"Transaction Documents" means this Agreement, the Note, the Seller
Guaranty, the MFN Guaranty, the Membership Pledge Agreement, the Fee Letter, the
Custodian Agreement, the Contribution Agreement, the Sale and Contribution
Agreement, the Lockbox Agreement, the Blocked Account Agreements, the Security
Agreement, the Borrower LLC Agreement, the Seller LLC Agreement, each Interest
Rate Hedge, the DBAB Side Letter, the Master Collection Account Agreement and
the other documents to be executed and delivered in connection with this
Agreement.
"Transferred Receivable" means each Receivable which appears on any
Schedule of Receivables at any time hereafter submitted to the Borrower pursuant
to the Sale and Contribution Agreement, whether purchased by the Borrower or
contributed to the capital of the Borrower. Once a Receivable appears on any
such Schedule of Receivables it shall remain a Transferred Receivable; provided,
however, that any Receivable that is released from the Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to Section
9.5(f) shall not be a "Transferred Receivable" after such Receivable is so
released.
"Transfer Request" has the meaning set forth in Section 9.5(a).
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"Transition Costs" means any reasonable documented expenses and
allocated cost of personnel reasonably incurred by the Backup Servicer in
connection with a transfer of servicing from the Servicer to the Backup Servicer
as the successor Servicer in an amount not to exceed $100,000.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Facility Termination Event" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute a Facility Termination Event.
"Usage Fee" has the meaning set forth in the Fee Letter.
"Warranty Receivable" means, with respect to any Collection Period, a
Receivable that the Servicer or the Seller has become obligated to purchase or
repurchase pursuant to Section 8.7 or under the Second Tier Sale and
Contribution Agreement.
"Xxxxx Fargo" means Xxxxx Fargo Bank Minnesota, National Association, a
national banking association.
"Xxxxx Fargo Fee Letter" means (a) that certain schedule of fees of
Xxxxx Fargo, acknowledged by MFN, the Servicer and the Borrower, and consented
to by the Agent, as the same may be amended, supplemented or otherwise modified
by the parties thereto with the consent of the Agent and (b) any letter
agreement(s) or schedule of fees entered into by MFN, the Servicer and the
Borrower, with the consent of the Agent, with a substitute Backup Servicer
and/or Custodian and/or Collateral Agent in replacement of the schedule of fees
referred to in clause (a) above relating to fees payable to such substitute
Backup Servicer and/or Custodian and/or Collateral Agent, as the case may be.
"Xxxxx Fargo Fee Rate" means with respect to any date, the quotient,
expressed as a percentage of (x) the sum of all compensation payable to Xxxxx
Fargo pursuant to the Xxxxx Fargo Fee Letter for the immediately preceding
Collection Period divided by (y) the Aggregate Outstanding Principal Balance of
Eligible Receivables as of such date.
"written" or "in writing" (and other variations thereof) means any form
of written communication or a communication by means of telex, telecopier
device, telegraph or cable.
"Yield" means, with respect to any period, the sum of the following:
(i) without duplication of the amount set forth in the
immediately following clause (ii), the sum of the daily interest
accrued on the commercial paper issued by each Noncommitted
Lender to fund or maintain any Advance outstanding on each day
during such period equal, for any such day, to the
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product of (x) the outstanding principal amount of such
commercial paper on such day, (y) the applicable Commercial
Paper Rate and (z) 1/360, plus
(ii) if any commercial paper has been issued by a
Noncommitted Lender during such period to fund the interest
component on any other commercial paper maturing on a date other
than a Settlement Date, the sum of the daily interest accrued on
such additional commercial paper outstanding on each day during
such period equal, for any such day, to the product of (x) the
outstanding principal amount of such additional commercial paper
on such day, (y) the applicable Commercial Paper Rate and (z)
1/360, plus
(iii) the sum of the daily interest accrued on Advances
funded or maintained other than through the issuance of
commercial paper on each day during such period equal, for any
such day, to the product of (x) the outstanding principal amount
of such Advances on such day, (y) the Bank Rate and (z) the
applicable computation period determined in accordance with
Section 3.5 of this Agreement, minus
(iv) the amount of Yield paid on all Interim Distribution
Dates during such period.
Notwithstanding clauses (i), (ii) and (iii) above, after the date any
principal amount of any Advance is due and payable (whether on the Facility
Termination Date, upon acceleration or otherwise) or after any other monetary
obligation of the Borrower or the Servicer arising under this Agreement shall
become due and payable, the Borrower or the Servicer, as the case may be, shall
pay (to the extent permitted by law, if in respect of any unpaid amounts
representing Yield) Yield (after as well as before judgment) on such amounts,
payable on demand, at a rate per annum equal to the Default Rate.
SECTION 1.2. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement have the meanings as so defined herein when used in any Note or
any other Transaction Document, certificate, report or other document made
or delivered pursuant hereto.
(b) Each term defined in the singular form in Section 1.1 or elsewhere
in this Agreement shall mean the plural thereof when the plural form of
such term is used in this Agreement, a Note or any other Transaction
Document, certificate, report or other document made or delivered pursuant
hereto, and each term defined in the plural form in Section 1.1 shall mean
the singular thereof when the singular form of such term is used herein or
therein.
(c) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this agreement as a whole and not to
any particular
37
provision of this Agreement, and article, section, subsection, schedule and
exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Agreement unless otherwise
specified.
ARTICLE II
THE FACILITY, ADVANCE PROCEDURES AND NOTES
SECTION 2.1. Facility.
(a) On the terms and subject to the conditions set forth in this
Agreement, each Noncommitted Lender may, in its sole discretion, make loans
(to the extent of its Available Purchase Amount) to the Borrower (each loan
made pursuant to this Section 2.1 (a), an "Advance") on a revolving basis
from time to time during the period commencing on the Effective Date and
ending on the Facility Termination Date, in each case in such amounts as
may be requested by the Borrower pursuant to Section 2.2. If on any day
there shall be more than one Noncommitted Lender, any Advance requested by
the Borrower on such day shall be allocated among the Noncommitted Lenders
pro rata on the basis of their respective Noncommitted Percentages and each
Noncommitted Lender may, in its sole and absolute discretion, determine
whether to make an Advance in its allocated amount. If a Noncommitted
Lender elects not to make a requested Advance, each of the Committed
Lenders with respect to such Noncommitted Lender shall make Advances (in an
aggregate amount equal to the requested Advance) to the Borrower (to the
extent of the unutilized Commitment of each such Committed Lender and pro
rata among such Committed Lenders in accordance with their respective
Adjusted Commitment Percentages) on a revolving basis from time to time
during the period commencing on the Effective Date and ending on the
Facility Termination Date. The lending arrangement made available to the
Borrower pursuant to the preceding sentences of this Section 2.1(a) is
herein called the "Facility". The aggregate principal amount of all
Advances at any time outstanding hereunder shall not exceed the lesser of
(i) the Facility Limit and (ii) the Borrowing Base.
(b) Notwithstanding the foregoing, under no circumstances shall any
Lender make any Advance if after giving effect thereto the aggregate
outstanding principal balance of (x) all Advances would exceed the Facility
Limit then in effect or (y) all Advances owing to such Lender would exceed
(i) if such Lender is a Noncommitted Lender, its Maximum Purchase Amount or
(ii) if such Lender is a Committed Lender, its applicable Commitment.
(c) Within the limits of the Facility, the Borrower may borrow, prepay
and reborrow Advances under this Section 2.1.
SECTION 2.2. Advance Procedures. The Borrower may request an Advance
hereunder by giving notice to the Agent and the Collateral Agent of a proposed
Advance not later than 1:00
38
P.M., New York time, one Business Day prior to the proposed date of such
Advance. Each such notice (herein called an "Advance Request") shall be in the
form of Exhibit A and shall include the date and amount of such proposed
Advance, the desired duration of the Fixed Period for such Advance and the
Supplement and Schedule setting forth the information required therein with
respect to the Receivables to be acquired by the Borrower with the proceeds of
the proposed Advance. Advances may be made no more frequently than once in any
calendar week. Any Advance Request given by the Borrower pursuant to this
Section 2.2 shall be irrevocable and binding on the Borrower.
SECTION 2.3. Funding. Subject to the satisfaction of the conditions
precedent set forth in Article VII with respect to such Advance and the
limitations set forth in Section 2.1, the Lenders shall make the proceeds of
such requested Advance available as follows: first, to the extent the amount on
deposit in the Reserve Account is less than the Minimum Reserve Account Amount
(computed after giving effect to the proposed Advance) on the proposed date of
the Advance, an amount equal to such deficiency shall be deposited by the
Lenders in the Reserve Account; and second, all amounts of the Advance in excess
of the required deposit in the Reserve Account shall be made available to the
Borrower by deposit to such account as may be designated by the Borrower in the
related Advance Request in same day funds no later than 3:00 p.m., New York City
time, on the proposed date of the Advance. Each Advance shall be on a Business
Day and shall be in an amount of at least $2,000,000 (or an integral multiple of
$1,000 in excess thereof).
SECTION 2.4. Representation and Warranty. Each request for an Advance
pursuant to Section 2.2 shall automatically constitute a representation and
warranty by the Borrower to the Agent and the Lenders that, on the requested
date of such Advance, (a) the representations and warranties contained in
Article X will be true and correct as of such date as though made on such date,
(b) no Facility Termination Event or Unmatured Facility Termination Event has
occurred and is continuing or will result from the making of such Advance, and
(c) after giving effect to such requested Advance, the aggregate principal
balance of the outstanding Advances hereunder will not exceed the lesser of (i)
the Facility Limit and (ii) the Borrowing Base.
SECTION 2.5. Voluntary Termination of Facility; Reduction and Increase of
Facility Limit.
(a) At any time the Borrower may, upon at least ten Business Days'
prior written notice to the Agent, terminate in whole or reduce the Total
Commitment. Upon any termination in whole of the Total Commitment, the
Facility Limit and the Maximum Purchase Amount of each Noncommitted Lender
shall be reduced to zero. Each partial reduction shall be in an aggregate
amount of $5,000,000 or integral multiples of $1,000,000 in excess thereof.
Partial reductions of the Total Commitment pursuant to this Section 2.5(a)
shall be allocated to the Commitment of each Committed Lender (thus
reducing the Maximum Purchase Amount of each Noncommitted Lender and the
Facility Limit) pro rata based on the Commitment Percentage represented by
such Commitment.
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Any termination or reduction of the Total Commitment shall require (i) in
the event of a partial reduction and after giving effect to any such
partial reduction and any prior partial reduction, that the remaining
Facility Limit be not less than $5,000,000, and (ii) in connection
therewith that the Borrower comply with Section 3.2(b), Section 4.1(b) and
Section 6.3, in each case, to the extent applicable. The Agent shall
promptly provide copies of any such notice of termination or reduction
received by it to each Lender together with a computation of the amount by
which its Commitment (if any) has been reduced.
(b) The Facility Limit shall be automatically reduced to $150,000,000
upon the occurrence of the Required Initial Take-Out Securitization.
(c) The Total Commitment (and Maximum Purchase Amounts and Facility
Limit) may be increased from time to time by (i) the increase of the
Commitment of one or more Committed Lenders (by amendment of its Joinder
Supplement), (ii) the addition of one or more Committed Lenders (by
execution and delivery of appropriate Joinder Supplements) or (iii) the
addition of one or more Noncommitted Lenders concurrently with the addition
of one or more Committed Lenders for such Noncommitted Lenders (by
execution and delivery of appropriate Joinder Supplements); provided,
however, that no such increase shall become effective unless (i) the Agent,
MFN, the related Noncommitted Lender (in the case of actions described in
(i) and (ii) affecting its Committed Lenders) and the Borrower shall have
given their written consent thereto, and (ii) such conditions, if any, as
the Agent shall have required in connection with its consent shall have
been satisfied. Notwithstanding the foregoing, at no time may the Facility
Limit exceed $300,000,000.
SECTION 2.6. Notes. All Advances shall be evidenced by a Note with
insertions appropriately completed and payable to the order of the Agent, on
behalf of the Investors. The Borrower hereby irrevocably authorizes the Agent to
make (or cause to be made) appropriate notations on the grid attached to each
Note (or on any continuation of such grid, or at the Agent's option, in its
records), which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal of, and the Yield rate(s) and Fixed Period(s) applicable
to the Advances evidenced thereby. Such notations shall be rebuttably
presumptive evidence of the subject matter thereof absent manifest error;
provided, however, that the failure to make any such notations shall not limit
or otherwise affect any of the Obligations.
ARTICLE III
YIELD, FEES, ETC.
SECTION 3.1. Yield. The Borrower hereby promises to pay Yield on the unpaid
principal amount of each Advance (or each portion thereof) for the period
commencing on the date of such Advance until such Advance is paid in full. No
provision of this Agreement or any
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Note shall require the payment or permit the collection of Yield in excess of
the maximum permitted by applicable law.
SECTION 3.2. Yield Payment Dates. Yield accrued on each Advance shall be
payable, without duplication:
(a) on the Facility Termination Date;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Advance; and
(c) on each Distribution Date; provided that Yield relating to such
Advance may be payable, at the option of the Agent or the Borrower, on the
related Interim Distribution Date.
SECTION 3.3. Yield Allocations; Selection of Fixed Periods, etc.
(a) The Agent, from time to time in its sole discretion exercised in
good faith, shall determine after consultation with each Noncommitted
Lender whether Yield in respect of the Advances then outstanding, or any
portion thereof, shall be calculated by reference to such Lender's
Commercial Paper Rate (such portion being herein called a "CP Allocation")
or the Bank Rate (such portion being herein called a "Bank Rate
Allocation", and together with a CP Allocation individually called an
"Allocation", and collectively, "Allocations"); provided, however, that the
Agent may determine, at any time and in its sole discretion exercised in
good faith, that the Commercial Paper Rate is unavailable or otherwise not
desirable, in which case the Advances will be allocated to a Bank Rate
Allocation (unless the Default Rate is in effect). The Agent shall provide
the Borrower with reasonably prompt notice of the Allocations made by it
pursuant to this Section 3.3(a).
(b) The Agent, in its sole discretion exercised in good faith after
consultation with each Noncommitted Lender and the Borrower, shall select
the duration of the initial and each subsequent Fixed Period relating to
each Advance, provided that any Fixed Period selected by the Agent
applicable to an Advance owing to a Noncommitted Lender shall have been
approved (in writing or by telephone promptly confirmed in writing) by such
Lender. In selecting such Fixed Period, the Agent shall use reasonable
efforts, taking into consideration market conditions, to accommodate the
Borrower's preferences; provided, however, that the Agent shall have the
ultimate authority to make all such selections. Unless consented to or
directed by the Agent, the aggregate number of Fixed Periods for all
Advances outstanding at any one time hereunder shall not exceed 20, it
being understood that if necessary to match the funding requirement of a
Noncommitted Lender, any Advance may be divided into portions having
different Fixed Periods.
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SECTION 3.4. Fees. The Borrower agrees to pay to the Agent, on behalf of
itself, the Lenders and the Liquidity Providers, certain fees in the amounts and
on the dates set forth in the letter agreement among DBNY, MFN and the Borrower
dated as of the date hereof (as the same may be amended, supplemented or
otherwise modified, the "Fee Letter").
SECTION 3.5. Computation of Yield and Fees. All Yield and Fees shall be
computed on the basis of the actual number of days (including the first day but
excluding the last day) occurring during the period for which such Yield or Fee
is payable over a year comprised of 360 days (or, in the case of Yield on an
Advance bearing Yield at the Alternate Base Rate, 365 days or, if appropriate,
366 days).
ARTICLE IV
REPAYMENTS AND PREPAYMENTS
SECTION 4.1. Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each Advance on the Facility Termination Date.
Prior thereto, the Borrower:
(a) may, from time to time on any Business Day, make a prepayment, in
whole or in part, of the outstanding principal amount of any Advance;
provided, however, that
(i) all such voluntary prepayments shall require at least two but
no more than five Business Days' prior written notice to the Agent
(which notice shall specify the amount and date of such prepayment);
and
(ii) all such voluntary partial prepayments shall be in a minimum
amount of $1,000,000 and an integral multiple of
$500,000;
(b) shall, on each date when any reduction in the Facility Limit shall
become effective pursuant to Section 2.5(a) or Section 2.5(b), make a
prepayment of the Advances in an amount equal to the excess, if any, of the
aggregate outstanding principal amount of the Advances over the Facility
Limit as so reduced;
(c) shall, immediately upon any acceleration of the maturity date of
the Advances pursuant to Section 14.2, repay all Advances in full, unless,
pursuant to Section 14.2(a), only a portion of all Advances is so
accelerated, in which event the Borrower shall repay the accelerated
portion of the Advances; and
(d) shall, on the date the Borrower receives any proceeds from any
Take-Out Securitization (after deducting all costs and expenses of such
Take-Out Securitization), make a prepayment (in an amount substantially
equal to such net proceeds or, if less, the total outstanding amount of the
applicable Advances).
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Each such prepayment or payment shall be subject to the payment of any
amounts required by Section 6.3 resulting from a prepayment or payment of an
Advance prior to the end of the Fixed Period with respect thereto.
ARTICLE V
PAYMENTS; TAXES
SECTION 5.1. Making of Payments; Taxes.
(a) Subject to, and in accordance with, the provisions of the Security
Agreement, all payments of principal of, or Yield on, the Advances and of
all Fees and other amounts shall be made by the Borrower no later than 2:00
p.m., New York time, on the day when due in lawful money of the United
States of America in immediately available funds to the Agent, at its
account (account number - 104636460008; and account name - TTI) maintained
at the office of Deutsche Bank AG, New York Branch (ABA # 026-003-780),
reference: MFN 2001 Warehouse, with telephone notice (including wire
number) to the Asset Securitization Group of the Agent (telephone number
000-000-0000), or such other account as the Agent shall designate in
writing to the Borrower and the Collateral Agent (the "Agent's Account").
Payments received by the Agent after 2:00 p.m., New York time, on any day
will be deemed to have been received by the Agent on its next following
Business Day. The Agent shall, upon receipt of such payments, promptly
remit such payments (in the same type of funds received by the Agent) to
each Lender which has an interest in such payments hereunder and pro rata
among the Lenders with such interests on the basis of the respective
amounts owing to such Lenders of the Obligations to which such payments
relate.
(b) All payments described in Section 5.1(a) and all other payments
made by or on behalf of the Borrower, the Seller, MFN or the Servicer to
the Agent for the benefit of itself or the Lenders or to any other Affected
Person under this Agreement and any other Transaction Document shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Official
Body (excluding (i) taxes imposed on the net income of the Agent or such
other Affected Person, however denominated, and (ii) franchise taxes
imposed on the net income of the Agent or such other Affected Person in
each case imposed: (1) by the United States or any political subdivision or
taxing authority thereof or therein; (2) by any jurisdiction under the laws
of which the Agent or such Affected Person or its applicable lending office
is organized or located, managed or controlled or in which its principal
office is located or any political subdivision or taxing authority thereof
or therein; or (3) by reason of any connection between the jurisdiction
imposing such tax and the Agent, such Affected Person or such lending
office other than a connection arising solely from this Agreement
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or any other Transaction Document or any transaction hereunder or
thereunder) (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, collectively or individually,
"Taxes"). If any such Taxes are required to be withheld from any amounts
payable to the Agent or any other Affected Person hereunder or under any
other Transaction Document, the amounts so payable to the Agent or such
Affected Person shall be increased to the extent necessary to yield to the
Agent or such Affected Person (after payment of all Taxes) all amounts
payable hereunder or thereunder at the rates or in the amounts specified in
this Agreement and the other Transaction Documents. The Borrower (or the
party required to "gross-up" the applicable payment) shall indemnify the
Agent or any such Affected Person for the full amount of any such Taxes on
the Settlement Date occurring after the date of written demand therefor by
the Agent; provided that no Person shall be indemnified pursuant to this
Section 5.1(b) to the extent the reason for such indemnification relates
to, or arises from, the failure by such Person to comply with the
provisions of Section 5.1(c).
(c) Each Affected Person that is not incorporated under the laws of
the United States of America or a state thereof or the District of Columbia
shall:
(i) prior to becoming a party to, or acquiring an interest in,
any Transaction Document, deliver to the Borrower and the Agent (A)
two duly completed copies of IRS Form W-8ECI or Form W-8BEN, or
successor applicable form, as the case may be, and (B) an IRS Form
W-8, or successor applicable form, as the case may be; and
(ii) deliver to the Borrower and the Agent two (2) further copies
of any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower and the Agent;
unless, in any such case, an event (including, without limitation, any change in
treaty, law or regulation) has occurred after the Closing Date and prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Affected Person from duly
completing and delivering any such form with respect to it, and such Affected
Person so advises the Borrower and the Agent. Each such Affected Person so
organized shall certify (i) in the case of an IRS Form W-8ECI or Form W-8BEN,
that it is entitled to receive payments under this Agreement and the other
Transaction Documents without deduction or withholding of any United States
federal income taxes and (ii) in the case of an IRS Form W-8, that it is
entitled to an exemption from United States backup withholding tax. Each Person
that desires to become an additional party to a Noncommitted Lender Liquidity
Arrangement, shall prior to the effectiveness of such addition, be required to
provide all of the forms and statements required pursuant to this Section
5.l(c).
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SECTION 5.2. Due Date Extension. If any payment of principal or Yield with
respect to any Advance falls due on a day which is not a Business Day, then such
due date shall be extended to the next following Business Day, and additional
Yield shall accrue and be payable for the period of such extension at the rate
applicable to such Advance.
ARTICLE VI
INCREASED COSTS, ETC.
SECTION 6.1. Increased Costs.
(a) If due to the introduction of or any change in or in the
interpretation of any law or regulation occurring or issued after the date
hereof, the Agent, any Lender or other Investor, any Liquidity Provider, or
any of their respective Affiliates (each an "Affected Person") determines
that compliance with any law or regulation or any guideline or request from
any central bank or other Official Body (whether or not having the force of
law) affects or would affect the amount of capital required or expected to
be maintained by such Affected Person and such Affected Person determines
that the amount of such capital is increased by or based upon the existence
of its obligations or commitments hereunder or with respect hereto or to
the funding thereof and other obligations or commitments of the same type,
then, upon demand by such Affected Person (with a copy to the Agent) (which
demand shall be accompanied by a statement setting forth the basis for the
calculations of the amount being claimed), the Borrower shall immediately
pay to the Agent, for the account of such Affected Person (as a third-party
beneficiary), from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such Affected Person in the
light of such circumstances, to the extent that such Affected Person
reasonably determines such increase in capital to be allocable to the
existence of any of such obligations, commitments or fundings. Such written
statement shall, in the absence of manifest error, be rebuttably
presumptive evidence of the subject matter thereof. Any Affected Person
claiming any additional amounts payable pursuant to this Section 6.1(a)
agrees to use reasonable efforts (consistent with legal and regulatory
restrictions) to designate a different office or branch of such Affected
Person as its lending office if the making of such a designation would
avoid the need for, or reduce the amount of, any such additional amounts
and would not, in the reasonable judgment of such Affected Person, be
otherwise disadvantageous to such Affected Person.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 6.2) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any
central bank or other Official Body (whether or not having the force of
law) issued after the date hereof, there shall be any increase in the cost
to a Lender of agreeing to make Advances in respect of which Yield is
computed by reference to the Eurodollar Rate, then, upon demand by such
Lender (with a copy to the Agent)
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(which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed), the Borrower shall immediately pay to the
Agent, for the account of such Lender (as a third-party beneficiary), from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increased costs. Such written statement
shall, in the absence of manifest error, be rebuttably presumptive evidence
of the subject matter thereof. Any Affected Person claiming any additional
amounts payable pursuant to this Section 6.1(b) agrees to use reasonable
efforts (consistent with legal and regulatory restrictions) to designate a
different office or branch of such Affected Person as its lending office if
the making of such a designation would avoid the need for, or reduce the
amount of, any such additional amounts and would not, in the reasonable
judgment of such Affected Person, be otherwise disadvantageous to such
Affected Person.
SECTION 6.2. Additional Yield on Advances Bearing a Eurodollar Rate. The
Borrower shall pay to any Lender, so long as such Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency liabilities, additional Yield on the unpaid Advances of such Lender
during each Fixed Period in respect of which Yield is computed by reference to
the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Fixed
Period, payable on each date on which Yield is payable on such Advances. Such
additional Yield shall be determined by such Lender and notice thereof
(accompanied by a statement setting forth the basis for the amount being
claimed) given to the Borrower through the Agent within 30 days after any Yield
payment is made with respect to which such additional Yield is requested. Such
written statement shall, in the absence of manifest error, be rebuttably
presumptive evidence of the subject matter thereof. Any Affected Person claiming
any additional amounts payable pursuant to this Section 6.2 agrees to use
reasonable efforts (consistent with legal and regulatory restrictions) to
designate a different office or branch of such Affected Person as its lending
office if the making of such a designation would avoid the need for, or reduce
the amount of, any such additional amounts and would not, in the reasonable
judgment of such Affected Person, be otherwise disadvantageous to such Affected
Person.
SECTION 6.3. Funding Losses. The Borrower hereby agrees that upon demand by
any Affected Person (which demand shall be accompanied by a statement setting
forth the basis for the calculations of the amount being claimed) the Borrower
will indemnify such Affected Person against any net loss or expense which such
Affected Person may sustain or incur (including, without limitation, any net
loss or expense incurred by reason of or resulting from interest to accrue on
the related commercial paper after the date of any failed borrowing, payment or
prepayment of an Advance or from the liquidation or reemployment of deposits or
other funds acquired by such Affected Person to fund or maintain any Advance to
the Borrower), as
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reasonably determined by such Affected Person, as a result of any failure to
borrow an Advance on the date specified therefor in an Advance Request (other
than due to a default by a Lender) or as a result of any payment or prepayment
(including any mandatory prepayment) of any Advance on a date other than the
last day of the Fixed Period for such Advance. Such written statement shall, in
the absence of manifest error, be rebuttably presumptive evidence of the subject
matter thereof. Each Affected Person will make a good faith effort to minimize
the costs incurred by the Borrower under this Section 6.3.
SECTION 6.4. Replacement of Affected Person. Upon the receipt by the
Borrower of a claim for reimbursement or compensation under Section 6.1 or 6.2
hereof by an Affected Person, if payment thereof shall not be waived by such
Affected Person, the Borrower may (a) request such Affected Person or the Lender
that has assigned an interest in its Advances to such Affected Person to use
reasonable efforts to assist the Borrower in its attempt to obtain a replacement
bank, financial institution or Structured Lender, as applicable, satisfactory to
the Borrower (in the case of a replacement Lender) and the Agent (which consent
shall not be unreasonably withheld), to acquire and assume all or a ratable part
of such Affected Person's commitment to make Advances, Advances, or interests
therein (a "Replacement Person"), or (b) request one or more of the other
Lenders or Investors to acquire and assume all or a part of such Affected
Person's commitment to make Advances, Advances or interests therein. Upon notice
from the Borrower, such Affected Person shall, or the Lender that has assigned
an interest in its Advances to such Affected Person shall cause such Affected
Person to, assign, without recourse, its commitment to make Advances, Advances
or interests therein and its other rights and obligations (if any) hereunder, or
a ratable share thereof, to the Replacement Person or Replacement Persons
designated by the Borrower and consented to by the Agent for a purchase price
equal to the sum of the principal amount of the Advances or interests therein so
assigned, all accrued and unpaid Yield thereon and any other amounts (including
Fees and any amounts owing under this Article VI) to which such Affected Person
is entitled hereunder; provided, that the Borrower shall provide such Affected
Person with an Officer's Certificate stating that such Replacement Person has
advised the Borrower that it is not subject to, or has agreed not to seek, such
increased amount.
ARTICLE VII
EFFECTIVENESS; CONDITIONS TO ADVANCES
SECTION 7.1. Effectiveness. This Agreement shall become effective on the
first day (the "Effective Date") on which the Agent, on behalf of the Lenders,
shall have received the following, each in form and substance satisfactory to
the Agent:
(a) Agreement. This Agreement and Joinder Supplements (resulting in a
Facility Limit of not less than $300,000,000), executed by each party
thereto;
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(b) Fee Letter. The Fee Letter, duly executed and delivered by the
parties thereto, and evidence that all amounts required to be paid on the
Effective Date thereunder shall have been paid;
(c) Transaction Documents. Executed counterparts of each of the other
Transaction Documents (other than the Lockbox Agreement, the Blocked
Account Agreements, the Master Collection Account Agreement, the Notes or
any Interest Rate Hedge), the Xxxxx Fargo Fee Letter and the Designated
Backup Servicer Fee Letter, duly executed by each of the parties thereto;
and
(d) Other. Such other approvals, documents, opinions, certificates and
reports as the Agent may reasonably request.
SECTION 7.2. Initial Advance. The making of the initial Advance is subject
to the condition that the Effective Date shall have occurred, the conditions set
forth in Section 7.3 have been satisfied, and the Agent on behalf of the Lenders
shall have received the following, each in form and substance satisfactory to
the Agent:
(a) NOTE. The Note duly completed and executed by the Borrower;
(b) Resolutions. A copy of the resolutions of the Board of Directors
(or similar items) of each of MFN, the Contributing Subsidiaries, the
Seller and the Borrower approving the Transaction Documents to be delivered
by it or the Borrower, as applicable, hereunder and the transactions
contemplated hereby, certified by its Secretary or Assistant Secretary;
(c) Charters. (i) The certificate of incorporation of MFN and each
Contributing Subsidiary certified by the Secretary of State of Delaware or
other jurisdiction of organization; and a certified copy of the by-laws of
MFN and each Contributing Subsidiary, (ii) the certificate of formation of
the Borrower certified by the Secretary of State of the State of Delaware;
and a certified copy of the limited liability company agreement of the
Borrower and (iii) the certificate of formation of the Seller certified by
the Secretary of State of the State of Delaware; and a certified copy of
the limited liability company agreement of the Seller;
(d) Good Standing Certificates. Good Standing Certificates for each of
MFN, each Contributing Subsidiary, the Seller and the Borrower issued by
the Secretary of State of the State of Delaware or other jurisdiction of
organization;
(e) Incumbency. A certificate of the Secretary or Assistant Secretary
of each of the Borrower, the Seller, each Contributing Subsidiary and MFN
certifying the names and true signatures of the officers authorized on its
behalf to sign this Agreement and the other Transaction Documents to be
delivered by it (on which certificate the Agent and the
48
Lenders may conclusively rely until such time as the Agent shall receive a
revised certificate meeting the requirements of this subsection (e));
(f) Filings. Acknowledgment copies of proper UCC-1 Financing
Statements (executed by the each Contributing Subsidiary, Seller and/or
Borrower, as applicable), as may be necessary or, in the opinion of the
Agent, desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the transfers contemplated by the Transaction
Documents and the security interest of the Collateral Agent on behalf of
the Secured Parties in all Borrower Collateral in which an interest may be
pledged hereunder;
(g) Searches. Certified copies of Requests for Information or Copies
(Form UCC-11) (or a similar search report certified by a party acceptable
to the Agent), dated a date reasonably near to the date of the initial
Advance, listing all effective financing statements which name the
Borrower, the Seller, each Contributing Subsidiary, or MFN (under their
respective present names and any previous names) as debtor and which are
filed in the jurisdictions in which filings were made pursuant to Section
7.2(f), together with copies of such financing statements;
(h) Opinions. Legal opinion(s) of the General Counsel of MFN, of
Vedder, Price, Xxxxxxx & Kammholz, special counsel for the MFN Entities, of
in-house counsel for the Backup Servicer, Custodian and Collateral Agent,
of Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel to Borrower and
Servicer and of Xxxxxx and Whitney, counsel to the Collateral Agent, each
in form and substance satisfactory to the Agent covering such matters as
the Agent may reasonably request;
(i) Lockbox Agreement and Blocked Account Agreements. Executed
counterparts of the Lockbox Agreement and the Blocked Account Agreements
duly executed by each of the parties thereto;
(j) Accounts. Evidence that the Reserve Account, the Collateral
Account and the Collection Account have been established;
(k) Procedures Letter. An "agreed upon procedures" letter approved and
accepted by the Independent Accountants, MFN and the Agent relating to the
reviews described in Section 8.12(b);
(l) Ratings Letter. If and only if the initial Advance is made by the
Noncommitted Lender, the Noncommitted Lender shall have received from each
Rating Agency a letter confirming that the Noncommitted Lender's Advances
under this Agreement will not result in a downgrade or withdrawal of the
existing ratings assigned by either Rating Agency to the Noncommitted
Lender's commercial paper notes; and
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(m) Other. Such other approvals, documents, opinions, certificates and
reports as the Agent may reasonably request.
SECTION 7.3. All Advances. The making of each Advance (including the
initial Advance) is subject to the condition that the Effective Date shall have
occurred, the conditions set forth in Section 7.2 shall have been satisfied, and
to the following further conditions precedent that:
(a) No Facility Termination Event, etc. Each of the Transaction
Documents shall be in full force and effect and (i) no Facility Termination
Event or Unmatured Facility Termination Event has occurred and is
continuing or will result from the making of such Advance, (ii) the
representations and warranties of the Borrower contained in Article X and
the Servicer contained in Section 8.6(b) are true and correct as of the
date of such requested Advance, with the same effect as though made on the
date of (and after giving effect to) such Advance, and (iii) after giving
effect to such Advance, the aggregate outstanding principal balance of the
Advances hereunder will not exceed the lesser of the Facility Limit and the
Borrowing Base;
(b) Advance Request, etc. The Agent shall have received the Advance
Request for such Advance in accordance with Section 2.2, together with all
items required to be delivered in connection therewith;
(c) Facility Termination Date. The Facility Termination Date shall not
have occurred;
(d) Minimum Advance Amount. The amount of such Advance is not less
than $2,000,000;
(e) Collateral Receipt. The Agent shall have received a duly completed
and executed Collateral Receipt confirming that a complete Receivable File
has been received with respect to all Receivables listed on the related
Advance Request, and the Agent shall have received, together with the
related Advance Request, written confirmation from the Collateral Agent
that the Collateral Agent has reviewed such Advance Request and determined
that the Collateral Receipt is substantially in the form attached as
Schedule A to the Custodian Agreement, and affirms that (i) the identifying
number on the Advance Request conforms to the number referenced in the
Collateral Receipt, (ii) the number of Receivables listed on the Schedule
attached to such Advance Request conforms to the number of Receivables as
stated in the Collateral Receipt and (iii) the aggregate Principal Balance
of the Receivables in the Advance Request conforms to the aggregate
Principal Balance thereof as stated in the Collateral Receipt;
(f) Portfolio Review. The Agent shall have received the results of the
most recent review required to be made by the Independent Accountants
pursuant to Section
50
8.12(b), which review shall contain no exceptions unacceptable to the Agent
in its reasonable discretion;
(g) Borrowing Base Confirmation. The Agent shall have received a duly
completed and executed certificate regarding the Borrowing Base in the
form attached hereto as Exhibit D (a "Borrowing Base Confirmation"),
computed as of the date of such Advance and after giving effect thereto
and to the purchase by the Borrower of any Receivables to be purchased
by it under the Sale and Contribution Agreement on such date;
(h) Interest Rate Xxxxxx. The Agent shall have received evidence, in
form and substance satisfactory to the Agent, that the Borrower has entered
into Interest Rate Xxxxxx to the extent required by, and satisfying the
requirements of, Section 11.6 (together with an Interest Rate Hedge
Assignment Acknowledgment duly executed by the counterparty thereto (if
necessary) and concurrently delivered to the Agent);
(i) Reserve Account. After giving effect to such Advance and the
application of the proceeds thereof in accordance with Section 2.3, the
amount on deposit in the Reserve Account is not less than the Minimum
Reserve Account Amount; and
(j) Other. The Agent shall have received such other approvals,
documents, opinions, certificates and reports as it may reasonably request.
ARTICLE VIII
ADMINISTRATION AND SERVICING
SECTION 8.1. Duties of the Servicer.
(a) The Servicer is hereby authorized to act for the Borrower and in
such capacity shall manage, service, administer and make collections on the
Transferred Receivables, and perform the other actions required by the
Servicer under this Agreement for the benefit of the Investors and other
Secured Parties. The Servicer agrees that its servicing of the Transferred
Receivables shall be carried out in accordance with customary and usual
procedures of institutions which service motor vehicle retail installment
sales contracts and, to the extent more exacting, the degree of skill and
attention that the Servicer exercises from time to time with respect to all
comparable motor vehicle receivables that it services for itself or others
in accordance with MFN's Servicing Procedures and Credit Manual as in
effect from time to time for servicing all its other comparable motor
vehicle receivables. The Servicer's duties shall include, without
limitation, collection and posting of all payments, responding to inquiries
of Obligors on the Transferred Receivables, investigating delinquencies,
sending payment statements or payment books to Obligors, reporting any
required tax information to Obligors, policing the collateral, complying
with the terms of the Lockbox Agreement and the Blocked
51
Account Agreements, accounting for collections and furnishing monthly and
annual statements to the Agent and the Collateral Agent with respect to
distributions, monitoring the status of Insurance Policies with respect to
the Financed Vehicles and performing the other duties specified herein. The
Servicer shall also administer and enforce all rights and responsibilities
of the holder of the Transferred Receivables provided for in the Dealer
Agreements (and shall maintain possession of the Dealer Agreements to the
extent it is necessary to do so), the Dealer Assignments and the Insurance
Policies, to the extent that such Dealer Agreements, Dealer Assignments and
Insurance Policies relate to the Transferred Receivables, the related
Financed Vehicles or the related Obligors.
(b) To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Servicer shall follow its
customary standards, policies, and procedures with respect to the
Transferred Receivables and shall have full power and authority, acting
alone, to do any and all things in connection with such managing,
servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Servicer
is hereby authorized and empowered by the Borrower to execute and deliver,
on behalf of the Borrower, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Transferred Receivables and
with respect to the related Financed Vehicles. The Servicer is authorized
to release Liens on Financed Vehicles in order to collect insurance
proceeds with respect thereto and to liquidate such Financed Vehicles in
accordance with its customary standards, policies and procedures; provided,
however, that notwithstanding the foregoing, the Servicer shall not, except
pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Transferred Receivable
or waive the right to collect the unpaid balance of any Transferred
Receivable from the Obligor, except that the Servicer may forego collection
efforts if the amount subject to collection is de minimis and if it would
forego collection in accordance with its customary procedures. The Servicer
is hereby authorized to commence, in its own name or in the name of the
Borrower, the Collateral Agent or the Lenders (provided that if the
Servicer is acting in the name of the Collateral Agent or the Lenders, the
Servicer shall have obtained the Collateral Agent's and the Agent's
consent, as the case may be, which consent shall not be unreasonably
withheld), a legal proceeding to enforce a Transferred Receivable pursuant
to Section 8.3 or to commence or participate in any other legal proceeding
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Transferred Receivable, an Obligor or a Financed Vehicle. If
the Servicer commences or participates in such a legal proceeding in its
own name, the Borrower or the Collateral Agent (on behalf of the Secured
Parties), as the case may be, shall thereupon be deemed to have
automatically assigned such Transferred Receivable to the Servicer solely
for purposes of commencing or participating in any such proceeding as a
party or claimant, and the Servicer is authorized and empowered by the
Borrower or the Collateral Agent (on behalf of the Secured Parties), as the
case may be, to execute and deliver any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
52
connection with any such proceeding. The Borrower and the Collateral Agent
(on behalf of the Secured Parties), as the case may be, shall furnish the
Servicer with any powers of attorney and other documents which the Servicer
may reasonably request in writing and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
SECTION 8.2. Collection of Receivable Payments; Modification and Amendment
of Receivables; Lockbox Agreements; Blocked Account Agreements.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Transferred
Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable
automobile receivables that it services for itself or others and otherwise
act with respect to the Transferred Receivables, the Dealer Agreements, the
Dealer Assignments and the Insurance Policies in such manner as will, in
the reasonable judgment of the Servicer, maximize the amount to be received
by the Borrower and the Secured Parties with respect thereto. The Servicer
is authorized in its discretion to waive any prepayment charge, late
payment charge or any other similar fees that may be collected in the
ordinary course of servicing any Transferred Receivable.
(b) The Servicer may at any time agree to a modification or amendment
of a Transferred Receivable in order to (i) change the Obligor's regular
due date to another date within the Collection Period in which such due
date occurs, (ii) re-amortize the amount of the Scheduled Payments on the
Transferred Receivable to the extent necessary to reflect a partial
prepayment of principal or (iii) convert a Pre-Computed Receivable to a
Simple Interest Receivable.
(c) The Servicer may grant payment extensions on, or other
modifications or amendments to, a Transferred Receivable (including those
modifications permitted by Section 8.2(b) in accordance with its customary
procedures if the Servicer believes in good faith that such extension,
modification or amendment is necessary to avoid a default on such
Transferred Receivable, will maximize the amount to be received by the
Borrower and the Secured Parties with respect to such Transferred
Receivable, and is otherwise in the best interests of the Borrower and the
Secured Parties; provided, however, that:
(i) in no event may a Transferred Receivable be extended more
than twice during any twelve month period or more than six times
during the full term of such Transferred Receivable;
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(ii) the aggregate period of all extensions on a Receivable shall
not exceed six months and any such extension shall not extend beyond
66 months after the Facility Termination Date; and
(iii) the Servicer shall not amend or modify a Transferred
Receivable (except as provided in Section 8.2(b) and clause (i) and
(ii) of this Section 8.2(c)) without the written consent of the Agent.
provided, that any such amendment, modification or extension shall be delivered
by the Servicer to the Custodian promptly after execution thereof.
(d) The Servicer shall use its best efforts to cause Obligors to make
all payments on the Transferred Receivables, whether by check or by direct
debit of the Obligor's bank account, to be made directly to the Lockbox or
a Blocked Account. The Servicer shall require the Blocked Account Banks to
deposit all payments on the Transferred Receivables in the Master
Collection Account no later than the Business Day after receipt and shall
require the Blocked Account Banks to transfer all such amounts credited to
the Master Collection Account to the Collection Account, no later than the
second Business Day after receipt of such payments.
Notwithstanding any Lockbox Agreement, the Blocked Account Agreements,
or any of the provisions of this Agreement relating to the Lockbox Agreement or
the Blocked Account Agreements, the Servicer shall remain obligated and liable
to the Agent, the Collateral Agent and the Investors for servicing and
administering the Transferred Receivables in accordance with the provisions of
this Agreement without diminution of such obligation or liability by virtue
thereof.
In the event the Servicer shall for any reason no longer be acting as
such, the Backup Servicer or successor Servicer shall thereupon assume all of
the rights and, from the date of assumption, all of the obligations of the
outgoing Servicer under the Lockbox Agreement, or the Blocked Account
Agreements, if applicable. The Backup Servicer, the Designated Backup
Subservicer or any other successor Servicer shall not be liable for any acts,
omissions or obligations of the Servicer prior to such succession. In such
event, the successor Servicer shall be deemed to have assumed all of the
outgoing Servicer's interest therein and to have replaced the outgoing Servicer
as a party to each such Lockbox Agreement and Blocked Account Agreements to the
same extent as if such Lockbox Agreement had been assigned to the successor
Servicer, except that the outgoing Servicer shall not thereby be relieved of any
liability or obligations on the part of the outgoing Servicer to the Lockbox
Bank or Blocked Account Agreements under such Lockbox Agreement or the Blocked
Account Agreements. The outgoing Servicer shall, at the expense of the outgoing
Servicer, deliver to the successor Servicer all documents and records relating
to each such agreement and an accounting of amounts collected and held by the
Lockbox Bank and the Blocked Account Banks and otherwise use its best efforts to
effect the orderly and efficient transfer of any Lockbox Agreement or Blocked
Account Agreement to the successor Servicer. In the event that the Agent elects
to change the identity of the Lockbox Bank or a Blocked Account Bank, the
Servicer, at its expense, shall cause the Lockbox Bank or the Blocked Account
Bank to deliver, at the direction of the
54
Agent, to the Collateral Agent or a successor Lockbox Bank or the Blocked
Account Bank all documents and records relating to the Transferred Receivables
and all amounts held (or thereafter received) by the Lockbox Bank or the Blocked
Account Bank (together with an accounting of such amounts) and shall otherwise
use its best efforts to effect the orderly and efficient transfer of the lockbox
or blocked account arrangements and the Servicer shall notify the Obligors to
make payments to the Lockbox Account or Blocked Account established by the
successor.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors received directly by the Servicer to the Lockbox Account or to a
Blocked Account as soon as practicable, but in no event later than the
Business Day after receipt thereof.
(f) In the event that Branch Collections with respect to any
Collection Period exceed the Branch Collections Limit for such Collection
Period, the Required Reserve Account Amount shall increase by the product
of (i) 0.25% for every 1% or portion thereof of such excess times (ii) the
Aggregate Outstanding Principal Balance of Eligible Receivables in the
Total Receivables Pool on such date (such product, the "Branch Collections
Adjustment Amount").
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SECTION 8.3. Realization Upon Receivables.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall repossess (or otherwise comparably
convert the ownership of) and liquidate any Financed Vehicle securing a
Transferred Receivable with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed, as soon as is
practicable after default on such Transferred Receivable but in no event
later than the date on which all or any portion of a Scheduled Payment has
become 151 or more days delinquent; provided, however, that the Servicer
may elect not to repossess a Financed Vehicle within such time period if in
its good faith judgment it determines that the proceeds ultimately
recoverable with respect to such Receivable would be increased by
forbearance. The Servicer is authorized to follow such customary practices
and procedures as it shall deem necessary or advisable, consistent with the
standard of care required by Section 8.1, which practices and procedures
may include using its best efforts to realize upon any recourse to Dealers,
selling the related Financed Vehicle at public or private sale, the
submission of claims under an Insurance Policy and other actions by the
Servicer in order to realize upon such Transferred Receivable. The
foregoing is subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with any repair or towards the repossession of such
Financed Vehicle unless it shall determine in its discretion that such
repair and/or repossession shall increase the proceeds of liquidation of
the related Transferred Receivable by an amount greater than the amount of
such expenses. All Recoveries shall be remitted directly by the Servicer to
the Lockbox Account or to a Blocked Account as soon as practicable, but in
no event later than the Business Day after receipt thereof. The Servicer
shall be entitled to recover all reasonable out-of-pocket expenses incurred
by it in the course of repossessing and liquidating a Financed Vehicle, but
only out of the cash proceeds of such Financed Vehicle, any deficiency
obtained from the Obligor or any amounts received from the related Dealer,
which amounts may be retained by the Servicer (and shall not be required to
be deposited in the Lockbox Account or to a Blocked Account) to the extent
of such expenses. The Servicer shall pay on behalf of the Borrower any
personal property taxes assessed on repossessed Financed Vehicles; and the
Servicer shall be entitled to reimbursement of any such tax from Recoveries
with respect to the related Transferred Receivable.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be
deemed to be an automatic assignment from the Borrower and the Collateral
Agent (on behalf of the Secured Parties) to the Servicer of the rights
under such Dealer Agreement and Dealer Assignment for purposes of
collection only. If, however, in any enforcement suit or legal proceeding,
it is held that the Servicer may not enforce a Dealer Agreement or Dealer
Assignment on the grounds that it is not a real party in interest or a
Person entitled to enforce the Dealer Agreement or Dealer Assignment, the
Borrower, at the Servicer's expense, shall take such steps as the Servicer
deems necessary to enforce the Dealer
56
Agreement or Dealer Assignment, including bringing suit in its name. All
amounts recovered shall be remitted directly by the Servicer to the Lockbox
Account or to a Blocked Account as soon as practicable, but in no event
later than the Business Day after receipt thereof.
SECTION 8.4. Insurance.
(a) The Servicer shall monitor the status of the Insurance Policies in
accordance with its customary servicing procedures. If the Servicer shall
determine that an Obligor has failed to obtain or maintain a physical loss
and damage insurance policy covering the related Financed Vehicle which
satisfies the conditions set forth in clause (xxiii) of the definition of
"Eligible Receivable" (including during the repossession of such Financed
Vehicle) the Servicer shall enforce the rights of the holder of the
Receivable thereunder to require that the Obligor obtains such physical
loss and damage insurance in accordance with its customary servicing
procedures.
(b) The initial Servicer may, in its reasonable discretion, if an
Obligor fails to obtain or maintain a physical loss and damage Insurance
Policy, obtain insurance with respect to the related Financed Vehicle and
advance on behalf of such Obligor, as required under the terms of the
Insurance Policy, the premiums for such insurance (such insurance being
referred to herein as "Force-Placed Insurance"). All policies of
Force-Placed Insurance shall be endorsed with clauses providing for loss
payable to the Collateral Agent. Any cost incurred by the Servicer in
maintaining such Force-Placed Insurance shall only be recoverable out of
premiums paid by the Obligors or Recoveries with respect to the Transferred
Receivable, as provided in paragraph (c) of this Section 8.4.
(c) In connection with any Force-Placed Insurance obtained hereunder,
the Servicer may, in the manner and to the extent permitted by applicable
law, require the Obligors to repay the entire premium to the Servicer. The
Servicer shall retain and separately administer the right to receive
payments from Obligors with respect to Insurance Add-On Amounts or rebates
of Force-Placed Insurance premiums. If an Obligor makes a payment with
respect to a Receivable having Force-Placed Insurance, the payment shall be
applied first to any unpaid Scheduled Payments and then to the Insurance
Add-On Amount. Recoveries on any Receivable will be used first to pay the
Principal Balance and accrued interest on such Receivable and then to pay
the related Insurance Add-On Amount.
(d) The Servicer may xxx to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Borrower and the
Collateral Agent (on behalf of the Secured Parties). If the Servicer elects
to commence a legal proceeding to enforce an Insurance Policy, the act of
commencement shall be deemed to be an automatic assignment of the rights of
the Borrower and the Collateral Agent (on behalf of the Secured Parties)
under such Insurance Policy to the Servicer for purposes of collection
only.
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If, however, in any enforcement suit or legal proceeding it is held that
the Servicer may not enforce an Insurance Policy on the grounds that it is
not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Borrower shall take such steps as the Servicer deems necessary
to enforce such Insurance Policy, including bringing suit in its name.
(e) The Servicer may, in its reasonable discretion, maintain
Collateral Insurance. If the Servicer elects not to maintain Collateral
Insurance it will be obligated to indemnify the Borrower and the Secured
Parties against any losses arising from an Obligor's failure to maintain
physical loss and damage insurance with respect to the related Financed
Vehicle.
SECTION 8.5. Maintenance of Security Interests in Financed Vehicles.
(a) Consistent with its obligations under this Agreement, the Security
Agreement and the Custodian Agreement, the Servicer shall take such steps
as are necessary to maintain perfection of the security interest created by
each Transferred Receivable in the related Financed Vehicle on behalf of
the Borrower and the Collateral Agent for the benefit of the Secured
Parties, including but not limited to obtaining the execution by the
Obligors and the recording, registering, filing, re-recording, re-filing,
and re-registering of all security agreements, financing statements and
continuation statements as are necessary to maintain the security interest
granted by the Obligors under the Transferred Receivables. The Borrower and
the Collateral Agent (on behalf of the Secured Parties) each hereby
authorizes the Servicer, and the Servicer agrees, to take any and all steps
necessary to re-perfect such security interest on behalf of the Borrower
and the Collateral Agent (on behalf of the Secured Parties) as necessary
because of the relocation of a Financed Vehicle or for any other reason. In
the event that the assignment of a Transferred Receivable to the Borrower
and the pledge thereof to the Collateral Agent (on behalf of the Secured
Parties), and the filing of UCC financing statements all as provided
herein, is insufficient, without a notation on the related Financed
Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the
Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle in favor of the Borrower and the pledge thereof to the
Collateral Agent (on behalf of the Secured Parties), the parties hereto
agree that the designation of any Contributing Subsidiary or the Seller as
the secured party on the certificate of title is, with respect to each
secured party, as applicable, in its capacity as agent of the Borrower and
the Secured Parties.
(b) The Agent may instruct the Borrower and the Servicer to take or
cause to be taken such reasonable action as may, in the opinion of counsel
to the Agent, be necessary or desirable to perfect or re-perfect the
security interests in the Financed Vehicles securing the Transferred
Receivables in the name of the Borrower and the Collateral Agent (on behalf
of the Secured Parties) (as lienholder) by amending the title
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documents of such Financed Vehicles or by such other reasonable means as
may, in the opinion of counsel to the Agent, be necessary or prudent. MFN
hereby agrees to pay all expenses related to such perfection or
re-perfection and to take all action necessary therefor.
SECTION 8.6. Covenants, Representations and Warranties of the Servicer.
(a) The Servicer covenants to the Borrower, the Agent and the Lenders
as follows:
(i) Liens in Force. The Financed Vehicle securing each
Transferred Receivable shall not be released in whole or in part from
the security interest granted by such Receivable, except upon payment
in full of such Receivable or as otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do nothing to impair the
rights of the Borrower or the Secured Parties in the Transferred
Receivables, the Dealer Agreements, the Dealer Assignments or the
Insurance Policies;
(iii) No Amendments. The Servicer shall not extend or otherwise
amend the terms of any Transferred Receivable, except in accordance
with Section 8.2, without the prior written consent of the Agent;
(iv) Restriction on Liens. The Servicer shall not: (i) create or
incur or agree to create or incur, or consent to cause (upon the
happening of a contingency or otherwise) the creation, incurrence or
existence of any Lien or restriction on transferability of the
Receivables or of any Other Conveyed Property except for the Lien in
favor of the Collateral Agent for the benefit of Secured Parties, and
the restrictions on transferability imposed by this Agreement or (ii)
sign or file under the UCC of any jurisdiction any financing statement
or sign any security agreement authorizing any secured party
thereunder to file such financing statement, with respect to the
Receivables or to any Other Conveyed Property, except in each case any
such instrument solely securing the rights and preserving the Lien of
the Collateral Agent, for the benefit of Secured Parties. The Servicer
will take no action to cause any Receivable to be evidenced by an
instrument (as such term is defined in the relevant UCC);
(v) Servicing of Receivables. The Servicer shall service the
Transferred Receivables as required by the terms of this Agreement and
(i) if an MFN Entity is the Servicer, in material compliance with the
current Servicing Procedures and Credit Manual for servicing all its
other comparable motor vehicle receivables or (ii) otherwise, in
accordance with standard industry practice; and no MFN Entity shall
change the Servicing Procedures and Credit Manual or the manner in
which it services the Receivables in any way that could reasonably be
59
expected to have a material adverse effect on the Transferred
Receivables or the Investors;
(vi) Compliance with Laws. The Servicer shall comply in all
material respects with the laws of each state in which a Transferred
Receivable is located, including, without limitation, all federal and
state laws regarding the collection and enforcement of consumer debt,
in respect of which the failure to comply would adversely affect the
interest of the Borrower, the Collateral Agent or the Secured Parties
in any Transferred Receivable or adversely affect its ability to
perform its obligations under this Agreement or under any other
Transaction Document to which it is a party (in any capacity);
(vii) Notice of Relocation. The Servicer shall give the Agent at
least 60 days prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new
financing statement. The Servicer shall at all times maintain each
office from which it services the Collateral and its principal
executive office within the United States of America;
(viii) Maintenance of Computer Systems, etc. The Servicer shall
maintain its computer systems so that, from and after the time of the
first Advance under this Agreement, the Servicer's master computer
records (including archives) that shall refer to the Collateral
indicate clearly that such Collateral is subject to first priority
security interest in favor of the Collateral Agent for the benefit of
the Secured Parties. Indication of the Collateral Agent's security
interest shall be deleted from or modified on the Servicer's computer
systems when, and only when, the Collateral in question shall have
been paid in full or sold by the Borrower in accordance herewith;
(ix) Other Sales, Grants or Transfers. If at any time the
Servicer shall propose to sell, grant a security interest in, or
otherwise transfer any interest in motor vehicle receivables to any
prospective purchaser, lender or other transferee, the Servicer shall
give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from
archives) that, if they shall refer in any manner whatsoever to any
Collateral, shall indicate clearly that such Collateral is subject to
a first priority security interest in favor of the Collateral Agent
for the benefit of the Secured Parties;
(x) Payments on Receivables. The Servicer shall direct each
Obligor to make all payments under the Receivables financed with
Advances directly to the Lockbox Account or to a Blocked Account. All
payments from Obligors under the Receivables which are received
directly by the Servicer will be
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deposited into the Lockbox Account or to a Blocked Account no later
than the Business Day following the day of receipt;
(xi) Preservation of Existence. The Servicer shall observe all
procedures required by its organizational documents and by-laws and
preserve and maintain its existence, rights, franchises and privileges
in the jurisdiction of its organization, and qualify and remain
qualified in good standing in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges
and qualifications would materially adversely affect (1) the interests
hereunder of the Agent or any Affected Person, (2) the collectibility
of any Receivable or (3) its ability to perform its obligations
hereunder or under any of the other Transaction Documents. The
Servicer shall not merge or consolidate with or into, or, except as
contemplated hereby, sell, convey, transfer, exchange, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) unless (i) the successor entity shall
have assumed the Servicer's obligations under this Agreement and under
any other Transaction Documents to which the Servicer is a party and
(ii) the Agent shall have provided its written consent thereto prior
to such merger or other disposition on or before the fifteenth day
after receipt of a written request for such consent;
(xii) Keeping of Records and Books of Account. The Servicer shall
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing the Receivables in the event of the destruction of the
originals thereof) and keep and maintain all documents, books, records
and other information reasonably necessary or advisable for the
collection of all Transferred Receivables (including, without
limitation, records adequate to permit the daily identification of all
collections of and adjustments to each Transferred Receivable);
(xiii) Separate Existence. The Servicer shall take all reasonable
steps (including, without limitation, all steps that the Agent may
from time to time reasonably request) to maintain the Servicer's
identity as a separate legal entity from the Borrower and to make it
manifest to third parties that the Servicer is an entity with assets
and liabilities distinct from those of the Borrower and each other
Affiliate thereof. Without limiting the generality of the foregoing,
the Servicer shall:
(A) subject to the terms of the Custodian Agreement,
maintain or cause to be maintained by an agent of the
Borrower under the Borrower's control physical
possession of all its books and records;
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(B) account for and manage its liabilities separately from
those of the Borrower, including, without limitation,
payment of all payroll and other administrative
expenses and taxes from its own assets;
(C) maintain its assets separately from the Borrower;
(D) maintain offices through which its business is
conducted separate from those of the Borrower (provided
that, to the extent that the Servicer and any of its
Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead
costs and expenses among them, and each such entity
shall bear its fair share of such expenses);
(E) not commingle its funds with those of the Borrower
except to the extent contemplated herein, or use its
funds for other than the Servicer's uses; and
(F) ensure that any financial reports required of the
Servicer shall comply with GAAP and shall be issued
separately from, but may be consolidated with, any
reports prepared by the Borrower.
(xiv) Documents. The Servicer shall comply with each of the
terms of the Transaction Documents to which it is party (in any
capacity) and shall not cancel or terminate any of the
Transaction Documents to which it is party or subject (in any
capacity), or consent to or accept any cancellation or
termination of any of such agreements, or amend or otherwise
modify any term or condition of any of the Transaction Documents
to which it is party or subject (in any capacity) or give any
consent, waiver or approval under any such agreement, or waive
any default under or breach of any of the Transaction Documents
to which it is party (in any capacity) or take any other action
under any such agreement not required by the terms thereof,
unless (in each case) the Agent shall have consented thereto; and
(b) The Servicer represents and warrants to the Borrower, the Agent
and the Lenders as follows:
(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a limited liability company under
the laws of the State of Delaware and in good standing under the laws
of the State of Delaware, with power, authority and legal right to own
its properties and to conduct its business as such properties are
currently owned and such business is
62
currently conducted. The Servicer had at all relevant times and now
has, power, authority and legal right to enter into and perform its
obligations under this Agreement and under the other Transaction
Documents to which it is party (in any capacity);
(ii) Due Qualification. The Servicer is duly qualified to do
business as a foreign entity in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions where the
failure to do so would have a material adverse effect on its ability
to perform its obligations hereunder or under any other Transaction
Document to which it is party (in any capacity);
(iii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party (in any capacity) and to
carry out its terms and their terms, respectively; and the execution,
delivery and performance of this Agreement and the other Transaction
Documents to which the Servicer is a party (in any capacity) have been
duly authorized by the Servicer by all necessary limited liability
company action;
(iv) Binding Obligation. This Agreement and the other Transaction
Documents to which the Servicer is a party (in any capacity) have been
duly executed and delivered, and this Agreement and the other
Transaction Documents to which the Servicer is a party (in any
capacity) constitute the legal, valid and binding obligations of the
Servicer enforceable in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(v) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to
which the Servicer is a party (in any capacity), and the fulfillment
of the terms of this Agreement and the Transaction Documents to which
it is a party (in any capacity), shall not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under the Seller LLC
Agreement or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Servicer is a party or by which it is
bound or any of its properties are subject, or result in the creation
or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or
other instrument, other than this Agreement, or violate any law,
order, rule or regulation applicable to the Servicer of any court or
other Official Body having jurisdiction over the Servicer or any of
its properties, or in
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any way materially adversely affect the interest of the Borrower, the
Collateral Agent or the Secured Parties in any Transferred Receivable,
or adversely affect its ability to perform its obligations under this
Agreement or under any of the other Transaction Documents to which it
is party;
(vi) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the
Servicer, before any court or other Official Body having jurisdiction
over the Servicer or the Servicer's properties (A) asserting the
invalidity of this Agreement or any of the other Transaction
Documents, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Servicer's
Transaction Documents, (C) seeking any determination or ruling that
could reasonably be expected to materially and adversely affect the
performance by the Servicer of its obligations under, or the validity
or enforceability of, this Agreement or any of the other Transaction
Documents, (D) involving the Servicer or (E) that could reasonably be
expected to, if adversely determined, have a material adverse effect
on the interest of the Borrower, the Collateral Agent or the Secured
Parties in any Transferred Receivable;
(vii) ERISA. Each ERISA Plan maintained by the Servicer or any of
its ERISA Affiliates is in compliance in all material respects with
its terms and with all applicable laws, including without limitation,
ERISA and the Code. There is no Lien on any of the Transferred
Receivables or Other Conveyed Property placed by the Pension Benefit
Guaranty Corporation or resulting from the application of Section
412(n) of the Code or Section 302(f) of ERISA in favor of any ERISA
Plan maintained by the Servicer or any of its ERISA Affiliates. None
of the Transferred Receivables or Other Conveyed Property has been
pledged as security for any ERISA Plan maintained by the Servicer or
any of its ERISA Affiliates. No Multiemployer Plan to which the
Servicer or any of its ERISA Affiliates is required to contribute is
insolvent or in reorganization. Neither the Servicer nor any of its
ERISA Affiliates has incurred or expects to incur any liability
(including any direct, contingent or secondary liability) to or on
account of an ERISA Plan or Multiemployer Plan pursuant to Section
409, 502(i), 515, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code;
(viii) Investment Company Status. The Servicer is not an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or is exempt from all provisions of such act;
(ix) No Consents. The Servicer is not required to obtain the
consent of any other Person which has not been obtained, or any
consent, license, approval or authorization of, or registration or
declaration with, any Official Body in connection with the execution,
delivery, performance, validity or enforceability of
64
this Agreement and the other Transaction Documents to which it is
party (in any capacity) which, if not obtained, would adversely affect
the interest of the Borrower, the Collateral Agent or the Secured
Parties in any Transferred Receivable or adversely affect the
Servicer's ability to perform its obligations under this Agreement or
under any other Transaction Document to which it is a party (in any
capacity);
(x) Representations and Warranties True and Correct. Each of the
representations and warranties of the Servicer contained in this
Agreement and the other Transaction Documents is true and correct in
all material respects and the Servicer hereby makes each such
representation to, and for the benefit of, the Agent and the other
Secured Parties as if the same were set forth in full herein;
(xi) Information True and Complete. All reports, certificates,
financial statements, spreadsheets and other data pertaining to the
performance or servicing of the Receivables heretofore or hereafter
furnished or made available by or on behalf of the Servicer to any
Lender, the Collateral Agent or the Agent in connection with this
Agreement or any transaction contemplated hereby, when considered
together, are and will be true and complete in all material respects
and do not and will not omit to state a material fact necessary to
make the statements contained therein not misleading;
(xii) Compliance with Laws. The Servicer has complied and will
comply in all material respects with all applicable laws, rules,
regulations, judgments, agreements, decrees and orders with respect to
its business and properties and all Borrower Collateral with respect
to which the failure to comply would adversely affect the interest of
the Borrower, the Collateral Agent or the Secured Parties in any
Transferred Receivable or adversely affect its ability to perform its
obligations under this Agreement or under any other Transaction
Document to which it is a party;
(xiii) Taxes. The Servicer has filed on a timely basis all tax
returns (including, without limitation, foreign, federal, state, local
and otherwise) required to be filed, is not liable for taxes payable
by any other Person (except for members of MFN's consolidated tax
group) and has paid or made adequate provisions for the payment of all
taxes, assessments and other governmental charges due from the
Servicer. No tax lien or similar adverse claim has been filed, and no
claim is being asserted, with respect to any such tax, assessment or
other governmental charge. Any taxes, fees and other governmental
charges payable by the Servicer in connection with the execution and
delivery of this Agreement and the other Transaction Documents and the
transactions contemplated hereby or thereby including the transfer of
each Transferred
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Receivable and Other Conveyed Property to the Borrower have been paid
or shall have been paid if and when due at or prior to the Closing
Date;
(xiv) Chief Executive Office. The chief executive office of the
Servicer is located at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx,
Xxxxxxxx 00000;
(xv) Solvency. The Servicer is solvent and will not become
insolvent after giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents. The Servicer, after
giving effect to the transactions contemplated by this Agreement and
the other Transaction Documents, will have adequate funds to conduct
its business in the foreseeable future;
(xvi) Tax Treatment. For federal income tax purposes, each
Transferred Receivable and the related Other Conveyed Property will be
treated as owned by the Borrower (it being understood, however, that
the Borrower is a "disregarded entity" for tax purposes);
(xvii) Certificates. Each Servicer's Certificate and Borrowing
Base Confirmation is, or will be, accurate in all material respects as
of the date of delivery thereof;
(xviii) No Liens, Etc. After giving effect to the conveyances
under the Contribution and Sale Agreement, the Borrower Collateral and
each part thereof is owned by the Borrower free and clear of any
Adverse Claim or restrictions on transferability and the Borrower has
the full right, limited liability company power and lawful authority
to assign, transfer and pledge the same and interests therein, and
upon the making of each Advance, the Collateral Agent, for the benefit
of the Secured Parties, will have acquired a perfected, first priority
and valid security interest (except, as to priority, for any tax lien
or mechanics liens that may arise after the Closing Date) in such
Borrower Collateral, free and clear of any Adverse Claim or
restrictions on transferability. No effective financing statement or
other instrument similar in effect signed by the Servicer and covering
all or any part of the Borrower Collateral is on file in any recording
office, except such as may have been filed in favor of the Collateral
Agent as "Secured Party" pursuant to Article IX of this Agreement or,
with respect to the Transferred Receivables, in favor of the Borrower
pursuant to the Sale and Contribution Agreement;
(xix) Purchase and Sale. Each Transferred Receivable and Other
Conveyed Property was purchased by, or contributed to, the Borrower on
the relevant Purchase Date pursuant to the Sale and Contribution
Agreement;
66
(xx) Financial or Other Condition. Since its formation, there has
been no material adverse change in the condition (financial or
otherwise), business, operations, results of operations, or properties
of the Servicer;
(xxi) No Trade Names. The Servicer has no trade names, fictitious
names, assumed names or "doing business as" names;
(xxii) Separate Existence. The Servicer is operated as an entity
with assets and liabilities distinct from those of the Borrower, and
the Servicer hereby acknowledges that the Agent and each of the
Lenders are entering into the transactions contemplated by this
Agreement in reliance upon the Borrower's identity as a separate legal
entity from the Servicer or any other MFN Entity (it being understood,
however, that the Borrower is a "disregarded entity" for tax purposes)
and there is not now, nor will there be at any time in the future, any
agreement or understanding between the Servicer and the Borrower
(other than as expressly set forth herein) providing for the
allocation or sharing of obligations to make payments or otherwise in
respect of any taxes, fees, assessments or other governmental charges;
(xxiii) Transaction Documents. The Sale and Contribution
Agreement is the only agreement pursuant to which the Borrower
purchases and receives contributions of Receivables from MFN, and the
Transaction Documents delivered to the Agent represent all material
agreements among the MFN Entities. The Servicer has furnished to the
Agent true, correct and complete copies of each Transaction Document
to which the Servicer is a party; each of which is in full force and
effect. Neither the Servicer nor any Affiliate party thereto is in
default of any of its obligations thereunder in any material respect.
Upon the purchase and/or contribution of each Receivable pursuant to
the Sale and Contribution Agreement, the Borrower shall be the lawful
owner of, and have good title to, such Receivable and all assets
relating thereto, free and clear of any Liens. All such assets are
transferred to the Borrower without recourse to the Servicer except as
described in the Sale and Contribution Agreement. The purchases of
such assets by the Borrower constitute valid and true sales for
consideration (and not merely a pledge of such assets for security
purposes) and the contributions of such assets received by the
Borrower constitute valid and true transfers for consideration, each
enforceable against creditors of the Servicer, and no such assets
shall constitute property of the Servicer;
(xxiv) Ownership of the Servicer. The Servicer shall be
wholly-owned, either directly or indirectly, by MFN; and
(xxv) Eligibility. All Receivables included in the Borrowing Base
as of the most recently delivered Servicer's Certificate or Borrowing
Base Confirmation are Eligible Receivables.
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SECTION 8.7. Purchase Upon Breach of Covenant or Representation and
Warranty. The Borrower or the Servicer, as the case may be, shall inform the
other parties to this Agreement promptly, in writing, upon the discovery of any
breach of the Servicer's or the Seller's representations and warranties and
covenants hereunder or under the Sale and Contribution Agreement; provided,
however, that the failure to give any such notice shall not derogate from any
obligation of the Servicer hereunder or the Seller under the Sale and
Contribution Agreement to repurchase any Transferred Receivable. With respect to
the breach of any of the Servicer's representations and warranties and covenants
pursuant to Section 8.5(a) and Section 8.6(a)(i), (ii), (iii), or (iv) and with
respect to the breach of the Performance Guarantor's representation and
warranties pursuant to Section 19.3(k), unless the breach shall have been cured
by the last day of the first full calendar month following the discovery by or
notice to the Servicer or the Seller, as the case may be, of the breach, the
Servicer or the Seller, as the case may be, shall have an obligation, and the
Borrower and the Agent shall (provided that it either has made such discovery or
has received such notice thereof) enforce such obligation, to purchase or
repurchase any Transferred Receivable materially and adversely affected by the
breach. The Borrower shall notify the Agent promptly, in writing, of any failure
by the Servicer or the Seller to so repurchase any Transferred Receivable. In
consideration of the purchase of the Transferred Receivable hereunder or under
the Sale and Contribution Agreement, the Servicer or the Seller, as the case may
be, shall remit the Purchase Amount to the Collection Account on the date of
such repurchase.
In addition to the foregoing and notwithstanding whether the related
Transferred Receivable shall have been purchased by the Servicer, MFN shall
indemnify the Backup Servicer, the Designated Backup Subservicer, the Borrower,
the Collateral Agent, the Agent and the other Secured Parties against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
a breach of the covenants or representations and warranties set forth in Section
8.5(a) or Section 8.6(b).
SECTION 8.8. Total Servicing Fee; Payment of Certain Expenses by Servicer.
(a) Subject to, and in accordance with, the provisions of the Security
Agreement, on each Distribution Date, the Servicer shall be entitled to
receive out of the Collection Account the Servicing Fee for the related
Collection Period.
(b) The Servicer shall be required to pay all expenses incurred by it
in connection with its activities under this Agreement (including taxes
imposed on the Servicer). The Servicer shall be liable for the fees and
expenses of the Backup Servicer, the Designated Backup Subservicer and
Sub-Servicer, the Lockbox Bank (and any fees under the Lockbox Agreement),
the Blocked Account Banks (and any fees under the Blocked Account
Agreements), the Custodian, the Collateral Agent, the Agent and the
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Independent Accountants, to the extent such amounts have not been paid in
accordance with the Security Agreement.
SECTION 8.9. Servicer's Certificate.
(a) No later than 5:00 p.m., New York City time, on each day that is
at least two Business Days prior to each Determination Date, the Servicer
shall deliver to the Backup Servicer a Servicer's Certificate executed by a
Responsible Officer of the Servicer in the form attached hereto as Exhibit
E. Upon its verification of such Servicer's Certificate pursuant to Section
8.13(a), the Backup Servicer shall deliver such Servicer's Certificate,
together with the Backup Servicer's certification described in Section
8.13(a), to the Collateral Agent, each Rating Agency, the Borrower and the
Agent by no later than 5:00 p.m., New York City time, on each Determination
Date. Transferred Receivables purchased by the Servicer or the Seller and
each Transferred Receivable which became a Warranty Receivable or a
Defaulted Receivable or a Delinquent Receivable or which was paid in full
during the related Collection Period shall be identified by account number
(as set forth in the Schedule of Receivables).
(b) In addition to the information required by Section 8.9(a), the
Servicer shall include in the copy of the Servicer's Certificate delivered
to the Borrower and the Agent (i) whether any Facility Termination Event or
Unmatured Facility Termination Event has occurred as of such Determination
Date, (ii) whether any Facility Termination Event or Unmatured Facility
Termination Event that may have occurred as of a prior Determination Date
is deemed cured as of such Determination Date, (iii) the Monthly Extension
Rate (and three month average thereof), and Portfolio Net Loss Ratio for
such Determination Date and the Servicer Delinquency Ratio as of the last
day of the preceding Collection Period, (iv) whether a Level I-VII Trigger
Event has occurred (specifying same) and the Stated Percentage and Required
Reserve Account Amount for such Determination Date and (v) each Borrowing
Base, each Required Holdback and the Deficiency Percentage for such
Determination Date.
SECTION 8.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Backup Servicer, the Collateral
Agent, each Rating Agency, the Borrower and the Agent, on or before March
31 of each year, beginning on March 31, 2002, an Officer's Certificate,
dated as of the immediately preceding December 31, stating that (i) a
review of the activities of the Servicer during the preceding 12-month
period (or such other period as shall have elapsed from the Closing Date to
the date of the first such certificate) and of its performance under this
Agreement has been made under such officer's supervision, and (ii) to such
officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such period, or, if there
has been a default in the fulfillment of any
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such obligation, specifying each such default known to such officer
and the nature and status thereof.
(b) The Borrower or the Servicer shall deliver to the Backup Servicer,
the Collateral Agent, each Rating Agency, the Borrower and the Agent,
promptly after having obtained knowledge thereof, but in no event later
than two Business Days thereafter, written notice in an Officer's
Certificate of any event which is, or with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section
13.1.
SECTION 8.11. Annual Independent Accountants' Report. The Servicer shall
cause a firm of nationally recognized independent certified public accountants
(the "Independent Accountants"), who may also render other services to the
Servicer or to MFN, to deliver to the Servicer, the Backup Servicer, the
Collateral Agent, the Borrower and the Agent, on or before March 31 of each
year, beginning on March 31, 2002, with respect to the twelve months ended the
immediately preceding December 31, a statement (the "Accountants' Report")
addressed to MFN and the Agent, to the effect that such firm has audited the
consolidated financial statements of MFN and issued its report thereon and that
(i) such audit was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting records and
such other auditing procedures as such firm considered necessary in the
circumstances, (ii) certain agreed upon procedures were applied to three
randomly selected Servicer's Certificates (which procedures shall be submitted
for approval to the Agent, which approval shall not be unreasonably withheld)
and (iii) the firm is independent of MFN and the Servicer within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants . In the event such independent public accountants require the
Backup Servicer or the Collateral Agent to agree to the procedures to be
performed by such firm in any of the reports required to be prepared pursuant to
this Section 8.11, the Agent shall direct the Backup Servicer or the Collateral
Agent in writing to so agree; it being understood and agreed that the Backup
Servicer or the Collateral Agent will deliver such letter of agreement in
conclusive reliance upon the direction of the Agent, and the Backup Servicer or
the Collateral Agent has not made any independent inquiry or investigation as
to, and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
SECTION 8.12. Access to Certain Documentation; Portfolio Review.
(a) The Servicer shall provide to representatives of the Backup
Servicer, the Collateral Agent, the Borrower and the Agent reasonable
access to the documentation regarding the Transferred Receivables
including, without limitation, copies of the Servicing Procedures and
Credit Manual. Nothing in this Section 8.12 shall derogate from the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access as provided in this Section 8.12 as a result of
such obligation shall not constitute a breach of this Section 8.12.
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(b) The Agent shall direct Independent Accountants approved by the
Agent to review information regarding the Transferred Receivables in
accordance with the agreed upon procedures described in Section 7.2(k) or
otherwise approved by the Agent. The reviews will be performed 30 days
after the Effective Date and thereafter on a quarterly basis; provided that
if (a) a Facility Termination Event has occurred and is continuing, (b) a
Servicer Termination Event has occurred and is continuing or (c) the
Required Reserve Account Amount is equal to or greater than 6% of the
Aggregate Outstanding Principal Balance of Eligible Receivables in the
Total Receivables Pool, then the Agent may direct the Independent
Accountants to make a review under this Section 8.12(b) on a more frequent
basis as determined by the Agent. The fees and expenses of the Independent
Accountants shall be paid by the Servicer.
SECTION 8.13. Monthly Tape.
(a) On or before each Determination Date, the Servicer will deliver to
the Backup Servicer the Monthly Tape in a format agreed to by the Backup
Servicer prior to the Effective Date containing the information with
respect to the Transferred Receivables as of the last day of the
immediately preceding calendar month necessary for preparation of the
Servicer's Certificate relating to the immediately succeeding Determination
Date. Based solely on the information contained in the Monthly Tape and the
Servicer's Certificate, the Backup Servicer shall verify the Aggregate
Outstanding Principal Balance of the Total Receivables Pool. The Backup
Servicer shall recalculate the Servicer Delinquency Ratio, Portfolio Net
Loss Ratio, Required Reserve Account Amount, total principal payments,
total interest payments, aggregate Add-On Balances, weighted average APR
and other amounts regarding the Receivables and account balances and
excluding corporate financial covenants contained in the Servicer's
Certificate delivered by the Servicer. Based on account statements and the
Servicer's Certificate, the Backup Servicer shall certify the amount on
deposit in the Reserve Account, the Reserve Account Investment earnings,
total principal collections, total interest collections and payments, if
any, made under the Interest Rate Hedge and shall recalculate the Available
Amount. The Backup Servicer shall certify to the Agent, the Collateral
Agent, each Rating Agency and the Borrower that the Servicer's Certificate
is correct on its face or shall notify the Servicer and the Agent of any
discrepancies, in each case, on or before the second Business Day following
the Determination Date. In the event that the Backup Servicer reports any
discrepancies, the Servicer and the Backup Servicer shall attempt to
reconcile such discrepancies prior to the related Distribution Date, but in
the absence of a reconciliation, the Servicer's Certificate shall control
for the purpose of calculations and distributions with respect to the
related Distribution Date. In the event that the Backup Servicer and the
Servicer are unable to reconcile discrepancies with respect to a Servicer's
Certificate by the related Distribution Date, the Servicer shall cause the
Independent Accountants, at the Servicer's expense, to audit the Servicer's
Certificate and, prior to the third Business Day, but in no event later
than the fifth calendar day, of the following month, reconcile the
discrepancies. The effect, if any, of such
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reconciliation shall be reflected in the Servicer's Certificate for such
next succeeding Determination Date.
(b) The Servicer shall deliver to the Agent and the Designated Backup
Subservicer a computer tape or other electronic listing containing
Collection Records and its Monthly Records on or before each Determination
Date and in any event within one Business Day after demand therefor (which
demand may be made at any time after the occurrence of a Facility
Termination Event or a Servicer Termination Event or the occurrence of any
event which, if uncured, with lapse of time or notice or lapse of time and
notice, would constitute a Facility Termination Event or a Servicer
Termination Event) and a computer tape containing as of the close of
business on the date of demand all of the data maintained by the Servicer
in computer format in connection with servicing the Transferred
Receivables. The Backup Servicer shall cause such Designated Backup
Subservicer to load such computer tapes into its computer system and to
certify to the Agent that (i) it can access and read the data and (ii) the
summary totals for each category of information provided in such computer
tapes conforms with the summary totals for such categories of information
as reflected in the books and records of the Seller.
(c) Other than the duties specifically set forth in this Agreement,
neither the Backup Servicer nor the Designated Backup Subservicer shall
have any obligations hereunder, including, without limitation, to
supervise, verify, monitor or administer the performance of the Servicer.
Neither Backup Servicer nor the Designated Backup Subservicer shall have
any liability for any actions taken or omitted by the Servicer. The duties
and obligations of the Backup Servicer and the Designated Backup
Subservicer shall be determined solely by the express provisions of this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Backup Servicer or the Designated Backup Subservicer.
(d) The Servicer shall deliver to the Agent, the Backup Servicer and
the Designated Backup Subservicer the Monthly Receivables Report on or
before each Determination Date.
SECTION 8.14. Retention of Servicer. Mercury Finance Company LLC hereby
covenants and agrees to act as Servicer under this Agreement for an initial
term, commencing on the Closing Date and ending on April 30, 2001, which term
shall be extendible by the Agent for successive monthly terms (or, pursuant to
revocable written standing instructions from time to time to the Servicer, for
any specified number of terms greater than one). Each such notice (including
each notice pursuant to standing instructions, which shall be deemed delivered
at the end of successive quarterly terms for so long as such instructions are in
effect) (a "Servicer Extension Notice") shall be delivered by the Agent to the
Servicer and to the Collateral Agent. Mercury Finance Company LLC hereby agrees
that, as of the date hereof and upon its receipt of any such Servicer Extension
Notice, Mercury Finance Company LLC shall become bound, for
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the initial term beginning on the Closing Date and for the duration of the
term covered by such notice, to continue as the Servicer subject to and in
accordance with the other provisions of this Agreement.
SECTION 8.15. Fidelity Bond. The Servicer shall maintain a fidelity bond in
such form and amount as is customary for entities acting as custodian of funds
and documents in respect of consumer contracts on behalf of institutional
investors.
SECTION 8.16. Insurance. The Servicer shall maintain customary amounts of
insurance coverage, including, without limitation, directors' and officers'
insurance, commercial crime coverage, employee dishonesty coverage, commercial
auto coverage, valuable papers and records coverage, coverage for fire, theft,
workers compensation, public liability, property damage and errors and omissions
coverage.
SECTION 8.17. Accounts.
(a) The Servicer shall establish the Collection Account in the name of
the Collateral Agent for the benefit of the Secured Parties. The Collection
Account shall be an Eligible Account and initially shall be a segregated
trust account established and maintained with the Collateral Agent. Amounts
on deposit in the Collection Account shall be invested in Permitted
Investments pursuant to written instructions from the Servicer. If written
direction from the Servicer is not timely delivered any such amounts on
deposit shall be invested in the investment described in subclause (f) of
the definition of Permitted Investments.
(b) The Servicer shall establish the Reserve Account in the name of
the Collateral Agent for the benefit of the Secured Parties. The Reserve
Account shall be an Eligible Account and initially shall be a segregated
trust account established and maintained with the Collateral Agent. Amounts
on deposit in the Reserve Account shall be invested in Permitted
Investments pursuant to written instructions from the Servicer. If written
direction from the Servicer is not timely delivered any such amounts on
deposit shall be invested in the investment described in subclause (f) of
the definition of Permitted Investments.
(c) The Servicer shall establish the Collateral Account in the name of
the Collateral Agent for the benefit of the Secured Parties. The Collateral
Account shall be an Eligible Account and initially shall be a segregated
trust account established and maintained with Collateral Agent. There shall
be deposited to the Collateral Account any amount delivered to the holder
of the Collateral Account by the Borrower and designated in writing (with a
copy to the Agent) to be deposited in the Collateral Account.
SECTION 8.18. Collections.
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(a) The Lockbox Agreement shall require the Lockbox Bank to remit to a
Blocked Account within two Business Days of receipt thereof (i) all
payments by or on behalf of the Obligors and (ii) all Recoveries, each as
collected during the Collection Period. The Blocked Account Agreements
shall require the Blocked Account Banks to remit to the Master Collection
Amount all amounts on deposit in the Blocked Accounts, no later than 24
hours following receipt thereof. In addition, the Servicer shall remit, or
cause to be remitted, all payments by or on behalf of the Obligors received
by the Servicer or the Borrower with respect to the Transferred
Receivables, all Recoveries, the purchase price paid by MFN or the Servicer
with respect to any Transferred Receivables and the proceeds of any
Take-Out Securitization relating to Transferred Receivables, no later than
the Business Day following receipt directly into the Master Collection
Account.
(b) Each payment made to the Borrower under an Interest Rate Hedge
shall be paid over to the Collection Account no later than the Business Day
following receipt thereof.
(c) The Servicer will be entitled to be reimbursed from amounts on
deposit in the Collection Account with respect to a Collection Period for
amounts previously deposited in the Collection Account but later determined
by the Servicer to have resulted from mistaken deposits or postings or
checks returned for insufficient funds. The amount to be reimbursed
hereunder shall be paid to the Servicer on the related Distribution Date
upon certification by the Servicer of such amounts and the provision of
such information to the Agent as may be necessary in the opinion of the
Agent to verify the accuracy of such certification. In the event that the
Agent has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section 8.18, the Agent shall
give the Servicer and the Collateral Agent written notice to such effect
and no distribution shall be made to the Servicer in respect of such
amount, or if the Servicer prior thereto has been reimbursed, such amounts
shall be withheld from amounts otherwise distributable to the Servicer on
the next succeeding Distribution Date.
SECTION 8.19. Application of Collections. For the purposes of this
Agreement, all collections for a Collection Period shall be applied by the
Servicer with respect to each Transferred Receivable in accordance with Section
8.4(c) and as follows: (i) unless otherwise required by law, in the case of a
Pre-Computed Receivable, in accordance with the terms contained in such
Pre-Computed Receivable, and (ii) in the case of a Simple Interest Receivable,
to interest and principal in accordance with the Simple Interest Method. With
respect to Simple Interest Receivables, any prepayment of principal during each
Collection Period shall be immediately applied to reduce the Principal Balance
of such Receivable during such Collection Period.
ARTICLE IX
GRANT OF SECURITY INTERESTS
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SECTION 9.1. Borrower's Grant of Security Interest. As security for the
prompt payment or performance in full when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations (including all Advances, Yield and
other amounts at any time owing hereunder), the Borrower hereby assigns and
pledges to the Collateral Agent, for the benefit of the Secured Parties, and
grants to the Collateral Agent, for the benefit of the Secured Parties, a
security interest in and lien upon, all of the Borrower's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which Borrower now has or hereafter acquires an interest and wherever the
same may be located (collectively, the "Borrower Collateral"):
(a) all Collateral;
(b) the Contribution Agreement, the Sale and Contribution Agreement,
the Lockbox Agreement, each Blocked Account Agreement and all other
documents now or hereafter in effect relating to the purchase, servicing or
processing of Transferred Receivables (collectively, the "Borrower Assigned
Agreements"), including (i) all rights of the Borrower to receive moneys
due and to become due under or pursuant to the Borrower Assigned
Agreements, (ii) all rights of the Borrower to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Borrower
Assigned Agreements, (iii) the Borrower's right of foreclosure as
lienholder of the vehicles underlying the Receivables, (iv) claims of the
Borrower for damages arising out of or for breach of or default under the
Borrower Assigned Agreements, and (v) the right of the Borrower to amend,
waive or terminate, and to vote and grant consents or approvals under, the
Borrower Assigned Agreements, to perform under the Borrower Assigned
Agreements and to compel performance and otherwise exercise all remedies
and rights under the Borrower Assigned Agreements;
(c) all of the following (the "Borrower Account Collateral"):
(i) the Lockbox Account and the Blocked Accounts and all funds
held in the Lockbox Account and the Blocked Accounts and all
certificates and instruments, if any, from time to time representing
or evidencing the Lockbox Account and the Blocked Accounts or such
funds,
(ii) the Collection Account and the Master Collection Account,
all funds held in the Collection Account, and all certificates and
instruments, if any, from time to time representing or evidencing the
Collection Account and the Master Collection Account or such funds,
(iii) the Reserve Account, all funds held in the Reserve Account,
and all certificates and instruments, if any, from time to time
representing or evidencing the Reserve Account or such funds,
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(iv) the Collateral Account, all funds held in the Collateral
Account, and all certificates and instruments, if any, from time to
time evidencing the Collateral Account or such funds,
(v) all investments from time to time of amounts in the
Collection Account, Reserve Account and Collateral Account, and all
certificates and instruments, if any, from time to time representing
or evidencing such investments,
(vi) all notes, certificates of deposit and other instruments
from time to time delivered to or otherwise possessed by the
Collateral Agent or any Secured Party or any assignee or agent on
behalf of the Collateral Agent or any Secured Party in substitution
for or in addition to any of the then existing Borrower Account
Collateral, and
(vii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of the then
existing Borrower Account Collateral;
(d) each Interest Rate Hedge including all rights of the Borrower to
receive moneys due and to become due thereunder;
(e) all additional property that may from time to time hereafter be
granted and pledged by the Borrower or by anyone on its behalf under this
Agreement, including the deposit with the Collateral Agent of additional
moneys by the Borrower; and
(f) all proceeds, accessions, substitutions, rents, Recoveries and
profits of, or with respect to, any and all of the foregoing Borrower
Collateral (including proceeds that constitute property of the types
described in Sections 9.1(a) through (e) above) and, to the extent not
otherwise included, all payments under insurance (whether or not the
Collateral Agent or a Secured Party or any assignee or agent on behalf of
the Collateral Agent or a Secured Party is an additional insured thereunder
or a loss payee thereof) or any indemnity, warranty or guaranty payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Borrower Collateral.
SECTION 9.2. Delivery of Collateral. All documents in the Receivables File
shall be delivered to and held by or on behalf of the Custodian pursuant to the
Custodian Agreement, and shall be in suitable form for transfer by delivery.
SECTION 9.3. Borrower Remains Liable. Notwithstanding anything in this
Agreement, (a) except to the extent of the Servicer's duties hereunder, the
Borrower shall remain liable under the Transferred Receivables, Borrower
Assigned Agreements and other agreements (including each Interest Rate Hedge)
included in the Borrower Collateral to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the
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exercise by a Secured Party or the Collateral Agent of any of its rights under
this Agreement, the Custodian Agreement or the Security Agreement shall not
release the Borrower, MFN or the Servicer from any of their respective duties or
obligations under the Transferred Receivables, Borrower Assigned Agreements or
other agreements included in the Borrower Collateral, (c) the Agent, the Secured
Parties, the Collateral Agent and the Custodian shall not have any obligation or
liability under the Transferred Receivables, Borrower Assigned Agreements or
other agreements included in the Borrower Collateral by reason of this
Agreement, the Custodian Agreement or the Security Agreement, and (d) neither
the Agent, the Collateral Agent, the Custodian nor any of the Secured Parties
shall be obligated to perform any of the obligations or duties of the Borrower,
MFN or the Servicer under the Transferred Receivables, Borrower Assigned
Agreements or other agreements included in the Borrower Collateral or to take
any action to collect or enforce any claim for payment assigned under this
Agreement.
SECTION 9.4. Covenants of the Borrower and Servicer Regarding the
Collateral.
(a) Offices and Records. The Borrower shall keep its chief place of
business and chief executive offices and the office where it keeps its
records at the location specified in Section 10.9 or, upon 60 days prior
written notice to the Agent and the Collateral Agent, at such other
location in a jurisdiction where all action required by Section 9.4(e)
shall have been taken with respect to the Borrower Collateral. The Borrower
and the Servicer shall, for not less than three years or for such longer
period as may be required by law, from the date on which any Transferred
Receivable arose, maintain the records with respect to each Transferred
Receivable, including records of all payments received, credits granted and
merchandise returned.
The Borrower and the Servicer will permit representatives of the
Agent, the Backup Servicer, the Designated Backup Subservicer, the
Collateral Agent and the Custodian at any time and from time to time during
normal business hours, and at such times outside of normal business hours
as the Agent, the Backup Servicer, the Designated Backup Subservicer, the
Collateral Agent and the Custodian shall reasonably request, (i) to inspect
and make copies of and abstracts from its records with respect to the
Transferred Receivables, and (ii) to visit the properties of the Borrower
or the Servicer utilized in connection with the collection, processing or
servicing of the Collateral for the purpose of examining such records, and
to discuss matters relating to the Collateral or the Borrower's or
Servicer's performance under this Agreement with any officer or employee of
the Borrower or Servicer having knowledge of such matters. In connection
therewith, the Agent, the Backup Servicer, the Designated Backup
Subservicer, the Collateral Agent or the Custodian may institute procedures
to permit it to confirm the Obligor balances in respect of any Transferred
Receivables. Each of the Borrower and the Servicer agrees to render to the
Agent, the Backup Servicer, the Designated Backup Subservicer, the
Collateral Agent and the Custodian such clerical and other assistance as
may be reasonably requested with regard to the foregoing. Without
duplication of any obligations of the Servicer set forth in clause (b)
below, if a Facility Termination Event
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shall have occurred and be continuing, promptly upon request therefor, the
Borrower or the Servicer shall deliver to the Agent and the Collateral
Agent records reflecting activity through the close of business on the
immediately preceding Business Day.
(b) Maintain Records of Collateral. The Servicer shall, at its own
cost and expense, maintain satisfactory and complete records of the
Collateral, including a record of all payments received and all credits
granted with respect to the Collateral and all other dealings with the
Collateral. Each of the Borrower and the Servicer will xxxx conspicuously
with a legend, in form and substance satisfactory to the Agent, its
records, computer tapes, computer disks and credit files pertaining to the
Collateral, and its storage facilities where it maintains information
pertaining to the Collateral, to evidence this Agreement and the assignment
and security interest granted by this Article IX.
(c) Performance of Borrower Assigned Agreements. The Borrower shall
(i) perform and observe all the terms and provisions of the Borrower
Assigned Agreements and the Interest Rate Xxxxxx to be performed or
observed by it, maintain the Borrower Assigned Agreements and the Interest
Rate Xxxxxx in full force and effect, enforce the Borrower Assigned
Agreements and the Interest Rate Xxxxxx in accordance with their terms and
take all such action to such end as may be from time to time requested by
the Agent, and (ii) upon request of the Agent, make to any other party to
the Borrower Assigned Agreements and the Interest Rate Xxxxxx such demands
and requests for information and reports or for action as the Borrower is
entitled to make under the Borrower Assigned Agreements and the Interest
Rate Xxxxxx.
(d) Notice of Adverse Claim. Each of the Borrower and the Servicer
shall advise the Agent and the Collateral Agent promptly, in reasonable
detail, (i) of any Adverse Claim known to it made or asserted against any
of the Borrower Collateral, and (ii) of the occurrence of any event which
would have a material adverse effect on the aggregate value of the Borrower
Collateral or on the assignments and security interests granted by the
Borrower in this Agreement.
(e) Further Assurances; Financing Statements.
(i) Each of the Borrower and the Servicer severally agrees that
at any time and from time to time, at its expense, it shall promptly
execute and deliver all further instruments and documents, and take
all reasonable further action, that may be necessary or desirable or
that the Agent or the Collateral Agent may reasonably request to
perfect and protect the assignments and security interests granted or
purported to be granted by this Article IX or to enable the Agent or
the Collateral Agent to exercise and enforce its rights and ----------
remedies under this Agreement and the Security Agreement with respect
to any Borrower Collateral. Without limiting the generality of the
foregoing, the Borrower shall execute and file such financing or
continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable or that the
Agent or
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the Collateral Agent may reasonably request to protect and preserve
the assignments and security interests granted by this Agreement and
the Security Agreement.
(ii) The Borrower and each Secured Party hereby severally
authorize the Collateral Agent to execute and file one or more
financing or continuation statements, and amendments thereto, relating
to all or any part of the Borrower Collateral without the signature of
the Borrower, the Seller, the Agent or the Secured Parties where
permitted by law. A carbon, photographic or other reproduction of this
Agreement or any financing statement covering the Borrower Collateral
or any part thereof shall be sufficient as a financing statement where
permitted by law. The Collateral Agent will promptly send to MFN and
the Agent any financing or continuation statements thereto which it
files without the signature of the Borrower or the Seller and will
promptly send to the Agent and MFN any financing or continuation
statements thereto which it files without the signature of the Agent
except, in the case of filings of copies of this Agreement as
financing statements, the Collateral Agent will promptly send to MFN
the filing or recordation information with respect thereto.
(iii) Each of the Borrower and the Servicer shall furnish to the
Agent and the Collateral Agent from time to time such statements and
schedules further identifying and describing the Borrower Collateral
and such other reports in connection with the Borrower Collateral as
the Agent or the Collateral Agent may reasonably request, all in
reasonable detail.
(iv) In the event three consecutive Servicer's Certificates
furnished to the Agent reflect that the Aggregate Outstanding
Principal Balance of Receivables in the Total Receivables Pool having
Obligors residing in the same state exceeds 10% of the Aggregate
Outstanding Principal Balance of all Receivables in the Total
Receivables Pool, the Borrower shall obtain from counsel in such state
an opinion (or a reliance letter on a recently delivered opinion)
addressed to the Agent and in form and substance reasonably acceptable
to the Agent with respect to the requirements in such state for the
assignment of a security interest in a Financed Vehicle.
SECTION 9.5. Release of Borrower Collateral.
(a) Generally. For purposes of selling and transferring Receivables to
any MFN Entity or third parties in connection with any Take-Out
Securitization, to the extent that (immediately after giving effect to any
requested release) there exists no Borrowing Base Deficiency and, unless
all Advances, Yield thereon and other amounts due hereunder have been paid
in full, there is no Facility Termination Event or Unmatured Facility
Termination Event, or, in connection with the purchase by the Servicer of a
Receivable pursuant to Section 8.4 or 8.7 or by the Seller under the Sale
and Contribution
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Agreement, the Borrower from time to time may obtain releases of the
Collateral Agent's (for the benefit of the Secured Parties) security
interest in all or any part of the Borrower Collateral. Each request (a
"Transfer Request") for a partial release of Collateral, except in
connection with the repurchase by the Servicer of a Receivable pursuant to
Section 8.4 or 8.7 or by the Seller under the Sale and Contribution
Agreement, shall be addressed to the Agent and the Collateral Agent,
demonstrating compliance with the immediately preceding sentence and
acknowledging that the receipt of proceeds from such sale or transfer shall
be deposited into the Collection Account.
(b) Transfers. With respect to each Transfer Request that is received
by the Agent by 12:00 noon, New York City time, on a Business Day, the
Agent shall use due diligence and reasonable efforts to review such
Transfer Requests and instruct the Custodian to prepare the files,
identified in each Transfer Request, for delivery or shipment by 12:00
noon, New York City time on the second succeeding Business Day.
(c) Continuation of Lien. Unless released in writing by the Collateral
Agent, as herein provided, the security interest in favor of the Collateral
Agent, for the benefit of the Secured Parties, in all Borrower Collateral
shall continue in effect until such time as the Collateral Agent (on behalf
of the Secured Parties) shall have received payment in full of the proceeds
from the sale or transfer of such Borrower Collateral to third parties in
accordance with this Section 9.5.
(d) Application of Proceeds; No Duty. Neither the Collateral Agent nor
any Secured Party shall be under any duty at any time to credit Borrower
for any amount due from any third party in respect of any purchase of any
Borrower Collateral contemplated above, until the Collateral Agent has
actually received such amount in immediately available funds for deposit to
the Collection Account. Neither the Collateral Agent nor any Secured Party
shall be under any duty at any time to collect any amounts or otherwise
enforce any obligations due from any third party in respect of any such
purchase of Receivables covered by the release of such portion of Borrower
Collateral or in respect of a securitization thereof with a third party.
(e) Representation in Connection with Releases, Sales and Transfers.
The Borrower represents and warrants that each request for any release or
transfer in connection with other securitizations pursuant to Section
9.5(a) shall automatically constitute a representation and warranty to the
Secured Parties, the Collateral Agent and the Agent to the effect that
immediately before and after giving effect to such release or Transfer
Request, there is no Facility Termination Event, or Unmatured Facility
Termination Event (including, without limitation any Borrowing Base
Deficiency).
(f) Release of Security Interest. Upon receipt of a Transfer Request
or, in connection with the purchase by the Servicer of a Receivable
pursuant to Section 8.4 or 8.7 or by the Seller under the Sale and
Contribution Agreement, upon the Servicer's written request, and, in each
case upon receipt in the Collection Account of proceeds
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from the sale or transfer, the Collateral Agent shall promptly release, at
the Borrower's expense, such part of Borrower Collateral covered in
connection with the Transfer Request or such Servicer's request and shall
deliver, at the Borrower's expense, the documents and certificates on the
released portion of Borrower Collateral to the trustee or such similar
entity in connection with any Take-Out Securitization or, in connection
with the purchase by the Servicer of a Receivable pursuant to Section 8.4
or 8.7 or by the Seller under the Sale and Contribution Agreement; provided
that the trustee or such similar entity in connection with any Take-Out
Securitization or the Servicer, as the case may be, acknowledges and agrees
(i) that all proceeds thereof that it receives are held in trust for the
Secured Parties and (ii) at such time that the Agent or the Collateral
Agent shall instruct such trustee to transfer such proceeds, the trustee
shall transfer such funds pursuant to such instructions.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
In order to induce the other parties hereto to enter into this
Agreement and, in the case of the Lenders, to make Advances hereunder, the
Borrower hereby represents and warrants to the Agent and the Investors as to
itself, as of the Closing Date and as of each Advance Date, as follows:
SECTION 10.1. Organization and Good Standing. The Borrower has been duly
organized and is validly existing as a limited liability company under the laws
of the State of Delaware and is in good standing under the laws of the State of
Delaware, with power, authority and legal right to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted. The Borrower had at all relevant times and now has, power,
authority and legal right to acquire and own the Transferred Receivables and the
Other Conveyed Property, and to grant to the Collateral Agent a security
interest in the Transferred Receivables, the Other Conveyed Property and the
other Borrower Collateral and to enter into and perform its obligations under
this Agreement and under other Transaction Document to which it is a party.
SECTION 10.2. Due Qualification. The Borrower is duly qualified to do
business as a foreign entity in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions where the failure to do so would
have a material adverse effect on its ability to perform its obligations
hereunder or under any other Transaction Document to which it is a party.
SECTION 10.3. Power and Authority. The Borrower has the power and authority
to execute and deliver this Agreement and the other Transaction Documents to
which it is a party and to carry out its terms and their terms, respectively;
the Borrower has full power and authority to grant to the Collateral Agent, for
the benefit of the Secured Parties, a perfected first priority security interest
in the Transferred Receivables and the other Borrower Collateral and has duly
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authorized such grant by all necessary limited liability company action; and the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which the Borrower is a party have been duly authorized by the
Borrower by all necessary limited liability company action.
SECTION 10.4. Security Interest, Binding Obligations. This Agreement and
the other Transaction Documents to which the Borrower is a party have been duly
executed and delivered and shall create a valid first priority security interest
(except, as to priority, for any tax liens or mechanics liens that may arise
after the Closing Date) in the Borrower Collateral in favor of the Collateral
Agent, on behalf of the Secured Parties, enforceable against the Borrower and
creditors of and purchasers from the Borrower, and this Agreement and the other
Transaction Documents to which the Borrower is a party constitute legal, valid
and binding obligations of the Borrower enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
SECTION 10.5. No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which the
Borrower is a party, and the fulfillment of the terms of this Agreement and the
other Transaction Documents to which it is a party, shall not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the Borrower LLC Agreement,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Borrower is a party or by which it is bound or any of its properties
are subject, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement, or violate any
law, order, rule or regulation applicable to the Borrower of any court or other
Official Body having jurisdiction over the Borrower or any of its properties, or
in any way materially adversely affect the interest of the Borrower, the
Collateral Agent or the secured Parties in any Transferred Receivable or
adversely affect the Borrower's ability to perform its obligations under this
Agreement or the other Transaction Documents to which it is a party.
SECTION 10.6. No Proceedings. There are no proceedings or investigations
pending or, to the Borrower's knowledge, threatened against the Borrower, before
any court or other Official Body having jurisdiction over the Borrower or its
properties (A) asserting the invalidity of this Agreement or any of the other
Transaction Documents, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the other Transaction
Documents, (C) seeking any determination or ruling that could reasonably be
expected to materially adversely affect the performance by the Borrower of its
obligations under, or the validity or enforceability of, this Agreement or any
of the other Transaction Documents, (D) involving the Borrower or (E) that could
reasonably be expected to, if adversely determined, have a material adverse
effect on the interest of the Borrower, the Collateral Agent or the Secured
Party in any Transferred Receivable.
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SECTION 10.7. No Consents. The Borrower is not required to obtain the
consent of any other Person which has not been obtained, or any consent,
license, approval or authorization of, or registration or declaration with, any
Official Body in connection with the execution, delivery, performance, validity
or enforceability of this Agreement or the other Transaction Documents to which
it is a party which, if not obtained, would adversely affect the interest of the
Borrower, the Collateral Agent or the Secured Parties in any Transferred
Receivable or adversely affect the Borrower's ability to perform its obligations
under this Agreement or under any other Transaction Document to which the
Borrower is a party.
SECTION 10.8. Use of Proceeds. No proceeds of any Advance will be used by
the Borrower to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
SECTION 10.9. Chief Executive Office. The chief executive office of the
Borrower is located at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxx 00000.
SECTION 10.10. Solvency. The Borrower is solvent and will not become
insolvent after giving effect to the transactions contemplated by this Agreement
and the Transaction Documents. The Borrower has no Indebtedness to any Person
other than pursuant to this Agreement and the other Transaction Documents. The
Borrower, after giving effect to the transactions contemplated by this Agreement
and the other Transaction Documents, will have adequate funds to conduct its
business in the foreseeable future.
SECTION 10.11. Tax Treatment. For federal income tax purposes, each
Transferred Receivable and the related Other Conveyed Property will be treated
as owned by the Borrower. For accounting purposes, the Borrower will treat the
purchase or absolute assignment of each Transferred Receivable and Other
Conveyed Property pursuant to the Sale and Contribution Agreement as a purchase
or absolute assignment of the Seller's full right, title and ownership interest
in such Transferred Receivable and Other Conveyed Property (and those
Transferred Receivables and Other Conveyed Property contributed to the Borrower
by MFN pursuant to the Sale and Contribution Agreement shall be accounted for as
an increase in the stated capital of the Borrower) and the Borrower has not in
any other manner accounted for or treated the transfer to it of Transferred
Receivables and Other Conveyed Property.
SECTION 10.12. Compliance With Laws. The Borrower has complied and will
comply in all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties and all Borrower Collateral with respect to which the failure to
comply would adversely affect the interest of the Borrower, the Collateral Agent
or the Secured Parties in any Transferred Receivable or adversely affect the
Borrower's ability to perform its obligations under this Agreement or under any
other Transaction Document to which it is a party.
SECTION 10.13. Taxes. The Borrower has filed on a timely basis all tax
returns (including, without limitation, foreign, federal, state, local and
otherwise) required to be filed, is
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not liable for taxes payable by any other Person and has paid or made adequate
provisions for the payment of all taxes, assessments and other governmental
charges due from the Borrower. No tax lien or similar adverse claim has been
filed, and no claim is being asserted, with respect to any such tax, assessment
or other governmental charge. Any taxes, fees and other governmental charges
payable by the Borrower in connection with the execution and delivery of this
Agreement and the other Transaction Documents and the transactions contemplated
hereby or thereby including the transfer of each Transferred Receivable and
Other Conveyed Property to the Borrower have been paid or shall have been paid
if and when due at or prior to the Closing Date and the relevant Purchase Date,
as the case may be.
SECTION 10.14. Certificates. Each Servicer's Certificate and Borrowing Base
Confirmation is, or will be, accurate in all material respects as of the date of
delivery thereof.
SECTION 10.15. No Liens, Etc. The Borrower Collateral and each part thereof
is owned by the Borrower free and clear of any Adverse Claim or restrictions on
transferability and the Borrower has the full right, limited liability company
power and lawful authority to assign, transfer and pledge the same and interests
therein, and upon the making of each Advance, the Collateral Agent, for the
benefit of the Secured Parties, will have acquired a perfected, first priority
and valid security interest (except, as to priority, for any tax lien or
mechanics liens that may arise after the Closing Date) in such Borrower
Collateral, free and clear of any Adverse Claim or restrictions on
transferability. No effective financing statement or other instrument similar in
effect covering all or any part of the Borrower Collateral is on file in any
recording office, except such as may have been filed in favor of the Collateral
Agent as "Secured Party" pursuant to Article IX of this Agreement or, with
respect to the Transferred Receivables, in favor of the Borrower pursuant to the
Sale and Contribution Agreement.
SECTION 10.16. Purchase and Sale. Each Transferred Receivable and Other
Conveyed Property was purchased by, or contributed to, the Borrower on the
relevant Purchase Date pursuant to the Sale and Contribution Agreement.
SECTION 10.17. Information True and Complete. All reports, certificates,
financial statements, spreadsheets and other data pertaining to the performance
or servicing of the Receivables heretofore or hereafter furnished or made
available by or on behalf of the Borrower to any Lender, the Collateral Agent or
the Agent in connection with this Agreement or any transaction contemplated
hereby, when considered together, are and will be true and complete in all
material respects and do not and will not omit to state a material fact
necessary to make the statements contained therein not misleading.
SECTION 10.18. ERISA Compliance. Each ERISA Plan maintained by Borrower or
any of Borrower's ERISA Affiliates is in compliance in all material respects
with its terms and with all applicable laws, including without limitation, ERISA
and the Code. There is no Lien on any of the Transferred Receivables or Other
Conveyed Property placed by the Pension Benefit Guaranty Corporation or
resulting from the application of Section 412(n) of the Code or Section 302(f)
of ERISA in favor of any ERISA Plan maintained by Borrower or any of Borrower's
ERISA Affiliates. None of the Transferred Receivables or Other Conveyed Property
has been pledged as security for any ERISA Plan maintained by Borrower or any of
Borrower's
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ERISA Affiliates. No Multiemployer Plan to which Borrower or any of Borrower's
ERISA Affiliates is required to contribute is insolvent or in reorganization.
Neither Borrower nor any of Borrower's ERISA Affiliates has incurred or expects
to incur any liability (including any direct, contingent or secondary liability)
to or on account of an ERISA Plan or Multiemployer Plan pursuant to Section 409,
502(i), 515, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of
the Code.
SECTION 10.19. Financial or Other Condition. Since December 31, 2000, there
has been no material adverse change in the condition (financial or otherwise),
business, operations, results of operations, or properties of the Borrower.
SECTION 10.20. Investment Company Status. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or is exempt from all provisions of such act.
SECTION 10.21. No Trade Names. The Borrower has no trade names, fictitious
names, assumed names or "doing business as" names.
SECTION 10.22. Separate Existence. The Borrower is operated as an entity
with assets and liabilities distinct from those of MFN and any other Affiliates
of the Borrower, and the Borrower hereby acknowledges that the Agent and each of
the Lenders are entering into the transactions contemplated by this Agreement in
reliance upon the Borrower's identity as a separate legal entity from MFN and
each such Affiliate. Since its formation, the Borrower has been (and will be)
operated in such a manner as to comply with the covenants set forth in Section
11.5.
There is not now, nor will there be at any time in the future, any
agreement or understanding between MFN and the Borrower (other than as expressly
set forth herein) providing for the allocation or sharing of obligations to make
payments or otherwise in respect of any taxes, fees, assessments or other
governmental charges.
SECTION 10.23. Investments. The Borrower does not own or hold, directly or
indirectly, any capital stock or equity security of, or any equity interest in,
any Person.
SECTION 10.24. Representations and Warranties True and Correct. Each of the
representations and warranties of the Borrower contained in this Agreement and
the other Transaction Documents is true and correct in all material respects and
the Borrower hereby makes each such representation and warranty to, and for the
benefit of, the Agent and the other Secured Parties as if the same were set
forth in full herein.
SECTION 10.25. Transaction Documents. The Sale and Contribution Agreement
is the only agreement pursuant to which the Borrower purchases and receives
contributions of
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Receivables, and the Transaction Documents delivered to the Agent represent all
material agreements among the MFN Entities. The Borrower has furnished to the
Agent true, correct and complete copies of each Transaction Document to which
the Borrower is a party; each of which is in full force and effect. Neither the
Borrower nor any Affiliate party thereto is in default of any of its obligations
thereunder in any material respect. Upon the purchase and/or contribution of
each Receivable pursuant to the Sale and Contribution Agreement, the Borrower
shall be the lawful owner of, and have good title to, such Receivable and all
assets relating thereto, free and clear of any Liens. All such assets are
transferred to the Borrower without recourse to the Seller except as described
in the Sale and Contribution Agreement. The purchases of such assets by the
Borrower constitute valid and true sales for consideration (and not merely a
pledge of such assets for security purposes) and the contributions of such
assets received by the Borrower constitute valid and true transfers for
consideration, each enforceable against creditors of the Seller, and no such
assets shall constitute property of the Seller.
SECTION 10.26. Ownership of the Borrower. The Borrower shall be
wholly-owned, either directly or indirectly, by MFN or its successors.
SECTION 10.27. Eligibility. All Receivables included in the Borrowing Base
as of the most recently delivered Servicer's Certificate or Borrowing Base
Confirmation are Eligible Receivables.
ARTICLE XI
COVENANTS OF THE BORROWER
From the date hereof until the first day, following the Commitment
Termination Date, on which all Obligations shall have been finally and fully
paid and performed, the Borrower hereby covenants and agrees with the Investors
and the Agent as follows:
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SECTION 11.1. Protection of Security Interest of the Secured Parties.
(a) At or prior to the date of the initial Advance, the Borrower shall
have filed or caused to be filed UCC-1 financing statements, executed by
the Borrower as debtor, naming the Collateral Agent (for the benefit of the
Secured Parties) as secured party and describing the Collateral, with the
office of the Secretary of State of the State of Illinois and the office of
the Secretary of State of Delaware and in such other locations as may be
necessary to perfect the security interests intended to be granted hereby
or as the Collateral Agent or the Agent shall have required. From time to
time thereafter, the Borrower shall execute and file such financing
statements and cause to be executed and filed such continuation statements,
all in such manner and in such places as may be required by law fully to
preserve, maintain and protect the interest of the Collateral Agent and the
Secured Parties under this Agreement in the Borrower Collateral and in the
proceeds thereof. The Borrower shall deliver (or cause to be delivered) to
the Agent and the Collateral Agent file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing. In the event that the Borrower fails to perform its
obligations under this subsection, the Agent or the Collateral Agent may do
so, in each case at the expense of the Borrower.
(b) The Borrower shall not change its name, identity, or structure in
any manner that would, could or might make any financing statement or
continuation statement filed by the Borrower (or by the Agent or the
Collateral Agent on behalf of the Borrower) in accordance with paragraph
(a) above seriously misleading within the meaning of ss. 9-402(7) of the
UCC, unless the Borrower shall have given the Agent and the Collateral
Agent at least 60 days prior written notice thereof, and shall promptly
file appropriate amendments to all previously filed financing statements
and continuation statements.
(c) The Borrower shall give the Agent at least 60 days prior written
notice of any relocation of its principal executive office if, as a result
of such relocation, the applicable provisions of the UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement. The Borrower shall at all
times maintain its principal executive office within the United States of
America.
(d) The Borrower shall maintain its computer systems, if any, and
cause the Servicer to maintain its computer system so that, from and after
the time of the first Advance under this Agreement, its master computer
records (including archives) that shall refer to the Collateral indicate
clearly that such Collateral is subject to first priority security interest
in favor of the Collateral Agent, for the benefit of the Secured Parties.
Indication of the Collateral Agent's (for the benefit of the Secured
Parties) security interest shall be deleted from or modified on its
computer systems when, and only when, the Collateral in question shall have
been paid in full.
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(e) If at any time the Borrower shall propose to sell, grant a
security interest in, or otherwise transfer any interest in motor vehicle
receivables to any prospective purchaser, lender or other transferee, the
Borrower shall give to such prospective purchaser, lender, or other
transferee computer tapes, records, or print-outs (including any restored
from archives) that, if they shall refer in any manner whatsoever to any
Collateral shall indicate clearly that such Collateral is subject to a
first priority security interest in favor of the Collateral Agent, for the
benefit of the Secured Parties.
SECTION 11.2. Reporting Requirements. The Borrower shall furnish, or cause
to be furnished, to the Agent and the Backup Servicer (with respect to clauses
(a) and (b) only):
(a) as soon as available and in any event within 90 days (or next
succeeding Business Day if the last day of such period is not a Business
Day) after the end of each fiscal year, a copy of the audited consolidated
financial statements for such year for MFN and its consolidated
Subsidiaries, setting forth in each case in comparative form the figures
for the previous fiscal year, certified, without qualification by
Independent Accountants acceptable to the Agent which certificate shall
state that such financial statements fairly present the financial condition
of MFN and its consolidated Subsidiaries in accordance with GAAP,
consistently applied, as of and for the fiscal year then ended, and each
other report or statement sent to shareholders or publicly filed by MFN or
the Borrower;
(b) as soon as available and in any event within 45 days (or next
succeeding Business Day if the last day of such period is not a Business
Day) after the end of each of the first three quarters of each fiscal year
of MFN, a consolidated balance sheet of MFN and its consolidated
Subsidiaries as of the end of such quarter and including the prior
comparable period, and a consolidated statement of income and of cash flow
of MFN and its consolidated Subsidiaries for such quarter and for the
period commencing at the end of the previous fiscal year and ending with
the end of such quarter, certified by the chief financial officer or chief
accounting officer of MFN identifying such documents as being the documents
described in this paragraph (b) and stating that the information set forth
therein fairly presents the financial condition of MFN and its consolidated
Subsidiaries in accordance with GAAP, consistently applied, as of and for
the periods then ended, subject to year-end adjustments consisting only of
normal, recurring accruals;
(c) as soon as possible and in any event within five days after the
occurrence of a Facility Termination Event or an Unmatured Facility
Termination Event, the statement of the chief financial officer of the
Borrower or MFN setting forth complete details of such Facility Termination
Event or Unmatured Facility Termination Event and the action which the
Borrower has taken, is taking and proposes to take with respect thereto;
(d) within 10 days after the date any material change in or amendment
to the Servicing Procedures and Credit Manual is made, a copy of the
Servicing Procedures and
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Credit Manual then in effect indicating such change or amendment; and
within 5 days after the date of any change in MFN's public or private debt
ratings, if any, a written certification of MFN's public and private debt
ratings after giving effect to any such change;
(e) promptly, notice of any change in the accountants or material
change in accounting policy of either the Borrower or MFN;
(f) as soon as possible and in any event within ten (10) Business Days
after the end of each calendar month except that if the month end is a
quarter end, then within twenty-five (25) days, the Monthly Financial
Statement; and
(g) promptly, from time to time, such other information, documents,
records or reports respecting the Transferred Receivables, the Other
Conveyed Property or the Financed Vehicles related to the Transferred
Receivables, the other Borrower Collateral or the condition or operations,
financial or otherwise, of the Borrower, MFN or any of its Subsidiaries, as
the Agent may, from time to time, reasonably request.
SECTION 11.3. Preservation of Existence. The Borrower shall observe all
procedures required by its organizational documents and preserve and maintain
its existence, rights, franchises and privileges in the jurisdiction of its
formation and qualify and remain qualified in good standing in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualifications would materially adversely affect (1) the
interests hereunder of the Agent or any Affected Person, (2) the collectibility
of any Receivable or (3) its ability to perform its obligations hereunder or
under any of the other Transaction Documents.
SECTION 11.4. Keeping of Records and Books of Account. The Borrower shall
maintain and implement (or cause the Servicer to maintain and implement)
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Receivables in the event of the
destruction of the originals thereof) and keep and maintain, all documents,
books and records of account (in which complete entries will be made in
accordance with GAAP consistently applied), and other information reasonably
necessary or advisable for the collection of all Transferred Receivables
(including, without limitation, records adequate to permit the daily
identification of all collections of and adjustments to each Transferred
Receivable).
SECTION 11.5. Separate Existence. The Borrower shall take all reasonable
steps (including, without limitation, all steps that the Agent may from time to
time reasonably request) to maintain the Borrower's identity as a separate legal
entity from MFN or any of its Affiliates and to make it manifest to third
parties that the Borrower is an entity with assets and liabilities distinct from
those of MFN and each other Affiliate thereof. Without limiting the generality
of the foregoing, the Borrower shall:
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(a) conduct business correspondence in its own name, follow required
limited liability company procedures and maintain appropriate books and
records;
(b) except as set forth in the Borrower LLC Agreement, not permit any
limitation on its authority to conduct its business and affairs in
accordance with accepted limited liability company practice, and shall not
authorize or suffer any Person other than its directors and officers to act
on its behalf with respect to matters (other than matters customarily
delegated to others under powers of attorney) for which its representatives
would customarily be responsible;
(c) subject to the terms of the Custodian Agreement, maintain or cause
to be maintained by an agent of the Borrower under the Borrower's control
physical possession of all its books and records;
(d) maintain capitalization adequate for the conduct of its business;
(e) account for and manage its liabilities separately from those of
any other Person, including, without limitation, payment of all payroll and
other administrative expenses and taxes from its own assets;
(f) maintain its assets separately from those of any other Person;
(g) maintain offices through which its business is conducted separate
from those of MFN and any Affiliates of MFN (provided that, to the extent
that MFN and any of its Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead costs and expenses
among them, and each such entity shall bear its fair share of such
expenses);
(h) not commingle its funds with those of MFN or any Affiliate of MFN
or any Affiliates of the Borrower except to the extent contemplated herein,
or use its funds for other than the Borrower's uses; and
(i) ensure that any financial reports required of the Borrower shall
comply with GAAP and shall be issued separately from, but may be
consolidated with, any reports prepared by any of its Affiliates.
SECTION 11.6. Interest Rate Xxxxxx. The Borrower shall maintain, at all
times on and after the date of the initial Advance hereunder, Interest Rate
Xxxxxx (a) between the Borrower and (i) DBNY or any of its Affiliates or (ii)
any other bank or other financial institution whose long-term rating is at least
A+ from S&P and Al from Moody's and whose short-term unsecured debt obligation
rating is at least A-1/P-1 by S&P and Moody's, respectively, and is reasonably
acceptable to the Agent, (b) with an aggregate notional principal amount not
less than the outstanding principal amount of the Advances and with a final
maturity date which is the date of the last required Scheduled Payment of any
Receivable in the Total Receivables Pool approved
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by the Agent and the Rating Agencies, (c) each of which has an Interest Rate Cap
Strike Price no greater than the Maximum Interest Rate Cap Strike Price and (d)
which are otherwise in form and substance reasonably acceptable to the Agent and
the Rating Agencies.
SECTION 11.7. Tangible Net Worth. The Borrower shall not permit its
Tangible Net Worth to be less than $5,000,000.
SECTION 11.8. Collection Policies. The Borrower shall, and shall cause the
Servicer to, comply in all material respects with the Servicing Procedures and
Credit Manual in regard to each Receivable. The Borrower shall not, and shall
not permit the Servicer to, make any change in the character of its business or
in the Servicing Procedures and Credit Manual, which change would, in either
case (i) impair the collectibility of any Receivable or (ii) otherwise have a
material adverse effect on its financial condition or operations. Following the
occurrence of a Facility Termination Event, the Borrower shall take such actions
as the Agent shall request to enforce the Borrower's rights under the
Receivables.
SECTION 11.9. Sales, Liens, Etc., Against Receivables and Related Assets.
The Borrower shall not, except as otherwise provided herein, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist, any Lien upon or with respect to, any Transferred Receivable or any other
Borrower Collateral.
SECTION 11.10. Stock Merger, Consolidation, Etc. The Borrower shall not
merge or consolidate with or into, or sell, convey, transfer, exchange, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
any of its assets except as contemplated by the terms of the Transaction
Documents and the Borrower LLC Agreement.
SECTION 11.11. Change in Name. The Borrower shall not make any change to
its name or use any trade names, fictitious names, assumed names or "doing
business as" names.
SECTION 11.12. Indebtedness. The Borrower shall not incur, create, assume,
suffer to exist or otherwise become liable with respect to any Indebtedness
other than (i) hereunder and under the other Transaction Documents and the Xxxxx
Fargo Fee Letter, and (ii) other Indebtedness for operational expenses of the
Borrower in an amount not to exceed $50,000 at any one time outstanding.
SECTION 11.13. Guarantees. The Borrower shall not guarantee, endorse or
otherwise be or become contingently liable (including by agreement to maintain
balance sheet tests) in connection with the obligations of any other Person,
except endorsements of negotiable instruments for collection in the ordinary
course of business and reimbursement or indemnification obligations in favor of
the Agent or any Affected Person as provided for under this Agreement.
SECTION 11.14. Limitation on Transactions with Affiliates: The Borrower
shall not enter into, or be a party to any transaction with any Affiliate of the
Borrower, except for (a) the
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transactions contemplated by the Transaction Documents and (b) to the extent not
otherwise prohibited under this Agreement, other transactions in the nature of
employment contracts and directors' fees, upon fair and reasonable terms
materially no less favorable to the Borrower than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 11.15. Documents. The Borrower shall not cancel or terminate any of
the Transaction Documents to which it is party (in any capacity), or consent to
or accept any cancellation or termination of any of such agreements, or amend or
otherwise modify any term or condition of any of the Transaction Documents to
which it is party (in any capacity) or give any consent, waiver or approval
under any such agreement, or waive any default under or breach of any of the
Transaction Documents to which it is party (in any capacity) or take any other
action under any such agreement not required by the terms thereof, unless (in
each case) (x) the Servicer shall have notified the Rating Agencies thereof and
(y) the Agent shall have consented thereto.
SECTION 11.16. LLC Agreement. The Borrower shall comply with the terms and
conditions of the Borrower LLC Agreement and shall not amend, modify or
otherwise change any of the terms or provisions in its Borrower LLC Agreement,
without (x) notice thereof being furnished by the Borrower to each Rating Agency
and (y) the prior written consent of the Agent.
SECTION 11.17. Accounting Treatment. The Borrower shall not prepare any
financial statements or other statements (including any tax filings which are
not consolidated with those of MFN, Seller or its Affiliates) which shall
account for the transactions contemplated by the Sale and Contribution Agreement
in any manner other than as the sale of, or a capital contribution of, the
Transferred Receivables and the related assets by the Seller to the Borrower.
SECTION 11.18. Limitation on Investments. The Borrower shall not form, or
cause to be formed, any Subsidiaries; or make or suffer to exist any loans or
advances to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or securities
or evidences of indebtedness, acquisition of the business or assets, or
otherwise) in, any Affiliate or any other Person except as otherwise permitted
herein and pursuant to the Sale and Contribution Agreement.
SECTION 11.19. Other Liens or Interests. Except for the security interest
granted hereunder, the Borrower will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on the
Borrower Collateral or any interest therein, and the Borrower shall defend the
right, title, and interest of the Collateral Agent (for the benefit of the
Secured Parties), in and to the Borrower Collateral against, and will take such
other action as is necessary to defeat, all claims of third parties claiming
through or under the Borrower.
SECTION 11.20. Payments on Receivables. All payments from Obligors under
the Receivables which are received directly by the Borrower will be deposited
into the Lockbox Account or a Blocked Account no later than the Business Day
following the day of receipt.
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SECTION 11.21. Business. The Borrower will engage only in the business of
purchasing Receivables from the Seller, financing such purchases, selling
Receivables in Take-Out Securitizations and engaging in related activities and
will engage in no other business activity.
ARTICLE XII
THE SERVICER
SECTION 12.1. Liability of Servicer; Indemnities.
(a) The Servicer shall be liable hereunder only to the extent of the
obligations in this Agreement and the other Transaction Documents
specifically undertaken by the Servicer and the representations made by the
Servicer.
(b) The Servicer shall defend, indemnify and hold harmless each
Indemnified Party from and against any and all costs, expenses, losses,
damages, claims, liabilities, penalties, fines, forfeitures and judgments,
including reasonable fees and expenses of counsel and expenses of
litigation arising out of or resulting from the use, ownership or operation
of any Financed Vehicle related to a Transferred Receivable.
(c) The Servicer shall indemnify, defend and hold harmless each
Indemnified Party from and against any taxes that may at any time be
asserted against such Indemnified Party with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible personal property, transfer,
privilege or license taxes (but not including any income or franchise taxes
or other taxes based upon the net income of the applicable Indemnified
Party, or taxes asserted with respect to, and as of the date of, the sale
of the Receivables to the Borrower) and costs and expenses in defending
against the same.
(d) The Servicer shall indemnify, defend and hold harmless each
Indemnified Party from and against any and all costs, expenses, losses,
claims, penalties, fines, forfeitures, judgments, damages and liabilities
to the extent that such cost, expense, loss, claim, penalty, fine,
forfeiture, judgment, damage or liability arose out of, or was imposed upon
such Indemnified Party by reason of the breach of this Agreement or any
other Transaction Document to which it is party by the Servicer, the
negligence, misfeasance, or bad faith of the Servicer in the performance of
its duties under this Agreement or by reason of negligent disregard of its
obligations and duties under this Agreement.
(e) Indemnification under this Section 12.1 shall survive the
termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer has made
any indemnity payments pursuant to this Section
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12.1 and the recipient thereafter collects any of such amounts from others,
the recipient shall promptly repay such amounts collected to the Servicer,
without interest.
(f) Notwithstanding the indemnity provisions contained in Sections
12.l(b) through (e), the Servicer shall not be required to indemnify any
Indemnified Party against any costs, expenses, losses, damages, claims or
liabilities to the extent the same shall have been (i) caused by the
willful misconduct or gross negligence of such party, or (ii) suffered by
reason of uncollectible or uncollected Receivables not caused by the
Servicer's negligence, misfeasance or bad faith.
(g) If for any reason (other than the exclusions (i) and (ii) set
forth in Section 12.1(f) the indemnification provided above in Section 12.1
is unavailable to an Indemnified Party or is insufficient to hold an
Indemnified Party harmless, then the Servicer shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect
not only the relative benefits received by such Indemnified Party, on the
one hand, and the Servicer, on the other hand, but also the relative fault
of such Indemnified Party, on the one hand, and the Servicer, on the other
hand, as well as any other relevant equitable considerations.
SECTION 12.2. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer, Backup Servicer, or Designated Backup Subservicer.
(a) The Servicer shall not merge or consolidate with any other Person,
convey, transfer or lease substantially all its assets as an entirety to
another Person, or permit any, other Person to become the successor to the
Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be
an Eligible Servicer, shall be acceptable to the Agent and the Required
Lenders and shall be capable of fulfilling the duties of the Servicer
contained in this Agreement. Any Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to
which the Servicer shall be a party, (iii) which acquires by conveyance,
transfer, or lease substantially all of the assets of the Servicer, or (iv)
succeeding to the business of the Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Servicer under this Agreement and the other Transaction Documents and,
whether or not such assumption agreement is executed, shall be the
successor to the Servicer under this Agreement and the other Transaction
Documents without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement, anything in this
Agreement to the contrary notwithstanding; provided, however, that nothing
contained herein shall be deemed to release the Servicer from any
obligation hereunder. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 12.2(a) to the Agent,
each Rating Agency, the Collateral Agent, the Backup Servicer and the
Designated Backup Subservicer. Notwithstanding the foregoing, as a
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condition to the consummation of the transactions referred to in clauses
(i), (ii), (iii) and (iv) above, (x) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Section
8.6(b) shall have been breached in any material respect (for purposes
hereof, such representations and warranties shall speak as of the date of
the consummation of such transaction) and no Facility Termination Event or
Unmatured Facility Termination Event shall have occurred and be continuing,
(y) the Servicer shall have delivered to the Agent an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section
12.2(a), and (z) the Servicer shall have delivered to the Agent an Opinion
of Counsel, stating, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary to preserve and protect the
security interest of the Collateral Agent (for the benefit of the Secured
Parties) in the Transferred Receivables and other Borrower Collateral and
reciting the details of the filings or (B) no such action shall be
necessary to preserve and protect such interest.
(b) Any Person (i) into which the Backup Servicer or the Designated
Backup Subservicer may be merged or consolidated, (ii) resulting from any
merger or consolidation to which the Backup Servicer or the Designated
Backup Subservicer shall be a party, (iii) which acquires by conveyance,
transfer or lease substantially all of the assets of the Backup Servicer or
the Designated Backup Subservicer, or (iv) succeeding to the business of
the Backup Servicer or the Designated Backup Subservicer, in any of the
foregoing cases shall execute an agreement of assumption to perform every
obligation of the Backup Servicer or the Designated Backup Subservicer, as
the case may be, under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer or the
Designated Backup Subservicer as the case may be, under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding; provided, however, that nothing contained herein
shall be deemed to release the Backup Servicer or the Designated Backup
Subservicer, as the case may be, from any obligation.
SECTION 12.3. Limitation on Liability of Servicer, Backup Servicer,
Designated Backup Subservicer and Others.
(a) Neither the Servicer nor the Backup Servicer, or the Designated
Backup Subservicer nor any of the directors or officers or employees or
agents of the Servicer, Backup Servicer or Designated Backup Subservicer
shall be under any liability to the Borrower, the Investors or the Agent,
except as provided in this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement;
provided, however, that this provision shall not protect the Servicer, the
Backup Servicer, or the Designated Backup Subservicer or any such person
against any liability that would otherwise be imposed by reason of a breach
of this Agreement or willful misfeasance,
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bad faith or negligence in the performance of duties. The Servicer, the
Backup Servicer, or the Designated Backup Subservicer and any director,
officer, employee or agent of the Servicer, Backup Servicer or the
Designated Backup Subservicer may rely in good faith on the written advice
of counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this
Agreement. Neither the Backup Servicer nor the Designated Backup
Subservicer shall be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the
expenditure or risk of such funds or incurrence of financial liability.
(b) Unless acting as Servicer hereunder, the Backup Servicer (i) shall
not be liable for any obligation of the Servicer contained in this
Agreement, and the Agent, the Borrower and the Investors shall look only to
the Servicer to perform such obligations and (ii) shall not be required to
make the representations and warranties set forth in Section 8.6(b).
(c) Neither the Backup Servicer nor the Designated Backup Subservicer
shall have responsibility nor shall be in default hereunder nor incur any
liability for any failure, error, malfunction or any delay in carrying out
any of its duties under this Agreement if any such failure or delay results
from the Backup Servicer or the Designated Backup Subservicer acting in
accordance with information prepared or supplied by Person other than the
Backup Servicer or the Designated Backup Subservicer or the failure of any
such Person to prepare or provide such information. Neither the Backup
Servicer shall nor the Designated Backup Subservicer have responsibility,
shall be in default and shall incur any liability (i) for any act or
failure to act by any third party, including the Servicer or for any
inaccuracy or omission in a notice or communication received by the Backup
Servicer or the Designated Backup Subservicer from any third party or (ii)
that is due to or results from the invalidity, unenforceability of any
Receivable under applicable law or the breach or the inaccuracy of any
representation or warranty made with respect to any Receivable.
SECTION 12.4. Delegation of Duties.
(a) So long as an MFN Entity is the Servicer, the Servicer may
delegate duties under this Agreement to an Affiliate of MFN with the prior
written consent of the Agent and written notice to the Backup Servicer and
the Designated Backup Subservicer. The Servicer also may at any time
perform the specific duties of (a) repossession of Financed Vehicles, (b)
tracking the insurance on Financed Vehicles and (c) pursuing the collection
of deficiency balances on Delinquent Receivables through sub-contractors
who are in the business of servicing automotive receivables, without the
consent of the Agent, the Lenders, the Backup Servicer or the Designated
Backup Subservicer. The Servicer may
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also perform other non-material specific duties through such
sub-contractors in accordance with customary servicing policies and
procedures without the prior consent of the Agent; provided, however, that
no such delegation or subcontracting of duties by the Servicer shall
relieve the Servicer of its responsibility with respect to such duties. No
MFN Entity nor any other party acting as Servicer hereunder shall appoint
any subservicer (other than the Sub-Servicer) hereunder without the prior
written consent of the Agent and written notice to the Backup Servicer and
the Designated Backup Subservicer.
If an MFN Entity is not the Servicer, such Servicer may delegate any
of its duties and obligations hereunder to SST or one or more other
Sub-Servicers pursuant to a sub-servicing agreement in form and substance
approved by the Agent. Notwithstanding the foregoing, each of such Servicer
and the Performance Guarantor shall remain primarily liable for the
performance of the duties and obligations so delegated and each of the
Borrower, Agent and Lenders shall have the right to look solely to the
Servicer and the Performance Guarantor for performance.
(b) The Backup Servicer may delegate duties under this Agreement to
one or more Designated Backup Subservicers with the prior written consent
of the Agent. The Backup Servicer hereby appoints SST as the initial
Designated Backup Subservicer, SST hereby accepts such appointment and the
Agent hereby consents to such appointment. The Backup Servicer may
terminate the appointment of any Designated Backup Subservicer only upon
the prior written consent of the Agent.
(c) The Servicer hereby appoints each Contributing Subsidiary as a
sub-servicer (each, a "Sub-Servicer") with respect to the Receivables
contributed to the Seller by such Contributing Subsidiary under the
Contribution Agreement. MFN agrees to cause each such Sub-Servicer to
perform the duties and obligations of the Servicer pursuant to the terms
hereof to the extent so designated by the Servicer. Notwithstanding the
foregoing: (i) each of the Servicer and the Performance Guarantor shall
remain primarily liable to the Borrower, the Agent and the Lenders for the
performance of the duties and obligations so delegated, and (ii) each of
the Borrower, the Agent and the Lenders shall have the right to look solely
to each of the Servicer and the Performance Guarantor for performance. The
Agent may terminate the appointment of any Sub-Servicer upon the
termination of the Servicer hereunder by giving notice of its desire to
terminate such appointment to the Servicer (and the Servicer shall provide
appropriate notice to such Sub-Servicer).
SECTION 12.5. Servicer, Backup Servicer and Designated Backup Subservicer
Not to Resign. Subject to the provisions of Section 12.2, none of the Servicer,
the Backup Servicer or the Designated Backup Subservicer shall resign from the
obligations and duties imposed on it by this Agreement as Servicer, Backup
Servicer or Designated Backup Subservicer except upon a determination that by
reason of a change in legal requirements the performance of its duties
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under this Agreement would cause it to be in violation of such legal
requirements in a manner which would result in a material adverse effect on the
Servicer, the Backup Servicer or the Designated Backup Subservicer, as the case
may be, and the Agent does not elect to waive the obligations of the Servicer,
the Backup Servicer or the Designated Backup Subservicer, as the case may be, to
perform the duties which render it legally unable to act or to delegate those
duties to another Person. Any such determination permitting the resignation of
the Servicer, Backup Servicer or Designated Backup Subservicer shall be
evidenced by an Opinion of Counsel to such effect delivered and acceptable to
the Agent. No resignation of the Servicer shall become effective until the
Backup Servicer or an entity acceptable to the Agent and the Required Lenders
shall have assumed the responsibilities and obligations of the Servicer. No
resignation of the Backup Servicer or the Designated Backup Subservicer shall
become effective until an entity acceptable to the Agent and the Required
Lenders shall have assumed the responsibilities and obligations of the Backup
Servicer or the Designated Backup Subservicer, as the case may be; provided,
however, that in the event a successor Backup Servicer or Designated Backup
Subservicer, as the case may be, is not appointed within 60 days after the
Backup Servicer or Designated Backup Subservicer, as the case may be, has given
notice of its resignation as permitted by this Section 12.5, the Backup Servicer
or Designated Backup Subservicer, as the case may be, may petition a court for
its removal. Notwithstanding the foregoing, the Backup Servicer or Designated
Backup Subservicer, as the case may be, may resign for any reason, provided an
entity acceptable to the Agent and the Required Lenders shall have assumed the
responsibilities and obligations of the Backup Servicer or Designated Backup
Subservicer, as the case may be, prior to the effectiveness of any such
resignation.
SECTION 12.6. Administrative Duties of Servicer.
(a) Duties with Respect to the Transaction Documents. The Servicer
shall perform the duties of the Borrower under the Transaction Documents.
(b) Duties with Respect to the Borrower. In addition to the duties of
the Servicer set forth in this Agreement or any of the Transaction
Documents, the Servicer shall perform such calculations and shall prepare
all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Borrower to prepare, file or
deliver pursuant to state and federal tax and securities laws. The Servicer
shall administer, perform or supervise the performance of such other
activities in connection with the Borrower as are not covered by any of the
foregoing provisions and as are reasonably within the capability of the
Servicer.
(c) Records. The Servicer shall maintain appropriate books of account
and records relating to services performed under this Agreement and as
required by the Transaction Documents.
ARTICLE XIII
SERVICER TERMINATION EVENTS
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SECTION 13.1. Servicer Termination Event. For purposes of this Agreement,
each of the following shall constitute a "Servicer Termination Event":
(a) Any failure by the Servicer or, so long as any MFN Entity is the
Servicer, any MFN Entity to deliver to the Collateral Agent or the Agent
any proceeds or payment required to be so delivered under the terms of this
Agreement (or, if any MFN Entity is the Servicer, under the Contribution
Agreement and Sale and Contribution Agreement) that continues unremedied
for a period of one Business Day after written notice is received by the
Servicer from the Agent or after discovery of such failure by a Responsible
Officer of the Servicer;
(b) Failure by the Servicer to deliver the Servicer's Certificate
required by Section 8.9 by 12:00 Noon, New York City time, on the second
Business Day after each Determination Date;
(c) Failure on the part of the Servicer to observe in all material
aspects its covenants and agreements set forth in Section 12.2(a);
(d) Failure on the part of the Servicer or, so long as any MFN Entity
is the Servicer, any MFN Entity, duly to observe or perform in any material
respect any other covenants or agreements of the Servicer or, so long as
any MFN Entity is the Servicer, any MFN Entity, as the case may be, set
forth in this Agreement, which failure continues unremedied for a period of
30 days after the earlier of knowledge thereof by a Responsible Officer of
the Servicer and the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Agent;
(e) The entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of the Servicer (or, if any MFN
Entity is the Servicer, any MFN Entity) in an involuntary case under the
Bankruptcy Code, as now or hereafter in effect, or another 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, if any MFN
Entity is the Servicer, any MFN Entity) or of any substantial part of their
respective properties or ordering the winding up or liquidation of the
affairs of the Servicer (or, if any MFN Entity is the Servicer, any MFN
Entity) or the commencement of an involuntary case under the Bankruptcy
Code, as now or hereinafter in effect, or another present or future federal
or state bankruptcy, insolvency or similar law and such case is not
dismissed within 60 days;
(f) The commencement by the Servicer (or, if any MFN Entity is the
Servicer, any MFN Entity) of a voluntary case under the Bankruptcy Code, 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, if any MFN Entity is the Servicer, any MFN Entity) to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Servicer
(or, if any MFN
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Entity is the Servicer, any MFN Entity) or of any substantial part of its
property or the making by the Servicer (or, if any MFN Entity is the Servicer,
any MFN Entity) of an assignment for the benefit of creditors or the failure by
the Servicer (or, if any MFN Entity is the Servicer, any MFN Entity) generally
to pay its debts as such debts become due or the taking of corporate action by
the Servicer (or, if any MFN Entity is the Servicer, any MFN Entity) in
furtherance of any of the foregoing;
(g) Any representation, warranty or statement of the Servicer (or, if
any MFN Entity is the Servicer, any MFN Entity) made in this Agreement or
any certificate, report or other writing delivered pursuant hereto shall
prove to be incorrect in any material respect as of the time when the same
shall have been made (excluding, however, any representation or warranty
set forth in the definition of "Eligible Receivable"), and, within 30 days
after the earlier of knowledge thereof by a Responsible Officer of the
Servicer and the date written notice thereof shall have been given to the
Servicer by the Agent, the circumstances or condition in respect of which
such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured;
(h) The Agent shall not have delivered a Servicer Extension Notice
pursuant to Section 8.14;
(i) One or more final judgments shall be entered by any court or
courts against the Servicer for the payment of money which exceed
$1,000,000 in the aggregate which are not fully covered by insurance or by
reserves shown on the financial statements of the Servicer which have been
delivered to Agent in accordance herewith; or a warrant of attachment or
execution or similar process shall be issued or levied against property of
the Servicer which, together with all other such property of the Servicer
subject to other such process, exceeds $1,000,000 in the aggregate, and
within 30 days after the entry, issue or levy thereof, such judgment,
warrant or process shall not have been paid or discharged or stayed pending
appeal, or if, after the expiration of any such stay, such judgment,
warrant or process shall not have been paid or discharged;
(j) The occurrence and continuance of a Facility Termination Event; or
(k) The Servicer shall fail to cause all Fort Xxxx Collections to be
deposited in a Blocked Account on or before September 30, 2001.
SECTION 13.2. Consequences of a Servicer Termination Event. If a Servicer
Termination Event shall occur and be continuing, the Agent may, and, upon the
direction of the Required Lenders, the Agent shall, by written notice given to
the Servicer (with a copy to the Backup Servicer and the Designated Backup
Subservicer), terminate all of the rights and obligations of the Servicer under
this Agreement. On or after the receipt by the Servicer of such written notice
or if the Agent shall not have delivered a Servicer Extension Notice pursuant to
Section 8.14, all authority, power, obligations and responsibilities of the
Servicer under this Agreement automatically shall pass to, be vested in and
become obligations and responsibilities
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of the Backup Servicer; provided, however, that the Backup Servicer shall have
no liability with respect to any obligation which was required to be performed
by the prior Servicer prior to the date that the Backup Servicer becomes the
Servicer or any claim of a third party based on any alleged action or inaction
of the prior Servicer. The Backup Servicer and the Designated Backup Subservicer
is authorized and empowered by this Agreement to execute and deliver, on behalf
of the prior Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such termination, whether to complete
the transfer and endorsement of the Transferred Receivables and related
documents to show the Collateral Agent (for the benefit of the Secured Parties)
as lienholder or secured party, or otherwise. The prior Servicer agrees to
cooperate with the Backup Servicer and the Designated Backup Subservicer in
effecting the termination of the responsibilities and rights of the prior
Servicer under this Agreement, including, without limitation and at the prior
Servicer's expense, the transfer to the Backup Servicer and the Designated
Backup Subservicer for administration by it of all cash amounts that shall at
the time be held by the prior Servicer for deposit, or have been deposited by
the prior Servicer, in the Collection Account or thereafter received with
respect to the Transferred Receivables and the delivery to the Backup Servicer
and the Designated Backup Subservicer of all Receivable Files, Monthly Records
and Collection Records and a computer tape in readable form containing all
information necessary to enable the Backup Servicer, the Designated Backup
Subservicer or a successor Servicer to service the Transferred Receivables. In
addition, upon the occurrence of a Servicer Termination Event, the Servicer
shall deliver to the Designated Backup Subservicer its Monthly Records within
one day after demand therefor and a computer tape or diskette (or any other
means of electronic transmission acceptable to the Designated Backup
Subservicer) containing as of the close of business on the date of demand all of
the data maintained by the Servicer in computer format in connection with
servicing the Transferred Receivables. If requested by the Agent, the Backup
Servicer, the Designated Backup Subservicer or successor Servicer shall
terminate the Lockbox Agreement or a Blocked Account Agreement with respect to
the Transferred Receivables and direct the Obligors to make all payments under
the Transferred Receivables directly to the successor Servicer (in which event
the successor Servicer shall process such payments in accordance with Section
8.18), or to a lockbox or blocked account established by the successor Servicer
at the direction of the Agent, at the prior Servicer's expense. The terminated
Servicer shall grant the Agent, the Collateral Agent, the Backup Servicer and
the Designated Backup Subservicer reasonable access to the terminated Servicer's
premises at the terminated Servicer's expense.
SECTION 13.3. Appointment of Successor Servicer.
(a) On and after (i) the time the Servicer receives a notice of
termination pursuant to Section 13.2 or (ii) upon the resignation of the
Servicer pursuant to Section 12.5 or (iii) the receipt by the Backup
Servicer (or any alternate successor Servicer appointed pursuant to Section
13.3(b)) of written notice from the Agent that the Agent is not extending
the Servicer's term pursuant to Section 8.14, the Backup Servicer shall be
the successor in all respects to the Servicer in its capacity as Servicer
under this
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Agreement and the transactions set forth or provided for in this Agreement
and shall be subject to all the responsibilities, restrictions, duties,
liabilities and termination provisions relating thereto placed on the
Servicer by the terms and provisions of this Agreement; provided, however,
that neither the Backup Servicer nor the Designated Backup Subservicer
shall not be liable for any acts, omissions or obligations of the Servicer
prior to such succession or for any breach by the Servicer of any of its
representations and warranties contained in this Agreement or in any
related document. The Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any
such succession. If a successor Servicer is acting as Servicer hereunder,
it shall be subject to termination under Section 13.2 upon the occurrence
of any Servicer Termination Event applicable to it as Servicer.
(b) The Agent (with the consent of the Required Lenders) may exercise
at any time its right to appoint as Backup Servicer, Designated Backup
Subservicer or as successor to the Servicer a person other than the Person
serving as Backup Servicer or Designated Backup Subservicer at the time and
shall have no liability to the Investors, the Borrower, any MFN Entity, the
Person then serving as Backup Servicer or any other Person if it does so.
Notwithstanding the above, if the Backup Servicer or Designated Backup
Subservicer shall be legally unable or unwilling to act as Servicer and the
Agent shall fail to appoint a successor Servicer within 60 days of its
receipt of notice from the Backup Servicer or Designated Backup Subservicer
to such effect, the Backup Servicer or Designated Backup Subservicer may
petition a court of competent jurisdiction to appoint any Eligible Servicer
as the successor to the Servicer. Pending such appointment, the Backup
Servicer shall act as successor Servicer unless it is legally unable to do
so, in which event the outgoing Servicer shall continue to act as Servicer
until a successor has been appointed and accepted such appointment. Subject
to Section 12.5, no provision of this Agreement shall be construed as
relieving the Backup Servicer of its obligation to succeed as successor
Servicer upon the termination of the Servicer pursuant to Section 13.2, the
resignation of the Servicer pursuant to Section 2.5 or the non-extension of
the servicing term of the Servicer pursuant to Section 8.14. If, upon the
termination of the Servicer pursuant to Section 13.2 or 8.14 or the
resignation of the Servicer pursuant to Section 12.5, the Agent (with the
consent of the Required Lenders) appoints a successor Servicer other than
the Backup Servicer, the Backup Servicer shall not be relieved of its
duties as Backup Servicer hereunder.
(c) Any successor Servicer appointed pursuant to this Section 13 shall
be entitled to compensation based upon a rate equal to the Servicing Fee
Rate. In addition, any successor Servicer shall be entitled to receive
Transition Costs in accordance with the Security Agreement.
(d) Notwithstanding anything contained herein to the contrary, the
Backup Servicer as Successor Servicer is authorized to accept and rely on
all of the accounting, records (including computer records) and work of the
prior Servicer relating to the
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Receivables (collectively, the "Predecessor Servicer Work Product") without
any audit or other examination thereof, and the Backup Servicer as
Successor Servicer shall have no duty, responsibility, obligation or
liability for the acts and omissions of the prior Servicer. If any error,
inaccuracy, omission or incorrect or non-standard practice or procedure
(collectively, "Errors") exist in any Predecessor Servicer Work Product and
such Errors make it materially more difficult to service or should cause or
materially contribute to the Backup Servicer as Successor Servicer making
or continuing any Errors (collectively, "Continued Errors"), the Backup
Servicer as Successor Servicer shall have no duty or responsibility for
such Continued Errors; provided, however, that the Backup Servicer as
Successor Servicer agrees to use its best efforts to prevent further
Continued Errors. In the event that the Backup Servicer as Successor
Servicer becomes aware of Errors or Continued Errors, the Backup Servicer
as Successor Servicer shall use its best efforts to reconstruct and
reconcile such data as is commercially reasonable to correct such Errors
and Continued Errors and to prevent future Continued Errors.
ARTICLE XIV
FACILITY TERMINATION EVENTS;
THEIR EFFECT
SECTION 14.1. Facility Termination Events. Each of the following shall
constitute a Facility Termination Event under this Agreement:
(a) Default in the payment when due of any principal of any Advance,
or default in the payment of any other amount payable by the Borrower
hereunder, including, without limitation, any Yield on any Advance or any
Fees which default shall continue for one Business Day;
(b) Any MFN Entity shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or in any other
Transaction Document on its part to be performed or observed and, except in
the case of the covenants and agreements contained in Sections 11.6, 11.7,
11.10, 12.2(a) and Article XIX, as to each of which no grace period shall
apply, any such failure shall remain unremedied for 10 days after knowledge
thereof by any MFN Entity or after written notice thereof shall have been
given by the Agent to any MFN Entity;
(c) Any representation or warranty of any MFN Entity (in any capacity)
made or deemed to have been made hereunder or in any other Transaction
Document or any other writing or certificate furnished by or on behalf of
any MFN Entity to the Agent or the Lenders for purposes of or in connection
with this Agreement or any other Transaction Document (including any
Servicer's Certificate or any Borrowing Base Confirmation delivered
pursuant to Section 7.3) shall prove to have been false or incorrect in any
material respect when made or deemed to have been made and, within 30 days
after the earlier of knowledge thereof by a Responsible Officer, as the
case may be,
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and the date written notice thereof shall have been given to any MFN
Entity, as the case may be, by the Agent, the circumstances or condition in
respect of which such representation, warranty or statement was incorrect
shall not have been eliminated or otherwise cured; provided that no breach
shall be deemed to occur hereunder in respect of any representation or
warranty relating to eligibility of any Receivable on its Purchase Date to
the extent the Seller has repurchased such Receivable in accordance with
the provisions hereof or of the Sale and Contribution Agreement;
(d) An Event of Bankruptcy shall have occurred and remain continuing
with respect to any MFN Entity;
(e) The aggregate principal amount of all Advances plus the Accrued
Expenses outstanding on any day shall exceed the Borrowing Base on such day
(a "Borrowing Base Deficiency") and such condition continues unremedied for
three Business Days;
(f) The Internal Revenue Service shall file notice of a Lien pursuant
to Section 6323 of the Internal Revenue Code with regard to any assets of
the Borrower or the Seller or any material portion of the assets of MFN or
any Contributing Subsidiary and such Lien shall not have been released
within 30 days, or the Pension Benefit Guaranty Corporation shall file
notice of a Lien pursuant to Section 4068 of ERISA with regard to any of
the assets of any MFN Entity and such Lien shall not have been released
within 30 days;
(g) (i) Any Transaction Document or any Lien granted thereunder by any
MFN Entity, shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any MFN Entity; or (ii) any MFN
Entity shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or (iii) any
Lien securing any Obligation shall, in whole or in part, not be or cease to
be a perfected first priority security interest against the MFN Entities;
(h) A Servicer Termination Event shall have occurred;
(i) MFN or any Contributing Subsidiary shall fail to pay any principal
of or premium or interest on any Indebtedness having a principal amount of
$5,000,000 (or, in the case of the Borrower and the Seller, $50,000) or
greater, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness; or any other
default under any agreement or instrument relating to any such Indebtedness
of any MFN Entity, as applicable, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such
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Indebtedness; or any such Indebtedness shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Indebtedness shall be required to
be made, in each case, prior to the stated maturity thereof;
(j) There shall occur a "termination event" or "event of default" or
similar event under any other Transaction Document;
(k) The average of the Monthly Extension Rates for four consecutive
Determination Dates shall exceed (i) 4%, with respect to the Determination
Dates occurring in the months of April through November or (ii) 7%, with
respect to the Determination Dates occurring in the months of December
through March;
(l) As of any Distribution Date, the amount in the Reserve Account is
less than the Minimum Reserve Account Amount, and such deficiency is not
cured on or prior to the immediately succeeding Distribution Date;
(m) A notice of termination with respect to the Lockbox Agreement or a
Blocked Account Agreement with respect to the Transferred Receivables shall
have been delivered, or a termination of the Lockbox Agreement or Blocked
Account Agreement shall have otherwise occurred, and a replacement Lockbox
Bank or Blocked Account Bank reasonably acceptable to the Agent shall not
have executed a Lockbox Agreement or Blocked Account Agreement with respect
to the Transferred Receivables in form and substance satisfactory to the
Agent within 30 days of such notice;
(n) A Change of Control shall occur with respect to MFN and the Agent
shall not have provided its written consent thereto or, in connection with
any Proposed MFN Transaction, the Agent shall have delivered a No Consent
Notice to MFN and the Agent shall not have accompanied such notice with
Notice of Firm Take-Out Commitment unless MFN promptly provides another
notice to the Agent that such Proposed MFN Transaction has been abandoned;
(o) The Consolidated Total Adjusted Equity of MFN at any time shall be
less than the Minimum Total Adjusted Equity Amount Tangible Net Worth
Amount at such time for any period of 20 consecutive days;
(p) Subject to Section 7.2 of the Contribution Agreement, any of the
Contributing Subsidiaries, the Seller or the Borrower shall cease to be a
direct or indirect wholly-owned subsidiary of MFN;
(q) One or more final judgments shall be entered by any court or
courts against any MFN Entity for the payment of money which exceed $50,000
in the aggregate in the case of the Seller or the Borrower and $5,000,000
in the aggregate in the
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case of MFN or any Contributing Subsidiary which are not fully covered by
insurance or, in the case of MFN or any Contributing Subsidiary, by
reserves shown on the consolidated financial statements of MFN which have
been delivered to the Agent in accordance herewith; or a warrant of
attachment or execution or similar process shall be issued or levied
against property of any MFN Entity which, together with all other such
property of any MFN Entity subject to other such process, exceeds in value
$50,000 in the aggregate in the case of the Seller or the Borrower and
$5,000,000 in the aggregate in the case of MFN or any Contributing
Subsidiary, and within thirty (30) days after the entry, issue or levy
thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any
such stay, such judgment, warrant or process shall not have been paid or
discharged; or
(r) MFN shall fail to maintain the Required Cash Balance;
(s) The average of the Servicer Delinquency Ratios for the last day of
each of the preceding three Collection Periods exceeds 4.5%; provided that
such 4.5% shall be reduced to 4.3% with respect to computations of the
Servicer Delinquency Ratios as of the last day of the March through
September (inclusive) Collection Periods; or
(t) The Portfolio Net Loss Ratio exceeds 15%.
SECTION 14.2. Effect of Facility Termination Event.
(a) Optional Termination. Upon the occurrence of a Facility
Termination Event (other than a Facility Termination Event described in
Section 14.1(d), the Agent may, and, at the direction of the Required
Lenders, the Agent shall declare all or any portion of the outstanding
principal amount of the Advances and other Obligations to be due and
payable and/or the Facility (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Advances and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or the Facility (and the Commitments of the Committed Lenders, if any,
thereunder) shall terminate.
(b) Automatic Termination. Upon the occurrence of a Facility
Termination Event described in Section 14.1(d) or a Servicer Termination
Event described in Section 13.1(e) or (f), the Facility Termination Date
shall be deemed to have occurred automatically, and all outstanding
Advances under this Agreement and all other Obligations under this
Agreement shall become immediately and automatically due and payable, all
without presentment, demand, protest, or notice of any kind.
SECTION 14.3. Certain Rights Upon Facility Termination Event.
(a) In addition to the rights and remedies specified in Section 14.2,
if a Facility Termination Event shall have occurred and be continuing, the
Agent may direct
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the Collateral Agent to exercise any of the remedies specified in the
Security Agreement or available to the Collateral Agent as a secured party
under the UCC in respect of the Borrower Collateral (or any portion
thereof).
(b) The rights and remedies provided to the Collateral Agent, the
Agent and the Secured Parties herein and in the other Transaction Documents
are cumulative and not exclusive of any other rights and remedies the
Collateral Agent, the Agent and the Secured Parties may have under
applicable law.
(c) If a Facility Termination Event shall have occurred and be
continuing, then at any time after the acceleration of the maturity of the
Advances and other Obligations has been made and before a judgment or
decree for payment of the money due has been obtained by the Agent as
hereinafter provided, the Required Lenders, by written notice to the
Borrower and the Agent, may rescind and annul such declaration and its
consequences if:
(i) the Borrower has paid or deposited with the Agent a sum
sufficient to pay
(A) all payments of principal of and Yield on the Advances
and all other amounts that would then be due hereunder
or if the Facility Termination Event giving rise to
such acceleration had not occurred; and
(B) all sums paid or advanced by the Agent hereunder and
the reasonable compensation, expenses, disbursements
and advances of the Agent and its agents and counsel;
and
(ii) all Facility Termination Events, other than the nonpayment
of the principal of the Advances that has become due solely by such
acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
(d) Call on Guarantees. Upon the termination of the Facility pursuant
to Section 14.2, the Agent may immediately proceed to collect all amounts
due and payable under this Agreement from the Seller, to the extent
provided under the Seller Guaranty and from MFN, to the extent provided
under the MFN Guaranty.
ARTICLE XV
THE AGENT
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SECTION 15.1. Appointment. Each Lender hereunder hereby irrevocably
designates and appoints DBNY as Agent hereunder, and authorizes the Agent to
take such action on its behalf under the provisions of this Agreement, the
Security Agreement and the other Transaction Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement, the Security Agreement and the other Transaction
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants; functions, responsibilities, duties, obligations or liabilities on
the part of the Agent to any Lender shall be read into this Agreement, the
Security Agreement or the other Transaction Documents or shall otherwise exist
against the Agent. In performing its functions and duties hereunder, the Agent
shall act solely as the agent of the Lenders, and the Agent does not assume, nor
shall be deemed to have assumed, any obligation or relationship of trust or
agency with or for any such Person.
SECTION 15.2. Delegation of Duties. The Agent may execute any of its duties
under this Agreement, the Security Agreement and the other Transaction Documents
by or through its subsidiaries, affiliates, agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible to any Lender for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 15.3. Exculpatory Provisions. Neither the Agent (acting in such
capacity) nor any of its directors, officers, agents or employees shall be (a)
liable for any action lawfully taken or omitted to be taken by it or them or any
Person described in Section 15.2 under or in connection with this Agreement, the
Security Agreement or the other Transaction Documents (except for its, their or
such Person's own gross negligence or willful misconduct), or (b) responsible in
any manner to any Person for any recitals, statements, representations or
warranties of any Person (other than itself) contained in the Transaction
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received under or in connection with, the Transaction
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of the Transaction Documents or any other document furnished in
connection therewith or herewith, or for any failure of any Person (other than
itself or its directors, officers, agents or employees) to perform its
obligations under any Transaction Document or for the satisfaction of any
condition specified in a Transaction Document. Except as otherwise expressly
provided in this Agreement, the Agent shall not be under any obligation to any
Person to ascertain or to inquire as to the observance or performance of any of
the agreements or covenants contained in, or conditions of, the Transaction
Documents, or to inspect the properties, books or records of any MFN Entity, the
Servicer, the Backup Servicer or the Designated Backup Subservicer.
SECTION 15.4. Reliance by Agent. The Agent shall in all cases be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate,
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affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to each of the Lenders), independent accountants and other
experts selected by the Agent. The Agent shall in all cases be fully justified
in failing or refusing to take any action under this Agreement, the Security
Agreement, any other Transaction Document or any other document furnished in
connection herewith or therewith unless it shall first receive such advice or
concurrence of the Lenders, as it deems appropriate, or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability,
cost and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement, the Security
Agreement, the other Transaction Documents or any other document furnished in
connection herewith or therewith in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.
SECTION 15.5. Action Upon Certain Events: Reports and Notices.
(a) To the extent the Agent is entitled to consent to or withhold its
consent of any waiver or amendment of this Agreement, the Security
Agreement or other Transaction Documents in accordance with the terms
hereof or thereof, or is notified in writing by a party hereto of a
Facility Termination Event or Servicer Termination Event, the Agent shall
(i) give prompt notice to the Lenders of any such waiver, amendment,
Facility Termination Event or Servicer Termination Event of which it is
aware, and (ii) take such action with respect to such waiver, amendment,
Facility Termination Event or Servicer Termination Event as shall be
directed by the Required Lenders; provided, however, that unless and until
the Agent shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such waiver, amendment, Facility Termination Event or Servicer
Termination Event, as applicable, as the Agent shall, in its sole
discretion, deem advisable and in the best interests of the Lenders.
(b) The Agent shall upon request promptly provide the Lenders with
copies of reports and notices received by it hereunder and under the
Custodian Agreement and the Security Agreement.
SECTION 15.6. Non-Reliance on Agent. The Lenders expressly acknowledge that
neither the Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent hereafter taken, including, without limitation, any
review of the affairs of any MFN Entity, the Servicer, the Backup Servicer or
the Designated Backup Subservicer, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Except as expressly
provided herein, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other
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information concerning the Borrower Collateral or the business, operations,
property, prospects, financial and other condition or creditworthiness of any
MFN Entity, the Servicer, the Lenders, the Backup Servicer or the Designated
Backup Subservicer which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 15.7. Indemnification. The Committed Lenders agree to indemnify the
Agent and its officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Borrower, the Servicer or any MFN Entity under the
Transaction Documents, and without limiting the obligation of such Persons to do
so in accordance with the terms of the Transaction Documents), ratably according
to their Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent or
the affected Person in connection with any investigative, or judicial proceeding
commenced or threatened, whether or not the Agent or such affected Person shall
be designated a party thereto) that may at any time be imposed on, incurred by
or asserted against the Agent or such affected Personas a result of, or arising
out of, or in any way related to or by reason of, any of the transactions
contemplated hereunder or under the Transaction Documents or any other document
furnished in connection herewith or therewith (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent or such affected Person).
SECTION 15.8. Successor Agent. The Agent may, upon five (5) days' notice to
the Lenders (with a copy to the Borrower), resign as Agent; provided that a
Lender agrees to become the successor Agent hereunder in accordance with the
next sentence. If the Agent shall resign as Agent under this Agreement, then the
Required Lenders during such period shall appoint from among the Committed
Lenders a successor agent, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent, effective upon its acceptance of such appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the retiring Agent's resignation hereunder as
Agent, the provisions of this Article XV shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.
SECTION 15.9. Liability of the Agent. Notwithstanding any provision of this
Agreement, the Security Agreement or any other Transaction Document: (i) the
Agent shall not have any obligations under this Agreement, the Security
Agreement or any other Transaction Document other than those specifically set
forth herein and therein, and no implied obligations of the Agent shall be read
into this Agreement, the Security Agreement or any other Transaction Document;
and (ii) in no event shall the Agent be liable under or in connection with this
Agreement, the Security Agreement or any other Transaction Document for
indirect, special, or consequential losses or damages of any kind, including
lost profits, even if advised of the possibility thereof and regardless of the
form of action by which such losses or damages may be
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claimed. Neither the Agent nor any of its respective directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken in good
faith by it or them under or in connection with this Agreement, the Security
Agreement or any other Transaction Document, except for its or their own gross
negligence or willful misconduct. Without limiting the foregoing, the Agent (a)
may consult with legal counsel (including counsel for the Lenders, the Borrower
or the Servicer), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts, (b) shall not be responsible to the Lenders, any MFN Entity, the
Servicer, the Backup Servicer or the Designated Backup Subservicer for any
statements, warranties or representations (other than its own statements) made
in or in connection with this Agreement, the Security Agreement or the other
Transaction Documents, (c) shall not be responsible to the Lenders, any MFN
Entity, the Servicer, the Backup Servicer or the Designated Backup Subservicer
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the Security Agreement or the other
Transaction Documents (other than the legality, validity, enforceability or
genuineness of its own execution, authorization and performance hereof and
thereof), (d) shall incur no liability under or in respect of any of the
commercial paper or other obligations of the Lenders under this Agreement, the
Security Agreement or the other Transaction Documents and (e) shall incur no
liability under or in respect of this Agreement, the Security Agreement or the
other Transaction Documents by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing (which may be by
facsimile) believed by it to be genuine and signed or sent by the proper party
or parties. Notwithstanding anything else herein or in the other Transaction
Documents, it is agreed that where the Agent may be required under this
Agreement, the Security Agreement or the other Transaction Documents to give
notice of any event or condition or to take any action as a result of the
occurrence of any event or the existence of any condition, the Agent agrees to
give such notice or take such action only to the extent that it has actual
knowledge of the occurrence of such event or the existence of such condition,
and shall incur no liability for any failure to give such notice or take such
action in the absence of such knowledge.
SECTION 15.10. Agent and Affiliates. The Agent and any of its Affiliates
may generally engage in any kind of business with any MFN Entity, the Servicer,
the Backup Servicer, the Designated Backup Subservicer any Obligor, any of their
respective Affiliates and any Person who may do business with or own securities
of any MFN Entity, the Servicer, the Backup Servicer, the Designated Backup
Subservicer any Obligor or any of their respective Affiliates, all as if the
Agent were not the Agent hereunder and without any duty to account therefor to
any Lender.
ARTICLE XVI
ASSIGNMENTS
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SECTION 16.1. Restrictions on Assignments. Except as specifically provided
herein (with respect to the Servicer, the Backup Servicer and the Designated
Backup Subservicer), none of the Borrower, the Servicer, any MFN Entity, the
Backup Servicer or the Designated Backup Subservicer may assign any of their
respective rights or obligations hereunder or any interest herein without the
prior written consent of the Agent and all the Lenders or, in the case of Backup
Servicer, the Designated Backup Subservicer, the Agent and the Required Lenders.
No Lender may assign its rights or obligations hereunder, any Advance or any
Note (or any portion thereof) to any Person without the prior written consent of
the Borrower and the Agent (as to the Borrower only, such consent not to be
unreasonably withheld or delayed); provided, however, that any Lender may
assign, or grant a security interest in, all or any portion of the Advances and
the Notes to (i) DBNY or any of its Affiliates or another Lender or (ii) any
Person managed by DBNY or any of its Affiliates, and (iii) any Liquidity
Provider (each, an "Eligible Assignee"), in each case under clauses (i), (ii)
and (iii) above, without the prior written consent of the Borrower; provided
further, however, that after the occurrence of the Facility Termination Date,
any Lender may, subject to the provisions of Section 16.5, assign all or a
portion of the Advances or Notes held by it to a Person other than those
identified in clauses (i), (ii) and (iii) above without the prior written
consent of the Borrower.
SECTION 16.2. Documentation. Each Lender shall deliver to each assignee an
assignment, in such form as such Lender and the related assignee may agree, duly
executed by such Lender assigning any such rights, obligations, Advances or
Notes to the assignee; and such Lender shall promptly execute and deliver all
further instruments and documents, and take all further action, that the
assignee may reasonably request, in order to perfect, protect or more fully
evidence the assignee's right, title and interest in and to the items assigned,
and to enable the assignee to exercise or enforce any rights hereunder or under
the Notes evidencing such Advances.
SECTION 16.3. Rights of Assignee. Upon the foreclosure of any assignment of
any Advances made for security purposes, or upon any other assignment of any
Advance from any Lender pursuant to this Article XVI, the respective assignee
receiving such assignment shall have all of the rights of such Lender hereunder
with respect to such Advances and all references to the Lender or Investors in
Section 6.1 shall be deemed to apply to such assignee.
SECTION 16.4. Notice of Assignment. Each Lender shall provide notice to the
Borrower of any assignment hereunder by such Lender to any assignee. Each Lender
authorizes the Agent to, and the Agent agrees that it shall, endorse the Note to
reflect any assignments made pursuant to this Article XVI or otherwise.
SECTION 16.5. Registration: Registration of Transfer and Exchange.
(a) The Agent shall keep a register (the "Note Resister") in which,
subject to such reasonable regulations as it may prescribe, the Agent shall
provide for the registration of the Notes and of transfer of interests in
the Notes. The Agent is hereby
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appointed "Note Registrar" for the purpose of registering the Notes and
transfers of the Notes as herein provided.
(b) Each person who has or who acquired a Note or interest therein
shall be deemed by such acquisition to have agreed to be bound by the
provisions of this Section 16.5. No Note may be transferred prior to the
Commitment Termination Date except to a successor Agent hereunder.
Thereafter a Note may be exchanged (in accordance with Section 16.5(c)) and
transferred to the holders (or their agents or nominees) of the Advances
and to any assignee (in accordance with Section 16.1) (or its agent or
nominee) of all or a portion of the Advances. The Agent shall not register
(or cause to be registered) the transfer of any Note, unless the proposed
transferee shall have delivered to the Agent (i) either (x) evidence
satisfactory to it that the transfer of such Note is exempt from
registration or qualification under the Securities Act of 1933, as amended,
and all applicable state securities laws and that the transfer does not
constitute a "prohibited transaction" under ERISA or the Code or (y) an
express agreement by the proposed transferee to be bound by and to abide by
the provisions of this Section 16.5, the restrictions noted on the face of
such Note and (ii) a properly executed Form W-9 and, in the case of a
transferee who is a foreign person (within the meaning of Section
7701(a)(5) of the Code), a properly executed Form W-8ECI or Form W-8BEN.
(c) After the Commitment Termination Date, at the option of the holder
thereof, a Note may be exchanged for one or more new Notes of any
authorized denominations and of a like type and aggregate principal amount
at an office or agency of the Borrower. Whenever any Notes are so
surrendered for exchange, the Borrower shall execute and deliver (through
the Agent) the new Notes which the holder making the exchange is entitled
to receive.
(d) Upon surrender for registration of transfer of any Note at an
office or agency of the Borrower, the Borrower shall execute and deliver
(through the Agent), in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a
like type and aggregate principal amount.
(e) All Notes issued upon any registration of transfer or exchange of
any Note in accordance with the provisions of this Agreement shall be the
valid obligations of the Borrower, evidencing the same debt, and entitled
to the same benefits under this Agreement, as the Note(s) surrendered upon
such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Borrower or the Agent) be
fully endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Note Registrar, duly executed by the holder
thereof or his attorney duly authorized in writing. Each such Note shall be
accompanied by a statement providing the name of the transferee and
indicating whether the transferee is subject to income tax backup
withholding requirements and whether the transferee is the sole beneficial
owner of such Notes.
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(g) No service charge shall be made for any registration of transfer
or exchange of Notes, but the Borrower may require payment from the
transferee holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer of exchange of Notes, other than exchanges pursuant to this
Section 16.5.
(h) The holders of the Notes shall be bound by the terms and
conditions of this Agreement.
SECTION 16.6. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Agent, the Borrower
shall execute and deliver (through the Agent) in exchange therefor a new
Note of like type and tenor and principal amount and bearing a number not
contemporaneously outstanding.
(b) If there shall be delivered to the Borrower and the Agent prior to
the payment of the Notes (i) evidence to their satisfaction of the
destruction, loss or theft of any Note and (ii) such security or indemnity
as may be required by them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Borrower or the Agent
that such Note has been acquired by a bona fide purchaser, the Borrower
shall execute and deliver (through the Agent), in lieu of any such
destroyed, lost or stolen Note, a new Note of like type, tenor and
principal amount and bearing a number not contemporaneously outstanding.
(c) Upon the issuance of any new Note under this Section 16.6, the
Borrower may require the payment from the transferor holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith.
(d) Every new Note issued pursuant to this Section 16.6 and in
accordance with the provisions of this Agreement, in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Borrower, whether or not the destroyed, lost or stolen
Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and
all other Notes duly issued hereunder.
(e) The provisions of this Section 16.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
SECTION 16.7. Persons Deemed Owners. The Borrower, the Servicer, the Agent,
the Collateral Agent and any agent for any of the foregoing may treat the holder
of any Note as the owner of such Note for all purposes whatsoever, whether or
not such Note may be overdue, and
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none of the Borrower, the Servicer, the Agent, the Collateral Agent and any such
agent shall be affected by notice to the contrary.
SECTION 16.8. Cancellation. All Notes surrendered for payment or
registration of transfer or exchange shall be promptly canceled. The Borrower
shall promptly cancel and deliver to the Agent any Notes previously
authenticated and delivered hereunder which the Borrower may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled by
the Borrower. No Notes shall be authenticated in lieu of or in exchange for any
Notes canceled as provided in this Section 16.8, except as expressly permitted
by this Agreement.
SECTION 16.9. Participations.
(a) At any time and from time to time, each Lender may, in accordance
with applicable law, at any time grant participations in all or a portion
of its Commitment and/or its interest in the Advances and other payments
due to it under this Agreement to any Person (each, a "Participant");
provided, however, that no participation shall be granted to any Person
unless and until the Agent and, if the proposed Participant is other than a
Person which at such time is an Eligible Assignee and no Facility
Termination Event shall have occurred, the Borrower shall have consented
thereto (which consent shall not be unreasonably withheld or delayed). Each
Lender hereby acknowledges and agrees that (A) any such participation will
not alter or affect such Lender's direct obligations hereunder, and (B)
neither the Borrower, the Agent nor the Servicer shall have any obligation
to have any communication or relationship with any Participant. Each
Participant shall comply with the provisions of Section 5.1(b) . No
Participant (i) which is other than an Eligible Assignee shall be entitled
to receive additional amounts under Section 6.1 in excess of the additional
amounts its lead Lender would have been entitled to receive had such
participation not been granted unless such Participant was consented to by
the Borrower or (ii) shall be entitled to transfer all or any portion of
its participation without the prior written consent of the Agent and, if
the proposed transferee is other than an Eligible Assignee and no Facility
Termination Event shall have occurred, the Borrower (which consent will not
be unreasonably withheld or delayed).
(b) Each Lender may pledge its interest in the Advances and the Notes
to any Federal Reserve Bank as collateral in accordance with applicable
law.
ARTICLE XVII
INDEMNIFICATION
SECTION 17.1. General Indemnity. Without limiting any other rights which
any such Person may have hereunder or under applicable law, MFN hereby agrees to
indemnify each of the Agent, the Investors, the Collateral Agent, the Custodian,
the Backup Servicer, the Designated Backup Subservicer, the Borrower, and each
other Affected Person and each of their
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Affiliates, and each of their respective successors, transferees, participants
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each of the foregoing Persons
being individually called an "Indemnified Party"), forthwith on demand, from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively called "Indemnified Amounts") awarded against or
incurred by any of them arising out of or relating to any Transaction Document
or the transactions contemplated thereby or the use of proceeds therefrom by any
MFN Entity, including (without limitation) in respect of the funding of any
Advance or in respect of any Transferred Receivable, excluding, however, (a)
Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct on the
part of such Indemnified Party or its agent or subcontractor, (b) except as
otherwise provided herein, non-payment by any obligor of an amount due and
payable with respect to a Transferred Receivable, (c) any loss in value of any
Financed Vehicle or Permitted Investment due to changes in market conditions or
for other reasons beyond the control of MFN or the Borrower or (d) any tax upon
or measured by net income on any Indemnified Party. Without limiting the
foregoing, but subject to the exclusions (a) through (d) above, MFN agrees to
indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
(i) the breach of any representation or warranty made by the
Borrower (or any of its officers) or MFN (in any capacity) or any
Affiliate of MFN under or in connection with this Agreement or the
other Transaction Documents, any Servicer's Certificate, Borrowing
Base Confirmation or any other information, report or certificate
delivered by the Borrower or Servicer or MFN (in any capacity) or an
Affiliate of MFN pursuant hereto or thereto, which shall have been
false or incorrect in any material respect when made or deemed made;
(ii) the failure by MFN (in any capacity) or any other MFN Entity
to comply in any material way with any applicable law, rule or
regulation with respect to any Transferred Receivable or any Financed
Vehicle, or the nonconformity of any Transferred Receivable with any
such applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the Collateral
Agent, for the benefit of the Secured Parties, a first-priority
security interest in all the Borrower Collateral, free and clear of
any Lien, other than a Lien arising solely as a result of an act of
any Investor, or any assignee of any Investor;
(iv) any dispute, claim, offset or defense (other than discharge
in bankruptcy) of an Obligor to the payment of any Transferred
Receivable (including, without limitation, a defense based on such
Transferred Receivable not being a legal, valid and binding obligation
of such Obligor enforceable against it in accordance with its terms);
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(v) any failure of any MFN Entity, as Servicer, to perform its
duties or obligations in accordance with the provisions of Article
VIII or any provision contained in any Transaction Document;
(vi) any claim involving products liability that arises out of or
relates to merchandise or services that are the subject of any
Transferred Receivable or strict liability claim in connection with
any Financed Vehicle related to a Transferred Receivable;
(vii) any tax or governmental fee or charge (but not including
taxes upon or measured by net income), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the making,
maintenance or funding, directly or indirectly, of any Advance, or any
other interest in the Borrower Collateral;
(viii) the offering or effectuation of any Take-Out
Securitization;
(ix) the commingling of the proceeds of the Borrower Collateral
at any time with other funds; or
(x) any claim, loss, penalty, fine, forfeiture, legal fees and
related costs, judgments and any other costs incurred as a result of
the negligence of any MFN Entity with respect to the Transferred
Receivables.
SECTION 17.2. Contribution. If for any reason (other than the exclusions
(a) through (d) set forth in the first paragraph of Section 17.1) the
indemnification provided above in Section 17.1 is unavailable to an Indemnified
Party or is insufficient to hold an Indemnified Party harmless, then MFN shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by such Indemnified Party, on
the one hand, and MFN, its Affiliates and the Borrower, on the other hand, but
also the relative fault of such Indemnified Party, on the one hand, and MFN, its
Affiliates or the Borrower, on the other hand, as well as any other relevant
equitable considerations.
ARTICLE XVIII
MISCELLANEOUS
SECTION 18.1. No Waiver; Remedies. No failure on the part of any Investor,
the Agent, any Indemnified Party or any Affected Person to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any of them of any
right, power or remedy hereunder preclude any other or further exercise thereof,
or the exercise of any other right, power or remedy. The remedies herein
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provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each of the Agent, each Investor and Participant
is hereby authorized by each MFN Entity party hereto at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Agent, Investor or
Participant to or for the credit or the account of such MFN Entity, against any
Indebtedness or other amounts owing now or hereafter existing under this
Agreement, to the Agent, any Affected Person, any Indemnified Party or any
Investor or their respective successors and assigns.
SECTION 18.2. Amendments, Waivers. (a) This Agreement may not be amended,
supplemented or modified nor may any provision hereof be waived except in
accordance with the provisions of this Section 18.2. With the written consent of
the Agent, the Borrower, the Servicer, MFN, the Backup Servicer and the
Designated Backup Subservicer may from time to time, without the consent of the
Required Lenders, enter into written amendments, supplements, waivers or
modifications of this Agreement (i) to cure any ambiguity, (ii) to correct any
provisions in this Agreement or (iii) to amend the Transaction Documents to the
extent required by any Rating Agency to prevent the Noncommitted Lender's
Advances under this Agreement from causing a downgrade or withdrawal of the
existing ratings assigned by such Rating Agency to the Noncommitted Lender's
commercial paper notes; provided, however, that such action shall not adversely
affect the interests of any Secured Party. With the written consent of the
Required Lenders, the Agent, the Borrower, the Servicer, MFN, the Backup
Servicer and the Designated Backup Subservicer may, from time to time, enter
into written amendments, supplements, waivers or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any manner the
rights of any party hereto or waiving, on such terms and conditions as may be
specified in such instrument, any of the requirements of this Agreement;
provided, however, that no such amendment, supplement, waiver or modification
shall (i) reduce the amount of or extend the maturity of any payment with
respect to an Advance or reduce the rate or extend the time of payment of Yield
thereon, or reduce or alter the timing of any other amount payable to any Lender
hereunder, in each case without the consent of each Lender affected thereby or
(ii) amend, modify or waive any provision of this Section 18.2 or 18.12, or
reduce the percentage specified in the definition of Required Lenders, in each
case without the written consent of all Lenders. Any waiver of any provision of
this Agreement shall be limited to the provisions specifically set forth therein
for the period of time set forth therein and shall not be construed to be a
waiver of any other provision of this Agreement. Written notice of each
amendment, supplement, waiver or modification entered into in accordance with
this Section 18.2, and of each extension to the Commitment Termination Date,
shall be promptly furnished to the Rating Agencies by the Servicer.
(b) The parties hereto agree to amend this Agreement and the other
Transaction Documents to the extent required by any Rating Agency to
prevent the Noncommitted Lender's Advances under this Agreement from
causing a downgrade or withdrawal of the existing ratings assigned by such
Rating Agency to the Noncommitted Lender's commercial paper notes.
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SECTION 18.3. Notices, Etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, or by facsimile, to the intended party at the address or
facsimile number of such party set forth under its name on the signature pages
hereof or in its Joinder Supplement or assignment documentation, or at such
other address or facsimile number as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective, (a) if personally delivered, when received, (b) if sent by
certified mail, three Business Days after having been deposited in the mail,
postage prepaid, (c) if sent by overnight courier, one Business Day after having
been given to such courier, and (d) if transmitted by facsimile, when sent,
receipt confirmed by telephone or electronic means, except that notices and
communications pursuant to Section 2.2 shall not be effective until received.
SECTION 18.4. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted under Section
17.1, MFN agrees to pay on demand all reasonable costs and expenses of the
Agent in connection with the preparation (subject to the Fee Letter),
execution, delivery, syndication and administration of this Agreement, any
Noncommitted Lender Liquidity Arrangement or other liquidity support
facility and the other documents and agreements to be delivered hereunder
or with respect hereto, and MFN further agrees to pay all reasonable costs
and expenses of the Agent in connection with any amendments, waivers or
consents executed in connection with this Agreement and any Noncommitted
Lender Liquidity Arrangement or other liquidity support facility,
including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and remedies under this Agreement and
any Noncommitted Lender Liquidity Arrangement or other liquidity support
facility, and to pay all costs and expenses, if any (including reasonable
counsel fees and expenses), of the Agent, the Lenders, the Investors, the
Collateral Agent and their respective Affiliates, in connection with the
enforcement of this Agreement, any of the other Transaction Documents
and/or any Noncommitted Lender Liquidity Arrangement or other liquidity
support facility and the other documents and agreements to be delivered
hereunder or with respect hereto.
(b) In addition, MFN shall pay any and all stamp, personal property,
transfer and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement, the Notes, applicable UCC
financing statements or the other documents or agreements to be delivered
hereunder, and the pledge of the Borrower Collateral, and agrees to save
each Indemnified Party harmless from and against any liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes and fees.
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SECTION 18.5. Binding Effect; Survival. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Servicer, the Backup
Servicer, the Designated Backup Subservicer, MFN, the Collateral Agent, the
Investors, the Agent and their respective successors and assigns, and the
provisions of Section 5.l(b), Article VI, Section 12.1, Article XVII and Article
XIX shall inure to the benefit of the Affected Persons and the Indemnified
Parties, as the case may be, and their respective successors and permitted
assigns; provided, however, nothing in the foregoing shall be deemed to
authorize any assignment not permitted by Article XVI. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such
time, after the Commitment Termination Date, when all Obligations have been
finally and fully paid and performed. The rights and remedies with respect to
any breach of any representation and warranty made by the Borrower pursuant to
Article X and the indemnification and payment provisions of Article VI, Section
12.1, Article XVII and Article XIX and the provisions of Section 18.10, Section
18.12 and Section 18.13 shall be continuing and shall survive any termination of
this Agreement and any termination of MFN's rights to act as Servicer hereunder
or under any other Transaction Document.
SECTION 18.6. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Schedule or Exhibit are to such
Section of or Schedule or Exhibit to this Agreement, as the case may be, and
references in any Section, subsection, or clause to any subsection, clause or
subclause are to such subsection, clause or subclause of such Section,
subsection or clause.
SECTION 18.7. 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 of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 18.8. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
SECTION 18.9. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
but all of which shall constitute together but one and the same agreement.
SECTION 18.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO AND EACH
INVESTOR BY ITS ACCEPTANCE OF ANY INTEREST IN ANY NOTE OR ADVANCE OR IN A
LENDER'S OBLIGATION TO MAKE ADVANCES HEREUNDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY
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WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE BORROWER, MFN, THE
SERVICER, THE AGENT, THE BACKUP SERVICER, THE DESIGNATED BACKUP SUBSERVICER, THE
COLLATERAL AGENT, THE INVESTORS OR ANY OTHER AFFECTED PERSON. THE BORROWER AND
MFN EACH ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER
TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER TRANSACTION DOCUMENT.
SECTION 18.11. Conflict Waiver. DBNY acts as Agent hereunder, as
administrative or servicing agent for one or more Noncommitted Lenders, and as
provider and as agent for other providers of backup facilities for one or more
Noncommitted Lenders, and may provide other services or facilities from time to
time (the "DBNY Roles"). Each of the parties hereto hereby acknowledges and
consents to any and all DBNY Roles, waives any objections it may have to any
actual or potential conflict of interest caused by DBNY's acting or maintaining
any of the DBNY Roles, and agrees that in connection with any DBNY Role, DBNY
may take, or refrain from taking, any action consistent with its obligations
under the Transaction Documents.
SECTION 18.12. No Proceedings.
(a) Each of the Borrower, MFN, the Servicer, the Backup Servicer, the
Collateral Agent, and each Investor hereby agrees that it will not and MFN
will cause each other MFN Entity not to institute against any Noncommitted
Lender, or join any other Person in instituting against any Noncommitted
Lender, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any
commercial paper or other senior indebtedness issued by such Noncommitted
Lender shall be outstanding or there shall not have elapsed one year plus
one day since the last day on which any such commercial paper or other
senior indebtedness shall be outstanding. The foregoing shall not limit
such Person's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person
other than such Person.
(b) Each of DBNY, MFN, the Servicer, the Backup Servicer, the
Designated Backup Subservicer, the Collateral Agent, each Investor and the
Agent hereby agrees that it will not in its capacity as a creditor of the
Borrower and MFN will cause each other MFN Entity not to institute against
the Borrower, or join any other Person in instituting against the Borrower,
any involuntary insolvency proceeding (namely, any proceeding of
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the type referred to in the definition of Event of Bankruptcy) so long as
any Advances or other amounts due from the Borrower hereunder shall be
outstanding or there shall not have elapsed one year plus one day since the
last day on which any such Advances or other amounts shall be outstanding.
The foregoing shall not limit such Person's right to file any claim in or
otherwise take any action with respect to any insolvency proceeding that
was instituted by any Person other than such Person.
SECTION 18.13. Limited Recourse to the Lenders. No recourse under any
obligation, covenant or agreement of a Lender contained in this Agreement shall
be had against any incorporator, stockholder, officer, director, member,
manager, employee or agent of any Lender or any of its Affiliates (solely by
virtue of such capacity) by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation of
each Lender, and that no personal liability whatever shall attach to or be
incurred by any incorporator, stockholder, officer, director, member, manager,
employee or agent of any Lender or any of their Affiliates (solely by virtue of
such capacity) or any of them under or by reason of any of the obligations,
covenants or agreements of a Lender contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by a Lender of
any of such obligations, covenants or agreements, either at common law or at
equity, or by statute, rule or regulation, of every such incorporator,
stockholder, officer, director, member, manager, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; provided that the foregoing shall not relieve any such Person
from any liability it might otherwise have as a result of their willful
misconduct, gross negligence or of fraudulent actions taken or fraudulent
omissions made by them.
SECTION 18.14. Collateral Agent. Each Lender and each Investor by its
acceptance of any interest in any Note or Advance or in a Lender's obligation to
make Advances hereunder and the Agent designate and appoint Xxxxx Fargo to act
as Collateral Agent hereunder and under the Security Agreement. Xxxxx Fargo, by
its execution hereof, accepts and agrees to such designation and appointment and
agrees to perform its obligations hereunder and under the Security Agreement in
accordance with the terms thereof and for the benefit of the Agent, the Lenders
and other Secured Parties. In furtherance of the foregoing, each Lender
authorizes the Agent to enter into the Security Agreement and to appoint the
Collateral Agent to act on behalf of, and as agent for, such Lender and the
Agent hereunder and under the Security Agreement and agrees to be bound by
Section 9 of such agreement.
SECTION 18.15. Custodian. Xxxxx Fargo accepts and agrees to its designation
and appointment as Custodian under the Custodian Agreement and agrees to perform
its obligations under such agreement in accordance with the terms thereof and
for the benefit of the Borrower and the Secured Parties.
SECTION 18.16. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS EXECUTED AND DELIVERED HEREWITH REPRESENT
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THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
ARTICLE XIX
PERFORMANCE GUARANTY
SECTION 19.1. Terms of Performance Guaranty.
(a) For value received, and in consideration of the financial
accommodation accorded to the Performance Guarantor by the Borrower under
this Agreement, the Performance Guarantor hereby fully, unconditionally,
and irrevocably guarantees to the Borrower, the Seller, the Collateral
Agent, the Lenders and the Agent the due performance of, and punctual
payment of all amounts payable by the Servicer under this Agreement or the
Seller under Section 5.1 of the Contribution and Sale Agreement when and as
such obligations hereunder shall become due and, in the case of any
payments, payable. The Performance Guarantor will ensure the performance
and payment of every act, duty, obligation, agreement and responsibility of
the Servicer set forth herein and the payment of all amounts payable by the
Seller under Section 5.1 of the Contribution and Sale Agreement.
(b) In case of the inability of the Servicer to punctually perform any
such act, duty, obligation, responsibility or agreement or to pay
punctually any such amounts, and in the case of the Seller to fail to pay
punctually such amounts the Performance Guarantor hereby agrees, upon
written demand by the Agent, to, as applicable, (i) perform any such act,
duty, obligation, responsibility or agreement and (ii) pay or cause to be
paid any such amount, punctually when and as the same shall become due and,
in the case of any payment, payable.
(c) The Performance Guarantor hereby agrees that its obligations under
this Section 19.1 constitute a guarantee of performance and payment when
due and not of collection.
(d) The Performance Guarantor hereby agrees that its obligations under
this Section 19.1 shall be unconditional, irrespective of the validity,
regularity or enforceability of this Agreement against the Servicer or the
Contribution and Sale Agreement against the Seller, the absence of any
action to enforce the Servicer's obligations under this Agreement or the
Seller's obligations under the Contribution and Sale Agreement, any waiver
or consent by the Borrower, the Seller or the Agent with respect to any
provisions thereof or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other
than the defenses of statute of limitations or payment, which are not
waived); provided, however, that
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Performance Guarantor shall be entitled to exercise any right that the
Servicer or Seller could have exercised under this Agreement to cure any
default in respect of its obligations under this Agreement, but only to the
extent such right is provided to the Servicer under this Agreement or to
the Seller under the Contribution and Sale Agreement.
(e) The Performance Guarantor hereby waives (i) promptness, diligence,
presentment, demand of payment, protest, order and, except as set forth in
paragraph (a) hereof, notice of any kind in connection with this Agreement
and this Section 19.1; (ii) any requirement that the Purchaser, the
Borrower, the Seller or the Agent exhaust any right to take any action
against the Servicer or Seller or any other person prior to or
contemporaneously with proceeding to exercise any right against the
Performance Guarantor under this Section 19.1 and (iii) any right of
reimbursement or subrogation with respect to any amounts paid by it
pursuant to this Section 19.1 until such time as all obligations owed by
the Borrower to the Agent and Secured Parties are paid in full.
SECTION 19.2. Covenants of the Performance Guarantor. The Performance
Guarantor covenants to the Borrower, the Agent and the Lenders as follows:
(a) Liens in Force. The Financed Vehicle securing each Transferred
Receivable shall not be released in whole or in part from the security
interest granted by such Receivable, except upon payment in full of such
Receivable or as otherwise contemplated herein;
(b) No Impairment. The Performance Guarantor shall do nothing to
impair the rights of the Borrower or the Secured Parties in the Transferred
Receivables, the Dealer Agreements, the Dealer Assignments or the Insurance
Policies;
(c) No Amendments. The Performance Guarantor shall not extend or
otherwise amend the terms of any Transferred Receivable, except in
accordance with Section 8.2, without the prior written consent of the
Agent;
(d) Restriction on Liens. The Performance Guarantor shall not: (i)
create or incur or agree to create or incur, or consent to cause (upon the
happening of a contingency or otherwise) the creation, incurrence or
existence of any Lien or restriction on transferability of the Receivables
or of any Other Conveyed Property except for the Lien in favor of the
Collateral Agent for the benefit of Secured Parties, and the restrictions
on transferability imposed by this Agreement or (ii) sign or file under the
UCC of any jurisdiction any financing statement or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, with respect to the Receivables or to any Other Conveyed
Property, except in each case any such instrument solely securing the
rights and preserving the Lien of the Collateral Agent, for the benefit of
Secured Parties. The Performance Guarantor will take no action to cause
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any Receivable to be evidenced by an instrument (as such term is defined in
the relevant UCC);
(e) Compliance with Laws. The Performance Guarantor shall comply in
all material respects with the laws of each state in which a Transferred
Receivable is located, including, without limitation, all federal and state
laws regarding the collection and enforcement of consumer debt, in respect
of which the failure to comply would adversely affect the interest of the
Borrower, the Collateral Agent or the Secured Parties in any Transferred
Receivable or adversely affect its ability to perform its obligations under
this Agreement or under any other Transaction Document to which it is a
party (in any capacity);
(f) Notice of Relocation. The Performance Guarantor shall give the
Agent at least 60 days prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement;
(g) Preservation of Existence. The Performance Guarantor shall observe
all procedures required by its organizational documents and by-laws and
preserve and maintain its existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain qualified in
good standing in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualifications
would materially adversely affect (1) the interests hereunder of the Agent
or any Affected Person, (2) the collectibility of any Receivable or (3) its
ability to perform its obligations hereunder or under any of the other
Transaction Documents. The Performance Guarantor shall not merge or
consolidate with or into, or, except as contemplated hereby, sell, convey,
transfer, exchange, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) unless (i) the successor
entity shall have assumed the Performance Guarantor's obligations under
this Agreement and any other Transaction Document to which the Performance
Guarantor is a party and (ii) the Agent shall have provided a Notice of
Transaction Consent with respect to such transaction as required by clause
(o) below.
(h) Keeping of Records and Books of Account. The Performance Guarantor
shall maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Receivables in
the event of the destruction of the originals thereof) and keep and
maintain, all documents, books and records of account (in which complete
entries will be made in accordance with GAAP consistently applied), and
other information reasonably necessary or advisable for the collection of
all Transferred
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Receivables (including, without limitation, records adequate to permit the
daily identification of all collections of and adjustments to each
Transferred Receivable).
(i) Consolidated Total Adjusted Equity. The Performance Guarantor
shall not permit its Consolidated Total Adjusted Equity to be less than the
Minimum Consolidated Total Adjusted Equity Amount at such time.
(j) Documents. The Performance Guarantor shall comply with each of the
terms of the Transaction Documents to which it is party (in any capacity)
and shall not cancel or terminate any of the Transaction Documents to which
it is party or subject (in any capacity), or consent to or accept any
cancellation or termination of any of such agreements, or amend or
otherwise modify any term or condition of any of the Transaction Documents
to which it is party or subject (in any capacity) or give any consent,
waiver or approval under any such agreement, or waive any default under or
breach of any of the Transaction Documents to which it is party (in any
capacity) or take any other action under any such agreement not required by
the terms thereof, unless (in each case) the Agent shall have consented
thereto.
(k) [Reserved].
(l) Use of Proceeds. The Performance Guarantor shall apply a portion
of the proceeds of the initial Advance sufficient to repay in full the
Existing Senior Debt.
(m) Leverage Ratio. The Performance Guarantor shall maintain a
Leverage Ratio, at and as of the end of each fiscal quarter of the
Performance Guarantor, of not more than 2.5.
(n) Separate Existence. The Performance Guarantor shall take all
reasonable steps (including, without limitation, all steps that the Agent
may from time to time reasonably request) to maintain the Performance
Guarantor's identity as a separate legal entity from the Borrower and to
make it manifest to third parties that the Performance Guarantor is an
entity with assets and liabilities distinct from those of the Borrower and
each other Affiliate thereof. Without limiting the generality of the
foregoing, the Performance Guarantor shall:
(i) subject to the terms of the Custodian Agreement, maintain or
cause to be maintained by an agent of the Borrower under the
Borrower's control physical possession of all its books and records;
(ii) account for and manage its liabilities separately from those
of the Borrower, including, without limitation, payment of all payroll
and other administrative expenses and taxes from its own assets;
(iii) maintain its assets separately from the Borrower;
126
(iv) maintain offices through which its business is conducted
separate from those of the Borrower (provided that, to the extent that
the Performance Guarantor and any of its Affiliates have offices in
the same location, there shall be a fair and appropriate allocation of
overhead costs and expenses among them, and each such entity shall
bear its fair share of such expenses);
(v) not commingle its funds with those of the Borrower except to
the extent contemplated herein, or use its funds for other than the
Performance Guarantor's uses; and
(vi) ensure that any financial reports required of the
Performance Guarantor shall comply with GAAP and shall be issued
separately from, but may be consolidated with, any reports prepared by
the Borrower.
(o) Notices and Required Consents to Proposed MFN Transactions. MFN
shall not consummate any Proposed Transaction without having received a
Notice of Transaction Consent. MFN shall provide written notice to the
Agent at least thirty (30) days prior to the contemplated date of closing
of any Proposed MFN Transaction of which MFN has actual knowledge. On or
before the expiration of the fifteen (15) day period commencing upon
receipt by the Agent of delivery of notice of such Proposed MFN
Transaction, Agent shall deliver either (x) a Notice of Transaction Consent
to MFN or (y) a No Consent Notice. Upon receipt by MFN, any No Consent
Notice shall result in an immediate Facility Termination Event as set forth
in Section 14.1(n) unless (A) such No Consent Notice is accompanied by a
Notice of Firm Take-Out Commitment or (B) MFN promptly provides written
notice to the Agent that such Proposed MFN Transaction has been abandoned.
Any Notice of Transaction Consent or Notice of Firm Take-Out Commitment
delivered by the Agent shall not constitute a waiver, release or other
modification of any obligation of any MFN Entity under the DBAB Side
Letter.
SECTION 19.3. Representations and Warranties of the Performance Guarantor.
The Performance Guarantor represents and warrants to the Borrower, the Agent and
the Lenders as follows:
(a) Organization and Good Standing. The Performance Guarantor has been
duly organized and is validly existing as a corporation under the laws of
the State of Delaware and in good standing under the laws of the State of
Delaware, with power, authority and legal right to own its properties and
to conduct its business as such properties are currently owned and such
business is currently conducted. The Performance Guarantor had at all
relevant times and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement and under the other
Transaction Documents to which it is a party (in any capacity).
(b) Due Qualification. The Performance Guarantor is duly qualified to
do business as a foreign corporation in good standing, and has obtained all
necessary
127
licenses and approvals, in all jurisdictions where the failure to do so
would have a material adverse effect on its ability to perform its
obligations hereunder or under any other Transaction Document to which it
is party (in any capacity);
(c) Power and Authority. The Performance Guarantor has the power and
authority to execute and deliver this Agreement and the other Transaction
Documents to which it is a party (in any capacity) and to carry out its
terms and their terms, respectively; and the execution, delivery and
performance of this Agreement and the Transaction Documents to which the
Performance Guarantor is a party (in any capacity) have been duly
authorized by the Performance Guarantor by all necessary corporate action;
(d) Binding Obligation. This Agreement and the other Transaction
Documents to which the Performance Guarantor is a party (in any capacity)
have been duly executed and delivered, and this Agreement and the other
Transaction Documents to which the Performance Guarantor is a party (in any
capacity) constitute legal, valid and binding obligations of the
Performance Guarantor enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which the Performance
Guarantor is a party (in any capacity), and the fulfillment of the terms of
this Agreement and the other Transaction Documents to which it is a party
(in any capacity), shall not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse
of time) a default under, its certificate of incorporation or bylaws, or
any indenture, agreement, mortgage, deed of trust or other instrument to
which the Performance Guarantor is a party or by which it is bound or any
of its properties are subject, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or regulation
applicable to the Performance Guarantor of any court or other Official
Body, having jurisdiction over the Performance Guarantor or any of its
properties, or in any way materially adversely affect the interest of the
Borrower, the Collateral Agent or the Secured Parties in any Transferred
Receivable, or adversely affect the Performance Guarantor's ability to
perform its obligations under this Agreement or under any of the other
Transaction Documents to which it is party (in any capacity);
(f) No Proceedings. There are no proceedings or investigations pending
or, to the Performance Guarantor's knowledge, threatened against the
Performance Guarantor, before any court or other Official Body having
jurisdiction over the Performance
128
Guarantor or its properties (A) asserting the invalidity of this Agreement
or any of the other Transaction Documents, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
any of the other Transaction Documents, (C) seeking any determination or
ruling that could reasonably be expected to materially and adversely affect
the performance by the Performance Guarantor of its obligations under, or
the validity or enforceability of, this Agreement or any of the Transaction
Documents, or (D) that could reasonably be expected to, if adversely
determined, have a material adverse effect on the interest of the Borrower,
the Collateral Agent or the Secured Parties in any Transferred Receivable;
(g) ERISA. Each ERISA Plan maintained by the Performance Guarantor or
any of its ERISA Affiliates is in compliance in all material respects with
its terms and with all applicable laws, including without limitation, ERISA
and the Code. There is no Lien on any of the Transferred Receivables or
Other Conveyed Property placed by the Pension Benefit Guaranty Corporation
or resulting from the application of Section 412(n) of the Code or Section
302(f) of ERISA in favor of any ERISA Plan maintained by the Performance
Guarantor or any of its ERISA Affiliates. None of the Transferred
Receivables or Other Conveyed Property has been pledged as security for any
ERISA Plan maintained by the Performance Guarantor or any of its ERISA
Affiliates. No Multiemployer Plan to which the Performance Guarantor or any
of its ERISA Affiliates is required to contribute is insolvent or in
reorganization. Neither the Performance Guarantor nor any of its ERISA
Affiliates has incurred or expects to incur any liability (including any
direct, contingent or secondary liability) to or on account of an ERISA
Plan or Multiemployer Plan pursuant to Section 409, 502(i), 515, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code;
(h) Investment Company Status. The Performance Guarantor is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or is exempt from all provisions of such act;
(i) No Consents. The Performance Guarantor is not required to obtain
the consent of any other Person which has not been obtained, or any
consent, license, approval or authorization of, or registration or
declaration with, any Official Body in connection with the execution,
delivery, performance, validity or enforceability of this Agreement and the
other Transaction Documents to which it is party (in any capacity) which,
if not obtained, would adversely affect the interest of the Borrower, the
Collateral Agent or the Secured Parties in any Transferred Receivable or
adversely affect the Performance Guarantor's ability to perform its
obligations under this Agreement or under any other Transaction Document to
which it is a party (in any capacity);
(j) Chief Executive Office. Its chief executive office is located at
000 Xxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxx 00000;
129
(k) Eligibility. Each Receivable included in the calculation of the
Borrowing Base as set forth in the Borrowing Base Confirmation is, on its
Purchase Date, an Eligible Receivable, and the representations and
warranties with respect thereto set forth in the Sale and Contribution
Agreement are true and correct on such date;
(l) Representations and Warranties True and Correct. Each of the
representations and warranties of the Performance Guarantor contained
in this Agreement and the other Transaction Documents is true and
correct in all material respects and the Performance Guarantor hereby
makes each such representation to, and for the benefit of, the Agent
and the other Secured Parties as if the same were set forth in full
herein;
(m) Information True and Complete. All reports, certificates,
financial statements, spreadsheets and other data pertaining to the
performance or servicing of the Receivables heretofore or hereafter
furnished or made available by or on behalf of the Performance Guarantor to
any Lender, the Collateral Agent or the Agent in connection with this
Agreement or any transaction contemplated hereby, when considered together,
are and will be true and complete in all material respects and do not and
will not omit to state a material fact necessary to make the statements
contained therein not misleading;
(n) Financial or Other Condition. There has been no material adverse
change in the condition (financial or otherwise), business operations,
results of operations, or properties of the Performance Guarantor since
December 31, 2000;
(o) Compliance with Laws. The Performance Guarantor has complied and
will comply in all material respects with all applicable laws, rules,
regulations, judgments, agreements, decrees and orders with respect to its
business and properties and all Borrower Collateral with respect to which
the failure to comply would adversely affect the interest of the Borrower,
the Collateral Agent or the Secured Parties in any Transferred Receivable
or adversely affect its ability to perform its obligations under this
Agreement or under any other Transaction Document to which it is a party;
(p) Taxes. The Performance Guarantor has filed on a timely basis all
tax returns (including, without limitation, foreign, federal, state, local
and otherwise) required to be filed, is not liable for taxes payable by any
other Person (except for members of MFN's consolidated tax group) and has
paid or made adequate provisions for the payment of all taxes, assessments
and other governmental charges due from the Performance Guarantor. No tax
lien or similar adverse claim has been filed, and no claim is being
asserted, with respect to any such tax, assessment or other governmental
charge. Any taxes, fees and other governmental charges payable by the
Performance Guarantor in connection with the execution and delivery of this
Agreement and the other Transaction Documents and the transactions
contemplated hereby or thereby including the transfer of each Transferred
Receivable and Other Conveyed Property to the Borrower have been paid or
shall have been paid if and when due at or prior to the Closing Date;
130
(q) Use of Proceeds. No proceeds of any Advance will be used by the
Performance Guarantor to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended;
(r) Solvency. The Performance Guarantor is solvent and will not become
insolvent after giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents. The Performance Guarantor,
after giving effect to the transactions contemplated by this Agreement and
the other Transaction Documents, will have adequate funds to conduct its
business in the foreseeable future;
(s) Tax Treatment. For federal income tax purposes, each Transferred
Receivable and the related Other Conveyed Property will be treated as owned
by the Borrower;
(t) Separate Existence. The Borrower is operated as an entity with
assets and liabilities distinct from those of the Performance Guarantor and
any other Affiliates of the Borrower, and the Performance Guarantor hereby
acknowledges that the Agent and each of the Lenders are entering into the
transactions contemplated by this Agreement in reliance upon the Borrower's
identity as a separate legal entity from the Performance Guarantor and each
such Affiliate. Since its formation, the Borrower has been (and will be)
operated in such a manner as to comply with the covenants set forth in
Section 11.5 and there is not now, nor will there be at any time in the
future, any agreement or understanding between the Performance Guarantor
and the Borrower (other than as expressly set forth herein) providing for
the allocation or sharing of obligations to make payments or otherwise in
respect of any taxes, fees, assessments or other governmental charges; and
(u) Transaction Documents. The Performance Guarantor has furnished to
the Agent true, correct and complete copies of each Transaction Document to
which the Performance Guarantor is a party; each of which is in full force
and effect. Neither the Performance Guarantor nor any Affiliate party
thereto is in default of any of its obligations thereunder in any material
respect.
[signature pages begin on next page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
MFN FUNDING LLC, as Borrower
By: /s/ Xxxxxx X. Xxxx
-----------------------
Name:Xxxxxx X. Xxxx
Title: President
000 Xxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Facsimile No.: (000) 000-0000
s-1
MERCURY FINANCE COMPANY LLC,
as initial Servicer
By: /s/ Xxxx Xxxxxx
-------------------
Name:Xxxx Xxxxxx
Title:President
000 Xxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Facsimile No.: (000) 000-0000
s-2
MFN FINANCIAL CORPORATION,
individually and as Performance
Guarantor
By:/s/ Xxxxxxx Xxxxxx
---------------------
Name: Xxxxxxx Xxxxxx
Title: President
000 Xxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Treasurer
Facsimile No.: (000) 000-0000
s-3
DEUTSCHE BANK AG, NEW YORK
BRANCH, as Agent
By: /s/ Xxxxx X. Xxxxx
-----------------------
Name: Xxxxx X. Xxxxx
Title: Director
By: /s/ Xxxxxxx Xxxxx
----------------------
Name: Xxxxxxx Xxxxx
Title: Director
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Asset Securitization
Group
Facsimile No.: (000) 000-0000
S-4
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Backup
Servicer, Custodian and Collateral
Agent
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------
Name:Xxxxxxxx X. Xxxxxxxx
Title: Vice President
6th and Marquette Avenue
MAC N9311-161
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
S-5
SYSTEMS & SERVICES TECHNOLOGIES,
INC., as Designated Backup
Subservicer
By: Xxxxxx X. Xxxx
-------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice
President/Secretary
Address: 0000 Xxxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
S-6
EXHIBIT A
---------
[FORM OF ADVANCE REQUEST]
Deutsche Bank AG, Xxxxx Fargo Bank Minnesota, National
New York Branch, as Agent Association, as Collateral Agent
00 Xxxx 00xx Xxxxxx 0xx and Marquette Ave.
New York, NY 10019 Xxxxxxxxxxx, XX 00000
Attention: Asset Securitization
Group - Funding Attention: Corporate Trust Department
Fax#: (000) 000-0000 Fax#: (000) 000-0000
Phone#: (000) 000-0000
RE: Advance Request: $_________ for Advance #[insert advance number]
Gentlemen and Ladies:
This Advance Request is delivered to you pursuant to Section 2.2 of the
Receivables Financing Agreement, dated as of March 1, 2001 (together with all
amendments, if any, from time to time made thereto, the "Receivables Financing
Agreement"), among MFN Funding LLC (the "Borrower"), Mercury Finance Company LLC
(the "Servicer"), MFN Financial Corporation, Xxxxx Fargo Bank Minnesota,
National Association, as Backup Servicer, Custodian and Collateral Agent,
Systems & Services Technologies, Inc., as Designated Backup Subservicer, the
Lenders parties thereto and Deutsche Bank AG, New York Branch (the "Agent").
Unless otherwise defined herein or the context otherwise requires, capitalized
terms used herein have the meanings provided in the Receivables Financing
Agreement.
The Borrower hereby requests that on , an Advance be made in the
aggregate principal amount of $__________ having a Fixed Period of ____ days
(determined pursuant to Section 3.3(b) of the Receivables Financing Agreement).
The Schedule setting forth the Eligible Receivables to be funded on the
date of the requested Advance is attached hereto as Annex I.
Please wire $_________ to the Reserve Account and $________ to the
Borrower by wire transfer to account no. ________ maintained at LaSalle Bank,
National Association (ABA# 000000000). After giving effect to the requested
Advance and the application of the proceeds thereof, the amount on deposit in
the Reserve Account on the Advance Date will be $________ which amount equals or
exceeds the Minimum Reserve Account Amount.
A-1
The Borrower hereby acknowledges that, pursuant to Section 2.4 of the
Receivables Financing Agreement, each of the delivery of this Advance Request
and the acceptance by the Borrower of the proceeds of the Advances requested
hereby constitutes a representation and warranty by the Borrower that, on the
date of such Advances, and before and after giving effect thereto and to the
application of the proceeds therefrom in accordance with the Transaction
Documents, all applicable statements set forth in Section 2.4 are true and
correct in all material respects. In addition the Borrower hereby certifies that
each of the Transaction Documents is in full force and effect and (i) no
Facility Termination Event or Unmatured Facility Termination Event has occurred
and is continuing or will result from the making of the requested Advance, (ii)
the representations and warranties of the Borrower contained in Article X and
the Servicer contained in Section 8.6(b) are true and correct as of the date of
such requested Advance, with the same effect as though made on the date of (and
after giving effect to) such Advance, and (iii) after giving effect to such
Advance, the aggregate outstanding principal balance of the Advances will not
exceed the lesser of the Facility Limit and the Borrowing Base.
The Borrower agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and correct at such
time as if then made, it will immediately so notify the Agent. Except to the
extent, if any, that prior to the time of the Advance requested hereby the Agent
shall receive written notice to the contrary from the Borrower, each matter
certified to herein shall be deemed once again to be certified as true and
correct at the date of such Advance as if then made.
The Borrower has caused this Advance Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly authorized officer or representative this __ day of _______, ____.
MFN FUNDING LLC
By:
------------------------
Name:
Title:
Attachment
----------
A-2
EXHIBIT B
---------
[FORM OF NOTE]
--------------
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF BY THE OWNER
HEREOF UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND
SUCH STATE LAWS, AND WILL NOT BE A "PROHIBITED TRANSACTION" UNDER THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). BY ACCEPTANCE OF THIS NOTE, THE
HOLDER AGREES TO BE BOUND BY ALL THE TERMS OF THE RECEIVABLES FINANCING
AGREEMENT.
$_________________ __________ __, 2001
FOR VALUE RECEIVED, the undersigned, MFN Funding LLC, a Delaware
limited liability company (the "Borrower"), promises to pay to the order of
Deutsche Bank AG, New York Branch, as Agent for the Lenders, on the Facility
Termination Date the principal sum of ____________________________ ______
($_________) or, if less, the aggregate unpaid principal amount of all Advances
shown on the schedule attached hereto (and any continuation thereof) and/or in
the records of Agent made by the Lenders pursuant to that certain Receivables
Financing Agreement, dated as of March 1, 2001 (together with all amendments and
other modifications, if any, from time to time thereafter made thereto, the
"Receivables Financing Agreement"), among the Borrower, Mercury Finance Company
LLC (the "Servicer"), MFN Financial Corporation, Xxxxx Fargo Bank Minnesota,
National Association, as Backup Servicer, Custodian and Collateral Agent,
Systems & Services Technologies, Inc., as Designated Backup Subservicer, the
Lenders parties thereto and Deutsche Bank AG, New York Branch, as Agent. Unless
otherwise defined, capitalized terms used herein have the meanings provided in
the Receivables Financing Agreement.
The Borrower also promises to pay Yield on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Receivables Financing
Agreement.
Payments of both principal and Yield are to be made in lawful money of
the United States of America in immediately available funds to the account
designated by the Agent pursuant to the Receivables Financing Agreement.
B-1
This Note is the Note referred to in, and evidences indebtedness
incurred under, the Receivables Financing Agreement, and the holder hereof is
entitled to the benefits of the Receivables Financing Agreement, to which
reference is made for a description of the security for this Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the indebtedness
evidenced by this Note and on which such indebtedness may be declared to be
immediately due and payable.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
As provided in the Receivables Financing Agreement and subject to
certain limitations therein set forth, the transfer of this Note is registrable
in the Note Register, upon surrender of this Note for registration of transfer
at the office or agency of the Agent in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in the form satisfactory to
the Note Registrar duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
minimum denominations of $100,000. As provided in the Receivables Financing
Agreement and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Borrower may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Borrower, and any agent of the Borrower, the Agent and the
Collateral Agent may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, whether or not this Note may be overdue, and
shall not be affected by notice to the contrary.
The holder hereof hereby agrees, and any assignee of such holder, by
accepting such assignment, shall be deemed to have agreed, that it will not
institute against any Noncommitted Lender or the Borrower, or join any other
Person in instituting against any Noncommitted Lender or the Borrower, any
insolvency proceeding (namely, any proceeding of the type referred to in the
definition of Event of Bankruptcy) so long as, in the case of a Noncommitted
Lender, any commercial paper or other senior indebtedness issued by such
Noncommitted Lender shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such commercial paper or other
senior indebtedness shall be outstanding and, in the case of the Borrower, any
Advances or other amounts due from the Borrower hereunder shall be outstanding
or there shall not have elapsed one year plus one day since the last day on
which any such Advances or other amounts shall be outstanding. The foregoing
shall not limit such
B-2
Person's right to file any claim in or otherwise take any action with respect to
any insolvency proceeding that was instituted by any Person other than such
Person. The agreement set forth in this paragraph shall survive payment of this
Note.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW)
.
MFN FUNDING LLC
By:
-------------------------
Name:
Title:
B-3
Form of Assignment Form
-----------------------
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint , agent to transfer this
Note on the books of the Borrower. The agent may substitute another to act for
him.
Dated:
-------------------------------------------------------------------------
(sign exactly as the name appears on
the other side of this Note)
Signature Guarantee:
-----------------------------------------------------------
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney," this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Note, it is recommended that you fill in the name of the new owner in the
"Assignee" blank. Alternatively, instead of using this Assignment Form, you may
sign a separate "power of attorney" form and then mail the unsigned Note and the
signed "power of attorney" in separate envelopes. For added protection, use
certified or registered mail for a Note.
B-4
Schedule attached to Note dated __________, 2001 of MFN Funding LLC payable to
the order of Deutsche Bank AG, New York Branch, as Agent
Date of Advance Amount of Advance Amount of Repayment
--------------- ----------------- -------------------
B-5
EXHIBIT C
---------
[FORM OF INTEREST RATE HEDGE ASSIGNMENT ACKNOWLEDGMENT]
[Date]
[Name of Hedge Counterparty]
[Address of Hedge Counterparty]
Attention:
------------------------------------------
Re: ISDA Master Agreement and Schedule, dated as of _______________,
2001 (as amended, the "Hedge Agreement"), among [Name of Hedge
Counterparty] (the "Counterparty") and MFN Funding LLC ("Company")
Ladies and Gentlemen:
Company hereby notifies you that Company has assigned to Xxxxx Fargo
Bank Minnesota, National Association, as Collateral Agent, under the Receivables
Financing Agreement identified below, all of its right, title and interest in
and to any interest rate hedge (each, a "Hedge") entered into pursuant to the
Hedge Agreement, including, without limitation, (i) all rights of Company to
receive moneys due and to become due under or pursuant to the Xxxxxx, (ii)
claims of Company for damages arising out of or for breach of or default under
the Xxxxxx, (iii) the right of Company to terminate the Xxxxxx or the Hedge
Agreement, and to compel performance and otherwise exercise all remedies
thereunder, and (iv) all proceeds of any and all of the foregoing (the
assignment of all right, title and interest of Company in and to the Xxxxxx and
the Hedge Agreement being referred to as the "Assigned Rights").
As used herein, "Receivables Financing Agreement" shall mean that
certain receivables Financing Agreement, dated as of March 1, 2001, by and among
the Company, MFN Financial Corporation, Mercury Finance Company LLC (the
"Servicer"), the Lenders parties thereto, Xxxxx Fargo Bank Minnesota, National
Association, as Backup Servicer, Custodian and Collateral Agent, Systems &
Services Technologies, Inc., as Designated Backup Subservicer and Deutsche Bank
AG, New York Branch, as Agent (the "Agent"), as the same may from time to time
be amended, supplemented or otherwise modified and in effect.
The Counterparty hereby agrees that, until the Counterparty receives
written notice from the Agent to the contrary, the Counterparty shall make all
payments under the Hedge Agreement and the Xxxxxx to Xxxxx Fargo Bank Minnesota,
National Association, as Collateral Agent, as follows: [insert wire
instructions]. Upon the Counterparty's receipt of written notice from the Agent,
(i) the Counterparty will cease to make any such payments to _______________,
and shall make all such payments only to the Agent or as the Agent may from time
to time direct, and
C-1
(ii) the Agent shall be entitled to exercise any and all rights and remedies of
Company under the Hedge Agreement and the Xxxxxx to receive such payments in
accordance with the terms hereof.
All payments to be made under the Hedge Agreement and the Xxxxxx by the
Counterparty shall be made by the Counterparty irrespective of, and without
deduction for, any counterclaim, defense, recoupment or set-off (other than
netting for payments owing by Company thereunder in accordance with the terms of
the Hedge Agreement and the Xxxxxx) and shall be final, and the Counterparty
will not seek to recover from the Agent or any Lender for any reason any such
payment once made.
Notwithstanding the foregoing, (a) Company shall remain liable under
the Hedge Agreement and each Hedge to perform all of its duties and obligations
thereunder to the same extent as if this Acknowledgment had not been executed,
(b) the exercise by the Agent of any of the rights hereunder shall not release
Company from any of its duties or obligations under the Hedge Agreement or any
Hedge, and (c) neither the Agent nor the Collateral Agent nor any Investor shall
have any obligation or liability under the Hedge Agreement or any Hedge by
reason of this Acknowledgment, nor shall any of them be obligated to perform any
of the obligations or duties of Company thereunder or to take any action to
collect or enforce any claim for payment thereunder.
Company shall not, without the prior written consent of the Agent (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Assigned Rights, or create or
permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Assigned Rights, except for the
assignment acknowledged hereby; (ii) cancel or terminate the Hedge Agreement or
any Hedge or consent to or accept any cancellation or termination thereof; (iii)
amend or otherwise modify the Hedge Agreement or any hedge or give any consent,
waiver or approval thereunder; (iv) waive any default under or breach of the
Hedge Agreement or any Hedge; or (v) take any other action in connection with
the Hedge Agreement or any Hedge which would impair the value of the interest or
rights of Company thereunder or which would impair the interest or rights of the
Agent for the Benefit of the Lenders.
No amendment or waiver of any provision hereof, and no consent to any
departure by Company herefrom shall in any event be effective unless the same
shall be in writing and signed by the Agent, Company and the Counterparty, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
This letter agreement may be executed in counterparts, each of which
when executed by the parties hereto shall be deemed an original and all of which
together shall be deemed the same instrument.
This letter agreement shall be binding upon Company and the
Counterparty and their respective successors and assigns, and shall inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent and Investors, and their respective successors,
C-2
transferees and assigns. This letter agreement shall be governed by and
construed in accordance with the law (including Section 5-1401 of the General
Obligations Laws of New York but otherwise without regard to conflicts of law
provisions) of the State of New York.
Very truly yours,
MFN FUNDING LLC
By: __________________________________
Name:
Title:
C-3
Agreed:
[NAME OF HEDGE COUNTERPARTY]
By: ________________________________________
Name:
Title:
Acknowledged:
DEUTSCHE BANK AG, NEW YORK
BRANCH, as Agent
By: ________________________________________
Name:
Title:
By: ________________________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Collateral Agent
By: ________________________________________
Name:
Title:
C-4
EXHIBIT D
---------
[FORM OF BORROWING BASE CONFIRMATION]
D-1
EXHIBIT E
---------
[FORM OF SERVICER'S CERTIFICATE]
E-1
EXHIBIT F
---------
[FORM OF JOINDER SUPPLEMENT]
----------------------------
JOINDER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among the financial institutions identified in Item 2 of
Schedule 1 hereto, MFN Financial Corporation ("MFN"), MFN Funding LLC (the
"Borrower"), Mercury Finance Company LLC (the "Servicer"), and Deutsche Bank AG,
New York Branch, as Agent for the Lenders under, and as defined in, the
Agreement described below (in such capacity, the "Agent").
WITNESSETH:
WHEREAS, this Supplement is being executed and delivered under the
Receivables Financing Agreement, dated as of March 20, 2001, among MFN, the
Borrower, the Servicer, certain Noncommitted Lenders and Committed Lenders
parties thereto, Xxxxx Fargo Bank Minnesota, National Association, as Backup
Servicer, Custodian and Collateral Agent, Systems & Services Technologies, Inc.,
as Designated Backup Subservicer, and the Agent (as from time to time amended,
supplemented or otherwise modified in accordance with the terms thereof, the
"Agreement"; unless otherwise defined herein, terms defined in the Agreement are
used herein as therein defined); and
WHEREAS, the party set forth in Item 2 of Schedule I hereto (the
"Proposed Lender") wishes to become a [Noncommitted][Committed] Lender party to
the Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
(a) Upon receipt by the Agent of five counterparts of this Supplement, to
each of which is attached a fully completed Schedule I and Schedule II, each of
which has been executed by the Proposed Lender, the Agent, MFN and the Borrower,
the Agent will transmit to MFN, the Borrower, the Servicer, the Collateral Agent
and the Proposed Lender a Joinder Effective Notice, substantially in the form of
Schedule III to this Supplement (a "Joinder Effective Notice"). Such Joinder
Effective Notice shall be executed by the Agent and shall set forth, inter alia,
the date on which the joinder effected by this Supplement shall become effective
(the "Joinder Effective Date"). From and after the Joinder Effective Date, the
Proposed Lender shall be a [Noncommitted][Committed] Lender party to the
Agreement for all purposes thereof.
(b) Each of the parties to this Supplement agrees and acknowledges that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Supplement.
F-1
(c) By executing and delivering this Supplement, the Proposed Lender
confirms to and agrees with the Agent and the Lenders as follows: (i) neither
the Agent nor any Lender makes any representation or warranty or assumes any
responsibility with respect to any statements, warranties or representations
made in or in connection with the Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Agreement or
any other instrument or document furnished pursuant thereto, or with respect to
the Receivables or the financial condition of MFN or the Borrower, or the
performance or observance by MFN or the Borrower of any of their respective
obligations under the Agreement or any other instrument or document furnished
pursuant hereto; (ii) the Proposed Lender confirms that it has received a copy
of such documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Supplement; (iii) the Proposed
Lender will, independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Agreement; (iv) the Proposed Lender appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Agreement as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto, all in accordance with
Article XV of the Agreement; and (vi) the Proposed Lender agrees (for the
benefit of the parties hereto, the Lenders, Backup Servicer) and the Designated
Backup Subservicer that it will perform in accordance with their terms all of
the obligations which by the terms of the Agreement are required to be performed
by it as a Lender which is a [Noncommitted][Committed] Lender.
(d) Schedule II hereto sets forth administrative information with respect
to the Proposed Lender.
(e) This Supplement shall be governed by, and construed in accordance with,
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
executed by their respective duly authorized officers on Schedule I hereto as of
the date set forth in Item 1 of Schedule I hereto.
F-2
MFN FUNDING, LLC, as Borrower
By: _______________________________
Name:
Title:
MFN FINANCIAL CORPORATION
By: _______________________________
Name:
Title:
MERCURY FINANCE COMPANY LLC,
as Servicer
By: _______________________________
Name:
Title:
DEUTSCHE BANK AG, NEW YORK
BRANCH, as Agent
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
F-3
SCHEDULE I TO
-------------
JOINDER SUPPLEMENT
------------------
COMPLETION OF INFORMATION AND
SIGNATURES FOR JOINDER SUPPLEMENT
Re: Receivables Financing Agreement, dated as of March 1, 2001,
with MFN Financial Corporation, the other parties thereto and
Deutsche Bank AG, New York Branch, as Agent.
Item 1: Date of Joinder Supplement:
-----------------------------
Item 2: Proposed Lender:
------------------------------
Item 3: Type of Lender: ------------ Noncommitted
Committed
------------
Item 4: Complete if Committed Lender: Commitment - $________________
Committed Lender with respect to
[Name of Noncommitted Lender)
Item 5: Signatures of Parties to Agreement:
, as
---------------------------------
Proposed Lender
By:
-----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
F-4
MFN FINANCIAL CORPORATION
By: ________________________________
Name:
Title:
MERCURY FINANCE COMPANY LLC,
as Servicer
By: ________________________________
Name:
Title:
DEUTSCHE BANK AG, NEW YORK
BRANCH, as Agent
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
F-5
SCHEDULE II TO
--------------
JOINDER SUPPLEMENT
------------------
LIST OF INVESTING OFFICES, ADDRESS
FOR NOTICES AND WIRE INSTRUCTIONS
---------------------------------
Address for Notices:
------------------- -----------------------------------------
Investing Office:
---------------- -----------------------------------------
Wire Instructions:
----------------- -----------------------------------------
F-6
SCHEDULE III TO
---------------
JOINDER SUPPLEMENT
------------------
FORM OF
JOINDER EFFECTIVE NOTICE
------------------------
To: Name of MFN, Servicer, the Borrower, Collateral Agent and Proposed
Lender
The undersigned, as Agent under the Receivables Financing Agreement,
dated as of March 1, 2001, with MFN Financial Corporation, the other parties
thereto and Deutsche Bank AG, New York Branch, as Agent for the Lenders
thereunder, acknowledges receipt of five executed counterparts of a completed
Joinder Supplement. [Note: attach copies of Schedules I and II from such
Agreement.] Terms defined in such Supplement are used herein as therein defined.
Pursuant to such Supplement, you are advised that the Joinder Effective
Date for [Name of Proposed Lender] will be and such Proposed Lender will be a
Lender [with a Commitment of $ ].
Very truly yours,
DEUTSCHE BANK AG,
NEW YORK BRANCH, as Agent
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
F-7
