<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ____________ TO ___________
Commission file number: 001-13973
UNICAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 65-0788314
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
10800 Biscayne Boulevard, Suite 300
Miami, Florida 33161
(Address of principal executive office) (Zip Code)
(305) 899-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
On August 13, 1998, there were 51,433,539 shares of Common Stock, par value
$.001, outstanding.
<PAGE> 2
UniCapital Corporation
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 4
Consolidated Balance Sheets 4
Consolidated Statements of Operations 5
Consolidated Statement of Cash Flows 6
Consolidated Statement of Stockholders' Equity 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 19
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 20
Exhibit Index 21
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
3
<PAGE> 4
ITEM 1. FINANCIAL STATEMENTS
UniCapital Corporation
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS December 31, 1997 June 30, 1998
----------------- -------------
<S> <C> <C>
Cash and cash equivalents $ 30 $ 20,003
Accounts receivable - 22,424
Net investment in direct financing and sales-type leases - 358,717
Equipment under operating leases, net - 219,050
Equipment held for sale or lease - 20,930
Property and equipment, net - 2,944
Investments - 17,214
Goodwill, net - 492,860
Deposits and other assets
601 60,764
------------- ----------
Total assets $ 631 $1,214,906
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Recourse debt $ - $ 19,411
Non-recourse and limited recourse debt - 356,307
Accounts payable and accrued expenses 355 41,782
Security and other deposits - 17,077
Income taxes payable - 3,856
Deferred income taxes payable - 47,234
Other liabilities - 1,168
------------- ----------
Total liabilities 355 486,835
Commitments and Contingencies - -
Stockholders' equity:
Preferred stock, $.001 par value, 20,000,000
shares authorized, no shares issued and
outstanding - -
Common stock, $.001 par value, 200,000,000 shares authorized,
5,276,250 and 48,139,651 shares issued and outstanding,
respectively 5 48
Additional paid-in capital 2,537 741,696
Stock subscription notes receivable (129) (3,798)
Unrealized gain on securities - 323
Retained earnings (deficit) (2,137) (10,198)
------------- ----------
Total stockholders' equity 276 728,071
------------- ----------
Total liabilities and stockholders' equity $ 631 $1,214,906
============= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE> 5
UniCapital Corporation
Consolidated Statements of Operations
(Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Six
months ended months ended
June 30, 1998 June 30, 1998
-------------- -------------
<S> <C> <C>
Finance income from direct financing and sales-type leases $ 5,568 $ 5,568
Rental income from operating leases 8,894 8,894
Sale of equipment 23,920 23,920
Gain on sale of leases 9,771 9,771
Fees, commissions and remarketing income 2,327 2,327
Interest and other income 3,910 3,910
----------- -----------
Total revenues
54,390 54,390
----------- -----------
Cost of operating leases 5,049 5,049
Cost of equipment sold 18,194 18,194
Interest expense 6,423 6,423
Selling, general and administrative 7,425 24,740
Goodwill amortization 1,412 1,412
----------- -----------
Total expenses 38,503 55,818
----------- -----------
Income (loss) from operations 15,887 (1,428)
Equity in income from minority-owned affiliates 45 45
----------- -----------
Income (loss) before taxes 15,932 (1,383)
Provision for income taxes 6,678 6,678
----------- -----------
Net income (loss) $ 9,254 $ (8,061)
=========== ===========
Earnings (loss) per common share, basic $ .36 $ (.50)
=========== ===========
Earnings (loss) per common share, diluted $ .36 $ (.50)
=========== ===========
Weighted average shares outstanding, basic 25,631,827 16,024,865
=========== ===========
Weighted average shares outstanding, diluted 25,781,715 16,148,025
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE> 6
UniCapital Corporation
Consolidated Statement of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, 1998
-------------
<S> <C>
Cash flows from operating activities:
Net loss $ (8,061)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 6,932
Deferred income tax expense 3,029
Provision for credit losses 298
Gain on sale of lease financing receivables (9,771)
Compensation expenses related to equity issuances 17,308
Gain on sale of equipment (1,155)
Equity in net earnings of minority-owned affiliates (45)
Changes in other assets and liabilities:
Accounts receivable 3,953
Deposits and other assets (15,674)
Accounts payable and accrued expenses (7,999)
Deposits on equipment held for lease (2,333)
Income taxes payable 2,296
Other liabilities (24,265)
--------
Net cash used in operating activities (35,487)
--------
Cash flows from investing activities:
Capital expenditures (936)
Cash paid for acquisitions, net of cash acquired (334,588)
Proceeds from sale of lease financing receivables 119,768
Proceeds from sale of equipment 22,882
Purchase of equipment held for sale or lease (148,245)
Collection of direct financing and sales-type
leases, net of finance income earned 33,432
Investment in direct financing and sales-type leases (36,650)
Increase in investments 53
--------
Net cash used in investing activities (344,284)
--------
Cash flows from financing activities:
Proceeds from recourse debt borrowings 153,592
Repayment of recourse debt (278,296)
Proceeds from non-recourse and limited recourse debt 82,234
Repayment of non-recourse and limited recourse debt (45,715)
Proceeds from issuance of common stock 489,931
Repayment of subordinated debt (2,002)
--------
Net cash provided by financing activities 399,744
--------
Increase in cash and cash equivalents 19,973
Cash and cash equivalents at beginning of period 30
--------
Cash and cash equivalents at end of period $ 20,003
========
Supplemental disclosure of cash flow information for non-cash item:
Stock subscription notes receivable received as
consideration for issuance of common stock $ 3,830
========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
6
<PAGE> 7
Unicapital Corporation
Consolidated Statement of Stockholders' Equity
(Dollars in Thousands, Except Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Retained
Common Additional Stock Subscription Unrealized Gain Earnings
Stock Paid-In Capital Notes Receivable on Securities (Deficit) Total
----- --------------- ---------------- ------------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 $ 5 $ 2,537 $ (129) $ - $ (2,137) $ 276
Issuance of 1,522,500
shares of common stock
($15,248 of
compensation expense
recorded) 2 20,367 (3,830) - - 16,539
Issuance of options
($2,060 of
compensation expense
recorded) - 2,060 - - - 2,060
Net loss - - - - (17,315) (17,315)
--- --------- ------- ---- -------- --------
Balance at March 31, 1998 7 24,964 (3,959) - (19,452) 1,560
Change in unrealized gain - - - 323 - 323
Issuance of 28,000,000
shares of common stock, net
of underwriters discounts
and offering costs 28 488,613 - - - 488,641
Issuance of 13,340,901
shares of common stock to
Founding Companies in
connection with the mergers 13 228,119 - - - 228,132
Payments received - - 161 - - 161
Net income
- - - - 9,254 9,254
--- --------- ------- ---- -------- --------
Balance at June 30, 1998 $48 $ 741,696 $(3,798) $323 $(10,198) $728,071
=== ========= ======= ==== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
7
<PAGE> 8
UniCapital Corporation
Notes to Unaudited Consolidated Financial Statements
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
UniCapital Corporation, a Delaware Corporation, ("UniCapital" or the
"Company") was founded in October 1997 to create a national operator and
consolidator of equipment leasing and specialty finance businesses serving the
commercial market. UniCapital acquired twelve equipment leasing and related
businesses (the "Founding Companies") (the "Mergers") upon consummation of an
initial public offering (the "Offering") of its common stock and, subsequent to
the Offering, continued to acquire, through merger or purchase, similar
companies to expand its national operations.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles and the
rules and regulations of the Securities and Exchange Commission for interim
financial statements. Accordingly, the interim statements do not include all of
the information and disclosures required for annual financial statements. In the
opinion of the Company's management, all adjustments (consisting solely of
adjustments of a normal recurring nature) necessary for a fair presentation of
these interim results have been included. Intercompany accounts and transactions
have been eliminated. The results for the interim periods are not necessarily
indicative of the results to be expected for the entire year.
The financial statements should be read in conjunction with the
Company's audited financial statements included in the Company's registration
statement filed on Form S-1.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a description of the Company's accounting policies, refer to the
Notes to the Financial Statements of the Company and each of the Founding
Companies included in the Company's registration statement filed on Form S-1.
NOTE 3 - STOCKHOLDERS' EQUITY
On May 20, 1998, in connection with its Offering, the Company sold
28,000,000 shares of Common Stock to the public at $19.00 per share. The net
proceeds to the Company from the Offering (after deducting underwriting
commissions and other offering costs) were $488.6 million. Of this amount,
$335.0 million was used to pay the cash portion of the purchase prices of the
Founding Companies.
NOTE 4 - EARNINGS (LOSS) PER SHARE
Earnings (loss) per share have been calculated and presented in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings Per Share", which requires the Company to compute and present basic
and diluted earnings per share. Dilutive securities are excluded from the
computation in periods in which they have an anti-dilutive effect.
NOTE 5 - INCOME TAXES
The Company accounts for income taxes under SFAS No. 109 "Accounting
for Income Taxes". Under this method, deferred tax assets and liabilities are
determined based on the differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Valuation
allowances are provided to reduce deferred taxes to the amount expected to be
realized based on available evidence. The Company's effective tax rate differs
from that computed at the statutory rate principally as a result of
non-deductible goodwill amortization and compensation expense related to certain
equity issuances.
NOTE 6 - CREDIT FACILITIES
In April 1998, the Company received a commitment from a major
commercial bank to provide $1.2 billion in credit facilities (the "Senior Credit
Facilities") which consist of the following sub-facilities: (i) a $300.0 million
Corporate Revolving Credit Facility primarily to finance acquisitions and
working capital (the "Revolving Facility"); (ii) a $300.0 million Large Ticket
Warehouse Facility primarily to finance the purchase and leasing of aircraft and
engines (the "Warehouse Facility"); and (iii) two asset-backed commercial paper
facilities totaling $600.0 million to finance small ticket and middle market
leases, consisting of an Equipment Lease Receivable Purchase Facility (the
"Purchase Facility") and an Equipment Lease Receivable Finance Facility (the
"Finance Facility"). All of the facilities were operational by June 30, 1998,
except the Finance Facility which became operational in July 1998. The Company
believes it to be in compliance with all covenants under these facilities at
June 30, 1998.
8
<PAGE> 9
UniCapital Corporation
Notes to Unaudited Consolidated Financial Statements
Revolving Facility. Under the Revolving Facility, the Company may
borrow up to $300.0 million. The proceeds of the Revolving Facility may be used
to finance the cash portion of permitted acquisitions and for general corporate
purposes, subject to certain limitations. Amounts outstanding under the
Revolving Facility are to bear interest, at the Company's option, at the agent's
base rate plus an applicable margin or a Eurodollar rate plus an applicable
margin. In addition, the Revolving Facility contains covenants, including but
not limited to limitations on liens, investments, dividends and other restricted
payments, incurrence of recourse indebtedness, transactions with affiliates and
acquisitions, as well as various financial covenants customary for transactions
of this type, including ratios of debt with recourse or limited recourse to cash
flow, total debt to net worth and cash flow to fixed charges, and maintenance at
all times of a minimum net worth with step-ups for a portion of the Company's
net income and the net proceeds of any equity issuances. The Company had $19
million of borrowings under its Revolving Facility at June 30, 1998.
Warehouse Facility. Under the Warehouse Facility, the Company may
borrow up to $300.0 million. The proceeds of the Warehouse Facility may be used
to finance the purchase of eligible aircraft and engines. Amounts outstanding
under the Warehouse Facility are to bear interest, at the Company's option, at
the agent's base rate plus an applicable margin or a Eurodollar rate plus an
applicable margin. The Warehouse Facility is non-recourse to the Company, and it
is to be secured by a first priority perfected pledge of the assets purchased
and held by the Company through the facility. In addition, the Warehouse
Facility contains covenants, including but not limited to limitations on liens,
investments, dividends and other restricted payments, capital expenditures,
transactions with affiliates, acquisitions and incurrence of debt, as well as
annual appraisals of eligible aircraft and engines, annual review of the
approved lessees, obligors and aircraft and financial covenants customary for
transactions of this type, including a ratio of cash flow to interest. The
Company had $49 million of borrowings under its Warehouse Facility at June 30,
1998.
Purchase Facility. The Company established the Purchase Facility, with
the bank as administrative agent, pursuant to which a commercial paper conduit
(the "CP Conduit") would purchase an interest (the "Net Investment") in up to
$225.0 million of small ticket and middle market leases meeting certain
eligibility requirements. Two wholly-owned, bankruptcy-remote subsidiaries of
the Company (the "Transferors") will purchase the Company's interest in certain
operating and financing leases and related leased equipment originated or
purchased by the Company or eligible subsidiaries of the Company. The CP Conduit
will purchase such interests in eligible leases at a discount of the present
value of the remaining lease receivable cash flows discounted back to the date
that such interests are purchased by the CP Conduit. Collections on the leases
purchased by the CP Conduit will generally be applied first to pay any amounts
due under the Purchase Facility and certain other specified facilities, and then
to the Transferors. The Company anticipates that the Net Investment under the
Purchase Facility will be periodically reduced through securitizations. The
Purchase Facility contains restrictions customary for facilities of this type,
including limitations on liens on the leases, indebtedness, certain lease
modifications and changes in credit and collection practices.
Finance Facility. The Company established the Finance Facility, with
the bank lender as administrative agent, pursuant to which the CP Conduit will
advance up to $375.0 million secured by small ticket and middle market leases
meeting certain eligibility requirements. A wholly-owned subsidiary (the
"Finance SPE") will receive a pledge of the Company's interest in certain
operating and financing leases and certain leased equipment originated or
purchased by the Company or any subsidiaries of the Company. The CP Conduit will
lend funds to the Finance SPE in an amount equal to a percentage of the present
value of the remaining lease receivable. Such borrowings will be secured by an
interest in the Finance SPE's leases and certain leased equipment. The Finance
Facility contains customary restrictions and requires the payment of various
fees, generally on terms substantially equivalent to those in the Purchase
Facility.
NOTE 7 - ACQUISITION
In June 1998, the Company acquired substantially all of the equity
interests of Jumbo Jet Leasing LP and related entities, a Miami, FL based lessor
of commercial aircraft in a transaction accounted for as a purchase.
9
<PAGE> 10
NOTE 8 - STATEMENT OF CASH FLOWS
The following table details the net cash paid for the acquisition of
equipment leasing companies which were accounted for using the purchase method
of accounting.
Acquisitions:
Six months ended
June 30, 1998
---------------------
(Dollars in Thousands)
Fair value of assets acquired $1,143,280
Fair value of liabilities assumed (580,122)
Common stock issued (228,132)
----------
Cash paid for the purchases of Founding Companies 335,026
Cash paid for the purchase of Jumbo Jet Leasing LP and
related entities 13,400
----------
Cash paid for the purchases of companies 348,426
Cash and cash equivalents acquired (13,838)
----------
Total cash paid for acquisitions $ 334,588
==========
NOTE 9 - SUBSEQUENT EVENTS
During July and August of 1998, the Company acquired all of the stock
of HLC Financial, Inc., Saddleback Financial Corporation, The Meyerson
Companies, Inc. (d/b/a BSB Leasing), and United States Turbine Engine Corp.
These transactions were accounted for using the purchase method of accounting.
NOTE 10 - UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information for the three and six
months ended June 30, 1998 and 1997 includes the results of UniCapital combined
with the Founding Companies as if the Mergers had occurred at the beginning of
each respective period. This pro forma combined financial information includes
the effects of (a) the Mergers; (b) the Offering; (c) certain reductions in
salaries, bonuses and benefits to the stockholders and managers of the Founding
Companies to which they have agreed prospectively; (d) amortization of goodwill;
(e) the incremental provision for federal and state income taxes assuming all
entities were subject to federal and state income taxes; and (f) the incremental
costs of being a public company.
The pro forma financial information may not be comparable to and may
not be indicative of the Company's post-Merger results of operations because the
Founding Companies were not under common control or management and had different
tax and capital structures during the periods presented.
The computation of pro forma basic and diluted earnings per share for
the three and six months ended June 30, 1998 and 1997 is based on 47,273,249 and
47,441,670 shares of common stock outstanding, respectively.
The following tables set forth the combined results of operations of
UniCapital on a pro forma basis for the period indicated:
10
<PAGE> 11
UniCapital Corporation
Notes to Unaudited Consolidated Financial Statements
<TABLE>
<CAPTION>
Three months ended June 30,
---------------------------
1997 1998
------- --------
(Dollars in Thousands)
<S> <C> <C>
Finance income from direct financing and sales-type leases $12,393 $ 12,674
Rental income from operating leases 13,227 15,534
Sale of equipment 20,943 67,825
Gain on sale of leases 2,497 10,973
Fees, commissions and remarketing income 4,383 6,915
Interest and other income 1,428 4,548
------- --------
Total revenues 54,871 118,469
------- --------
Cost of operating leases 4,359 9,353
Cost of equipment sold 17,112 59,341
Interest expense 8,991 10,658
Selling, general and administrative 15,324 16,983
Goodwill amortization 3,175 3,175
------- --------
Total expenses 48,961 99,510
------- --------
Income from operations 5,910 18,959
Equity in income from minority-owned affiliates 835 1,475
------- --------
Income before income taxes and extraordinary item 6,745 20,434
Provision for income taxes 3,819 9,090
------- --------
Income before extraordinary gain 2,926 11,344
Extraordinary gain on extinguishment of debt, net of tax 393 -
------- --------
Net income $ 3,319 $ 11,344
======= ========
Earnings per common share, basic $ .07 $ .24
======= ========
Earnings per common share, diluted $ .07 $ .24
======= ========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------
1997 1998
-------- --------
(Dollars in Thousands)
<S> <C> <C>
Finance income from direct financing and sales-type leases $ 23,734 $ 25,186
Rental income from operating leases 24,671 28,337
Sale of equipment 36,149 104,426
Gain on sale of leases 6,884 14,563
Fees, commissions and remarketing income 6,492 11,745
Interest and other income 2,539 6,336
-------- --------
Total revenues 100,469 190,593
-------- --------
Cost of operating leases 11,098 17,691
Cost of equipment sold 30,015 83,013
Interest expense 17,440 19,355
Selling, general and administrative 26,327 32,123
Goodwill amortization 6,224 6,224
-------- --------
Total expenses 91,104 158,406
-------- --------
Income from operations 9,365 32,187
Equity in income from minority-owned affiliates 1,324 3,583
-------- --------
Income before income taxes and extraordinary item 10,689 35,770
Provision for income taxes 6,476 16,014
-------- --------
Income before extraordinary gain 4,213 19,756
Extraordinary gain on extinguishment of debt, net of tax 393 -
-------- --------
Net income $ 4,606 $ 19,756
======== ========
Earnings per common share, basic $ .10 $ .42
======== ========
Earnings per common share, diluted $ .10 $ .42
======== ========
</TABLE>
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
Unaudited Consolidated Financial Statements and the related notes thereto and
the historical financial statements of the Company.
INTRODUCTION
UniCapital was founded in October 1997 to create a national operator
and consolidator of equipment leasing and specialty finance businesses serving
the commercial market. UniCapital originates, acquires, sells and services
equipment leases and arranges structured financings in the computer and
telecommunications equipment, large ticket and structured finance, middle market
and small ticket areas of the equipment leasing industry. In addition, one of
the Founding Companies provides lease administration and processing services for
certain of the leases originated by the Founding Companies, as well as for any
securitizations undertaken by the Company. The Companies' leases and structured
financing arrangements cover a broad range of equipment, including aircraft,
computer and telecommunications equipment, construction and manufacturing
equipment, office equipment, trucks, printing equipment, car washes, petroleum
retail equipment and vending machines. The Company funds the acquisition or
origination of its leases through warehouse credit facilities or through
recourse or non-recourse financing and retains the leases for its own account or
sells the leases to third parties.
The Company derives the majority of its revenue from lease payments on
leases originated and held by the Company, gain on sale of leases and sale of
equipment subject to leases. The Company also derives revenue from sale of
equipment off-lease and the sale of new equipment, as well as from servicing
fees, late charges and administrative fees. The Company also receives
remarketing fees for the sale of off-lease equipment on behalf of equity
investors in leases originated by the Company and may obtain a premium for sales
prices in excess of an agreed amount.
Cost of operating leases is primarily depreciation on equipment under
operating lease. Cost of equipment sold represents cost of equipment sold
subject to lease, cost of equipment sold through sales-type leases and cost of
equipment sold off-lease.
Interest expense includes interest and fees on the Company's credit
facilities.
Selling, general and administrative costs include salaries, benefits
and commissions payable to the Company's sales and marketing personnel, finance
and other general and administrative costs.
UNAUDITED PRO FORMA COMBINED RESULTS OF OPERATIONS
The unaudited pro forma combined financial statements reflect results
of UniCapital's consolidation transaction as though the Mergers had occurred as
of the beginning of each period presented in conformity with SEC Regulation S-X.
The pro forma adjustments included the following: intangible amortization,
incremental income taxes to reflect federal and state liabilities as though all
of the companies were corporations, reductions in compensation from that
previously reflected in the separate company financial statements of these
companies to which they have agreed prospectively and the incremental cost of
being a public company.
12
<PAGE> 13
The following table sets forth the combined results of operations of
UniCapital and the Founding Companies on a pro forma basis and as a percentage
of revenues for the period indicated:
<TABLE>
<CAPTION>
Three months ended June 30,
--------------------------------------------------
1997 1998
--------------------- -----------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Finance income from direct financing and sales-type leases $12,393 22.6% $ 12,674 10.7%
Rental income from operating leases 13,227 24.1 15,534 13.1
Sale of equipment 20,943 38.2 67,825 57.3
Gain on sale of leases 2,497 4.6 10,973 9.3
Fees, commissions and remarketing income 4,383 8.0 6,915 5.8
Interest and other income 1,428 2.5 4,548 3.8
------- ----- -------- -----
Total revenues 54,871 100.0 118,469 100.0
------- ----- -------- -----
Cost of operating leases 4,359 7.9 9,353 7.9
Cost of equipment sold 17,112 31.2 59,341 50.1
Interest expense 8,991 16.4 10,658 9.0
Selling, general and administrative 15,324 27.9 16,983 14.3
Goodwill amortization 3,175 5.8 3,175 2.7
------- ----- -------- -----
Total expenses 48,961 89.2 99,510 84.0
------- ----- -------- -----
Income from operations 5,910 10.8 18,959 16.0
Equity in income from minority-owned affiliates 835 1.5 1,475 1.2
------- ----- -------- -----
Income before income taxes and extraordinary item 6,745 12.3 20,434 17.2
Provision for income taxes 3,819 7.0 9,090 7.7
------- ----- -------- -----
Income before extraordinary gain 2,926 5.3 11,344 9.6
Extraordinary gain on extinguishment of debt 393 0.7 - -
------- ----- -------- -----
Net income $ 3,319 6.0% $ 11,344 9.6%
======= ===== ======== =====
</TABLE>
Pro Forma Combined Results for the Three Months Ended June 30, 1998 Compared to
the Three Months Ended June 30, 1997.
Rental income from operating leases. Rental income from operating leases
increased to $15.5 million for the three months ended June 30, 1998 from $13.2
million for the three months ended June 30, 1997, an increase of 17.4%,
primarily due to increases in the portfolio of equipment under operating leases
during 1998. These increases were primarily through the origination of
commercial aircraft and computer and telecommunications equipment operating
leases.
Sale of equipment. Sale of equipment increased to $67.8 million for the three
months ended June 30, 1998 from $20.9 million for the three months ended June
30, 1997, an increase of $46.9 million, or 223.9%, primarily as a result of
$42.6 million in commercial aircraft sales during the three months ended June
30, 1998, as compared to none during the three months ended June 30, 1998.
Gain on sale of leases. Gain on sale of leases increased to $11.0 million for
the three months ended June 30, 1998 from $2.5 million for the three months
ended June 30, 1997, an increase of $8.5 million, or 339.4%, primarily as a
result of the sale of approximately $108 million of small and middle market
leases into the Company's Purchase Facility in June 1998. The Founding Companies
have historically sold leases regularly throughout the year in similar, but
smaller transactions.
Fees, commissions and remarketing income. Fees, commissions and remarketing
income increased to $6.9 million for the three months ended June 30, 1998 from
$4.4 million for the three months ended June 30, 1997, an increase of $2.5
million or 57.8%. This increase is primarily attributable to commission income
on four municipal lease transactions which were consummated and increased
remarketing profits in computer and telecommunications equipment during the
three months ended June 30, 1998.
Interest and other income. Interest and other income increased to $4.5 million
for the three months ended June 30, 1998 from $1.4 million for the three months
ended June 30, 1997, an increase of $3.1 million or 218.5%. This increase is
attributable to the investment of cash and marketable securities in overnight
investments and the release of maintenance liabilities on aircraft sold.
13
<PAGE> 14
Cost of operating leases. Cost of operating leases increased to $9.4 million for
the three months ended June 30, 1998 from $4.4 million for the three months
ended June 30, 1997, an increase of $5.0 million or 114.6%. This increase
represents additional depreciation expense on equipment placed under operating
lease in 1998, primarily aircraft.
Cost of equipment sold. Cost of equipment sold increased to $59.3 million for
the three months ended June 30, 1998 from $17.1 million for the three months
ended June 30, 1997, an increase of $42.2 million, or 246.8%, primarily as a
result of the cost of commercial aircraft sold during the three months ended
June 30, 1998.
Interest expense. Interest expense increased to $10.7 million for the three
months ended June 30, 1998 from $9.0 million for the three months ended June 30,
1997, an increase of $1.7 million or 18.5%, primarily due to the increased
amount of borrowings during the period and amortization of fees on the Company's
credit facilities.
Selling, general and administrative. Selling, general and administrative
expenses increased to $17.0 million for the three months ended June 30, 1998
from $15.3 million for the three months ended June 30, 1998, an increase of $1.7
million or 10.8%, primarily due to increased origination activity.
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------------------------------
1997 1998
--------------------- -----------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Finance income from direct financing and sales-type leases $ 23,734 23.6% $ 25,186 13.2%
Rental income from operating leases 24,671 24.6 28,337 14.9
Sale of equipment 36,149 36.0 104,426 54.8
Gain on sale of leases 6,884 6.9 14,563 7.6
Fees, commissions and remarketing income 6,492 6.5 11,745 6.2
Interest and other income 2,539 2.4 6,336 3.3
-------- ----- -------- ----
Total revenues 100,469 100.0 190,593 100.0
Cost of operating leases 11,098 11.0 17,691 9.3
Cost of equipment sold 30,015 29.9 83,013 43.6
Interest expense 17,440 17.4 19,355 10.2
Selling, general and administrative 26,327 26.2 32,123 16.9
Goodwill amortization 6,224 6.2 6,224 3.3
-------- ----- -------- ----
Total expenses 91,104 90.7 158,406 83.1
-------- ----- -------- ----
Income from operations 9,365 9.3 32,187 16.9
Equity in income from minority-owned affiliates 1,324 1.3 3,583 1.9
-------- ----- -------- ----
Income before income taxes and extraordinary item 10,689 10.6 35,770 18.8
Provision for income taxes 6,476 6.4 16,014 8.4
-------- ----- -------- ----
Income before extraordinary gain
4,213 4.2 19,756 10.4
Extraordinary gain on extinguishment of debt 393 .4 - -
-------- ----- -------- ----
Net income $ 4,606 4.6% $ 19,756 10.4%
======== ===== ======== ====
</TABLE>
Pro Forma Combined Results for the Six Months Ended June 30, 1998 Compared to
the Six Months Ended June 30, 1997.
Rental income from operating leases. Rental income from operating leases
increased to $28.3 million for the six months ended June 30, 1998 from $24.7
million for the six months ended June 30, 1997, an increase of $3.7 million or
14.9%, primarily due to increases in the portfolio of equipment under operating
leases during 1998. These increases were primarily through commercial aircraft
and computer and telecommunications equipment operating leases.
Sale of equipment. Sale of equipment increased to $104.4 million for the six
months ended June 30, 1998 from $36.1 million for the six months ended June 30,
1997, an increase of $68.3 million, or 188.9%, primarily as a result of $42.6
million in commercial aircraft sales and increased originations of sales-type
leases of computer and telecommunication equipment during the six months ended
June 30, 1998, as compared to none during the six months ended June 30, 1998.
Gain on sale of leases. Gain on sale of leases increased to $14.6 million for
the six months ended June 30, 1998 from $6.9 million for the six months ended
June 30, 1997, an increase of $7.7 million, or 111.5%, primarily as a result of
the sale of approximately $108 million of small and middle market leases into
the Company's Purchase Facility in June
14
<PAGE> 15
1998. The Founding Companies have historically sold leases throughout the
year in similar, but smaller transactions.
Fees, commissions and remarketing income. Fees, commissions and remarketing
income increased to $11.7 million in the six months ended June 30, 1998 from
$6.5 million in the six months ended June 30, 1998, an increase of $5.3 million
or 80.9%. This increase was primarily attributable to commission income on four
municipal lease transactions and increased remarketing profits in computer and
telecommunications equipment in 1998.
Interest and other income. Interest and other income increased to $6.3 million
in the six months ended June 30, 1998 from $2.5 million in the six months ended
June 30, 1997, an increase of $3.8 million or 149.5%. This increase can be
attributable to the investment of cash and marketable securities in overnight
investments and the release of maintenance liabilities on aircraft sold.
Cost of operating leases. Cost of operating leases increased to $17.7 million
for the six months ended June 30, 1998 from $11.1 million for the six months
ended June 30, 1997, an increase of $6.6 million or 59.4%. This increase
represents additional depreciation expense on equipment placed under operating
lease in 1998, primarily aircraft.
Cost of equipment sold. Cost of equipment sold increased to $83.0 million for
the six months ended June 30, 1998 from $30.0 million for the six months ended
June 30, 1997, an increase of $53.0 million, or 176.6%, primarily as a result of
the cost of commercial aircraft sold during the six months ended June 30, 1998.
Interest expense. Interest expense increased to $19.4 million in the six months
ended June 30, 1998 from $17.4 million in the six months ended June 30, 1997, an
increase of $1.9 million or 11.0%, primarily due to the increased amount of
borrowings during the period and amortization of fees on the Company's credit
facilities in 1998.
Selling, general and administrative. Selling, general and administrative
expenses increased to $32.1 million for the six months ended June 30, 1998 from
$26.3 million for the six months ended June 30, 1998, an increase of $5.8
million or 22.0%, primarily due to increased origination activity during 1998.
Equity in income of minority owned affiliates. Equity in income of minority
owned affiliates increased to $3.6 million in the six months ended June 30, 1998
from $1.3 million in the six months ended June 30, 1997, an increase of $2.3
million or 170.6% due to the sale of several aircraft by those affiliates during
the three months ended March 31, 1998.
15
<PAGE> 16
HISTORICAL RESULTS OF OPERATIONS
The following table sets forth certain selected financial data for the
Company on a historical basis and as a percentage of revenues for the periods
indicated:
<TABLE>
<CAPTION>
Three Six
months ended months ended
June 30, 1998 June 30, 1998
------------- -------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Finance income from direct financing and sales-type leases $ 5,568 10.2% $ 5,568 10.2%
Rental income from operating leases 8,894 16.4 8,894 16.4
Sale of equipment 23,920 44.0 23,920 44.0
Gain on sale of leases 9,771 18.0 9,771 18.0
Fees, commissions and remarketing income 2,327 4.2 2,327 4.2
Interest and other income 3,910 7.2 3,910 7.2
------- ----- ------- -----
Total revenues 54,390 100.0 54,390 100.0
------- ----- ------- -----
Cost of operating leases 5,049 9.3 5,049 9.3
Cost of equipment sold 18,194 33.4 18,194 33.4
Interest expense 6,423 11.8 6,423 11.8
Selling, general and administrative 7,425 13.7 24,740 45.5
Goodwill amortization 1,412 2.6 1,412 2.6
------- ----- ------- -----
Total expenses 38,503 70.8 55,818 102.6
------- ----- ------- -----
Income (loss) from operations 15,887 29.2 (1,428) (2.6)
Equity in income from minority-owned affiliates 45 .1 45 .1
------- ----- ------- -----
Income (loss) before taxes 15,932 29.3 (1,383) (2.5)
Provision for income taxes 6,678 12.3 6,678 12.3
------- ----- ------- -----
Net income (loss) $ 9,254 17.0% $(8,061) (14.8)%
======= ===== ======= =====
</TABLE>
Historical Combined Results for the Three Months Ended June 30, 1998.
Sale of equipment. Sale of equipment was $23.9 million for the three months
ended June 30, 1998 as a result of sales of equipment at the Founding Companies
from the period May 20, 1998 through June 30, 1998. These sales were primarily
comprised of commercial aircraft and sales of computer and telecommunications
equipment through sales-type leases.
Gain on Sale of Leases. Gain on sale of leases was primarily generated from the
sale of approximately $108 million of leases into the Company's Purchase
Facility in June 1998.
Cost of equipment sold. Cost of equipment sold was $18.2 million for the three
months ended June 30, 1998, primarily as a result of sales of commercial
aircraft and computer and telecommunications equipment.
Selling, general and administrative. Selling, general and administrative
expenses were $7.4 million for the three months ended June 30, 1998. These
expenses included salaries and benefits and occupancy expenses of the Company's
combined headquarters, sales and operations facilities.
Historical Combined Results for the Six Months Ended June 30, 1998.
Selling, general and administrative. Selling, general and administrative
expenses include a $17.3 million non-cash compensation charge for common stock
and options issued to certain stockholders during the three months ended March
31, 1998, representing the excess of the estimated fair value over the
consideration received for the shares at issuance.
16
<PAGE> 17
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Statements in this Form 10-Q based on current expectations that are not
strictly historical statements, such as the Company's or management's
intentions, hopes, beliefs, expectations, strategies, or predictions, are
forward-looking statements. Such statements, or any other variation thereof
regarding the Company's future activities or other future events or conditions
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, are intended to
be covered by the safe harbors for forward-looking statements created thereby.
Investors are cautioned that all forward-looking statements involve risk and
uncertainty, including without limitation, the sufficiency of the Company's
working capital and the ability of the Company to realize benefits from
consolidating certain general and administrative functions, to pursue strategic
acquisitions and alliances, to retain management and to implement its focused
business strategy, to leverage consulting services, to secure full-service
contracts, to expand client relationships, to recruit, train and retain
personnel successfully, to expand services and geographic reach and to defend
successfully itself in ongoing and future litigation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's business is capital intensive and requires access to
substantial short-term and long-term credit to fund new equipment leases. The
Founding Companies have funded their operations primarily through sale of leases
and non-recourse or recourse borrowings. The Company will continue to require
access to significant additional capital to maintain and expand its volume of
leases funded, as well as to fund any future acquisitions of equipment leasing
and specialty finance companies.
The Company's uses of cash include the origination of equipment leases,
payment of interest expenses, repayment of borrowings under its credit
facilities, operating and administrative expenses, income taxes and capital
expenditures and may include payment of the cash portion of the earn-out
arrangements with the former stockholders of the Founding Companies.
The Company currently does not have any commitments to make significant
capital expenditures in the next twelve months. The Company believes that funds
generated from operations, together with the Company's Senior Credit Facilities,
will be sufficient to finance its current operations and planned capital
expenditure requirements at least through 1998. To the extent that the Company
is successful in consummating acquisitions, it may be necessary to finance such
acquisitions through the issuance of additional equity securities, incurrence of
indebtedness or a combination of both. At June 30, 1998, the Company had
borrowings of $19.0 million under its Revolving Facility at an effective annual
interest rate of LIBOR plus the Applicable Margin as defined in the Revolving
Facility.
17
<PAGE> 18
PART II. OTHER INFORMATION
18
<PAGE> 19
ITEM 2. Changes in Securities
In connection with the acquisitions of the Founding Companies,
UniCapital issued 13,340,901 shares of the Company's Common
Stock on May 20, 1998 to the former owners of the Founding
Companies. Each such transaction was intended to be exempt
from registration in reliance upon Section 4(2) of the
Securities Act.
On May 14, 1998, the Commission declared effective the
Company's IPO Registration Statement on Form S-1 (File No.
333-46603). The Registration Statement covered the sale of
28,000,000 shares of the Company's Common Stock at an offering
price of $19 per share. The managing underwriters in the
offering were Morgan Stanley Dean Witter, Salomon Smith
Barney, Nationsbanc Montgomery Securities LLC and Friedman,
Billings, Ramsey & Co., Inc. (the "Underwriters"). On May 20,
1998 UniCapital sold to the Underwriters 28,000,000 shares of
Common Stock for an aggregate consideration of $532,000,000,
less underwriting discounts and commissions of $31,920,000,
and other expenses of $11,439,000, for net proceeds to the
Company of $488,641,000. The other expenses of $11,439,000
were paid to third parties not affiliated with the Company.
From the amount of net proceeds approximately $335.0 million
in cash was paid by the Company to third parties (previously
unrelated to the Company) through June 30, 1998 in connection
with the acquisitions of the Founding Companies and $144.8
million was used to repay indebtedness of the Founding
Companies. Certain Board members elected at the July meeting
were former stockholders of Founding Companies.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.01 Credit Agreement by and among UniCapital Corporation,
NationsBank, National Associations and the Lenders
party thereto, dated as of June 10, 1998.
4.02 Transfer and Administration Agreement among Kitty
Hawk Funding Corporation, UCP Qualifying SPE 1998-1
Limited Partnership, UCP Operating SPE 1998-1 Limited
Partnership, Portfolio Financial Servicing Company,
L.P. and NationsBank, N.A., dated as of June 22, 1998.
4.03 Loan and Security Agreement among Kitty Hawk Funding
Corporation, UCP Borrowing SPE 1998-1 Limited
Partnership, Portfolio Financial Servicing Company,
L.P. and NationsBank, N.A., dated as of July 10, 1998.
11.01 Statement regarding computation of per share earnings
27.01 Financial Data Schedule
(b) Reports on Form 8-K
On June 2, 1998, the Company filed a Form 8-K to report the
acquisition of twelve equipment leasing and related businesses
under Item 2. Acquisition and Disposition of Assets.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNICAPITAL CORPORATION
(Registrant)
Date: August 13, 1998 By:
/S/ JONATHAN NEW
----------------------------------------------
Jonathan New
Chief Financial Officer
(Principal Financial and Accounting Officer)
20
<PAGE> 21
Exhibit Index
4.01 Credit Agreement by and among UniCapital Corporation, NationsBank,
National Associations and the Lenders party thereto, dated as of June
10, 1998.
4.02 Transfer and Administration Agreement among Kitty Hawk Funding
Corporation, UCP Qualifying SPE 1998-1 Limited Partnership, UCP
Operating SPE 1998-1 Limited Partnership, Portfolio Financial Servicing
Company, L.P. and NationsBank, N.A., dated as of June 22, 1998.
4.03 Loan and Security Agreement among Kitty Hawk Funding Corporation, UCP
Borrowing SPE 1998-1 Limited Partnership, Portfolio Financial Servicing
Company, L.P. and NationsBank, N.A., dated as of July 10, 1998.
11.01 Statement regarding computation of per share earnings
27.01 Financial Data Schedule
21
<PAGE> 1
Exhibit 4.01
================================================================================
CREDIT AGREEMENT
by and among
UNICAPITAL CORPORATION,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent and as Lender
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 10, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
Definitions and Terms
1.1. Definitions..............................................................2
1.2. Rules of Interpretation.................................................32
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.........................................................34
2.2. Payment of Interest.....................................................36
2.3. Payment of Principal....................................................36
2.4. Manner of Payment.......................................................38
2.5. Notes...................................................................38
2.6. Pro Rata Payments.......................................................38
2.7. Reductions..............................................................38
2.8. Conversions and Elections of Subsequent Interest Periods................39
2.9. Increase and Decrease in Amounts........................................40
2.10. Unused Fee..............................................................40
2.11. Deficiency Advances; Failure to Purchase Participations.................40
2.12. Use of Proceeds.........................................................41
2.13. Swing Line..............................................................41
ARTICLE III
Letters of Credit
3.1. Letters of Credit.......................................................43
3.2. Reimbursement...........................................................43
3.3. Letter of Credit Facility Fees..........................................46
3.4. Administrative Fees.....................................................47
ARTICLE IV
Security
4.1. Security................................................................48
4.2. Stock and Equity Interest Pledge........................................48
4.3. Guaranty................................................................48
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
4.4. Security Interests......................................................48
4.5. Pledge and Subordination of Intercompany Notes..........................49
4.6. Intellectual Property Security Agreement................................49
4.7. Further Assurances......................................................49
4.8. Information Regarding Collateral........................................49
4.9. Termination in Connection with Permitted Sales and Securitizations......50
ARTICLE V
Change in Circumstances
5.1. Increased Cost and Reduced Return.......................................51
5.2. Limitation on Types of Loans............................................52
5.3. Illegality..............................................................52
5.4. Treatment of Affected Loans.............................................53
5.5. Compensation............................................................53
5.6. Taxes...................................................................54
5.7. Syndication Costs.......................................................55
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
6.1. Conditions of Initial Advance...........................................56
6.2. Conditions of Revolving Loans and Letter of Credit......................58
ARTICLE VII
Representations and Warranties
7.1. Organization and Authority..............................................60
7.2. Loan Documents..........................................................60
7.3. Solvency................................................................61
7.4. Subsidiaries and Stockholders...........................................61
7.5. Ownership Interests.....................................................61
7.6. Financial Condition.....................................................61
7.7. Title to Properties.....................................................62
7.8. Taxes...................................................................62
7.9. Other Agreements........................................................62
7.10. Litigation..............................................................63
7.11. Margin Stock............................................................63
7.12. Investment Company......................................................63
7.13. Patents, Etc............................................................63
7.14. No Untrue Statement.....................................................63
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
7.15. No Consents, Etc........................................................64
7.16. Employee Benefit Plans..................................................64
7.17. No Default..............................................................65
7.18. Environmental Laws......................................................65
7.19. Employment Matters......................................................65
7.20. RICO....................................................................66
7.21. Year 2000 Compliance....................................................66
ARTICLE VIII
Affirmative Covenants
8.1. Financial Reports, Etc..................................................67
8.2. Maintain Properties.....................................................68
8.3. Existence, Qualification, Etc...........................................69
8.4. Regulations and Taxes...................................................69
8.5. Insurance...............................................................69
8.6. True Books..............................................................69
8.7. Right of Inspection.....................................................69
8.8. Observe all Laws........................................................69
8.9. Governmental Licenses...................................................70
8.10. Covenants Extending to Other Persons....................................70
8.11. Officer's Knowledge of Default..........................................70
8.12. Suits or Other Proceedings..............................................70
8.13. Notice of Environmental Complaint or Condition..........................70
8.14. Environmental Compliance................................................70
8.15. Environmental Indemnification...........................................71
8.16. Further Assurances......................................................71
8.17. Employee Benefit Plans..................................................71
8.18. Continued Operations....................................................72
8.19. New Subsidiaries........................................................72
8.20. Year 2000 Compliance ..................................................74
8.21. Lease Receivables ....................................................74
8.22. Repayment of Loans and Investments......................................75
ARTICLE IX
Negative Covenants
9.1. Financial Covenants.....................................................76
9.2. Acquisitions............................................................76
9.3. Liens...................................................................77
9.4. Indebtedness............................................................78
9.5. Transfer of Assets......................................................78
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
9.6. Investments.............................................................79
9.7. Merger or Consolidation.................................................80
9.8. Restricted Payments.....................................................80
9.9. Transactions with Affiliates............................................80
9.10. Compliance with ERISA...................................................80
9.11. Fiscal Year.............................................................81
9.12. Dissolution, etc........................................................81
9.13. Limitations on Sales and Leasebacks.....................................81
9.14. Change in Control.......................................................82
9.15. Rate Hedging Obligations................................................82
9.16. Negative Pledge Clauses.................................................82
9.17. Compensation; Reimbursement of Expenses; Earnouts.......................82
9.18. Prepayments, Etc. of Indebtedness.......................................82
ARTICLE X
Events of Default and Acceleration
10.1. Events of Default.......................................................83
10.2. Agent to Act............................................................86
10.3. Cumulative Rights.......................................................86
10.4. No Waiver...............................................................86
10.5. Allocation of Proceeds..................................................86
ARTICLE XI
The Agent
11.1. Appointment, Powers, and Immunities.....................................88
11.2. Reliance by Agent.......................................................88
11.3. Defaults................................................................89
11.4. Rights as Lender........................................................89
11.5. Indemnification.........................................................89
11.6. Non-Reliance on Agent and Other Lenders.................................90
11.7. Resignation of Agent....................................................90
11.8. Sharing of Payments, etc................................................90
11.9. Fees....................................................................91
ARTICLE XII
Miscellaneous
12.1. Assignments and Participations..........................................92
12.2. Notices.................................................................93
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
12.3. Right of Set-off; Adjustments...........................................95
12.4. Survival................................................................95
12.5. Expenses................................................................96
12.6. Amendments and Waivers..................................................96
12.7. Counterparts............................................................96
12.8. Termination.............................................................97
12.9. Indemnification; Limitation of Liability................................97
12.10. Severability............................................................98
12.11. Entire Agreement........................................................98
12.12. Agreement Controls......................................................98
12.13. Usury Savings Clause....................................................98
12.14. GOVERNING LAW; WAIVER OF JURY TRIAL.....................................99
12.15. Payments...............................................................100
12.16. Confidentiality........................................................100
12.17. Intercreditor Agreement................................................101
EXHIBIT A Applicable Commitment Percentages........................A-1
EXHIBIT B Form of Assignment and Acceptance........................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized
Representative...........................................C-1
EXHIBIT D-1 Form of Borrowing Notice...............................D-1-1
EXHIBIT D-2 Form of Borrowing Notice--Swing Line Loans.............D-2-1
EXHIBIT E Form of Interest Rate Selection Notice...................E-1
EXHIBIT F-1 Form of Revolving Note.................................F-1-1
EXHIBIT F-2 Form of Swing Line Note................................F-2-1
EXHIBIT G Form of Opinion of Borrower's Counsel....................G-1
EXHIBIT H Compliance Certificate...................................H-1
EXHIBIT I Form of Guaranty Agreement...............................I-1
EXHIBIT J Form of Security Agreement...............................J-1
EXHIBIT K Form of Intercompany Note Pledge Agreement...............K-1
EXHIBIT L Form of Intercompany Note Subordination Agreement........L-1
EXHIBIT M Form of Pledge Agreement.................................M-1
EXHIBIT N Form of Intellectual Property Security Agreement.........N-1
EXHIBIT O Form of Asset Ceiling Certificate........................O-1
EXHIBIT P Form of LC Account Agreement.............................P-1
Schedule 4.8 Information Regarding Collateral.........................S-1
Schedule 7.4 Subsidiaries and Investments in Other Persons............S-2
Schedule 7.7 Liens....................................................S-3
Schedule 7.8 Tax Matters..............................................S-4
Schedule 7.10 Litigation...............................................S-5
Schedule 7.18 Environmental Matters....................................S-6
</TABLE>
v
<PAGE> 7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 10, 1998 (the "Agreement"),
is made by and among UNICAPITAL CORPORATION, a Delaware corporation having its
principal place of business in Miami, Florida (the "Borrower"), NATIONSBANK,
NATIONAL ASSOCIATION, a national banking association organized and existing
under the laws of the United States, in its capacity as a Lender
("NationsBank"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 12.1 (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"), and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association organized and
existing under the laws of the United States, in its capacity as agent for the
Lenders (in such capacity, and together with any successor agent appointed in
accordance with the terms of Section 11.7, the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available
to the Borrower a revolving credit facility of up to $300,000,000, the proceeds
of which are to be used for general corporate purposes including permitted
acquisitions and working capital as set forth in Section 2.12 hereof and which
shall include a letter of credit facility of up to $50,000,000 for the issuance
of standby and commercial letters of credit and a swing line sublimit of up to
$15,000,000; and
WHEREAS, the Lenders are willing to make such revolving credit and
letter of credit facilities available to the Borrower upon the terms and
conditions set forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby
agree as follows:
1
<PAGE> 8
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition of (i) a
controlling equity interest in another Person (including the
purchase of an option, warrant or convertible or similar type
security to acquire such a controlling interest at the time it
becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for,
or conversion of securities into, such equity interest, or (ii)
assets of another Person which constitute all or substantially all
of the assets of such Person or of a line or lines of business
conducted by such Person.
"Adjusted Consolidated EBITDA" means, with respect to
the Borrower and its Subsidiaries for any Applicable Period ending
on the date of computation thereof, the sum of, without
duplication, (i) Consolidated Net Income, adjusted to exclude
non-cash gains on sales of leases of equipment and of equipment,
and the non-cash portion of any Residual Realization, (ii) Adjusted
Consolidated Interest Expense, (iii) taxes on income, (iv)
amortization of intangible assets, (v) depreciation on assets not
subject to operating leases, and (vi) the amount of any credit loss
chargeable to Consolidated Net Income but not actually incurred
during the Applicable Period, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
provided, however, that with respect to a Permitted Acquisition
that is accounted for as a "purchase," for the four Four-Quarter
Periods ending next following the date of such Permitted
Acquisition, Adjusted Consolidated EBITDA shall include the results
of operations of the Person or assets so acquired, which amounts
shall be determined on a historical pro forma basis as if such
Permitted Acquisition had been consummated as a "pooling of
interests."
"Adjusted Consolidated Fixed Charge Ratio" means,
with respect to the Borrower and its Subsidiaries for any
Applicable Period ending on the date of computation thereof, the
ratio of (i) Adjusted Consolidated EBITDA plus Consolidated Lease
Payments for such period less (without duplication) Capital
Expenditures for such period less cash taxes, to (ii) Adjusted
Consolidated Fixed Charges for such period.
"Adjusted Consolidated Fixed Charges" means, with
respect to Borrower and its Subsidiaries for any Applicable Period
ending on the date of computation thereof, the sum of, without
duplication, (i) Adjusted Consolidated Interest Expense, (ii)
required principal payments on Recourse Indebtedness, (iii)
Consolidated Lease Payments for such period and (iv) the cash
portion of any earnouts paid during such period, all determined on
a consolidated basis in accordance with GAAP applied on a
Consistent Basis; provided, however, that with respect to a
Permitted Acquisition that is accounted for as a "purchase," for
the four Four-Quarter Periods ending next following the date of
such Permitted Acquisition, Adjusted Consolidated Fixed Charges
shall include the results of
2
<PAGE> 9
operations of the Person or assets so acquired, which amounts shall
be determined on a historical pro forma basis as if such Permitted
Acquisition had been consummated as a "pooling of interests."
"Adjusted Consolidated Indebtedness" means, with
respect to the Borrower and its Subsidiaries for any fiscal period
ending on the date of computation thereof, Consolidated
Indebtedness for such period, adjusted to exclude all Non-Recourse
Indebtedness.
"Adjusted Consolidated Interest Expense" means, with
respect to any period of computation thereof, the gross interest
expense of the Borrower and its Subsidiaries with respect to
Recourse Indebtedness, including without limitation (i) the current
amortized portion of debt discounts to the extent included in gross
interest expense, (ii) the current amortized portion of all fees
(including fees payable in respect of any Swap Agreement) payable
in connection with the incurrence of Recourse Indebtedness to the
extent included in gross interest expense and (iii) the portion of
any payments made in connection with Capital Leases allocable to
interest expense, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Adjusted Consolidated Net Worth" means, with respect
to the Borrower and its Subsidiaries on the date of computation
thereof, Consolidated Net Worth less the then-current net book
value of all assets acquired or created after the Closing Date
which would be treated as intangible assets, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Advance" means a borrowing under the Revolving
Credit Facility consisting of a Base Rate Loan or a Eurodollar Rate
Loan.
"Aircraft Facility" means the $300,000,000 revolving
credit facility made pursuant to the Aircraft Facility Credit
Agreement.
"Aircraft Facility Credit Agreement" means that
certain Aircraft Facility Credit Agreement of even date herewith by
and among NationsBank, as Agent and as Lender, each of the Lenders
and certain Special Purpose Subsidiaries.
"Aircraft Special Purpose Subsidiary" means any
Special Purpose Subsidiary which is at the time of determination a
borrower under the Aircraft Facility Credit Agreement.
"Aircraft Special Purpose Subsidiary Owner " means
any Person that owns an equity or beneficial interest in any
Aircraft Special Purpose Subsidiary.
3
<PAGE> 10
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by,
or is under common control with the Borrower; or (ii) which
beneficially owns or holds 10% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 10% or more of the equity interest) of the Borrower;
or 10% or more of any class of the outstanding voting stock (or in
the case of a Person which is not a corporation, 10% or more of the
equity interest) of which is beneficially owned or held by the
Borrower; provided, however, at the time the Borrower registers any
security issued by it pursuant to the Securities Act of 1933, as
amended, the figure "10%" used in this definition shall
automatically change to "5%" without further action. The term
"control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting stock, by
contract or otherwise.
"Applicable Commitment Percentage" means, with
respect to each Lender at any time, a fraction, the numerator of
which shall be such Lender's Revolving Credit Commitment and the
denominator of which shall be the Total Revolving Credit
Commitment, which Applicable Commitment Percentage for each Lender
as of the Closing Date is as set forth in Exhibit A; provided that
the Applicable Commitment Percentage of each Lender shall be
increased or decreased to reflect any assignments to or by such
Lender effected in accordance with Section 12.1.
"Applicable Lending Office" means, for each Lender
and for each Type of Loan, the "Lending Office" of such Lender (or
of an affiliate of such Lender) designated for such Type of Loan on
the signature pages hereof or such other office of such Lender (or
an affiliate of such Lender) as such Lender may from time to time
specify to the Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans
of such Type are to be made and maintained.
"Applicable Margin" means that percent per annum set
forth below, which shall be based upon the Consolidated Leverage
Ratio for the Applicable Period most recently ended as specified
below:
4
<PAGE> 11
<TABLE>
<CAPTION>
Applicable
Margin
------
Consolidated
Leverage Base Eurodollar
Ratio Rate Rate
------------ ---- ----------
<S> <C> <C>
Less than or equal to
1.00 to 1.00 .50% 1.50%
Less than or equal to
2.00 to 1.00 and
greater than 1.00 to 1.00 1.00% 2.00%
Greater than 2.00 to 1.00 1.50% 2.50%
(subject to the limitation
set forth in Section 9.1(b))
---------------
</TABLE>
The Applicable Margin shall be established at the end of each fiscal
quarter of the Borrower (each, a "Determination Date"). Any change in
the Applicable Margin following each Determination Date shall be
determined based upon the computations set forth in the certificate
furnished to the Agent pursuant to Section 8.1(a)(ii) and Section
8.1(b)(ii), subject to review and approval of such computations by the
Agent, and shall be effective commencing on the first Business Day
following the date such certificate is received until the first
Business Day following the date on which a new certificate is delivered
or is required to be delivered, whichever shall first occur (each, a
"Compliance Date"); provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
8.1, then the Applicable Margin shall be 1.50% for Base Rate Loans and
2.50% for Eurodollar Rate Loans until the appropriate certificate is so
delivered. Notwithstanding the foregoing, however, from the Closing
Date to the second Compliance Date following the Closing Date, the
Applicable Margin shall be no less than 1.00% for Base Rate Loans and
2.00% for Eurodollar Rate Loans.
"Applicable Period" means (i) for the fiscal quarter of the
Borrower and its Subsidiaries ending June 30, 1999 and each fiscal
quarter of the Borrower and its Subsidiaries thereafter, a Four-Quarter
Period, and (ii) for the fiscal quarters of the Borrower and its
Subsidiaries ending September 30, 1998, December 31, 1998, and March
31, 1999 the one, two and three fiscal quarter periods ending on such
dates. For purposes of determining the Consolidated Leverage Ratio and
the Adjusted Consolidated Fixed Charge Ratio for the one, two or three
fiscal quarter periods of the Borrower and its Subsidiaries ending
September 30, 1998, December 31, 1998 and March 31, 1999, Adjusted
Consolidated EBITDA and Adjusted Consolidated Fixed Charges shall be
determined by multiplying the Adjusted Consolidated EBITDA and Adjusted
Consolidated Fixed Charges (other than required principal payments) for
such periods by four, two and four-thirds, respectively. Commencing
with the fiscal quarter ending June 30, 1999 and thereafter, such
ratios shall be calculated for a Four-Quarter Period.
5
<PAGE> 12
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Leverage Ratio for
the Applicable Period most recently ended as specified below:
Consolidated Applicable
Leverage Unused
Ratio Fee
------------- ----------
Less than or equal to 1.00 to 1.00 .375%
Less than or equal to
2.00 to 1.00 and
greater than 1.00 to 1.00 .450%
Greater than 2.00 to 1.00 .500%
(subject to Section 9.1(b))
---------------
The Applicable Unused Fee shall be established at each Determination
Date. Any change in the Applicable Unused Fee following each
Determination Date shall be determined based upon the computations set
forth in the certificate furnished to the Agent pursuant to Section
8.1(a)(ii) and Section 8.1(b)(ii), subject to review and approval of
such computations by the Agent and shall be effective commencing on the
first Business Day following the date such certificate is received
until the first Business Day following the date on which a new
certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
8.1, then the Applicable Unused Fee shall be .500% until the
appropriate certificate is so delivered. Notwithstanding the foregoing,
however, from the Closing Date to the second Compliance Date following
the Closing Date, the Applicable Unused Fee shall be no less than
.450%.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Asset Ceiling" means, at any date of determination, 90% of
the book value of Unencumbered Assets plus $15,000,000, in each case
determined pursuant to the most recent certificate of the Borrower
prepared in accordance with Section 8.1(e) hereof.
"Asset Ceiling Certificate" means the certificate delivered by
the Borrower pursuant to Section 8.1(e) hereof, in the form of
Exhibit O.
"Asset Disposition" means any voluntary disposition, whether
by sale, lease or transfer, other than as permitted under Section 9.5
hereof, of (a) any of the assets, excluding cash and cash equivalents,
of the Borrower or its Subsidiaries, and (b) any of the capital
6
<PAGE> 13
stock, or securities or investments exchangeable, exercisable or
convertible for or into, or otherwise entitling the holder to receive
any of the capital stock, of any Subsidiary (other than a disposition
to a Guarantor).
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 12.1.
"Authorized Representative" means any of the President or any
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer or Treasurer of the Borrower, or any other
Person expressly designated by the Board of Directors of the Borrower
(or the appropriate committee thereof) as an Authorized Representative
of the Borrower, as set forth from time to time in a certificate in the
form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to
the sum of (a) the higher of (i) the Federal Funds Rate for such day
plus one-half of one percent (0.5%) and (ii) the Prime Rate for such
day plus (b) the Applicable Margin. Any change in the Base Rate due to
a change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds
Rate.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan or Swing
Line Loan made either to (i) satisfy Reimbursement Obligations arising
from a drawing under a Letter of Credit or (ii) pay NationsBank in
respect of Swing Line Outstandings.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrower's Account" means a demand deposit account number
3751028367 or any successor account with the Agent, which may be
maintained at one or more offices of the Agent or an agent of the
Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or a Swing Line Loan, in the forms of Exhibits D-1 and D-2,
respectively.
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York and Charlotte, North
Carolina.
7
<PAGE> 14
"Capital Expenditures" means, with respect to the Borrower and
its Subsidiaries, for any period the sum of (without duplication) (i)
all expenditures (whether paid in cash or accrued as liabilities) by
the Borrower or any Subsidiary during such period for items that would
be classified as "property, plant or equipment" or comparable items on
the consolidated balance sheet of the Borrower and its Subsidiaries,
including without limitation all transactional costs incurred in
connection with such expenditures provided the same have been
capitalized, excluding, however, the amount of any Capital Expenditures
paid for with proceeds of casualty insurance as evidenced in writing
and submitted to the Agent together with any compliance certificate
delivered pursuant to Section 8.1(a) or (b), and (ii) with respect to
any Capital Lease entered into by the Borrower or its Subsidiaries
during such period, the present value of the lease payments due under
such Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such lease (or in
the absence of a stated interest rate, that rate used in the
preparation of the financial statements described in Section 8.1(a)),
all the foregoing in accordance with GAAP applied on a Consistent
Basis.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) other than those
Persons set forth on Schedule 1.1 who own on the Closing Date
more than 20% of the Voting Stock either (A) becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act ), directly or indirectly, of Voting Stock of the Borrower
(or securities convertible into or exchangeable for such
Voting Stock) representing 20% or more of the combined voting
power of all Voting Stock of the Borrower (on a fully diluted
basis) or (B) otherwise has the ability, directly or
indirectly, to elect a majority of the board of directors of
the Borrower;
(ii) during any period of up to 12 consecutive
months, commencing on the Closing Date, individuals who at the
beginning of such 12-month period were directors of the
Borrower shall cease for any reason (other than the death,
disability or retirement of an officer of the Borrower that is
serving as a director at such time so long as another officer
of the Borrower replaces such Person as a director) to
constitute a majority of the board of directors of the
Borrower; or
(iii) any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall
have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition
of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of the
Borrower.
8
<PAGE> 15
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Collateral" means, collectively, all property of the
Borrower, any Subsidiary or any other Person in which the Agent or any
Lender is granted a Lien as security for all or any portion of the
Obligations under any Security Instrument.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements referred to in Section 7.6(a).
"Consolidated Indebtedness" means all Indebtedness of the
Borrower and its Subsidiaries, all determined on a consolidated basis.
"Consolidated Lease Payments" means the gross amount of all
lease or rental payments, whether or not characterized as rent, of the
Borrower and its Subsidiaries, excluding payments in respect of Capital
Leases constituting Indebtedness, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) the sum of (without duplication)
Adjusted Consolidated Indebtedness (determined as at such date) to (ii)
Adjusted Consolidated EBITDA (for the Applicable Period ending on (or
most recently ended prior to) such date).
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income, and (ii) dividends and
distributions made in the ordinary course of their businesses by
Persons in which investment is permitted pursuant to this Agreement and
not related to an extraordinary event), less all operating and
non-operating expenses of the Borrower and its Subsidiaries including
taxes on income, all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis; but excluding (for all
purposes other than compliance with Section 9.1(a) hereof) as income:
(i) net gains on the sale, conversion or other disposition of capital
assets (for purposes of this clause (i), capital assets shall not
include sales of leases or portfolios of leases, related equipment,
aircraft and engines, and other assets purchased and sold in the
ordinary course of business), (ii) net gains on the acquisition,
retirement, sale or other disposition of capital stock and other
securities of the Borrower or its Subsidiaries, (iii) net gains on the
collection of proceeds of life insurance policies, (iv) any write-up of
any asset, and (v) any other net gain or credit of an extraordinary
nature as determined in accordance with GAAP applied on a Consistent
Basis; provided, however, that for purposes of determining compliance
with the
9
<PAGE> 16
provisions of Section 9.1(a) hereof, there shall be disregarded any
increase in Consolidated Net Income upon giving effect to any
Acquisition which results from the treatment of such Acquisition as a
"pooling of interests" although such Acquisition was a "purchase"
transaction for GAAP purposes.
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, the sum of the following in respect
of the Borrower and its Subsidiaries (determined on a consolidated
basis and excluding any upward adjustment after the Closing Date due to
revaluation of assets): (i) the amount of issued and outstanding share
capital, plus (ii) the amount of additional paid-in capital and
retained earnings (or, in the case of a deficit, minus the amount of
such deficit), plus (iii) the amount of any foreign currency
translation adjustment (if positive, or, if negative, minus the amount
of such translation adjustment), minus (iv) the amount of any treasury
stock, all as determined in accordance with GAAP applied on a
Consistent Basis.
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring thereof,
would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied on
a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, Letters of Credit and any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness,
dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including
obligations of such Person however incurred:
(1) to purchase such Indebtedness or other obligation
or any property or assets constituting security therefor;
(2) to advance or supply funds in any manner (i) for
the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(3) to grant or convey any lien, security interest,
pledge, charge or other encumbrance on any property or assets
of such Person to secure payment of such Indebtedness or other
obligation;
(4) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(5) otherwise to assure the owner of the Indebtedness
or such obligation of the primary obligor against loss in
respect thereof.
10
<PAGE> 17
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
of one Type as a Eurodollar Rate Loan of the same Type from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a
conversion pursuant to Section 2.8 or Article III of one Type of Loan
into another Type of Loan.
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of Borrower or any
Subsidiary to be transferred in connection therewith, (ii) the amount
of any cash and fair market value of other property (excluding property
described in clause (i) and the unpaid principal amount of any debt
instrument) given as consideration, (iii) the amount (determined by
using the face amount or the amount payable at maturity, whichever is
greater) of any Indebtedness incurred, assumed or acquired by the
Borrower or any Subsidiary in connection with such Acquisition, (iv)
all additional purchase price amounts in the form of earnouts and other
contingent obligations that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with
GAAP, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on financial statements
of the Borrower and its Subsidiaries in accordance with GAAP, and other
affiliated contracts in connection with such Acquisition, (vi) the
aggregate fair market value of all other consideration given by the
Borrower or any Subsidiary in connection with such Acquisition, and
(vii) out of pocket transaction costs for the services and expenses of
attorneys, accountants and other consultants incurred in effecting such
transaction, and other similar transaction costs so incurred. For
purposes of determining the Cost of Acquisition for any transaction,
(A) the capital stock of the Borrower shall be valued (I) in the case
of capital stock that is then designated as a national market system
security by the National Association of Securities Dealers, Inc.
("NASDAQ") or is listed on a national securities exchange, the average
closing price of the Borrower's capital stock as quoted by the New York
Stock Exchange for the ten trading days ending on and including the
third trading day prior to the closing of such Acquisition, and (II)
with respect to shares that are not freely tradeable, as determined by
a committee composed of the disinterested members of the Board of
Directors of the Borrower and, if requested by the Agent, determined to
be a reasonable valuation by the independent public accountants
referred to in Section 8.1(a), (B) the capital stock of any Subsidiary
shall be valued as determined by a committee composed of the
disinterested members of the Board of Directors of such Subsidiary and,
if requested by the Agent, determined to be a reasonable valuation by
the independent public accountants referred to in Section 8.1(a), and
(C) with respect to any Acquisition accomplished pursuant to the
exercise of options or warrants or the conversion of securities, the
Cost of Acquisition shall include both the cost of acquiring such
option, warrant or convertible security as well as the cost of exercise
or conversion.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder.
11
<PAGE> 18
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan,
and thereafter at a rate of interest per annum which shall be two
percent (2%) above the Base Rate, (ii) with respect to Base Rate Loans,
and Reimbursement Obligations, at a rate of interest per annum which
shall be two percent (2%) above the Base Rate and (iii) in any case,
the maximum rate permitted by applicable law, if lower.
"Defaulted Receivable" means, a lease receivable arising under
any Equipment Lease: (i) as to which any payment remains unpaid for 180
consecutive days or more from the original due date for such lease
receivable; (ii) as to which an Event of Bankruptcy has occurred and is
continuing with respect to the obligor thereof; (iii) which has been
identified by any of the parties to either the Lease Facility Credit
Agreement or the Transfer and Administration Agreement as
uncollectible; or (iv) which, consistent with the credit and collection
policy of the holder thereof, should be written off as uncollectible.
"Determination Date" has the meaning set forth in the
definition of Applicable Margin.
"Direct Foreign Subsidiary" means any Foreign Subsidiary that
is a direct Subsidiary of the Borrower or any Domestic Subsidiary.
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Domestic Subsidiary" means a Subsidiary which is organized
under the laws of one of the states or territories comprising the
United States of America.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 12.1, the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower within
five Business Days after notice of such proposed assignment has been
provided by the assigning Lender to the Borrower; provided, however,
that neither the Borrower nor an affiliate of the Borrower shall
qualify as an Eligible Assignee.
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Agent:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 92 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and Moody's;
12
<PAGE> 19
(c) interest bearing demand or time deposits issued
by any Lender or certificates of deposit maturing within one
year from the date of issuance thereof and issued by a bank or
trust company organized under the laws of the United States or
of any state thereof having capital surplus and undivided
profits aggregating at least $400,000,000 and being rated "A-"
or better by S&P or "A-3" or better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (f) above, the
shares of which mutual funds are at all times rated "AAA" by
S&P;
(h) tax-exempt or taxable adjustable rate preferred
stock issued by a Person having a rating of its long term
unsecured debt of "A-" or better by S&P or "A-3" or better by
Moody's; and
(i) asset-backed remarketed certificates of
participation representing a fractional undivided interest in
the assets of a trust, which certificates are rated at least
"A-1" by S&P and "P-1" by Moody's.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning, any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, as amended; the Resource Conservation and Recovery Act, as
amended; the Toxic Substances Control Act, as amended; the Clean Air
Act, as amended; the Clean Water Act, as amended; together with all
regulations promulgated thereunder, and any other "Superfund" or
"Superlien" law.
"Equipment Lease" means any lease, installment sale or secured
financing of equipment or other personal property by the Borrower or
any Subsidiary, as lessor, seller or lender, to any Person, whether
such lease, sale or financing is originated by the Borrower or any
Subsidiary, or acquired by the Borrower or any Subsidiary.
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"Equity Offering" means a public or private offering of equity
securities (including, without limitation, any security or investment
exchangeable, exercisable or convertible for or into, or otherwise
entitling the holder to receive, equity securities) of the Borrower or
any Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code.
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
---------------------------
Rate 1- Reserve Requirement Margin
"Event of Bankruptcy" means, with respect to any Person: (i)
that such Person (a) shall generally not pay its debts as such debts
become due or (b) shall admit in writing its inability to pay its debts
generally or (c) shall make a general assignment for the benefit of
creditors; (ii) any proceeding shall be instituted by or against such
Person (and, if instituted against such Person, shall not have been
dismissed within 60 days of its being instituted) seeking to adjudicate
it as bankruptcy or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee or
other similar official for it or any substantial part of its property;
or (iii) if such Person is a corporation, such Person shall take any
corporate action to authorize any of the actions set forth in clauses
(i) or (ii).
"Event of Default" means any of the occurrences set forth as
such in Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Excluded Property" means, collectively, any property of the
Borrower or its Subsidiaries identified as Excluded Property in any
Security Instrument.
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<PAGE> 21
"Excluded Residual Interest" means the Residual Interest in
any Equipment or Equipment Lease which is (i) owned by a Special
Purpose Subsidiary while participating in the Aircraft Facility, or
(ii) an asset securing any Indebtedness under this Agreement.
"Facility Termination Date" means such date as all of the
following shall have occurred: (a) the Borrower shall have permanently
terminated the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings and Letter of Credit Outstandings,
together with all accrued and unpaid interest thereon, except for such
issued and undrawn Letters of Credit as have been fully cash
collateralized in a manner consistent with the terms of Section
10.1(B), (b) all Swap Agreements that include any Lender shall have
been terminated, expired or cash collateralized (unless such Lender
shall otherwise consent), (c) all Revolving Credit Commitments and
Letter of Credit Commitments shall have terminated or expired and (d)
the Borrower shall have fully, finally and irrevocably paid and
satisfied in full all Obligations (other than Obligations consisting of
continuing indemnities and other contingent Obligations of the Borrower
or any Guarantor that may be owing to the Lenders pursuant to the Loan
Documents and expressly survive termination of this Agreement);
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower and its Subsidiaries commencing on January 1 of each calendar
year and ending on December 31 of each calendar year.
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan.
"Foreign Subsidiary" means any Subsidiary organized under the
laws of any jurisdiction other than one of the states comprising the
United States of America, any territory thereof or the District of
Columbia.
"Founding Companies" means, collectively, American Capital
Resources, Inc.; Boulder Capital Group, Inc.; CLA Holdings, Inc.;
Cauff, Lippman Aviation, Inc.; Jacom Computer Services, Inc.; K.L.C.,
Inc.; Matrix Funding Corporation; MFA Acquisition Corp.; Municipal
Capital Markets Group, Inc.; The NSJ Group, Inc.; PFSC Acquisition
Corp.; PFSC
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<PAGE> 22
Limited Acquisition Corp.; Portfolio Financial Servicing Company, L.P.;
Varilease Corporation; and The Walden Asset Group, Inc.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board, the American Institute of Certified Public Accountants
or which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report.
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guarantors" means, at any date, the Founding Companies, any
Subsidiary that is not a Special Purpose Subsidiary (other than an
Aircraft Special Purpose Subsidiary or an Aircraft Special Purpose
Subsidiary Owner) and all Aircraft Special Purpose Subsidiaries and
Aircraft Special Purpose Subsidiary Owners.
"Guaranty" means each Guaranty Agreement between one or more
Guarantors and the Agent for the benefit of the Lenders, delivered as
of the Closing Date and otherwise pursuant to Section 8.19, as the same
may be amended, modified or supplemented.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials and lead), the generation, handling,
storage, transportation, disposal, treatment, release, discharge or
emission of which is subject to any Environmental Law.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property or arising under Rate
Hedging Obligations, all indebtedness secured by any Lien on the
property of such Person whether or not such indebtedness is assumed,
all liability of such Person by way of endorsements (other than for
collection or deposit in the ordinary course of business), all
Contingent Obligations (but excluding for purposes of determining
compliance with Section 9.1 hereof, Obligations of the Borrower arising
under the Aircraft
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<PAGE> 23
Facility Credit Agreement) and any other item which in accordance with
GAAP is required to be classified as a liability on a balance sheet;
but excluding all accounts payable in the ordinary course of business
so long as payment therefor is due within one year; provided that in no
event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits or reserves or deferred compensation obligations.
"Indebtedness for Money Borrowed" means with respect to any
Person, without duplication, all indebtedness in respect of money
borrowed included on such Person's balance sheet in accordance with
GAAP, including without limitation all of that portion of obligations
with respect to Capital Leases which in accordance with GAAP is
required to be classified as a liability on a balance sheet and the
deferred purchase price of any property or asset, evidenced by a
promissory note, bond, debenture or similar written obligation for the
payment of money (including conditional sales or similar title
retention agreements), other than trade payables incurred in the
ordinary course of business.
"Intellectual Property Assignments" means those certain
Assignments of Patents, Trademarks, Copyrights and Licenses in the form
attached as Exhibit A to Exhibit N hereto, to be filed upon
acceleration of the Obligations hereunder, as from time to time
amended, supplemented or restated.
"Intellectual Property Security Agreement" means collectively
(or individually as the context may indicate), (i) the Intellectual
Property Security Agreement dated as of the date hereof by the Loan
Parties to the Agent, and (ii) any additional Intellectual Property
Security Agreement delivered to the Agent pursuant to Section 8.19, as
hereafter modified, amended or supplemented from time to time.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the rate per
annum (rounded upwards, if necessary), to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Interbank Offered
Rate" shall mean, with respect to any Eurodollar Rate Loan for the
Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period, provided, however; if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest 1/100 of 1%).
"Intercompany Advance" means a loan or advance heretofore or
hereafter made by the Borrower or a Guarantor to the Borrower or a
Guarantor which is evidenced by an Intercompany Note in which the Agent
has a valid, duly perfected, first priority Lien under
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<PAGE> 24
the Intercompany Note Pledge Agreement, and the repayment of which is
subordinated to the rights of the Agent and the Lenders under the Loan
Documents in accordance with the provisions set forth in the
Intercompany Notes or in the Intercompany Note Subordination Agreement.
"Intercompany Notes" means, collectively, (i) the promissory
notes heretofore issued and described on Schedule A to the Intercompany
Note Pledge Agreement, (ii) promissory notes hereafter issued and
outstanding from time to time evidencing the Intercompany Advances and
(iii) promissory notes hereafter issued and outstanding from time to
time in accordance with the requirements of Section 9.6(g), 9.6(h) or
9.6(j).
"Intercompany Note Holder" means, at any date, the Borrower
and any Guarantor who has extended any Intercompany Advance that
remains outstanding at such date.
"Intercompany Note Pledge Agreement" means, collectively (or
individually as the context may indicate) (i) that certain Intercompany
Note Pledge Agreement of even date herewith among the Borrower, certain
Subsidiaries and the Agent, substantially in the form of Exhibit K, and
(ii) any other Intercompany Note Pledge Agreement in the form of
Exhibit K delivered to the Agent pursuant to Section 8.19, pursuant to
which the Agent is granted a Lien in the Intercompany Notes held by
such Intercompany Note Holder, in each case as the same may be amended,
supplemented or restated from time to time.
"Intercompany Note Subordination Agreement"means the
Subordination Agreement dated as of the date hereof between the
Borrower, certain Subsidiaries of the Borrower and the Agent in the
form of Exhibit L, as hereafter modified, amended or supplemented from
time to time.
"Intercompany Note Subordination Supplement" means any
supplement to the Intercompany Note Subordination Agreement in the form
of Exhibit A to Exhibit L hereto, with appropriate revisions as to the
identity of the Subordinated Creditor, delivered to the Agent pursuant
to Section 8.19, Article IV or any other provision of this Agreement,
as modified, amended or supplemented from time to time.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of June 10, 1998 among the Agent, for itself and on
behalf of the Lenders, and NationsBank as agent for itself and on
behalf of the "lenders" (as defined in the Aircraft Facility Credit
Agreement).
"Interest Period" means, for each Eurodollar Rate Loan, a
period commencing on the date such Eurodollar Rate Loan is made or
Converted and ending, at the Borrower's option, on the date one week
(to the extent reasonably available to each of the Lenders) or one,
two, three or six months thereafter as notified to the Agent by the
Authorized Representative three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
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<PAGE> 25
(i) if the Authorized Representative fails to notify
the Agent of the length of an Interest Period three (3)
Business Days prior to the first day of such Interest Period,
the Eurodollar Rate Loan for which such Interest Period was to
be determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate Loan
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding Business Day);
(iii) any Interest Period (other than an Interest
Period of one week) which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month;
(iv) no Interest Period shall extend past the Stated
Termination Date; and
(v) there shall not be more than ten (10) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
the form of Exhibit E.
"IPSA Supplement" means any supplement to the Intellectual
Property Security Agreement in the form of Exhibit B to Exhibit N, with
appropriate revisions as to the identity of the grantor, as amended,
modified or supplemented from time to time.
"Issuing Bank" means NationsBank as issuer of Letters of
Credit under Article III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Issuing Bank, in the
form of Exhibit P, as amended, modified or supplemented from time to
time.
"Lease Facility Credit Agreement" means that certain Loan and
Security Agreement entered into or to be entered into by and among
NationsBank, as agent, each of the "Bank Investors" from time to time
party thereto, Kitty Hawk Funding Corporation and Portfolio Financial
Servicing Company, as "Master Servicer."
"Lease Receivable Financing Facility" means the lease
receivable financing facility made pursuant to the Lease Facility
Credit Agreement.
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<PAGE> 26
"Lease Receivable Purchase Facility" means the lease
receivable purchase facility made pursuant to the Transfer and
Administration Agreement.
"Letter of Credit" means a standby or commercial letter of
credit issued by the Issuing Bank pursuant to Article III hereof for
the account of the Borrower in favor of a Person advancing credit or
securing an obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III hereof providing for the issuance by the Issuing Bank for
the account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding the Total Letter of Credit
Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount available to be drawn under all
Letters of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Loan" or "Loans" means any borrowing pursuant to an Advance
under the Revolving Credit Facility and includes Swing Line Loans, as
the context may require.
"Loan Documents" means this Agreement, the Notes, the Security
Instruments, the Guaranty, the LC Account Agreement, the Applications
and Agreements for Letter of Credit, and all other instruments and
documents heretofore or hereafter executed or delivered to or in favor
of any Lender or the Agent in connection with the Loans made and
transactions contemplated under this Agreement, as the same may be
amended, supplemented or replaced from the time to time.
"Loan Parties" means the Borrower and each Guarantor.
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<PAGE> 27
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, prospects, operations or condition,
financial or otherwise, of the Borrower and its Subsidiaries, taken as
a whole, (ii) the ability of any of the Loan Parties to pay or perform
its respective obligations, liabilities and indebtedness under the Loan
Documents as such payment or performance becomes due in accordance with
the terms thereof, or (iii) the rights, powers and remedies of the
Agent or any Lender under any Loan Document or the validity, legality
or enforceability thereof.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated in the
highest investment rating category by both S&P and Moody's.
"NationsBank" means NationsBank, National Association and its
successors.
"Net Proceeds" (a) from any Equity Offering means cash
payments received by the Borrower therefrom as and when received, net
of all legal, accounting, banking and underwriting fees and expenses,
commissions, discounts and other issuance expenses incurred in
connection therewith and all taxes required to be paid or accrued as a
consequence of such issuance; and (b) from any Asset Disposition means
cash payments received by the Borrower or a Subsidiary therefrom
(including any cash payments received pursuant to any note or other
debt security received in connection with any Asset Disposition) as and
when received, net of (i) all legal fees and expenses and other fees
and expenses paid to third parties and incurred in connection
therewith, (ii) all taxes required to be paid or accrued as a
consequence of such sale, (iii) all amounts applied to repayment of
Indebtedness (other than the Obligations) secured by a Lien on the
asset or property disposed and (iv) all costs incurred to sell,
transfer or dispose of an asset at or about the time such asset is
sold, transferred or disposed of.
"NMS" means NationsBanc Montgomery Securities LLC and its
successors.
"Non-Aircraft Special Purpose Subsidiary" means a Special
Purpose Subsidiary that is not an Aircraft Special Purpose Subsidiary
or an Aircraft Special Purpose Subsidiary Owner.
"Non-Recourse Indebtedness" means Indebtedness arising under
the Lease Receivable Purchase Facility and Indebtedness that is not
Recourse Indebtedness as to which recourse is limited to specific
assets which have been pledged to secure such Non-Recourse
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<PAGE> 28
Indebtedness; provided that to the extent any Indebtedness is partially
Recourse Indebtedness (as set forth in the definition of "Recourse
Indebtedness"), this definition shall only include that portion of such
Indebtedness that is not Recourse Indebtedness.
"Notes" means, collectively, the promissory notes of the
Borrower evidencing Revolving Loans executed and delivered to the
Lenders substantially in the form of Exhibit F-1 and evidencing Swing
Line Loans executed and delivered to NationsBank substantially in the
form of Exhibit F-2.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, (iii)
all liabilities of Borrower to any Lender which arise under a Swap
Agreement unless otherwise agreed to by such Lender, and (iv) the
payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lenders, the Agent or NMS
hereunder, under any one or more of the other Loan Documents or with
respect to the Loans.
"Operating Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the bylaws, operating agreement, partnership
agreement, limited partnership agreement or other applicable documents
relating to the operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, any corporate, organizational or partnership
action (including any required shareholder, member or partner action),
or other similar official action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any
corporation, limited liability company, partnership, limited
partnership, limited liability partnership or other legally authorized
incorporated or unincorporated entity, the articles of incorporation,
certificate of incorporation, articles of organization, certificate of
limited partnership or other applicable organizational or charter
documents relating to the creation of such entity.
"Outstandings" means, collectively, at any date, the Letter of
Credit Outstandings, Swing Line Outstandings, and Revolving Credit
Outstandings on such date.
"Participation" means, (i) with respect to any Lender (other
than the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof and (ii) with
respect to any Lender (other than NationsBank) and a Swing Line Loan,
the extension of credit represented by the participation of such Lender
hereunder in the liability of NationsBank in respect of a Swing Line
Loan made by NationsBank in accordance with the terms hereof.
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<PAGE> 29
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Permitted Acquisition" means an Acquisition where (i) the
Person to be (or whose assets are to be) acquired does not oppose such
Acquisition and the line or lines of business of the Person to be
acquired are substantially the same as one or more line or lines of
business conducted by the Borrower and its Subsidiaries, (ii) no
Default or Event of Default shall have occurred and be continuing
either immediately prior to or immediately after giving effect to such
Acquisition and the Borrower shall have furnished to the Agent (A) the
financial statements for the twelve (12) months ended as of the end of
the most recently completed Fiscal Year of the Person to be acquired
(or whose assets are to be acquired) and an interim financial statement
for such Person for the period since such fiscal year end, provided
such interim period shall cover, at a minimum, the period from the
prior fiscal year end through the month end no less than 60 days prior
to the signing of the letter of intent with such Person, and (B) a
certificate in the Form of Exhibit H prepared on a historical pro forma
basis giving effect to such Acquisition, which certificate shall
demonstrate that no Default or Event of Default would have existed as
of the most recently ended fiscal quarter of the Borrower for which
financial statements are required to be delivered pursuant to either
Section 8.1(a) or (b) had the Acquisition been completed by the end of
the such quarter, provided that to the extent the interim statement of
such Person is for a period of less than four fiscal quarters, Borrower
shall create a pro forma twelve month income statement for the Person
to be acquired by annualizing the results of operations of the Person
being acquired (or whose assets are to be acquired) for the period for
which interim financial statements are available, (iii) the Person
acquired shall be a wholly-owned Subsidiary, or be merged into the
Borrower or a wholly-owned Subsidiary, immediately upon consummation of
the Acquisition (or if assets are being acquired, the acquiror shall be
the Borrower or a wholly-owned Subsidiary), (iv) either (A) the Person
acquired shall become a Guarantor and shall satisfy all requirements of
a Guarantor under Section 8.19, or (B) the Person acquired shall be a
Qualified Special Purpose Subsidiary or Special Purpose Subsidiary that
is not an Aircraft Special Purpose Subsidiary and such Subsidiary shall
be a wholly-owned Subsidiary of a Person that shall satisfy all
requirements of a Guarantor under Section 8.19, and (v) either (A) the
cash portion of the Cost of Acquisition is equal to or less than 10% of
Consolidated Net Worth, or (B) the Cost of Acquisition is equal to or
less than 20% of Consolidated Net Worth;
"Permitted Liens" means collectively each of the Liens set
forth in Sections 9.3(a)-(h), inclusive.
"Permitted Receivables Sales Transaction" means the Lease
Receivable Purchase Facility and other sales and assignments of
Equipment Leases and underlying equipment by
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<PAGE> 30
the Borrower or any Subsidiary in the ordinary course of business to
the extent treated as sales in accordance with GAAP and which
transactions shall either (i) be on such terms and subject to such
terms and conditions as shall be reasonably acceptable to the Agent or
(ii) be at an advance rate greater than or equal to 85% of the net
present value of the portion of the Equipment Lease being sold or
assigned; provided, however, that to the extent any portion or
component of such transaction is treated as indebtedness in accordance
with GAAP and such indebtedness constitutes Non-Recourse Indebtedness,
such portion of the transaction shall be deemed to be a Permitted
Receivables Secutitization.
"Permitted Receivables Securitization" means the Lease
Receivable Finance Facility and other limited recourse sales, transfers
and assignments of Equipment Leases and underlying equipment by the
Borrower or any Subsidiary to one or more Special Purpose Subsidiaries
or other parties, the proceeds of which shall be made available to the
Borrower or such Subsidiary either (i) in such amounts and on such
terms and conditions as shall be reasonably acceptable to the Agent or
(ii) at an advance rate greater than or equal to 85% of the net present
value of the portion of the Equipment Lease being sold, assigned or
transferred.
"Person" means an individual, partnership, corporation,
limited liability company, limited liability partnership, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
"Pledge Agreement" means, collectively (or individually as the
context may indicate), (i) that certain Pledge Agreement dated as of
the date hereof substantially in the form of Exhibit M among the
Borrower, certain Subsidiaries of the Borrower and the Agent for the
benefit of the Agent and the Lenders, (ii) any additional Pledge
Agreement delivered to the Agent pursuant to Section 8.19, and (iii)
any Pledge Agreement Supplement delivered to the Agent, all as
hereafter amended, supplemented or replaced from time to time.
"Pledge Agreement Supplement" means a supplement to the Pledge
Agreement substantially in the form of Exhibit A to Exhibit M, with
appropriate revisions as to the identity of the Pledgor.
"Pledged Interests" shall have the meaning therefor provided
in the Pledge Agreement.
"Pledged Stock" has the meaning given to such term in the
Pledge Agreement.
"Pre-Refunded Municipal Obligations" means obligations of any
state of the United States of America or of any municipal corporation
or other public body organized under the laws of any such state which
are rated, based on the escrow, in the highest investment rating
category by both S&P and Moody's and which have been irrevocably called
for redemption and advance refunded through the deposit in escrow of
Government Securities or other debt securities which are (i) not
callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest
on such obligations as the same becomes due and (iii) in a principal
amount and bear such rate or rates of interest
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as shall be sufficient to pay in full all principal of, interest, and
premium, if any, on such obligations as the same becomes due as
verified by a nationally recognized firm of certified public
accountants.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Office" means the principal office of NationsBank,
presently located at Independence Center, 15th Floor, NC1 001-15-04,
Charlotte, North Carolina 28255, Attention: Agency Services, or such
other office and address as the Agent may from time to time designate.
"Pro Forma Historical Statements" means (i) unaudited pro
forma (x) combined balance sheet and (y) combined statement of
operations of the Borrower and the Founding Companies, (ii) the balance
sheet of the Borrower at December 31, 1997, and (iii) financial
statements of the Founding Companies, all as set forth in the
Registration Statement.
"Qualified Special Purpose Subsidiary" means any Non-Aircraft
Special Purpose Subsidiary (i) that is a wholly-owned Subsidiary of a
Guarantor, all of which Guarantor's stock has been pledged to the
Agent, (ii) that has as its only assets aircraft and aircraft engines,
(iii) that has no Indebtedness other than Indebtedness incurred in
financing the acquisition of assets permitted in clause (ii) hereof,
(iv) that has purposes restricted by its Organizational Documents to
the ownership, operation and financing of the assets permitted in
clause (ii) hereof, and (v) all of the ownership interests of which
either (a) have been pledged to the Agent by the owner of such
interests to secure such owner's obligations under its Guaranty, or (b)
are not permitted to be pledged by the lender financing the acquisition
of the assets permitted in clause (ii) hereof.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Recourse Indebtedness" means Indebtedness of the Borrower or
a Subsidiary the source of payment of which is not wholly limited to
the proceeds realized by the holder of such Indebtedness from the sale
or disposition of the assets of the obligor of such Indebtedness
pledged to secure such Indebtedness, but for which the obligor may have
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<PAGE> 32
recourse to the Borrower or a Guarantor; provided, however, that in the
case of Indebtedness for which the source of payment is partially
limited to the proceeds realized by the holder of such Indebtedness
from the sale or disposition of the assets of the obligor, this term
shall only include that portion of such Indebtedness that is not so
limited, and the remaining portion of such Indebtedness so limited
shall be "Non-Recourse Indebtedness" as defined above.
"Registration Statement" means the Borrower's Registration
Statement on Form S-1 Registration No. 333-46603, as filed with the
Securities and Exchange Commission on February 20, 1998, as amended,
including all documents incorporated therein by reference.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof or compliance by any
Lender with any request or directive after the Closing Date regarding
capital adequacy, including those relating to "highly leveraged
transactions," whether or not having the force of law, and whether or
not failure to comply therewith would be unlawful and whether or not
published or proposed prior to the date hereof.
"Reimbursement Obligation" shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 3.2) for amounts theretofore
paid by the Issuing Bank pursuant to a drawing under such Letter of
Credit.
"Related Acquisitions" means the acquisition by the Borrower
of the Founding Companies in accordance with the terms of the Related
Acquisition Agreements, and further described in the Registration
Statement.
"Related Acquisition Agreements" means, collectively, those
merger agreements by and among the Borrower, the Founding Companies and
their stockholders and partners, together with all schedules, annexes
and exhibits thereto, as any of the same may be amended or
supplemented.
"Related Acquisition Transaction Documents" means the Related
Acquisition Agreements and each document, agreement, instrument,
opinion or certificate incorporated therein or delivered in connection
therewith, including in each case all annexes, schedules and exhibits
thereto, as any of the same may be amended or supplemented.
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"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations are rated
either "A" by S&P or "A-2" by Moody's, or whose commercial paper is
rated either "A-1" by S&P or "P-1" by Moody's.
"Required Lenders" means, (i) as of any date on which there is
only one Lender, that Lender; and (ii) as of any date on which there is
more than one Lender, Lenders on such date having Credit Exposures (as
defined below) aggregating more than 66.67% of the aggregate Credit
Exposures of all Lenders on such date, but in no event fewer than two
Lenders. For purposes of the preceding sentence, the amount of the
"Credit Exposure" of each Lender shall be equal at all times (a) other
than following the occurrence and during the continuance of an Event of
Default, to its Revolving Credit Commitment, and (b) following the
occurrence and during the continuance of an Event of Default, to the
sum of (i) the amount of such Lender's Applicable Commitment Percentage
of Revolving Credit Outstandings plus (ii) the amount of such Lender's
Applicable Commitment Percentage of Letter of Credit Outstandings plus
(iii) the amount of such Lender's Applicable Commitment Percentage of
Swing Line Loans; provided that, for the purpose of this definition
only, (A) if any Lender shall have failed to fund its Applicable
Commitment Percentage of any Advance, the Revolving Credit Commitment,
as applicable, of such Lender shall be deemed reduced by the amount it
so failed to fund for so long as such failure shall continue and such
Lender's Credit Exposure attributable to such failure shall be deemed
held by any Lender making more than its Applicable Commitment
Percentage of such Advance to the extent it covers such failure, (B) if
any Lender shall have failed to pay to the Issuing Bank upon demand its
Applicable Commitment Percentage of any drawing under any Letter of
Credit resulting in an outstanding Reimbursement Obligation, such
Lender's Credit Exposure attributable to such Letter of Credit
Outstandings shall be deemed to be held by Issuing Bank and (C) if any
Lender shall have failed to pay to NationsBank its Applicable
Commitment Percentage of any Swing Line Loan, such Lender's Credit
Exposure attributable to all Swing Line Outstandings shall be deemed to
be held by NationsBank for purposes of this definition.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Residual Interest" means, with respect to any Equipment or
Equipment Lease any interest, whether by way of a beneficial interest
in a trust, residual interest in leased equipment, a residual
certificate or otherwise.
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"Residual Realization" means, with respect to the disposition
of any Residual Interest, the net proceeds received by the Borrower or
any Subsidiary upon such disposition.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower or a Subsidiary) now or
hereafter outstanding, except a dividend payable solely in shares of a
class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class
of stock of Borrower or any of its Subsidiaries (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding; (c) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares
of any class of stock of Borrower or any of its Subsidiaries now or
hereafter outstanding; and (d) any issuance and sale of capital stock
of any Subsidiary of the Borrower (or any option, warrant or right to
acquire such stock) other than to the Borrower.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Loans to the Borrower up
to an aggregate principal amount at any one time outstanding equal to
such Lender's Applicable Commitment Percentage of the Total Revolving
Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Revolving Loans to the Borrower by the
Lenders in the aggregate principal amount of the Total Revolving Credit
Commitment less all Letter of Credit Outstandings and Swing Line
Outstandings.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding.
"Revolving Credit Termination Date" means the earlier of (i)
the Stated Termination Date or (ii) such date of termination of
Lenders' obligations pursuant to Section 10.1 upon the occurrence of an
Event of Default, or (iii) such date as the Borrower may voluntarily
and permanently terminate the Revolving Credit Facility by payment in
full of all Revolving Credit Outstandings, Swing Line Outstandings and
Letter of Credit Outstandings and cancellation of all Letters of
Credit, together with all accrued and unpaid interest thereon.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill.
"Security Agreement" means, collectively (or individually as
the context may indicate), (i) the Security Agreement dated as of the
date hereof by the Borrower to the Agent, and (ii) any additional
Security Agreement delivered to the Agent pursuant to Section 8.19, as
hereafter modified, amended or supplemented from time to time.
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"Security Instruments" means, collectively, the Pledge
Agreement, the Security Agreement, the Intellectual Property Security
Agreement, the Intellectual Property Assignment, any IPSA Supplement,
the LC Account Agreement, the Intercompany Note Pledge Agreement, the
Intercompany Note Subordination Agreement, any Intercompany Note
Subordination Supplement, and all other agreements, instruments and
other documents, whether now existing or hereafter in effect, pursuant
to which the Borrower or any Subsidiary shall grant or convey to the
Agent or the Lenders a Lien in property as security for all or any
portion of the Obligations, as any of them may be amended, modified or
supplemented from time to time.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including Contingent Obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Special Purpose Subsidiary" means a Subsidiary of the
Borrower or another Subsidiary or a UniCapital Subsidiary Trust (as
defined in the Aircraft Facility Credit Agreement) established in order
to facilitate the financing or sale of specific assets owned by such
Subsidiary.
"Stated Termination Date" means June 10, 2001 or such later
date as the parties may agree pursuant to Section 2.13.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower or a Subsidiary and any Person with respect to Indebtedness
evidenced by any or all of the Notes, on terms mutually acceptable to
Borrower and such Person, which agreements create Rate Hedging
Obligations.
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"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Borrower pursuant to Section 2.13.
"Swing Line Loans" means loans made by NationsBank to the
Borrower pursuant to Section 2.13.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Swing Line Refunding Loan" means any Revolving Loan made to
pay NationsBank in respect of Swing Line Outstandings.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4062(e) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to
exceed $50,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $300,000,000, as reduced from time to time in accordance with
Section 2.7.
"Transfer and Administration Agreement" means that certain
Transfer and Administration Agreement entered into or to be entered
into by and among NationsBank, as agent, each of the "Bank Investors"
from time to time party thereto each of the "Transferors" from time to
time party thereto, Kitty Hawk Funding Corporation and Portfolio
Financial Servicing Company, as "Master Servicer".
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or
a Eurodollar Rate Loan).
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"Unencumbered Assets" means those tangible and intangible
assets (other than (i) goodwill, (ii) retained certificates, (iii)
property, plant and equipment not held for lease or sale or formerly
held for lease or sale and (iv) all Residual Interests) of the Borrower
and the Guarantors, including without limitation lease receivables,
notes receivables and equipment held for sale, that are not subject to
any Lien other than Liens created under the Security Instruments in
favor of the Agent and the Lenders; provided, however, with respect to
any Equipment Lease, (i) if any of the equipment, the related lease
agreement or any lease receivable thereunder is subject to a Lien other
than Liens created under the Security Interests in favor of the Agent
and the Lenders, or (ii) if the lease receivable arising under such
Equipment Lease is a Defaulted Receivable under either the Lease
Receivable Financing Facility or the Lease Receivable Purchase
Facility, then none of such related equipment, lease agreement or lease
receivable shall be an Unencumbered Asset.
"Voting Stock" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"Working Capital Loan" means any Advance permitted under
Section 2.12 hereof, the proceeds of which are to be used for general
working capital needs of the Borrower or a Subsidiary.
"Working Capital Outstandings" means, as of any date of
determination, the aggregate principal amount of all Working Capital
Loans then outstanding.
"Year 2000 Compliant" means all computer applications
(including those affected by information received from its suppliers
and vendors) that are material to the Borrower's or any of its
Subsidiaries' business and operations will on a timely basis be able to
perform properly data-sensitive functions involving all dates on and
after January 1, 2000.
"Year 2000 Problem" means the risk that computer applications
used by the Borrower and any of its Subsidiaries (including those
affected by information received from its suppliers and vendors) may be
unable to recognize and perform properly data-sensitive functions
involving certain dates on and after January 1, 2000.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in
accordance with GAAP applied on a Consistent Basis.
(b) Each term defined in Article 1 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that
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the Uniform Commercial Code of another jurisdiction is controlling, in
which case such terms shall have the meaning given in the Uniform
Commercial Code of the applicable jurisdiction.
(c) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(d) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(e) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(f) When used herein or in any other Loan Document, words such
as "hereunder", "hereto", "hereof" and "herein" and other words of like
import shall, unless the context clearly indicates to the contrary,
refer to the whole of the applicable document and not to any particular
article, section, subsection, paragraph or clause thereof.
(g) References to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof the rule of ejusdem generis shall not be applicable to limit a
general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
(h) All dates and times of day specified herein shall refer to
such dates and times at Charlotte, North Carolina.
(i) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
(j) Any reference to an officer of the Borrower or any other
Person by reference to the title of such officer shall be deemed to
refer to each other officer of such Person, however titled, exercising
the same or substantially similar functions.
(k) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such
document or agreement, as the case may be, as amended, modified or
supplemented from time to time only as and to the extent permitted
therein and in the Loan Documents.
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ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances to the Borrower under
the Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, provided, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the Agent has accelerated
the maturity of any of the Notes as a result of an Event of Default; provided
further, however, that immediately after giving effect to each such Advance, (x)
the amount of Revolving Credit Outstandings plus Letter of Credit Outstandings
plus Swing Line Outstandings shall not exceed the Total Revolving Credit
Commitment, (y) the amount of Working Capital Outstandings plus Letter of Credit
Outstandings plus the aggregate principal amount of Swing Line Loans outstanding
constituting Working Capital Loans shall not exceed the Asset Ceiling, and (z)
the amount of Swing Line Outstandings shall not exceed $15,000,000. Within such
limits, the Borrower may borrow, repay and reborrow under the Revolving Credit
Facility on a Business Day from the Closing Date until, but (as to borrowings
and reborrowings) not including, the Revolving Credit Termination Date;
provided, however, that (y) no Revolving Loan that is a Eurodollar Rate Loan
shall be made which has an Interest Period that extends beyond the Stated
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan may,
subject to the provisions of Section 2.7, be repaid only on the last day of the
Interest Period with respect thereto unless such payment is accompanied by the
additional payment, if any, required by Section 5.5.
(b) Amounts. Except as otherwise permitted by the Lenders from
time to time, (x) the amount of Revolving Credit Outstandings plus Letter of
Credit Outstandings plus Swing Line Outstandings shall not exceed at any time
the Total Revolving Credit Commitment, (y) the amount of Working Capital
Outstandings plus Letter of Credit Outstandings less the aggregate principal
amount of Swing Line Refunding Loans outstanding shall not exceed at any time
the Asset Ceiling, and (z) the amount of Swing Line Outstandings shall not
exceed $15,000,000. In the event there shall be at any time any such excess
under (x), (y) or (z) above outstanding, the Borrower shall immediately make
such payments and prepayments in such amounts as shall be necessary to comply
with the restrictions set forth in this Section 2.1(b). Each Loan hereunder,
other than Base Rate Refunding Loans, and each Conversion under Section 2.8,
shall be in an amount of at least $5,000,000, and, if greater than $5,000,000,
an integral multiple of $1,000,000.
(c) Advances. (i) An Authorized Representative shall give the
Agent (A) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Revolving Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the Conversion of a borrowing hereunder from
Base Rate Loans to
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<PAGE> 40
Eurodollar Rate Loans) prior to 10:30 A.M., and (B) irrevocable written notice
by telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan (other than Base Rate Refunding Loans to the extent the same are
effected without notice pursuant to Section 2.1(c)(iv)) that is a Base Rate Loan
(whether representing an additional borrowing hereunder or the Conversion of
borrowing hereunder from Eurodollar Rate Loans to Base Rate Loans) prior to
10:30 A.M. on the day of such proposed Loan. Each such notice shall specify the
amount of the borrowing, the Type of Loan (Base Rate or Eurodollar Rate), the
date of borrowing and, if a Eurodollar Rate Loan, the Interest Period to be used
in the computation of interest. Notice of receipt of such Borrowing Notice or
Interest Rate Selection Notice, as the case may be, together with the amount of
each Lender's portion of an Advance requested thereunder, shall be provided by
the Agent to each Lender by telefacsimile transmission with reasonable
promptness, but (provided the Agent shall have received such notice by 10:30
A.M.) not later than 1:00 P.M. on the same day as the Agent's receipt of such
notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Advance or Advances to
be made by it on such day available by wire transfer to the Agent in the amount
of its pro rata share, determined according to such Lender's Applicable
Commitment Percentage of the Loan or Loans to be made on such day. Such wire
transfer shall be directed to the Agent at the Principal Office and shall be in
the form of Dollars constituting immediately available funds. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds thereof
to the Borrower's Account or otherwise as shall be directed in the applicable
Borrowing Notice by the Authorized Representative and reasonably acceptable to
the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Loans in
accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than ten (10) different
Interest Periods. If the Agent does not receive a Borrowing Notice or an
Interest Rate Selection Notice giving notice of election of the duration of an
Interest Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Section 2.1(c) or 2.8, the
Borrower shall be deemed to have elected to Convert such Loan to (or Continue
such Loan as) a Base Rate Loan until the Borrower notifies the Agent in
accordance with Section 2.8.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Stated Termination Date, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Loan as herein provided shall then be satisfied, the Reimbursement
Obligation arising from such drawing shall be paid to the Issuing Bank by the
Agent without the requirement of notice to or from the Borrower from immediately
available funds which shall be advanced as a Base Rate Refunding Loan by each
Lender under the Revolving Credit Facility in an amount equal to such Lender's
Applicable Commitment Percentage of such Reimbursement Obligation, and (B) if
the conditions to making a Revolving Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately
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available funds the purchase from the Issuing Bank of their respective
Participations in the related Reimbursement Obligation based on their respective
Applicable Commitment Percentages of the Total Letter of Credit Commitment. If a
drawing is presented under any Letter of Credit in accordance with the terms
thereof and the Borrower shall not immediately reimburse the Issuing Bank in
respect thereof, then notice of such drawing or payment shall be provided
promptly by the Issuing Bank to the Agent and the Agent shall provide notice to
each Lender by telephone or telefacsimile transmission. If notice to the Lenders
of a drawing under any Letter of Credit is given by the Agent at or before 12:00
noon on any Business Day, each Lender shall, pursuant to the conditions
specified in this Section 2.1(c)(iv), either make a Base Rate Refunding Loan or
fund the purchase of its Participation in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay such amount to
the Agent for the account of the Issuing Bank at the Principal Office in Dollars
and in immediately available funds before 2:30 P.M. on the same Business Day. If
notice to the Lenders of a drawing under a Letter of Credit is given by the
Agent after 12:00 noon on any Business Day, each Lender shall, pursuant to the
conditions specified in this Section 2.1(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the Agent for the account of the Issuing Bank at the
Principal Office in Dollars and in immediately available funds before 12:00 noon
on the next following Business Day. Any such Base Rate Refunding Loan shall be
advanced as, and shall Continue as, a Base Rate Loan unless and until the
Borrower Converts such Base Rate Loan in accordance with the terms of Section
2.8.
2.2. Payment of Interest. (a) The Borrower shall pay interest to the
Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Loan made by such Lender for the period commencing on the date of
such Loan until such Loan shall be due at the then applicable Base Rate for Base
Rate Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as
designated by the Authorized Representative pursuant to Section 2.1; provided,
however, that if any Event of Default shall occur and be continuing, all amounts
outstanding hereunder shall bear interest thereafter at the Default Rate.
(b) Interest on each Loan shall be computed on the basis of a
year of 360 days and calculated in each case for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
June 30, 1998 for each Base Rate Loan, (ii) on the last day of the applicable
Interest Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3) months after
the first day of such Interest Period, and (iii) upon payment in full of the
principal amount of such Loan.
2.3. (a) Payment of Principal. The principal amount of each Loan shall
be due and payable to the Agent for the benefit of each Lender in full on the
Revolving Credit Termination Date, or earlier as specifically provided herein.
The principal amount of any Base Rate Loan may be prepaid in whole or in part at
any time. The principal amount of any Eurodollar Rate Loan may be prepaid only
at the end of the applicable Interest Period unless the Borrower shall pay to
the Agent for the account of the Lenders the additional amount, if any, required
under Section 5.5. All prepayments of Loans made by the Borrower shall be in the
amount of $5,000,000 or such greater amount which is an integral multiple of
$1,000,000, or the amount equal to all Revolving Credit
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Outstandings, or such other amount as necessary to comply with Section 2.1(b),
Section 2.3(b) or Section 2.8.
(b) Mandatory Prepayments. The Borrower shall make the
following required prepayments, each such payment to be made to the Agent for
the benefit of the Lenders within the time period specified below:
(i) Asset Dispositions. The Borrower shall make a
prepayment of Working Capital Loans from the Net Proceeds of
any Asset Disposition, other than an Asset Disposition by a
Non-Aircraft Special Purpose Subsidiary, in an amount equal to
one hundred percent (100%) of such Net Proceeds. Each such
prepayment shall be made within five (5) Business Days of
receipt of such Net Proceeds and upon not less than three (3)
Business Days written notice to the Agent, which notice shall
include a certificate of an Authorized Representative setting
forth in reasonable detail the calculations utilized in
computing the amount of the Net Proceeds.
(ii) Mandatory Prepayments Under the Aircraft
Facility Credit Agreement. The Borrower shall make a
prepayment in an amount equal to one hundred percent (100%) of
the amount of any mandatory prepayment required to be paid to
the Borrower pursuant to Section 2.3(b) of the Aircraft
Facility Credit Agreement. Each such prepayment shall be made
contemporaneously with the prepayment pursuant to Section
2.3(b) of the Aircraft Facility Credit Agreement.
(iii) Intercompany Notes. The Borrower shall make a
prepayment of Working Capital Loans equal to 100% of any
principal payment made by any Person of any obligation arising
under or evidenced by any Intercompany Note, if such
obligation was funded by a Loan hereunder.
(iv) Intercompany Loans and Advances. The Borrower
shall make a prepayment of Working Capital Loans equal to 100%
of the amount of any repayment of outstanding loans or
advances made by a Special Purpose Subsidiary pursuant to
Section 8.22 hereof, if such outstanding loan or advance was
funded by a Loan hereunder.
All mandatory prepayments pursuant to this Section 2.3(b) shall be
applied first to repay Base Rate Loans and then to Eurodollar Rate Loans. Any
prepayment of an Eurodollar Rate Loan pursuant to this Section 2.3(b) other than
on the last day of an Interest Period shall be accompanied by the additional
payment, if any, required by Section 5.5 hereof.
2.4. Manner of Payment. (a) Each payment of principal (including any
prepayment) and payment of interest and fees, and any other amount required to
be paid to the Lenders with respect to the Loans, shall be made to the Agent at
the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds without setoff, deduction or counterclaim before
12:30 P.M. on the date such payment is due. Upon request of the Authorized
Representative, the Agent
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may, but shall not be obligated to, debit the amount of any such payment which
is not made by such time to any ordinary deposit account, if any, of the
Borrower with the Agent.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 12:30 P.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Agent until the time such funds become
available funds. Any non-conforming payment may constitute or become a Default
or Event of Default. Interest shall continue to accrue on any principal as to
which a non-conforming payment is made until the later of (x) the date such
funds become available funds or (y) the next Business Day at the Default Rate
from the date such amount was due and payable.
(c) In the event that any payment hereunder or under the Notes becomes
due and payable on a day other than a Business Day, then such due date shall be
extended to the next succeeding Business Day unless provided otherwise under
clause (ii) of the definition of "Interest Period"; provided that interest shall
continue to accrue during the period of any such extension and provided further,
that in no event shall any such due date be extended beyond the Revolving Credit
Termination Date.
2.5. Notes. Revolving Loans made by each Lender shall be evidenced by
the Note payable to the order of such Lender in the respective amount of its
Applicable Commitment Percentage of the Revolving Credit Commitment, which Note
shall be dated the Closing Date or a later date pursuant to an Assignment and
Acceptance and shall be duly completed, executed and delivered by the Borrower.
2.6. Pro Rata Payments. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Loans and the fees
described in Section 2.10 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.
2.7. Reductions. (a) The Borrower, by notice from an Authorized
Representative, shall have the right from time to time, upon not less than three
(3) Business Days' written notice to the Agent, effective upon receipt, to
reduce the Total Revolving Credit Commitment. The Agent shall give each Lender,
within one (1) Business Day of receipt of such notice, telefacsimile notice, or
telephonic notice (confirmed in writing), of such reduction. Each such reduction
shall be in the aggregate amount of $5,000,000 or such greater amount which is
in an integral multiple of $1,000,000, or the entire remaining Total Revolving
Credit Commitment, and shall permanently reduce the Total Revolving Credit
Commitment.
(b) In the event of a voluntary permanent reduction of the commitment
under either the Aircraft Facility, the Lease Receivable Financing Facility or
the Lease Receivable Purchase Facility, the Borrower shall be required to
permanently reduce the Total Revolving Credit Commitment by an amount pro rata
to the amount of such reduction of the Aircraft Facility, the Lease Receivable
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Financing Facility or the Lease Receivable Purchase Facility. The Borrower shall
give notice to the Agent at the time of any such reduction to the Aircraft
Facility, the Lease Receivable Financing Facility or the Lease Receivable
Purchase Facility, at which time the Agent shall be instructed to make a pro
rata reduction to the Total Revolving Credit Commitment.
In the case of a reduction under either subsection (a) or (b) above, each
reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Loans to the extent that the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings plus Swing Line Outstandings
exceeds the Total Revolving Credit Commitment after giving effect to such
reduction, together with accrued and unpaid interest on the amounts prepaid. No
such reduction shall result in the payment of any Eurodollar Rate Loan other
than on the last day of the Interest Period of such Eurodollar Rate Loan unless
such prepayment is accompanied by amounts due, if any, under Section 5.5.
2.8. Conversions and Elections of Subsequent Interest Periods. Subject
to the limitations set forth below and in Article V, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on
any Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate
Loans on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing, upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M.
three (3) Business Days' prior to the date of such election or Conversion:
(i) elect a subsequent Interest Period for all or a
portion of Eurodollar Rate Loans to begin on the last day of
the then current Interest Period for such Eurodollar Rate
Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans
on any Business Day.
Each election and Conversion pursuant to this Section 2.8 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article V. The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.9. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as Advances
shall be reduced by the aggregate amount of Revolving Credit Outstandings,
Letters of Credit Outstandings and Swing Line Outstandings.
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2.10. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused fee equal to the Applicable Unused Fee
multiplied by the average daily amount by which the Total Revolving Credit
Commitment exceeds the sum of (i) Revolving Credit Outstandings plus (ii) Letter
of Credit Outstandings. Such fees shall be due in arrears on the last Business
Day of each March, June, September and December commencing June 30, 1998 to and
on the Revolving Credit Termination Date. Notwithstanding the foregoing, so long
as any Lender fails to make available any portion of its Revolving Credit
Commitment when requested, such Lender shall not be entitled to receive payment
of its pro rata share of such fee until such Lender shall make available such
portion. Such fee shall be calculated on the basis of a year of 360 days for the
actual number of days elapsed.
2.11. Deficiency Advances; Failure to Purchase Participations. No
Lender shall be responsible for any default of any other Lender in respect to
such other Lender's obligation to make any Loan hereunder or fund its purchase
of any Participation hereunder nor shall the Revolving Credit Commitment of any
Lender hereunder be increased as a result of such default of any other Lender.
Without limiting the generality of the foregoing, in the event any Lender shall
fail to advance funds to the Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the applicable Note in
its favor as a Lender all or any portion of such amount or amounts (each, a
"deficiency advance") and shall thereafter be entitled to payments of principal
of and interest on such deficiency advance in the same manner and at the same
interest rate or rates to which such other Lender would have been entitled had
it made such Advance under its Note; provided that, (i) such defaulting Lender
shall not be entitled to receive payments of principal, interest or fees with
respect to such deficiency advance until such deficiency advance shall be paid
by such Lender and (ii) upon payment to the Agent from such other Lender of the
entire outstanding amount of each such deficiency advance, together with accrued
and unpaid interest thereon, from the most recent date or dates interest was
paid to the Agent by a Borrower on each Loan comprising the deficiency advance
at the interest rate per annum for overnight borrowing by the Agent from the
Federal Reserve Bank, then such payment shall be credited against the applicable
Note of the Agent in full payment of such deficiency advance and such Borrower
shall be deemed to have borrowed the amount of such deficiency advance from such
other Lender as of the most recent date or dates, as the case may be, upon which
any payments of interest were made by such Borrower thereon. In the event any
Lender shall fail to fund its purchase of a Participation after notice from the
Issuing Bank or NationsBank, as the Swing Line lender, as applicable, such
Lender shall pay to the Issuing Bank or NationsBank, as the Swing Line lender,
as applicable, interest on the amount so due from the date of such notice at the
interest rate per annum for overnight borrowing by the Agent from the Federal
Reserve Bank to the date such purchase price is received by the Issuing Bank or
NationsBank, as the Swing Line lender, as applicable.
2.12. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower to finance the
cash portion of Permitted Acquisitions. In addition, the proceeds of the Loans
made pursuant to the Revolving Credit Facility including the Swing Line
hereunder may be used by the Borrower for general working capital needs;
provided, however, any Advances intended for use by the Borrower for working
capital needs shall
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be designated as Working Capital Loans, and provided that all Advances shall be
subject to the restrictions set forth in Section 2.1(b).
2.13. Swing Line. (a) Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Credit Facility
in an efficient manner and to minimize the transfer of funds between the Agent
and the Lenders, NationsBank shall make available Swing Line Loans to the
Borrower prior to the Revolving Credit Termination Date. NationsBank shall not
be obligated to make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of NationsBank the Borrower is not in compliance with all the
conditions to the making of Loans set forth in this Agreement, (ii) if after
giving effect to such Swing Line Loan, the Swing Line Out standings exceed
$15,000,000 or (iii) if after giving effect to such Swing Line Loan, the sum of
the Swing Line Outstandings, Revolving Credit Outstandings and Letter of Credit
Outstandings exceeds the Total Revolving Credit Commitment. Swing Line Loans
shall be limited to Base Rate Loans. The Company may borrow, repay and reborrow
under this Section 2.13. Unless notified to the contrary by NationsBank,
borrowings under the Swing Line shall be made in the minimum amount of $500,000
or, if greater, in amounts which are integral multiples of $100,000, or in the
amount necessary to effect a Base Rate Refunding Loan, upon written request by
telefacsimile transmission, effective upon receipt, by an Authorized
Representative of the Borrower made to NationsBank not later than 12:30 P.M. on
the Business Day of the requested borrowing. Each such Borrowing Notice shall
specify the amount of the borrowing and the date of borrowing, the use of the
proceeds of such Swing Line Loan and shall be in the form of Exhibit D-2, with
appropriate insertions. Unless notified to the contrary by NationsBank, each
repayment of a Swing Line Loan shall be in an amount which is an integral
multiple of $100,000 or the aggregate amount of all Swing Line Outstandings. If
the Borrower instructs NationsBank to debit any demand deposit account of the
Borrower in the amount of any payment with respect to a Swing Line Loan, or
NationsBank otherwise receives repayment, after 12:30 P.M. on a Business Day,
such payment shall be deemed received on the next Business Day.
(b) Swing Line Loans shall bear interest at the Base Rate, the interest
payable on Swing Line Loans is solely for the account of NationsBank, and all
accrued and unpaid interest on Swing Line Loans shall be payable on the dates
and in the manner provided in Sections 2.2(b) and 2.4 with respect to interest
on Base Rate Loans. The Swing Line Outstandings shall be evidenced by a Note
delivered to NationsBank pursuant to this Section 2.13(b) on the Closing Date in
the original principal amount of $15,000,000.
(c) Upon the making of a Swing Line Loan, each Lender shall be deemed
to have purchased from NationsBank a Participation therein in an amount equal to
that Lender's Applicable Commitment Percentage of such Swing Line Loan. Upon
demand made by NationsBank, each Lender shall, according to its Applicable
Commitment Percentage of such Swing Line Loan, promptly provide to NationsBank
an amount equal to its Participation therein. Any such provision made by a
Lender pursuant to demand of NationsBank shall be deemed (i) provided that the
conditions to making Loans shall be satisfied, a Base Rate Refunding Loan under
Section 2.1 until the Borrower Converts such Base Rate Loan in accordance with
the terms of Section 2.8, and (ii) in all other cases, the funding by each
Lender of the purchase price of its Participation in such Swing Line Loan. The
obligation of each Lender to so provide such amount to NationsBank shall be
absolute and
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unconditional and shall not be affected by the occurrence of an Event of Default
or any other occurrence, event or circumstance whatsoever, including without
limitation non-compliance with the restrictions set forth in Section 2.1(b) and
shall be made without any offset, abatement, withholding or reduction
whatsoever.
The Borrower, at its option and subject to the terms hereof, may
request an Advance pursuant to Section 2.1 in an amount sufficient to repay
Swing Line Outstandings on any date and the Agent shall provide from the
proceeds of such Advance to NationsBank the amount necessary to repay such Swing
Line Outstandings (which NationsBank shall then apply to such repayment) and
credit any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to Section 2.1(c)(ii). The proceeds of such
Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances. The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings and
accrued interest thereon shall be due and payable in full.
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ARTICLE III
Letters of Credit
3.1. Letters of Credit. The Issuing Bank agrees, subject to the
terms and conditions of this Agreement, upon request of the Borrower to issue
from time to time for the account of the Borrower Letters of Credit upon
delivery to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment, (ii) no Letter of Credit shall be issued if, after
giving effect thereto, Letter of Credit Outstandings plus Revolving Credit
Outstandings plus Swing Line Outstandings shall exceed the Total Revolving
Credit Commitment, and (iii) no Letter of Credit shall be issued to support the
purchase of any item of equipment or of any Equipment Lease. No Letter of Credit
shall have an expiry date (including all rights of the Borrower or any
beneficiary named in such Letter of Credit to require renewal) or payment date
occurring later than the earlier to occur of one year after the date of its
issuance or the fifth Business Day prior to the Stated Termination Date.
3.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn or purporting to be drawn under the Letters of Credit in
accordance with the terms of the respective letters of credit and all reasonable
expenses incurred by the Issuing Bank in connection with the Letters of Credit,
and in any event and without demand to place in possession of the Issuing Bank
sufficient funds (which, subject to the restrictions set forth in Section 2.1(a)
and Section 2.1(b), shall include Advances under the Revolving Credit Facility
if permitted by Section 2.1 and Swing Line Loans if permitted by Section 2.13)
to pay all debts and liabilities arising under any Letter of Credit. The Issuing
Bank agrees to give the Borrower prompt notice of any request for a draw under a
Letter of Credit. The Issuing Bank may charge any account the Borrower may have
with it for any and all amounts the Issuing Bank pays under a Letter of Credit,
plus charges and reasonable expenses as from time to time agreed to by the
Issuing Bank and the Borrower; provided that to the extent permitted by Section
2.1(c)(iv) and Section 2.13, amounts shall be paid pursuant to Advances under
the Revolving Credit Facility or, if the Borrower shall elect, by Swing Line
Loans. The Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Default Rate, such rate to be
calculated on the basis of a year of 360 days for actual days elapsed.
(b) In accordance with the provisions of Section 2.1(c)(iv),
the Issuing Bank shall notify the Agent of any drawing under any Letter of
Credit promptly following the receipt by the Issuing Bank of such drawing.
(c) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
Section 3.2(a), each
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Lender (other than the Issuing Bank) thereby shall absolutely, unconditionally
and irrevocably assume, and shall be unconditionally obligated to pay to the
Issuing Bank as hereinafter described, its Applicable Commitment Percentage of
the liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in its
capacity as a Lender) shall, subject to the terms and
conditions of Article II, pay to the Agent for the account of
the Issuing Bank at the Principal Office in Dollars and in
immediately available funds, an amount equal to its Applicable
Commitment Percentage of any drawing under a Letter of Credit,
such funds to be provided in the manner described in Section
2.1(c)(iv).
(ii) Simultaneously with the making of each payment
by a Lender to the Issuing Bank pursuant to Section
2.1(c)(iv)(B), such Lender shall, automatically and without
any further action on the part of the Issuing Bank or such
Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest
accrued prior to the date the Lender made its payment) in the
related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately
due and payable whether by Advances made in accordance with
Section 2.1(c)(iv), Swing Line Loans made in accordance with
Section 2.13, or otherwise.
(iii) Each Lender's obligation to make payment to the
Agent for the account of the Issuing Bank pursuant to Section
2.1(c)(iv) and this Section 3.2(c), and the right of the
Issuing Bank to receive the same, shall be absolute and
unconditional, shall not be affected by the occurrence of any
Event of Default or any other occurrence, event or
circumstance whatsoever, including without limitation any
non-compliance with the restrictions set forth in Section
2.1(b), and shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the
account of the Issuing Bank in full upon such request as
required by Section 2.1(c)(iv) or this Section 3.2(c), such
Lender shall, on demand, pay to the Agent for the account of
the Issuing Bank interest on the unpaid amount for each day
during the period commencing on the date of notice given to
such Lender pursuant to Section 2.1(c) until such Lender pays
such amount to the Agent for the account of the Issuing Bank
in full at the interest rate per annum for overnight borrowing
by the Agent from the Federal Reserve Bank.
(iv) In the event the Lenders have purchased
Participations in any Reimbursement Obligation as set forth in
clause (ii) above, then at any time payment (in fully
collected, immediately available funds) of such Reimbursement
Obligation, in whole or in part, is received by Issuing Bank
from the Borrower, Issuing Bank shall promptly pay to each
Lender an amount equal to its Applicable Commitment Percentage
of such payment from the Borrower.
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(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter. Upon the
request of any Lender from time to time, the Issuing Bank shall deliver to the
Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article VI, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of
Section 12.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which the
Issuing Bank, such other Lender or the Agent may incur (or which may be claimed
against the Issuing Bank, such other Lender or the Agent) by any Person by
reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Bank, any other Lender or the Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, (i) caused by the willful misconduct or gross negligence of the
party to be indemnified or (ii) caused by the failure of the Issuing Bank to pay
under any Letter of Credit after the presentation to it of a request for payment
strictly complying with the terms and conditions of such Letter of Credit,
unless such payment is prohibited by any law, regulation, court order or decree.
The indemnification and hold harmless provisions of this Section 3.2(g) shall
survive repayment of the Obligations, occurrence of the Facility Termination
Date and expiration or termination of this Agreement.
(h) Without limiting Borrower's rights as set forth in Section
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank's right to
receive such payment shall be absolute, unconditional and irrevocable, and that
such obligations of the Borrower shall be performed strictly in accordance with
the terms of this Agreement and such Letters of Credit and the related
Applications and Agreement for any Letter of Credit, under all circumstances
whatsoever, including the following circumstances:
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(i) any lack of validity or enforceability of the
Letter of Credit, the obligation supported by the Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "Related LC Documents");
(ii) any amendment or waiver of or any consent to or
departure from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense
(other than the defense of payment in accordance with the
terms of this Agreement) or other rights which the Borrower
may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any persons or entities for whom any
such beneficiary or any such transferee may be acting), the
Agent, the Lenders or any other Person, whether in connection
with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute between
the Borrower and any beneficiary or any transferee of a Letter
of Credit (or any persons or entities for whom such
beneficiary or any such transferee may be acting), the Agent,
the Lenders or any other Person;
(v) any draft, statement or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) any delay, extension of time, renewal,
compromise or other indulgence or modification granted or
agreed to by the Agent, with or without notice to or approval
by the Borrower in respect of any of Borrower's Obligations
under this Agreement; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
3.3. Letter of Credit Facility Fees. The Borrower shall pay to the
Agent, (i) for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin for
Eurodollar Rate Loans, and (ii) for the Issuing Bank, 0.125% per annum based on
the aggregate amount available to be drawn on each outstanding Letter of Credit.
Such fees shall be due with respect to each Letter of Credit quarterly in
arrears on the last day of each March, June, September and December, the first
such payment to be made on the first such date occurring after the date of
issuance of a Letter of Credit. The fees described in this Section 3.3 shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.
3.4. Administrative Fees. The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
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ARTICLE IV
Security
4.1. Security. As security for the full and timely payment and
performance of all Obligations, the Loan Parties (other than Aircraft Special
Purpose Subsidiaries and Aircraft Special Purpose Subsidiary Owners) shall on or
before the Closing Date do or cause to be done all things necessary in the
opinion of the Agent and its counsel to grant to the Agent for the benefit of
the Lenders a duly perfected first priority security interest in all Collateral
subject to no prior Lien or other encumbrance or restriction on transfer (other
than Permitted Liens and restrictions on transfer imposed by applicable
securities laws). Notwithstanding any provision of this Article IV or any
Security Instrument to the contrary, no such security interest shall be granted
in any Excluded Property.
4.2. Stock and Equity Interest Pledge. As security for the full and
timely payment and performance of all Obligations now existing or hereafter
arising, and certain Guarantors' obligations under the Guaranty, the Borrower
and each Subsidiary owning any Pledged Stock or any other Pledged Interests
shall on or before the Closing Date deliver to the Agent, in form and substance
reasonably acceptable to the Agent, the Pledge Agreement together with
certificates representing such Pledged Stock or Pledged Interests and such stock
powers duly executed in blank as may be required by the Agent in accordance with
the terms hereof and thereof. In addition to any Pledge Agreement required to be
delivered pursuant to Section 8.19 hereof, the Borrower and each Subsidiary
hereby agrees to pledge to the Agent for the benefit of the Lenders (i) 100% of
the capital stock and related interests and rights of any Domestic Subsidiary
hereafter acquired or created, and (ii) 65% of the Voting Stock and 100% of the
non-voting common stock and related interests and rights of any Direct Foreign
Subsidiary hereafter acquired or created and, in each case, to deliver to the
Agent a Pledge Agreement substantially in the form of Exhibit M hereto within
thirty (30) days of the acquisition or creation of such Subsidiary.
Notwithstanding the foregoing, any pledge of Pledged Stock of, or Pledged
Interests in, any Non-Aircraft Special Purpose Subsidiary will be subject to
requirements of credit enhancers, rating agencies and other securitization
parties.
4.3. Guaranty. The Borrower shall cause the Guaranty to be delivered on
or before the Closing Date by each Guarantor, in form and substance reasonably
acceptable to the Agent. The Borrower hereby agrees to cause a Guaranty to be
delivered by any hereafter acquired, created or arising Domestic Subsidiary;
provided, however, no hereafter acquired, created or arising Subsidiary that is
a Non-Aircraft Special Purpose Subsidiary shall be required to execute a
Guaranty.
4.4. Security Interests. As security for the full and timely payment
and performance of (i) all Obligations now existing or hereafter arising and
(ii) if applicable, its obligations as a Guarantor under the Guaranty, the
Borrower shall, and shall cause each Guarantor (other than Aircraft Special
Purpose Subsidiaries and Aircraft Special Purpose Subsidiary Owners) to, on or
before the Closing Date deliver to the Agent, in form and substance reasonably
acceptable to the Agent, the Security Agreement, the Uniform Commercial Code
financing statements, and each other Security Instrument sufficient to grant to
the Agent a valid, duly perfected security interest in the Collateral described
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therein, subject to no prior Liens, and do all things necessary in the opinion
of the Agent and its counsel to grant to the Agent for the benefit of the
Lenders a first priority security interest, duly perfected with respect to
Collateral governed by the UCC, in all Collateral subject to no prior Lien or
other encumbrance or restriction on transfer (other than restrictions on
transfer imposed by applicable securities laws). The Borrower hereby agrees to
cause the Security Instruments to be delivered by any hereafter acquired or
created Domestic Subsidiary or, to the extent applicable under foreign law or
practice, Foreign Subsidiary pursuant to the terms of Section 8.19 hereof.
4.5. Pledge and Subordination of Intercompany Notes. As security for
the full and timely payment and performance of (i) all Obligations now existing
or hereafter arising and (ii) certain of the Guarantors' Obligations under the
Guaranty the Borrower shall cause the Intercompany Note Holders to deliver the
Intercompany Note Pledge Agreement to the Agent for the benefit of the Lenders.
The Borrower hereby agrees to cause the Intercompany Note Holders now existing
or hereafter acquired or created to pledge, grant a Lien and collaterally assign
to the Agent for the benefit of the Lenders all Intercompany Notes now existing
or hereafter arising.
4.6. Intellectual Property Security Agreement. The Borrower and each
Subsidiary owning any material patents, patent applications, trademarks,
trademark registrations and applications therefor, copyrights, copyright
registrations and applications therefore or any other material intellectual
property, shall deliver to the Agent for the benefit of the Lenders the
Intellectual Property Security Agreement in the form of Exhibit N hereto, and
the Intellectual Property Assignments in the form of Exhibit A to Exhibit N
hereto. The Borrower hereby agrees to pledge, or cause to be pledged, all
intellectual property interests and licenses hereafter acquired or created and
owned by the Borrower or any Subsidiary within thirty (30) days of the
acquisition or creation of such intellectual property or license.
4.7. Further Assurances. At the request of the Agent, the Borrower will
or will cause its Subsidiaries, as the case may be to execute, by its duly
authorized officers, alone or with the Agent, any certificate, instrument,
statement or document, or to procure any such certificate, instrument, statement
or document, or to take such other action (and pay all connected costs) which
the Agent reasonably deems necessary from time to time to create, continue or
preserve the liens and security interests in Collateral (and the perfection and
priority thereof) of the Agent contemplated hereby and by the other Loan
Documents.
4.8. Information Regarding Collateral. The Borrower represents,
warrants and covenants that (i) the chief executive office of the Borrower and
each other Person providing Collateral pursuant to a Security Instrument (each,
a "Grantor") at the Closing Date is located at the address or addresses
specified on Schedule 4.8, and (ii) Schedule 4.8 contains a true and complete
list of (a) the name and address of each Grantor and of each other Person that
has effected any merger or consolidation with a Grantor or contributed or
transferred to a Grantor any property constituting Collateral at any time since
January 1, 1993 (excluding Persons making sales in the ordinary course of their
businesses to a Grantor of property constituting inventory in the hands of such
seller), (b) each location of the chief executive office of each Grantor at any
time since January 1, 1993, (c) each location in which goods constituting
Collateral are or have been located since January 1, 1993 (together with the
name of each owner of the property located at such address if not the applicable
Grantor, and a summary
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description of the relationship between the applicable Grantor and such Person),
and (d) each trade style used by any Grantor since January 1, 1993 and the
purposes for which it was used. Borrower shall not change, and shall not permit
any other Grantor to change, the location of its chief executive office or any
location specified in clause (c) of the immediately preceding sentence, or use
or permit any other Grantor to use, any additional trade style, except upon
giving not less than thirty (30) days' prior written notice to the Agent and
taking or causing to be taken all such action at Borrower's or such other
Grantor's expense as may be reasonably requested by the Agent to perfect or
maintain the perfection of the Lien of the Agent in Collateral.
4.9. Termination in Connection with Permitted Sales and
Securitizations. Notwithstanding anything to the contrary herein or in the
Security Instruments, in the event the Borrower or any Subsidiary shall enter
into any Permitted Receivables Sales Transaction or any Permitted Receivables
Securitization, (i) the Lien in favor of the Agent created herein or in the
Security Instruments in any Equipment Lease, Equipment and Residual Interest, as
applicable, shall be automatically terminated to the extent necessary to
effectuate such Permitted Receivables Sales Transaction or such Permitted
Receivables Securitization in connection with such Equipment Lease, Equipment
and Residual Interest, as applicable, (ii) any Guaranty of the Special Purpose
Subsidiary party to such Permitted Receivables Sales Transaction or Permitted
Receivables Securitization, if any, shall be automatically terminated, and (iii)
the Agent shall take all such actions as are necessary to effectuate such
release, all at the sole expense of the Borrower.
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ARTICLE V
Change in Circumstances
5.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency issued after the date hereof:
(i) shall subject such Lender (or its Applicable
Lending Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
Rate Loans, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Rate Loans (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other
than the Reserve Requirement utilized in the determination of the
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Revolving
Credit Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Loans or to reduce any sum received or receivable by such Lender
(or its Applicable Lending Office) under this Agreement or its Note with respect
to any Eurodollar Rate Loans, then the Borrower shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such increased
cost or reduction, provided that in determining such costs, no Lender shall
treat the Borrower less favorably than borrowers of similar size and
circumstances. If any Lender requests compensation by the Borrower under this
Section 5.1(a), the Borrower may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender to make or Continue Loans of the
Type with respect to which such compensation is requested, or to Convert Loans
of any other Type into Loans of such Type, until the event or condition giving
rise to such request ceases to be in effect (in which case the provisions of
Section 5.4 shall be applicable); provided that such suspension shall not affect
the right of such Lender to receive the compensation so requested.
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(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency issued after
the date hereof, has or would have the effect of reducing the rate of return on
the capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level below that which
such Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 5.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 5.1 shall furnish to the Borrower and the Agent
a statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
5.2. Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall
be conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
5.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrower thereof and
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such Lender's obligation to make or Continue Eurodollar Rate Loans and to
Convert other Types of Loans into Eurodollar Rate Loans shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Rate
Loans (in which case the provisions of Section 5.4 shall be applicable).
5.4. Treatment of Affected Loans. If the obligation of any Lender to
make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 5.1
or 5.3 hereof (Loans of such Type being herein called "Affected Loans" and such
Type being herein called the "Affected Type"), such Lender's Affected Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 5.3 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent upon reasonable
determination by such Lender that such Affected Loans may not be Eurodollar Rate
Loans) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
5.5. Compensation. Upon the request of any Lender, the Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 10.1) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article VI to be satisfied) to borrow, Convert,
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Continue, or prepay a Eurodollar Rate Loan on the date for such
borrowing, Conversion, Continuation, or prepayment specified in the
relevant notice of borrowing, prepayment, Continuation, or Conversion
under this Agreement.
5.6. Taxes. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, adopted after the date hereof excluding, in
the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender (or its Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If the Borrower shall be required by
law to deduct any Taxes adopted after the date hereof from or in respect of any
sum payable under this Agreement or any other Loan Document to any Lender or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 5.6) such Lender or the Agent receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) the Borrower shall furnish to the
Agent, at its address referred to in Section 12.2, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution or delivery of, or otherwise
with respect to, this Agreement or any other Loan Document (hereinafter referred
to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 5.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be given), shall provide the Borrower and the Agent with (i)
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii)
Internal
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Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 5.6(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 5.6(a) or
5.6(b) with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 5.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 5.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Notes.
5.7. Syndication Costs. If, within 90 days from the Closing Date, the
Agent incurs any breakage costs, charges or fees incurred with respect to
Eurodollar Rate Loans for Interest Periods of greater than one month in duration
on account of the syndication of the Revolving Credit Facility, the Borrower
shall immediately reimburse the Agent for any such costs, charges or fees. Such
right of reimbursement is in addition to, and not in limitation of, the other
provisions of this Article V. In addition, the Borrower agrees that the
incurrence of such costs and expenses shall not be the basis for the Borrower
withholding its consent or approval of any Person as an Eligible Assignee.
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ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
6.1. Conditions of Initial Advance. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, and of the Issuing
Bank to issue any Letter of Credit, and of NationsBank to make any Swing Line
Loan, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement,
the Notes, the Guaranty, the Security Instruments and the
other Loan Documents, together with all schedules and exhibits
thereto;
(ii) the favorable written opinion or opinions with
respect to the Loan Documents and the transactions
contemplated thereby of counsel to the Loan Parties dated the
Closing Date, addressed to the Agent and the Lenders and
satisfactory to the Agent, substantially in the form of
Exhibit G;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee
thereof) of each Loan Party certified by its secretary or
assistant secretary as of the Closing Date, approving and
adopting the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of each of the
Loan Parties executing the Loan Documents on behalf of such
Loan Party, certified by the secretary or assistant secretary
of such Loan Party;
(v) the Organizational Documents of each of the Loan
Parties certified as of a recent date by the Secretary of
State of its state of organization;
(vi) Operating Documents of each of the Loan Parties
certified as of the Closing Date as true and correct by its
secretary or assistant secretary;
(vii) certificates issued as of a recent date by the
Secretaries of State of the respective jurisdictions of
formation of each of the Loan Parties as to the due existence
and good standing of such Person;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
each of the Loan Parties as of a recent date by the Secretary
of State or comparable official of each jurisdiction in which
the failure to be qualified to do business or authorized so to
conduct business could have a Material Adverse Effect;
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(ix) notice of appointment of the initial Authorized
Representative(s);
(x) evidence of all insurance required by the Loan
Documents;
(xi) an initial Borrowing Notice, if any, and, if
elected by the Borrower, Interest Rate Selection Notice;
(xii) properly executed Uniform Commercial Code
financing statements reflecting the filing in all places
required by applicable law to perfect the Liens of the Agent
under the Security Instruments as a first priority Lien as to
items of Collateral in which a security interest may be
perfected by the filing of financing statements, and such
other documents and/or evidence of other actions as may be
necessary under applicable law to perfect the Liens of the
Agent under the Security Instruments as a first priority Lien
in and to such other Collateral as the Agent may require,
including without limitation:
(i) the delivery by the Borrower of all
stock certificates evidencing Pledged Stock and
certificates, if any, evidencing ownership of Pledged
Interests, accompanied in each case by duly executed
stock powers (or other appropriate transfer
documents) in blank affixed thereto; and
(ii) the delivery by the Borrower of
certificates of the Registrar of each non-corporate
Subsidiary evidencing the due registration on the
registration books of such non-corporate Subsidiary
of the Lien in favor of the Agent in the Pledged
Interests conferred under the Security Instruments;
(xiii) Intercompany Notes existing as of the Closing
Date together with endorsements or instruments of assignment
executed in blank and attached thereto;
(xiv) consent by makers of Intercompany Notes to
pledge under the Intercompany Pledge Agreement;
(xv) receipt and satisfactory review of the Pro Forma
Historical Statements and combined quarterly projections for
the Borrower and its Subsidiaries for 1998;
(xvi) evidence that all fees payable by the Borrower
on the Closing Date to the Agent, NMS and the Lenders have
been paid in full;
(xvii) Uniform Commercial Code search results showing
only those Liens as are acceptable to the Lenders;
(xviii) such other documents, instruments,
certificates and opinions as the Agent or any Lender may
reasonably request on or prior to the Closing Date in
connection with the consummation of the transactions
contemplated hereby;
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(xix) true copies of the Registration Statement and
the Related Acquisition Transaction Documents certified to be
true and correct by the Secretary of the Borrower; and
(xxi) an Asset Ceiling Certificate in the form of
Exhibit O hereto; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to
the Agent or the Lenders any event, condition, situation or
status since the date of the information contained in the
financial and business projections, budgets, pro forma data
and forecasts concerning the Borrower and its Subsidiaries
delivered to the Agent prior to the Closing Date that has had
or could reasonably be expected to result in a Material
Adverse Effect;
(ii) no litigation, action, suit, investigation or
other arbitral, administrative or judicial proceeding shall be
pending or threatened which could reasonably be likely to
result in a Material Adverse Effect; and
(iii) the Loan Parties shall have received all
approvals, consents and waivers, and shall have made or given
all necessary filings and notices as shall be required to
consummate the transactions contemplated hereby without the
occurrence of any default under, conflict with or violation of
(A) any applicable law, rule, regulation, order or decree of
any Governmental Authority or arbitral authority or (B) any
agreement, document or instrument to which any of the Loan
Parties is a party or by which any of them or their properties
is bound.
6.2. Conditions of Revolving Loans and Letter of Credit. The
obligations of the Lenders to make any Revolving Loans, and the Issuing Bank to
issue Letters of Credit and NationsBank to make Swing Line Loans, hereunder on
or subsequent to the Closing Date are subject to the satisfaction of the
following conditions:
(a) the Agent or, in the case of Swing Line Loans, NationsBank
shall have received a Borrowing Notice if required by Article II;
(b) the representations and warranties of the Loan Parties set
forth in Article VII and in each of the other Loan Documents shall be
true and correct in all material respects on and as of the date of such
Advance, Swing Line Loan or Letter of Credit issuance or renewal, with
the same effect as though such representations and warranties had been
made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in Section 7.6(a)(i)
shall be deemed to be those financial statements most recently
delivered to the Agent and the Lenders pursuant to Section 8.1 from the
date financial statements are delivered to the Agent and the Lenders in
accordance with such Section;
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(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each Advance,
Swing Line Loan or the issuance of a Letter of Credit, no Default or
Event of Default shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all
outstanding Loans for each Lender shall not exceed such
Lender's Revolving Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Participations
in Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment;
(iii) a Swing Line Loan, the Swing Line Outstandings
outstanding shall not exceed $15,000,000;
(iv) a Working Capital Loan or a Letter of Credit
or renewal thereof, the amount of all Working Capital
Outstandings plus Letter of Credit Outstandings plus the
aggregate principal amount of Swing Line Loans outstanding
constituting Working Capital Loans shall not exceed the Asset
Ceiling; and
(v) a Loan, Swing Line Loan or a Letter of Credit
or renewal thereof, the sum of Letter of Credit Outstandings
plus Revolving Credit Outstandings plus Swing Line
Outstandings shall not exceed the Total Revolving Credit
Commitment.
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ARTICLE VII
Representations and Warranties
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
7.1. Organization and Authority.
(a) The Borrower and each Subsidiary is a corporation or
partnership duly organized and validly existing under the laws of the
jurisdiction of its formation;
(b) The Borrower and each Subsidiary (x) has the requisite
power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan
Documents, and (y) is qualified to do business in every jurisdiction in
which failure so to qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party;
(d) Each Loan Party (other than the Borrower) has the power
and authority to execute, deliver and perform the Guaranty and each of
the other Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to
which any Loan Party is a party will be the legal, valid and binding
obligation or agreement, as the case may be, of such Loan Party,
enforceable against such Loan Party in accordance with its terms,
subject to the effect of any applicable bankruptcy, moratorium,
insolvency, reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law
or in equity);
7.2. Loan Documents. The execution, delivery and performance by each
Loan Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational
Action of such Loan Party required for the lawful execution, delivery
and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on such Loan Party or its properties, or (iii) the
Organizational Documents or Operating Documents of such Loan Party;
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(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time or both, would constitute an event of default,
under any contract, indenture, agreement or other instrument or
document to which such Loan Party is a party, or by which the
properties or assets of such Loan Party are bound; and
(d) does not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of such Loan Party or
any Subsidiary except any Liens in favor of the Agent and the Lenders
created by the Security Instruments;
7.3. Solvency. Each Loan Party is Solvent after giving effect to the
transactions contemplated by the Loan Documents;
7.4. Subsidiaries and Stockholders. The Borrower has no Subsidiaries
other than those Persons listed as Subsidiaries in Schedule 7.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.19; Schedule 7.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
7.4, free and clear of any Lien;
7.5. Ownership Interests. Borrower owns no interest in any Person other
than the Persons listed in Schedule 7.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 9.6 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.19;
7.6. Financial Condition.
(a) The Registration Statement includes (i) unaudited pro
forma (x) combined balance sheet and (y) combined statement of
operations of the Borrower and the Founding Companies, (ii) the balance
sheet of the Borrower at December 31, 1997, and (iii) financial
statements of the Founding Companies for the periods set forth therein.
Such balance sheet, statement of operations and financial statements
(including the notes thereto) present fairly the financial condition of
the Borrower and Founding Companies as of the periods reported therein,
all in conformity with GAAP;
(b) since December 31, 1997 (in the case of the Borrower) or
the date of the most recent audited financial statements contained in
the Registration Statement (in the case of the Founding Companies)
there has been no material adverse change in the condition, financial
or otherwise, of (i) the Borrower or any of its Subsidiaries (before
giving effect to the Related
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Acquisition) or (ii) the Founding Companies, or in the businesses,
properties, performance, prospects or operations of (x) the Borrower or
any of its Subsidiaries (before giving effect to the Related
Acquisition) or (y) the Founding Companies, nor have such businesses or
properties been materially adversely affected as a result of any fire,
explosion, earthquake, accident, strike, lockout, combination of
workers, flood, embargo or act of God;
(c) except as set forth in the financial statements referred
to in Section 7.6(a) or permitted by Section 9.4, neither Borrower nor
any Subsidiary has incurred, other than in the ordinary course of
business, any material Indebtedness or other commitment or liability
which remains outstanding or unsatisfied;
(d) the Pro Forma Historical Statements provided to the Agent
and the Lenders fairly present in accordance with GAAP the historical
pro forma financial condition and results of operations of the Borrower
and its Subsidiaries for the respective periods covered thereby, after
giving pro forma effect to the Related Acquisition and making the
adjustments described therein; and
(e) the pro forma projections of the Borrower and its
Subsidiaries giving effect to the Related Acquisition for the fiscal
years ending December 31, 1998 and 1999 provided to the Agent and the
Lenders were prepared by the Borrower in good faith and are based upon
assumptions which the Borrower believes to have been reasonable as of
the time of preparation thereof and as of the Closing Date;
7.7. Title to Properties. The Borrower and each of its Subsidiaries and
each other Loan Party has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except for
the transfer restrictions and Liens described in Schedule 7.7 and Liens
permitted by Section 9.3;
7.8. Taxes. Except as set forth in Schedule 7.8, the Borrower and each
of its Subsidiaries has filed or caused to be filed all federal and state income
tax returns which are required to be filed by it, and all other material
federal, state and local tax returns which are required to be filed by it and,
except for taxes and assessments being contested in good faith by appropriate
proceedings diligently conducted and against which reserves reflected in the
financial statements described in Section 7.6(a) and satisfactory to the
Borrower's independent certified public accountants have been established, have
paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due;
7.9. Other Agreements. No Loan Party nor any Subsidiary is
(a) a party to or subject to any judgment, order, decree,
agreement, lease or instrument, or subject to other restrictions, which
individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which such
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Loan Party or any Subsidiary is a party, which default has, or if not
remedied within any applicable grace period could reasonably be likely
to have, a Material Adverse Effect;
7.10. Litigation. Except as set forth in Schedule 7.10, there is no
action, suit, investigation or proceeding at law or in equity or by or before
any governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or other Loan Party or affecting the Borrower or any Subsidiary or
other Loan Party or any properties or rights of the Borrower or any Subsidiary
or other Loan Party, which could reasonably be likely to have a Material Adverse
Effect;
7.11. Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly authorized herein. None
of such proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither the Borrower nor any
agent acting in its behalf has taken or will take any action which might cause
this Agreement or any of the documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, as amended, or the Securities Act of 1933, as amended, or any state
securities laws, in each case as in effect on the date hereof;
7.12. Investment Company. No Loan Party is an "investment company," or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. ss. 80a-1, et seq.). The application of the proceeds
of the Loans and repayment thereof by the Borrower and the performance by the
Borrower and the other Loan Parties of the transactions contemplated by the Loan
Documents will not violate any provision of said Act, or any rule, regulation or
order issued by the Securities and Exchange Commission thereunder, in each case
as in effect on the date hereof;
7.13. Patents, Etc. The Borrower and each other Loan Party owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights necessary to or used in the conduct of
its businesses as now conducted and as contemplated by the Loan Documents,
without known conflict with any patent, license, franchise, trademark, trade
secret, trade name, copyright, other proprietary right of any other Person;
7.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any other Loan Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading;
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7.15. No Consents, Etc. Neither the respective businesses or properties
of the Loan Parties or any Subsidiary, nor any relationship among the Loan
Parties or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of any Loan Party as a
condition to the execution, delivery and performance of, or consummation of the
transactions contemplated by the Loan Documents, which, if not obtained or
effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or qualification
has been duly obtained or effected, as the case may be;
7.16. Employee Benefit Plans.
(a) The Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder and in material compliance
with all Foreign Benefit Laws with respect to all Employee Benefit
Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such plan
has been determined to be exempt under Section 501(a) of the Code. No
material liability has been incurred by the Borrower or any ERISA
Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i)
engaged in a nonexempt prohibited transaction described in Section 4975
of the Code or Section 406 of ERISA affecting any of the Employee
Benefit Plans or the trusts created thereunder which could subject any
such Employee Benefit Plan or trust to a material tax or penalty on
prohibited transactions imposed under Internal Revenue Code Section
4975 or ERISA, (ii) incurred any material accumulated funding
deficiency with respect to any Employee Benefit Plan, whether or not
waived, or any other liability to the PBGC which remains outstanding
other than the payment of premiums and there are no premium payments
which are due and unpaid, (iii) failed to make a material required
contribution or payment to a Multiemployer Plan, or (iv) failed to make
a material required installment or other required payment under Section
412 of the Code, Section 302 of ERISA or the terms of such Employee
Benefit Plan;
(c) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
unpaid withdrawal liability with respect to any Multiemployer Plan;
(d) The present value of all vested accrued benefits under
each Employee Benefit Plan which is subject to Title IV of ERISA, did
not, as of the most recent valuation date for each such plan, exceed
the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
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(e) To the best of the Borrower's knowledge, each Employee
Benefit Plan subject to Title IV of ERISA, maintained by the Borrower
or any ERISA Affiliate, has been adminis tered in accordance with its
terms in all material respects and is in compliance in all material
respects with all applicable requirements of ERISA and other applicable
laws, regulations and rules;
(f) The consummation of the Loans and the issuance of the
Letters of Credit provided for herein will not involve any prohibited
transaction under ERISA which is not subject to a statutory or
administrative exemption; and
(g) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower after
due inquiry, is threatened concerning or involving any Employee Benefit
Plan;
7.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default hereunder;
7.18. Environmental Laws. Except as listed on Schedule 7.18, the
Borrower and each Subsidiary is in material compliance with all applicable
Environmental Laws and has been issued and currently maintains all required
federal, state and local permits, licenses, certificates and approvals. Except
as listed on Schedule 7.18, neither the Borrower nor any Subsidiary has been
notified of any pending or threatened action, suit, proceeding or investigation,
and neither the Borrower nor any Subsidiary is aware of any facts, which (a)
calls into question, or could reasonably be expected to call into question,
compliance by the Borrower or any Subsidiary with any Environmental Laws, (b)
seeks, or could reasonably be expected to form the basis of a meritorious
proceeding, to suspend, revoke or terminate any license, permit or approval
necessary for the operation of the Borrower's or any Subsidiary's business or
facilities or for the generation, handling, storage, treatment or disposal of
any Hazardous Materials, or (c) seeks to cause, or could reasonably be expected
to form the basis of a meritorious proceeding to cause, any property of the
Borrower or any Subsidiary or other Loan Party to be subject to any restrictions
on ownership, use, occupancy or transferability under any Environmental Law;
7.19. Employment Matters. (a) None of the employees of the Borrower or
any Subsidiary is subject to any collective bargaining agreement and there are
no strikes, work stoppages, election or decertification petitions or
proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending or
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threatened any litigation, administrative proceeding nor, to the knowledge of
the Borrower, any investigation, in respect of such matters which, if decided
adversely, could reasonably be likely, individually or in the aggregate, to have
a Material Adverse Effect.
7.20. RICO. Neither the Borrower nor any Subsidiary is engaged in or
has engaged in any course of conduct that could subject any of their respective
properties to any Lien, seizure or other forfeiture under any criminal law,
racketeer influenced and corrupt organizations law, civil or criminal, or other
similar laws.
7.21. Year 2000 Compliance. The Borrower and its Subsidiaries have (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan substantially in accordance with that timetable. The
Borrower reasonably believes that all computer applications (including those
affected by information received from its suppliers and vendors) that are
material to its or any of its Subsidiaries' business and operations will on a
timely basis be Year 2000 Compliant, except to the extent that a failure to do
so could not reasonably be expected to have Material Adverse Effect.
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ARTICLE VIII
Affirmative Covenants
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
8.1. Financial Reports, Etc. (a) As soon as practical and in any event
within 90 days after the end of each Fiscal Year of the Borrower, deliver or
cause to be delivered to the Agent and each Lender (i) consolidated and
unaudited consolidating balance sheets of the Borrower and its Subsidiaries as
at the end of such Fiscal Year, and the notes thereto, and the related
consolidated and unaudited consolidating statements of income, stockholders'
equity and cash flows, and the respective notes thereto, for such Fiscal Year,
setting forth (other than for consolidating statements) comparative financial
statements for the preceding Fiscal Year, all prepared in accordance with GAAP
applied on a Consistent Basis and containing, with respect to the consolidated
financial statements, opinions of Price Waterhouse, L.L.P., or other such
independent certified public accountants selected by the Borrower and approved
by the Agent, which are unqualified as to the scope of the audit performed and
as to the "going concern" status of the Borrower and without any exception not
acceptable to the Lenders, and (ii) a certificate of an Authorized
Representative demonstrating compliance with Sections 9.1(a) through 9.1(e),
which certificate shall be in the form of Exhibit H;
(b) as soon as practical and in any event within 45 days after the end
of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent and each Lender (i) consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating statements of income,
stockholders' equity and cash flows for such fiscal quarter and for the period
from the beginning of the then current Fiscal Year through the end of such
reporting period, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of the Borrower and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes in their
financial position for such fiscal period, in conformity with the standards used
in preparation of the interim financial statements described in Section 7.6(a),
and (ii) a certificate of an Authorized Representative containing computations
for such quarter comparable to that required pursuant to Section 8.1(a)(ii);
(c) together with each delivery of the financial statements required by
Section 8.1(a)(i), deliver to the Agent and each Lender a letter from the
Borrower's accountants specified in Section 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial statements delivered
under Section 8.1(a)(i), they obtained no knowledge of any Default or Event of
Default by the Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial covenants (which at the date of
such statement remains uncured); or if the accountants have obtained knowledge
of such Default or Event of Default, a statement specifying the nature and
period of existence thereof;
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(d) the Borrower shall deliver to the Agent and each Lender (i)
promptly after the filing thereof, a copy of all regular or special reports or
effective registration statements which Borrower or any Subsidiary shall file
with the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) promptly upon becoming available to the Borrower, a
copy of any proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii)
promptly upon becoming available to the Borrower, a copy of any management
letter or other report submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
of the Borrower or any Subsidiary; and
(e) as soon as practicable and in any event within 20 days following
the end of each calendar month, deliver to the Agent and each Lender an Asset
Ceiling Certificate in the form of Exhibit O hereto, such certificate to
demonstrate compliance with limitations on Working Capital Outstandings and
Section 9.1(e) hereof and to include with respect to all Qualified Special
Purpose Subsidiaries information concerning dates of formation, liquidation, and
investments permitted pursuant to Section 9.6 hereof including the amount of
Working Capital Loans received by it from the Borrower;
(f) promptly, from time to time, deliver or cause to be delivered to
the Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
(g) as soon as practicable and in any event within ten (10) days
following a Permitted Receivables Securitization (other than the Lease
Receivable Finance Facility) or a Permitted Receivables Sales Transaction (other
than the Lease Receivable Purchase Facility), deliver to the Agent a statement
of all lease receivables sold, assigned, pledged or otherwise transferred in
connection with such Permitted Receivables Securitization or such Permitted
Receivables Sales Transaction;
Subject to the provisions of Section 12.16 hereof, the Agent and the
Lenders are hereby authorized to deliver a copy of any such financial or other
information delivered hereunder to the Lenders (or any affiliate of any Lender)
or to the Agent, to any Governmental Authority having jurisdiction over the
Agent or any of the Lenders pursuant to any written request therefor or in the
ordinary course of examination of loan files, or to any other Person who shall
acquire or consider the assignment of, or acquisition of any participation
interest in, any Obligation permitted by this Agreement;
8.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, patents, copyrights, trade secrets, know-how, and other
intellectual property and proprietary information (or adequate licenses
thereto), in each case as are reasonably necessary to conduct its business as
currently conducted or as contemplated hereby, all in accordance with customary
and prudent business practices;
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8.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 9.7, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which the failure
to do so could reasonably be expected to have a Material Adverse Effect;
8.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable against its creditors;
8.5. Insurance. (a) Keep all of its insurable properties adequately
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated
and otherwise as required by the Security Instruments, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property and (c) maintain
insurance under all applicable workers' compensation laws (or in the
alternative, maintain required reserves if self-insured for workers'
compensation purposes) such policies of insurance to have such limits,
deductibles, exclusions, co-insurance and other provisions providing no less
coverages than are maintained by similar businesses that are similarly situated,
such insurance policies to be in form reasonably satisfactory to the Agent. Each
of the policies of insurance described in this Section 8.5 shall provide that
the insurer shall give the Agent not less than thirty (30) days' prior written
notice before any such policy shall be terminated, lapse or be altered in any
manner;
8.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as may be required by GAAP with respect to
doubtful accounts and all taxes, assessments, charges, levies and claims and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements;
8.7. Right of Inspection. Permit any Person designated by any Lender or
the Agent to visit and inspect any of the properties (subject to the limitations
imposed, if any, on such inspections, by lessors under any Equipment Lease),
corporate books and financial reports of the Borrower or any Subsidiary and to
discuss its affairs, finances and accounts with its principal officers and
independent certified public accountants, all at reasonable times, at reasonable
intervals and with reasonable prior notice;
8.8. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of any
Governmental Authority with respect to the conduct of its business;
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8.9. Governmental Licenses. Obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as
contemplated by the Loan Documents in each instance in which the failure to do
so could reasonably be expected to have a Material Adverse Effect;
8.10. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 8.2 through 8.9, and 8.18
inclusive;
8.11. Officer's Knowledge of Default. Upon any officer of the Borrower
obtaining knowledge of any Default or Event of Default hereunder, or any event,
development or occurrence which could reasonably be expected to have a Material
Adverse Effect, cause such officer or an Authorized Representative to promptly
notify the Agent of the nature thereof, the period of existence thereof, and
what action the Borrower or such Subsidiary or other Loan Party proposes to take
with respect thereto;
8.12. Suits or Other Proceedings. Upon any officer of the Borrower
obtaining knowledge of any litigation or other proceedings being instituted
against the Borrower or any Subsidiary or other Loan Party, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary or other Loan Party, making a claim or claims in an
aggregate amount greater than $2,000,000 not otherwise covered by insurance,
promptly deliver to the Agent written notice thereof stating the nature and
status of such litigation, dispute, proceeding, levy, execution or other
process;
8.13. Notice of Environmental Complaint or Condition. To the extent
likely to have a Material Adverse Effect, promptly provide to the Agent true,
accurate and complete copies of any and all notices, complaints, orders,
directives, claims or citations received by the Borrower or any Subsidiary
relating to any (a) violation or alleged violation by the Borrower or any
Subsidiary of any applicable Environmental Law; (b) release or threatened
release by the Borrower or any Subsidiary, or by any Person handling,
transporting or disposing of any Hazardous Material on behalf of the Borrower or
any Subsidiary, or at any facility or property owned or leased or operated by
the Borrower or any Subsidiary, of any Hazardous Material, except where
occurring legally pursuant to a permit or license; or (c) liability or alleged
liability of the Borrower or any Subsidiary for the costs of cleaning up,
removing, remediating or responding to a release of Hazardous Materials;
8.14. Environmental Compliance. If the Borrower or any Subsidiary shall
receive any letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or any Subsidiary has violated any Environmental Law,
has released any Hazardous Material in violation of any Environmental Laws, or
is liable for the costs of cleaning up, removing, remediating or responding to a
release of Hazardous Materials, the Borrower and any Subsidiary shall, within
the time period permitted and to the extent required by the applicable
Environmental Law or the Governmental Authority responsible for enforcing such
Environmental Law, remove or remedy, or cause the applicable Subsidiary to
remove or remedy, such violation or release or satisfy such liability;
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8.15. Environmental Indemnification. Without limiting the generality of
Section 12.9, each Loan Party hereby agrees jointly and severally to indemnify
and hold the Agent and the Lenders, and their respective officers, directors,
employees and agents, harmless from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including assessment and cleanup
costs and reasonable attorneys', consultants' or other expert fees, expenses and
disbursements) arising directly or indirectly from, out of or by reason of (a)
the violation of any Environmental Law by the Borrower or any Subsidiary or with
respect to any property owned, operated or leased by the Borrower or any
Subsidiary or (b) the handling, storage, transportation, treatment, emission,
release, discharge or disposal of any Hazardous Materials by or on behalf of the
Borrower or any Subsidiary, or on or with respect to property owned or leased or
operated by the Borrower or any Subsidiary. The provisions of this Section 8.15
shall survive repayment of the Obligations, occurrence of the Facility
Termination Date and expiration or termination of this Agreement;
8.16. Further Assurances. At the Borrower's cost and expense, upon
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement, the Security Instruments and the other Loan Documents;
8.17. Employee Benefit Plans.
(a) With reasonable promptness, and in any event within thirty
(30) days thereof, give notice to the Agent of (a) the establishment of
any new Pension Plan (which notice shall include a copy of such plan),
(b) the commencement of contributions to any Employee Benefit Plan to
which the Borrower or any of its ERISA Affiliates was not previously
contributing, (c) any material increase in the benefits of any existing
Employee Benefit Plan, (d) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or
sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date;
(b) Promptly and in any event within fifteen (15) days of
becoming aware of the occurrence or forthcoming occurrence of any (a)
Termination Event or (b) nonexempt "prohibited transaction," as such
term is defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder,
deliver to the Agent a notice specifying the nature thereof, what
action the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto and, when known, any action taken
or threatened by the Internal Revenue Service, the Department of Labor
or the PBGC with respect thereto; and
(c) With reasonable promptness but in any event within fifteen
(15) days for purposes of clauses (a), (b) and (c), deliver to the
Agent copies of (a) any unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an
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Employee Benefit Plan under Section 401(a) of the Code, (b) all notices
received by the Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer
any Pension Plan, and (c) all notices received by the Borrower or any
ERISA Affiliate from a Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant to Section 4202
of ERISA. The Borrower will notify the Agent in writing within five (5)
Business Days of the Borrower or any ERISA Affiliate obtaining
knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of Section
4041(c) of ERISA;
8.18. Continued Operations. Continue at all times to conduct its
business and engage principally in the same line or lines of business
substantially as heretofore conducted;
8.19. New Subsidiaries. Within sixty (60) days of the acquisition or
creation of any Subsidiary which is required to be a Guarantor hereunder or
executes a Guaranty, but in any event prior to the Borrower or any Subsidiary
making available to such Subsidiary any portion of any Advance, cause to be
delivered to the Agent for the benefit of the Lenders each of the following:
(a) a Guaranty executed by such Subsidiary substantially in
the form of Exhibit I; provided, however, that no Non-Aircraft Special
Purpose Subsidiary shall be required to execute a Guaranty;
(b) a Security Agreement of such Subsidiary (other than an
Aircraft Special Purpose Subsidiary or a Special Purpose Subsidiary
Owner) substantially in the form of Exhibit J, together with such
Uniform Commercial Code financing statements on Form UCC-1 or
otherwise duly executed by such Subsidiary as "Debtor" and naming the
Agent for the benefit of the Lenders as "Secured Party", in form,
substance and number sufficient in the reasonable opinion of the Agent
and its special counsel to be filed in all Uniform Commercial Code
filing offices in all jurisdictions in which filing is necessary or
advisable to perfect in favor of the Agent for the benefit of the
Lenders the Lien on Collateral conferred under such Security Instrument
to the extent such Lien may be perfected by Uniform Commercial Code
filing;
(c) if such Subsidiary (other than an Aircraft Special Purpose
Subsidiary or a Special Purpose Subsidiary Owner) is a Domestic
Subsidiary or a Direct Foreign Subsidiary and is a corporation or is a
non-corporate entity that has issued certificates evidencing ownership
interests therein, (A) the Pledged Stock or, if applicable,
certificates of ownership of the Pledged Interests, together with duly
executed stock powers or powers of assignment in blank affixed thereto,
as required by Section 4.2, and (B) if such Collateral shall be owned
by a Subsidiary who has not then executed and delivered to the Agent a
Security Instrument from the owner of such Collateral granting a Lien
to the Agent in such Collateral, a Security Agreement or a Pledge
Agreement (as appropriate) substantially similar in form and content to
that executed and delivered by the Borrower as of the Closing Date,
with appropriate revisions as to the identity of the pledgor and
securing the obligations of such pledgor under its Guaranty;
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(d) if such Subsidiary (other than an Aircraft Special Purpose
Subsidiary or a Special Purpose Subsidiary Owner) is a non-corporate
entity not described in clause (c) immediately above, (A) the
certificate of the Registrar of such entity with respect to the
registration of the Lien on Pledged Interests, and (B) if such
Collateral shall be owned by a Subsidiary who has not then executed and
delivered to the Agent a Security Instrument from the owner of such
Collateral granting a Lien to the Agent in such Collateral, a Security
Agreement or a Pledge Agreement (as appropriate) substantially similar
in form and content to that executed and delivered by the Borrower as
of the Closing Date, with appropriate revisions as to the identity of
the pledgor and securing the obligations of such pledgor under its
Guaranty;
(e) a supplement to the appropriate schedule attached to the
appropriate Security Instruments listing the additional Collateral,
certified as true, correct and complete by the Authorized
Representative (provided that the failure to deliver such supplement
shall not impair the rights conferred under the Security Instruments in
after acquired Collateral);
(f) an Intercompany Note Pledge Agreement and an Intercompany
Note Subordination Agreement executed by such Subsidiary (other than an
Aircraft Special Purpose Subsidiary or a Special Purpose Subsidiary
Owner); provided, however, that no Non-Aircraft Special Purpose
Subsidiary shall be required to execute either an Intercompany Note
Pledge Agreement or an Intercompany Note Subordination Agreement;
(g) if deemed necessary by the Agent, an IPSA Supplement and
an Intellectual Property Security Agreement executed by such Subsidiary
(other than an Aircraft Special Purpose Subsidiary or a Special Purpose
Subsidiary Owner); provided, however, that no Non-Aircraft Special
Purpose Subsidiary shall be required to execute either an IPSA
Supplement or an Intellectual Property Security Agreement;
(h) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Guaranty, if required, and other Loan Documents
provided for in this Section 8.19 and addressed to the Agent and the
Lenders, in form and substance reasonably acceptable to the Agent
(which opinion may include assumptions and qualifications of similar
effect to those contained in the opinions of counsel delivered pursuant
to Section 6.1(a)), to the effect that:
(A) such Subsidiary is validly existing and in good
standing in the jurisdiction of its formation, has the
requisite power and authority to own its properties and
conduct its business as then owned and then conducted and
proposed to be conducted, and is duly qualified to transact
business and is in good standing as a foreign corporation or
partnership in each other jurisdiction in which the character
of the properties owned or leased, or the business carried on
by it, requires such qualification and the failure to be so
qualified would reasonably be likely to result in a Material
Adverse Effect;
(B) the execution, delivery and performance of the
Guaranty, if required, and other Loan Documents described in
this Section 8.19 to which such Subsidiary
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is a signatory have been duly authorized by all requisite
corporate or partnership action (including any required
shareholder or partner approval), each of such agreements has
been duly executed and delivered and constitutes the valid and
binding agreement of such Subsidiary, enforceable against such
Subsidiary in accordance with its terms, subject to the effect
of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the
enforceability of creditors' rights generally and to the
effect of general principles of equity (whether considered in
a proceeding at law or in equity); and
(C) the Uniform Commercial Code financing statements
on Form UCC-1 delivered to the Agent by the Subsidiary in
connection with the delivery of the Security Instruments of
such Subsidiary have been duly executed by the Subsidiary and
are in form, substance and number sufficient for filing in all
Uniform Commercial Code filing offices in all jurisdictions in
which filing is necessary to perfect in favor of the Agent for
the benefit of the Lenders the Lien on Collateral conferred
under such Security Instruments to the extent such Lien may be
perfected by Uniform Commercial Code filing;
(i) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable law, of the
shareholders) of such Subsidiary authorizing the actions and the
execution and delivery of documents described in this Section 8.19; and
(j) in the event such Subsidiary is a Non-Aircraft Special
Purpose Subsidiary, evidence satisfactory to the Agent that all
requirements of credit enhancers, rating agencies and other
securitization parties have been satisfied.
8.20. Year 2000 Compliance. The Borrower will promptly notify the Agent
in the event the Borrower discovers or determines that any computer application
(including those affected by information received from its suppliers and
vendors) that is material to its or any of its Subsidiaries' business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
8.21. Lease Receivables.
(a) Maintain accurate, complete and current records of all
lease receivables, including but not limited to the asset subject to
the lease, the lessor, the lessee and any assignment, sale, pledge or
other transfer of any lease, lease receivable or the leased asset; all
such records to be maintained by Portfolio Financial Servicing Company,
L.P. or its designee or such other Person as approved by the Agent in
its reasonable discretion; and
(b) no less than thirty (30) days after the end of each Fiscal
Year, and at any other time at the request of the Agent, perform an
audit of the lease receivables and no less than
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forty-five (45) days after the end of each fiscal quarter prepare a
report containing such information as the Agent may reasonably request
with respect to such lease receivables and deliver such report to the
Agent.
8.22. Repayment of Loans and Investments. The Borrower shall cause any
Subsidiary, including any Special Purpose Subsidiary, to immediately repay all
outstanding loans or advances made to it, directly or indirectly, pursuant to
Sections 9.6(g), (h) and (j) upon the disposition by such Subsidiary of its
assets. In addition, the Borrower shall cause each such Subsidiary to
immediately transfer as a dividend or other distribution all profits generated
upon the disposition of its assets to the Borrower or any Guarantor.
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ARTICLE IX
Negative Covenants
Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will not, nor will it permit any Subsidiary to:
9.1. Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth to
be less than (i) at the Closing Date, the greater of either (A)
$595,000,000, or (B) eighty-five percent (85%) of Consolidated Net
Worth as at May 19, 1998 and (ii) as at the last day of each succeeding
fiscal quarter of the Borrower and until (but excluding) the last day
of the next following fiscal quarter of the Borrower, the sum of (A)
the amount of Consolidated Net Worth required to be maintained pursuant
to this Section 9.1(a) as at the end of the immediately preceding
fiscal quarter, plus (B) 75% of Consolidated Net Income (with no
reduction for net losses during any period) for the fiscal quarter of
the Borrower ending on such day (including within "Consolidated Net
Income" certain items otherwise excluded, as provided for in the
definition of "Consolidated Net Income"), plus (C) 100% of the
aggregate amount of all the Net Proceeds of any Equity Offering of the
Borrower during the fiscal quarter of the Borrower ending on such date.
(b) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as of the end of any Applicable Period to be greater
than 2.50 to 1.00.
(c) Adjusted Consolidated Fixed Charge Ratio. Permit the
Adjusted Consolidated Fixed Charge Ratio as of the end of any
Applicable Period to be less than 2.50 to 1.00.
(d) Consolidated Indebtedness to Adjusted Consolidated Net
Worth. Permit at any time the ratio of Consolidated Indebtedness to
Adjusted Consolidated Net Worth to be greater than 5.00 to 1.00.
(e) Unencumbered Assets. Permit the value of Unencumbered
Assets at any time to be less than $100,000,000.
9.2. Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition except for a Permitted Acquisition.
9.3. Liens. Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than
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(a) Liens created under the Security Instruments in favor of
the Agent and the Lenders, and otherwise existing as of the date hereof
and as set forth in Schedule 7.7;
(b) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently
conducted, which, except as expressly so specified on Schedule 7.7, are
inferior in respect of the Collateral to the Liens conferred under the
Security Instruments, and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP and which Liens are not yet enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance of
tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Borrower or
any Subsidiary and which do not materially detract from the value of
the property to which they attach or materially impair the use thereof
to the Borrower or any Subsidiary;
(f) purchase money Liens to secure Indebtedness permitted
under Section 9.4(c) and incurred to purchase fixed assets, provided
such Indebtedness represents not less than 75% of the purchase price of
such assets as of the date of purchase thereof and no property other
than the assets so purchased secures such Indebtedness;
(g) Liens arising in connection with Capital Leases permitted
under Section 9.4(c); provided that no such Lien shall extend to any
Collateral or to any other property other than the assets subject to
such Capital Leases;
(h) Liens to secure Non-Recourse Indebtedness or arising in a
Permitted Receivables Securitization, provided that such Liens are
limited to those assets securing such Non-Recourse Indebtedness or
Permitted Receivables Securitization, and provided further
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that no Lien shall be incurred, created or permitted to exist on any
Excluded Residual Interest;
(i) Liens arising in connection with the Aircraft Facility;
and
(j) Liens upon Net Proceeds of the exercise by the
underwriters of the "greenshoe option" following completion of the
initial public offering of the Borrower, used to secure letters of
credit or surety bonds;
9.4. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, howsoever evidenced, except:
(a) Indebtedness owing to the Agent or any Lender in
connection with this Agreement, any Note or other Loan Document and
Indebtedness arising under the Aircraft Facility;
(b) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(c) purchase money Indebtedness and Capital Leases described
in Sections 9.3(f) and 9.3(g) not to exceed an aggregate outstanding
amount at any time of $10,000,000;
(d) Indebtedness arising from Rate Hedging Obligations
permitted under Section 9.15;
(e) Non-Recourse Indebtedness;
(f) Intercompany Advances;
(g) Indebtedness arising from a Permitted Receivables
Securitization;
(h) Indebtedness incurred in connection with a loan or advance
permitted under Section 9.6(g), 9.6(h) or 9.6(j);
(i) additional unsecured Indebtedness for Money Borrowed not
otherwise covered by clauses (a) through (h) above, provided that the
aggregate outstanding principal amount of all such other Indebtedness
permitted under this clause (i) shall in no event exceed $20,000,000 at
any time;
9.5. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
any assets of Borrower or any Subsidiary other than in compliance with Section
2.3(b) or other than (a) dispositions of inventory in the ordinary course of
business and dispositions of property, plant and equipment which is obsolete or
no longer used in the operations of the Borrower or any Subsidiary, (b)
Permitted Receivables Sales Transactions, (c) sales of equipment subject to a
Permitted Receivables Securitization in the ordinary course of business, (d)
transfers of assets necessary to give effect to
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merger or consolidation transactions permitted by Section 9.7, (e) the
disposition of Eligible Securities in the ordinary course of management of the
investment portfolio of the Borrower and its Subsidiaries, (f) pursuant to a
Permitted Receivables Securitization, (g) dispositions of Residual Interests
other than Excluded Residual Interests, and (h) transfers of assets by a Loan
Party to another Loan Party;
9.6. Investments. Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that the Borrower or any Subsidiary may
maintain investments or invest in:
(a) securities of any Person acquired in an Acquisition
permitted hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof and as set
forth in Schedule 7.4;
(d) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(e) investments in Subsidiaries which are Guarantors;
(f) loans between the Borrower and the Guarantors described in
Section 9.4(f);
(g) loans and advances to Qualified Special Purpose
Subsidiaries, provided (i) any such loans or advances are evidenced by
a promissory note or other written instrument acceptable to the Agent
payable to a Guarantor or the Borrower, (ii) all such promissory notes
or other evidence of such Indebtedness shall be pledged to the Agent
for the benefit of the Lenders pursuant to an Intercompany Note Pledge
Agreement executed by all obligees thereof, and (iii) all such
Indebtedness shall be due and payable upon disposition by such
Qualified Special Purpose Subsidiary of its assets;
(h) loans and advances to Non-Aircraft Special Purpose
Subsidiaries who are not Guarantors and who are not Qualified Special
Purpose Subsidiaries, provided the aggregate outstanding principal
amount of such loans and advances shall not at any time exceed ten
percent (10%) of Adjusted Consolidated Net Worth;
(i) other loans, advances and investments not otherwise
covered by clause (a) through (h) above in an aggregate principal
amount at any time outstanding not to exceed $5,000,000; and
(j) loans and advances to Subsidiaries who are not Guarantors,
but who are parties to the Lease Receivable Purchase Facility or the
Lease Receivable Financing Facility,
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provided such loans or advances are made to facilitate a Permitted
Receivables Securitization or a Permitted Receivables Sales
Transaction;
9.7. Merger or Consolidation. (a) Consolidate with or merge into any
other Person, or (b) permit any other Person to merge into it, or (c) liquidate,
wind-up or dissolve or sell, transfer or lease or otherwise dispose of all or a
substantial part of its assets (other than sales permitted under Section 9.5);
provided, however, (i) any Subsidiary of the Borrower may merge or transfer all
or substantially all of its assets into or consolidate with the Borrower or any
wholly-owned Subsidiary of the Borrower, and (ii) any other Person may merge
into or consolidate with the Borrower or any wholly-owned Subsidiary and any
Subsidiary may merge into or consolidate with any other Person in order to
consummate an Acquisition permitted by Section 9.2, provided further, that any
resulting or surviving entity shall execute and deliver such agreements and
other documents, including a Guaranty, (as required under Section 8.19(a) above)
and take such other action as the Agent may require to evidence or confirm its
express assumption of the obligations and liabilities of its predecessor
entities under the Loan Documents;
9.8. Restricted Payments. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing;
9.9. Transactions with Affiliates. Other than transactions permitted
under Sections 9.6 and 9.7, enter into any transaction after the Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of the Borrower, except (a) that such Persons may render services to the
Borrower or its Subsidiaries for compensation at the same rates generally paid
by Persons engaged in the same or similar businesses for the same or similar
services, (b) that the Borrower or any Subsidiary may render services to such
Persons for compensation at the same rates generally charged by the Borrower or
such Subsidiary and (c) in either case in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's (or any Subsidiary's)
business consistent with past practice of the Borrower and its Subsidiaries and
upon fair and reasonable terms no less favorable to the Borrower (or any
Subsidiary) than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate;
9.10. Compliance with ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
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(d) fail to make any material contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan; or
(g) fail, or permit the Borrower or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof;
9.11. Fiscal Year. Change its Fiscal Year;
9.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 9.7 and except in connection with
transfers of assets permitted under Section 9.5;
9.13. Limitations on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property, whether now owned or hereafter acquired in a related
transaction or series of related transactions, which has been or is to be sold
or transferred by the Borrower or any Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or any
Subsidiary;
9.14. Change in Control. Cause, suffer or permit to exist or occur any
Change of Control;
9.15. Rate Hedging Obligations. Incur any Rate Hedging Obligations or
enter into any agreements, arrangements, devices or instruments relating to Rate
Hedging Obligations, except pursuant to Swap Agreements in an aggregate notional
amount of at least 50% of the Revolving Credit Outstandings or as otherwise
agreed by the Agent;
9.16. Negative Pledge Clauses. Enter into or cause, suffer or permit to
exist any agreement with any Person other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents which prohibits or limits
the ability of any of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now
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owned or hereafter acquired, provided that the Borrower and any Subsidiary may
enter into such an agreement in connection with property acquired with the
proceeds of purchase money Indebtedness permitted hereunder;
9.17. Compensation; Reimbursement of Expenses; Earnouts.
(a) Pay any salary, fees, and other direct and indirect
remuneration and compensation to any of its directors and executive
officers in an amount in excess of those amounts paid to directors and
executive officers of comparable companies engaged in the same general
type of business and in similar financial condition;
(b) Reimburse any stockholder, officer, director, employee or
agent of the Borrower or any Subsidiary for any expenses incurred by
such Person other than reasonable expenses incurred for or on behalf of
the Borrower or any Subsidiary in the ordinary course of business;
(c) Amend, modify, restate or otherwise alter in any material
respect any earnout agreements, or any employment agreements or
non-compete agreements with executive officers of any of the Founding
Companies without the prior written consent of the Agent;
9.18. Prepayments, Etc. of Indebtedness. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness, other than Non-Recourse Indebtedness; or
(b) amend, modify or change in any manner any term or condition of any
Indebtedness described in Section 9.4(a) or any lease so that the terms and
conditions thereof are less favorable to the Agent and the Lenders than the
terms of such Indebtedness or leases as of the Closing Date.
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ARTICLE X
Events of Default and Acceleration
10.1. Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of any Loan, Reimbursement Obligation or other
Obligation, when and as the same shall be due and payable whether
pursuant to any provision of Article II or Article III, at maturity, by
acceleration or otherwise; or
(b) if default shall be made in the due and punctual payment
of any amount of interest on any Loan, Reimbursement Obligation or
other Obligation or of any fees or other amounts payable to any of the
Lenders or the Agent within three (3) Business Days of the date on
which the same shall be due and payable; or
(c) if default shall be made in the performance or observance
of any covenant set forth in Section 8.7, 8.11, 8.12, 8.19 or Article
IX;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement or the Notes (other than as
described in clauses (a), (b) or (c) above) and such default shall
continue for 30 or more days after the earlier of receipt of notice of
such default by the Authorized Representative from the Agent or an
executive officer of the Borrower becomes aware of such default, or if
a default shall be made in the performance or observance of, or shall
occur under, any covenant, agreement or provision contained in any of
the other Loan Documents (beyond any applicable grace period, if any,
contained therein) or in any instrument or document evidencing or
creating any obligation, guaranty, or Lien in favor of the Agent or any
of the Lenders or delivered to the Agent or any of the Lenders in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than by reason of any action by the Agent), or if without
the written consent of the Lenders, this Agreement or any other Loan
Document shall be disaffirmed or shall terminate, be terminable or be
terminated or become void or unenforceable for any reason whatsoever
(other than in accordance with its terms in the absence of default or
by reason of any action by the Lenders or the Agent); or
(e) if there shall occur (i) a default, which is not waived,
in the payment of any principal, interest, premium or other amount with
respect to any Indebtedness or Rate Hedging Obligation (other than the
Loans and other Obligations) of the Borrower or any Subsidiary in an
amount not less than $5,000,000 in the aggregate outstanding, or (ii) a
default, which is not waived, in the performance, observance or
fulfillment of any term or
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covenant contained in any agreement or instrument under or pursuant to
which any such Indebtedness or Rate Hedging Obligation may have been
issued, created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, or (iii) any other event of default as specified in any
agreement or instrument under or pursuant to which any such
Indebtedness or Rate Hedging Obligation may have been issued, created,
assumed, guaranteed or secured by the Borrower or any Subsidiary, and
such default or event of default under (i), (ii) or (iii) hereof shall
continue for more than the period of grace, if any, therein specified,
or such default or event of default shall permit the holder of any such
Indebtedness (or any agent or trustee acting on behalf of one or more
holders) to accelerate the maturity thereof; provided, however, that
the events described in this Section 10.1(e) shall not constitute an
Event of Default to the extent that such event relates to a Special
Purpose Subsidiary and the Borrower is subject to no recourse as a
result of such event;
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report
or statement at any time furnished to the Agent or any Lender by or on
behalf of the Borrower or any other Loan Party pursuant to or in
connection with any Loan Document, or otherwise, shall be false or
misleading in any material respect when given; or
(g) if the Borrower or any Subsidiary or other Loan Party
shall be unable to pay its debts generally as they become due; file a
petition to take advantage of any insolvency statute; make an
assignment for the benefit of its creditors; commence a proceeding for
the appointment of a receiver, trustee, liquidator or conservator of
itself or of the whole or any substantial part of its property; file a
petition or answer seeking liquidation, reorganization or arrangement
or similar relief under the federal bankruptcy laws or any other
applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Subsidiary or other
Loan Party or of the whole or any substantial part of its properties
and such order, judgment or decree continues unstayed and in effect for
a period of sixty (60) days, or approve a petition filed against the
Borrower or any Subsidiary seeking liquidation, reorganization or
arrangement or similar relief under the federal bankruptcy laws or any
other applicable law or statute of the United States of America or any
state, which petition is not dismissed within sixty (60) days; or if,
under the provisions of any other law for the relief or aid of debtors,
a court of competent jurisdiction shall assume custody or control of
the Borrower or any Subsidiary or other Loan Party or of the whole or
any substantial part of its properties, which control is not
relinquished within sixty (60) days; or if there is commenced against
the Borrower or any Subsidiary or other Loan Party any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state which proceeding or petition
remains undismissed for a period of sixty (60) days; or if the Borrower
or any Subsidiary or other Loan Party takes any action to indicate its
consent to or approval of any such proceeding or petition; or
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(i) if (i) one or more judgments or orders where the amount
not covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $5,000,000 is rendered against the Borrower
or any Subsidiary, or (ii) there is any attachment, injunction or
execution against any of the Borrower's or Subsidiaries' properties for
any amount in excess of $5,000,000 in the aggregate; and such judgment,
attachment, injunction or execution remains unpaid, unstayed,
undischarged, unbonded or undismissed for a period of thirty (30) days;
or
(j) if the Borrower or any Subsidiary shall, other than in the
ordinary course of business (as determined by past practices), suspend
all or any part of its operations material to the conduct of the
business of the Borrower or such Subsidiary for a period of more than
60 days; or
(k) if there shall occur and not be waived an Event of Default
as defined in any of the other Loan Documents;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be
taken: (i) the Agent, with the consent of the Required
Lenders, may, and at the direction of the Required Lenders
shall, declare any obligation of the Lenders and the Issuing
Bank to make further Revolving Loans and Swing Line Loans or
to issue additional Letters of Credit terminated, whereupon
the obligation of each Lender to make further Revolving Loans,
of NationsBank to make further Swing Line Loans, and of the
Issuing Bank to issue additional Letters of Credit, hereunder
shall terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Obligations to be
immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to the Agent and the Lenders, shall forthwith become
immediately due and payable without presentment, demand,
protest, notice or other formality of any kind, all of which
are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(g) or (h) above, then the obligation of the Lenders to make
Revolving Loans, of NationsBank to make Swing Line Loans, and
of the Issuing Bank to issue Letters of Credit hereunder shall
automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of
any action by the Agent or the Required Lenders or notice to
the Agent or the Lenders;
(B) The Borrower shall, upon demand of the Agent or
the Required Lenders, deposit cash with the Agent in an amount
equal to the amount of any Letter of Credit Outstandings, as
collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts
shall be held by the Agent pursuant to the terms of the LC
Account Agreement; and
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(C) the Agent and each of the Lenders shall have all
of the rights and remedies available under the Loan Documents
or under any applicable law.
10.2. Agent to Act. In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
10.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
10.4. No Waiver. No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
10.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
Article X hereof, all payments received by the Agent hereunder, in respect of
any principal of or interest on the Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Agent in the following order:
(a) amounts due to the Lenders pursuant to Sections 2.10, 3.3,
3.4 and 12.5;
(b) amounts due to the Agent pursuant to Section 11.9;
(c) payments of interest on Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(d) payments of principal of Loans, Swing Line Loans and
Reimbursement Obligations, to be applied for the ratable benefit of the
Lenders (with amounts payable in respect of Swing Line Outstandings
being included in such calculation and paid to NationsBank);
(e) payments of cash amounts to the Agent in respect of
outstanding Letters of Credit pursuant to Section 10.1(B);
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(f) amounts due to the Lenders pursuant to Sections 3.2(g),
8.15 and 12.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders;
(h) amounts due to any of the Lenders in respect of
Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders on a pro rata basis according to the amounts owed; and
(i) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
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ARTICLE XI
The Agent
11.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 11.5 and
the first sentence of Section 11.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents):
(a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee
or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Loan Party or any other Person to perform any of its
obligations thereunder;
(c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Loan Party or the satisfaction of any
condition or to inspect the property (including the books and records)
of any Loan Party or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted
to be taken by it under or in connection with any Loan Document, except
for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
11.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Loan Party), independent accountants, and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes hereof unless and until the Agent
receives and accepts an Assignment and Acceptance executed in
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accordance with Section 12.1 hereof. As to any matters not expressly provided
for by this Agreement, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding on all of the Lenders; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to any Loan Document or applicable law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
11.3. Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 11.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the Required
Lenders, provided 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 Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
11.4. Rights as Lender. With respect to its Revolving Credit Commitment
and the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Loan Party or any of its Subsidiaries
or affiliates as if it were not acting as Agent, and NationsBank (and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from any Loan Party or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
11.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 12.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the Agent
(including by any Lender) in any way relating to or arising out of any Loan
Document or the transactions contemplated thereby or any action taken or omitted
by the Agent under any Loan Document provided that no Lender shall be liable for
any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs or expenses payable by the Borrower under Section
11.5, to the extent that the Agent is not promptly reimbursed for such costs and
expenses by
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the Borrower. The agreements contained in this Section 11.5 shall survive
payment in full of the Loans and all other amounts payable under this Agreement.
11.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Loan Parties and their Subsidiaries and decision to
enter into this Agreement and that it 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 analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of its Subsidiaries or affiliates that may come into the possession
of the Agent or any of its affiliates.
11.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent; provided,
however, so long as no Default or Event of Default shall have occurred and be
continuing such successor Agent shall be subject to the consent of the Borrower,
which consent shall not be unreasonably withheld. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$2,000,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
11.8. Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article V) which results in its receiving more than its pro rata share of the
aggregate payments with respect to all of the Obligations (other than any
payment expressly provided hereunder to be distributed on other than a pro rata
basis and payments pursuant to Article V), then (a) such Lender shall be deemed
to have simultaneously purchased from the other Lenders a share in their
Obligations so that the amount of the Obligations held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to time
as shall be equitable to insure that the Lenders share such payments ratably;
provided, however, that for purposes of this Section 11.8 the term "pro rata"
shall be determined with respect to the Revolving Credit Commitment of each
Lender and to the Total Revolving Credit Commitments after subtraction in each
case of amounts, if any, by which any such Lender has not funded its share of
the outstanding Loans and Obligations. If all or any portion of any such excess
payment is thereafter recovered from the Lender which received the same, the
purchase provided in this Section 11.8 shall be rescinded to
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the extent of such recovery, without interest. The Borrower expressly consents
to the foregoing arrangements and agrees that each Lender so purchasing a
portion of the other Lenders' Obligations may exercise all rights of payment
(including, without limitation, all rights of set-off, banker's lien or
counterclaim) with respect to such portion as fully as if such Lender were the
direct holder of such portion.
11.9. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.
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ARTICLE XII
Miscellaneous
12.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this Agreement,
any such partial assignment shall be in an amount at least equal to $5,000,000
or an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to the Agent for its acceptance an Assignment and Acceptance in the form of
Exhibit B hereto, together with any Note subject to such assignment and a
processing fee of $3,500, not to be reimbursed by the Borrower.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 5.6.
(b) The Agent shall maintain at its address referred to in Section 12.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit B
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hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(d) Each Lender may sell participations to one or more Persons in all
or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article V and the right of set-off contained in Section
12.3, and (iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending its Revolving Credit Commitment).
(e) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time assign and pledge all or any portion of its Loans and
its Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its obligations
hereunder.
(f) Subject to the provisions of Section 12.16 hereof, any Lender may
furnish any information concerning the Borrower or any of its Subsidiaries in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants).
12.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
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<PAGE> 98
(a) if to the Borrower:
UniCapital Corporation
10800 Biscayne Boulevard
Miami, Florida 33161
Attn: Daniel M. Chait
Telephone: (305) 899-5019
Telefacsimile: (305) 899-5050
With a copy to:
Morgan, Lewis & Bockius, LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
Attention: Michael J. Pedrick
Telephone: (215) 963-5000
Telefacsimile: (215) 963-5299
(b) if to the Agent:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
with a copy to:
NationsBank, National Association
100 S.E. Second Street, 14th Floor
Miami, Florida 33131
Attention: Ms. Allison Freeland
Telephone: (305) 533-2421
Telefacsimile: (305) 533-2437
(c) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance;
(d) if to any other Loan Party, at the address set forth
on the signature page of the Guaranty or Security
Instrument executed by such Loan Party, as the case
may be.
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<PAGE> 99
12.3. Right of Set-off; Adjustments.
(a) Upon the occurrence and during the continuance of any
Event of Default, each Lender (and each of its affiliates) is hereby
authorized 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 such Lender (or any of its
affiliates) to or for the credit or the account of the Borrower against
any and all of the obligations of the Borrower now or hereafter
existing under this Agreement and the Note held by such Lender,
irrespective of whether such Lender shall have made any demand under
this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this
Section 12.3 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans owing to it, or
interest thereon, such benefitted Lender shall purchase for cash from
the other Lenders a participating interest in such portion of each such
other Lender's Loans owing to it, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without
interest. The Borrower agrees that any Lender so purchasing a
participation from a Lender pursuant to this Section 12.3 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Person were the direct creditor of the Borrower in the
amount of such participation.
12.4. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
Eurodollar Rate Loan hereunder or the Borrower has continuing obligations
hereunder unless otherwise provided herein. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants, provisions and
agreements by or on behalf of the Borrower which are contained in the Loan
Documents shall inure to the benefit of the successors and permitted assigns of
the Lenders or any of them.
12.5. Expenses. The Borrower agrees to pay subject to the fee letter on
demand all costs and expenses of the Agent in connection with the syndication,
preparation, execution, delivery,
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<PAGE> 100
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent (excluding
the cost of internal counsel) with respect thereto and with respect to advising
the Agent as to its rights and responsibilities under the Loan Documents. The
Borrower further agrees to pay on demand all costs and expenses of the Agent and
the Lenders, if any (including, without limitation, reasonable external
attorneys' fees and expenses), in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of the Loan Documents and
the other documents to be delivered hereunder.
12.6. Amendments and Waivers. Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if Article XI or the rights or duties of the Agent are affected thereby,
by the Agent); provided that no such amendment or waiver shall, unless signed by
all the Lenders, (i) increase the Revolving Credit Commitment of the Lenders,
(ii) reduce the principal of or rate of interest on any Loan or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for the payment
of any scheduled installment of principal of or interest on any Loan or any fees
or other amounts payable hereunder or for termination of any Revolving Credit
Commitment, or (iv) change the percentage of the Revolving Credit Commitment or
of the unpaid principal amount of the Notes, or the number of Lenders, which
shall be required for the Lenders or any of them to take any action under this
Section 12.6 or any other provision of this Agreement or (v) release any
Guarantor or all or substantially all of the Collateral; and provided, further,
that no such amendment or waiver that affects the rights, privileges or
obligations of NationsBank as provider of Swing Line Loans, shall be effective
unless signed in writing by NationsBank or that affects the rights, privileges
or obligations of the Issuing Bank as issuer of Letters of Credit, shall be
effective unless signed in writing by the Issuing Bank; and provided, however,
that notwithstanding anything to the contrary in this Section 12.6, the release
of any Liens or Guarantors pursuant to Section 4.8 shall not require the
approval of any Lender.
No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.
12.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
12.8. Termination. The termination of this Agreement shall not affect
any rights of the Borrower, the Lenders or the Agent or any obligation of the
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the
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<PAGE> 101
benefit of the Lenders under the Loan Documents shall continue in full force and
effect, notwith standing the termination of this Agreement, until all of the
Obligations have been paid in full after the termination hereof (other than
Obligations in the nature of continuing indemnities or expense reimbursement
obligations not yet due and payable, which shall continue) or the Borrower has
furnished the Lenders and the Agent with an indemnification satisfactory to the
Agent and each Lender with respect thereto. All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until payment in full of the Obligations unless otherwise provided
herein. Notwithstanding the foregoing, if after receipt of any payment of all or
any part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and the
Borrower shall be liable to, and shall indemnify and hold the Agent or such
Lender harmless for, the amount of such payment surrendered until the Agent or
such Lender shall have been finally and irrevocably paid in full. The provisions
of the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Agent or the Lenders in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Agent or the Lenders' rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become final
and irrevocable.
12.9. Indemnification; Limitation of Liability.
(a) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their affiliates and their respective
officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages,
losses, liabilities, costs, and expenses (including, without
limitation, reasonable external attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation,
or proceeding or preparation of defense in connection therewith) the
Loan Documents, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Loans except to the
extent such claim, damage, loss, liability, cost, or expense is found
in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section
12.9 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any
other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated.
The Borrower agrees that no Indemnified Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to it,
any of its Subsidiaries, any Guarantor, or any security holders or
creditors thereof arising out of, related to or in connection with the
transactions contemplated herein, except to the extent that such
liability is found in a final non-appealable judgment by a court of
competent jurisdiction to have directly resulted from such Indemnified
Party's gross negligence or willful misconduct. The Borrower agrees not
to assert any claim against the Agent, any Lender, any of their
affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of
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<PAGE> 102
liability, for special, indirect, consequential, or punitive damages
arising out of or otherwise relating to the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.
(b) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 12.9 shall survive the payment in
full of the Loans and all other amounts payable under this Agreement.
12.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
12.11. Entire Agreement. This Agreement, together with the other Loan
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, Eurodollar Rate Loans and other communications between or among
the parties, both oral and written, with respect thereto.
12.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
12.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below). If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to the Borrower.
As used in this paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from time to time may be
contracted for, charged, or received under the laws applicable to such Lender
which are
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<PAGE> 103
presently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum nonusurious
interest rate than applicable laws now allow.
12.14. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN
THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY SHALL BE
GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE
INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY OF
MIAMI-DADE, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY, ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND THE BORROWER
HEREBY IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER
PROVIDED IN SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED
FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(d) NOTHING CONTAINED IN SUBSECTIONS (a) OR (b) HEREOF SHALL
PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
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EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY
ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE
TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
12.15. Payments. All principal, interest, and other amounts to be made
by the Borrower under this Agreement and the other Loan Documents shall be made
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, deduction or counterclaim. Subject to the definition of
"Interest Period" herein, whenever any payment under this Agreement or any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time in such case shall be included in the computation of interest and fees,
as applicable, and as the case may be.
12.16. Confidentiality. The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement; provided that nothing herein
shall prevent any Lending Party from disclosing such information (a) to any
other Lending Party or any affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or affiliate of any
Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any litigation to which
such Lending Party or any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
12.17. Intercreditor Agreement. The Agent and each of the Lenders
hereby acknowledges and agrees to be bound by the terms of the Intercreditor
Agreement.
[Signatures on following pages]
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<PAGE> 105
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
UNICAPITAL CORPORATION
WITNESS:
By:
- ---------------------------------- ---------------------------------
Name:
-------------------------------
Daniel Chait
- ---------------------------------- Title: Vice President
-----------------------------
CREDIT AGREEMENT
SIGNATURE PAGES
<PAGE> 106
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By:
---------------------------------
Name: Allison Freeland
-------------------------------
Title: Senior Vice President
------------------------------
CREDIT AGREEMENT
SIGNATURE PAGES
<PAGE> 107
NATIONSBANK, NATIONAL ASSOCIATION
By:
---------------------------------
Name: Allison Freeland
-------------------------------
Title: Senior Vice President
------------------------------
Lending Office for Base Rate Loans:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mary Cardinale
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, National Association
ABA#: 053000196
Account No.: 1366212250600
Reference: UniCapital
Attention: Corporate Credit Services
Lending Office for Eurodollar Rate Loans:
NationsBank, National Association
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Mary Cardinale
Telephone: (704) 386-4220
Telefacsimile: (704) 386-9923
Wire Transfer Instructions:
NationsBank, National Association
ABA#: 053000196
Account No.: 1366212250600
Reference: UniCapital
Attention: Corporate Credit Services
CREDIT AGREEMENT
SIGNATURE PAGES
<PAGE> 108
EXHIBIT A
Applicable Commitment Percentages
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
- ------ ---------------- ----------
NationsBank, National
Association $300,000,000.00 100.00%
----------- ----------
$300,000,000.00 100%
A-1
<PAGE> 109
EXHIBIT B
Form of Assignment and Acceptance
Reference is made to the Credit Agreement dated as of June 10, 1998
(the "Credit Agreement") among UniCapital Corporation, a Delaware corporation
(the "Borrower"), the Lenders (as defined in the Credit Agreement) and
NationsBank National Association, as agent for the Lenders (the "Agent"). Terms
defined in the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the date hereof equal to the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement and the other Loan Documents. After
giving effect to such sale and assignment, the Assignee's Revolving Credit
Commitment and the amount of the Loans owing to the Assignee will be as set
forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note held by the Assignor and requests that the Agent
exchange such Note for new Notes payable to the order of the Assignee in an
amount equal to the Revolving Credit Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Revolving Credit Commitment
retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 8.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor 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 Credit
Agreement; (iii) confirms that it is not an affiliate of the Borrower; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of
B-1
<PAGE> 110
the Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service or other forms required under Section
5.6.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date specified on Schedule 1.
5. As of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
6. From and after the Effective Date, the Agent shall make all payments
under the Credit Agreement and the Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Florida.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
B-2
<PAGE> 111
Schedule 1
Percentage interest assigned: ________%
Assignee's Commitment: $_______
Aggregate outstanding principal amount
of Loans assigned: $_______
Principal amount of Note payable to Assignee: $_______
Principal amount of Note payable to Assignor: $_______
Effective Date (if other than date
of acceptance by Agent): *_______, 19__
[NAME OF ASSIGNOR], as Assignor
By:
-----------------------------------
Title:
Dated: , 19
----------- --
[NAME OF ASSIGNEE], as Assignee
By:
-----------------------------------
Title:
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
B-3
<PAGE> 112
Accepted [and Approved] **
this ___ day of ___________, 19 _
NATIONSBANK NATIONAL ASSOCIATION
By:____________________________________
Title:
[Approved this ____ day
of ____________, 19__
UNICAPITAL CORPORATION
By:____________________________________]**
Title:
** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
B-4
<PAGE> 113
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized Representative
Reference is hereby made to the Credit Agreement dated as of June
10, 1998 (the "Agreement") among UniCapital Corporation, a Delaware corporation
(the "Borrower"), the Lenders (as defined in the Agreement), and NationsBank,
National Association, as Agent for the Lenders ("Agent"). Capitalized terms used
but not defined herein shall have the respective meanings therefor set forth in
the Agreement.
The Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Representative under the Loan Documents,
and hereby represents and warrants that (i) set forth opposite each such
individual's name is a true and correct statement of such individual's office
(to which such individual has been duly elected or appointed), a genuine
specimen signature of such individual and an address for the giving of notice,
and (ii) each such individual has been duly authorized by the Borrower to act as
Authorized Representative under the Loan Documents:
Name and Address Office Specimen Signature
- -------------------------- ------------------------- ------------------------
- --------------------------
- --------------------------
- -------------------------- ------------------------- ------------------------
- -------------------------- ------------------------- ------------------------
- --------------------------
Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of June, 1998.
UNICAPITAL CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
C-1
<PAGE> 114
EXHIBIT D-1
Form of Borrowing Notice
To: NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of June
10, 1998 (the "Agreement") among UniCapital Corporation (the "Borrower"), the
Lenders (as defined in the Agreement), and NationsBank, National Association, as
Agent for the Lenders ("Agent"). Capitalized terms used but not defined herein
shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives
notice to the Agent that Loans of the type and amount set forth below be made on
the date indicated:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- --------- --------- ---------------
<S> <C> <C> <C>
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
</TABLE>
- -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $5,000,000 or if greater an integral multiple of $1,000,000, unless
a Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
Use of Proceeds:
- ----------------
[ ] Acquisition Loan
[ ] Working Capital Loan.
The Borrower hereby requests that the proceeds of Loans described
in this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions].
D-1-1
<PAGE> 115
The undersigned hereby certifies that:
1. In the event any Loan hereunder is a Working Capital Loan which
is to be loaned or advanced to a Subsidiary of the Borrower, the obligee of such
loan or advance is ___________________________ and the Subsidiary to which such
amounts are to be loaned or advanced is ___________________________, and (a)
such loan or advance to such Subsidiary shall be evidenced by a promissory note
or other written evidence of Indebtedness satisfactory to the Agent, (b) such
promissory note or other written evidence of Indebtedness shall be pledged to
the Agent for the benefit of the Lenders pursuant to an Intercompany Note Pledge
Agreement, and (c) the obligations owed to the Borrower or any other Subsidiary
pursuant to such Indebtedness shall be subordinated to the Obligations pursuant
to an Intercompany Note Subordination Agreement.
2. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
3. All the representations and warranties set forth in Article VII
of the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and correct as of the date hereof except
that the reference to the financial statements in Section 7.6(a) of the
Agreement are to those financial statements most recently delivered to you
pursuant to Section 8.1 of the Agreement (it being understood that any financial
statements delivered pursuant to Section 8.1(b) have not been certified by
independent public accountants) and attached hereto are any changes to the
Schedules referred to in connection with such representations and warranties.
4. The Borrower represents and warrants to the Agent that the
amount of Working Capital Outstandings plus Letter of Credit Outstandings, after
giving effect to the Loan requested hereunder, does not exceed the Asset
Ceiling.
5. All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full.
UNICAPITAL CORPORATION
BY:
------------------------------------------------
Authorized Representative
DATE:
----------------------------------------------
D-1-2
<PAGE> 116
EXHIBIT D-2
Form of Borrowing Notice--Swing Line Loans
To: NationsBank, National Association,
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704)386-9923
Reference is hereby made to the Credit Agreement dated as of June
10, 1998 (the "Agreement") among UniCapital Corporation (the "Borrower"), the
Lenders (as defined in the Agreement), and NationsBank, National Association, as
Agent for the Lenders ("Agent"). Capitalized terms used but not defined herein
shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives
notice to NationsBank that a Swing Line Loan of the amount set forth below be
made on the date indicated:
Amount(1) Date of Loan
--------- ------------
--------- ----------, ----
- -----------------------
(1) Must be $_________ or if greater an integral multiple of $_______, unless a
Base Rate Refunding Loan.
Use of Proceeds:
- ----------------
[ ]
-------------------------------------------------------
[ ]
-------------------------------------------------------
The Borrower hereby requests that the proceeds of Swing Line Loans
described in this Borrowing Notice be made available to the Borrower as follows:
[insert transmittal instructions] .
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article VII of
the Agreement and in the Loan Documents (other than those expressly stated to
refer to a particular date) are true and
D-2-1
<PAGE> 117
correct as of the date hereof except that the reference to the financial
statements in Section 7.6(a) of the Agreement are to those financial statements
most recently delivered to you pursuant to Section 8.1 of the Agreement (it
being understood that any financial statements delivered pursuant to Section
8.1(b) have not been certified by independent public accountants) and attached
hereto are any changes to the Schedules referred to in connection with such
representations and warranties.
3. All conditions contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full.
UNICAPITAL CORPORATION
BY:
-----------------------------------------------
Authorized Representative
DATE:
----------------------------------------------
D-2-2
<PAGE> 118
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association
(Carolinas), as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (the "Agreement") among UniCapital Corporation (the "Borrower"), the
Lenders (as defined in the Agreement), and NationsBank, National Association, as
Agent for the Lenders ("Agent"). Capitalized terms used but not defined herein
shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent of the following selection of a type of Loan [or Segment] and
Interest Period:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ----------- --------- --------- ---------------
<S> <C> <C> <C>
Base Rate Loan ______ _________ ____________
Eurodollar Rate Loan ______ _________ ____________
</TABLE>
- -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $_________ or if greater an integral multiple of $_______, unless a
Base Rate Refunding Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan.
UNICAPITAL CORPORATION
BY:
-----------------------------------------------
Authorized Representative
DATE:
----------------------------------------------
E-1
<PAGE> 119
EXHIBIT F-1
Form of Revolving Note
Promissory Note
(Revolving Loan)
$______________
_________, Florida
June 10, 1998
FOR VALUE RECEIVED, UNICAPITAL CORPORATION, a Delaware corporation
having its principal place of business located in Bar Harbor Island, Florida
(the "Borrower"), hereby promises to pay to the order of _______________________
________________________ (the "Lender"), in its individual capacity, at the
office of NATIONSBANK, NATIONAL ASSOCIATION, as agent for the Lenders (the
"Agent"), located at One Independence Center, 101 North Tryon Street, NC1-001-
15-04, Charlotte, North Carolina 28255 (or at such other place or places as the
Agent may designate in writing) at the times set forth in the Credit Agreement
dated as of June 10, 1998 among the Borrower, the financial institutions party
thereto (collectively, the "Lenders") and the Agent (the "Agreement" -- all
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of ___________
DOLLARS ($__________) or, if less than such principal amount, the aggregate
unpaid principal amount of all Revolving Loans made by the Lender to the
Borrower pursuant to the Agreement on the Revolving Credit Termination Date or
such earlier date as may be required pursuant to the terms of the Agreement, and
to pay interest from the date hereof on the unpaid principal amount hereof, in
like money, at said office, on the dates and at the rates provided in Article II
of the Agreement. All or any portion of the principal amount of Loans may be
prepaid or required to be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 (a) of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
F-1-1
<PAGE> 120
This Revolving Note is one of the Revolving Notes in the principal
amount of $300,000,000 referred to in the Agreement and is issued pursuant to
and entitled to the benefits and security of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon which
the Revolving Loans evidenced hereby were or are made and are to be repaid. This
Revolving Note is subject to certain restrictions on transfer or assignment as
provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Revolving Note
any collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
UNICAPITAL CORPORATION
WITNESS:
By:
- ----------------------------- ----------------------------------------
Name:
--------------------------------------
Title:
- ----------------------------- -------------------------------------
F-1-2
<PAGE> 121
EXHIBIT F-2
Form of Swing Line Note
Swing Line Note
$15,000,000 _________, ______________
June 10, 1998
FOR VALUE RECEIVED, UNICAPITAL CORPORATION (the "Borrower") hereby
promises to pay to NATIONSBANK, NATIONAL ASSOCIATION or its assigns (the
"Lender"), in its individual capacity, at the office of NATIONSBANK, NATIONAL
ASSOCIATION, as administrative agent for the Lenders (the "Agent"), located at
One Independence Center, 101 North Tryon Street, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Credit Agreement dated as of June 10,
1998 among the Borrower, the financial institutions party thereto (collectively,
the "Lenders") and the Agent (as amended and supplemented and in effect from
time to time, the "Agreement" -- all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement), in lawful
money of the United States of America, in immediately available funds, the
lesser of (i) the principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) or
(ii) if less than such principal amount, the aggregate unpaid principal amount
of all Swing Line Loans made by the Lender to the Borrower pursuant to the
Agreement on the Revolving Credit Termination Date or such earlier date as may
be required pursuant to the terms of the Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates provided in Article II of the Agreement.
All or any portion of the principal amount of Loans may be prepaid or may be
required to be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2(a) of the Agreement.
Further, in the event of such acceleration, this Note shall become immediately
due and payable, without presentation, demand, protest or notice of any kind,
all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Note is the Swing Line Note in the aggregate principal amount of
US$15,000,000 referred to in the Agreement and is issued pursuant to and
entitled to the benefits and security of the
F-2-1
<PAGE> 122
Agreement to which reference is hereby made for a more complete statement of the
terms and conditions upon which the Swing Line Loans evidenced hereby were or
are made and are to be repaid. This Note is subject to certain restrictions on
transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Note any
collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence or any other formality are hereby waived
by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Swing Line Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
UNICAPITAL CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
F-2-2
<PAGE> 123
EXHIBIT G
Form of Opinion of Borrower's Counsel
June 10, 1998
See attached.
G-1
<PAGE> 124
EXHIBIT H
Compliance Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
NationsBank, National Association,
as Agent
__________________________________
__________________________________
Attention: _______________________
Telefacsimile: (___) ___-____
Reference is hereby made to the Credit Agreement dated as of June 10,
1998 (the "Agreement") among UniCapital Corporation, a Delaware corporation (the
"Borrower"), the Lenders (as defined in the Agreement) and NationsBank, National
Association, as Agent for the Lenders ("Agent"). Capitalized terms used but not
otherwise defined herein shall have the respective meanings therefor set forth
in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:
1. Calculations:
A. Compliance with Section 9.1(a) Consolidated Net Worth:
-----------------------
1. Consolidated Net Worth $__________
REQUIRED:
(A) CLOSING DATE: $__________
EACH SUCCEEDING FISCAL QUARTER:
-------------------------------
a. Requirement for preceding fiscal quarter $__________
b. Consolidated Net Income
for preceding fiscal quarter (including
certain items otherwise excluded from
Consolidated Net Income) $__________
c. If (b.) is positive, multiply line (b.) by 75%;
if (b.) is negative, enter "0" $__________
d. Add Lines (a.) and (c.) $__________
H-1
<PAGE> 125
e. Aggregate Net Proceeds of any Equity
Offering during preceding fiscal quarter;
if negative, enter "0" $__________
f. Add Lines (d.) and (e.) $__________
(B) CURRENT FISCAL QUARTER (LINE f.) $__________
B. Compliance with Section 9.1(c) Adjusted Consolidated Fixed Charge Ratio:
-----------------------------------------
1. Adjusted Consolidated EBITDA
(sum of a. through f.) $__________
a. Consolidated Net Income (adjusted
in accordance with subparagraph
(i) of the definition of Adjusted
Consolidated EBITDA) $__________
b. Adjusted Consolidated
Interest Expense $__________
c. Taxes on Income $__________
d. Amortization of intangible assets $__________
e. Depreciation on assets not subject
to operating leases $__________
f. Credit loss chargeable to Consolidated Net
Income but not incurred during the period $__________
2. Consolidated Lease Payments
made during such period $__________
3. Capital Expenditures made during such period $__________
4. Cash taxes paid during such period $__________
5. Adjusted Consolidated Fixed
Charges (sum of a. through d.) $__________
a. Adjusted Consolidated Interest Expense $__________
b. Required principal payments on
Recourse Indebtedness for such period $__________
c. Consolidated Lease Payments
made during such period $__________
d. Cash portion of any earnouts paid
during such period $__________
6. B.1 + B.2 $__________
7. B.3 + B.4
8. B.6 - B.7 $__________
9. B.5 $__________
H-2
<PAGE> 126
10. Ratio of B.8 to B.9 ___ to 1.00
REQUIRED: LINE B.10 MUST NOT BE LESS THAN 2.50 TO 1.00
C. Compliance with Section 9.1(b) Consolidated Leverage Ratio:
----------------------------
1. Adjusted Consolidated Indebtedness $__________
2. Adjusted Consolidated EBITDA (as calculated
above) $__________
3. Ratio of C.1 to C.2 ___ to 1.00
REQUIRED: LINE C.3 MUST NOT BE MORE THAN 2.50 TO 1.00
D. Compliance with Section 9.1(d) Consolidated
------------
Indebtedness to Adjusted Consolidated Net Worth
-----------------------------------------------
1. Consolidated Indebtedness $__________
2. Consolidated Shareholders Equity $__________
3. D.1 + D.2 $__________
4. Ratio of D.1 to D.3 ___ to 1.00
REQUIRED: LINE D.4 MUST NOT BE GREATER THAN 5.00 TO 1.00
E. Compliance with Section 9.1(e) Unencumbered Assets
-------------------
1. Unencumbered Assets $__________
REQUIRED: LINE E.1 MUST BE GREATER THAN $100,000,000
2. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrower has not defaulted in the
keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article X of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrower proposes to take the following action with
respect to such Default or Event of Default:__________________
______________________________________________________________
___________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 8.1 of the
Agreement.
H-3
<PAGE> 127
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of _______,
_____.
UNICAPITAL CORPORATION
By:
---------------------------------
Authorized Representative
Name:
-------------------------------
Title:
------------------------------
H-4
<PAGE> 128
EXHIBIT I
Form of Guaranty Agreement
See attached.
I-1
<PAGE> 129
EXHIBIT J
Form of Security Agreement
See attached.
J-1
<PAGE> 130
EXHIBIT K
Form of Intercompany Note Pledge Agreement
See attached.
K-1
<PAGE> 131
EXHIBIT L
Form of Intercompany Note Subordination Agreement
See attached.
L-1
<PAGE> 132
EXHIBIT M
Form of Pledge Agreement
See attached.
M-1
<PAGE> 133
EXHIBIT N
Form of Intellectual Property Security Agreement
See attached.
N-1
<PAGE> 134
EXHIBIT O
Form of Asset Ceiling Certificate
The undersigned Authorized Officer of UniCapital Corporation hereby
certifies the following to be true and correct as of ____________ ___, 19__ [the
last day of preceding month] to be:
I. Book value of Unencumbered Assets eligible to be
considered in the computation of the Asset Ceiling:
A. Equipment held for lease $_____________
B. Equipment held for sale $_____________
C. Lease Receivables $_____________
D. Note Receivables $_____________
E. TOTAL ELIGIBLE UNENCUMBERED ASSETS $_____________
II. Asset Ceiling
A. Total Eligible Unencumbered Assets
(from I.A. above) $_____________
B. Line II.B. x 90% $_____________
C. Asset Ceiling Addition $15,000,000.00
--------------
ASSET CEILING AS OF THE DATE
FIRST SET FORTH ABOVE (SUM OF II.B AND II.C) $
=============
III. Information Concerning Qualified Special Purpose Subsidiaries:
A. Attached hereto as Schedule 1 is a complete list of all
Qualified Special Purpose Subsidiaries, including with respect
to each one, the date of formation, the date of liquidation
(if applicable), the amounts and dates of all investments
therein and the dates and amounts of all Working Capital Loans
used to fund such investments.
O-1
<PAGE> 135
EXECUTED THIS ___ DAY OF __________________, ______.
UNICAPITAL CORPORATION
By:
---------------------------------
Authorized Representative
Name:
-------------------------------
Title:
------------------------------
O-2
<PAGE> 136
EXHIBIT P
Form of LC Account Agreement
See attached.
P-1
<PAGE> 137
Schedule 4.8
------------
Information Regarding Collateral
S-1
<PAGE> 138
Schedule 7.4
------------
Subsidiaries and Investments in Other Persons
S-2
<PAGE> 139
Schedule 7.7
------------
Liens
S-3
<PAGE> 140
Schedule 7.8
------------
Tax Matters
S-4
<PAGE> 141
Schedule 7.10
-------------
Litigation
S-5
<PAGE> 142
Schedule 7.18
-------------
Environmental Matters
S-6
<PAGE> 1
EXHIBIT 4.02
EXECUTION COPY
---------------------------------------------------------------
TRANSFER AND ADMINISTRATION AGREEMENT
among
KITTY HAWK FUNDING CORPORATION,
as Company
and
UCP QUALIFYING SPE 1998-1 LIMITED PARTNERSHIP
UCP OPERATING SPE 1998-1 LIMITED PARTNERSHIP
as Pledgors
and
PORTFOLIO FINANCIAL SERVICING COMPANY, L.P.
individually and
as Master Servicer
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of June 22, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
ARTICLE I
DEFINITIONS..................................................................... 1
SECTION 1.1 Certain Defined Terms................................ 1
SECTION 1.2 Other Terms.......................................... 28
SECTION 1.3 Computation of Time Periods.......................... 28
ARTICLE II
PLEDGES AND SETTLEMENTS......................................................... 28
SECTION 2.1 Facility............................................. 28
SECTION 2.2 Pledges; Pledge Certificates;
Eligible Receivables....................... 29
SECTION 2.3 Selection of Tranche Periods and
Tranche Rates.............................. 33
SECTION 2.4 Discount, Fees and Other Costs and
Expenses................................... 36
SECTION 2.5 Settlement and Reinvestment Procedures............... 37
SECTION 2.6 Liquidation Settlement Procedures.................... 39
SECTION 2.7 Fees................................................. 40
SECTION 2.8 Protection of the Interest of the
Company and the Bank Investors; Releases... 40
SECTION 2.9 Deemed Collections; Reassignments;
Prepayment Shortfalls; Application
of Payments................................ 41
SECTION 2.10 Payments and Computations, Etc....................... 42
SECTION 2.11 Reports.............................................. 43
SECTION 2.12 Accounts............................................. 43
SECTION 2.13 Sharing of Payments, Etc............................. 45
SECTION 2.14 Right of Setoff...................................... 46
SECTION 2.15 Hedging of Receivables............................... 46
SECTION 2.16 Substitution of Receivables.......................... 47
SECTION 2.17 Auction Procedure.................................... 48
ARTICLE III
REPRESENTATIONS AND WARRANTIES.................................................. 49
SECTION 3.1 Representations and Warranties of the
Pledgors................................... 49
SECTION 3.2 Reaffirmation of Representations and
Warranties by the Pledgor.................. 53
SECTION 3.3 [Reserved.].......................................... 53
SECTION 3.4 Representations and Warranties of the
Master Servicer............................ 53
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
ARTICLE IV
CONDITIONS PRECEDENT............................................................ 55
SECTION 4.1 Conditions to Closing................................ 55
ARTICLE V
COVENANTS....................................................................... 59
SECTION 5.1 Affirmative Covenants of Pledgors.................... 59
SECTION 5.2 Negative Covenants of the Pledgors................... 64
SECTION 5.3 [Reserved.].......................................... 66
SECTION 5.4 [Reserved.].......................................... 66
SECTION 5.5 Affirmative Covenants of the Master
Servicer................................... 66
SECTION 5.6 [Reserved.].......................................... 68
SECTION 5.7 Negative Covenants of the Master Servicer............ 68
ARTICLE VI
ADMINISTRATION AND COLLECTIONS.................................................. 69
SECTION 6.1 Appointment of the Master Servicer................... 69
SECTION 6.2 Duties of the Master Servicer........................ 69
SECTION 6.3 Rights After Designation of New Master
Servicer................................... 75
SECTION 6.4 Master Servicer Default.............................. 76
SECTION 6.5 Responsibilities of the Pledgors and the
Seller..................................... 77
SECTION 6.6 Limitation on Liability of the Master
Servicer and Others........................ 77
SECTION 6.7 The Master Servicer Not to Resign.................... 77
SECTION 6.8 Acknowledgement of Guaranty.......................... 78
</TABLE>
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<TABLE>
<S> <C> <C> <C>
ARTICLE VII
TERMINATION EVENTS................................................................ 78
SECTION 7.1 Termination Events..................................... 78
SECTION 7.2 Termination............................................ 80
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS........................................ 81
SECTION 8.1 Indemnities by the Pledgors............................ 81
SECTION 8.2 Indemnity for Taxes, Reserves and
Expenses..................................... 84
SECTION 8.3 Taxes.................................................. 86
SECTION 8.4 Other Costs, Expenses and Related
Matters...................................... 87
SECTION 8.5 [Reserved.]............................................ 88
SECTION 8.6 Pledgor Liability...................................... 88
ARTICLE IX
THE AGENT; BANK COMMITMENT........................................................ 88
SECTION 9.1 Authorization and Action............................... 88
SECTION 9.2 Agent's Reliance, Etc.................................. 89
SECTION 9.3 Termination Events..................................... 89
SECTION 9.4 Rights as Bank Investor................................ 90
SECTION 9.5 Indemnification of the Agent........................... 90
SECTION 9.6 Non-Reliance........................................... 91
SECTION 9.7 Resignation of Agent................................... 91
SECTION 9.8 Payments by the Agent.................................. 92
SECTION 9.9 Bank Commitment; Assignment to Bank
Investors.................................... 92
ARTICLE X
MISCELLANEOUS..................................................................... 96
SECTION 10.1 Term of Agreement...................................... 96
SECTION 10.2 Waivers; Amendments.................................... 97
SECTION 10.3 Notices................................................ 97
SECTION 10.4 Governing Law; Submission to
Jurisdiction; Integration....................100
SECTION 10.5 Severability; Counterparts.............................101
SECTION 10.6 Successors and Assigns.................................101
SECTION 10.7 Waiver of Confidentiality..............................103
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
SECTION 10.8 Confidentiality Agreement..............................103
SECTION 10.9 No Bankruptcy Petition Against the
Company......................................103
SECTION 10.10 No Recourse Against Stockholders,
Officers or Directors........................104
SECTION 10.11 Characterization of the Transactions
Contemplated by the Agreement................104
EXHIBIT A
FORM OF NOTICE OF CHANGE IN FACILITY LIMIT.............A-1
EXHIBIT B CREDIT POLICY MANUAL AND CREDIT
POLICY PROCEDURE MEMORANDA.............................B-1
EXHIBIT C [Reserved.]............................................C-1
EXHIBIT D [Reserved.]............................................D-1
EXHIBIT E FORM OF INVESTOR REPORT................................E-1
EXHIBIT F FORM OF PLEDGE CERTIFICATE ............................F-1
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION
AGREEMENT..............................................G-1
EXHIBIT H LIST OF ACTIONS AND SUITS..............................H-1
EXHIBIT I LOCATION OF RECORDS....................................I-1
EXHIBIT J LIST OF SUBSIDIARIES AND TRADENAMES
......................................................J-1
EXHIBIT K [Reserved.]............................................K-1
EXHIBIT L-1 FORM OF OFFICER'S CERTIFICATE OF QUALIFYING
PLEDGOR.............................................L-1-1
EXHIBIT L-2 FORM OF OFFICER'S CERTIFICATE OF
OPERATING PLEDGOR....................................L-2-1
EXHIBIT L-3 FORM OF OFFICER'S CERTIFICATE OF
SELLER...............................................L-3-1
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C> <C> <C>
EXHIBIT L-4 FORM OF OFFICER'S CERTIFICATE OF
THE GENERAL PARTNER..................................L-4-1
EXHIBIT L-5 FORM OF OFFICER'S CERTIFICATE OF
THE PARENT...........................................L-5-1
EXHIBIT L-6 FORM OF OFFICER'S CERTIFICATE OF THE MASTER
SERVICER............................................L-6-1
EXHIBIT M FORM OF SECURED NOTE...................................M-1
EXHIBIT N ELIGIBLE ORIGINATORS...................................N-1
</TABLE>
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<PAGE> 7
TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"), dated as of
June 22, 1998, by and among UCP QUALIFYING SPE 1998-1 LIMITED PARTNERSHIP, a
Nevada limited partnership, as a pledgor (in such capacity, the "Qualifying
Pledgor"), UCP OPERATING SPE 1998-1 LIMITED PARTNERSHIP, a Nevada limited
partnership, as a pledgor (in such capacity, the "Operating Pledgor" and,
collectively with the Qualifying Pledgor, the "Pledgors"), PORTFOLIO FINANCIAL
SERVICING COMPANY, L.P., a Delaware limited partnership, individually and as
master servicer (in such capacity, the "Master Servicer"), KITTY HAWK FUNDING
CORPORATION, a Delaware corporation (the "Company") and NATIONSBANK, N.A., a
national banking association ("NationsBank"), as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that is a party hereto in the capacity of a Bank Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Pledgors may desire to pledge and assign, from time to
time, certain lease and secured loan receivables to secure a borrowing from the
Company and/or the Bank Investors, as applicable, and the Company may desire to,
and the Bank Investors, if requested, shall lend certain amounts to the
Pledgors, which amounts are secured by the Pledgors' pledge and assignment of
such receivables, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Accounts" means, collectively, the Collection Account, the
Reserve Account, the Fee Reserve Account, the Principal
Collection Account and the Interest Accrual Account.
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<PAGE> 8
"Administrative Agent" means NationsBank, N.A., as administrative
agent.
"Administrative Fee" means the fee payable to the Agent pursuant to
Section 2.7 hereof, the terms of which are set forth in the Fee Letter.
"Advance Amount" means with respect to any Pledge, the amount paid to
the Pledgors by the Company or the Bank Investors being the product of the
applicable Advance Percentage and the Outstanding Balance of the related
Receivables at the time of such Pledge.
"Advance Percentage" means with respect to any Pledge of a Receivable,
93%, or if the Three-Month Average Net Portfolio Yield as of the related Pledge
Date is less than or equal to 1.50%, 88% or such other percentage as may be
agreed to by the Agent and the Pledgors as evidenced in related Pledge
Certificate.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any Person other than the Company and the Bank Investors (including any UCC
financing statement or any similar instrument filed against such Person's assets
or properties); provided, however,that any lien in favor of a third-party lessor
for the Equipment relating to a Leveraged Lease Loan shall not constitute an
Adverse Claim; provided, further, that a lien on the applicable Pledgor's right,
title and interest in any Equipment or proceeds thereof that is expressly
subordinated to the interests of the Agent, the Company and the Bank Investors
under this Agreement and is made subject to payment in full of the related
Contract shall not constitute an Adverse Claim hereunder.
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
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<PAGE> 9
to direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for the
Company and the Bank Investors, and any successor thereto appointed pursuant to
Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount with respect to all Tranche
Periods at such time, (ii) the Net Investment at such time, and (iii) all other
amounts owed (whether due or accrued) hereunder by the Pledgors to the Company
at such time.
"Assignment Amount" with respect to a Bank Investor shall mean at any
time an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of
the Net Investment at such time and (ii) such Bank Investor's unused Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Available Funds" means, for each Payment Date, all Collections
Available for the related Collection Period, plus all Servicing Advances for
such Payment Date, plus all amounts received under the Hedge Agreements with
respect to such Payment Date, plus all Finance Facility Release Amounts for such
Payment Date, plus all amounts on deposit in the Interest Accrual Account
immediately prior to such Payment Date.
"Bank Investors" shall mean NationsBank, N.A. and each other
bank that is party hereto in the capacity of a Bank Investor and
their respective successors and assigns.
"Bankruptcy Code" means the Federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Liquidity Provider (or, if there is
more than one Liquidity Provider, then by NationsBank) from time to time,
changing when
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<PAGE> 10
and as said prime rate changes (such rate not necessarily being the lowest or
best rate charged by the Liquidity Provider (or NationsBank, as applicable)) and
(ii) the sum of (a) 1.50% and (b) the rate equal 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 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 that is a Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider (or, if more than one Liquidity
Provider, then by NationsBank) from three Federal funds brokers of recognized
standing selected by it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Pledgors, the Seller or any ERISA
Affiliate of the Pledgors, or the Seller is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York; Portland, Oregon; Miami, Florida; or
Charlotte, North Carolina are authorized or required by law to close, and, when
used with respect to the determination of any Eurodollar Rate or any notice with
respect thereto, any such day which is also a day for trading by and between
banks in United States dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche, either (i)
prior to the Termination Date, a period of up to 30 days requested by the
Pledgors and agreed to by the Company, NationsBank on behalf of the Liquidity
Provider, or the Agent, as the case may be, commencing on a Business Day
requested by the Pledgors and agreed to by the Company, NationsBank or the
Agent, as the case may be, or (ii) after the Termination Date, a period of one
day. If such BR Tranche Period would end on a day which is not a Business Day,
such BR Tranche Period shall end on the next succeeding Business Day.
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<PAGE> 11
"Capitalized Lease" means any lease of property by a Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
"Carrying Costs" has the meaning provided in Section 2.5.
"Closing Date" means June 26, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means NationsBank, N.A., as collateral agent for any
Liquidity Provider, any Credit Support Provider, the holders of Commercial Paper
and certain other parties.
"Collection Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(a).
"Collection Period" means with respect to each Payment Date, the
immediately preceding calendar month (or, with respect to the first Payment
Date, the period beginning on the initial Cutoff Date and ending on the last day
of the month preceding such Payment Date).
"Collections" means, with respect to any Receivable, all cash
collections on and other cash proceeds of or recoveries on the related Contract,
including, without limitation, all interest charges, rental payments, and cash
proceeds of all Related Security and including all amounts received with respect
to any Deemed Collections or other reassignments of Receivables pursuant to
Section 2.9, but, in each case, other than any Excluded Amounts.
"Collections Available" means, for any Payment Date, all Collections
with respect to the related Collection Period, less any amounts allocated since
the preceding Payment Date, or since the initial Pledge Date in the case of the
first Payment Date, pursuant to Section 2.5(b).
"Commercial Paper" means the promissory notes issued by the Company in
the commercial paper market.
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<PAGE> 12
"Commitment" means (i) with respect to each Bank Investor party hereto,
the commitment of such Bank Investor to make loans to the Pledgors or to acquire
such loans from the Company in accordance herewith in an amount not to exceed
the dollar amount set forth opposite such Bank Investor's signature on the
signature page hereto under the heading "Commitment", minus the dollar amount of
any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement plus the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make loans to the Pledgors or to acquire such loans from the
Company not to exceed the amount set forth in such Assignment and Assumption
Agreement minus the dollar amount of any Commitment or portion thereof assigned
pursuant to an Assignment and Assumption Agreement prior to such time of
determination and (iii) with respect to any assignee of an assignee referred to
in clause (ii) above, the commitment of such assignee to make loans to the
Pledgors or to acquire such loans from the Company not to exceed the amount set
forth in an Assignment and Assumption Agreement between such assignee and its
assign.
"Commitment Termination Date" means June 25, 1999, or such later date
to which the Commitment Termination Date may be extended by the Pledgors, the
Agent and the Bank Investors not later than 90 days prior to the then current
Commitment Termination Date, any such extension to become effective on the then
current Commitment Termination Date and to be for a period not to exceed 364
days from the date of the then current Commitment Termination Date.
"Company" means Kitty Hawk Funding Corporation, and its
successors and assigns.
"Concentration Factor" means for any Obligor on any date of
determination, Receivables of such Obligor having an aggregate Outstanding
Balance not in excess of (a) if the Net Investment is $100,000,000 or more on
such date of determination, the greater of 2% of the Net Investment on such date
and $5,000,000 or, with respect to any Obligor whose long term unsecured debt
obligations are rated at least "Baa3" by Moody's and at least "BBB-" by
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<PAGE> 13
Standard & Poor's or, if only rated by one such rating agency, are rated by such
rating agency at least at the applicable rating set forth above, the greater of
5% of the Net Investment on such date and $7,000,000, (b) if the Net Investment
is less than $100,000,000 on such date of determination, (x) for Obligors whose
Obligor Risk Rating is "5" or worse, $3,000,000 and (y) for Obligors whose
Obligor Risk Rating is "4" or better, $4,000,000; provided that Obligors whose
Obligor Risk Rating is "5" or worse may have pledged Receivables hereunder
having an Outstanding Balance in excess of $3,000,000 but not in excess of
$4,000,000 to the extent that the Transaction Risk Rating for those Receivables
is "4" or better or (c) in any event, such other greater amount that is
determined by the Agent in the reasonable exercise of its good faith judgment
and disclosed in a written notice delivered to the Pledgors or such other lesser
amount that is determined by the Agent with the mutual consent of the Pledgors.
"Conduit Assignee" means any commercial paper conduit designated by
NationsBank from time to time to accept an assignment from the Company of all or
a portion of the Net Investment.
"Contract" means any lease, conditional sale contract, loan contract or
security agreement with respect to any Equipment under which the Seller acts as
lessor or secured party to an Obligor.
"Contract Payment" means each periodic installment of rent or scheduled
payment or principal and interest payable by an Obligor under a Contract.
"Contract Schedule" means the schedule in the form attached hereto as
Schedule I to Exhibit F delivered by the Pledgors to the Agent with respect to
each Pledge or such other form as may be agreed to by the Agent from time to
time.
"CP Rate" means, with respect to any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper having a term equal to such CP Tranche Period
may be sold by any placement agent or commercial paper dealer selected by the
Company, provided, however, that if the rate (or rates) as agreed between
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<PAGE> 14
any such agent or dealer and the Company is a discount rate, then the rate (or
if more than one rate, the weighted average of the rates) resulting from the
Company's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a period of
days not to exceed 90 days commencing on a Business Day requested by the
Pledgors and agreed to by the Company pursuant to Section 2.3. If a CP Tranche
Period would end on a day which is not a Business Day, such CP Tranche Period
shall end on the next succeeding Business Day.
"Credit and Collection Policy" shall mean the Parent's Credit Policy
Manual and Credit Policy and Procedure Memoranda, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the Company and
the Credit Support Provider evidencing the obligation of the Credit Support
Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company in connection with the issuance by the Company of
Commercial Paper.
"Cut-off Date" means, for each Receivable that is subject to a Pledge
hereunder, either (a) the first day of the month of such Pledge or, if later
than the first day of such month, the date of origination thereof or (b) such
other date as may be specified in the related Pledge Certificate.
"Dealer Fee" means the fee payable by the Pledgors to the Collateral
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Fee Letter.
"Deemed Collections" means any Collections on any Receivable deemed to
have been received pursuant to Section 2.9 hereof.
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<PAGE> 15
"Defaulted Receivable" means a Receivable: (i) as to which any payment
remains unpaid for 180 consecutive days or more from the original due date for
such payment; (ii) as to which an Event of Bankruptcy has occurred and is
continuing with respect to the Obligor thereof; (iii) which has been identified
by the Pledgors, the Seller or the Master Servicer as uncollectible; or (iv)
which, consistent with the Credit and Collection Policy, should be written off
as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which
any payment remains unpaid for more than 30 days from the
original due date for such payment and (ii) which is not a
Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon prior
notice to the Pledgors from the Agent, which notice shall be based in the
Agent's sole discretion on its assessment of the risk of loss posed by such
Obligor's Receivables and which notice shall be given 30 days prior to the date
such Obligor shall cease to be a Designated Obligor unless to do so would
materially adversely affect the interests of the Agent, the Company or the Bank
Investors hereunder.
"Determination Date" means the 10th day of each month or, if such 10th
day is not a Business Day, the immediately preceding Business Day.
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<PAGE> 16
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
---------------
360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche
Period.
provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Discount at a rate which is in excess of the maximum
amount permitted by applicable law; and provided, further, that Discount shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"Discount Rate" means for each Receivable, an amount equal to the sum
of (i) the Hedge Rate for such Receivable then in effect plus (ii) 2.00%.
"Early Collection Fee" means, for any Tranche Period (such Tranche
Period to be determined without regard to the last sentence in Section 2.3(a)
hereof) during which the portion of the Net Investment that was allocated to
such Tranche Period is reduced for any reason whatsoever prior to the end of
such Tranche Period, the excess, if any, of (i) the additional Discount that
would have accrued during such Tranche Period if such reductions had not
occurred, minus (ii) the income, if any, received by the recipient of such
reductions from investing the proceeds of such reductions.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the
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<PAGE> 17
laws of the United States of America or any state thereof and subject to
supervision and examination by Federal or state banking or depositary
institution authorities; provided, however, that at the time of investment or
contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, or long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Moody's and S&P of at least "P-1"
and "A-1", respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two highest
investment categories granted by Moody's and by S&P; (iii) certificates of
deposit having, at the time of investment or contractual commitment to invest
therein, a rating from Moody's and S&P of at least "P-1" and "A-1",
respectively; or (iv) investments in money market funds rated in the highest
investment category or otherwise approved in writing by the applicable rating
agencies; (b) demand deposits in any depositary institution or trust company
referred to in (a)(ii) above; (c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of investment or
contractual commitment to invest therein, a credit rating from Moody's and S&P
of at least "P-1" and "A-1", respectively; (d) Eurodollar time deposits having a
credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively;
and (e) repurchase agreements involving any of the Eligible Investments
described in clauses (a)(i), (a)(iii) and (d) hereof so long as the other party
to the repurchase agreement has at the time of investment therein, a rating from
Moody's and S&P of at least "P-1" and "A-1", respectively.
"Eligible Originators" means, at any time, any Subsidiary of the Parent
listed on Exhibit N hereto, as such list may be amended from time to time at the
reasonable discretion of the Agent upon prior notice to the Parent (which
notice, in the case of the removal of any such Subsidiary from those listed on
Exhibit N, shall be given 30 days' notice prior to the date of such amendment
unless to delay would materially adversely affect the interests of the Agent,
the Company or the Bank Investors hereunder).
"Eligible Receivable" means, at any time, any Receivable:
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<PAGE> 18
(i) which has been originated by the Seller at the instruction
of, or was sold to the Seller by, and in either case was underwritten
by, the Parent or a Subsidiary of the Parent that, at the time of the
Pledge of such Receivable hereunder, was an Eligible Originator, and
has been sold to one or both Pledgors (and, in the case of all Related
Security relating to Equipment, to the Operating Lease Pledgor)
pursuant to and in accordance with the Receivables Purchase Agreement
and to which the applicable Pledgor or Pledgors have good title
thereto, free and clear of all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been, unless otherwise permitted herein, the
subject of the grant by the applicable Pledgor or Pledgors of a first
priority perfected security interest therein (and in the Collections
and Related Security related thereto), effective until the earlier of
the termination of this Agreement or the time at which the related
Contract is either paid in full or reacquired by the applicable Pledgor
or Pledgors pursuant to this Agreement;
(iii) the Obligor of which (A) is a United States resident,
(B) is a Designated Obligor on the related Pledge Date, (C) is not an
Affiliate of any of the parties hereto and (D) is not a government or a
governmental subdivision or agency; provided that Receivables which in
the aggregate do not have an Outstanding Balance that represents more
than 5.0% of the Net Investment or $8 million, whichever is greater,
may be backed by the full faith and credit of the United States or of a
governmental entity whose long term general obligations are rated
investment grade;
(iv) which is not a Defaulted Receivable on the related Pledge
Date;
(v) which is not a Delinquent Receivable on the related Pledge
Date;
(vi) which arises pursuant to a Contract with respect to which
each of the Seller, the related Eligible Originator and the Pledgor or
Pledgors, as applicable, has
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performed all obligations required to be performed by it
thereunder at the time of the related Pledge Date;
(vii) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(viii) which arises under a Contract that is "chattel paper"
within the meaning of Article 9 of the UCC of all applicable
jurisdictions and is (A) secured by a first priority perfected security
interest in the related Equipment (provided that Receivables as to
which in each case the related Equipment had at the origination of the
related Contract an original equipment cost of less than $35,000 and
which in the aggregate do not have an Outstanding Balance that
represents more than 20% of the Net Investment or $20 million,
whichever is greater, may be represented by Contracts as to which steps
to perfect such security interest have not been taken), (B) a Leveraged
Lease Loan secured by a first priority perfected security interest in
both the related lease and Equipment (subject to such lease), and which
related lease would be an Eligible Receivable had it been directly sold
to the Borrower pursuant to the Receivables Purchase Agreement and
pledged hereunder, or (C) a "true lease" as to which the related
Equipment is owned by the Operating Lease Pledgor free and clear of all
Adverse Claims;
(ix) which is denominated and payable only in United States
dollars in the United States by an Obligor with a billing address in
the United States and for which the related Equipment is located in the
United States;
(x) which, arises under a Contract that, is in full force and
effect and is and at all times will be the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to, nor has there been
asserted, any litigation, right of recession, setoff, counterclaim or
other defense;
(xi) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including,
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without limitation, laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with
respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation in any material respect;
(xii) which (A) has been originated and serviced in accordance
with and otherwise satisfies all applicable requirements of the Credit
and Collection Policy and (B) is assignable without the consent of, or
notice to, the Obligor thereunder;
(xiii) which was generated in the ordinary course of the
Seller's and the related Eligible Originator's business;
(xiv) the Obligor of which has been directed to make all
payments to the Lock-Box Account;
(xv) as to which the Agent has not given at least 30 days'
notice to the Pledgor that such Receivable or class of Receivables is
not acceptable for pledge hereunder, based upon the reasonable
determination of the Agent, that a Material Adverse Effect with respect
to such class of Receivables may arise because of the nature of the
business of the Obligor;
(xvi) the assignment of which under the Receivables Purchase
Agreement by the Seller and the pledge of which hereunder by the
Pledgors do not violate, conflict or contravene any applicable laws,
rules, regulations, orders or writs or any contractual or other
restriction, limitation or encumbrance;
(xvii) to which the Obligor is responsible for the payment of
all expenses in connection with maintenance, repair, insurance, taxes
and otherwise with respect to the related Equipment and which requires
the Obligor to make periodic lease payments without condition
notwithstanding damage to or destruction of the Equipment, or any other
event, including Equipment obsolescence;
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(xviii) as to which the related Contract is not a lease on a
vehicle or other type of equipment which requires titling in the name
of the Operating Lease Pledgor in order to perfect the Operating Lease
Pledgor's interest, provided that certain Receivables may be leases on
vehicles or other types of equipment which require titling in the name
of the Operating Lease Pledgor, so long as the aggregate Outstanding
Balance of such Receivables does not represent more than 5.0% of the
Net Investment or $7 million, whichever is greater, and provided that
such vehicles are re-titled as required to perfect such interest within
90 days of the related Pledge Date;
(xix) which has an outstanding term of 84 months or less,
provided that certain Receivables may have a term greater than 84
months but in no event greater than 120 months if the aggregate
Outstanding Balance of such Receivables does not represent more than
7.5% of the Net Investment or $15 million, whichever is greater;
(xx) which has a remaining Outstanding Balance on the related
Pledge Date equal to or less than $5,000,000;
(xxi) which contains customary and enforceable provisions
adequate for realization of the benefits of the related Equipment;
(xxii) which is not a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC;
(xxiii) which is not subject to any guaranty of the payment
obligation thereunder by the Seller, the related Eligible Originator,
the Parent or the Master Servicer and in respect of which neither the
Seller, the Parent nor the related Eligible Originator at the time of
Pledge hereunder has established any specific credit reserve with
respect to the related Obligor;
(xxiv) as to which the Seller or its assignee may accelerate
all remaining Contract Payments if the Obligor is in default under any
of its obligations under such Receivable;
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(xxv) which has not been terminated as a result of the loss,
theft, damage beyond repair or governmental seizure of such item of
Equipment or for any other reason;
(xxvi) the Outstanding Balance of which does not include the
amount of any security deposit held by the Master Servicer, the Seller
or the Parent;
(xxvii) which provides that in the event of the loss, theft,
damage beyond repair or governmental seizure of the related Equipment,
the Obligor is required to repair or replace the related Equipment or
pay an amount not less than the Required Payoff Amount;
(xxviii) under which the Obligor has represented to the Seller
and/or the related Eligible Originator that such Obligor has accepted
the related Equipment or is contractually bound to accept such
Equipment upon shipment or delivery thereof;
(xxix) which does not permit prepayment except upon the
payment of an amount not less than the Required Payoff Amount or, if
the Contract is a conditional sale contract or a loan, upon the payment
of the outstanding principal amount thereof together with any accrued
but unpaid interest, penalties and fees thereon;
(xxx) the Pledge of such Receivable hereunder will not cause
the Concentration Factor with respect to the related Obligor to be
exceeded;
(xxxi) for which the related Contract and Records are in the
custody of the Master Servicer at one of the locations set forth in
Exhibit I, except that (1) for Receivables having an Outstanding
Balance not in excess of 3% of the Facility Limit, such Contract and
Records shall be delivered to the Master Servicer's custody not later
than the fifth Business Day after the date of the Pledge thereof
hereunder and (2) Contracts and Records during Interim Funding may be
at the location of the applicable Originator; and
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(xxxii) which is in Interim Funding; provided, that the
aggregate Outstanding Balance of Receivables in Interim Funding will
not exceed $50 million and Interim Funding will not continue for any
such Receivable for a period in excess of 12 months.
"Equipment" means each item of personal property, together with any
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a
Contract.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Rate" means, with respect to any Eurodollar Tranche Period,
a rate which is 0.75% in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate obtained
by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to 100%
minus the reserve percentage used for determining the maximum reserve
requirement as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the Agent during such Eurodollar Tranche Period in respect of eurocurrency or
eurodollar funding, lending or liabilities (or, if more than one percentage
shall be so applicable, the daily average of such percentage for those days in
such Eurodollar Tranche Period during which any such percentage shall be
applicable) plus (B) the then daily net annual assessment rate (rounded upwards,
if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for
determining the current annual assessment payable by the
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<PAGE> 24
Agent to the Federal Deposit Insurance Corporation in respect of eurocurrency or
eurodollar funding, lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to one month requested by
the Pledgors and agreed to by the Company, NationsBank, on behalf of the
Liquidity Provider, or the Agent, as the case may be, commencing on a Business
Day requested by the Pledgors and agreed to by the Company, NationsBank or the
Agent, as applicable; provided, however, that if such Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Eurodollar Tranche
Period shall expire on the next succeeding Business Day; provided, further, that
if such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Eurodollar Tranche Period shall expire on the next
preceding Business Day or (b) a Business Day for which there is no numerically
corresponding day in the applicable subsequent calendar month, such Eurodollar
Tranche Period shall expire on the last Business Day of such month.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall be unable to pay its debts generally as they become due, (b)
shall file a petition to take advantage of any insolvency statute, (c) shall
make an assignment for the benefit of its creditors, (d) shall commence a
proceeding for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property or (e) shall
file a petition or answer seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute; or (ii)(a) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of such Person or of the whole or any substantial part of its
properties and such order, judgment or decree continues unstayed and in effect
for a period of sixty days, or approve a petition filed against such Person
seeking liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state, which
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petition is not dismissed within sixty days, (b) under the provisions of any
other law for the relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of such Person or of the whole or any
substantial part of its properties, which control is not relinquished within
sixty days, (c) there is commenced against such Person any proceeding or
petition seeking reorganization, arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state which proceeding or petition remains undismissed for a
period of sixty days or (d) such Person takes any action to indicate its consent
to or approval of any such proceeding or petition.
"Excluded Amounts" means any collections on a Receivable or the related
Contract or Related Security (a) attributable to any Taxes, fees or other
charges imposed by any Official Body, (b) representing reimbursements of
insurance premiums or payments for services that were not financed by the Seller
or the Eligible Originator, (c) with respect to a Receivable re-assigned or
substituted for as provided for in this Agreement, (d) with respect to Equipment
related to any Contract that has been paid in full and (e) attributable to any
costs expressly incurred to third parties, such as any UCC fees, maintenance
fees and the like.
"Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.
"Facility Fee" means the fee payable by the Pledgors to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Facility
Fee Letter.
"Facility Fee Letter" means the letter agreement dated the date hereof
among the Pledgors and the Agent with respect to the Facility Fee.
"Facility Limit" means $225,000,000; provided that such amount may not
at any time exceed the aggregate Commitments at any time in effect; and
provided, further, that the Agent will, from time to time, at the request of the
Pledgors, within three Business Days after the receipt by the Agent of a
certificate executed by the Pledgors in the form attached hereto as Exhibit A,
agree to changes in the Facility Limit without the
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<PAGE> 26
approval of the Company or the Bank Investors so long as (i) the Company and the
Bank Investors receive notice of such change at least three Business Days prior
to the date of such change, and (ii) any resulting increase occurs
simultaneously with an equivalent decrease, and any resulting decrease occurs
simultaneously with an equivalent increase, in the facility limit under the
Finance Facility Agreement, and (iii) after giving effect to any such change,
the aggregate of the Facility Limit under this Agreement and the facility limit
under the Finance Facility Agreement remains the same.
"Facility Pledge Agreement" means that certain agreement, dated as of
June 22, 1998, among the Pledgors and the Finance Facility Pledgor pursuant to
which the Pledgors, on the one hand, and the Finance Facility Pledgor, on the
other, have made reciprocal pledges of certain amounts to be released to such
pledgors pursuant to this Agreement and the Finance Facility Agreement,
respectively.
"Facility Term" means the period commencing on the Closing Date and
ending on the Facility Termination Date.
"Facility Termination Date" means the earlier to occur of (a) the
Termination Date and (b) the Commitment Termination Date.
"Fee Letter" means the letter agreement dated the date hereof among the
Pledgors and the Company with respect to the Administrative Fee and the Program
Fee to be paid by the Pledgors or the Parent hereunder, as amended, modified or
supplemented from time to time.
"Fee Reserve Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(d).
"Finance Facility Agreement" means that certain Loan and Security
Agreement, dated as of June 22, 1998, among the Finance Facility Pledgor, the
Agent, the Company, the Bank Investors, the Master Servicer and the Parent.
"Finance Facility Pledgor" means UCP Borrowing SPE 1998-1 Limited
Partnership and its successors and assigns.
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"Finance Facility Release Amounts" means, for any Payment Date, all
cash amounts released since the preceding Payment Date to and including such
Payment Date to the Finance Facility Pledgor pursuant to the Finance Facility
Agreement and pledged to the Pledgors pursuant to the Facility Pledge Agreement.
"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
accounting profession, which are in effect as of the date of this Agreement.
"General Partner" means UCP GP SPE 1998-1 LLC, a Nevada limited
liability company and its successors and assigns.
"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"H.15" means Statistical Release No. H.15 (519) of the
Federal Reserve Board or any successor publication.
"Hedge Counterparty" means with respect to this Agreement, each party
which has entered into a Hedging Agreement with the Pledgors, the Parent or the
Seller (which Hedging Agreement has been assigned to the Agent), as to which
such party's (a) long-term unsecured debt obligations are rated not lower than
one of the two highest investment categories granted by S&P and Moody's and (b)
short-term unsecured debt obligations are rated at least "A-1" by S&P and "P-1"
by Moody's, or such party that has been approved in advance by the Agent.
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"Hedge Payments" means for each Payment Date, any and all amounts due
and payable to the Hedge Counterparty under each Hedging Agreement from but not
including the preceding Payment Date to and including such Payment Date.
"Hedge Rate" means, for any Receivable at any time for which a Hedging
Agreement is in effect, the per annum rate at which the Hedge Payments under the
related Hedging Agreement are calculated net of a percentage amount reflecting
the average daily spread between the yield on the related Treasury security and
the rate that reflects hedge payments with respect to such security as
determined for similar hedging agreements during the preceding calendar quarter;
provided that with respect to any Receivable for any period during which such
Receivable is not required to be hedged pursuant to Section 2.15 or is otherwise
unhedged with the consent of the Agent, the Hedge Rate with respect to such
Receivable shall be the Hedge Rate as determined above from the Hedging
Agreement most recently entered into pursuant to this Agreement.
"Hedged Amount" has the meaning specified in Section 2.15.
"Hedging Agreement" means, each hedging agreement entered into by the
Pledgors, the Parent or the Seller and a Hedge Counterparty the form of which
has been approved in writing in advance by the Agent.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section
8.1 hereof.
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"Indemnified Parties" has the meaning specified in Section
8.1 hereof.
"Interest Accrual Account" means the account, established by the Agent
for the benefit of the Company and the Bank Investors, pursuant to Section
2.12(e).
"Interest Component" shall mean, (i) with respect to any Commercial
Paper issued on an interest-bearing basis, the interest payable on such
Commercial Paper at its maturity and (ii) with respect to any Commercial Paper
issued on a discount basis, the portion of the face amount of such Commercial
Paper representing the discount incurred in respect thereof.
"Interim Funding" means for any Receivable, with respect to which the
related Equipment is delivered in stages, a period during which Contract
Payments are based on the Equipment actually shipped or delivered, with the full
funding term of such Contract to commence pursuant to the terms thereof after
delivery of all such items of Equipment.
"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Pledgors and the Agent, furnished by the Master Servicer pursuant to Section
2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Leveraged Lease Loan" means a loan by the Seller or an Eligible
Originator to a third party lessor secured by all of such lessor's right, title
and interest in a lease (originated by the Seller or such Eligible Originator
and sold, together with the related Equipment, to such third party) and in the
related Equipment.
"LIBOR Rate" means, with respect to any Eurodollar Tranche Period, the
rate which appears on Telerate Page 3750 (as defined in the 1987 Interest Rate
and Currency Exchange Definitions published by the International Swap Dealers
Association, Inc.) (or such page as may replace Telerate Page 3750), at
approximately 11:00 a.m. (London time), two Business Days before
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the first day of such Eurodollar Tranche Period in an amount approximately equal
to the Eurodollar Tranche to which the Eurodollar Rate is to apply and for a
period of time approximately equal to the applicable Eurodollar Tranche Period.
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
and the Liquidity Provider evidencing the obligation of the Liquidity Provider
to provide liquidity support to the Company in connection with the issuance by
the Company of Commercial Paper.
"Lock-Box Account" means, collectively, each account maintained by the
Master Servicer at the Lock-Box Bank for the purpose of receiving Collections.
"Lock-Box Bank" means NationsBank, N.A. or its designee.
"Majority Investors" shall mean, at any time, the Agent and those Bank
Investors which hold Commitments aggregating in excess of 50% of the Facility
Limit as of such date.
"Master Servicer" means at any time the Person then authorized pursuant
to Section 6.1 to service, administer and collect Receivables.
"Master Servicer Default" has the meaning specified in
Section 6.4 hereof.
"Material Adverse Effect" means any event or condition which would have
a material adverse effect on (i) the general collectibility of the Receivables,
(ii) the ability of the Pledgors and the Parent to perform their collective
obligations under the Transaction Documents to which they are parties and (iii)
the interests of the Agent, the Company or the Bank Investors under the
Transaction Documents.
"Maximum Net Investment" means $225,000,000; provided that such amount
shall increase or decrease in an amount equal to any increase or decrease in the
Facility Limit.
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"Maximum Percentage Factor" means 100%
"Moody's" means Moody's Investors Service, Inc.
"Monthly Costs" means for any Payment Date the amounts due on such
Payment Date pursuant to clauses (i) through (v) of Section 2.5(a) and for each
Tranche Period all amounts due pursuant to Section 2.5(b) or, after the
Termination Date, Section 2.6.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by a Pledgor, the Parent or any
ERISA Affiliate of a Pledgor or the Parent on behalf of its employees.
"Net Asset Test" shall mean a test that is met if, as of the time of
determination, the sum of the Net Receivables Balance and the amount on deposit
in the Accounts, exceeds the aggregate Net Investment plus the amount of any
outstanding Carrying Costs.
"Net Investment" means as of any time of determination the sum of the
cash amounts paid to the Pledgors (other than from amounts on deposit in the
Principal Collection Account) for each Pledge occurring prior to such date less
the aggregate amount of Collections received and applied by the Agent prior to
such date to reduce such Net Investment pursuant to Section 2.5 or 2.6 hereof;
provided that the Net Investment shall be restored and reinstated in the amount
of any Collections so received and applied if at any time the distribution of
such Collections is rescinded or must otherwise be returned for any reason; and
provided, further, that the Net Investment may be increased by the amount
described in Section 9.9(g) as described therein.
"Net Portfolio Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction the numerator of which is
Available Funds for such Collection Period (not including any Finance Facility
Release Amounts for such Collection Period) minus any amounts payable on the
related Payment Date pursuant to clauses (i) through (v) and (vii) through
(viii) of Section 2.5(a) and the denominator of which is the average Net
Investment for such Collection Period.
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"Net Receivables Balance" means at any time the Outstanding Balance of
the Eligible Receivables at such time reduced by the aggregate Outstanding
Balance of all Eligible Receivables which are Defaulted Receivables.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Obligor Risk Rating" means, with respect to an Obligor, the numerical
"Obligor Rating" assigned pursuant to the Credit and Collection Policy.
"Official Body" means any government or political subdivision or any
agency, authority, 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.
"Operating Lease Pledgor" means UCP Operating SPE 1998-1 Limited
Partnership and its successors and assigns.
"Other Conduit Participant" means any Person other than the Pledgors
that has entered into a receivables purchase or pledge agreement or transfer or
pledge and administration agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any date
of determination, an amount equal to the present value of all Contract Payments
(not including delinquent payments in respect of Delinquent Receivables) to
become due thereunder following such date (determined by discounting on a
monthly basis (assuming a calendar year consisting of twelve 30-day months), at
a rate equal to the then applicable Discount Rate for such Receivable, each such
Contract Payment from the last day of the Collection Period during which such
Contract Payment is due, to such date). The Outstanding Balance of any
Receivable in Interim Funding shall be equal to 90% of the related original
Equipment cost as set forth in the Contract Schedule, and such balance shall not
decline during Interim Funding based on Contract Payments made thereunder. In
determining the Outstanding Balance with respect to any date of determination,
the future remaining Contract Payments will be calculated after giving effect to
any payments received prior to such date of calculation to the extent
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such payments relate to Contract Payments due and payable by the Obligors with
respect to the related Collection Period and any prior Collection Period; the
Outstanding Balance of any Defaulted Receivable and any Receivable that has been
subject to a Deemed Collection will be equal to zero.
"Parent" means UniCapital Corporation, a Delaware
corporation, and its successors and assigns.
"Payment Date" means the 20th day of each month, or if such day is not
a Business Day the next succeeding Business Day, or such earlier date of the
related month as may be agreed upon by the Agent and the Pledgors, commencing in
the month following the initial Pledge under this Agreement.
"Percentage Factor" shall mean the fraction (expressed as a percentage)
computed at any time of determination by dividing (i) the Net Investment minus
the amount on deposit in the Principal Collection Account and the Reserve
Account by (ii) the product of the Net Receivables Balance and the Weighted
Average Advance Percentage, each at the time of such computation.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Pledge" means a pledge and assignment by the Pledgors to the Company
or the Bank Investors of all of each Pledgor's respective right, title and
interest in, to and under the Receivables hereunder and all Related Security
(including, without limitation, as a result of any reinvestment of Collections
in Pledged Interests pursuant to Section 2.2(b) and 2.5).
"Pledge Certificate" has the meaning specified in Section
2.2(a) hereof.
"Pledge Date" means, with respect to each Pledge, the Business Day on
which such Pledge is made.
"Pledgors" means the Qualifying Pledgor and the Operating
Lease Pledgor.
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"Pledged Interest" means, at any time of determination, all right,
title and interest created hereunder in each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable.
"Prepayment Shortfall" has the meaning specified in Section 2.9.
"Principal Collection Account" means the account established by the
Agent, for the benefit of the Company and the Bank Investors pursuant to Section
2.12(c).
"Principal Deemed Amount" means, for any Payment Date, the excess of
the Outstanding Balance of the Receivables at the end of the second preceding
Collection Period (or for any Receivable for which the Cut-off Date therefor
occurred since the end of such Collection Period, the Outstanding Balance of
each such Receivable as of its Cut-off Date) over the Outstanding Balance of the
Receivables at the end of the preceding Collection Period; provided, that, the
Principal Deemed Amount will not be calculated for any Receivables as to which a
Take-Out occurred during such preceding Collection Period.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1)
of the UCC.
"Program Fee" means the fee payable to the Company pursuant to Section
2.7 hereof, the terms of which are set forth in the Fee Letter.
"Purchased Interest" means the interest in the Receivables acquired by
the Liquidity Provider through purchase pursuant to the terms of the Liquidity
Provider Agreement.
"Purchase Facility Differential" means for any Payment Date (i) the sum
of, for such Payment Date, all Collections Available for the related Collection
Period, plus all Servicing Advances for such Payment Date, plus all amounts
received under the Hedge Agreements with respect to such Payment Date plus all
amounts on
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deposit in the Interest Accrual Account immediately prior to such Payment Date
minus (ii) the amount required to be remitted on such Payment Date pursuant to
clauses (i) through (ix) of Section 2.5(a).
"Purchase Facility Free Cash Flow" means for any Payment
Date any positive Purchase Facility Differential for such Payment
Date.
"Purchase Facility Shortfall" means for any Payment Date the absolute
value of any negative Purchase Facility Differential for such Payment Date.
"Purchase Termination Date" means the date upon which either Pledgor
shall cease, for any reason whatsoever, to make purchases of Receivables from
the Seller under the Receivables Purchase Agreement or the Receivables Purchase
Agreement shall terminate for any reason whatsoever.
"Qualifying Pledgor" means UCP Qualifying SPE 1998-1 Limited
Partnership and its successors and assigns.
"Receivable" means Contracts sold to the Pledgors under the Receivables
Purchase Agreement, whether constituting an account, chattel paper, instrument,
investment property or general intangible or arising in connection with the sale
or lease of Equipment, including all Contract Payments and other payment
obligations (but other than Excluded Amounts) owed thereunder on or after the
related Cut-off Date by the related Obligor, including the right to payment of
any finance charges and other obligations of such Obligor with respect thereto.
Notwithstanding the foregoing, once a Receivable has been deemed collected
pursuant to Section 2.9 hereof, it shall no longer constitute a Receivable
hereunder.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of June 22, 1998, among the Seller, as seller, the Pledgors,
as purchasers, and the Parent.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing
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software and related property and rights) maintained with respect to Receivables
and the related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Pledgors of written notice that the Company
elects to commence the amortization of its interest in the Net Investment or
otherwise liquidate its interest in the Pledged Interest.
"Related Commercial Paper" shall mean Commercial Paper issued by the
Company the proceeds of which were used to acquire, or refinance the acquisition
of, an interest in Receivables.
"Related Security" means with respect to any Receivable:
all of the Pledgors' right, title and interest in and to:
(a) any collateral securing the Obligor's obligations under
such Contract (excluding security deposits) or any Guaranty thereof;
(b) all cash realizations on the related Equipment (including
returned and repossessed Equipment) and all loss and casualty insurance
maintained with respect to such Equipment, in each case to the extent
constituting recoveries on a Defaulted Receivable or otherwise
representing the amount necessary to pay in full all unpaid Contract
Payments and other amounts due on the related Receivable in the event
that it is a Defaulted Receivable;
(c) all Guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting,
securing or insuring any Equipment, to the extent of the cash
realizations set forth in clause (b) above;
(d) all Records related to such Contract; and
(e) all Proceeds of the foregoing;
excluding, however, in each case any Excluded Amounts.
"Required Payoff Amount" means with respect to any
Collection Period for any Receivable, the sum of (i) the Contract
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Payment due in any Collection Period, together with any past due Contract
Payments, (ii) the Outstanding Balance of such Receivable as of the last day of
such Collection Period (after taking into account the Contract Payment due on
such Collection Period and, if the applicable Receivable is a Defaulted
Receivable, assuming for the purpose of determining the Outstanding Balance
thereof pursuant to this clause (ii) that such Receivable is not a Defaulted
Receivable) plus (iii) any breakage cost associated with the applicable Hedging
Agreement.
"Reserve Account" means the account, established by the Agent, for the
benefit of the Company and the Bank Investors, pursuant to Section 2.12(b).
"Reserve Account Event" means a period commencing on any Payment Date
for which the Three-Month Average Net Portfolio Yield for the related Collection
Period was below 1.75% and ending at the end of any Collection Period for which
the Three- Month Average Net Portfolio Yield is greater than 1.75%.
"Revolving Credit Facility Agreement" means that certain credit
agreement, dated June 10, 1998, among the Parent, NationsBank and certain
lenders a party thereto from time to time.
"Revolving Credit Facility Default" means the occurrence of an Event of
Default, as defined in the Revolving Credit Facility Agreement.
"Section 8.2 Costs" has the meaning specified in Section
8.2(d) hereof.
"Secured Note" means the secured note issued to the Agent for the
benefit of the Company and the Bank Investors pursuant to Section 2.2(d) hereof.
"Seller" means UniCapital Funding Corporation and its
successors and assigns.
"Servicer Advance" has the meaning specified in Section
6.2(l) hereof.
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"Servicing Fee" means the fees payable to the Master Servicer on each
Payment Date in an amount equal to 0.50% per annum on the amount of the
Outstanding Balance of all Receivables as of the beginning of the related
Collection Period.
"Specified Reserve Account Requirement" means zero, or upon the
occurrence and during the continuance of a Reserve Account Event, the greater of
(x) 2.00% of the then outstanding Net Investment and (y) $1,000,000.
"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Substitute Receivable" has the meaning specified in
Section 2.16.
"Take-Out" means any reduction of the Net Investment resulting from an
auction of Receivables or a reassignment to one or both Pledgors of Receivables
in accordance with Section 2.17.
"Taxes" shall have the meaning specified in Section 8.3
hereof.
"Termination Date" means the earliest of (i) the Business Day
designated by the Pledgors to the Agent as the Termination Date at any time
following 60 days' written notice to the Agent, (ii) the day upon which the
Termination Date is declared or automatically occurs pursuant to Section 7.2(a)
hereof, (iii) two Business Days prior to the Commitment Termination Date (unless
such date has been extended), or (iv) the Purchase Termination Date.
"Termination Event" means an event described in Section 7.1
hereof.
"Three-Month Average Net Portfolio Yield" means, as of any
date of determination, commencing in the fourth month following
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the month of the initial Pledge, the weighted average of the Net Portfolio
Yields for the three most recently ended Collection Periods (or for any date of
determination in the fourth month following the month of the initial Pledge, the
Net Portfolio Yield for the immediately preceding Collection Period, and for any
such date in the fifth such month, the weighted average of the Net Portfolio
Yields for the two most recently ended Collection Periods), in the case of each
such weighted average calculation, weighted for each Collection Period by the
average Net Investment for such Collection Period.
"Tranche" means a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.3 hereof.
"Tranche Period" means a CP Tranche Period, a BR Tranche
Period or a Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate or the
Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section
8.4(a) hereof.
"Transaction Risk Rating" means, with respect to a Receivable, the
numerical "Transaction Rating" assigned pursuant to the Credit and Collection
Policy.
"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Facility Fee Letter, the Fee Letter, the
Secured Note, the Pledge Certificates and all of the other instruments,
documents and other agreements executed and delivered by the Seller or the
Pledgors in connection with any of the foregoing, in each case, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of
America.
"Weighted Average Advance Percentage" means, as of any date
of determination, the average of the Advance Percentages for the
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Receivables weighted for each Receivable by the Outstanding Balance of such
Receivable.
SECTION 1.2 Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.3 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including", the words
"to" and "until" each means "to but excluding", and the word "within" means
"from and excluding a specified date and to and including a later specified
date".
ARTICLE II
PLEDGES AND SETTLEMENTS
SECTION 2.1 Facility. Upon the terms and subject to the conditions
herein set forth, (x) the Pledgors, jointly and severally, may, at their option,
obtain the proceeds of loans from the Company or the Bank Investors, as
applicable, in exchange for the pledge and assignment to the Agent, on behalf of
the Company or the Bank Investors, as applicable, without recourse except as
provided herein, of all of each Pledgor's respective right, title and interest
in, to and under the Receivables, together with all Related Security with
respect thereto, from time to time and (y) the Agent, on behalf of the Company,
provided that the Termination Date shall not have occurred and at the Company's
option, may, or the Agent, on behalf of the Bank Investors, provided that the
Termination Date shall not have occurred and that the Bank Investors shall have
previously accepted the assignment by the Company of all of its interest in the
Affected Assets, shall, if so requested, loan such proceeds, secured by such
pledge and assignment from the Pledgors. By accepting any pledge and assignment
hereunder, neither the Company, any Bank Investor nor the Agent assumes or shall
have any obligations or liability under any of the Contracts, all of which shall
remain the obligations and
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liabilities of the applicable Pledgor and of the Seller, or with respect to any
of the Equipment or the other Related Security.
SECTION 2.2 Pledges; Pledge Certificates; Eligible
Receivables.
(a) Pledges. Upon the terms and subject to the conditions
herein set forth from time to time (i) the Pledgors, jointly and
severally, may, at their option, borrow from the Company or the Bank
Investors, as applicable, amounts which are secured by the pledge and
assignment to the Agent, on behalf of the Company or the Agent, on
behalf of the Bank Investors, as applicable, without recourse except as
provided herein, of all of each Pledgor's respective right, title and
interest in, to and under the Receivables, together with Related
Security, Collections and Proceeds with respect thereto and (ii) the
Agent, provided that the Termination Date shall not have occurred and
at the Company's option, may, or the Agent, on behalf of the Bank
Investors, provided that the Termination Date shall not have occurred
and that the Bank Investors shall have previously accepted the
assignment by the Company of all of its interest in such loans and the
Affected Assets, shall, in each case if so requested by the Pledgors,
accept such pledge and assignment from the Pledgors, without recourse
except as provided herein, of all of each Pledgor's respective right,
title and interest in, to and under the Receivables, together with
Related Security Collections and Proceeds with respect thereto;
provided that the payment to the Pledgors of the Advance Amount related
thereto shall have been made and, after giving effect to the payment to
the Pledgors of such Advance Amount, (x) the sum of the Net Investment
plus, in the case where the Pledged Interest is held by the Agent on
behalf of the Company, the Interest Component of all outstanding
Related Commercial Paper, would not exceed the Facility Limit and (y)
the Net Investment would not exceed the Maximum Net Investment;
provided, further, that the representations and warranties set forth in
Section 3.1 shall be true and correct both immediately before and
immediately after giving effect to any such Pledge.
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The Pledgors may, by delivering to the Agent the Pledge Certificate via
telecopy in the form of Exhibit F attached hereto (the "Pledge
Certificate"), request to borrow from the Company or the Bank
Investors, as applicable, amounts which are secured by the pledge and
assignment to the Agent, on behalf of the Company or the Bank
Investors, as applicable, of all of each Pledgor's respective right,
title and interest in, to and under the Receivables and the other
Affected Assets relating thereto no later than (i) if the proposed Net
Investment associated with any Pledge is greater than $150,000,000, no
later than 4:00 p.m. (New York City time) on the fifth Business Day
prior to the proposed date of such Pledge, (ii) if the proposed Net
Investment associated with any Pledge is greater than $45,000,000 but
less than or equal to $150,000,000, no later than 4:00 p.m. (New York
City time) on the third Business Day prior to the proposed date of such
Pledge, (iii) if the proposed Net Investment associated with any Pledge
is greater than $20,000,000 but less than or equal to $45,000,000, no
later than 4:00 p.m. (New York City time) on the second Business Day
prior to the proposed date of such Pledge, (iv) if the proposed Net
Investment associated with any Pledge is greater than $5,000,000 but
less than or equal to $20,000,000, no later than 11:00 a.m. (New York
City time) on the Business Day prior to the proposed date of such
Pledge and (v) if the proposed Net Investment associated with any
Pledge is less than or equal to $5,000,000 no later than 4:00 p.m. (New
York City time) on the Business Day prior to the proposed date of such
Pledge.
Each such notice shall specify (w) whether such request is made to the
Agent, on behalf of the Company or on behalf of the Bank Investors (it
being understood and agreed that once any Pledged Interest hereunder is
acquired on behalf of the Bank Investors, the Agent, on behalf of Bank
Investors, shall be required to purchase all Pledged Interests held by
the Agent on behalf of the Company in accordance with Section 9.7 and
thereafter that no additional Pledges shall be funded on behalf of the
Company hereunder), (x) the desired Advance Amount (which shall be at
least $1,000,000 or, to the extent that the then available unused
portion of the Facility Limit is less than such amount, such lesser
amount equal to such available portion of the Facility
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Limit), (y) the desired date of such Advance Amount and (z) the desired
Tranche Period(s) and allocations of the Net Investment of such Advance
Amount thereto as required by Section 2.3. The Agent will promptly
notify the Company or each of the Bank Investors, as the case may be,
of the Agent's receipt of any request for an Advance Amount to be made
to the Agent on behalf of such Person. To the extent that any such
Advance Amount is requested of the Agent, on behalf of the Company, the
Company shall instruct the Agent to accept or reject such offer by
notice given to the Pledgors and the Agent by telephone or telecopy by
no later than the close of its business on the Business Day of its
receipt of any such request. Each notice of proposed Pledge shall be
irrevocable and binding on the Pledgors and the Pledgors shall
indemnify the Company and each Bank Investor against any loss or
expense incurred by the Company or any Bank Investor, either directly
or indirectly (including, in the case of the Company, through the
Liquidity Provider Agreement) as a result of any failure by the
Pledgors to complete such Pledge including, without limitation, any
loss or expense incurred by the Company or any Bank Investor, either
directly or indirectly (including, in the case of the Company, pursuant
to the Liquidity Provider Agreement) by reason of the liquidation or
reemployment of funds acquired by the Company, any Bank Investor or the
Liquidity Provider (including, without limitation, funds obtained by
issuing commercial paper or promissory notes or obtaining deposits as
loans from third parties) for the Company, any Bank Investor or the
Liquidity Provider to fund such Pledge. With respect to any failure of
either of the Pledgors for which the Company or the Bank Investors are
indemnified pursuant to the preceding sentence, the applicable Bank
Investor or the Company, as the case may be, incurring any indemnified
costs as a result of such failure, shall take such steps as may be
reasonable for avoiding or mitigating (consistent with the internal
policies and governance and legal and regulatory restrictions of the
Bank Investors or the Company, as applicable, and without requiring the
incurring of any additional costs by, or otherwise being
disadvantageous to, such party) additional costs as a result of such
failure.
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On the date of each Pledge, the Agent, on behalf of the Company or the
Bank Investors, as applicable, shall deliver written confirmation to
the Pledgors and the Parent of the Advance Amount, the Tranche
Period(s) and the Tranche Rate(s) relating to such Pledge and the
Pledgors shall deliver to the Agent an original executed Pledge
Certificate. The Agent shall indicate the amount of such Pledge
together with the date thereof as well as any change in the Net
Investment on the grid attached to the Pledge Certificate. The Pledge
Certificate shall evidence the Pledges. Following each Pledge, the
Company or the Bank Investors, as the case may be, shall deposit to the
Pledgors' account at the location indicated in Section 10.3 hereof, in
immediately available funds, an amount equal to the Advance Amount for
such Pledge made to the Company or the Bank Investors, as the case may
be.
By no later than 11:00 a.m. (New York City time) on any Pledge Date,
the Company or each Bank Investor, as the case may be, shall remit its
share (which, in the case of a Pledge to the Bank Investors, shall be
equal to such Bank Investor's Pro Rata Share) of the aggregate Advance
Amount for such Pledge to the account of the Agent specified therefor
from time to time by the Agent by notice to such Persons. The
obligation of each Bank Investor to remit its Pro Rata Share of any
such Advance Amount shall be several from that of each other Bank
Investor, and the failure of any Bank Investor to so make such amount
available to the Agent shall not relieve any other Bank Investor of its
obligation hereunder. Following each Pledge and the Agent's receipt of
funds from the Company or the Bank Investors as aforesaid, the Agent
shall remit the Advance Amount to the Pledgors' account at the location
indicated in Section 10.3 hereof, in immediately available funds, in an
amount equal to the Advance Amount for such Pledge. The allocation of
the Advance Amount among each Pledgor shall be by agreement among the
Pledgors and neither the Agent, the Company nor the Bank Investors
shall have any obligations or responsibility related to the allocation
of the Advance Amount upon its remittance to the Pledgors' account as
set forth in the preceding sentence. Unless the Agent shall have
received notice from the Company or any Bank Investor, as applicable,
that such Person will not make its share of
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any Advance Amount relating to any Pledge available on the applicable
Pledge Date therefor, the Agent may (but shall have no obligation to)
make the Company's or any such Bank Investor's share of any such
Advance Amount available to the Pledgors in anticipation of the receipt
by the Agent of such amount from the Company or such Bank Investor. To
the extent the Company or any such Bank Investor fails to remit any
such amount to the Agent after any such advance by the Agent on such
Pledge Date, the Company and the Bank Investors shall be required to
pay such amount, together with interest thereon at a per annum rate
equal to the Federal funds rate (as determined in accordance with
clause (ii) of the definition of "Base Rate") to the Agent upon its
demand therefor (provided that the Company shall have no obligation to
pay such interest amounts except to the extent that it shall have
sufficient funds to pay the face amount of its Commercial Paper in
full). Until such amount shall be repaid by the defaulting Company or
Bank Investor, as applicable, such amount shall be deemed to be Net
Investment paid by the Agent and the Agent shall be deemed to be the
owner of a Pledged Interest hereunder. Upon the payment of such amount
to the Agent by the Company or the Bank Investors, such payment shall
constitute such Person's payment of its share of the applicable Advance
Amount for such Pledge.
(b) [Reserved.]
(c) All Pledges. Each Pledge shall constitute a pledge to the
Agent, on behalf of the Company or the Bank Investors, as applicable,
of all of each Pledgor's respective right, title and interest in, to
and under each and every Receivable, together with all Related Security
with respect thereto. The Agent shall hold the Pledged Interests on
behalf of the Company and each Bank Investor in accordance with each of
the Company's and each Bank Investor's percentage interest in the
Pledged Interest (determined on the basis of the relationship that the
portion of the Net Investment funded by such Person bears to the
aggregate Net Investment of the Company and all of the Bank Investors
at such time).
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(d) Secured Note. The Pledgors shall issue to the Agent the
Secured Note, in the form of Exhibit M, on or prior to the date hereof.
(e) Percentage Factor. The Percentage Factor shall be
initially computed as of the opening of business on the date of the
initial Pledge hereunder. Thereafter until the Termination Date, the
Percentage Factor shall be recomputed on each Determination Date as of
the last day of the related Collection Period and at such other times
as may be reasonably requested by the Agent.
(f) Finance Facility Release Amounts; Sale Agreements. As
additional security for the payment of all Monthly Costs due under this
Agreement, each Pledgor pledges and assigns all of its right, title and
interest in the Facility Pledge Agreement, including all Finance
Facility Collateral (as defined therein) to the Agent, which pledge and
assignment the Agent hereby accepts on behalf of the Company and the
Bank Investors, as applicable. Accordingly, Finance Facility Release
Amounts shall be available on each Payment Date as part of Available
Funds for such Payment Date. As additional security for the payment of
all Aggregate Unpaids, each Pledgor pledges and assigns all of its
right, title and interest in the Receivables Purchase Agreement and the
parties hereto acknowledge that the Agent, on behalf of the Company and
the Bank Investors, as applicable, may enforce such right, title and
interest directly as if it were party thereto.
(g) Limitations on Equipment. With respect to the interests in
Equipment that are subject to Pledges hereunder, such interests are
limited to those that constitute Related Security for the related
Receivable. Therefore, upon the payment in full of any Receivable, the
Agent, the Company and the Bank Investors shall have no further
interest hereunder in the related Equipment, and all such Equipment
shall be held by the Operating Lease Pledgor or its assignee free and
clear of any lien or other claim created or imposed pursuant to this
Agreement.
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SECTION 2.3 Selection of Tranche Periods and Tranche
Rates.
(a) Prior to the Termination Date; Pledged Interest held on
behalf of the Company. At all times hereafter, but prior to the
Termination Date and not with respect to any portion of the Pledged
Interest held on behalf of the Bank Investors (or any of them), the
Pledgors may, subject to the Company's approval and the limitations
described below, request Tranche Periods and allocate a portion of the
Net Investment to each selected Tranche Period, so that the aggregate
amounts allocated to outstanding Tranche Periods at all times shall
equal the Net Investment held on behalf of the Company. The Pledgors
shall jointly give the Company irrevocable notice by telephone of the
new requested Tranche Period(s) at least three Business Days prior to
the expiration of any then existing Tranche Period; provided, however,
that in the event of a Tranche Period with respect to a Pledge Date,
such notice period shall not exceed the notice period pursuant to
Section 2.2 that applies to the related Pledge; provided, further, that
the Company may select, in its sole discretion, any such new Tranche
Period if (i) the Pledgors fail to provide such notice on a timely
basis or (ii) the Company determines, in its sole discretion, that the
Tranche Period requested by the Pledgors is unavailable or for any
reason commercially undesirable. The Company confirms that it is its
intention to allocate all or substantially all of the Net Investment
held on behalf of it to one or more CP Tranche Periods; provided that
the Company may determine, from time to time, in its sole discretion,
that funding such Net Investment by means of one or more CP Tranche
Periods is not possible or is not desirable for any reason. If the
Liquidity Provider acquires from the Company a Purchased Interest with
respect to the Receivables pursuant to the terms of the Liquidity
Provider Agreement, NationsBank, on behalf of the Liquidity Provider,
may exercise the right of selection granted to the Company hereby. The
initial Tranche Period applicable to any such Purchased Interest shall
be a period of not greater than 7 days and such Tranche shall be a BR
Tranche. Thereafter, provided that the Termination Date shall not have
occurred, the Tranche Period applicable thereto shall be the BR Rate or
the Eurodollar Rate, as determined by the
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Pledgors. In the case of any Tranche Period outstanding
upon the Termination Date, such Tranche Period shall end on
such date.
(b) After the Termination Date; Pledged Interest Held on
behalf of the Company. At all times on and after the Termination Date,
with respect to any portion of the Pledged Interest which shall be held
by the Agent on behalf of the Company, the Company or NationsBank, as
applicable, shall select all Tranche Periods and Tranche Rates
applicable thereto.
(c) Prior to the Termination Date; Pledged Interest Held on
Behalf of Bank Investors. At all times with respect to any portion of
the Pledged Interest held by the Agent on behalf of the Bank Investors,
but prior to the Termination Date, the initial Tranche Period
applicable to such portion of the Net Investment allocable thereto
shall be a period of not greater than 3 days and such Tranche shall be
a BR Tranche. Thereafter, with respect to such portion, and with
respect to any other portion of the Pledged Interest held on behalf of
the Bank Investors (or any of them), provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall
be, at the Pledgor's option, either a BR Tranche or a Eurodollar
Tranche. The Pledgor shall give the Agent irrevocable notice by
telephone of the new requested Tranche Period at least three (3)
Business Days prior to the expiration of any then existing Tranche
Period. In the case of any Tranche Period outstanding upon the
occurrence of the Termination Date, such Tranche Period shall end on
the date of such occurrence.
(d) After the Termination Date; Pledged Interest Held on
behalf of Bank Investors. At all times on and after the Termination
Date, with respect to any portion of the Pledged Interest held by the
Agent on behalf of the Bank Investors, the Agent shall select all
Tranche Periods and Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent
is unable to obtain on a timely basis the information necessary to
determine the LIBOR Rate for any proposed Eurodollar Tranche, then
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(A) the Agent shall forthwith notify the Company or Bank
Investors, as applicable, and the Pledgors that the Eurodollar
Rate cannot be determined for such Eurodollar Tranche, and
(B) while such circumstances exist, neither the Company, the
Bank Investors nor the Agent shall allocate the Net Investment
of any additional Pledged Interests pledged and assigned
during such period or reallocate the Net Investment allocated
to any then existing Tranche ending during such period, to a
Eurodollar Tranche.
(ii) If, with respect to any outstanding Eurodollar Tranche,
the Company or any of the Bank Investors on behalf of which the Agent
holds any Pledged Interest herein notifies the Agent that it is unable
to obtain matching deposits in the London interbank market to fund its
purchase or maintenance of such Pledged Interest or that the Eurodollar
Rate applicable to such Pledged Interest will not adequately reflect
the cost to the Person of funding or maintaining its respective Pledged
Interest for such Tranche Period then the Agent shall forthwith so
notify the Pledgors, whereupon neither the Agent nor the Company or the
Bank Investors, as applicable, shall, while such circumstances exist,
allocate any Net Investment of any additional Pledged Interest pledged
and assigned during such period or reallocate the Net Interest
allocated to any Tranche Period ending during such period, to a
Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall
notify the Agent that such Person has determined (or has been notified
by any Liquidity Provider) that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful
(either for the Company, such Bank Investor, or such Liquidity
Provider, as applicable), or any central bank or other governmental
authority asserts that it is unlawful, for the Company, such Bank
Investor or such Liquidity Provider, as applicable, to fund Advances or
the maintenance of Pledged Interests at the Eurodollar Rate,
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then (x) as of the effective date of such notice from such Person to
the Agent, the obligation or ability of the Company or such Bank
Investor, as applicable, to fund Advances or the maintenance of Pledged
Interests at the Eurodollar Rate shall be suspended until such Person
notifies the Agent that the circumstances causing such suspension no
longer exist and (y) the Net Investment of each Eurodollar Tranche in
which such Person owns an interest shall either (1) if such Person may
lawfully continue to maintain such Pledged Interest at the Eurodollar
Rate until the last day of the applicable Tranche Period, be
reallocated on the last day of such Tranche Period to another Tranche
Period in respect of which the Net Investment allocated thereto accrues
Discount at a Tranche Rate other than the Eurodollar Rate or (2) if
such Person shall determine that it may not lawfully continue to
maintain such Pledged Interest at the Eurodollar Rate until the end of
the applicable Tranche Period, such Person's share of the Net
Investment allocated to such Eurodollar Tranche shall be deemed to
accrue Discount at the Base Rate from the effective date of such notice
until the end of such Tranche Period.
SECTION 2.4 Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1 hereof, the
Pledgors shall pay, as and when due in accordance with this Agreement, all
Carrying Costs, and the Servicing Fees. On the last day of each Tranche Period,
the Pledgors shall pay to the Agent, on behalf of the Company or the Bank
Investors, as applicable, an amount equal to the accrued and unpaid Discount for
such Tranche Period together with, in the event the Pledged Interest is held on
behalf of the Company, an amount equal to the discount accrued on the Company's
Commercial Paper to the extent such Commercial Paper was issued in order to fund
the Pledged Interest in an amount in excess of the Advance Amount of a Pledge.
The Pledgors shall pay to the Agent, on behalf of the Company, on each day on
which Related Commercial Paper is issued by the Company, the Dealer Fee.
Discount shall accrue with respect to each Tranche on each day occurring during
the Tranche Period related thereto. Nothing in this Agreement shall limit in any
way the obligations of the Pledgors, which shall be joint and several, to pay
the amounts set forth in this Section 2.4.
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SECTION 2.5 Settlement and Reinvestment Procedures.
(a) On each Payment Date, so long as no Termination Event has
occurred, all the Available Funds for such Payment Date will be
allocated by the Master Servicer in the following order of priority:
(i) first, to each Hedge Counterparty, on a pro rata
basis, any Hedge Payments then due;
(ii) second, to the Master Servicer, any unreimbursed
Servicer Advances;
(iii) third, to the Master Servicer, the accrued and
unpaid Servicing Fees, if the Master Servicer is not an
Affiliate of the Parent;
(iv) fourth, to the Agent, for the benefit of the
Company and the Bank Investors, as applicable, the sum of the
following, in each case, to the extent not previously paid and
without duplication: accrued and unpaid Dealer Fees on
Commercial Paper; the Program Fee, Facility Fee and
Administrative Fee; any accrued Discount (whether or not
payable on such Payment Date) and any Discount payable on or
prior to such Payment Date to the extent not previously paid;
any amounts due to the Credit Support Provider under the
Credit Support Agreement or the Liquidity Provider under the
Liquidity Provider Agreement, in each case to the extent
payable pursuant to the terms of this Agreement by the
Pledgors and not otherwise payable from any of the
above-referenced fees; and Section 8.2 Costs (all of these,
the "Carrying Costs"); provided that any amount allocated
pursuant to this clause (iv) on account of accrued and unpaid
Discount that is not yet payable shall be deposited into the
Interest Accrual Account;
(v) fifth, to the Agent, for the benefit of the
Company and the Bank Investors, an amount equal to the
Principal Deemed Amount for such Payment Date plus any unpaid
shortfall in the amount applied pursuant to this clause (v) to
pay the Principal Deemed Amount from prior Payment Dates, for
deposit to the Principal
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Collection Account, such amount to be so deposited until the
Percentage Factor is equal to the Maximum Percentage Factor;
(vi) sixth, if a Reserve Account Event has occurred
and is continuing with respect to such Payment Date, to the
Reserve Account the amount, if any, necessary to cause the
balance on deposit therein to equal the Specified Reserve
Account Requirement;
(vii) seventh, to the extent that after giving effect
to clauses (v) and (vi) above, and any Pledge of Receivables
on such Payment Date, the Percentage Factor exceeds the
Maximum Percentage Factor, to the Agent, for the benefit of
the Company and the Bank Investors, the amount necessary to
cause the Percentage Factor to equal the Maximum Percentage
Factor, such amount to be deposited into the Principal
Collection Account;
(viii) eighth, to the Master Servicer, the accrued
and unpaid Servicing Fee, if the Master Servicer is an
Affiliate of the Parent;
(ix) ninth, to the Master Servicer, any amounts
collected during the related Collection Period in respect of
late fees, insufficient funds charges, extension fees and
other like amounts;
(x) tenth, to the Finance Facility Pledgor all
amounts required to be remitted thereto pursuant to the
Facility Pledge Agreement; and
(xi) eleventh, the balance, if any, to the Pledgors.
(b) On the last day of each Tranche Period, first, from
amounts on deposit in the Interest Accrual Account and, second, from
the Collections on deposit in the Collection Account, the Master
Servicer shall deposit to the Agent's account, for the benefit of the
Company or the Bank Investors, as applicable, an amount equal to the
accrued and unpaid Discount for such Tranche Period. The Agent, upon
its receipt of such amounts in the Agent's account, shall
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distribute such amounts to the Company and/or the Bank Investors
entitled thereto as set forth above; provided that if the Agent shall
have insufficient funds to pay all of the above amounts in full on any
such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to
payment thereof. In addition, on any Business Day, the Master Servicer
shall remit to the applicable Hedge Counterparty, any Hedge Payments
then due.
(c) Amounts on deposit in the Principal Collection Account
will be applied by the Agent to repay the principal component (and not
the Discount related thereto) of the Commercial Paper or other
investments being used to fund the Net Investment as and when the same
mature; provided that so long as the Termination Date has not occurred,
the Agent may use amounts on deposit in the Principal Collection
Account to fund Pledges pursuant to Section 2.2 including Pledges to
the extent necessary to cause the Percentage Factor to not exceed the
Maximum Percentage Factor (so long as either the Pledgors consent to
the use thereof to fund Pledges or such use shall not cause the
Percentage Factor to increase).
SECTION 2.6 Liquidation Settlement Procedures. On the last day of each
Tranche Period to occur on or after the Termination Date, the Master Servicer
shall deposit to the Agent's account to the extent not already so deposited, for
the benefit of the Company or the Bank Investors, as applicable, from amounts on
deposit in the Collection Account, the sum of (i) the accrued Discount for such
Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche
Period, and (iii) all other Aggregate Unpaids. On such day, the Master Servicer
shall deposit to its account, from amounts on deposit in the Collection Account
which remain after payment in full of the aforementioned amounts, the accrued
Servicing Fee for such Tranche Period. If there shall be insufficient funds on
deposit for the Master Servicer to distribute funds in payment in full of the
aforementioned amounts, the Master Servicer shall distribute funds first, in
payment of the accrued Discount, second, if the Parent or any Affiliate of the
Parent is not then the Master Servicer, to the Master Servicer's account, in
payment of the Servicing Fee payable to the Master Servicer, third, in reduction
of the Net Investment allocated to any Tranche Period ending on
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such date, fourth, in payment of all fees payable by the Pledgors hereunder,
fifth, in payment of all other Aggregate Unpaids and sixth, if the Parent or any
Affiliate of the Parent is the Master Servicer, to its account as Master
Servicer, in payment of the Servicing Fee payable to such Person as Master
Servicer. The Agent, upon its receipt of such amounts in the Agent's account,
shall distribute such amounts to the Company and/or the Bank Investors entitled
thereto as set forth above; provided that if the Agent shall have insufficient
funds to pay all of the above amounts in full on any such date, the Agent shall
pay such amounts in the order of priority set forth above and, with respect to
any such category above for which the Agent shall have insufficient funds to pay
all amounts owing on such date, ratably (based on the amounts in such categories
owing to such Persons) among all such Persons entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Discount and Servicing Fees have been paid in full and all
other Aggregate Unpaids have been paid in full, (i) the Agent, on behalf of the
Company and the Bank Investors, shall be deemed to have automatically
re-assigned to the Pledgors all of the Agent's right, title and interest in and
to the Affected Assets (including the Pledged Interest), (ii) the Master
Servicer shall pay to the Pledgors any remaining amounts on deposit in the
Collection Account and (iii) the Agent, on behalf of the Company and the Bank
Investors, shall execute and deliver to the Pledgors, at the Pledgors' expense,
such documents or instruments as are necessary to terminate the Agent's
interests in the Affected Assets. Any such documents shall be prepared by or on
behalf of the Pledgors.
SECTION 2.7 Fees. Notwithstanding any limitation on recourse contained
in this Agreement pursuant to the Fee Letter or the Facility Fee Letter, the
Pledgors jointly and severally shall pay on each Payment Date the following
non-refundable fees: to the Company, the Program Fee, and to the Agent, the
Administrative Fee and the Facility Fee. If on any Payment Date, Available Funds
are not sufficient to pay the fees described in the immediately preceding
sentence, payment of such fees shall be made from the amounts on deposit in the
Fee Reserve Account.
SECTION 2.8 Protection of the Interest of the Company and
the Bank Investors; Releases. (a) Each Pledgor agrees that it
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will, and will cause the Seller to, from time to time, at its expense, promptly
execute and deliver all instruments and documents and take all actions as may be
necessary or as the Agent may reasonably request in order to perfect or protect
the Pledged Interest or to enable the Agent, the Company or the Bank Investors
to exercise or enforce any of their respective rights hereunder. Without
limiting the foregoing, each Pledgor will, and will cause the Seller to, upon
the request of the Agent, the Company or any of the Bank Investors, in order to
accurately reflect this transaction, (x) execute and file such financing or
continuation statements or amendments thereto or assignments thereof (as
permitted pursuant to Section 10.6 hereof) as may be requested by the Agent, the
Company or any of the Bank Investors and (y) mark its respective master data
processing records and other documents with a legend describing the conveyance
to the Pledgors of the Receivables (in the case of the Seller) and to the Agent,
for the benefit of the Company and the Bank Investors, of the Pledged Interest.
Each Pledgor shall, and will cause the Seller to, upon the reasonable request of
the Agent, the Company or any of the Bank Investors obtain such additional
search reports as the Agent, the Company or any of the Bank Investors shall
request. To the fullest extent permitted by applicable law, the Agent shall be
permitted to sign and file continuation statements. Carbon, photographic or
other reproduction of this Agreement or any financing statement shall be
sufficient as a financing statement. The Pledgors shall not, and shall not
permit the Seller to, change its respective name, identity or corporate
structure (within the meaning of Section 9-402(7) of the UCC) nor relocate its
respective chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least thirty (30) days prior notice thereof
and (ii) prepared at the Pledgors' expense and delivered to the Agent all
financing statements, instruments and other documents necessary to preserve and
protect the Pledged Interest or reasonably requested by the Agent in connection
with such change or relocation. Any filings under the UCC or otherwise that are
occasioned by such change in name or location shall be made at the expense of
Pledgors.
(b) The Master Servicer shall instruct all Obligors to cause all
Collections to be deposited directly with the Lock-Box Bank. If the Pledgors,
the Seller or the Master Servicer receives any Collections, the Pledgors, the
Seller or the Master
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Servicer, as applicable, shall immediately, but in any event within two Business
Days of receipt, remit (and shall cause the Seller to remit) such Collections to
the Collection Account.
(c) With respect to Receivables and Related Security reassigned due to
Deemed Collections or otherwise reassigned pursuant to Section 2.9, substituted
for pursuant to Section 2.16 or subject to a Take-out, or with respect to
Equipment with respect to Receivables that have been paid in full, the Agent
shall execute such appropriate releases (without recourse) or termination
statements as may be reasonably requested by the Pledgors.
SECTION 2.9 Deemed Collections; Reassignments; Prepayment Shortfalls;
Application of Payments. If on any day during any Collection Period any of the
representations or warranties in Article III is or has become untrue with
respect to a Receivable (whether on or after the date of any pledge of an
interest therein to the Agent, the Company or the Bank Investors as contemplated
hereunder), then any party hereto discovering the same shall so inform the other
parties hereto (provided that notice thereof shall be given to the Agent on
behalf of the Company and the Bank Investors), and unless the breach of such
representation or warranty shall have been cured on or prior to the related
Payment Date, the applicable Pledgor shall be deemed to have received during
such Collection Period a Collection of such Receivable in full and such Pledgor
shall on the related Payment Date pay to the Master Servicer an amount equal to
the Required Payoff Amount with respect to such Receivable and such amount shall
be allocated and applied by the Master Servicer as a Collection allocable to the
Pledged Interest in accordance with Section 2.5 or 2.6 hereof, as applicable;
provided that in lieu of such payment, to the extent permitted pursuant to
Section 2.16, the Pledgors may substitute a Substitute Receivable for any such
Receivable.
The Pledgors shall have the option, but shall not be required, to
accept the reassignment of Receivables that are not subject to a Deemed
Collection but that are 60 or more days past due at a price equal to the
Required Payoff Amount therefor. Also, the Pledgors will accept the reassignment
of Defaulted Receivables upon 5 Business Days' notice following the demand of
the Agent at a price equal to the Required Payoff Amount;
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provided that in lieu of such payment, to the extent permitted pursuant to
Section 2.16, the Pledgors may substitute a Substitute Receivable for any such
Defaulted Receivable. In addition, to the extent any Contract that is a
conditional sales contract or other loan is prepaid by the related Obligor
pursuant to its terms, the amount, if any, by which the amount of such
prepayment is less than the Required Payoff Amount for such Receivable (any such
amount, a "Prepayment Shortfall"), shall be paid by the Pledgors to the Agent
from their own account on the demand of the Agent. Any amounts received in
respect of such reassignments or in respect of any Prepayment Shortfall shall be
applied as a Collection in the manner set forth in the preceding paragraph.
Notwithstanding the foregoing, the aggregate of (i) the Outstanding
Balance of Receivables reassigned to the Pledgors pursuant to this Section 2.9
or substituted for Substitute Receivables pursuant to Section 2.16 (and if any
such Receivables are Defaulted Receivables, assuming for purposes of determining
the Outstanding Balance thereof that such Receivables are not in fact Defaulted
Receivables) plus (ii) the amount of payments made in respect of Prepayment
Shortfalls by or on behalf of the Pledgors pursuant to this Section 2.9, in each
case since the most recent Take-Out hereunder (or since the initial Pledge, if
no Take-Out has yet occurred) shall in no event exceed 10% of the then
Outstanding Net Investment; provided that any Receivable reassigned to the
Pledgors pursuant to this Section 2.9 or substituted for pursuant to Section
2.16, that at the time of such reassignment or substitution was subject to a
Deemed Collection shall not be included in calculating such 10% limitation.
SECTION 2.10 Payments and Computations, Etc. All amounts to be paid or
deposited by the Pledgors or the Master Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available funds; if such amounts
are payable to the Agent (whether on behalf of the Company or any Bank Investor
or otherwise) they shall be paid or deposited in the account indicated in
Section 10.3 hereof, until otherwise notified by the Agent. The Pledgors shall,
to the extent permitted by law, pay to the Agent, for the benefit of the Company
and the Bank Investors upon demand, interest on all
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amounts not paid or deposited when due hereunder at a rate equal to 2% per annum
plus the Base Rate. All computations of Discount, interest and all per annum
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first but excluding the last day) elapsed. Any
computations by the Agent of amounts payable by the Pledgors hereunder shall be
binding upon the Pledgors absent manifest error.
SECTION 2.11 Reports. (a) Prior to the fifteenth day of each month (or,
if such fifteenth day is not a Business Day, the immediately preceding Business
Day), the Master Servicer shall prepare and forward to the Agent and the
Administrative Agent (i) an Investor Report as of the end of the last day of the
immediately preceding month and (ii) such other information as the Agent or the
Administrative Agent may reasonably request.
SECTION 2.12 Accounts. (a) Collection Account. There shall be
established on the day of the initial Pledge hereunder and maintained with the
Agent, a segregated account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Agent, on behalf of the Company and the Bank Investors. Funds on deposit in
the Collection Account shall be invested by the Agent in Eligible Investments
that will mature so that such funds in the necessary amount will be available
prior to the last day of each successive Tranche Period or Payment Date
following such investment. On the last day of each Tranche Period, all interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be retained in the Collection Account and be available
to make any payments required to be made hereunder (including Discount) by the
Pledgors. On the date on which the Net Investment is zero, all accrued Discount
and Servicing Fees have been paid in full and all other Aggregate Unpaids have
been paid in full, any funds remaining on deposit in the Collection Account
shall be paid to the Pledgors.
(b) Reserve Account. There shall be established on the day of the
initial Pledge hereunder and maintained with the Agent, a segregated account
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Agent, on behalf of the
Company and the Bank Investors. Funds on deposit in the Reserve Account shall be
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invested by the Agent in Eligible Investments that will mature so that such
funds will be available prior to the last day of each successive Tranche Period
or Payment Date following such investment. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Account shall
be retained in the Reserve Account and be available to make payments required to
be made therefrom. Funds on deposit in the Reserve Account shall be retained in
the Reserve Account and be available (i) to pay any Discount payable pursuant to
Section 2.5(b) to the extent amounts on deposit in the Interest Accrual Account
and the Collection Account are insufficient therefor, (ii) on any Payment Date
to make any payments required to be made under clauses (i) through (v) of
Section 2.5(a) to the extent that Available Funds are insufficient therefor and
(iii) on and after the Termination Date to the Agent to reduce the Net
Investment. On each Payment Date, after giving effect to the allocations set
forth in Section 2.5(a), any amounts on deposit therein that are in excess of
the Specified Reserve Account Balance will be released to the Pledgors. At any
time at which a Reserve Account Event is no longer continuing any amounts
remaining on deposit in the Reserve Account, after application of such amounts
to make any payments required pursuant to the preceding sentence, will be
released to the Pledgors.
(c) Principal Collection Account. There shall be established on the day
of the initial Pledge hereunder and maintained with the Agent, a segregated
account (the "Principal Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. All interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Principal Collection Account shall be retained in the Principal Collection
Account and be available to make payments required to be made therefrom. Funds
on deposit in the Principal Collection Account shall be invested by the Agent in
Eligible Investments that will mature so that such funds will be available prior
to the last day of each successive Tranche Period or Payment Date following such
investment. Funds on deposit in the Principal Collection Account will be applied
as set forth in Section 2.5(c).
(d) Fee Reserve Account. There shall be established on the
day of the initial Pledge hereunder and maintained with the
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Agent, a segregated account (the "Fee Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Agent, on behalf of the Company and the Bank Investors. On or prior to the
date of the initial Pledge hereunder, an amount equal to the product of (a)
0.10% and (b) the Facility Limit as of such Pledge Date will be deposited into
the Fee Reserve Account. Funds on deposit in the Fee Reserve Account shall be
invested by the Agent in Eligible Investments that will mature so that such
funds will be available prior to each Payment Date. All interest and earnings
(net of losses and investment expenses) on funds on deposit in the Fee Reserve
Account shall be retained in the Fee Reserve Account and be available to make
payments required to be made therefrom. Funds on deposit in the Fee Reserve
Account shall be available on any Pledge Date or the date of any Take-out to
make any payments of the Program Fee, the Facility Fee or the Administrative Fee
that have become due and payable to the extent that Available Funds are
insufficient therefor. If on any Payment Date (including after a Take-Out as
described below) the Net Investment is equal to or exceeds $100,000,000, and
each of the above-referenced fees has been paid-in-full as of such Payment Date,
all funds on deposit in the Fee Reserve Account will be released at such time to
the Pledgors. If after giving effect to the initial Pledge to occur after any
Take-out, the Net Investment is equal to less than $100,000,000, the Pledgors
shall deposit into the Fee Reserve Account an amount from the proceeds of such
Pledge so that the amount on deposit therein equals the product of (a) 0.10% and
(b) the Facility Limit as of such Pledge Date.
(e) Interest Accrual Account. There shall be established on the day of
the initial Pledge hereunder and maintained with the Agent, a segregated account
(the "Interest Accrual Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Agent, on behalf of
the Company and the Bank Investors. Funds on deposit in the Interest Accrual
Account shall be invested by the Agent in Eligible Investments that will mature
so that such funds will be available as needed prior to the last day of each
successive Tranche Period following such investment. All interest and earnings
(net of losses and investment expenses) on funds on deposit in the Interest
Accrual Account shall be retained in the Interest Accrual Account and be
available to make payments required to be
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made therefrom. Funds on deposit in the Interest Accrual Account shall be
available to make payments of accrued and unpaid Discount pursuant to Section
2.5(b).
SECTION 2.13 Sharing of Payments, Etc. If the Company or any Bank
Investor (for purposes of this Section only, being a "Recipient") shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Pledged Interest pledged to it (other
than pursuant to Section 2.7 or Article VIII and other than as a result of the
differences in the timing of the applications of Collections pursuant to Section
2.5 or 2.6) in excess of its ratable share of payments on account of Purchased
Interest funded by the Company and/or the Bank Investors entitled thereto, such
Recipient shall forthwith purchase from the Company and/or the Bank Investors
entitled to a share of such participations in the Pledged Interests pledged to
such Persons as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such Recipient, such purchase from each such other Person shall be rescinded and
each such other Person shall repay to the Recipient the purchase price paid by
such Recipient for such participation to the extent of such recovery, together
with an amount equal to such other Person's ratable share (according to the
proportion of (a) the amount of such other Person's required payment to (b) the
total amount so recovered from the Recipient) of any interest or other amount
paid or payable by the Recipient in respect of the total amount so recovered.
SECTION 2.14 Right of Setoff. Without in any way limiting the
provisions of Section 2.13, each of the Company and the Bank Investors is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence of the Termination Date, to set-off, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by the Company or such
Bank Investor to, or for the account of, the Pledgors against the amount of the
Aggregate Unpaids owing by the Pledgors to such Person or to the Agent on behalf
of such Person (even if contingent or unmatured).
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SECTION 2.15 Hedging of Receivables. The Pledgors shall from time to
time enter into such Hedging Agreements as shall be necessary so that after
giving effect to any Pledge, the excess of the Outstanding Balance of the
Receivables over the aggregate Hedged Amount under all Hedging Agreements shall
not be equal to or in excess of $10,000,000; provided that if at any time the
aggregate Hedged Amount under all Hedging Agreements exceeds the Outstanding
Balance of the Receivables, the Pledgors shall reduce such excess to zero by
terminating or reducing by an appropriate amount the Hedge Agreements. Upon
entering into any Hedging Agreement the Pledgors shall assign to the Agent, on
behalf of the Company and the Bank Investors, as applicable, all of the
Pledgors' rights under such Hedging Agreement. Each Hedging Agreement shall (i)
have a scheduled termination date that coincides with the last Contract Payment
due to occur for the Receivables to which such Hedging Agreement relates; (ii)
provide for a notional amount equal to 100% of the Outstanding Balance of such
Receivables rounded to the nearest multiple of $100,000 (the "Hedged Amount");
(iii) provide that Hedge Payments be calculated based on the "constant maturity"
yield on U.S. Treasury securities with a maturity date equal or nearest to the
then expected remaining weighted average life (as determined by the Agent in its
sole discretion) of the related Receivables; (iv) provide that the Hedge
Counterparty's payment obligations shall be calculated by reference to the
Hedged Amount and a per annum rate determined by reference to H.15, as defined
in the 1991 ISDA Definitions published by the International Swaps and
Derivatives Association, Inc. and as determined in accordance with the
procedures in effect on the date of this Agreement (the "H.15"); (v) provide
that any payments to be paid with respect to each Payment Date and any early
termination date thereunder by the Hedge Counterparty are to be deposited into
the Collection Account, for distribution in accordance with this Agreement; and
(vi) be on such other terms and subject to such other conditions as shall be
reasonably acceptable to the Agent. The "constant maturity" yield as described
in clause (iii) above shall be determined based on the average yield, in effect
for the week ending on the last Friday immediately preceding the related date of
determination for U.S. Treasury securities adjusted to a constant maturity, as
published in H.15. In the event the H.15 is no longer available, then the rates
described in clauses (iii) and (iv) above shall be reasonably agreed to between
the Pledgors and the Hedge Counterparty and reasonably acceptable to
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the Agent in order to effect an economically equivalent business deal between
such parties. The Master Servicer will provide the Agent with written notice
confirming the amounts, if any, to be paid by or to the Hedge Counterparty on
each Payment Date and any early termination date.
Each Pledgor hereby assigns all of its rights under each Hedging
Agreement to the Agent, on behalf of the Company and the Bank Investors. In
addition, the parties hereto agree that all pledges, grants and assignments made
hereunder for the benefit of the Agent, the Company and the Bank Investors
(including, without limitation, Sections 2.2(a), 2.2(f) and 2.8), shall also be
for the ratable benefit of each Hedge Counterparty as if it were named in each
such pledge, as security and assurance to it of the payment in full of all
amounts due or to become due to it hereunder.
SECTION 2.16 Substitution of Receivables. On any day prior to the
occurrence of the Termination Date, the Pledgors may, subject to the conditions
set forth in this Section 2.16, replace any Receivable with one or more other
Receivables (each, a "Substitute Receivable"); provided, however, that no such
replacement shall occur unless each of the following conditions is satisfied as
of the date of such replacement and substitution by the Substitute Receivables
to be substituted on such date:
(a) each Substitute Receivable is an Eligible
Receivable;
(b) after giving effect to any such substitution, (x) the sum
of the Net Investment plus, in the case where the Pledged Interest is
held by the Agent on behalf of the Company, the Interest Component of
all outstanding related Commercial Paper, would not exceed the Facility
Limit and (y) the Net Investment would not exceed the Maximum Net
Investment;
(c) the aggregate Outstanding Balance of such Substitute
Receivables shall be equal to or greater than the aggregate Required
Pay-off Amount as of the date of the substitution of the Receivables
being replaced;
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(d) the sum of the Outstanding Balances as of the respective
dates of substitution of all of the Receivables substituted for under
this Agreement, other than any Receivable that at the time of
substitution was subject to a Deemed Collection pursuant to Section 2.9
shall not cause the 10% limitation set forth in the last paragraph of
Section 2.9 to be exceeded;
(e) all representations and warranties contained in Section
3.1 shall be true and correct with respect to each such Substitute
Receivable;
(f) such substitution does not cause a Termination Event to
occur;
(g) the Pledgors shall deliver to the Agent on the date of
such substitution a Pledge Certificate certifying that each of the
foregoing is true and correct as of such date; and
(h) each Receivable substituted for (except for Receivables
subject to a Deemed Collection or that are not Eligible Receivables)
must be at least 60 days past due.
In connection with any such substitution or any reassignment pursuant
to Section 2.9, the Agent shall, automatically and without further action, be
deemed to transfer to the appropriate Pledgors, free and clear of any Adverse
Claim created pursuant to this Agreement, all of the right, title and interest
of the Agent to and under such replaced Receivable and all Related Security, and
the Agent shall be deemed to represent and warrant that it has the corporate
authority and has taken all necessary corporate action to accomplish such
transfer, but without any other representation and warranty, express or implied.
SECTION 2.17 Auction Procedure.
On any Business Day, the Seller may request the Agent, on behalf of the
Company and the Bank Investors, to conduct an auction with respect to the
Pledged Interest and the interest in the Secured Note represented by all or a
specified portion (such portion to have been specified by the Pledgors) of the
Receivables and the Related Security on the terms and conditions
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set forth herein. With respect to any such auction, the Agent shall accept the
highest bid submitted so long as (i) at least two bids are received, and at
least one bid is made by a Person that is not a Pledgor or an Affiliate of the
Pledgors, (ii) the highest such bid shall be at least equal to the amount
necessary so that after giving effect to the application of such proceeds to pay
Net Investment and other Aggregate Unpaids, the remaining Net Investment and Net
Receivables Balance will be such that the Percentage Factor will not exceed the
Maximum Percentage Factor and (iii) the highest such bid shall in addition not
be less than the principal component of the Company's maturing Commercial Paper
which was issued to fund the portion of the Net Investment relating to the
Receivables being auctioned or the principal component subject to the Tranche
Period otherwise utilized by the Company or the Bank Investors to fund such
portion of the Net Investment, as applicable plus all unreimbursed Servicer
Advances and all Discount associated with the Tranche Periods utilized to fund
such portion of the Net Investment, as well as all other Carrying Costs related
to the auctioned Contracts accrued through the date of such reassignment. The
Pledgors shall be entitled to notification of the amount of the highest
qualifying bid for any such auction and either or both Pledgors, or any
Affiliate thereof, shall be entitled to purchase the auctioned portion of the
Pledged Interest for an amount equal to such highest bid. The method, manner,
time, place and terms of any such auction shall be commercially reasonable.
The Pledgors shall also be obligated to pay to the Agent the Agent's
reasonable legal fees and expenses incurred in connection with any such auction
and any Early Collection Fees in connection with such auction.
Upon the deposit to the Collection Account and the payment to the
Company of the amounts described in this Section, the Agent shall execute and
deliver to the Person so acquiring the Receivables at such Person's expense,
such documents or instruments as are necessary to terminate the Agent's interest
in the Receivables and the Related Security.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Pledgors. Each
Pledgor represents and warrants to the Agent, the Company and the Bank Investors
that:
(a) Existence and Power. Such Pledgor is a limited partnership
duly organized, validly existing and in good standing under the laws of
the State of Nevada and has all limited partnership power and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. Each Pledgor is duly qualified to do
business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have
a Material Adverse Effect.
(b) Company and Governmental Authorization; Contravention. The
execution, delivery and performance by such Pledgor of this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Facility Fee
Letter, the Secured Note, the Pledge Certificates and the other
Transaction Documents to which such Pledgor is a party are within such
Pledgor's partnership powers, have been duly authorized by all
necessary action on behalf of such Pledgor, require no action by or in
respect of, or filing with, any Official Body or official thereof
(except as contemplated by Section 2.8 hereof), and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the Certificate of Limited Partnership of such Pledgor
or of any agreement, judgment, injunction, order, writ, decree or other
instrument binding upon such Pledgor or result in the creation or
imposition of any Adverse Claim on the assets of such Pledgor (except
as contemplated by Section 2.8 hereof).
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(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter, the
Secured Note and the other Transaction Documents to which such Pledgor
is a party constitutes and each Pledge Certificate upon payment of the
Advance Amount set forth therein will constitute the legal, valid and
binding obligation of such Pledgor, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors generally.
(d) Perfection. Immediately preceding each Pledge hereunder,
each Receivable and any related Equipment shall be owned by a Pledgor
free and clear of all Adverse Claims, other than those which may be
simultaneously released and liens with respect to Leveraged Lease
Loans. On or prior to each Pledge, all financing statements and other
documents required to be recorded or filed in order to perfect and
protect the Agent's Pledged Interest against all creditors of and
purchasers from the Pledgors and the Seller will have been duly filed
in each filing office necessary for such purpose and all filing fees
and taxes, if any, payable in connection with such filings shall have
been paid in full. Notwithstanding the foregoing, it is understood
that, except with respect to Receivables that are Leveraged Lease
Loans, (i) no UCC-1 filing may have been made with respect to the
Equipment (other than vehicles as described in (ii) below) underlying
those Receivables that had at the origination of the related Contract
an original equipment cost of less than $35,000 (provided such
Receivables do not represent more than 20% of the Net Investment or $20
million of the Net Investment, whichever is greater) and (ii) certain
Receivables may be leases on vehicles or other types of equipment which
require titling in the name of the Pledgors, so long as the aggregate
Outstanding Balance of such Receivables does not represent more than
5.0% of the Net Investment or $7 million of the Net Investment,
whichever is greater, and provided that such vehicles are re-titled as
required to perfect such interest within 90 days of the related Pledge.
(e) Accuracy of Information. All information heretofore
furnished by such Pledgor (including without
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limitation, the Investor Reports, any other reports delivered pursuant
to Section 2.11 hereof and the Pledgors' financial statements) to the
Company, any Bank Investors, the Agent or the Administrative Agent for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by
such Pledgor to the Company, any Bank Investors, the Agent or the
Administrative Agent will be, true and accurate in every material
respect, on the date such information is stated or certified.
(f) Tax Status. Such Pledgor has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge
of such Pledgor threatened, against or affecting such Pledgor or any
Affiliate of such Pledgor or their respective properties, in or before
any court, arbitrator or other body, which may, individually or in the
aggregate, have a Material Adverse Effect.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by
such Pledgor of this Agreement, the performance by such Pledgor of the
transactions contemplated by this Agreement, and the fulfillment of the
terms hereof and thereof by such Pledgor, have been obtained.
(i) Use of Proceeds. No proceeds of any Pledge will be used by
such Pledgor to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(j) Place of Business. The principal place of business and
chief executive office of such Pledgor is located at the address of
such Pledgor indicated in Section 10.3 hereof and the offices where
such Pledgor keeps all its Records, are located at the address(es)
described on Exhibit
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I or such other locations notified to the Company in accordance with
Section 2.8 hereof in jurisdictions where all action required by
Section 2.8 hereof has been taken and completed.
(k) Good Title. At the time of each Pledge, the Agent shall
acquire an assignment of a valid and perfected first priority security
interest to the extent of the Pledged Interest and in the Related
Security and Collections with respect thereto free and clear of any
Adverse Claim.
(l) Trade Names, Etc. Such Pledgor has no subsidiaries and
within the last five years, has operated under no trade names and has
not changed its name, merged with or into or consolidated with any
other corporation or been the subject of any proceeding under Title 11,
United States Code (Bankruptcy).
(m) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(n) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
(to the extent it is the Parent or any Subsidiary or Affiliate of the
Parent) to service and collect the Receivables.
(o) No Termination Event. No event has occurred and
is continuing and no condition exists which constitutes a
Termination Event.
(p) Not an Investment Company. Such Pledgor is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. Such Pledgor and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.
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(r) Lock-Box Account. All Obligors have been instructed to
make payment to a Lock-Box Account.
(s) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales
act or similar law.
(t) Pledges Under Receivables Purchase Agreement. Each
Receivable has been purchased by a Pledgor (or the interests
represented thereby have been collectively purchased by the Pledgors)
from the Seller pursuant to, and in accordance with, the terms of the
Receivables Purchase Agreement.
(u) Preference; Voidability. The Pledgors shall have given
reasonably equivalent value to the Seller in consideration for the
transfer to the Pledgors of the Receivables and Related Security from
the Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the Seller to the Pledgors and no
such transfer is or may be voidable under any Section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(v) Each Receivable listed on the Contract Schedule is an
Eligible Receivable as of the related Pledge Date.
Any document, instrument, certificate or notice delivered to the
Company hereunder shall be deemed a representation and warranty by the Pledgors.
SECTION 3.2 Reaffirmation of Representations and Warranties by the
Pledgor. On each day that a Pledge is made hereunder, the Pledgors, by accepting
the proceeds of the related Advance Amount, whether delivered to the Pledgors
pursuant to Section 2.2(a) or Section 2.5(c) hereof, shall be deemed to have
certified that all representations and warranties described in Section 3.1
hereof are correct on and as of such day as though made on and as of such day.
SECTION 3.3 [Reserved.]
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SECTION 3.4 Representations and Warranties of the Master Servicer. The Master
Servicer represents and warrants to the Company and the Bank Investors that:
(a) Corporate Existence and Power. The Master Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Master Servicer is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Master Servicer of this
Agreement are within the Master Servicer's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Official Body or official
thereof, and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Incorporation or Bylaws of the Master Servicer or of any agreement,
judgment, injunction, order, writ, decree or other instrument binding
upon the Master Servicer or result in the creation or imposition of any
Adverse Claim on the assets of the Master Servicer or any of its
Subsidiaries.
(c) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors.
(d) Accuracy of Information. All information heretofore
furnished by the Master Servicer to the Agent, the Company, any Bank
Investor or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information
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hereafter furnished by the Master Servicer to the Agent, the Company,
any Bank Investor or the Administrative Agent will be, true and
accurate in every material respect, on the date such information is
stated or certified.
(e) Tax Status. The Master Servicer has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(f) Action, Suits. Except as set forth in Exhibit H, there are
no actions, suits or proceedings pending, or to the knowledge of the
Master Servicer threatened, against or affecting the Master Servicer or
any Affiliate of the Master Servicer or their respective properties, in
or before any court, arbitrator or other body, which may, individually
or in the aggregate, have a Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Master Servicer of this Agreement, the performance by the Master
Servicer of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof and thereof by the Master Servicer,
have been obtained.
(h) Nature of Receivables. Each Receivable included in the
calculation of the Net Receivables Balance in fact satisfies at such
time the definition of "Eligible Receivable".
(i) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(j) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
to service and collect the Receivables.
(k) No Termination Event. No event has occurred and
is continuing and no condition exists which constitutes a
Termination Event.
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(l) Not an Investment Company. The Master Servicer is not, and
is not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(m) ERISA. Each of the Master Servicer and its ERISA
Affiliates is in compliance in all material respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(n) Lock-Box Account. All Obligors have been instructed to
make payment to the Lock-Box Account.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 Conditions to Closing. (a) On or prior to the date of
execution hereof, the Pledgors shall deliver to the Agent the following
documents, instruments and fees all of which shall be in a form and substance
acceptable to the Agent:
(i) A copy of the resolutions of the member of the General
Partner of each Pledgor approving the execution, delivery and
performance by such Pledgor of this Agreement, the Receivables Purchase
Agreement and the other Transaction Documents to be delivered by such
Pledgor hereunder or thereunder.
(ii) The Certificate of Limited Partnership or other
organizational document of each Pledgor certified by the Secretary of
State or other similar official of the State of Nevada dated a date
reasonably prior to the Closing Date.
(iii) The Articles of Incorporation or applicable
organizational document of the Seller certified by the Secretary of
State or other similar official of the State of Delaware dated a date
reasonably prior to the Closing Date.
(iv) The Articles of Organization or other organizational
document of the General Partner certified by the Secretary of State or
other similar official of the State of Nevada dated a date reasonably
prior to the Closing Date.
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(v) The Articles of Organization or other organizational
document of the Parent certified by the Secretary of State or other
similar official of the State of Delaware dated a date reasonably prior
to the Closing Date.
(vi) The Certificate of Limited Partnership or other
organizational document of the Master Servicer certified by the
Secretary of State or other similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(vii) A Good Standing Certificate for each Pledgor from the
Secretary of State or other similar official of the State of Nevada
dated a date reasonably prior to the Closing Date.
(viii) A Good Standing Certificate for the Seller issued by
the Secretary of State or a similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(ix) A Good Standing Certificate for the Parent from the
Secretary of State or other similar official of the State of Delaware
dated a date reasonably prior to the Closing Date.
(x) A Good Standing Certificate for the Master Servicer from
the Secretary of State or other similar official of the State of
Delaware dated a date reasonably prior to the Closing Date.
(xi) A Certificate of the Secretary of the General Partner of
each Pledgor substantially in the form of Exhibits L-1 and L-2 attached
hereto.
(xii) A Certificate of the Secretary of the Seller
substantially in the form of Exhibit L-3 attached hereto.
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(xiii) A Certificate of the Secretary of the General Partner
substantially in the form of Exhibit L-4 attached hereto.
(xiv) A Certificate of the Secretary of the Parent
substantially in the form of Exhibit L-5 attached hereto.
(xv) A Certificate of the Secretary of the Master Servicer
substantially in the form of Exhibit L-6 attached hereto.
(xvi) An opinion of Morgan, Lewis & Bockius LLP, special
counsel to the Parent, the Master Servicer and the Seller, covering
certain corporate and security interest matters in form and substance
satisfactory to the Agent and the Agent's counsel.
(xvii) An opinion of Dewey Ballantine LLP, special counsel to
the Pledgors and the Seller, covering certain bankruptcy and insolvency
matters (i.e. "true sale" and nonconsolidation) in form and substance
satisfactory to the Agent and the Agent's counsel.
(xviii) An opinion of Dewey Ballantine LLP, special counsel to
the Pledgors and the Seller covering certain tax matters in form and
substance satisfactory to the Agent and the Agent's counsel.
(xix) An opinion of Dewey Ballantine LLP, special counsel to
the Pledgors and the Seller covering certain corporate matters in form
and substance satisfactory to the Agent and the Agent's counsel.
(xx) An opinion of Woodburn and Wedge, special Nevada counsel
to the Pledgors and the Seller covering certain corporate matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xxi) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter and each of
the other Transaction Documents to be
executed by the Seller or the Pledgors.
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(xxii) The Secured Note, duly executed by the Pledgors and
appropriately completed.
(xxiii) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
(xxiv) For each Pledgor, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
such Pledgor as the debtor in favor of the Agent, for the benefit of
the Company and the Bank Investors, as the secured party or other
similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Agent's
interest in all of each Pledgor's respective right, title and interest
in, to and under all Receivables and the Related Security and
Collections relating thereto; provided that no such filings need be
made with respect to the related Equipment.
(xxv) For each Pledgor, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Seller as the debtor in favor of such Pledgor as secured party and
the Agent, for the benefit of the Company and the Bank Investors, as
assignee of the secured party or other similar instruments or documents
as may be necessary or in the reasonable opinion of the Agent desirable
under the UCC of all appropriate jurisdictions or any comparable law to
perfect the Pledgor's interest in all applicable Receivables and the
Related Security and Collections relating thereto; provided that no
such filings need be made with respect to the related Equipment.
(xxvi) Certified copies of request for information or copies
(Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Pledge listing all effective financing statements which name
either of the Pledgors or the Seller (under their respective present
names and any previous names) as debtor and which are filed in juris
dictions in which the filings were made pursuant to items (xxiv) or
(xxv) above together with copies of such financing
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statements (none of which shall cover any Receivables or
Contracts).
(a) On or prior to the date of execution hereof and, on or prior to the
related Pledge Date, the Pledgors shall deliver to the Agent the following
documents and instruments all of which shall be in a form or substance
acceptable to the Agent:
(xxvii) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by Pledgors.
(xxviii) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by the Seller.
(xxix) A computer tape setting forth all Receivables and the
Outstanding Balances thereon and such other information as the Agent
may reasonably request.
(xxx) The Pledge Certificate, duly executed by the Pledgors.
(xxxi) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
ARTICLE V
COVENANTS
SECTION 5.1 Affirmative Covenants of Pledgors. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
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(a) Financial Reporting. The Pledgors will, and will cause the
Parent and each of its Subsidiaries to, maintain, for itself and each
of its respective Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Agent:
(i) Annual Reporting. As soon as practical and in any
event within 90 days after the end of each fiscal year of the
Parent, (x) consolidated and unaudited consolidating balance
sheets of the Parent and its Subsidiaries as at the end of
such fiscal year, and the notes thereto, and the related
consolidated and unaudited consolidating statements of income,
stockholders' equity and cash flows, and the respective notes
thereto, for such fiscal year, setting forth (other than for
consolidating statements) comparative financial statements for
the preceding fiscal year, all prepared in accordance with
GAAP applied on a consistent basis and containing, with
respect to the consolidated financial statements, opinions of
Price Waterhouse L.L.P., or other such independent certified
public accountants selected by the Parent and approved by the
Agent, which are unqualified as to the scope of the audit
performed and as to the "going concern" status of the Parent
and without any exception not acceptable to the Agent and (y)
annual consolidated financial statements, prepared in
accordance with GAAP and compiled by such accountants, for
each of the Pledgors;
(ii) Quarterly Reporting. As soon as practical and in
any event within 45 days after the end of each fiscal quarter
(except the last fiscal quarter of the fiscal year of the
Parent), consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for
such fiscal quarter and for the period from the beginning of
the then-current fiscal year through the end of such reporting
period, and accompanied by a certificate of the chief
financial officer of the Parent or any other Person expressly
designated by the Board of Directors
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of the Parent as an authorized representative to the effect
that such financial statements present fairly the financial
position of the Parent and its Subsidiaries as of the end of
such fiscal period and the results of their operations and the
changes in their financial position for such fiscal period, in
conformity with the standards typically used in preparation of
the interim financial statements.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate signed by each Pledgor's or the Parent's, as
applicable, chief financial officer stating that to the best
of such Person's knowledge, no Termination Event exists and no
event which but for the lapse of time or the giving of notice,
or both, would constitute Termination Event exists, or if any
such event exists, stating the nature and status thereof.
(iv) Shareholders and Partners Statements and
Reports. Promptly upon the furnishing thereof to the partners
of the Pledgors or the shareholders of the Parent, copies of
all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports which Parent or any
subsidiary files with the Securities and Exchange Commission.
(vi) Notice of Termination Events. As soon as
possible and in any event within two (2) days after the
knowledge of the occurrence of each Termination Event or event
which but for the lapse of time or the giving of notice, or
both, would constitute a Termination Event, a statement of the
chief financial officer or chief accounting officer of both
Pledgors setting forth details of such event and the action
which the Pledgors propose to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt
Ratings. Within ten (10) days after the date any
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material change in or amendment to the Credit and Collection
Policy is made, a copy of such amendment and, if requested by
the Agent, a copy of the Credit and Collection Policy then in
effect. Within five days after the date of any change in the
Pledgors' or Parent's public debt ratings (other than any
asset-backed ratings), if any, a written certification of the
Pledgor's or the Seller's public debt ratings (other than any
asset-backed ratings) after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety
(90) days after the close of each of the Parent's and each
Pledgor's fiscal years, a complete copy of the Credit and
Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which
either Pledgor, the Seller or any ERISA Affiliate of either
Pledgor or the Seller files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which either Pledgor, the
Seller or any ERISA Affiliates of either Pledgor or the Seller
receives from the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor.
(x) Other Information. Such other information
(including non-financial information) as the Agent or the
Administrative Agent may from time to time reasonably request
with respect to the Seller, the Pledgors or any Subsidiary of
any of the foregoing.
(b) Conduct of Business. Each Pledgor will carry on and conduct its
business in substantially the same fields of enterprise as it is
presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all
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requisite authority to conduct its business in each jurisdiction
in which its business is conducted.
(c) Compliance with Laws. The Pledgors will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be
subject.
(d) Furnishing of Information and Inspection of Records. The
Pledgors will furnish to the Agent from time to time such information
with respect to the Receivables as the Agent may reasonably request,
including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. The Pledgors will at any time
and from time to time upon reasonable notice during regular business
hours permit the Agent, or its agents or representatives, (i) to
examine and make copies of and take abstracts from all Records and (ii)
to visit the offices and properties of the Pledgors for the purpose of
examining such Records, and to discuss matters relating to Receivables
or the Pledgors' performance hereunder and under the other Transaction
Documents to which such Person is a party with any of the officers,
directors, employees or independent public accountants of the Pledgors
having knowledge of such matters.
(e) Keeping of Records and Books of Account. The Pledgors will
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing 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 Receivables (including, without limitation, records adequate to
permit the daily identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). The
Pledgors will give the Agent notice of any material change in the
administrative and operating procedures of the Pledgors or the Seller,
as applicable, referred to in the previous sentence.
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(f) Performance and Compliance with Receivables and Contracts.
Each Pledgor, at its expense, will timely and fully perform and comply
with all material provisions, covenants and other promises required to
be observed by such Pledgor or the Seller under the Contracts related
to the Receivables.
(g) Credit and Collection Policies. The Pledgors will comply
in all material respects with the Credit and Collection Policy in
regard to each Receivable and the related Contract.
(h) Collections Received. The Pledgors shall hold in trust,
and deposit, immediately, but in any event not later than within two
Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Pledgors or the Seller,
as the case may be.
(i) Accounting and Tax Treatment. The Pledgors will not (i)
account for (including for tax purposes), or otherwise treat, the
transactions contemplated by the Receivables Purchase Agreement in any
manner other than as a sale of Receivables by the Seller to the
Pledgors; provided, however, that the Operating Lease Pledgor will
treat the transfer of the Receivables transferred by the Seller to the
Operating Lease Pledgor pursuant to the Receivables Purchase Agreement
as a financing for accounting purposes or (ii) account for or otherwise
treat the transactions contemplated hereby in any manner other than as
a pledge of Receivables by the Pledgors to the Agent on behalf of the
Company or the Bank Investors, as applicable. In addition, the Pledgors
shall disclose (in a footnote or otherwise) in all of its respective
financial statements (including any such financial statements
consolidated with any other Persons' financial statements) the
existence and nature of the transaction contemplated hereby and by the
Receivables Purchase Agreement and the interest of the Pledgors and the
Agent, on behalf of the Company and the Bank Investors, in the Affected
Assets.
(j) Separate Business. Each Pledgor shall at all
times (a) to the extent such Pledgor's office is located in
the offices of the Seller or any Affiliate of the Seller,
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pay fair market rent for its executive office space located in the
offices of the Seller or any Affiliate of the Seller, (b) have at all
times at least two managers which are not employees, officers or
directors of the Seller or any Affiliate of the Seller or of any major
creditor of the Seller or any Affiliate of the Seller and are persons
who are familiar and have experience with asset securitization, (c)
maintain such Pledgor's books, financial statements, accounting records
and other corporate documents and records separate from those of the
Seller or any other entity, (d) not commingle such Pledgor's assets
with those of the Seller or any other entity, (e) act solely in its
corporate name and through its own authorized officers and agents, (f)
make investments directly or by brokers engaged and paid by such
Pledgor or its agents (provided that if any such agent is an Affiliate
of such Pledgor it shall be compensated at a fair market rate for its
services), (g) separately manage such Pledgor's liabilities from those
of the Seller or any Affiliates of the Seller and pay its own
liabilities, including all administrative expenses, from its own
separate assets, except that Parent may pay the organizational expenses
of such Pledgor, and (h) pay from such Pledgor's assets all obligations
and indebtedness of any kind incurred by such Pledgor. Each Pledgor
shall abide by all limited partnership formalities, including the
maintenance of current minute books, and such Pledgor shall cause its
financial statements to be prepared in accordance with generally
accepted accounting principles in a manner that indicates the separate
existence of such Pledgor and its assets and liabilities. Each Pledgor
shall (i) pay all its liabilities, (ii) not assume the liabilities of
the Seller or any Affiliate of the Seller, (iii) not lend funds or
extend credit to the Seller or any affiliate of the Seller except
pursuant to the Receivables Purchase Agreement in connection with the
purchase of Receivables thereunder and (iv) not guaranty the
liabilities of the Seller or any Affiliates of the Seller other than,
in the case of a guaranty by the Qualifying Pledgor, the Operating
Lease Pledgor and, in the case of a guaranty by the Operating Lease
Pledgor, the Qualifying Pledgor, or with respect to either Pledgor, as
otherwise provided in the Facility Pledge Agreement. The officers and
nonmembers and members of each Pledgor (as appropriate) shall make
decisions with respect
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to the business and daily operations of such Pledgor independent of and
not dictated by any controlling entity. Each Pledgor shall not engage
in any business not permitted by its Agreement of Limited Partnership
as in effect on the Closing Date.
(k) Partnership Documents. Each Pledgor shall only amend,
alter, change or repeal Article 2, Section 16.1, Section 20.1, or
Section 21.6 of its Agreement of Limited Partnership with the prior
written consent of the Agent.
SECTION 5.2 Negative Covenants of the Pledgors. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and in the Receivables Purchase Agreement, each Pledgor will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (or the filing of any
financing statement) or with respect to any of the Affected Assets or
any account which concentrates in a Lock-Box Bank to which any
Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, each Pledgor will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(c) No Change in Business or Credit and Collection Policy.
Each Pledgor will not make any material change in the Credit and
Collection Policy without providing the Agent with prior written notice
of the change; provided that each Pledgor will reverse any such change
if the Agent disapproves of such change within 30 days of receiving
prior written notice of such change. Each Pledgor will not make
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any change in the character of its business which would have
a Material Adverse Effect.
(d) No Mergers, Etc. Each Pledgor will not (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other Person unless, in
the case of the Seller, the Seller is the surviving entity.
(e) Change in Payment Instructions to Obligors. Each Pledgor
will not make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless such instructions
are to deposit such payments to another existing Lock-Box Account and
the Agent shall have received written notice of such change at least 30
days prior thereto.
(f) Change of Name, Etc. Each Pledgor will not change its
name, identity or structure or the location of its chief executive
office, unless at least 10 days prior to the effective date of any such
change such Pledgor delivers to the Agent such documents, instruments
or agreements, executed by such Pledgor, as are necessary to reflect
such change and to continue the perfection of the Agent's security or
other interests in the Affected Assets.
(g) Amendment to Receivables Purchase Agreement. Each Pledgor
will not amend, modify, or supplement the Receivables Purchase
Agreement or waive any provision thereof, in each case except with the
prior written consent of the Agent and the Administrative Agent; nor
shall the Pledgor take any other action under the Receivables Purchase
Agreement that shall have a Material Adverse Effect or which is
inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein, each Pledgor
will not create, incur, assume or suffer to exist any indebtedness
whether current or funded, or any other liability other than (i)
indebtedness of the Pledgor representing fees, expenses and indemnities
arising hereunder or under the Receivables Purchase Agreement for the
purchase price of the Receivables under the Receivables Purchase
Agreement, and (ii) other indebtedness incurred in
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the ordinary course of its business in an amount not to exceed $50,000
in any fiscal year; provided, however, that each Pledgor may incur
indebtedness in order to finance the residual value of any Equipment
related to a Receivable hereunder, so long as such indebtedness is
non-recourse, not subject to petition and fully subordinated to the
payment of the related Receivable hereunder.
(i) ERISA Matters. Each Pledgor will not (i) engage or permit
any of its respective ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of
ERISA) for which an exemption is not available or has not previously
been obtained from the U.S. Department of Labor; (ii) permit to exist
any accumulated funding deficiency (as defined in Section 302(a) of
ERISA and Section 412(a) of the Code) or funding deficiency with
respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail
to make any payments to any Multiemployer Plan that such Pledgor or any
ERISA Affiliate of such Pledgor is required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto; (iv)
terminate any Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any reportable event described in
Title IV of ERISA which represents a material risk of a liability to
such Pledgor or any ERISA Affiliate of such Pledgor under ERISA or the
Code, if such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events occurring
within any fiscal year of such Pledgor, in the aggregate, involve a
payment of money or an incurring of liability by such Pledgor or any
ERISA Affiliate of such Pledgor, in an amount in excess of $1,000,000.
(j) Payment to the Seller. With respect to any Receivable sold
or contributed by the Seller to either Pledgor, the respective Pledgor
shall, and shall cause the Seller to, effect such sale or contribution
under, and pursuant to the terms of, the Receivables Purchase
Agreement, including, without limitation, the payment by such Pledgor
to the Seller of an amount equal to the purchase price for each such
Receivable sold, as required by the terms of the Receivables Purchase
Agreement.
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SECTION 5.3 [Reserved.]
SECTION 5.4 [Reserved.]
SECTION 5.5 Affirmative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) Conduct of Business. The Master Servicer will carry on and
conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted.
(b) Compliance with Laws. The Master Servicer will comply in
all material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(c) Furnishing of Information and Inspection of Records. The
Master Servicer will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. The Master
Servicer will, at any time and from time to time upon reasonable notice
during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts
from all Records and (ii) to visit the offices and properties of the
Master Servicer for the purpose of examining such Records, and to
discuss matters relating to Receivables or the Pledgors', the Seller's
or the Master Servicer's performance hereunder and under the other
Transaction Documents to which such Person
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is a party with any of the officers, directors, employees or
independent public accountants of the Master Servicer having knowledge
of such matters.
(d) Keeping of Records and Books of Account. The Master
Servicer will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other infor mation reasonably necessary or advisable for
the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Master Servicer will give the Agent notice of any
material change in the administrative and operating procedures of the
Master Servicer referred to in the previous sentence.
(e) Notice of Agent's Interest. In the event that either
Pledgor or the Seller shall sell or otherwise transfer any interest in
accounts receivable, any computer tapes or files or other documents or
instruments provided by the Master Servicer in connection with any such
sale or transfer shall disclose the Pledgors' ownership of the
Receivables and the Agent's interest therein.
(f) Credit and Collection Policies. The Master Servicer will
comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Collections. The Master Servicer shall instruct all
Obligors to cause all Collections other than Collections remitted
directly to be deposited directly to a Lock-Box Account.
(h) Collections Received. The Master Servicer shall hold in
trust, and deposit, immediately, but in any event not later than within
two Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Master Servicer.
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SECTION 5.6 [Reserved.]
SECTION 5.7 Negative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Master Servicer will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(b) No Change in Business or Credit and Collection Policy. The
Master Servicer will not make any material change in the Credit and
Collection Policy without providing the Agent with prior written notice
of such change; provided that the Master Servicer will reverse any such
change if the Agent disapproves of such change within 30 days of
receiving prior written notice of such change. The Master Servicer will
not make any change in the character of its business which would have a
Material Adverse Effect.
(c) No Mergers, Etc. The Master Servicer will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person
unless the Master Servicer is the surviving entity.
(d) Change in Payment Instructions to Obligors. The Master
Servicer will not make any change in its instructions to Obligors
regarding payments to be made to the Lock-Box Account, unless such
instructions are to deposit such payments to another existing Lock-Box
Account and the Agent shall have received written notice of such change
at least 30 days prior thereto.
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ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1 Appointment of the Master Servicer. The servicing,
administering and collection of the Receivables shall be conducted by the Person
(the "Master Servicer") so designated from time to time in accordance with this
Section 6.1. Until the Company gives notice to the Pledgors of the designation
of a new Master Servicer, Portfolio Financial Services Company is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Master Servicer pursuant to the terms hereof. The Master Servicer may not
delegate any of its rights, duties or obligations hereunder, or designate a
substitute Master Servicer, without the prior written consent of the Agent,
provided that, it is understood that the Master Servicer's duties hereunder with
respect to particular Receivables may and shall be delegated to the respective
Eligible Originators thereof and provided, further, that the Master Servicer
shall continue to remain solely liable for the performance of the duties as
Master Servicer hereunder notwithstanding any such delegation hereunder. The
Agent may, and upon the direction of the Majority Investors the Agent shall,
after the occurrence of a Master Servicer Default or any other Termination Event
(other than those specified in clauses (k), (l), (q) and (r) of Section 7.1)
designate as Master Servicer any Person (including itself) to succeed Portfolio
Financial Services Company or any successor Master Servicer, on the condition in
each case that any such Person so designated shall agree to perform the duties
and obligations of the Master Servicer pursuant to the terms hereof. Following
the occurrence and continuance of a Master Servicer Default or any Termination
Event (other than those specified above), the Agent may notify any Obligor of
the Pledged Interest.
SECTION 6.2 Duties of the Master Servicer.
(a) The Master Servicer shall take or cause to be taken all
such action as may be necessary or advisable to collect all payments
due under each Receivable and the related Contract from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy. The Master Servicer's duties will include, without
limitation, collection and posting of all payments, responding to
inquiries of Obligors regarding the
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Receivables and related Contracts, investigating delinquencies and
remitting payments to the Agent in a timely manner. Each of the
Pledgors, the Company, the Agent and the Bank Investors hereby appoints
as its agent the Master Servicer, from time to time designated pursuant
to Section 6.1 hereof, to enforce its respective rights and interests
in and under the Affected Assets. To the extent permitted by applicable
law, each of the Pledgors and the Seller hereby grants to any Master
Servicer appointed hereunder an irrevocable power of attorney to take
any and all steps in the Pledgors' and/or the Seller's name and on
behalf of the Pledgors or the Seller necessary or desirable, in the
reasonable determination of the Master Servicer, to collect all amounts
due under any and all Receivables, including, without limitation,
endorsing the Pledgors' and/or the Seller's name on checks and other
instruments representing Collections and enforcing such Receivables and
the related Contracts. The Master Servicer shall set aside for the
account of the Pledgors and the Agent their respective allocable shares
of the Collections of Receivables in accordance with Sections 2.5 and
2.6 hereof. The Master Servicer shall segregate and deposit to the
Agent's account the Agent's allocable share of Collections of
Receivables when required pursuant to Article II hereof. So long as no
Termination Event shall have occurred and be continuing, the Master
Servicer may, in accordance with the Credit and Collection Policy,
extend the maturity of Receivables; provided, however, that such
extension or adjustment shall not alter the status of such Receivable
as a Delinquent Receivable or a Defaulted Receivable, as applicable.
The Master Servicer may not otherwise waive, modify or otherwise vary
any provision of a Contract except as consistent with the Credit and
Collection Policy. The Master Servicer may not permit a Receivable to
be terminated prior to the scheduled termination date thereof unless
such termination results in a payment at least equal to the Required
Payoff Amount being deposited into the Collection Account with respect
to the related Payment Date. The Pledgors shall deliver to the Master
Servicer and the Master Servicer shall hold in trust for the Pledgors
and the Agent, on behalf of the Company and the Bank Investors, in
accordance with their respective interests, all Records which evidence
or relate to Receivables or Related Security.
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The Master Servicer shall not make the Agent, the Company or any of the
Bank Investors a party to any litigation without the prior written
consent of such Person.
(b) If the Master Servicer commences a legal proceeding to
enforce a Defaulted Receivable or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or involving
a Contract, the Agent will be deemed to have automatically assigned its
security interest in the related Contract to the Master Servicer for
purposes of commencing or participating in any such proceeding as a
party or claimant, and the Master Servicer is authorized and empowered
by the Agent, the Company and the Bank Investors, to execute and
deliver, on behalf of itself and the Agent for the benefit of the
Company and Bank Investors, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceedings. If in
any enforcement suit or legal proceeding it is held that the Master
Servicer may not enforce a Contract on the ground that it is not a real
party in interest entitled to enforce the Contract, then the Agent
will, at the Master Servicer's expense and direction, take steps on
behalf of the Agent as agent for the Company and the Bank Investors to
enforce the Contract, including bringing suit in the name of the Agent
for the benefit of the Company and the Bank Investors.
Upon termination of a Contract as a result of a default by the
Obligor thereunder, the Master Servicer will use best efforts to
repossess or otherwise comparably covert the ownership of and to
re-lease or otherwise dispose of any related Equipment. Without
limiting the generality of the foregoing, the Master Servicer may
dispose of any such Equipment by purchasing such Equipment or by
selling such Equipment at a public or private sale to any of its
Affiliates for a purchase price equal to the fair market value thereof.
(c) The Master Servicer shall take and retain custody of the
Contracts and other Records in accordance with the terms and conditions
of this Agreement, all for the benefit
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of the Company and the Bank Investors and subject to the lien thereon
in favor of the Agent, as agent for the Company and the Bank Investors.
Within five Business Days of its receipt of any Records, the Master
Servicer shall review the related Contract to verify that such Contract
has been executed and has no mutilated pages and to confirm (in
reliance on the related contract number and Obligor name) that such
Contract is referenced on the related list of Receivables. In order to
facilitate the foregoing review by the Master Servicer, in connection
with each delivery of Records hereunder to the Master Servicer, the
Master Servicer shall maintain an electronic file, in EXCEL or a
comparable format, that contains the related list of Receivables or
which otherwise contains the Contract number and the name of the
Obligor with respect to each related Contract. If, at the conclusion of
such review, the Master Servicer shall determine that such Contract is
not executed or has mutilated pages, or that it is not referenced on
such list of Receivables, the Master Servicer shall promptly notify the
Seller, the Pledgors and the Agent of such determination by providing a
written report to such Persons setting forth, with particularity, the
lack of execution of such Contract, that such Contract has mutilated
pages, or the fact that such Contract was not referenced on the related
list of Receivables. In addition, unless instructed otherwise by the
Seller or the Agent within 10 days of the Master Servicer's delivery of
such report, the Master Servicer shall return any Contract not
referenced on such list of Receivables to the Seller.
In taking and retaining custody of the Contracts and other
Records, the Master Servicer shall be deemed to be acting as the agent
of the Agent, as agent for the Company and as agent of the Bank
Investors. The Master Servicer shall clearly indicate that such Records
are the sole property of the applicable Pledgor and that such Pledgor
has granted a security interest therein to the Agent on behalf of the
Company. All Contracts shall be clearly segregated from any other
documents or instruments maintained by the Master Servicer and shall be
kept in fireproof vaults or cabinets at such locations as shall be
reasonably acceptable to the Agent. The Master Servicer shall notify
the Agent of
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any change in location by a written notice delivered at least 45 days
prior to such change.
(d) To the extent provided for in any Contract, the Master
Servicer will use its commercially reasonable efforts to collect all
payments with respect to amounts due for taxes and assessments relating
to the related Receivables or the Equipment and remit such amounts to
the appropriate governmental authority or insurer on or prior to the
date such payments are due.
(e) The Master Servicer will use its commercially reasonable
efforts to ensure that each Obligor maintains casualty insurance
coverage with respect to the related Equipment in an amount that is
consistent with prudent leasing industry standards. Additionally, the
Master Servicer will require that each Obligor maintain third-party
liability insurance for property damage during the term of each
Contract in amounts and against risks customarily insured against by
the Obligor on equipment owned by it. Notwithstanding the preceding two
sentences, the Master Servicer, in accordance with the Credit and
Collection Policy, may not require insurance or may allow Obligors to
self-insure. If an Obligor fails to maintain casualty or property
damage liability insurance, the Master Servicer may purchase and
maintain such insurance on behalf of, and at the expense of, the
Obligor. In connection with its activities as Master Servicer the
Master Servicer agrees to present, on behalf of the Agent as agent for
the Company and the Bank Investors, claims to the insurer under each
casualty insurance policy and any such property damage liability
policy, and to settle, adjust and compromise such claims, in each case,
consistent with the terms of each such Contract. Such Master Servicer's
insurance policies with respect to the related Equipment will insure
against liability for personal injury relating to such Equipment
thereunder, will name the Seller as an insured thereunder and will
contain a breach of warranty clause.
(f) The Master Servicer will be required to pay all expenses
incurred by it in connection with its activities under this Agreement,
including fees and disbursements of the Master Servicer, independent
accountants, Taxes imposed
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on the Master Servicer, and expenses incurred in connection with
payments and reports pursuant to this Agreement. The Master Servicer
will be required to pay all reasonable fees and expenses owing to any
bank or trust company in connection with the maintenance of the
Lock-Box Account. The Master Servicer shall be required to pay such
expenses for its own account and shall not be entitled to any payment
therefor other than the Servicing Fee.
(g) The Master Servicer shall, as soon as practicable
following receipt thereof, turn over to the Pledgors any collections
received hereunder or under any of the other Transaction Documents of
any indebtedness of any Person which is not on account of a Receivable.
(h) If the Master Servicer is not a Pledgor or the Seller or
an Affiliate of a Pledgor or the Seller, the Master Servicer, by giving
three Business Days' prior written notice to the Agent, may revise the
percentage used to calculate the Servicing Fee so long as the revised
percentage will not result in a Servicing Fee that exceeds 110% of the
current Servicing Fee.
(i) The Master Servicer, if other than a Pledgor or the Seller
or an Affiliate of a Pledgor or the Seller, shall as soon as
practicable upon demand, deliver to the Seller all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(j) The Master Servicer will provide to the Agent, on or prior
to March 31 of each year, commencing March 31, 1999, an annual report
signed by a officer of the Master Servicer certifying that (a) a review
of the activities of the Master Servicer, and the Master Servicer's
performance pursuant to this Agreement, for the period ending on the
last day of the immediately preceding fiscal year has been made under
such Person's supervision and (b) the Master Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year and no Master
Servicer Default has occurred and is continuing (or if a Master
Servicer Default has so occurred and is continuing, specifying each
such event, the nature and status thereof
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and the steps necessary to remedy such event, and, if a Master Servicer
Default occurred during such year and no notice thereof has been given
to the Agent, specifying such Master Servicer Default and the steps
taken to remedy such event).
On or before the Closing Date and on a semi-annual basis
thereafter, the Agent shall have the option to have the Agent or its
designees conduct a sample audit of the Receivables and the related
Records in conjunction with a review of the Master Servicer's
collection and administration practices with respect to the Contracts
and the related Receivables in order to assess the performance of such
Receivables and to verify the Master Servicer's compliance with its
written policies and procedures and with this Agreement and the other
Transaction Documents. The Eligible Originator shall pay, or reimburse
the Agent for all of the Agent's out-of-pocket expenses relating to any
such audit and review which shall be limited to $5,000 annually except
during the continuance of a Termination Event; provided, however, that
the Agent shall be responsible for the fees and expenses of a third
party firm engaged by the Agent to perform a sample audit only with
respect to the initial sample audit and one of the semi-annual audits
in each year.
(k) Notwithstanding anything to the contrary contained in this
Article VI, the Master Servicer, if not the Pledgor, the Seller or any
Affiliate of a Pledgor or the Seller, shall have no obligation to
collect, enforce or take any other action described in this Article VI
with respect to any indebtedness that is not included in the Pledged
Interest other than to deliver to the Pledgors the collections and
documents with respect to any such indebtedness as described in Section
6.2 hereof.
(l) For each Payment Date the Master Servicer shall make an
advance (a "Servicer Advance") to the Collection Account in an amount
equal to any Contract Payment on any Receivable due during the
preceding Collection Period and not received on or prior to the
Determination Date immediately preceding such Payment Date.
Notwithstanding the preceding sentence, (i) the Master Servicer shall
be
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required to make a Servicer Advance if, and only if, the Master
Servicer determines (such determination to be conclusive and binding)
in good faith that such Servicer Advance will be recoverable from the
payment of future collections on, or the liquidation of, the Receivable
as to which such advance is to be made, and (ii) the Master Servicer's
obligation to make a Servicer Advance for any Receivable shall cease on
the day such Receivable becomes a Defaulted Receivable. The Master
Servicer will deposit any Servicer Advances into the Collection Account
on or prior to 11:00 a.m. (New York City time) on the related Payment
Date, in immediately available funds.
SECTION 6.3 Rights After Designation of New Master Servicer. At any
time following the designation of a Master Servicer (other than a Pledgor, the
Seller or any Affiliate of a Pledgor or the Seller) pursuant to Section 6.1
hereof:
(i) The Agent may direct that payment of all amounts
payable under any Receivable be made directly to the Agent or
its designee.
(ii) The Pledgors shall, at the Agent's request and
at the Pledgors' expense, give notice of the Agent's, the
Pledgors' and/or the Bank Investors' interest in the
Receivables to each Obligor and direct that payments be made
directly to the Agent or its designee.
(iii) The Pledgors shall, at the Agent's request, (A)
deliver all of the Records, to the Agent or its designee at a
place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from
time to time constituting Collections of Receivables in a
manner acceptable to the Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(iv) The Pledgors and the Master Servicer hereby
authorize the Agent to take any and all steps in the Pledgors'
or the Master Servicer's name and on behalf
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of the Pledgors and the Master Servicer necessary or
desirable, in the sole determination of the Agent, to collect
all amounts due under any and all Receivables, including,
without limitation, endorsing the Pledgors' or the Master
Servicer's name on checks and other instruments representing
Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.4 Master Servicer Default. The occurrence of any one or more
of the following events shall constitute a Master Servicer Default:
(a) (i) the Master Servicer shall fail in any material respect
to observe or perform any term, covenant or agreement hereunder (other
than as referred to in clause (ii) of this Section 6.4(a)) or under any
of the other Transaction Documents to which the Master Servicer is a
party or by which the Master Servicer is bound, and such failure shall
remain unremedied for a period of thirty (30) days after the earlier of
(x) the date it first became known to any officer of the Master
Servicer or (y) the date on which written notice thereof shall have
been given to the Master Servicer by any other party hereto, or (ii)
the Master Servicer shall fail to make any payment or deposit required
to be made by it hereunder when due, and such failure shall continue
for 48 hours; or
(b) any representation or warranty made by the Master Servicer
in this Agreement, any of the other Transaction Documents or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made and
shall not have been cured and corrected for a period of 30 days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto; or
(c) any certification or statement made by the Master Servicer
in this Agreement, in any of the other Transaction Documents or in any
certificate or report delivered by it pursuant to any of the foregoing
shall prove to have been incorrect in any material respect when made or
deemed made,
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and a Material Adverse Effect shall result which shall not have been
cured and corrected for a period of 30 days after the earlier of (x)
the date it first became known to any officer of the Master Servicer or
(y) the date on which written notice thereof shall have been given to
the Master Servicer by any other party hereto; or
(d) failure of the Master Servicer or any of its Subsidiaries
to pay when due any amounts due under any agreement under which any
Indebtedness greater than $5 million is governed; or the default by the
Master Servicer or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness greater than $5 million was created or is governed,
regardless of whether such event is an "event of default" or "default"
under any such agreement; or any Indebtedness of the Master Servicer or
any of its Subsidiaries greater than $5 million shall be declared to be
due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to the
Master Servicer or any of its Subsidiaries; or
(f) there shall have occurred any material adverse change in
the operations of the Master Servicer since the end of the last fiscal
year ending prior to the date of its appointment as Master Servicer
hereunder which, in the commercially reasonably judgment of the Agent,
materially and adversely affects the Master Servicer's ability to
perform under this Agreement.
SECTION 6.5 Responsibilities of the Pledgors and the Seller. Anything
herein to the contrary notwithstanding, the Pledgors shall, and/or shall cause
the Seller to, (i) perform all of their obligations under the Contracts related
to the Receivables to the same extent as if interests in such Receivables had
not been pledged hereunder and under the Receivables Purchase Agreement and the
exercise by the Agent, the Company and the Bank Investors of their rights
hereunder and under the Receivables Purchase Agreements shall not relieve the
Pledgors or the Seller from such obligations and (ii) pay, or
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cause the Obligor or the Master Servicer to pay, when due any taxes, including
without limitation, any sales taxes payable in connection with the Receivables
and their creation and satisfaction. Neither the Agent, the Company nor any of
the Bank Investors shall have any obligation or liability with respect to any
Receivable or related Contracts, nor shall it be obligated to perform any of the
obligations of the Seller thereunder.
SECTION 6.6 Limitation on Liability of the Master Servicer and Others.
Except as provided herein, neither the Master Servicer nor any of the directors
of officers or employees or agents of the Master Servicer shall be under any
liability to the Agent, the Company, the Bank Investors or any other Person for
any action taken or for refraining from the taking of any action pursuant to
this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misconduct, bad faith or negligence in the
performance of duties or by reason of its willful misconduct hereunder.
SECTION 6.7 The Master Servicer Not to Resign. The Master Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) the performance of its duties hereunder is or
becomes impermissible under applicable law and (ii) there is no reasonable
action which the Master Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced as to
clause (i) above by an opinion of legal counsel to such effect delivered to the
Agent. No such resignation shall become effective until a successor Master
Servicer shall have assumed the responsibilities and obligations of the Master
Servicer in accordance with Section 6.1.
SECTION 6.8 Acknowledgement of Guaranty. The parties hereto hereby
acknowledge that the Parent has guaranteed the performance of the Master
Servicer under this Agreement.
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ARTICLE VII
TERMINATION EVENTS
SECTION 7.1 Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) a Pledgor shall fail to make any payment or deposit to be
made by it hereunder or under the Receivables Purchase Agreement when
due hereunder or thereunder; or
(b) any representation or warranty made by a Pledgor, the
Seller or an Eligible Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when
made or deemed made and shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(c) any certification or statement made by a Pledgor, the
Seller or an Eligible Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any or any certificate or report delivered by it
pursuant to any of the foregoing shall prove to have been incorrect in
any material respect when made or deemed made and a Material Adverse
Effect shall result which shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(d) a Pledgor shall default in any material respect in the
performance of any payment or undertaking (other than those covered by
clause (a) above) (i) to be performed or observed under Section
5.1(a)(vi), 5.1(h), 5.1(l), 5.2(a),
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(c), (d), (e) or (f) or (ii) to be performed or observed under any
other provision hereof and such failure shall remain unremedied for a
period of thirty (30) days after the earlier of (x) the date it first
became known to any officer of a Pledgor or (y) the date on which
written notice thereof shall have been given to the a Pledgor by any
other party hereto; or
(e) failure of a Pledgor to pay when due any amounts due under
any agreement to which such Person is a party and under which any
Indebtedness is governed; failure of the Parent or the Seller to pay
when due any amounts due under any agreement to which any such Person
is a party and under which any Indebtedness greater than $5,000,000 is
governed; or the default by a Pledgor, the Parent or the Seller in the
performance of any term, provision or condition contained in any
agreement to which any such Person is a party and under which any
Indebtedness owing by a Pledgor, the Parent or the Seller was created
or is governed and for which in the case of the Parent or the Seller
the amount of such Indebtedness is greater than $5,000,000; or any
Indebtedness owing by a Pledgor, the Parent or the Seller greater than
$5,000,000 shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date
of maturity thereof; or
(f) any Event of Bankruptcy shall occur with respect to a
Pledgor, Parent or the Seller; or
(g) the Agent, on behalf of the Company and the Bank
Investors, shall, for any reason, fail or cease to have a valid and
perfected first priority security interest in the Affected Assets free
and clear of any Adverse Claims (except as otherwise contemplated
herein); or
(h) a Master Servicer Default shall have occurred; or
(i) the Receivables Purchase Agreement shall have
terminated; or
(j) a Revolving Credit Facility Default shall have
occurred; or
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(k) a Pledgor or the Parent shall enter into any transaction
or merger whereby it is not the surviving entity and where, in the case
of the Parent, the surviving entity is not acceptable to the Agent; or
(l) there shall have occurred any Material Adverse Effect; or
(m) at any time, the Percentage Factor is greater than the
Maximum Percentage Factor and such imbalance is not cured on or prior
to the next succeeding Payment Date; or
(n) after giving effect to any Payment Date, the Percentage
Factor is greater than the Maximum Percentage Factor;
(o) the Net Investment is greater than the Maximum Net
Investment; or
(p) at any time, the Net Asset Test is not met; or
(q) the Three-Month Average Net Portfolio Yield is less than
1.25%; or
(r) a Take-Out does not occur within the fifteen months of the
initial Pledge under this Agreement or at least once every six-months
after the initial Take-Out under this Agreement or any Take-Out does
not reduce the Net Investment to $5,000,000 or less; or
(s) at any time the Receivables are not subject to Hedging
Agreements in accordance with Section 2.15, and such failure is not
cured within five Business Days of the earlier of (x) the date it first
became known to any officer of a Pledgor or (y) the date on which
written notice thereof shall have been given to the a Pledgor by any
other party hereto.
SECTION 7.2 Termination. (a) Upon the occurrence of any Termination
Event, the Agent may, or at the direction of the Majority Investors shall, by
notice to the Pledgors and the Master Servicer declare the Termination Date to
have occurred; provided that in the case of any event described in Section
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7.1(f) or 7.1(g) above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.2(a), the Base Rate plus 2.00% shall be
the Tranche Rate applicable to the Net Investment for all existing and future
Tranches.
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1 Indemnities by the Pledgors. Without limiting any other
rights which the Agent, the Company or each Bank Investors may have hereunder or
under applicable law, each Pledgor hereby agrees to indemnify the Company, the
Bank Investors, the Agent, the Administrative Agent, the Collateral Agent, the
Liquidity Provider and the Credit Support Provider and any successors and
permitted assigns and their respective officers, directors and employees
(collectively, "Indemnified Parties") from and against any and all damages,
losses, claims, liabilities, costs and expenses, including, without limitation,
reasonable external attorneys' fees (which such attorneys may be employees of
the Liquidity Provider, the Credit Support Provider, the Agent, the
Administrative Agent or the Collateral Agent, as applicable) and disbursements
(all of the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them in any action or proceeding between a
Pledgor, the Parent or the Master Servicer (if an Affiliate of the Pledgors) and
any of the Indemnified Parties or between any of the Indemnified Parties and any
third party or otherwise arising out of or as a result of this Agreement, the
other Transaction Documents, the ownership or maintenance, either directly or
indirectly, by the Agent, the Company or any Bank Investor of the Pledged
Interest or any of the other transactions contemplated hereby or thereby;
excluding, however, (i) Indemnified Amounts to the extent resulting from gross
negligence
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or willful misconduct on the part of an Indemnified Party, (ii) recourse (except
as otherwise specifically provided in this Agreement) for uncollectible or
uncollected Receivables or (iii) any Indemnified Amounts relating to actions or
omissions on the part of the Seller which would otherwise constitute Indemnified
Amounts. Without limiting the generality of the foregoing, each Pledgor shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(i) any representation or warranty made by the
Pledgors or the Master Servicer (if an Affiliate of the
Pledgors) or any officers of the Pledgors or the Master
Servicer under or in connection with this Agreement, the
Receivables Purchase Agreement, any of the other Transaction
Documents, any Investor Report or any other information or
report delivered by the Pledgors or the Master Servicer
pursuant hereto, which shall have been false or incorrect in
any material respect when made or deemed made;
(ii) the failure by either Pledgor or the Master
Servicer (if an Affiliate of the Pledgors) to comply with any
applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of
any Receivable or the related Contract with any such
applicable law, rule or regulation;
(iii) the failure to create or maintain a valid and
perfected first priority security interest in favor of the
Agent, for the benefit of the Company and the Bank Investors,
in the Affected Assets as contemplated pursuant to Section
10.11, free and clear of any Adverse Claim;
(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other
similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect
to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the
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payment of any Receivable (including, without limita tion, a
defense based on such Receivable or the related Contract not
being the legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of merchandise or services
related to such Receivable or the furnishing or failure to
furnish such merchandise or services; provided that the
indemnification provided hereby shall not extend to credit
losses on the Affected Assets or any payment failure resulting
solely from such credit losses;
(vi) any failure of the Master Servicer (if an
Affiliate of the Pledgors) to perform its duties or
obligations in accordance with the provisions hereof; or
(vii) any products liability claim or personal injury
or property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with
Equipment which is the subject of any Receivable;
(viii) the transfer of an interest in any Receivable
other than an Eligible Receivable;
(ix) the failure by a Pledgor or the Master Servicer
(if an Affiliate of the Pledgors) to comply with any term,
provision or covenant contained in this Agreement or any of
the other Transaction Documents to which it is a party or to
perform any of its respective duties under the Contracts;
provided that the indemnification provided hereby shall not
extend to credit losses on the Affected Assets or any payment
failure resulting solely from such credit losses;
(x) the failure of either Pledgor to pay when due any
taxes, including without limitation, sales, excise or personal
property taxes payable in connection with any of the
Receivables;
(xi) any repayment by any Indemnified Party of any
amount previously distributed in reduction of Net
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Investment which such Indemnified Party believes in
good faith is required to be made;
(xii) the commingling by the Pledgors or the Master
Servicer (if an Affiliate of the Pledgors) of Collections of
Receivables at any time with other funds;
(xiii) any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction
Documents, the use of proceeds of Advance Amounts by the
Pledgors, the ownership of Pledged Interests, or any
Receivable, Related Security or
Contract;
(xiv) any inability to obtain any judgment in or
utilize the court or other adjudication system of, any state
in which an Obligor may be located as a result of the failure
of a Pledgor to qualify to do business or file any notice of
business activity report or any similar report;
(xv) any failure of a Pledgor to give reasonably
equivalent value to the Seller in consideration of the
purchase by the Pledgor from the Seller of any Receivable, or
any attempt by any Person to void, rescind or set-aside any
such transfer under statutory provisions or common law or
equitable action, including, without limitation, any provision
of the Bankruptcy Code; or
(xvi) any action taken by a Pledgor or the Master
Servicer (if an Affiliate of the Pledgors) in the enforcement
or collection of any Receivable;
provided, however, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Conduit Participants, the
Company shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Pledgors and each Other Conduit
Participant; and provided, further, that if such Indemnified Amounts are
attributable to the Pledgors, the Seller
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or the Master Servicer and not attributable to any Other Conduit Participant,
the Pledgors shall be solely liable for such Indemnified Amounts or if such
Indemnified Amounts are attributable to Other Conduit Participants and not
attributable to the Pledgors, the Seller or the Master Servicer, such Other
Conduit Participants shall be solely liable for such Indemnified Amounts.
SECTION 8.2 Indemnity for Taxes, Reserves and Expenses. (a) If after
the date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax,
duty or other charge (other than Excluded Taxes) with respect
to this Agreement, the other Transaction Documents, the
maintenance or financing of the Pledged Interest, the
Receivables or payments of amounts due hereunder, or shall
change the basis of taxation of payments to any Indemnified
Party of amounts payable in respect of this Agreement, the
other Transaction Documents, maintenance or financing of the
Pledged Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds hereunder, under
the Liquidity Provider Agreement or the credit support
furnished by the Credit Support Provider or otherwise in
respect of this Agreement, the other Transaction Documents,
maintenance or financing of the Pledged Interest or the
Receivables (except for changes in the rate of general
corporate, franchise, net income or other income tax imposed
on such Indemnified Party by any jurisdiction;
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by,
any Indemnified
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Party or shall impose on any Indemnified Party or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting this Agreement,
the other Transaction Documents, the maintenance or financing
of the Pledged Interest, the Receivables or payments of
amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the
credit support provided by the Credit Support Provider or
otherwise in respect of this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged
Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable external
attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing) with
respect to this Agreement, the other Transaction Documents,
the maintenance or financing of the Pledged Interest, the
Receivables or payments of amounts due hereunder or its
obligation to advance funds hereunder under the Liquidity
Provider Agreement or the credit support furnished by the
Credit Support Provider or otherwise in respect of this
Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interests or the Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Pledged Interest, the
Receivables, the obligations hereunder, the funding of any purchases hereunder,
the Liquidity Provider Agreement or the Credit Support Agreement, by an amount
deemed by such Indemnified Party to be material, then, within ten (10) days
after written demand (including an explanation of the basis for such demand) by
such Indemnified Party through the Agent, the Pledgors shall pay to the Agent,
for the benefit of such Indemnified Party, such additional amount or amounts as
will compensate such Indemnified Party for such increased cost or reduction.
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(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any
change in the interpretation thereof by any Official Body, or any
directive regarding capital adequacy (in the case of any bank
regulatory guideline, whether or not having the force of law) of any
such Official Body, has or would have the effect of reducing the rate
of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or
its parent) could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Indemnified Party to be
material, then from time to time, within ten (10) days after demand by
such Indemnified Party through the Agent, the Pledgors shall pay to the
Agent, for the benefit of such Indemnified Party, such additional
amount or amounts as will compensate such Indemnified Party (or its
parent) for such reduction.
(c) The Agent will promptly notify the Pledgors of any event
of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Section
8.2. A notice (including an explanation of the basis for such demand)
by the Agent or the applicable Indemnified Party claiming compensation
under this Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Agent or any applicable
Indemnified Party may use any reasonable averaging and attributing
methods consistent with those used for similar transactions.
(d) With respect to any liability to any Indemnified Party for
any amounts under this Section 8.2 ("Section 8.2 Costs"), the Agent
agrees that it shall, upon the incurring of any Section 8.2 Costs, take
such steps as may be reasonable, and consult with the Pledgors in good
faith with a view toward agreeing to alternative arrangements, for
avoiding or mitigating (consistent with the internal
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policies and governance and legal and regulatory restrictions of the
applicable Indemnified Party and without requiring the incurring of any
additional costs by, or otherwise being disadvantageous to, such party)
additional Section 8.2 Costs.
(e) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the
acquisition of interests in receivables from one or more Other Conduit
Participants, the Company shall allocate any Section 8.2 costs which
are in connection with the Liquidity Provider Agreement, the Credit
Support Agreement or the credit support provided by the Credit Support
Provider to the Pledgors and each Other Conduit Participant; provided,
however, that if such Section 8.2 Costs are attributable to the
Pledgors, the Seller or the Master Servicer and not attributable to any
Other Conduit Participant, the Pledgors shall be solely liable for such
Section 8.2 Costs or if such Section 8.2 Costs are attributable to
Other Conduit Participants and not attributable to the Pledgors, the
Seller or the Master Servicer, such Other Conduit Participants shall be
solely liable for such Section 8.2 Costs.
SECTION 8.3 Taxes. All payments made hereunder by the Pledgors or the
Master Servicer (each, a "payor") to the Company, any Bank Investor or the Agent
(each, a "recipient") shall be made free and clear of and without deduction for
any present or future income, excise, stamp or franchise taxes and any other
taxes, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority on any recipient (or any assignee of such
parties) (such non-excluded items being called "Taxes"), but excluding franchise
taxes and taxes imposed on or measured by the recipient's net income or gross
receipts ("Excluded Taxes"). In the event that any withholding or deduction from
any payment made by the payor hereunder is required in respect of any Taxes,
then such payor shall:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
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(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.
SECTION 8.4 Other Costs, Expenses and Related Matters. (a) The Pledgors
agree, upon receipt of a written invoice, to pay and to save the Company, the
Bank Investors (subject to Section 9.9(b)) and the Agent harmless against
liability for the payment of, all reasonable out-of-pocket documented expenses
(including, without limitation, reasonable attorneys', accountants' and other
third parties' fees and reasonable expenses, any filing fees and expenses
incurred by officers or employees of the Company, the Bank Investors and/or the
Agent) or intangible, documentary or recording taxes incurred by or on behalf of
the Company, any Bank Investor and the Agent (i) in connection with the
negotiation, execution, delivery and preparation of this Agreement, the other
Transaction Documents and any documents or instruments delivered pursuant hereto
and thereto and the transactions contemplated hereby or thereby (including,
without limitation, the perfection or protection of the Pledged Interest) and
(ii) from time to time
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(a) relating to any amendments, waivers or consents under this Agreement and the
other Transaction Documents, (b) arising in connection with the Company's, any
Bank Investor's, the Agent's or the Collateral Agent's enforcement or
preservation of rights (including, without limitation, the perfection and
protection of the Pledged Interest under this Agreement), or (c) arising in
connection with any audit, dispute, disagreement, litigation or preparation for
litigation involving this Agreement or any of the other Transaction Documents
(all of such amounts, collectively, "Transaction Costs").
(b) The Pledgors shall pay the Agent, for the account of the Company
and the Bank Investors, as applicable, on demand any Early Collection Fee due on
account of the reduction of a Tranche on a day prior to the last day of its
Tranche Period.
SECTION 8.5 [Reserved.]
SECTION 8.6 Pledgor Liability. All amounts due or required to be paid
by, and all other obligations of the Pledgors under this Article VIII shall be
joint and several obligations of the Pledgors.
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION 9.1 Authorization and Action. The Company and each Bank
Investor hereby irrevocably appoints and authorizes the Agent to act as its
agent under this Agreement and the other Transaction Documents with such powers
and discretion as are specifically delegated to the Agent by the terms of this
Agreement and the other Transaction Documents, together with such other powers
as are reasonably incidental thereto. The Agent (which term as used in this
sentence and in Section 9.05 and the first sentence of Section 9.06 hereof shall
include its affiliates and its own and its affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee or
fiduciary for the Company or any Bank Investor; (b) shall not be responsible to
the Company or any Bank Investor for any recital, statement, representation,
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or warranty (whether written or oral) made in or in connection with any
Transaction Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Transaction Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Transaction Document, or any other document referred to or
provided for therein or for any failure by any of the Pledgor, the Seller or the
Master Servicer or any other Person to perform any of its obligations
thereunder; (c) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any of the Pledgors, the Seller or the Master Servicer or the
satisfaction of any condition or to inspect the property (including the books
and records) of any of the Pledgor, the Seller or the Master Servicer or any of
their Subsidiaries or affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Transaction Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Transaction Document, except for its own
gross negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
SECTION 9.2 Agent's Reliance, Etc. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Pledgors, the Seller or the Master
Servicer), independent accountants, and other experts selected by the Agent. As
to any matters not expressly provided for by this Agreement, the Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Investors, and
such instructions shall be binding on the Company and all of the Bank Investors;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Transaction
Document or
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applicable law or unless it shall first be indemnified to its satisfaction by
the Bank Investors against any and all liability and expense which may be
incurred by it by reason of taking any such action.
SECTION 9.3 Termination Events. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Termination Event or an event which
but for the lapse of time or the giving of notice, or both, would constitute a
Termination Event, unless the Agent has received written notice specifying such
event and stating that such notice is a "Notice of Termination Event." In the
event that the Agent receives such a notice of the occurrence of a Termination
Event or potential Termination Event, the Agent shall give prompt notice thereof
to the Company. The Agent shall (subject to Section 9.02 hereof) take such
action with respect to such Termination Event or potential Termination Event as
shall reasonably be directed by the Majority Investors, provided 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 Termination Event or potential Termination Event as it
shall deem advisable in the best interest of the Company and the Bank Investors.
SECTION 9.4 Rights as Bank Investor. With respect to its Commitment,
NationsBank (and any successor acting as Agent) in its capacity as a Bank
Investor hereunder shall have the same rights and powers hereunder as any other
Bank Investor and may exercise the same as though it were not acting as the
Agent, and the term "Bank Investor" or "Bank Investors" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
NationsBank (and any successor acting as Agent) and its affiliates may (without
having to account therefor to the Company or any Bank Investor) accept deposits
from, lend money to, make investments in, provide services to, and generally
engage in any kind of lending, trust, or other business with any of the
Pledgors, the Seller and the Master Servicer or any of their Subsidiaries or
affiliates as if it were not acting as Agent, and NationsBank (and any successor
acting as Agent) and its affiliates may accept fees and other consideration from
any of the Pledgors, the Seller and the Master Servicer or any of their
Subsidiaries or affiliates for services in connection with
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this Agreement or otherwise without having to account for the same to the
Company or any Bank Investor.
SECTION 9.5 Indemnification of the Agent. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Pledgors), ratably in
accordance with their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
(including by the Company or any Bank Investor) in any way relating to or
arising out of this Agreement or any other Transaction Document or the
transactions contemplated thereby or any action taken or omitted by the Agent
under this Agreement or any other Transaction Document, provided that no Bank
Investors shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person indemnified. Without
limitation of the foregoing, the Bank Investors agree to reimburse the Agent,
ratably in accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
other Transaction Documents, to the extent that such expenses are incurred in
the interests of or otherwise in respect of the Bank Investors hereunder and/or
thereunder and to the extent that the Agent is not reimbursed for such expenses
by the Pledgors. The agreements contained in this Section shall survive payment
in full of the Net Investment and all other amounts payable under this
Agreement.
SECTION 9.6 Non-Reliance. The Company and each Bank Investor agrees
that it has, independently and without reliance on the Agent or the Company or
any Bank Investor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Pledgors, the Seller, the
Eligible Originators and the Master Servicer and their Subsidiaries and decision
to enter into this Agreement and that it will, independently and without
reliance upon the Agent, the Company or any Bank Investor, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own
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analysis and decisions in taking or not taking action under the Transaction
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Company and the Bank Investors by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Company with any credit or other information concerning the affairs,
financial condition, or business of any of the Pledgors, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates that may come into
the possession of the Agent or any of its affiliates.
SECTION 9.7 Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Company, the Bank Investors and the Pledgors. Upon
any such resignation, the Majority Investors shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Investors and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Company and the Bank Investors, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
SECTION 9.8 Payments by the Agent. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective Assignment
and Assumption Agreements) in accordance with their respective related pro rata
interests in the Net Investment on the Business Day received by the Agent,
unless such amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to the Bank
Investors on such Business Day, but, in any event, shall pay
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such amounts to the Bank Investors in accordance with their respective related
pro rata interests in the Net Investment not later than the following Business
Day.
SECTION 9.9 Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect a
Pledge as requested under Section 2.2(a), then at any time, the
Pledgors shall have the right to require the Company to assign its
interest in the Net Investment in whole to the Bank Investors pursuant
to this Section 9.9. In addition, if at any time on or prior to the
Commitment Termination Date (i) a Termination Event occurs that results
in the Termination Date or (ii) the Company elects to give notice to
the Pledgors of a Reinvestment Termination Date, the Pledgors hereby
request and direct that the Company assign its interest in the Net
Investment in whole to the Bank Investors pursuant to this Section 9.9
and the Pledgors hereby agree jointly and severally to pay the amounts
described in Section 9.9(d) below. Provided that the Net Asset Test is
satisfied, upon any such election by the Company or any such request by
the Pledgors, the Company shall make such assignment and the Bank
Investors shall accept such assignment and shall assume all of the
Company's obligations hereunder. In connection with any assignment from
the Company to the Bank Investors pursuant to this Section 9.9, each
Bank Investor shall, on the date of such assignment, pay to the Company
an amount equal to its Assignment Amount. In addition, at any time on
or prior to the Commitment Termination Date, the Pledgors shall have
the right to request funding under this Agreement directly from the
Bank Investors; provided, however, that at such time all conditions
precedent set forth herein for an Advance shall be satisfied. In
connection with such funding by the Bank Investors, the Bank Investors
shall accept the assignment of all of the Company's interest in the Net
Investment and assume all of the Company's obligations hereunder
concurrently with or prior to any such Advance. Upon any assignment by
the Company to the Bank Investors contemplated hereunder, the Company
shall cease to make any additional Pledges hereunder.
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(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Net Investment, the Receivables, and Related
Security with respect thereto and its rights and obligations hereunder
to any Person unless approved in writing by the Parent (which consent
will not be unreasonably withheld), the Administrative Agent, on behalf
of the Company, and the Agent (which consent will not be unreasonably
withheld). In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment,
the Receivables and Related Security with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall
promptly execute and deliver all further instruments and documents, and
take all further action, that the assignee may reasonably request, in
order to protect, or more fully evidence the assignee's right, title
and interest in and to such interest and to enable the Agent, on behalf
of such assignee, to exercise or enforce any rights hereunder and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. Upon any such
assignment, (i) the assignee shall have all of the rights and
obligations of the assignor hereunder and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party with respect to such interest for all purposes
of this Agreement and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party
(it being understood that the Bank Investors, as assignees, shall (x)
be obligated to fund Pledges under Section 2.2(a) in accordance with
the terms thereof, notwithstanding that the Company was not so
obligated and (y) not have the right to elect the commencement of the
amortization of the Net Investment pursuant to the definition of
"Reinvestment Termination Date", notwithstanding that the Company had
such right) and (ii) the assignor shall relinquish its rights with
respect to such interest for all purposes of this Agreement and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. No
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such assignment shall be effective unless a fully executed copy of the
related Assignment and Assumption Agreement shall be delivered to the
Agent and the Pledgor. All Transaction Costs incurred in connection
with the initial assignment hereunder of NationsBank's Pro Rata Share
of its interests as Bank Investor shall be borne by the Pledgors, but
the costs associated with any other such assignment by Bank Investors
shall not be borne by the Pledgors. No Bank Investor shall assign any
portion of its Commitment hereunder without also simultaneously
assigning an equal portion of its interest in the Liquidity Provider
Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any state ments,
warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
or this Agreement, the other Transaction Documents or any such other
instrument or document; (ii) the assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Pledgor, the Seller or the Master Servicer or the
performance or observance by the Pledgor, the Seller or the Master
Servicer of any of their respective obligations under this Agreement,
the Receivables Purchase Agreement, the other Transaction Documents or
any other instrument or document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this Agreement, the
Receivables Purchase Agreement and such other instruments, documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Assumption
Agreement and to purchase such interest; (iv) such assignee will,
independently and without reliance upon the Agent, or any of its
Affiliates, or the assignor and based on such agreements, documents and
information as it shall deem appropriate at the time, continue to make
its own
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credit decisions in taking or not taking action under this Agreement
and the other Transaction Documents; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the other Transaction
Documents and any other instrument or document furnished pursuant
hereto or thereto as are delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto
and to enforce its respective rights and interests in and under this
Agreement, the other Transaction Documents, the Receivables, the
Contracts and the Related Security; (vi) such assignee agrees that it
will perform in accordance with their terms all of the obligations
which by the terms of this Agreement and the other Transaction
Documents are required to be performed by it as the assignee of the
assignor; and (vii) such assignee agrees that it will not institute
against the Company any proceeding of the type referred to in Section
10.9 prior to the date which is one year and one day after the payment
in full of all Commercial Paper issued by the Company.
(d) Pledgors' Obligation to Pay Certain Amounts; Additional
Assignment Amount. The Pledgors shall pay to the Agent, for the account
of the Company, from the sources set forth in Section 2.5, in
connection with any assignment by the Company to the Bank Investors
pursuant to this Section 9.9, an aggregate amount equal to all Discount
to accrue through the end of each outstanding Tranche Period plus all
other Aggregate Unpaids (other than the Net Investment). To the extent
that such Discount relates to interest or discount on Related
Commercial Paper, if the Pledgors fail to make payment of such amounts
at or prior to the time of assignment by the Company to the Bank
Investors, such amount shall be paid by the Bank Investors (in
accordance with their respective Pro Rata Shares) to the Company as
additional consideration for the interests assigned to the Bank
Investors and the amount of the "Net Investment" hereunder held by the
Bank Investors shall be increased by an amount equal to the additional
amount so paid by the Bank Investors.
(e) Administration of Agreement After Assignment.
After any assignment by the Company to the Bank Investors
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pursuant to this Section 9.9 (and the payment of all amounts owing to
the Company in connection therewith), all rights of the Administrative
Agent and the Collateral Agent set forth herein shall be deemed to be
afforded to the Agent on behalf of the Bank Investors instead of either
such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.9, all payments to be made
hereunder by the Pledgors or the Master Servicer to the Company shall
be made to the Agent's account as such account shall have been notified
to the Pledgors and the Master Servicer.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 9.9, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or Moody's, respectively (or such
rating shall have been withdrawn by Standard & Poor's or Moody's), such
Bank Investor, upon request of the Agent, shall, within five Business
Days of such request, assign its rights and obligations hereunder to
another financial institution (which institution's short term debt
shall be rated at least "A-2" and "P-2" from Standard & Poor's and
Moody's, respectively, and which shall not be so rated with negative
credit implications). In either such case, if any such Bank Investor
shall not have assigned its rights and obligations under this Agreement
within the applicable time period described above, the Company shall
have the right to require such Bank Investor to accept the assignment
of such Bank Investor's Pro Rata Share of the Net Investment; such
assignment shall occur in accordance with the applicable provisions of
this Section 9.9. Such Bank Investor shall be obligated to pay to the
Company, in connection with such
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assignment, in addition to the Pro Rata Share of the Net Investment, an
amount equal to the interest component of the outstanding Commercial
Paper issued to fund the portion of the Net Investment being assigned
to such Bank Investor, as reasonably determined by the Agent, such
amount when paid to constitute an addition to the Net Investment held
by such Bank Investor. Notwithstanding anything contained herein to the
contrary, upon any such assignment to a downgraded Bank Investor as
contemplated pursuant to the immediately preceding sentence, the
aggregate available amount of the Facility Limit, solely as it relates
to new Pledges by the Company, shall be reduced by the amount of unused
Commitment of such downgraded Bank Investor; it being understood and
agreed, that nothing in this sentence or the two preceding sentences
shall affect or diminish in any way any such downgraded Bank Investor's
Commitment to the Pledgors or such downgraded Bank Investor's other
obligations and liabilities hereunder and under the other Transaction
Documents.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, in each case, in cash;
provided that (i) the rights and remedies of the Agent, the Company, the Bank
Investors and the Administrative Agent with respect to any representation and
warranty made or deemed to be made by the Pledgors pursuant to this Agreement,
(ii) the indemnification and payment provisions of Article VIII, and (iii) the
agreement set forth in Section 10.9 hereof, shall be continuing and shall
survive any termination of this Agreement.
SECTION 10.2 Waivers; Amendments. (a) No failure or delay on the part
of the Agent, the Company, the Administrative Agent or any Bank Investor in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right
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or remedy preclude any other further exercise thereof or the exercise of any
other power, right or remedy. The rights and remedies herein provided shall be
cumulative and nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any other Transaction Document
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Pledgors, the Master Servicer, the Company and the Majority
Investors (and, if Article IX or the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or waiver shall, unless
signed by each Bank Investor directly affected thereby, (i) increase the
Commitment of a Bank Investor, (ii) reduce the Net Investment or rate of
interest to accrue thereon or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled distribution in respect
of the Net Investment or interest with respect thereto or any fees or other
amounts payable hereunder or for termination of any Commitment, (iv) change the
percentage of the Commitments or the number of Bank Investors, which shall be
required for the Bank Investors or any of them to take any action under this
Section or any other provision of this Agreement, (v) release all or
substantially all of the property with respect to which a security or other
interest therein has been granted hereunder to the Agent or the Bank Investors
or (vi) extend or permit the extension of the Commitment Termination Date. In
the event the Agent requests the Company's or a Bank Investor's consent pursuant
to the foregoing provisions and the Agent does not receive a consent (either
positive or negative) from the Company or such Bank Investor within 10 Business
Days of the Company's or Bank Investor's receipt of such request, then the
Company or such Bank Investor (and its percentage ownership interest hereunder)
shall be disregarded in determining whether the Agent shall have obtained
sufficient consent hereunder.
SECTION 10.3 Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy,
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when such telecopy is transmitted to the telecopy number specified in this
Section 10.3 and confirmation is received, (ii) if given by mail 3 Business Days
following such posting, postage prepaid, U.S. certified or registered, (iii) if
given by overnight courier, one (1) Business Day after deposit thereof with a
national overnight courier service, or (iv) if given by any other means, when
received at the address specified in this Section 10.3. However, anything in
this Section to the contrary notwithstanding, each Pledgor hereby authorizes the
Company to effect Pledges, Tranche Period and Tranche Rate selections based on
telephonic notices made by any Person which the Company in good faith believes
to be acting on behalf of the Pledgor. The Pledgors agree to deliver promptly to
the Company a written confirmation of each telephonic notice signed by an
authorized officer of Pledgor. However, the absence of such confirmation shall
not affect the validity of such notice. If the written confirmation differs in
any material respect from the action taken by the Company, the records of the
Company shall govern absent manifest error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities
Two Wall Street - 19th Floor
New York, New York 10005
Telephone: (212) 346-9006
Telecopy: (212) 346-9012
(with a copy to the Administrative Agent)
If to the Qualifying Pledgor:
UCP Qualifying SPE 1998-1 Limited Partnership
One East First Street
Suite 1600
Reno, Nevada 89501
with a copy to:
UCP Qualifying SPE 1998-1 Limited Partnership
c/o Daniel Chait
10800 Biscayne Boulevard
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Suite 300
Miami, Florida 33161
Telephone: (305) 899-5000
Telecopy: (305) 899-5050
Payment Information:
Bank: NationsBank, N.A.
ABA No.: 111 000 012
Account Name: UCP Qualifying SPE 1998-1
Limited Partnership
Account No.: 37510 59378
If to the Operating Pledgor:
UCP Operating SPE 1998-1 Limited Partnership
One East First Street
Suite 1600
Reno, Nevada 89501
with a copy to:
UCP Operating SPE 1998-1 Limited Partnership
c/o Daniel Chait
10800 Biscayne Boulevard
Suite 300
Miami, Florida 33161
Telephone: (305) 899-5000
Telecopy: (305) 899-5050
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Payment Information:
Bank: NationsBank, N.A.
ABA No.: 111 000 012
Account Name: UCP Operating SPE 1998-1
Limited Partnership
Account No.: 37510 59378
If to the Master Servicer
Portfolio Financial Servicing Company, L.P.
2121 SW Broadway
Portland, Oregon
Telephone: (503) 228-1245
Telecopy: (503) 721-1712
If to the Seller
Unicapital Funding Corporation
10800 Biscayne Boulevard
Suite 300
Miami, Florida 33161
Telephone: (305) 899-5000
Telecopy: (305) 899-5050
Payment Information:
NationsBank, N.A.
ABA 111 000 012
Account 37510 33 747
Reference UniCapital Lease Funding
If to the Collateral Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
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If to the Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
Payment Information:
NationsBank, N.A.
ABA 053-000-196
for the account of NationsBank Charlotte
Account No. 10822016511
Attn.: Camille Zerbinos
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
If to the Bank Investors, at their respective addresses set
forth on the signature pages hereto or of the Assignment and
Assumption Agreement pursuant to which it became a party
hereto.
SECTION 10.4 Governing Law; Submission to Jurisdiction; Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. EACH PLEDGOR HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each Pledgor hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such
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proceeding brought in such a court has been brought in an inconvenient forum.
Nothing in this Section 10.4 shall affect the right of the Company to bring any
action or proceeding against either Pledgor or its respective properties in the
courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire Agreement among the parties hereto with
respect to the subject matter hereof superseding all prior oral or written
understandings.
SECTION 10.5 Severability; Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or unenforce
able in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.6 Successors and Assigns. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that neither the Pledgors nor Master Servicer may assign any
of its rights or delegate any of its duties hereunder or under the Receivables
Purchase Agreement or under any of the other Transaction Documents to which it
is a party without the prior written consent of the Agent. No provision of this
Agreement shall in any manner restrict the ability of the Company or any Bank
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<PAGE> 130
Investor to assign, participate, grant security interests in, or otherwise
transfer any portion of the Pledged Interest.
(b) Without limiting the foregoing, the Company may, from time to time,
with prior or concurrent notice to the Pledgors, the Parent and the Master
Servicer, in one transaction or a series of transactions, assign all or a
portion of the Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee; provided that if such Conduit Assignee is not administered by
NationsBank, the Company shall only make such assignment if the Pledgors consent
to such assignment. Upon and to the extent of such assignment by the Company to
a Conduit Assignee, (i) such Conduit Assignee shall be the owner of the assigned
portion of the Net Investment, (ii) the related administrative or managing agent
for such Conduit Assignee will act as the Administrative Agent for such Conduit
Assignee, with all corresponding rights and powers, express or implied, granted
to the Administrative Agent hereunder or under the other Transaction Documents,
(iii) such Conduit Assignee and its liquidity support provider(s) and credit
support provider(s) and other related parties shall have the benefit of all the
rights and protections provided to the Company and its Liquidity Support
Provider(s) and Credit Support Provider(s), respectively, herein and in the
other Transaction Documents (including, without limitation, any limitation on
recourse against such Conduit Assignee or related parties, any agreement not to
file or join in the filing of a petition to commence an insolvency proceeding
against such Conduit Assignee, and the right to assign to another Conduit
Assignee as provided in this paragraph), (iv) such Conduit Assignee shall assume
all (or the assigned or assumed portion) of the Company's obligations, if any,
hereunder or any other Transaction Document, and the Company shall be released
from such obligations, in each case to the extent of such assignment, and the
obligations of the Company and such Conduit Assignee shall be several and not
joint, (v) all distributions in respect of the Net Investment shall be made to
the applicable agent or administrative agent, as applicable, on behalf of the
Company and such Conduit Assignee on a pro rata basis according to their
respective interests, (vi) the definition of the term "CP Rate" with respect to
the portion of the Net Investment funded with commercial paper issued by the
Company from time to time shall be determined in the manner set forth in the
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<PAGE> 131
definition of "CP Rate" applicable to the Company on the basis of the interest
rate or discount applicable to commercial paper issued by such Conduit Assignee
(rather than the Company), (vii) the defined terms and other terms and
provisions of this Agreement and the other Transaction Documents shall be
interpreted in accordance with the foregoing, and (viii) if requested by the
Agent or the agent or administrative agent with respect to the Conduit Assignee,
the parties will execute and deliver such further agreements and documents and
take such other actions as the Agent or such agent or administrative agent may
reasonably request to evidence and give effect to the foregoing. No Assignment
by the Company to a Conduit Assignee of all or any portion of the Net Investment
shall in any way diminish the related Bank Investors' obligation under Section
9.9 to fund any Pledge not funded by the Company or such Conduit Assignee or to
acquire from the Company or such Conduit Assignee all or any portion of the Net
Investment.
(c) Each of the Pledgors, the Seller and the Master Servicer hereby
agrees and consents to the assignment by the Company from time to time of all or
any part of its rights under, interest in and title to this Agreement and the
Pledged Interest to any Liquidity Provider or to any Conduit Assignee as set
forth in section 10.6(b). In addition, each of the Pledgors and the Seller
hereby consents to and acknowledges the assignment by the Company of all of its
rights under, interest in and title to this Agreement and the Pledged Interest
to the Master Servicer.
SECTION 10.7 Waiver of Confidentiality. Each of the Pledgors, the
Seller and the Master Servicer hereby consents to the disclosure of any
non-public information (other than the identity of the Obligors and other
information relating to the identity of the Obligors with respect to it received
by the Company, the Agent, any Bank Investor or the Administrative Agent to any
of the Company, the Agent, any nationally recognized rating agency rating the
Company's Commercial Paper (informing such agency of the highly confidential
nature of such information), the Administrative Agent, the Collateral Agent, any
Bank Investor, the Liquidity Provider or the Credit Support Provider in relation
to this Agreement. Each of the Agent, the Company and each Bank Investor agrees
that, other than as set forth in the preceding sentence, it shall not disclose
such information to any other Person except (i) its auditors and
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<PAGE> 132
attorneys and employees, (ii) as otherwise required by applicable law or order
of a court of competent jurisdiction or (iii) to a potential Bank Investor upon
its agreement to abide by the provisions of this Section with respect to such
information.
SECTION 10.8 Confidentiality Agreement. Each of the Pledgors and the
Master Servicer hereby agrees that it will not disclose the contents of this
Agreement or any other proprietary or confidential information of the Company,
the Agent, the Administrative Agent, the Collateral Agent, any Liquidity
Provider or any Bank Investor to any other Person except (i) its auditors and
attorneys, employees or financial advisors (other than any commercial bank) and
any nationally recognized rating agency, provided such auditors, attorneys,
employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information or (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction.
SECTION 10.9 No Bankruptcy Petition Against the Company. Each of the
Pledgors, the Master Servicer and the Seller hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
SECTION 10.10 No Recourse Against Stockholders, Officers or Directors.
No recourse under any obligation, covenant or agreement of the Company contained
in this Agreement shall be had against Merrill Lynch Money Markets Inc. (or any
affiliate thereof), or any stockholder, officer or director of the Company, as
such, 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 the Company,
and that no personal liability whatsoever shall attach to or be incurred by
Merrill Lynch Money Markets Inc. (or any affiliate thereof), or the
stockholders, officers or directors of the buyer, as such, or any of them, under
or by reason of any of the obligations,
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<PAGE> 133
covenants or agreements of the Company contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by the Company
of any of such obligations, covenants or agreements, either at common law or at
equity, or by statute or constitution, of Merrill Lynch Money Markets Inc. (or
any affiliate thereof) and every such stockholder, officer or director of the
Company is hereby expressly waived as a condition of and consideration for the
execution of this Agreement.
SECTION 10.11 Characterization of the Transactions Contemplated by the
Agreement. It is the intention of the parties that this Agreement grants a
security interest in the Receivables, together with the Related Security with
respect thereto to secure payment of the amounts financed hereunder.
Accordingly, each Pledgor hereby grants to the Agent, on behalf of the Company
and the Bank Investors, a first priority perfected and continuing security
interest in all of such Pledgor's right, title and interest in, to and under the
Receivables, together with all Related Security with respect thereto, and
together with all of the Pledgor's rights under the Receivables Purchase
Agreement with respect to the Receivables and with respect to any obligations
thereunder of the Seller or any Eligible Originator with respect to the
Receivables, and that this Agreement shall constitute a security agreement under
applicable law. The Pledgors hereby assign to the Agent, on behalf of the
Company and the Bank Investors, all of their rights and remedies under the
Receivables Purchase Agreement with respect to the Receivables and with respect
to any obligations thereunder of the Seller or any Eligible Originator with
respect to the Receivables. The Pledgors, the Company, the Agent and the Bank
Investors acknowledge that the arrangement created pursuant to this Agreement is
a financing, and not a sale of Pledged Interest, for Federal, state and local
tax purposes, and agree to act for all purposes hereof in accordance with the
foregoing.
127
<PAGE> 134
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Transfer and Administration Agreement as of the date first written above.
KITTY HAWK FUNDING CORPORATION,
as Company
By: _________________________
Name:
Title:
UCP QUALIFYING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: Andrew L. Stidd
Title: Manager
UCP OPERATING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: Andrew L. Stidd
Title: Manager
PORTFOLIO FINANCIAL SERVICING
COMPANY, L.P., as Master Servicer
128
<PAGE> 135
By: PFSC ACQUISITION CORP.,
as general partner
By: _________________________
Name:
Title:
129
<PAGE> 136
Commitment NATIONSBANK, N.A., as Agent
and a Bank Investor
$_____________
By: ________________________
Name:
Title:
130
<PAGE> 137
EXHIBIT A
FORM OF NOTICE OF
CHANGE IN FACILITY LIMIT
[Date]
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention:Michelle M. Heath--
Structured Finance
Dear Ms. Heath:
Reference is made to the Transfer and Administration Agreement dated as
of June 22, 1998 (such agreement as amended, modified or supplemented from time
to time, the "Agreement") among UCP Qualifying SPE 1998-1 Limited Partnership,
as Pledgor (in such capacity, the "Qualifying Pledgor"), UCP Operating SPE
1998-1 Limited Partnership, as Pledgor (in such capacity, the "Operating Lease
Pledgor" and, collectively with the Qualifying Pledgor, the "Pledgors"),
Portfolio Financial Servicing Company, L.P., individually and as master servicer
(the "Master Servicer"), Kitty Hawk Funding Corporation (the "Company"),
NationsBank, N.A., as agent for the Company and the Bank Investors (in such
capacity, the "Agent") and as a Bank Investor, and each other bank that is a
party to the Agreement in the capacity of a Bank Investor. Terms defined in the
Agreement are used herein with the same meaning.
Pursuant to the Agreement, the undersigned hereby request that the
Facility Limit be [increased][decreased] from $__________ to $_______________,
concurrently with an equivalent [decrease][increase] in the facility limit under
the Finance Facility Agreement. A separate request under that facility is being
made concurrently herewith. The undersigned request that such change be
effective as of [date], which is at least three Business Days from the date of
delivery hereof.
A-1
<PAGE> 138
UCP QUALIFYING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name:
Title:
UCP OPERATING SPE 1998-1 Limited
Partnership, as Pledgor
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name:
Title:
Confirmed and Accepted as of this
___ day of _______, ____
NATIONSBANK, N.A., as Agent
By: ________________________
Name:
Title:
A-2
<PAGE> 139
EXHIBIT B
CREDIT POLICY MANUAL AND CREDIT POLICY PROCEDURE MEMORANDA
Each of the Parent's Credit Policy Manual and Credit Policy
and Procedure Memoranda were delivered by the Pledgors on June
25, 1998 to the Agent and the receipt of which has been
separately acknowledged by the Agent.
B-1
<PAGE> 140
EXHIBIT C
[Reserved.]
C-1
<PAGE> 141
EXHIBIT D
[Reserved.]
D-1
<PAGE> 142
EXHIBIT E
FORM OF INVESTOR REPORT
E-1
<PAGE> 143
EXHIBIT F
FORM OF PLEDGE CERTIFICATE
NationsBank, N.A.
NationsBank Corporate Center - 10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath - Structured Finance
Reference is made to the Transfer and Administration Agreement dated as
of June 22, 1998 (such agreement as amended, modified or supplemented from time
to time, the "Agreement") among UCP Qualifying SPE 1998-1 Limited Partnership,
as Pledgor (in such capacity, the "Qualifying Pledgor"), UCP Operating SPE
1998-1 Limited Partnership, as Pledgor (in such capacity, the "Operating Lease
Pledgor" and, collectively with the Qualifying Pledgor, the "Pledgors"),
Portfolio Financial Servicing Company, L.P., individually and as master servicer
(the "Master Servicer"), Kitty Hawk Funding Corporation (the "Company"),
NationsBank, N.A., as agent for the Company and the Bank Investors (in such
capacity, the "Agent") and as a Bank Investor, and each other bank that is a
party to the Agreement in the capacity of a Bank Investor. Terms defined in the
Agreement are used herein with the same meaning.
The Pledgors, pursuant to Section 2.3(a) of the Transfer and
Administration Agreement, hereby request that the Company make an advance to it
pursuant to the following instructions:
Borrowing Date: ________________________________________
Borrowing request is made to: [Company] [Bank Investors]
Advance Amount: ________________________________________
Tranche Period(s): ________________________________________
Account to be credited: ____________________________[bank name]
ABA No. ________________________________________
F-1
<PAGE> 144
Account No. ________________________________________
Reference No. ________________________________________
Please credit the above-mentioned account by 11:00 a.m. (New
York City time) on the Borrowing Date.
The Pledgors hereby certify as of the date hereof that $__________ is
available for additional Pledges based on the following calculation:
$__________ (Maximum Net Investment)
minus $__________ (Net Investment)
$__________ (amount available for borrowing)
As of the date of the related borrowing, the Pledgors jointly and
severally pledge and assign to the Agent, on behalf of the Company and the Bank
Investors, as applicable, all of each Pledgor's respective right, title and
interest in, to and under the Receivables set forth on the Contract Schedule
hereto and made a part hereof (each, a "Pledge"), which such Pledges are further
described in Section 2.2(a) of the Agreement. Each Pledge by the Pledgors to the
Agent and each reduction or increase in the Net Investment in respect of each
Pledge evidenced hereby shall be indicated by the Agent on the grid attached
hereto as Annex 1, and which grid will be part of this Pledge Certificate.
The Pledgors hereby certify that as of the date hereof (a) the
conditions precedent pursuant to Section 4.1(b) of the Transfer and
Administration Agreement have been satisfied, (b) the representations and
warranties made in Section 3.1 of the Transfer and Administration Agreement are
true and correct both immediately before and immediately after giving effect to
a borrowing pursuant to Section 2.2 and (c) no Event of Default exists.
F-2
<PAGE> 145
This Pledge Certificate is made without recourse except as otherwise
provided in the Agreement.
This Pledge Certificate shall be governed by, and construed in
accordance with, the laws of the State of New York.
This Pledge Certificate may be executed by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of the signature page to this
Pledge Certificate by telecopier shall be effective as delivery of a manually
executed counterpart of this Pledge Certificate.
F-3
<PAGE> 146
IN WITNESS WHEREOF, the undersigned has caused this Pledge Certificate
to be duly executed and delivered by its duly authorized officer as of the date
first above written.
UCP QUALIFYING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: ___________________________
Name:
Title:
UCP OPERATING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: ___________________________
Name:
Title:
Dated: _____________________
F-4
<PAGE> 147
SCHEDULE I TO EXHIBIT F
CONTRACT SCHEDULE
Lease Specific Information -- Origination
Account Number
Serial Number
Lessee Name
Street Address
City
State
Zip Code
Credit Rating of Lessee, if attainable (D&B)
Credit Score as per UniCapital Corporation's Credit and
Collection Policy
Location of Collateral
City
State
Zip Code
Location of Contracts (Name and Institution where held)
Collateral Type (ex. Personal Computer, Printing Press)
Type of Lease
Operating
Sales-type
Finance
Promissory Note
Vendor/Manufacturer
Flag for "unique funding arrangements"
Advance Vendor Payments
Progress Funding
Wet Funding
PPR-type Leases
Gross Contractual Receivable Balance
Outstanding Remaining Lease Balance
Amount of Rent (Lease Payment)
Frequency of Lease Payments (Monthly, quarterly,
or semi-annually)
Lease Rate (Yield)
Discount Rate (Applicable Hedge Rate Pursuant to TAA)
Term (months)
Amount Financed
F-5
<PAGE> 148
Original Cost of Equipment (OEC)
End of Term Provision(s)
nominal: guaranteed/unguaranteed
or fair market value
F-6
<PAGE> 149
Current Status of Lease Pool
Gross Receivables Serviced And Owned
Fair Market Value of Collateral
Date of Fair Market Value determination
Booked Value of Equipment
Residual Value booked
Actual Residual Realized
Remarketing Revenue
Remarketing Fees
Delinquent Status
1-30 Day
31-60 Day
61-90 Day
91-120 Day
121-150 Day
151-180 Day
180+Day
Defaulted Receivables (Y/N)
Cause of Default (Why Lessee cannot pay?)
Gross Charge-offs
Net Charge-offs
Recoveries
Flag for Repossessed Collateral
Flag for Prepay
Amount Prepaid
Accrued Interest
Outstanding Principal of Receivable
Maturity Date of Lease Term
Cut-Off Date
F-7
<PAGE> 150
ANNEX 1 TO EXHIBIT F
GRID
Date of Pledge:
Amount of Pledge:
Increase in Net Investment (Giving effect to Pledge):
Decrease in Net Investment (Giving effect to Pledge):
F-8
<PAGE> 151
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Transfer and Administration Agreement dated as
of June 22, 1998 (such agreement as amended, modified or supplemented from time
to time, the "Agreement") among UCP Qualifying SPE 1998-1 Limited Partnership,
as Pledgor (in such capacity, the "Qualifying Pledgor"), UCP Operating SPE
1998-1 Limited Partnership, as Pledgor (in such capacity, the "Operating Lease
Pledgor" and, collectively with the Qualifying Pledgor, the "Pledgors"),
Portfolio Financial Servicing Company, individually and as master servicer (the
"Master Servicer"), Kitty Hawk Funding Corporation (the "Company"), NationsBank,
N.A., as agent for the Company and the Bank Investors (in such capacity, the
"Agent") and as a Bank Investor, and each other bank that is a party to the
Agreement in the capacity of a Bank Investor. Terms defined in the Agreement are
used herein with the same meaning.
___________________ (the "Assignor") and _____________________
(the "Assignee") agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee,
without recourse and without representation and warranty, and the
Assignee hereby purchases and assumes from the Assignor, that interest
in and to all of the Assignor's rights and obligations under the
Agreement and the other Transaction Documents, as of the date hereof.
Such interest is expressed as a percentage of all rights and
obligations of the Bank Investors being equal to the percentage
equivalent of a fraction the numerator of which is $________, and the
denominator of which is $________ the current Facility Limit. After
giving effect to such sale and assignment, the Assignee's Commitment
will be as set forth on the signature page hereto.
(b) [In consideration of the payment of $___________, being
___% of the existing Net Investment, and of $___________, being ___% of
the aggregate unpaid accrued
G-1
<PAGE> 152
Discount, receipt of which payment is hereby acknowledged, the Assignor
hereby assigns to the Agent for the account of the Assignee, and the
Assignee hereby purchases from the Assignor, a ___% interest in and to
all of the Assignor's right, title and interest in and to the Net
Investment purchased by the undersigned on _______________, 1998 under
the Agreement.][INCLUDE IF AN EXISTING NET INVESTMENT IS BEING
ASSIGNED.]
(c) The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or the Receivables,
any other Transaction Document or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any of the Pledgors, [the Master Servicer], the Agent or
the Seller or the performance or observance by any of the Pledgors,
[the Master Servicer], the Agent or the Seller of any of their
respective obligations under the Agreement, any other Transaction
Document, or any instrument or document furnished pursuant thereto.
(d) The Assignee (i) confirms that it has received a copy of
the Agreement, the related Receivables Purchase Agreement, the Secured
Note, the Facility Fee Letter and the Fee Letter, together with copies
of the financial statements referred to in Section 5.1 of the
Agreement, to the extent delivered through the date of this Agreement,
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this
Assignment and Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Agent, any of its
Affiliates, the Assignor or any other [Bank Investor], and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own
G-2
<PAGE> 153
credit decisions in taking or not taking action under the Agreement
and/or any other Transaction Document; (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Agreement and/or the other
Transaction Documents as are delegated to the Agent by the terms
thereof, together with such powers and discretion as are reasonably
incidental thereto; (iv) agrees 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 [Bank Investor]; and (vi)
specifies as its address for notices and its account for payments the
office and account set forth beneath its name on the signature pages
hereof[; and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the
Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the
Assignee under the Agreement or such other documents as are necessary
to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty]. [The Assignee also covenants with
each of the Agent and the Master Servicer that the Assignee will not
make a public offering of the interest being assigned to and accepted
by it hereby, and will not reoffer or resell such interest, in a manner
that would render the issuance and sale of such interest, whether
considered together with the resale or otherwise, a violation of the
Securities Act of 1933 or any state securities or "Blue Sky" laws or
require registration pursuant thereto.]
(e) The effective date for this Assignment and Assumption
Agreement shall be the later of (i) the date on which the Agent
receives this Assignment executed by the parties hereto and receives
the consent of [the Pledgors and] the Administrative Agent, on behalf
of the Company, and (ii) the date of this Assignment and Assumption
Agreement (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement and the consent of [the Pledgors
and] the Administrative Agent, on behalf of the Company, this
Assignment and Assumption Agreement will be delivered to the Agent for
acceptance and recording.
G-3
<PAGE> 154
(f) Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Assumption Agreement,
shall have the rights and obligations of a Bank Investor thereunder;
and (ii) the Assignor shall, to the extent provided in this Assignment
and Assumption Agreement, relinquish its rights and be released from
its obligations under the Agreement.
(g) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make, or cause to be made, all payments
under the Agreement in respect of the interest assigned hereby
(including, without limitation, all payments in respect of such
interest in Net Investment, Discount and fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Agreement for periods prior to the Effective Date
directly between themselves.
(h) This Assignment and Assumption Agreement shall be governed
by, and construed in accordance with, the laws of the State of New
York.
(i) This Assignment and Assumption Agreement may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of the
signature page to this Assignment by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
G-4
<PAGE> 155
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the ____ day of June , 1998.
Remaining [NAME OF ASSIGNOR]
Commitment
$_____________ By:____________________________
Name:
Title:
Commitment
[NAME OF ASSIGNEE]
$--------------
By: ____________________________
Name:
Title:
[Address]
Address for notices
[Account]
Account for payments:
Consented to this __ day
of _________, 1998
NATIONSBANK, N.A., as
Administrative Agent
By: _______________________
Name:
Title:
NATIONSBANK, N.A.,
as Agent
By: _______________________
Name:
Title:
G-5
<PAGE> 156
EXHIBIT H
LIST OF ACTIONS AND SUITS
None.
H-1
<PAGE> 157
EXHIBIT I
LOCATION OF RECORDS
Portfolio Financial Servicing Company, L.P.
2121 SW Broadway
Portland, Oregon 97201
Attention: Gerald Hudspeth
K.L.C., Inc. (Keystone) - with respect to Receivables for which
it is Eligible Originator
433 New Park
West Hartford, Connecticut 06110
Attention: Edgar Lee
I-1
<PAGE> 158
EXHIBIT J
LIST OF SUBSIDIARIES AND TRADENAMES
None.
J-1
<PAGE> 159
EXHIBIT K
[Reserved.]
K-1
<PAGE> 160
EXHIBIT L-1
FORM OF OFFICER'S CERTIFICATE OF QUALIFYING PLEDGOR
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, which is the general partner of UCP QUALIFYING SPE 1998-1
LIMITED PARTNERSHIP (the "Partnership"), a Nevada limited partnership, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-1-1
<PAGE> 161
WITNESS my hand as of this ____ day of ________, 1998.
---------------------
Name:
Title:
I, the undersigned, __________________ of UniCapital Funding
Corporation, DO HEREBY CERTIFY that _____________________ is the duly elected
and qualified ___________________ of UniCapital Funding Corporation and the
signature above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-------------------------
Name:
Title:
L-1-2
<PAGE> 162
EXHIBIT L-2
FORM OF OFFICER'S CERTIFICATE OF OPERATING PLEDGOR
I, __________________, the undersigned ______________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, which is the general partner of UCP OPERATING SPE 1998-1
LIMITED PARTNERSHIP (the "Partnership"), a Nevada limited liability partnership,
DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-2-1
<PAGE> 163
WITNESS my hand as of this ____ day of ________, 1998.
--------------------
Name:
Title:
I, the undersigned, of UniCapital Funding Corporation, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
_____________ of UniCapital Funding Corporation and the signature above is
his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
-------------------------
Name:
Title:
L-2-2
<PAGE> 164
EXHIBIT L-3
FORM OF OFFICER'S CERTIFICATE OF SELLER
I, __________________, the undersigned ________________
of UniCapital Funding Corporation (the "Company"), a Delaware
corporation, DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of June 9, 1998 and June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
---- ------ ---------
-------------------------
--------------------------
--------------------------
--------------------------
L-3-1
<PAGE> 165
WITNESS my hand as of this ____ day of ________, 1998.
-------------------
Name:
Title:
I, the undersigned, ___________________ of UniCapital Funding
Corporation, DO HEREBY CERTIFY that _____________________ is the duly elected
and qualified ______________ of Unicapital Funding Corporation and the signature
above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
------------------------
Name:
Title:
L-3-2
<PAGE> 166
EXHIBIT L-4
FORM OF OFFICER'S CERTIFICATE OF THE GENERAL PARTNER
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, a Delaware limited liability company (the "Company"), DO
HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Articles of Organization of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Operating Agreement of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member adopted as of June 19, 1998, authorizing
the execution, delivery and performance of each of the documents mentioned
therein, which resolutions have not been revoked, modified, amended or rescinded
and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as the Managers of the Company and the signatures below set
opposite their names are their genuine signatures:
Name Signature
- ---- ---------
Kevin P. Burns ______________________________
Andrew L. Stidd ______________________________
Richard I. Hansen ______________________________
Gerald T. Hudspeth ______________________________
Christopher A. Kane ______________________________
L-4-1
<PAGE> 167
WITNESS my hand as of this ____ day of ________, 1998.
By: ___________________
Name:
Title:
I, the undersigned, ___________________ of the Company, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
______________ of the Company and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
By: ________________________
Name:
Title:
L-4-2
<PAGE> 168
EXHIBIT L-5
FORM OF OFFICER'S CERTIFICATE OF THE PARENT
I, __________________, the undersigned __________________ of
UniCapital Corporation (the "Company"), a Delaware corporation, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of May 24, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
---- ------ ---------
-------------------------
-------------------------
-------------------------
-------------------------
L-5-1
<PAGE> 169
WITNESS my hand as of this ____ day of ________, 1998.
-------------------
Name:
Title:
I, the undersigned, ___________________ of UniCapital Corporation, DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
______________ of UniCapital Corporation and the signature above is his/her
genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
------------------------
Name:
Title:
L-5-2
<PAGE> 170
EXHIBIT L-6
FORM OF OFFICER'S CERTIFICATE OF THE MASTER SERVICER
I, __________________, the undersigned ______________ of PFSC
Acquisition Corp., the general partner of PORTFOLIO FINANCIAL SERVICING COMPANY,
L.P. (the "Partnership"), a Delaware limited partnership, DO HEREBY CERTIFY
that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the general partner of the Partnership adopted by
consent as of June 8, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
L-6-1
<PAGE> 171
WITNESS my hand as of this ____ day of ________, 1998.
---------------------
Name:
Title:
I, the undersigned, __________________ of PFSC Acquisition Corp., DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
___________ of PFSC Acquisition Corp. and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
-------------------------
Name:
Title:
L-6-2
<PAGE> 172
EXHIBIT M
FORM OF SECURED NOTE
THIS NOTE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED EXCEPT IN ACCORDANCE WITH THE TRANSFER AND ADMINISTRATION
AGREEMENT REFERRED TO HEREIN. THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS
AND NO TRANSFER HEREOF MAY BE MADE EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT
OF 1933, AS AMENDED AND ANY OTHER APPLICABLE LAWS.
$225,000,000
[Date]
This Note is secured solely by a pool of equipment lease and contract
receivables generated from time to time in the ordinary course of business by
UniCapital Funding Corporation (the "Seller") and acquired by UCP Qualifying SPE
1998-1 Limited Partnership and UCP Operating SPE 1998-1 Limited Partnership
(together, the "Pledgors") as further set forth in the Agreement (as defined
below).
(By way of clarification, this Note does not represent any
interest (equity or otherwise) in either of the Pledgors)
FOR VALUE RECEIVED, the Pledgors promise to pay to Nationsbank, N.A.,
on behalf of and as agent for Kitty Hawk Funding Corporation (the "Buyer") and
the Bank Investors (as defined in the Agreement) the principal sum of
$225,000,000 (Two hundred and twenty-five million dollars) or such other amount
as shall represent the outstanding Net Investment together with all other
Aggregate Unpaids, at the times and on the dates and all as more fully provided
in the Transfer and Administration Agreement dated as of June 22, 1998 among the
Seller, the Buyer, each of the Pledgors, Portfolio Financial Servicing Company,
L.P., individually and as master servicer, NationsBank, N.A. as agent for the
Company and the Bank Investors, and certain financial
M-1
<PAGE> 173
institutions that are a party thereto in the capacity of a Bank Investor (such
agreement as amended, supplemented or modified from time to time, the
"Agreement"). The Receivables consist of all receivables generated under the
Contracts from time to time hereafter, all monies due or to become due in
payment of the Receivables and the other assets and interests as provided in the
Agreement.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned to such terms in the Agreement. This Note is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the holder hereof by virtue of
the acceptance hereof assents and by which the holder hereof is bound. In the
event of any inconsistency or conflict between the terms of this Note and the
terms of the Agreement, the terms of the Agreement shall prevail.
This Note is secured by the Receivables and Related Security, including
the right to receive Collections and other amounts at the times and in the
amounts specified in the Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of New York. This Note is issued
pursuant to, and is entitled to the benefits of, the Agreement.
M-2
<PAGE> 174
IN WITNESS WHEREOF, the Pledgors have caused this Note to be duly
executed.
UCP QUALIFYING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: ________________________
Name:
Title:
UCP OPERATING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: ________________________
Name:
Title:
M-3
<PAGE> 175
EXHIBIT N
ELIGIBLE ORIGINATORS
1. American Capital Resources, Inc.
2. Boulder Capital Group, Inc.
3. Jacom Computer Services, Inc.
4. K.L.C., Inc. (Keystone)
5. Merrimac Financial Associates
6. Varilease Corp.
7. Walden Asset Group, Inc.
N-1
<PAGE> 1
Exhibit 4.03
- --------------------------------------------------------------------------------
LOAN AND SECURITY AGREEMENT
among
KITTY HAWK FUNDING CORPORATION,
as Company
and
UPC BORROWING SPE 1998-1 LIMITED PARTNERSHIP
as Borrower
and
PORTFOLIO FINANCIAL SERVICING COMPANY, L.P.
individually and
as Master Servicer
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of July 1, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.................................................................. 1
SECTION 1.1. Certain Defined Terms............................. 1
SECTION 1.2. Other Terms....................................... 27
SECTION 1.3. Computation of Time Periods....................... 28
ARTICLE II
PLEDGES AND SETTLEMENTS...................................................... 28
SECTION 2.1. Facility.......................................... 28
SECTION 2.2. Availability of Borrowings........................ 28
SECTION 2.3. Selection of Tranche Periods and Tranche
Rates............................................. 31
SECTION 2.4. Discount, Fees and Other Costs and
Expenses................................................... 34
SECTION 2.5. Settlement and Reinvestment Procedures............ 34
SECTION 2.6. Liquidation Settlement Procedures................. 36
SECTION 2.7. Fees.............................................. 37
SECTION 2.8. Protection of the Interest of the
Company and the Bank Investors............................. 37
SECTION 2.9. Prepayment Shortfalls; Application of
Payments................................................... 39
SECTION 2.10. Payments and Computations, Etc.................... 39
SECTION 2.11. Reports........................................... 40
SECTION 2.12. Accounts.......................................... 40
SECTION 2.13. Sharing of Payments, Etc.......................... 42
SECTION 2.14. Right of Setoff................................... 42
SECTION 2.15. Hedging of Receivables............................ 42
SECTION 2.16. Substitution of Receivables....................... 43
ARTICLE III
REPRESENTATIONS AND WARRANTIES................... 44
SECTION 3.1. Representations and Warranties of the
Borrower................................................... 44
SECTION 3.2. Reaffirmation of Representations and
Warranties by the Borrower................................. 48
SECTION 3.3. [Reserved.]....................................... 48
SECTION 3.4. Representations and Warranties of the
Master Servicer............................................ 48
ARTICLE IV
CONDITIONS PRECEDENT......................................................... 50
SECTION 4.1. Conditions to Closing............................. 50
i
<PAGE> 3
ARTICLE V
COVENANTS.................................................................... 54
SECTION 5.1. Affirmative Covenants of Borrower................. 54
SECTION 5.2. Negative Covenants of the Borrower................ 58
SECTION 5.3. [Reserved.]....................................... 61
SECTION 5.4. [Reserved.]....................................... 61
SECTION 5.5. Affirmative Covenants of the Master
Servicer................................................... 61
SECTION 5.6. [Reserved.]....................................... 63
SECTION 5.7. Negative Covenants of the Master
Servicer................................................... 63
ARTICLE VI
ADMINISTRATION AND COLLECTIONS............................................... 64
SECTION 6.1. Appointment of the Master Servicer................ 64
SECTION 6.2. Duties of the Master Servicer..................... 64
SECTION 6.3. Rights After Designation of New Master
Servicer................................................... 70
SECTION 6.4. Master Servicer Default........................... 71
SECTION 6.5. Responsibilities of the Borrower and the
Seller................................... 72
SECTION 6.6. Limitation on Liability of the Master
Servicer and Others........................................ 72
SECTION 6.7. The Master Servicer Not to Resign................. 72
ARTICLE VII
TERMINATION EVENTS........................................................... 73
SECTION 7.1. Termination Events................................ 73
SECTION 7.2. Termination....................................... 75
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS................................... 76
SECTION 8.1. Indemnities by the Borrower....................... 76
SECTION 8.2. Indemnity for Taxes, Reserves and
Expenses................................................... 79
SECTION 8.3. Taxes............................................. 81
SECTION 8.4. Other Costs, Expenses and Related
Matters.................................................... 82
ii
<PAGE> 4
ARTICLE IX
THE AGENT; BANK COMMITMENT................................................... 83
SECTION 9.1. Authorization and Action.......................... 83
SECTION 9.2. Agent's Reliance, Etc............................. 84
SECTION 9.3. Termination Events................................ 84
SECTION 9.4. Rights as Bank Investor........................... 85
SECTION 9.5. Indemnification of the Agent...................... 85
SECTION 9.6. Non-Reliance...................................... 86
SECTION 9.7. Resignation of Agent.............................. 86
SECTION 9.8. Payments by the Agent............................. 86
SECTION 9.9. Bank Commitment; Assignment to Bank
Investors.................................................. 87
ARTICLE X
MISCELLANEOUS................................................................ 91
SECTION 10.1. Term of Agreement................................. 91
SECTION 10.2. Waivers; Amendments............................... 92
SECTION 10.3. Notices........................................... 92
SECTION 10.4. Governing Law; Submission to
Jurisdiction; Integration.................................. 95
SECTION 10.5. Severability; Counterparts........................ 95
SECTION 10.6. Successors and Assigns............................ 96
SECTION 10.7. Waiver of Confidentiality......................... 97
SECTION 10.8. Confidentiality Agreement......................... 98
SECTION 10.9. No Bankruptcy Petition Against the
Company.................................................... 98
SECTION 10.10. No Recourse Against Stockholders,
Officers or Directors...................................... 98
EXHIBIT B CREDIT POLICY MANUAL AND CREDIT POLICY
PROCEDURE MEMORANDA.................................................B-1
EXHIBIT C [RESERVED.].......................................C-1
EXHIBIT D [RESERVED.].......................................D-1
EXHIBIT E FORM OF INVESTOR REPORT...........................E-1
EXHIBIT F FORM OF BORROWING REQUEST.........................F-1
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT.......G-1
EXHIBIT H LIST OF ACTIONS AND SUITS.........................H-1
EXHIBIT I LOCATION OF RECORDS...............................I-1
EXHIBIT J LIST OF SUBSIDIARIES AND TRADENAMES...............J-1
EXHIBIT K [Reserved.] ......................................K-2
iii
<PAGE> 5
EXHIBIT L-1 FORM OF OFFICER'S CERTIFICATE OF THE
BORROWER..........................................................L-1-1
EXHIBIT L-2 FORM OF OFFICER'S CERTIFICATE OF THE SELLER..............L-2-1
EXHIBIT L-3 FORM OF OFFICER'S CERTIFICATE OF THE GENERAL
PARTNER.........................................L-3-1
EXHIBIT L-4 FORM OF OFFICER'S CERTIFICATE OF THE PARENT..............L-4-1
EXHIBIT L-5 FORM OF OFFICER'S CERTIFICATE OF THE MASTER
SERVICER.................................................L-5-1
EXHIBIT M FORM OF VARIABLE FUNDING NOTE.....................M-1
EXHIBIT N FORM OF PARENT GUARANTY...........................N-1
iv
<PAGE> 6
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT (this "Agreement"), dated as of July 1,
1998, by and among UCP BORROWING SPE 1998-1 LIMITED PARTNERSHIP, a Nevada
limited partnership, as borrower (in such capacity, the "Borrower"), PORTFOLIO
FINANCIAL SERVICING COMPANY, L.P., a Delaware limited partnership, individually
and as master servicer (in such capacity, the "Master Servicer"), KITTY HAWK
FUNDING CORPORATION, a Delaware corporation (the "Company") and NATIONSBANK,
N.A., a national banking association ("NationsBank"), as agent for the Company
and the Bank Investors (in such capacity, the "Agent") and as a Bank Investor,
and each other bank that is a party hereto in the capacity of a Bank Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower has requested that the Company make Advances to
the Borrower, from time to time, which will be secured by certain lease and
secured loan receivables and the other collateral described herein and evidenced
by a variable funding note, and the repayment of which will be fully guaranteed
by UniCapital Corporation, a Delaware corporation (the "Parent");
WHEREAS, the Company will finance such Advances through the periodic
issuance of commercial paper and related liquidity draws; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Company is willing to make such Advances to the Borrower.
NOW, THEREFORE, the parties hereby agree as follows:
<PAGE> 7
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Accounts" means, collectively, the Collection Account, the
Reserve Account, the Principal Collection Account and the
Interest Accrual Account.
"Administrative Agent" means NationsBank, N.A., as
administrative agent.
"Administrative Fee" means the fee payable to the Agent pursuant to
Section 2.7(a) hereof, the terms of which are set forth in the Fee Letter.
"Advance" has the meaning specified in Section 2.1 hereof.
"Advance Amount" means with respect to any Advance, the amount paid to
the Borrower by the Company or the Bank Investors being the product of the
applicable Advance Percentage and the Outstanding Balance of the related
Receivables at the time of such Advance.
"Advance Percentage" means with respect to any Advance, 93%, or if the
Three-Month Average Net Portfolio Yield as of the related Borrowing Date is less
than or equal to 1.50%, 88% or such other percentage as may be agreed to by the
Agent and the Borrower, as evidenced by the related Borrowing Request.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any Person other than the Company and the Bank Investors (including any UCC
financing statement or any similar instrument filed against such Person's assets
or properties); provided, however, that any lien in favor of a third-party
lessor for the Equipment relating to a Leveraged Lease Loan shall not constitute
an Adverse Claim; provided, further, that a lien on the Borrower's right, title
and interest in any Equipment or proceeds thereof that is expressly subordinated
to the interests of the Agent, the Company and the
2
<PAGE> 8
Bank Investors under this Agreement and is made subject to payment in full of
the related Contract shall not constitute an Adverse Claim hereunder.
"Affected Assets" means, collectively, the Receivables and the Related
Security, Collections and Proceeds relating thereto.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of voting stock, by contract or otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for the
Company and the Bank Investors, and any successor thereto appointed pursuant to
Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
(i) the aggregate accrued and unpaid Discount with respect to all Tranche
Periods at such time, (ii) the Net Investment at such time, and (iii) all other
amounts owed (whether due or accrued) hereunder by the Borrower to the Company
at such time.
"Assignment Amount" with respect to a Bank Investor shall mean at any
time an amount equal to the lesser of (i) such Bank Investor's Pro Rata Share of
the Net Investment at such time and (ii) such Bank Investor's unused Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Available Funds" means, for each Payment Date, all Collections
Available for the related Collection Period, plus all Servicing Advances for
such Payment Date, plus all amounts received under the Hedge Agreements with
respect to such Payment Date, plus all Purchase Facility Release Amounts for
such Payment Date, plus all amounts on deposit in the Interest Accrual Account
immediately prior to such Payment Date.
3
<PAGE> 9
"Bank Investors" shall mean NationsBank, N.A. and each other
bank that is party hereto in the capacity of a Bank Investor and
their respective successors and assigns.
"Bankruptcy Code" means the Federal Bankruptcy Code, as amended from
time to time (Title 11 of the United States Code).
"Base Rate" or "BR" means, a rate per annum equal to the greater of (i)
the prime rate of interest announced by the Liquidity Provider (or, if there is
more than one Liquidity Provider, then by NationsBank) from time to time,
changing when and as said prime rate changes (such rate not necessarily being
the lowest or best rate charged by the Liquidity Provider (or NationsBank, as
applicable)) and (ii) the sum of (a) 1.50% and (b) the rate equal 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
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 that is a Business Day, the average of the
quotations for such day for such transactions received by the Liquidity Provider
(or, if more than one Liquidity Provider, then by NationsBank) from three
Federal funds brokers of recognized standing selected by it.
"Benefit Plan" means any employee benefit plan as defined in Section
3(3) of ERISA in respect of which the Borrower, the Seller or any ERISA
Affiliate of the Borrower, or the Seller is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.
"Borrower" means UCP Borrowing SPE 1998-1 Limited Partnership, a Nevada
limited partnership, and its successors and assigns.
"Borrowing Request" has the meaning specified in Section
2.2(a) hereof.
"Borrowing Base" means (i) the product of the Net Receivables Balance
and the Weighted Average Advance Percentage plus (ii) all amounts on deposit in
the Principal Collection Account and the Reserve Account.
4
<PAGE> 10
"Borrowing Base Deficiency" means on any day, the excess of the Net
Investment on such day over the Borrowing Base of such day.
"Borrowing Date" means the date of Advances made hereunder.
"Business Day" means any day excluding Saturday, Sunday and any day on
which banks in New York, New York; Portland, Oregon; Miami, Florida; or
Charlotte, North Carolina are authorized or required by law to close, and, when
used with respect to the determination of any Eurodollar Rate or any notice with
respect thereto, any such day which is also a day for trading by and between
banks in United States dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche, either (i)
prior to the Termination Date, a period of up to 30 days requested by the
Borrower and agreed to by the Company, NationsBank on behalf of the Liquidity
Provider, or the Agent, as the case may be, commencing on a Business Day
requested by the Borrower and agreed to by the Company, NationsBank or the
Agent, as the case may be, or (ii) after the Termination Date, a period of one
day. If such BR Tranche Period would end on a day which is not a Business Day,
such BR Tranche Period shall end on the next succeeding Business Day.
"Capitalized Lease" means any lease of property by a Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.
"Carrying Costs" has the meaning provided in Section 2.5.
"Closing Date" means July __, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in Section 2.8
hereof.
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<PAGE> 11
"Collateral Agent" means NationsBank, N.A., as collateral agent for any
Liquidity Provider, any Credit Support Provider, the holders of Commercial Paper
and certain other parties.
"Collection Account" means the account, established by the Agent, for
the benefit of the Company and the Bank Investors, pursuant to Section 2.12(a).
"Collection Period" means with respect to each Payment Date, the
immediately preceding calendar month (or, with respect to the first Payment
Date, the period beginning on the initial Cutoff Date and ending on the last day
of the month preceding such Payment Date).
"Collections" means, with respect to any Receivable, all cash
collections on and other cash proceeds of or recoveries on the related Contract,
including, without limitation, all interest charges, rental payments, and cash
proceeds of all Related Security, in each case, other than any Excluded Amounts.
"Collections Available" means, for any Payment Date, all Collections
with respect to the related Collection Period, less any amounts allocated since
the preceding Payment Date, or since the initial Borrowing Date in the case of
the first Payment Date, pursuant to Section 2.5(b).
"Commercial Paper" means the promissory notes issued by the Company in
the commercial paper market.
"Commitment" means (i) with respect to each Bank Investor a party
hereto, the commitment of such Bank Investor to make loans to the Borrower or to
acquire such loans from the Company in accordance herewith in an amount not to
exceed the dollar amount set forth opposite such Bank Investor's signature on
the signature page hereto under the heading "Commitment" minus the dollar amount
of any Commitment or portion thereof assigned pursuant to an Assignment and
Assumption Agreement plus the dollar amount of any increase to such Bank
Investor's Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make loans to the Borrower or to acquire such loans from the
Company
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<PAGE> 12
not to exceed the amount set forth in such Assignment and Assumption Agreement
minus the dollar amount of any Commitment or portion thereof assigned pursuant
to an Assignment and Assumption Agreement prior to such time of determination
and (iii) with respect to any assignee of an assignee referred to in clause (ii)
above, the commitment of such assignee to make loans to the Borrower or to
acquire such loans from the Company not to exceed the amount set forth in an
Assignment and Assumption Agreement between such assignee and its assign.
"Commitment Termination Date" means July 30, 1999, or such later date
to which the Commitment Termination Date may be extended by the Borrower, the
Agent and the Bank Investors not later than 90 days prior to the then current
Commitment Termination Date, any such extension to become effective on the then
current Commitment Termination Date and to be for a period not to exceed 364
days from the date of the then current Commitment Termination Date.
"Company" means Kitty Hawk Funding Corporation, and its
successors and assigns.
"Concentration Factor" means for any Obligor on any date of
determination, Receivables of such Obligor having an aggregate Outstanding
Balance not in excess of (a) if the Net Investment is $100,000,000 or more on
such date of determination, the greater of 2% of the Net Investment on such date
and $5,000,000 or, with respect to any Obligor whose long term unsecured debt
obligations are rated at least "Baa3" by Moody's and at least "BBB-" by Standard
& Poor's or, if only rated by one such rating agency, are rated by such rating
agency at least at the applicable rating set forth above, the greater of 5% of
the Net Investment on such date and $7,000,000, (b) if the Net Investment is
less than $100,000,000 on such date of determination, (x) for Obligors whose
Obligor Risk Rating is "5" or worse, $3,000,000 and (y) for Obligors whose
Obligor Risk Rating is "4" or better, $4,000,000; provided that Obligors whose
Obligor Risk Rating is "5" or worse may have pledged Receivables hereunder
having an Outstanding Balance in excess of $3,000,000 but not in excess of
$4,000,000 to the extent that the Transaction Risk Rating for those Receivables
is "4" or better, or (c) in any event, such other greater amount that is
determined by the Agent in the reasonable exercise of its good faith judgment
and disclosed in a written
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<PAGE> 13
notice delivered to the Borrower or such other lesser amount that is determined
by the Agent with the mutual consent of the Borrower.
"Conduit Assignee" means any commercial paper conduit designated by
NationsBank from time to time to accept an assignment from the Company of all or
a portion of the Net Investment.
"Contract" means any lease, conditional sale contract, loan contract or
security agreement with respect to any Equipment under which the Seller acts as
lessor or secured party to an Obligor.
"Contract Payment" means each periodic installment of rent, scheduled
payment of principal and interest or PRR Payment payable by an Obligor under a
Contract.
"Contract Schedule" means the schedule in the form attached hereto as
Schedule I to Exhibit F delivered by the Borrower to the Agent with respect to
each Advance or such other form as may be agreed to by the Agent from time to
time.
"CP Rate" means, with respect to any CP Tranche Period, the rate
equivalent to the rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper having a term equal to such CP Tranche Period
may be sold by any placement agent or commercial paper dealer selected by the
Company; provided, however, that if the rate (or rates) as agreed between any
such agent or dealer and the Company is a discount rate, then the rate (or if
more than one rate, the weighted average of the rates) resulting from the
Company's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a period of
days not to exceed 90 days commencing on a Business Day requested by the
Borrower and agreed to by the Company pursuant to Section 2.3. If a CP Tranche
Period would end on a day which is not a Business Day, such CP Tranche Period
shall end on the next succeeding Business Day.
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<PAGE> 14
"Credit and Collection Policy" shall mean the Parent's Credit Policy
Manual and Credit Policy and Procedure Memoranda, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the Company and
the Credit Support Provider evidencing the obligation of the Credit Support
Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who provides
credit support to the Company in connection with the issuance by the Company of
Commercial Paper.
"Cut-off Date" means, for each Receivable that is subject to an Advance
hereunder, either (a) the first day of the month of such Advance or, if later
than the first day of such month, the date of origination thereof or (b) such
other date as may be specified in the related Borrowing Request.
"Dealer Fee" means the fee payable by the Borrower to the Collateral
Agent, pursuant to Section 2.4 hereof, the terms of which are set forth in the
Fee Letter.
"Defaulted Receivable" means a Receivable: (i) as to which any payment
remains unpaid for 180 consecutive days or more from the original due date for
such payment; (ii) as to which an Event of Bankruptcy has occurred and is
continuing with respect to the Obligor thereof; (iii) which has been identified
by the Borrower, the Seller or the Master Servicer as uncollectible; or (iv)
which, consistent with the Credit and Collection Policy, should be written off
as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Delinquent Receivables as of such date by (ii) the
aggregate Outstanding Balance of all Receivables as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which any payment
remains unpaid for more than 30 days from the
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<PAGE> 15
original due date for such payment and (ii) which is not a Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor; provided,
however, that any Obligor shall cease to be a Designated Obligor upon prior
notice to the Borrower from the Agent, which notice shall be based in the
Agent's sole discretion on its assessment of the risk of loss posed by such
Obligor's Receivables and which notice shall be given 30 days prior to the date
such Obligor shall cease to be a Designated Obligor unless to do so would
materially adversely affect the interests of the Agent, the Company or the Bank
Investors hereunder.
"Determination Date" means the 10th day of each month or if such 10th
day is not a Business Day, the immediately preceding Business Day.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
---------------
360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche Period;
provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Discount at a rate which is in excess of the maximum
amount permitted by applicable law; and provided, further, that Discount shall
not be considered paid by any distribution if at any time such distribution is
rescinded or must be returned for any reason.
"Discount Rate" means for any date of determination and any Receivable,
the sum of (i) either (x) the "constant maturity" yield, as of the last day of
the Collection Period immediately preceding such date of determination (or, if
later, as of the
10
<PAGE> 16
Borrowing Date for such Receivable), on U.S. Treasury securities with a maturity
date equal or nearest to the then expected remaining weighted average life (as
determined by the Agent in its sole discretion) of the related Receivables or
(y) if such Receivables are then subject to a Hedging Agreement, the then
applicable Hedge Rate of such Receivables plus (ii) 2.00%. The "constant
maturity" yield shall be determined based on the average yield, in effect for
the week ending on the last Friday immediately preceding the last day of the
related Collection Period, for U.S. Treasury securities adjusted to a constant
maturity, as published in H.15.
"Early Collection Fee" means, for any Tranche Period (such Tranche
Period to be determined without regard to the last sentence in Section 2.3(a)
hereof) during which the portion of the Net Investment that was allocated to
such Tranche Period is reduced for any reason whatsoever prior to the end of
such Tranche Period, the excess, if any, of (i) the additional Discount that
would have accrued during such Tranche Period if such reductions had not
occurred, minus (ii) the income, if any, received by the recipient of such
reductions from investing the proceeds of such reductions.
"Eligible Investments" means any of the following (a) negotiable
instruments or securities represented by instruments in bearer or registered or
in book-entry form which evidence (i) obligations fully guaranteed by the United
States of America; (ii) time deposits in, or bankers acceptances issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if any, or
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Moody's and S&P of at least "P-1" and "A-1", respectively, in
the case of the certificates of deposit or short-term deposits, or a rating not
lower than one of the two highest investment categories granted by Moody's and
by S&P; (iii) certificates of deposit having, at the time of investment
11
<PAGE> 17
or contractual commitment to invest therein, a rating from Moody's and S&P of at
least "P-1" and "A-1", respectively; or (iv) investments in money market funds
rated in the highest investment category or otherwise approved in writing by the
applicable rating agencies; (b) demand deposits in any depositary institution or
trust company referred to in (a)(ii) above; (c) commercial paper (having
original or remaining maturities of no more than 30 days) having, at the time of
investment or contractual commitment to invest therein, a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively; (d) Eurodollar time
deposits having a credit rating from Moody's and S&P of at least "P-1" and
"A-1", respectively; and (e) repurchase agreements involving any of the Eligible
Investments described in clauses (a)(i), (a)(iii) and (d) hereof so long as the
other party to the repurchase agreement has at the time of investment therein, a
rating from Moody's and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the Seller at the instruction
of, or was sold to the Seller by, and in either case was underwritten
by, the Parent or a Subsidiary of the Parent that at the time of the
assignment of such Receivable hereunder, was an Originator, and has
been sold to the Borrower pursuant to and in accordance with the
Receivables Purchase Agreement and to which the Borrower has good title
thereto, free and clear of all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been, unless otherwise permitted herein, the
subject of the grant by the Borrower of a first priority perfected
security interest therein (and in the Collections and Related Security
related thereto), effective until the earlier of the termination of
this Agreement or the time at which the related Contract is either paid
in full or reacquired by the Borrower pursuant to this Agreement;
(iii) the Obligor of which (A) is a United States resident,
(B) is a Designated Obligor on the related Borrowing Date, (C) is not
an Affiliate of any of the parties hereto, and (D) is not a government
or a
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<PAGE> 18
governmental subdivision or agency; provided that Receivables which in
the aggregate do not have an Outstanding Balance that represents more
than 5.0% of the Net Investment or $8 million, whichever is greater,
may be backed by the full faith and credit of the United States or of a
governmental entity whose long term general obligations are rated
investment grade;
(iv) which is not a Defaulted Receivable on the related
Borrowing Date;
(v) which is not a Delinquent Receivable on the related
Borrowing Date;
(vi) which arises pursuant to a Contract with respect to which
each of the Seller, the Originator and the Borrower, as applicable, has
performed all obligations required to be performed by it thereunder on
the related Borrowing Date;
(vii) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(viii) which arises under a Contract that is "chattel paper"
within the meaning of Article 9 of the UCC of all applicable
jurisdictions and is (A) secured by a first priority perfected security
interest in the related Equipment (provided that Receivables as to
which in each case the related Equipment had at the origination of the
related Contract an original equipment cost of less than $35,000 and
which in the aggregate do not have an Outstanding Balance that
represents more than 20% of the Net Investment or $20 million,
whichever is greater, may be represented by Contracts as to which steps
to perfect such security interest have not been taken), (B) a Leveraged
Lease Loan secured by a first priority perfected security interest in
both the related lease and Equipment (subject to such lease), and which
related lease would be an Eligible Receivable had it been directly sold
to the Borrower pursuant to the Receivables Purchase Agreement and
pledged hereunder, or (C) a "true lease" as to which the related
Equipment is owned by the Borrower free and clear of all Adverse
Claims;
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<PAGE> 19
(ix) which is denominated and payable only in United States
dollars in the United States by an Obligor with a billing address in
the United States and for which the related Equipment is located in the
United States;
(x) which, arises under a Contract that, is in full force and
effect and is and at all times will be the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to, nor has there been
asserted, any litigation, right of recession, setoff, counterclaim or
other defense;
(xi) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) has been originated and serviced in accordance
with and otherwise satisfies all applicable requirements of the Credit
and Collection Policy and (B) is assignable without the consent of, or
notice to, the Obligor thereunder;
(xiii) which was generated in the ordinary course of the
Seller's and the Originator's business;
(xiv) the Obligor of which has been directed to make all
payments to the Lock-Box Account;
(xv) as to which the Agent has not given at least 30 days'
notice to the Borrower that such Receivable or class of Receivables is
not acceptable for pledge hereunder, based upon the reasonable
determination of the Agent , that a Material Adverse Effect with
respect to such class of Receivables may arise because of the nature of
the business of the Obligor;
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<PAGE> 20
(xvi) the assignment of which under the Receivables Purchase
Agreement by the Seller and hereunder by the Borrower do not violate,
conflict or contravene any applicable laws, rules, regulations, orders
or writs or any contractual or other restriction, limitation or
encumbrance;
(xvii) to which the Obligor is responsible for the payment of
all expenses in connection with maintenance, repair, insurance, taxes
and otherwise with respect to the related Equipment and which requires
the Obligor to make periodic lease payments without condition
notwithstanding damage to or destruction of the Equipment, or any other
event, including Equipment obsolescence;
(xviii) as to which the related Contract is not a lease on a
vehicle or other type of equipment which requires titling in the name
of the Borrower in order to perfect the Borrower's interest; provided
that certain Receivables may be leases on vehicles or other types of
equipment which require titling in the name of the Borrower, so long as
the aggregate Outstanding Balance of such Receivables does not
represent more than 5.0% of the Net Investment or $7 million, whichever
is greater, and provided that such vehicles are re-titled as required
to perfect such interest within 90 days of the related Borrowing Date;
(xix) which has an outstanding term of 84 months or less,
provided that certain Receivables may have a term greater than 84
months but in no event greater than 120 months if the aggregate
Outstanding Balance of such Receivables does not represent more than
7.5% of the Net Investment or $15 million, whichever is greater;
(xx) which has a remaining Outstanding Balance on the related
Borrowing Date equal to or less than $5,000,000;
(xxi) which contains customary and enforceable provisions
adequate for realization of the benefits of the related Equipment;
(xxii) which is not a "consumer lease" as defined in Section
2A-103(l)(e) of the UCC;
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<PAGE> 21
(xxiii) as to which the Seller or its assignee may accelerate
all remaining Contract Payments (or, if the Contract is a conditional
sale contract or a loan, accelerate the outstanding principal amount
thereof together with any accrued but unpaid interest, penalties and
fees thereon) if the Obligor is in default under any of its obligations
under such Receivable;
(xxiv) which has not been terminated as a result of the loss,
theft, damage beyond repair or governmental seizure of such item of
Equipment or for any other reason;
(xxv) the Outstanding Balance of which does not include the
amount of any security deposit held by the Master Servicer, the Seller
or the Parent, but which may include up to 6 PRR Payments;
(xxvi) which provides that in the event of the loss, theft,
damage beyond repair or governmental seizure of the related Equipment,
the Obligor is required to repair or replace the related Equipment or
pay an amount not less than the Required Payoff Amount;
(xxvii) under which the Obligor has represented to the Seller
and/or the related Originator that such Obligor has accepted the
related Equipment or is contractually bound to accept such Equipment
upon shipment or delivery thereof;
(xxviii) which does not permit prepayment except upon the
payment of an amount not less than the Required Payoff Amount or, if
the Contract is a conditional sale contract or a loan, upon the payment
of the outstanding principal amount thereof together with any accrued
but unpaid interest, penalties and fees thereon;
(xxix) the assignment of such Receivable hereunder will not
cause the Concentration Factor with respect to the related Obligor to
be exceeded;
(xxx) for which the related Contract and Records are in the
custody of the Master Servicer at one of the locations set forth in
Exhibit I, except that (1) for Receivables having an Outstanding
Balance not in excess of 3% of the
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<PAGE> 22
Facility Limit, such Contract and Records shall be delivered to the
Master Servicer's custody not later than the fifth Business Day after
the date of the assignment thereof hereunder and (2) Contracts and
Records during Interim Funding may be at the location of the applicable
Originator; and
(xxxi) which is in Interim Funding; provided that the
aggregate Outstanding Balance of Receivables in Interim Funding will
not exceed $50 million and Interim Funding will not continue for any
such Receivable for a period in excess
of 12 months.
"Equipment" means each item of personal property, together with any
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a
Contract.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(n) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurodollar Rate" means, with respect to any Eurodollar Tranche Period,
a rate which is 0.75% in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate obtained
by dividing (i) the applicable LIBOR Rate by (ii) a percentage equal to 100%
minus the reserve percentage used for determining the maximum reserve
requirement as specified in Regulation D (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the Agent during such Eurodollar Tranche Period in respect of eurocurrency or
17
<PAGE> 23
eurodollar funding, lending or liabilities (or, if more than one percentage
shall be so applicable, the daily average of such percentage for those days in
such Eurodollar Tranche Period during which any such percentage shall be
applicable) plus (B) the then daily net annual assessment rate (rounded upwards,
if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for
determining the current annual assessment payable by the Agent to the Federal
Deposit Insurance Corporation in respect of eurocurrency or eurodollar funding,
lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a Eurodollar
Tranche, prior to the Termination Date, a period of up to one month requested by
the Borrower and agreed to by the Company, NationsBank, on behalf of the
Liquidity Provider, or the Agent, as the case may be, commencing on a Business
Day requested by the Borrower and agreed to by the Company, NationsBank or the
Agent, as applicable; provided, however, that if such Eurodollar Tranche Period
would expire on a day which is not a Business Day, such Eurodollar Tranche
Period shall expire on the next succeeding Business Day; provided, further, that
if such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Eurodollar Tranche Period shall expire on the next
preceding Business Day or (b) a Business Day for which there is no numerically
corresponding day in the applicable subsequent calendar month, such Eurodollar
Tranche Period shall expire on the last Business Day of such month.
"Event of Bankruptcy" means, with respect to any Person, (i) that such
Person (a) shall be unable to pay its debts generally as they become due, (b)
shall file a petition to take advantage of any insolvency statute, (c) shall
make an assignment for the benefit of its creditors, (d) shall commence a
proceeding for the appointment of a receiver, trustee, liquidator or conservator
of itself or of the whole or any substantial part of its property or (e) shall
file a petition or answer seeking liquidation, reorganization or arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute; or (ii)(a) a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee,
18
<PAGE> 24
liquidator or conservator of such Person or of the whole or any substantial part
of its properties and such order, judgment or decree continues unstayed and in
effect for a period of sixty days, or approve a petition filed against such
Person seeking liquidation, reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state, which petition is not dismissed within
sixty days, (b) under the provisions of any other law for the relief or aid of
debtors, a court of competent jurisdiction shall assume custody or control of
such Person or of the whole or any substantial part of its properties, which
control is not relinquished within sixty days, (c) there is commenced against
such Person any proceeding or petition seeking reorganization, arrangement or
similar relief under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state which proceeding or
petition remains undismissed for a period of sixty days or (d) such Person takes
any action to indicate its consent to or approval of any such proceeding or
petition.
"Excluded Amounts" means any collections on a Receivable or the related
Contract or Related Security therefor (a) attributable to any Taxes, fees or
other charges imposed by any Official Body, (b) representing reimbursements of
insurance premiums or payments for services that were not financed by the Seller
or the Originator, (c) with respect to a Receivable reassigned or substituted
for as provided for in this Agreement, (d) with respect to Equipment related to
any Contract that has been paid in full and (e) attributable to any costs
expressly incurred to third parties, such as any UCC fees, maintenance fees and
the like.
"Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.
"Facility Fee" means the fee payable by the Borrower to the Company
pursuant to Section 2.7 hereof, the terms of which are set forth in the Facility
Fee Letter.
"Facility Fee Letter" means the letter agreement dated the date hereof
between the Borrower and the Agent with respect to the Facility Fee.
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<PAGE> 25
"Facility Limit" means $375,000,000; provided that such amount may not
at any time exceed the aggregate Commitments at any time in effect; and
provided, further, that the Agent will, from time to time, at the request of the
Borrower, within three Business Days after the receipt by the Agent of a
certificate executed by the Borrower in the form attached hereto as Exhibit A,
agree to changes in the Facility Limit without the approval of the Company or
the Bank Investors so long as (i) the Agent receives notice of such change at
least 5 Business Days prior to the date of such change, (ii) any resulting
increase occurs simultaneously with an equivalent decrease, and any resulting
decrease occurs simultaneously with an equivalent increase, in the facility
limit under the Purchase Facility Agreement, and (iii) after giving effect to
any such change, the aggregate of the Facility Limit under this Agreement and
the facility limit under the Purchase Facility Agreement remains the same.
"Facility Pledge Agreement" means that certain agreement, dated as of
June 22, 1998, among the Purchase Facility Pledgors and the Borrower pursuant to
which the Purchase Facility Pledgors, on the one hand, and the Borrower, on the
other, have made reciprocal pledges of certain amounts to be released to the
Purchase Facility Pledgors or the Borrower, as applicable, pursuant to the
Purchase Facility Agreement and this Agreement, respectively.
"Facility Term" means the period commencing on the Closing Date and
ending on the Facility Termination Date.
"Facility Termination Date" means the earlier to occur of (a) the
Termination Date and (b) the Commitment Termination Date.
"Fee Letter" means the letter agreement dated the date hereof among the
Borrower, the Parent and the Company with respect to the Administrative Fee and
the Program Fee to be paid by the Borrower or the Parent hereunder, as amended,
modified or supplemented from time to time.
"Financing Facility Differential" means for any Payment Date (i) the
sum of, for such Payment Date, all Collections Available for the related
Collection Period, plus all Servicing Advances for such Payment Date, plus all
amounts received under the Hedge Agreements with respect to such Payment Date
and plus all amounts
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on deposit in the Interest Accrual Account immediately prior to such Payment
Date minus (ii) the amount required to be remitted on such Payment Date pursuant
to clauses (i) through (ix) of Section 2.5(a).
"Financing Facility Free Cash Flow" means for any Payment Date any
positive Financing Facility Differential for such Payment Date.
"Financing Facility Shortfall" means for any Payment the absolute value
of any negative Financing Facility Differential for such Payment Date.
"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
accounting profession, which are in effect as of the date of this Agreement.
"General Partner" means UCP GP SPE 1998-1 LLC, a Nevada limited
liability company, and its successors and assigns.
"Guaranty" means, with respect to any Person any agreement by which
such Person assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the
obligation of any other Person, or agrees to maintain the net worth or working
capital or other financial condition of any other Person or otherwise assures
any other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"H.15" means Statistical Release No. H.15 (519) of the Federal Reserve
Board or any successor publication.
"Hedge Counterparty" means with respect to this Agreement, each party
which has entered into a Hedging Agreement with the Borrower, the Parent or the
Seller (which Hedging Agreement has been assigned to the Agent), as to which
such party's (a) long-
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term unsecured debt obligations are rated not lower than one of the two highest
investment categories granted by S&P and Moody's and (b) short-term unsecured
debt obligations are rated at least "A-1" by S&P and "P-1" by Moody's, or such
party that has been approved in advance by the Agent.
"Hedge Payments" means for each Payment Date, any and all amounts due
and payable to the Hedge Counterparty under each Hedging Agreement from but not
including the preceding Payment Date to and including such Payment Date.
"Hedge Rate" means, for any Receivable at any time for which a Hedging
Agreement is in effect, the per annum rate at which the Hedge Payments under the
related Hedging Agreement are calculated net of a percentage amount reflecting
the average daily spread between the yield on the related Treasury security and
the rate that reflects hedge payments with respect to such security as
determined for similar hedging agreements during the preceding calendar quarter.
"Hedged Amount" has the meaning specified in Section 2.15.
"Hedging Agreement" means, each hedging agreement entered into by the
Borrower, the Parent or the Seller and a Hedge Counterparty the form of which
has been approved in writing in advance by the Agent.
"Hedging Event" means the occurrence of a Three-Month Average Net
Portfolio Yield that is less than 2.0%.
"Indebtedness" means, with respect to any Person such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business on terms customary in the trade, (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) Capitalized Lease obligations and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
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"Indemnified Amounts" has the meaning specified in Section
8.1 hereof.
"Indemnified Parties" has the meaning specified in Section
8.1 hereof.
"Interest Accrual Account" means the account, established by the Agent
for the benefit of the Company and the Bank Investors, pursuant to Section
2.12(d).
"Interest Component" shall mean, (i) with respect to any Commercial
Paper issued on an interest-bearing basis, the interest payable on such
Commercial Paper at its maturity, and (ii) with respect to any Commercial Paper
issued on a discount basis, the portion of the face amount of such Commercial
Paper representing the discount incurred in respect thereof.
"Interim Funding" means for any Receivable, with respect to which the
related Equipment is delivered in stages, a period during which Contract
Payments are based on the Equipment actually shipped or delivered, with the full
funding term of such Contract to commence pursuant to the terms thereof after
delivery of all such items of Equipment.
"Investor Report" means a report, in substantially the form attached
hereto as Exhibit E or in such other form as is mutually agreed to by the
Borrower and the Agent, furnished by the Master Servicer pursuant to Section
2.11 hereof.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Leveraged Lease Loan" means a loan by the Seller or an Originator to a
third party lessor secured by all of such lessor's right, title and interest in
a lease (originated by the Seller or such Originator and sold, together with the
related Equipment, to such third party) and in the related Equipment.
"LIBOR Rate" means, with respect to any Eurodollar Tranche Period, the
rate which appears on Telerate Page 3750 (as defined in the 1987 Interest Rate
and Currency Exchange Definitions published by the International Swap Dealers
Association, Inc.)
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(or such page as may replace Telerate Page 3750), at approximately 11:00 a.m.
(London time), two Business Days before the first day of such Eurodollar Tranche
Period in an amount approximately equal to the Eurodollar Tranche to which the
Eurodollar Rate is to apply and for a period of time approximately equal to the
applicable Eurodollar Tranche Period.
"Liquidity Provider" means the Person or Persons who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the Company
and the Liquidity Provider evidencing the obligation of the Liquidity Provider
to provide liquidity support to the Company in connection with the issuance by
the Company of Commercial Paper.
"Lock-Box Account" means, collectively, each account maintained by the
Master Servicer at the Lock-Box Bank for the purpose of receiving Collections.
"Lock-Box Bank" means NationsBank, N.A. or its designee.
"Majority Investors" shall mean, at any time, the Agent and those Bank
Investors which hold Commitments aggregating in excess of 50% of the Facility
Limit as of such date.
"Master Servicer" means at any time the Person then authorized pursuant
to Section 6.1 to service, administer and collect Receivables.
"Master Servicer Default" has the meaning specified in
Section 6.4 hereof.
"Material Adverse Effect" means any event or condition which would have
a material adverse effect on (i) the general collectibility of the Receivables,
(ii) the ability of the Borrower and the Parent to perform their collective
obligations under the Transaction Documents to which they are parties and (iii)
the interests of the Agent, the Company or the Bank Investors under the
Transaction Documents.
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"Maximum Net Investment" means $375,000,000; provided that such amount
shall increase or decrease in an amount equal to any increase or decrease in the
Facility Limit.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current year or the
immediately preceding five years contributed to by the Borrower, the Parent or
any ERISA Affiliate of the Borrower or the Parent on behalf of its employees.
"Net Asset Test" shall mean a test that is met if, as of the time of
determination, the sum of the Net Receivables Balance and the amount on deposit
in the Accounts, exceeds the aggregate Net Investment plus the amount of any
outstanding Carrying Costs.
"Net Investment" means, as of any time of determination, the sum of the
Advance Amounts made to the Borrower hereunder (other than from amounts on
deposit in the Principal Collection Account) less the aggregate amount of
Collections received and applied by the Agent prior to such date to reduce such
Net Investment; provided that the Net Investment shall be restored and
reinstated in the amount of any Collections so received and applied if at any
time the distribution of such Collections is rescinded or must otherwise be
returned for any reason; and provided, further, that the Net Investment may be
increased by the amount described in Section 9.9(g) as described therein.
"Net Portfolio Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction the numerator of which is
Available Funds for such Collection Period (not including any Purchase Facility
Release Amounts for such Collection Period) plus any amounts paid by the
Borrower or the Parent to the Agent, the Company or the Bank Investors from
amounts other than Available Funds and minus any amounts payable on the related
Payment Date pursuant to clauses (i) through (v) and (vii) through (viii) of
Section 2.5(a) and the denominator of which is the average Net Investment for
such Collection Period.
"Net Receivables Balance" means at any time the lesser of (i) the
Outstanding Balance of the Eligible Receivables at such time reduced by the
aggregate Outstanding Balance of all Eligible
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Receivables which are Defaulted Receivables and (ii) the current market value of
the Receivables, determined by the Agent in its reasonable discretion.
"Obligor" means a Person obligated to make payments for the provision
of goods and services pursuant to a Contract.
"Obligor Risk Rating" means, with respect to an Obligor, the numerical
"Obligor Rating" assigned pursuant to the Credit and Collection Policy.
"Official Body" means any government or political subdivision or any
agency, authority, 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.
"Originator" means UniCapital Funding Corporation or any
other Subsidiary of UniCapital Corporation.
"Other Conduit Participant" means any Person other than the Borrower
that has entered into a receivables purchase or pledge agreement or transfer or
pledge and administration agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at any date
of determination, an amount equal to the present value of all Contract Payments
(not including delinquent payments in respect of Delinquent Receivables) to
become due thereunder following such date (determined by discounting on a
monthly basis (assuming a calendar year consisting of twelve 30-day months), at
a rate equal to the then applicable Discount Rate for such Receivable or pool of
Receivables, each such Contract Payment from the last day of the Collection
Period during which such Contract Payment is due, to such date). The Outstanding
Balance of any Receivables in Interim Funding shall be equal to 90% of the
related original Equipment cost as set forth in the Contract Schedule, and such
balance shall not decline during Interim Funding based on Contract Payments made
thereunder. In determining the Outstanding Balance with respect to any date of
determination, the future remaining Contract Payments will be calculated after
giving effect to any payments received prior to such date of calculation to the
extent such payments relate to
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Contract Payments due and payable by the Obligors with respect to the related
Collection Period and any prior Collection Period; the Outstanding Balance of
any Defaulted Receivable and any Receivable that has been subject to a Deemed
Collection will be equal to zero.
"Parent" means UniCapital Corporation, a Delaware corporation, and its
successors and assigns.
"Parent Guaranty" means the guaranty agreement, dated as of the date
hereof, made by Parent in favor of the Company and the Bank Investors,
substantially in the form of Exhibit N hereto, as amended, supplemented or
otherwise modified from time to time.
"Payment Date" means the 20th day of each month, or if such day is not
a Business Day the next succeeding Business Day, or such earlier date of the
related month as may be agreed upon by the Agent and the Borrower, commencing in
the month following the initial Advance under this Agreement.
"Person" means any corporation, limited liability company, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Pledged Interest" means, at any time of determination, all right,
title and interest created hereunder in each and every then outstanding
Receivable, and all Related Security with respect to each such Receivable.
"Prepayment Shortfall" has the meaning specified in Section 2.9.
"Principal Collection Account" means the account established by the
Agent, for the benefit of the Company and the Bank Investors pursuant to Section
2.12(c).
"Principal Deemed Amount" means, for any Payment Date, the excess of
the Outstanding Balance of the Receivables at the end of the second preceding
Collection Period (or for any Receivable for which the Cut-off Date therefor
occurred since the end of such Collection Period, the Outstanding Balance of
each such Receivable as of its Cut-off Date) over the Outstanding Balance
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of the Receivables at the end of the preceding Collection Period; provided,
that, the Principal Deemed Amount will not be calculated for any Receivables as
to which a Take-Out occurred during such preceding Collection Period.
"Pro Rata Share" means, for a Bank Investor, the Commitment of such
Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1)
of the UCC.
"Program Fee" means the fee payable to the Company pursuant to Section
2.7 hereof, the terms of which are set forth in the Fee Letter.
"PRR Payment" means, in the case of an Obligor designated on the
Contract Schedule as an Obligor for "PRR-type leases", each of the first 6
monthly payments relating to any 12 month extension of the term of the related
Contract.
"Purchase Facility Agreement" means that certain Transfer and
Administration Agreement, dated as of June 22, 1998, among the Purchase Facility
Pledgors, the Agent, the Company, the Bank Investors and the Master Servicer.
"Purchase Facility Pledgors" means UCP Qualifying SPE 1998-1 Limited
Partnership, a Nevada limited partnership, and UCP Operating Lease SPE 1998-1
Limited Partnership, a Nevada limited partnership, and their respective
successors and assigns.
"Purchase Facility Release Amounts" means, for any Payment Date, all
cash amounts released since the preceding Payment Date to and including such
Payment Date to the Purchase Facility Pledgors pursuant to the Finance Facility
Agreement and pledged to the Borrower pursuant to the Facility Pledge Agreement.
"Purchased Interest" means the interest in the Receivables acquired by
the Liquidity Provider through purchase pursuant to the terms of the Liquidity
Provider Agreement.
"Receivable" means Contracts sold to the Borrower under the
Receivables Purchase Agreement, whether constituting an account,
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chattel paper, instrument, investment property or general intangible or arising
in connection with the sale or lease of Equipment, including all Contract
Payments and other payment obligations (but other than Excluded Amounts) owed
thereunder on or after the related Cut-off Date by the related Obligor,
including the right to payment of any finance charges and other obligations of
such Obligor with respect thereto. Notwithstanding the foregoing, once a
Receivable has been deemed collected pursuant to Section 2.9 hereof, it shall no
longer constitute a Receivable hereunder.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of July 1, 1998, among the Seller, as seller, the Borrower,
as purchaser, and the Parent.
"Records" means all Contracts and other documents, books, records and
other information (including, without limitation, computer programs, tapes,
discs, punch cards, data processing software and related property and rights)
maintained with respect to Receivables and the related Obligors.
"Reinvestment Termination Date" means the second Business Day after the
delivery by the Company to the Borrower of written notice that the Company
elects to commence the amortization of its interest in the Net Investment or
otherwise liquidate its interest in the Advances.
"Related Commercial Paper" shall mean Commercial Paper issued by the
Company the proceeds of which were used to acquire, or refinance the acquisition
of, an interest in Receivables.
"Related Security" means with respect to any Receivable, all of the
Borrower's right, title and interest in and to:
(a) any collateral securing the Obligor's obligations under
such Contract (excluding security deposits) or any Guaranty thereof;
(b) all cash realizations on the related Equipment (including
returned and repossessed Equipment) and all loss and casualty insurance
maintained with respect to such Equipment, in each case to the extent
constituting recoveries on a Defaulted Receivable or otherwise
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representing the amount necessary to pay in full all unpaid Contract
Payments and other amounts due on the related Receivable in the event
that it is a Defaulted Receivable;
(c) all Guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting,
securing or insuring any Equipment, to the extent of the cash
realizations set forth in clause (b) above;
(d) all Records related to such Contract; and
(e) all Proceeds of the foregoing;
excluding, however, in each case any Excluded Amounts.
"Required Payoff Amount" means with respect to any Collection Period
for any Receivable, the sum of (i) the Contract Payment due in any Collection
Period, together with any past due Contract Payments, (ii) the Outstanding
Balance of such Receivable as of the last day of such Collection Period (after
taking into account the Contract Payment due on such Collection Period and, if
the applicable Receivable is a Defaulted Receivable, assuming for the purpose of
determining the Outstanding Balance thereof pursuant to this clause (ii) that
such Receivable is not a Defaulted Receivable) plus (iii) any breakage cost
associated with the applicable Hedging Agreement.
"Reserve Account" means the account, established by the Agent, for the
benefit of the Company and the Bank Investors, pursuant to Section 2.12(b).
"Reserve Account Event" means a period commencing on any Payment Date
for which the Three-Month Average Net Portfolio Yield for the related Collection
Period was below 1.75% and ending at the end of any Collection Period for which
the Three-Month Average Net Portfolio Yield is greater than 1.75%.
"Revolving Credit Facility Agreement" means that certain credit
agreement, dated June 10, 1998, among the Parent, NationsBank and certain
lenders a party thereto from time to time.
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"Revolving Credit Facility Default" means the occurrence of an Event of
Default, as defined in the Revolving Credit Facility Agreement.
"Section 8.2 Costs" has the meaning specified in Section 8.2(d) hereof.
"Seller" means UniCapital Funding Corporation and its successors and
assigns.
"Servicer Advance" has the meaning specified in Section 6.2(l) hereof.
"Servicing Fee" means the fees payable to the Master Servicer on each
Payment Date in an amount equal to 0.50% per annum on the amount of the
Outstanding Balance of all Receivables as of the beginning of the related
Collection Period.
"Specified Reserve Account Requirement" means zero, or upon the
occurrence and during the continuance of a Reserve Account Event, the greater of
(x) 2.00% of the then outstanding Net Investment and (y) $1,000,000.
"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Substitute Receivable" has the meaning specified in Section 2.16.
"Take-Out" means a prepayment of principal on the VFN on any Payment
Date pursuant to Section 2.5(d) that reduces the Net Investment to an amount
equal to or less than the greater of (x) $20,000,000 or (y) 20% of the Net
Investment outstanding immediately prior to such Payment Date.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
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"Termination Date" means the earliest of (i) the Business Day
designated by the Borrower to the Agent as the Termination Date at any time
following 60 days' written notice to the Agent, (ii) the day upon which the
Termination Date is declared or automatically occurs pursuant to Section 7.2(a)
hereof, (iii) two Business Days prior to the Commitment Termination Date (unless
such date has been extended) or (iv) the Reinvestment Termination Date.
"Termination Event" means an event described in Section 7.1 hereof.
"Three-Month Average Net Portfolio Yield" means as of any date of
determination, commencing in the fourth month following the month of the initial
Advance, the weighted average of the Net Portfolio Yields for the three most
recently ended Collection Periods (or for any date of determination in the
fourth month following the month of the initial Advance, the Net Portfolio Yield
for the immediately preceding Collection Period, and for any such date in the
fifth such month, the weighted average of the Net Portfolio Yields for the two
most recently ended Collection Periods), in the case of each such weighted
average calculation, weighted for each Collection Period by the average Net
Investment for such Collection Period.
"Tranche" means a portion of the Net Investment allocated to a Tranche
Period pursuant to Section 2.3 hereof.
"Tranche Period" means a CP Tranche Period, a BR Tranche Period or a
Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate or the Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section 8.4(a) hereof.
"Transaction Risk Rating" means, with respect to a Receivable, the
numerical "Transaction Rating" assigned pursuant to the Credit and Collection
Policy.
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"Transaction Documents" means, collectively, this Agreement, the
Receivables Purchase Agreement, the Facility Fee Letter, the Fee Letter, the VFN
and all of the other instruments, documents and other agreements executed and
delivered by the Seller or the Borrower in connection with any of the foregoing,
in each case, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"UCC" means, with respect to any state, the Uniform Commercial Code as
from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"VFN" has the meaning specified in Section 2.1 hereof.
"Weighted Average Advance Percentage" means, as of any date of
determination, the average of the Advance Percentages for the Receivables
weighted for each Receivable by the Outstanding Balance of such Receivable.
SECTION 1.2. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including", the words
"to" and "until" each means "to but excluding", and the word "within" means
"from and excluding a specified date and to and including a later specified
date".
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ARTICLE II
PLEDGES AND SETTLEMENTS
SECTION 2.1. Facility. Subject to the terms and conditions hereof, the
Company agrees to make loans ("Advances") to the Borrower from time to time as
permitted by this Agreement during the Facility Term in an aggregate amount
outstanding at any time not to exceed the Facility Limit; provided, however,
that in no event shall the Company make any Advance if, after giving effect to
such Advance, either (a) the Net Investment plus accrued interest thereon would
exceed the Facility Limit or (b) a Borrowing Base Deficiency would exist.
The Advances shall be evidenced by a variable funding note of the
Borrower, substantially in the form of Exhibit M attached hereto (as amended,
supplemented or otherwise modified from time to time, the "VFN"), payable to the
order of the Agent. The Agent shall record the date and amount of each Advance
made and the date and amount of each payment of principal thereof, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. The VFN shall (a) be dated the Closing Date (b) be
stated to mature on the Commitment Termination Date and (c) provide for the
payment of principal and interest in accordance with Sections 2.5 and 2.6
hereof.
SECTION 2.2. Availability of Borrowings. (a) During the Facility Term,
the Borrower may request Advances on any Business Day by delivering to the
Administrative Agent irrevocable notice of each borrowing via facsimile in the
form of Exhibit B attached hereto (a "Borrowing Request") (i) if the proposed
Advance is greater than $150,000,000, no later than 4:00 p.m. (New York City
time) on the fifth Business Day prior to the proposed Borrowing Date , (ii) if
the proposed Advance is greater than $45,000,000 but less than or equal to
$150,000,000, no later than 4:00 p.m. (New York City time) on the third Business
Day prior to the proposed Borrowing Date, (iii) if the proposed Advance is
greater than $20,000,000 but less than or equal to $45,000,000, no later than
4:00 p.m. (New York City time) on the second Business Day prior to the proposed
Borrowing Date (iv) if the proposed Advance is greater than $5,000,000 but less
than or equal to $20,000,000, no later than 11:00 a.m. (New York City time) on
the Business Day prior to the proposed Borrowing Date and (v) if the proposed
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Advance is less than or equal to $5,000,000, no later than 4:00 p.m. (New York
City time) on the Business Day prior to the proposed Borrowing Date. The
Borrowing Request shall specify (i) the proposed Borrowing Date for such
Advance; (ii) whether such request is made to the Company or the Bank Investors;
(iii) the desired Advance Amount (which shall be at least $1,000,000; and (iv)
the desired Tranche Period related thereto pursuant to Section 2.3 hereof. Each
Borrowing Request shall be irrevocable and binding on the Borrower and the
Borrower shall indemnify the Company and each Bank Investor against any loss or
expense incurred by the Company, any Bank Investor, the Agent or the
Administrative Agent, either directly or indirectly (including in the case of
the Company) through the Liquidity Provider Agreement, as a result of any
failure by the Borrower to complete such borrowing, including, without
limitation, any loss or expense incurred by the Company or any Bank Investor,
either directly or indirectly (including in the case of the Company, pursuant to
the Liquidity Provider Agreement), by reason of the liquidation or reemployment
of funds acquired by the Company, any Bank Investor or the Liquidity Provider
(including, without limitation, funds obtained by issuing commercial paper or
promissory notes or obtaining deposits as loans from third parties) for the
Company, any Bank Investor or the Liquidity Provider to fund such borrowing.
With respect to any failure of either of the Borrower for which the Company or
the Bank Investors are indemnified pursuant to the preceding sentence, the
applicable Bank Investor or the Company, as the case may be, incurring any
indemnified costs as a result of such failure, shall take such steps as may be
reasonable for avoiding or mitigating (consistent with the internal policies and
governance and legal and regulatory restrictions of the Bank Investors or the
Company, as applicable, and without requiring the incurring of any additional
costs by, or otherwise being disadvantageous to, such party) additional costs as
a result of such failure. The Administrative Agent will promptly notify the
Company and each of the Bank Investors, as the case may be, of the Agent's
receipt of any request for an Advance.
(b) By no later than 11:00 a.m. (New York City time) on any
Borrowing Date, the Company or each Bank Investor, as the case may be, shall
remit its share (which, in the case of an Advance by the Bank Investors, shall
be equal to such Bank Investor's Pro Rata Share) of the aggregate Advance Amount
to the
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account of the Agent specified therefor from time to time by the Agent by notice
to such Persons. The obligation of each Bank Investor to remit its Pro Rata
Share of any such Advance Amount shall be several from that of each other Bank
Investor, and the failure of any Bank Investor to so make such amount available
to the Agent shall not relieve any other Bank Investor of its obligation
hereunder. Following each Advance and the Agent's receipt of funds from the
Company or the Bank Investors as aforesaid, the Agent shall remit the Advance
Amount to the Borrower's account at the location indicated in Section 10.3
hereof, in immediately available funds. Unless the Agent shall have received
notice from the Company or any Bank Investor, as applicable, that such Person
will not make its share of any Advance Amount available on the applicable
Borrowing Date therefor, the Agent may (but shall have no obligation to) make
the Company's or any such Bank Investor's share of any such Advance Amount
available to the Borrower in anticipation of the receipt by the Agent of such
amount from the Company or such Bank Investor. To the extent the Company or any
such Bank Investor fails to remit any such amount to the Agent after any such
advance by the Agent on such Borrowing Date, the Company and the Bank Investors
shall be required to pay such amount, together with interest thereon at a per
annum rate equal to the Federal funds rate (as determined in accordance with
clause (ii) of the definition of "Base Rate") to the Agent upon its demand
therefor (provided that the Company shall have no obligation to pay such
interest amounts except to the extent that it shall have sufficient funds to pay
the face amount of its Commercial Paper in full). Until such amount shall be
repaid by the defaulting Company or Bank Investor, as applicable, such amount
shall be deemed to be Net Investment paid by the Agent and the Agent shall be
deemed to be the owner of a Pledged Interest hereunder. Upon the payment of such
amount to the Agent by the Company or the Bank Investors, such payment shall
constitute such Person's payment of its share of the applicable Advance Amount.
(c) Purchase Facility Release Amounts. As additional security
for the payment of all amounts due under this Agreement, the Borrower pledges
and assigns all of its right, title and interest in the Facility Pledge
Agreement, including all Purchase Facility Free Cash Flow to the Agent, which
pledge and assignment the Agent hereby accepts on behalf of the Company and the
Bank Investors, as applicable. Accordingly, Purchase Facility Free
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Cash Flow shall be available on each Payment Date as part of Available Funds for
such Payment Date. As additional security for the payment of all Aggregate
Unpaids, the Borrower pledges and assigns all of its right, title and interest
in the Receivables Purchase Agreement and the parties hereto acknowledge that
the Agent, on behalf of the Company and the Bank Investors, as applicable, may
enforce such right, title and interest directly as if it were party thereto.
(d) Limitations on Equipment. With respect to the interests in
Equipment that are pledged hereunder, such interests are limited to those that
constitute Related Security for the related Receivable. Therefore, upon the
payment in full of any Receivable, the Agent, the Company and the Bank Investors
shall have no further interest hereunder in the related Equipment, and all such
Equipment shall be held by the Borrower or its assignee free and clear of any
lien or other claim created or imposed pursuant to this Agreement.
SECTION 2.3. Selection of Tranche Periods and Tranche
Rates.
(a) Prior to the Termination Date; Pledged Interest held on
behalf of the Company. At all times hereafter, but prior to the
Termination Date and not with respect to any portion of the Pledged
Interest held on behalf of the Bank Investors (or any of them), the
Borrower may, subject to the Company's approval and the limitations
described below, request Tranche Periods and allocate a portion of the
Net Investment to each selected Tranche Period, so that the aggregate
amounts allocated to outstanding Tranche Periods at all times shall
equal the Net Investment held on behalf of the Company. The Borrower
shall give the Company irrevocable notice by telephone of the new
requested Tranche Period(s) at least three Business Days prior to the
expiration of any then existing Tranche Period; provided, however, that
in the event of a Tranche Period with respect to a Borrowing Date, such
notice period shall not exceed the notice period pursuant to Section
2.2 that applies to the related Advance; provided, further, that the
Company may select, in its sole discretion, any such new Tranche Period
if (i) the Borrower fails to provide such notice on a timely basis or
(ii) the Company determines, in its sole
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discretion, that the Tranche Period requested by the Borrower is
unavailable or for any reason commercially undesirable. The Company
confirms that it is its intention to allocate all or substantially all
of the Net Investment held on behalf of it to one or more CP Tranche
Periods; provided that the Company may determine, from time to time, in
its sole discretion, that funding such Net Investment by means of one
or more CP Tranche Periods is not possible or is not desirable for any
reason. If the Liquidity Provider acquires from the Company a Purchased
Interest with respect to the Receivables pursuant to the terms of the
Liquidity Provider Agreement, NationsBank, on behalf of the Liquidity
Provider, may exercise the right of selection granted to the Company
hereby. The initial Tranche Period applicable to any such Purchased
Interest shall be a period of not greater than 7 days and such Tranche
shall be a BR Tranche. Thereafter, provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall be
the BR Rate or the Eurodollar Rate, as determined by the Borrower. In
the case of any Tranche Period outstanding upon the Termination Date,
such Tranche Period shall end on such date.
(b) After the Termination Date; Pledged Interest Held on
behalf of the Company. At all times on and after the Termination Date,
with respect to any portion of the Pledged Interest which shall be held
by the Agent on behalf of the Company, the Company or NationsBank, as
applicable, shall select all Tranche Periods and Tranche Rates
applicable thereto.
(c) Prior to the Termination Date; Pledged Interest Held on
Behalf of Bank Investors. At all times with respect to any portion of
the Pledged Interest held by the Agent on behalf of the Bank Investors,
but prior to the Termination Date, the initial Tranche Period
applicable to such portion of the Net Investment allocable thereto
shall be a period of not greater than 3 days and such Tranche shall be
a BR Tranche. Thereafter, with respect to such portion, and with
respect to any other portion of the Pledged Interest held on behalf of
the Bank Investors (or any of them), provided that the Termination Date
shall not have occurred, the Tranche Period applicable thereto shall
be, at the Borrower's
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option, either a BR Tranche or a Eurodollar Tranche. The Borrower shall
give the Agent irrevocable notice by telephone of the new requested
Tranche Period at least three (3) Business Days prior to the expiration
of any then existing Tranche Period. In the case of any Tranche Period
outstanding upon the occurrence of the Termination Date, such Tranche
Period shall end on the date of such occurrence.
(d) After the Termination Date; Pledged Interest Held on
behalf of Bank Investors. At all times on and after the Termination
Date, with respect to any portion of the Pledged Interest held by the
Agent on behalf of the Bank Investors, the Agent shall select all
Tranche Periods and Tranche Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent
is unable to obtain on a timely basis the information necessary to
determine the LIBOR Rate for any proposed Eurodollar Tranche, then
(A) the Agent shall forthwith notify the Company or Bank
Investors, as applicable, and the Borrower that the Eurodollar
Rate cannot be determined for such Eurodollar Tranche, and
(B) while such circumstances exist, neither the Company, the
Bank Investors nor the Agent shall allocate the Net Investment
of any additional Pledged Interests pledged and assigned
during such period or reallocate the Net Investment allocated
to any then existing Tranche ending during such period, to a
Eurodollar Tranche.
(ii) If, with respect to any outstanding Eurodollar Tranche,
the Company or any of the Bank Investors on behalf of which the Agent
holds any Pledged Interest herein notifies the Agent that it is unable
to obtain matching deposits in the London interbank market to fund its
purchase or maintenance of such Pledged Interest or that the Eurodollar
Rate applicable to such Pledged Interest will not adequately reflect
the cost to the Person of funding or maintaining its respective Pledged
Interest for such Tranche
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Period then the Agent shall forthwith so notify the Borrower, whereupon
neither the Agent nor the Company or the Bank Investors, as applicable,
shall, while such circumstances exist, allocate any Net Investment of
any additional Pledged Interest pledged and assigned during such period
or reallocate the Net Interest allocated to any Tranche Period ending
during such period, to a Eurodollar Tranche.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall
notify the Agent that such Person has determined (or has been notified
by any Liquidity Provider) that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful
(either for the Company, such Bank Investor, or such Liquidity
Provider, as applicable), or any central bank or other governmental
authority asserts that it is unlawful, for the Company, such Bank
Investor or such Liquidity Provider, as applicable, to fund Advances or
the maintenance of Pledged Interests at the Eurodollar Rate, then (x)
as of the effective date of such notice from such Person to the Agent,
the obligation or ability of the Company or such Bank Investor, as
applicable, to fund Advances or the maintenance of Pledged Interests at
the Eurodollar Rate shall be suspended until such Person notifies the
Agent that the circumstances causing such suspension no longer exist
and (y) the Net Investment of each Eurodollar Tranche in which such
Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Pledged Interest at the Eurodollar Rate until
the last day of the applicable Tranche Period, be reallocated on the
last day of such Tranche Period to another Tranche Period in respect of
which the Net Investment allocated thereto accrues Discount at a
Tranche Rate other than the Eurodollar Rate or (2) if such Person shall
determine that it may not lawfully continue to maintain such Pledged
Interest at the Eurodollar Rate until the end of the applicable Tranche
Period, such Person's share of the Net Investment allocated to such
Eurodollar Tranche shall be deemed to accrue Discount at the Base Rate
from the effective date of such notice until the end of such Tranche
Period.
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SECTION 2.4. Discount, Fees and Other Costs and Expenses. The Borrower
shall pay, as and when due in accordance with this Agreement, all Carrying
Costs, and the Servicing Fees. On the last day of each Tranche Period, the
Borrower shall pay to the Agent, on behalf of the Company or the Bank Investors,
as applicable, an amount equal to the accrued and unpaid Discount for such
Tranche Period together with, in the event the Pledged Interest is held on
behalf of the Company, an amount equal to the discount accrued on the Company's
Commercial Paper to the extent such Commercial Paper was issued in order to fund
the Pledged Interest in an amount in excess of the Advance Amount. The Borrower
shall pay to the Agent, on behalf of the Company, on each day on which Related
Commercial Paper is issued by the Company, the Dealer Fee. Discount shall accrue
with respect to each Tranche on each day occurring during the Tranche Period
related thereto.
SECTION 2.5. Settlement and Reinvestment Procedures. (a) On each
Payment Date, so long as no Termination Event has occurred, all the Available
Funds for such Payment Date will be allocated by the Master Servicer in the
following order of priority:
(i) first, to each Hedge Counterparty, on a pro rata
basis, any Hedge Payments then due;
(ii) second, to the Master Servicer, any
unreimbursed Servicer Advances;
(iii) third, to the Master Servicer, the accrued and unpaid
Servicing Fees, if the Master Servicer is not an Affiliate of
the Parent;
(iv) fourth, to the Agent, for the benefit of the Company
and the Bank Investors, as applicable, the sum of the
following, in each case, to the extent not previously paid and
without duplication: accrued and unpaid Dealer Fees on
Commercial Paper; the Program Fee, Facility Fee and
Administrative Fee; any accrued Discount (whether or not
payable on such Payment Date) and any Discount payable on or
prior to such Payment Date to the extent not previously paid;
any amounts due to the Credit Support Provider under the
Credit Support
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Agreement or the Liquidity Provider under the Liquidity
Provider Agreement, in each case to the extent payable
pursuant to the terms of this Agreement by the Borrower and
not otherwise payable from any of the above-referenced fees;
and Section 8.2 Costs (all of these, the "Carrying Costs");
provided that, any amount allocated pursuant to this clause
(iv) on account of accrued and unpaid Discount that is not yet
payable shall be deposited into the Interest Accrual Account;
(v) fifth, to the Agent, for the benefit of the
Company and the Bank Investors, an amount equal to the
Principal Deemed Amount for such Payment Date plus any unpaid
shortfall in the amount applied pursuant to this clause (v) to
pay the Principal Deemed Amount from prior Payment Dates, for
deposit to the Principal Collection Account, such amount to be
so deposited until the Borrowing Base is equal to the Net
Investment;
(vi) sixth, if a Reserve Account Event has occurred
and is continuing with respect to such Payment Date, to the
Reserve Account the amount, if any, necessary to cause the
balance on deposit therein to equal the Specified Reserve
Account Requirement;
(vii) seventh, to the extent that after giving effect
to clauses (v) and (vi) above, a Borrowing Base Deficiency
exists, to the Agent, for the benefit of the Company and the
Bank Investors, the amount necessary to cause the Net
Investment to equal the Borrowing Base, such amount to be
deposited into the Principal Collection Account;
(viii) eighth, to the Master Servicer, the accrued
and unpaid Servicing Fee, if the Master Servicer is an
Affiliate of the Parent;
(ix) ninth, to the Master Servicer, any amounts
collected during the related Collection Period in respect of
late fees, insufficient funds charges, extension fees and
other like amounts;
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(x) tenth, to the Purchase Facility Pledgors all
amounts required to be remitted thereto pursuant to the
Facility Pledge Agreement; and
(ix) eleventh, the balance, if any, to the Borrower.
To the extent Available Funds, are for any reason insufficient to pay
amounts due under clauses (i) through (vii) above, on any date due, the Borrower
shall pay such deficiency on such date and any remaining unpaid amounts shall
constitute Aggregate Unpaids hereunder.
(b) On the last day of each Tranche Period, first, from
amounts on deposit in the Interest Accrual Account and, second, from the
Collections on deposit in the Collection Account, the Master Servicer shall
deposit to the Agent's account, for the benefit of the Company or the Bank
Investors, as applicable, an amount equal to the accrued and unpaid Discount for
such Tranche Period. To the extent funds on deposit in the Collection Account
are insufficient to pay amounts due pursuant to the preceding sentence, the
Borrower shall pay such deficiency on such date and any remaining unpaid amounts
shall constitute Aggregate Unpaids hereunder. The Agent, upon its receipt of
such amounts in the Agent's account, shall distribute such amounts to the
Company and/or the Bank Investors entitled thereto as set forth above; provided
that if the Agent shall have insufficient funds to pay all of the above amounts
in full on any such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to payment
thereof. In addition, on any Business Day, the Master Servicer shall remit to
the applicable Hedge Counterparty, any Hedge Payments then due.
(c) Amounts on deposit in the Principal Collection Account
will be applied by the Agent to repay the principal component (and not the
Discount related thereto) of the Commercial Paper or other investments being
used to fund the Net Investment as and when the same mature; provided that so
long as the Termination Date has not occurred, the Agent may use amounts on
deposit in the Principal Collection Account to fund Advances pursuant to Section
2.2 to the extent sufficient to prevent the occurrence of a Borrowing Base
Deficiency (so long as the
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Borrower consents to the use thereof to fund Advances or such use shall not
cause a Borrowing Base Deficiency).
(d) The Borrower shall have the right on any Payment Date,
upon written notice to the Administrative Agent not later than the related
Determination Date, to deposit into the Principal Collection Account, as
prepayments of principal on the VFN, amounts to be applied to reduce the Net
Investment. The entire principal balance of the VFN shall be due and payable on
the Facility Termination Date together with all accrued and unpaid Discount
thereon.
SECTION 2.6. Liquidation Settlement Procedures. On the last day of each
Tranche Period to occur on or after the Termination Date, the Master Servicer
shall deposit to the Agent's account to the extent not already so deposited, for
the benefit of the Company or the Bank Investors, as applicable, from amounts on
deposit in the Collection Account, the sum of (i) the accrued Discount for such
Tranche Period, (ii) the portion of the Net Investment allocated to such Tranche
Period, and (iii) all other Aggregate Unpaids. To the extent funds on deposit in
the Collection Account are insufficient to pay amounts due pursuant to the
preceding sentence, the Borrower shall pay such deficiency on such date and any
remaining unpaid amounts shall constitute Aggregate Unpaids hereunder. On such
day, the Master Servicer shall deposit to its account, from amounts on deposit
in the Collection Account which remain after payment in full of the
aforementioned amounts, the accrued Servicing Fee for such Tranche Period. If
there shall be insufficient funds on deposit for the Master Servicer to
distribute funds in payment in full of the aforementioned amounts, the Master
Servicer shall distribute funds first, in payment of the accrued Discount,
second, if the Parent or any Affiliate of the Parent is not then the Master
Servicer, to the Master Servicer's account, in payment of the Servicing Fee
payable to the Master Servicer, third, in reduction of the Net Investment
allocated to any Tranche Period ending on such date, fourth, in payment of all
fees payable by the Borrower hereunder, fifth, in payment of all other Aggregate
Unpaids and sixth, if the Parent or any Affiliate of the Parent is the Master
Servicer, to its account as Master Servicer, in payment of the Servicing Fee
payable to such Person as Master Servicer. The Agent, upon its receipt of such
amounts in the Agent's account, shall distribute such amounts to the Company
and/or the Bank
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Investors entitled thereto as set forth above; provided that if the Agent shall
have insufficient funds to pay all of the above amounts in full on any such
date, the Agent shall pay such amounts in the order of priority set forth above
and, with respect to any such category above for which the Agent shall have
insufficient funds to pay all amounts owing on such date, ratably (based on the
amounts in such categories owing to such Persons) among all such Persons
entitled to payment thereof.
Following the date on which the Net Investment has been reduced to
zero, all accrued Discount and Servicing Fees have been paid in full and all
other Aggregate Unpaids have been paid in full, (i) the Agent, on behalf of the
Company and the Bank Investors, shall be deemed to have automatically
re-assigned to the Borrower all of the Agent's right, title and interest in and
to the Affected Assets (including the Pledged Interest), (ii) the Master
Servicer shall pay to the Borrower any remaining amounts on deposit in the
Collection Account and (iii) the Agent, on behalf of the Company and the Bank
Investors, shall execute and deliver to the Borrower, at the Borrower's expense,
such documents or instruments as are necessary to terminate the Agent's
interests in the Affected Assets. Any such documents shall be prepared by or on
behalf of the Borrower.
SECTION 2.7. Fees. Notwithstanding any limitation on recourse contained
in this Agreement pursuant to the Fee Letter or the Facility Fee Letter, the
Borrower shall pay, on each Payment Date, the following non-refundable fees: to
the Company, the Program Fee, and to the Agent, the Administrative Fee and the
Facility Fee.
SECTION 2.8. Protection of the Interest of the Company and the Bank
Investors. (a) The Borrower hereby assigns and pledges to the Agent for its
benefit and the ratable benefit of the Company and the Bank Investors, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Company and the Bank Investors a security interest in, all of the Borrower's
right, title and interest in and to the following (collectively, the
"Collateral"):
1. all Receivables and all Related Security related
thereto; and
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2. all proceeds of any and all of the foregoing and,
to the extent not otherwise included, all payments under insurance (whether or
not the Agent is the loss payee thereof), or any indemnity, warranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral. The security interests and liens granted pursuant to this Section
2.8 hereof by the Borrower shall secure the payment of all Aggregate Unpaids.
(b) The Borrower agrees that it will, and will cause the
Seller to, from time to time, at its expense, promptly execute and deliver all
instruments and documents and take all actions as may be necessary or as the
Agent may reasonably request in order to perfect or protect the Pledged Interest
or to enable the Agent, the Company or the Bank Investors to exercise or enforce
any of their respective rights hereunder. Without limiting the foregoing, the
Borrower will, and will cause the Seller to, upon the request of the Agent, the
Company or any of the Bank Investors, in order to accurately reflect this
transaction, execute and file such financing or continuation statements or
amendments thereto or assignments thereof (as permitted pursuant to Section 10.6
hereof) as may be requested by the Agent, the Company or any of the Bank
Investors. The Borrower shall, and will cause the Seller to, upon the reasonable
request of the Agent, the Company or any of the Bank Investors obtain such
additional search reports as the Agent, the Company or any of the Bank Investors
shall request. To the fullest extent permitted by applicable law, the Agent
shall be permitted to sign and file continuation statements. Carbon,
photographic or other reproduction of this Agreement or any financing statement
shall be sufficient as a financing statement. The Borrower shall not, and shall
not permit the Seller to, change its respective name, identity or corporate
structure (within the meaning of Section 9-402(7) of the UCC) nor relocate its
respective chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least thirty (30) days prior notice thereof
and (ii) prepared at the Borrower's expense and delivered to the Agent all
financing statements, instruments and other documents necessary to preserve and
protect the Pledged Interest or reasonably requested by the Agent in connection
with such change or relocation. Any filings under the UCC or otherwise that are
occasioned by such change in name or location shall be made at the expense of
the Borrower.
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Upon the later of the payment in full in cash of the Aggregate Unpaids and the
Facility Termination Date, the Pledged Interest shall terminate and all rights
to such Collateral shall revert to
the Borrower.
(c) The Master Servicer shall instruct all Obligors to cause all
Collections to be deposited directly with a Lock-Box Bank. If the Borrower, the
Seller or the Master Servicer receives any Collections, the Borrower, the Seller
or the Master Servicer, as applicable, shall immediately, but in any event
within two Business Days of receipt, remit (and shall cause the Seller to remit)
such Collections to the Collection Account.
SECTION 2.9. Prepayment Shortfalls; Application of Payments. (a) If on
any day during any Collection Period any of the representations or warranties in
Article III is or has become untrue with respect to a Receivable (whether on or
after the date of any pledge of an interest therein to the Agent, the Company or
the Bank Investors as contemplated hereunder), then any party hereto discovering
the same shall so inform the other parties hereto (provided that notice thereof
shall be given to the Agent on behalf of the Company and the Bank Investors),
and unless the breach of such representation or warranty shall have been cured
on or prior to the related Payment Date, the Borrower shall on or prior to the
related Payment Date pay to the Master Servicer an amount equal to the Required
Payoff Amount with respect to such Receivable and such amount shall be allocated
and applied by the Master Servicer as a Collection allocable to the Net
Investment in accordance with Section 2.5 or 2.6 hereof, as applicable; provided
that in lieu of such payment, to the extent permitted pursuant to Section 2.16,
the Borrower may substitute a Substitute Receivable for any such Receivable.
In addition, to the extent any Contract that is a conditional sales
contract or other loan is prepaid by the related Obligor pursuant to its terms,
the amount, if any, by which the amount of such prepayment is less than the
Required Payoff Amount for such Receivable (any such amount, a "Prepayment
Shortfall"), shall be paid by the Borrower to the Agent from its own account.
Any amounts received in respect of any Prepayment Shortfall shall be applied as
a Collection in the manner set forth in the preceding paragraph.
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SECTION 2.10. Payments and Computations, Etc. All amounts to be paid or
deposited by the Borrower or the Master Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (New York
City time) on the day when due in immediately available funds; if such amounts
are payable to the Agent (whether on behalf of the Company or any Bank Investor
or otherwise) they shall be paid or deposited in the account indicated in
Section 10.3 hereof, until otherwise notified by the Agent. The Borrower shall,
to the extent permitted by law, pay to the Agent, for the benefit of the Company
and the Bank Investors upon demand, interest on all amounts not paid or
deposited when due hereunder at a rate equal to 2% per annum plus the Base Rate.
All computations of Discount, interest and all per annum fees hereunder shall be
made on the basis of a year of 360 days for the actual number of days (including
the first but excluding the last day) elapsed. Any computations by the Agent of
amounts payable by the Borrower hereunder shall be binding upon the Borrower
absent manifest error.
SECTION 2.11. Reports. (a) Prior to the fifteenth day of each month
(or, if such fifteenth day is not a Business Day), the immediately preceding
Business Day), the Master Servicer shall prepare and forward to the Agent and
the Administrative Agent (i) an Investor Report as of the end of the last day of
the immediately preceding month and (ii) such other information as the Agent or
the Administrative Agent may reasonably request.
SECTION 2.12. Accounts. (a) Collection Account. There shall be
established on the day of the initial Advance hereunder and maintained with the
Agent, a segregated account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Agent, on behalf of the Company and the Bank Investors. Funds on deposit in
the Collection Account shall be invested by the Agent in Eligible Investments
that will mature so that such funds in the necessary amount will be available
prior to the last day of each successive Tranche Period or Payment Date
following such investment. On the last day of each Tranche Period, all interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be retained in the Collection Account and be available
to make any payments required to be made hereunder (including Discount) by the
Borrower. On
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the date on which the Net Investment is zero, all accrued Discount and Servicing
Fees have been paid in full and all other Aggregate Unpaids have been paid in
full, any funds remaining on deposit in the Collection Account shall be paid to
the Borrower.
(b) Reserve Account. There shall be established on the day of the
initial Advance hereunder and maintained with the Agent, a segregated account
(the "Reserve Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Agent, on behalf of the
Company and the Bank Investors. Funds on deposit in the Reserve Account shall be
invested by the Agent in Eligible Investments that will mature so that such
funds will be available prior to the last day of each successive Tranche Period
or Payment Date following such investment. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Reserve Account shall
be retained in the Reserve Account and be available to make payments required to
be made therefrom. Funds on deposit in the Reserve Account shall be retained in
the Reserve Account and be available (i) to pay any Discount payable pursuant to
Section 2.5(b) to the extent amounts on deposit in the Interest Accrual Account
and the Collection Account are insufficient therefor, (ii) on any Payment Date
to make any payments required to be made under clauses (i) through (v) of
Section 2.5(a) to the extent that Available Funds are insufficient therefor and
(iii) on and after the Termination Date to the Agent to reduce the Net
Investment. On each Payment Date, after giving effect to the allocations set
forth in Section 2.5(a), any amounts on deposit therein that are in excess of
the Specified Reserve Account Balance will be released to the Borrower. At any
time at which a Reserve Account Event is no longer continuing any amounts
remaining on deposit in the Reserve Account, after application of such amounts
to make any payments required pursuant to the preceding sentence, will be
released to the Borrower.
(c) Principal Collection Account. There shall be established on the day
of the initial Advance hereunder and maintained with the Agent, a segregated
account (the "Principal Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. All interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Principal Collection Account shall be
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retained in the Principal Collection Account and be available to make payments
required to be made therefrom. Funds on deposit in the Principal Collection
Account shall be invested by the Agent in Eligible Investments that will mature
so that such funds will be available prior to the last day of each successive
Tranche Period or Payment Date following such investment. Funds on deposit in
the Principal Collection Account will be applied as set forth in Section 2.5(c).
(d) Interest Accrual Account. There shall be established on the day of
the initial Advance hereunder and maintained with the Agent, a segregated
account (the "Interest Accrual Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Agent, on behalf of the Company and the Bank Investors. Funds on deposit in the
Interest Accrual Account shall be invested by the Agent in Eligible Investments
that will mature so that such funds will be available as needed prior to the
last day of each successive Tranche Period following such investment. All
interest and earnings (net of losses and investment expenses) on funds on
deposit in the Interest Accrual Account shall be retained in the Interest
Accrual Account and be available to make payments required to be made therefrom.
Funds on deposit in the Interest Accrual Account shall be available to make
payments of accrued and unpaid Discount pursuant to Section 2.5(b).
SECTION 2.13. Sharing of Payments, Etc. If the Company or any Bank
Investor (for purposes of this Section only, being a "Recipient") shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of setoff, or otherwise) on account of Pledged Interest pledged to it (other
than pursuant to Section 2.7 or Article VIII and other than as a result of the
differences in the timing of the applications of Collections pursuant to Section
2.5 or 2.6) in excess of its ratable share of payments on account of Advances
funded by the Company and/or the Bank Investors entitled thereto, such Recipient
shall forthwith purchase from the Company and/or the Bank Investors entitled to
a share of such participations in the Pledged Interest pledged to such Persons
as shall be necessary to cause such Recipient to share the excess payment
ratably with each such other Person entitled thereto; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
Recipient, such purchase from each such other
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Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
SECTION 2.14. Right of Setoff. Without in any way limiting the
provisions of Section 2.13, each of the Company and the Bank Investors is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence of the Termination Date, to set-off, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by the Company or such
Bank Investor to, or for the account of, the Borrower against the amount of the
Aggregate Unpaids owing by the Borrower to such Person or to the Agent on behalf
of such Person (even if contingent or unmatured).
SECTION 2.15. Hedging of Receivables If, at any time, a Hedging Event
has occurred, the Borrower shall enter into such Hedging Agreements as shall be
necessary so that after giving effect to any Advance, the excess of the
Outstanding Balance of the Receivables over the aggregate Hedged Amount under
all Hedging Agreements shall not be equal to or in excess of $10,000,000;
provided that if at any time the aggregate Hedged Amount under all Hedging
Agreements exceeds the Outstanding Balance of the Receivables, the Borrower
shall reduce such excess to zero by terminating or reducing by an appropriate
amount the Hedge Agreements; provided, further that 30 days prior to the date on
which the Agent reasonably determines a Take-Out will occur, the Borrower may
terminate any Hedging Agreements to the extent such Hedging Agreements do not
relate to the anticipated market value of the Receivables. Upon entering into
any Hedging Agreement the Borrower shall assign to the Agent, on behalf of the
Company and the Bank Investors, as applicable, all of the Borrower's rights
under such Hedging Agreement. Each Hedging Agreement shall (i) have a scheduled
termination date that coincides with the last Contract Payment due to occur for
the Receivables to which such Hedging Agreement relates; (ii) provide for a
notional amount equal to 100% of the Outstanding Balance of
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such Receivables rounded to the nearest multiple of $100,000 (the "Hedged
Amount"); (iii) provide that Hedge Payments be calculated based on the "constant
maturity" yield on U.S. Treasury securities with a maturity date equal or
nearest to the then expected remaining weighted average life of the related
Receivables; (iv) provide that the Hedge Counterparty's payment obligations
shall be calculated by reference to the Hedged Amount and a per annum rate
determined by reference to H.15, as defined in the 1991 ISDA Definitions
published by the International Swaps and Derivatives Association, Inc. and as
determined in accordance with the procedures in effect on the date of this
Agreement (the "H.15"); (v) provide that any payments to be paid with respect to
each Payment Date and any early termination date thereunder by the Hedge
Counterparty are to be deposited into the Collection Account, for distribution
in accordance with this Agreement; and (vi) be on such other terms and subject
to such other conditions as shall be reasonably acceptable to the Agent. In the
event the H.15 is no longer available, then the rates described in clause (iii)
above shall be reasonably agreed to between the Borrower and the Hedge
Counterparty and reasonably acceptable to the Agent in order to effect an
economically equivalent business deal between such parties. The Master Servicer
will provide the Agent with written notice confirming the amounts, if any, to be
paid by or to the Hedge Counterparty on each Payment Date and any early
termination date. The Borrower hereby assigns all of its rights under each
Hedging Agreement to the Agent, on behalf of the Company and the Bank Investors.
In addition, the parties hereto agree that all pledges, grants and assignments
made hereunder for the benefit of the Agent, the Company and the Bank Investors
(including, without limitation, Sections 2.2(a), 2.2(c) and 2.8), shall also be
for the ratable benefit of each Hedge Counterparty as if it were named in each
such pledge, as security and assurance to it of the payment in full of all
amounts due or to become due to it hereunder.
SECTION 2.16. Substitution of Receivables. On any day prior to the
occurrence of the Termination Date, the Borrower may, subject to the conditions
set forth in this Section 2.16, replace any Receivable with one or more other
Receivables (each, a "Substitute Receivable"); provided, however, that no such
replacement shall occur unless each of the following conditions is satisfied as
of the date of such replacement and substitution by the Substitute Receivables
to be substituted on such date:
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(a) each Substitute Receivable is an Eligible Receivable;
(b) after giving effect to any such substitution, (x) the sum
of the Net Investment plus, in the case where the Pledged Interest is
held by the Agent on behalf of the Company, the Interest Component of
all outstanding related Commercial Paper, would not exceed the Facility
Limit and (y) the Net Investment would not exceed the Maximum Net
Investment;
(c) the aggregate Outstanding Balance of such Substitute
Receivables shall be equal to or greater than the aggregate Required
Pay-off Amount as of the date of the substitution of the Receivables
being replaced;
(d) all representations and warranties contained in Section
3.1 shall be true and correct with respect to each such Substitute
Receivable;
(e) such substitution does not cause a Termination Event to
occur;
(f) no selection procedure adverse to the Company or the Bank
Investors was utilized in selecting any such Substitute Receivable from
those Contracts owned by the Borrower or the Seller as of the date of
such substitution; and
(g) the Borrower shall deliver to the Agent on the date of
such substitution a certificate certifying that each of the foregoing
is true and correct as of such date.
In connection with any such substitution, the Agent shall,
automatically and without further action, be deemed to transfer to the Borrower,
free and clear of any Adverse Claim created pursuant to this Agreement, all of
the right, title and interest of the Agent to and under such replaced Receivable
and all Related Security, and the Agent shall be deemed to represent and warrant
that it has the corporate authority and has taken all necessary corporate action
to accomplish such transfer, but without any other representation and warranty,
express or implied.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Agent, the Company and the Bank
Investors that:
(a) Existence and Power. The Borrower is a limited partnership
duly organized, validly existing and in good standing under the laws of
the State of Nevada and has all limited partnership power and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. The Borrower is duly qualified to do
business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have
a Material Adverse Effect.
(b) Company and Governmental Authorization; Contravention. The
execution, delivery and performance by the Borrower of this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Facility Fee
Letter, the VFN and the other Transaction Documents to which the
Borrower is a party are within the Borrower's partnership powers, have
been duly authorized by all necessary action on behalf of the Borrower,
require no action by or in respect of, or filing with, any Official
Body or official thereof (except as contemplated by Section 2.8
hereof), and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Limited Partnership of the Borrower or of any agreement, judgment,
injunction, order, writ, decree or other instrument binding upon the
Borrower or result in the creation or imposition of any Adverse Claim
on the assets of the Borrower (except as contemplated by Section 2.8
hereof).
(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter, the VFN
and the other Transaction Documents to
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which the Borrower is a party constitutes the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally.
(d) Perfection. Immediately preceding each pledge of
Collateral hereunder, each Receivable to be pledged and any related
Equipment shall be owned by the Borrower free and clear of all Adverse
Claims, other than those which may be simultaneously released and liens
with respect to Leveraged Lease Loans. On or prior to each pledge of
Collateral, all financing statements and other documents required to be
recorded or filed in order to perfect and protect the Agent's Pledged
Interest against all creditors of and purchasers from the Borrower and
the Seller will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
Notwithstanding the foregoing, it is understood that, except with
respect to Receivables that are Leveraged Lease Loans, (i) no UCC-1
filing may have been made with respect to the Equipment (other than
vehicles as described in (ii) below) underlying those Receivables that
had at the origination of the related Contract an original equipment
cost of less than $35,000 (provided such Receivables do not represent
more than 20% of the Net Investment or $20 million of the Net
Investment, whichever is greater) and (ii) certain Receivables may be
leases on vehicles or other types of equipment which require titling in
the name of the Borrower, so long as the aggregate Outstanding Balance
of such Receivables does not represent more than 5.0% of the Net
Investment or $7 million of the Net Investment, whichever is greater,
and provided that such vehicles are re-titled as required to perfect
such interest within 90 days of the related pledge of Collateral.
(e) Accuracy of Information. All information heretofore
furnished by the Borrower (including without limitation, the Investor
Reports, any other reports delivered pursuant to Section 2.11 hereof
and the Borrower's financial statements) to the Company, any Bank
Investors, the Agent or the Administrative Agent for purposes of or in
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connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to the
Company, any Bank Investors, the Agent or the Administrative Agent will
be, true and accurate in every material respect, on the date such
information is stated or certified.
(f) Tax Status. The Borrower has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge
of the Borrower threatened, against or affecting the Borrower or any
Affiliate of the Borrower, or their respective properties, in or before
any court, arbitrator or other body, which may, individually or in the
aggregate, have a Material Adverse Effect.
(h) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Borrower of this Agreement, the performance by the Borrower of the
transactions contemplated by this Agreement, and the fulfillment of the
terms hereof and thereof by the Borrower, have been obtained.
(i) 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.
(j) Place of Business. The principal place of business and
chief executive office of the Borrower are located at the address of
the Borrower indicated in Section 10.3 hereof and the offices where the
Borrower keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Company
in accordance with Section 2.8 hereof in jurisdictions where all action
required by Section 2.8 hereof has been taken and completed.
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(k) Good Title. Upon each pledge of Collateral hereunder, the
Agent shall acquire an assignment of a valid and perfected first
priority perfected security interest to the extent of the Pledged
Interest and in the Related Security and Collections with respect
thereto free and clear of any Adverse Claim.
(l) Trade Names, Etc. The Borrower has no subsidiaries and
within the last five (5) years, has operated under no trade names and
has not changed its name, merged with or into or consolidated with any
other corporation or been the subject of any proceeding under Title 11,
United States Code (Bankruptcy).
(m) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(n) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
(to the extent it is the Parent or any Subsidiary or Affiliate of the
Parent) to service and collect the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event.
(p) Not an Investment Company. The Borrower is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. The Borrower and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.
(r) Lock-Box Account. All Obligors have been instructed to
make payment to a Lock-Box Account.
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(s) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales
act or similar law.
(t) Transfers Under Receivables Purchase Agreement. Each
Receivable has been purchased by the Borrower from the Seller pursuant
to, and in accordance with, the terms of the Receivables Purchase
Agreement.
(u) Preference; Voidability. The Borrower shall have given
reasonably equivalent value to the Seller in consideration for the
transfer to the Borrower of the Receivables and Related Security from
the Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the Seller to the Borrower and no
such transfer is or may be voidable under any Section of the Bankruptcy
Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as amended.
(v) No Borrowing Base Deficiency. No Borrowing Base Deficiency
exists.
(w) Eligible Receivables. Each Receivable listed on the
Contract Schedule is an Eligible Receivable as of the related Borrowing
Date.
Any document, instrument, certificate or notice delivered to the
Company hereunder shall be deemed a representation and warranty by the Borrower.
SECTION 3.2. Reaffirmation of Representations and Warranties by the
Borrower. On each day that an Advance is made hereunder, the Borrower, by
accepting the Advance Amount, shall be deemed to have certified that all
representations and warranties described in Section 3.1 hereof are correct on
and as of such day as though made on and as of such day.
SECTION 3.3. [Reserved.]
SECTION 3.4. Representations and Warranties of the Master Servicer. The
Master Servicer represents and warrants to the Company and the Bank Investors
that:
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(a) Corporate Existence and Power. The Master Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Master Servicer is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Master Servicer of this
Agreement are within the Master Servicer's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Official Body or official
thereof, and do not contravene, or constitute a default under, any
provision of applicable law, rule or regulation or of the Certificate
of Incorporation or Bylaws of the Master Servicer or of any agreement,
judgment, injunction, order, writ, decree or other instrument binding
upon the Master Servicer or result in the creation or imposition of any
Adverse Claim on the assets of the Master Servicer or any of its
Subsidiaries.
(c) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Master Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors.
(d) Accuracy of Information. All information heretofore
furnished by the Master Servicer to the Agent, the Company, any Bank
Investor or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Master Servicer to the
Agent, the Company, any Bank Investor or the Administrative Agent will
be, true and accurate in every material respect, on the date such
information is stated or certified.
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(e) Tax Status. The Master Servicer has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(f) Action, Suits. Except as set forth in Exhibit H, there are
no actions, suits or proceedings pending, or to the knowledge of the
Master Servicer threatened, against or affecting the Master Servicer or
any Affiliate of the Master Servicer or their respective properties, in
or before any court, arbitrator or other body, which may, individually
or in the aggregate, have a Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental
authority required in connection with the execution and delivery by the
Master Servicer of this Agreement, the performance by the Master
Servicer of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof and thereof by the Master Servicer,
have been obtained.
(h) Nature of Receivables. Each Receivable included in the
calculation of the Net Receivables Balance in fact satisfies at such
time the definition of "Eligible Receivable".
(i) Credit and Collection Policy. Since June 25, 1998, there
have been no material changes in the Credit and Collection Policy other
than as permitted hereunder.
(j) Collections and Servicing. Since June 25, 1998, there has
been no material adverse change in the ability of the Master Servicer
to service and collect the Receivables.
(k) No Termination Event. No event has occurred and
is continuing and no condition exists which constitutes a
Termination Event.
(l) Not an Investment Company. The Master Servicer is not, and
is not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
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(m) ERISA. Each of the Master Servicer and its ERISA
Affiliates is in compliance in all material respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(n) Lock-Box Account. All Obligors have been instructed to
make payment to the Lock-Box Account.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. (a) On or prior to the date of
execution hereof, the Borrower shall deliver to the Agent the following
documents, instruments and fees all of which shall be in a form and substance
acceptable to the Agent:
(i) A copy of the resolutions of the Member of the General
Partner of the Borrower certified by its Secretary approving the
execution, delivery and performance by the Borrower of this Agreement,
the Receivables Purchase Agreement and the other Transaction Documents
to be delivered by Borrower hereunder or thereunder.
(ii) The Certificate of Limited Partnership or other
organizational document of the Borrower certified by the Secretary of
State or other similar official of the State of Nevada dated a date
reasonably prior to the Closing Date.
(iii) A Good Standing Certificate for the Borrower, issued by
the Secretary of State or similar official of the State of Nevada dated
a date reasonably prior to the Closing Date.
(iv) A Certificate of the Secretary of the General Partner of
the Borrower substantially in the form of Exhibit L-1 attached hereto.
(v) A Certificate of the Secretary of the Seller substantially
in the form of Exhibit L-2 attached hereto.
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(vi) A Certificate of the Secretary of the General Partner
substantially in the form of Exhibit L-3 attached hereto.
(vii) A Certificate of the Secretary of the Parent
substantially in the form of Exhibit L-4 attached hereto.
(viii) A Certificate of the Secretary of the Master Servicer
substantially in the form of Exhibit L-5 attached hereto.
(ix) An opinion of Morgan, Lewis & Bockius LLP, special
counsel to the Parent, the Master Servicer and the Seller, covering
certain corporate and security interest matters in form and substance
satisfactory to the Agent and the Agent's counsel.
(x) An opinion of Dewey Ballantine LLP, special counsel to the
Borrower and the Seller, covering certain tax matters in form and
substance satisfactory to the Agent and Agent's counsel.
(xi) An opinion of Dewey Ballantine LLP, special counsel to
the Borrower and the Seller covering certain corporate matters in form
and substance satisfactory to the Agent and the Agent's counsel.
(xii) An opinion of Woodburn and Wedge, special Nevada counsel
to the Borrower and the Seller covering certain corporate matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xiii) An opinion of [_________________], special Florida
counsel to the Borrower and the Seller covering certain tax matters in
form and substance satisfactory to the Agent and the Agent's counsel.
(xiv) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Facility Fee Letter and each of
the other Transaction Documents to be executed by the Seller or the
Borrower.
(xv) The VFN, duly executed by the Borrower.
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(xvi) The Facility Pledge Agreement, duly executed by the
Borrower and the Purchase Facility Pledgors.
(xvii) The Parent Guaranty, duly executed by the Parent.
(xviii) For the Borrower, copies of proper financing
statements (Form UCC-1), dated a date reasonably near to the Closing
Date naming the Borrower as the debtor in favor of the Agent, for the
benefit of the Company and the Bank Investors, as the secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the Agent's
interest in all of each Pledgor's respective right, title and interest
in, to and under all Receivables and the Related Security and
Collections relating thereto; provided that no such filings need be
made with respect to the related Equipment.
(xix) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Seller as the debtor in favor of the Borrower as the secured party
and the Agent, for the benefit of the Company and the Bank Investors,
as assignee of the secured party or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Agent
desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Borrower's interest in all applicable
Receivables and the Related Security and Collections relating thereto;
provided that no such filings need be made with respect to the related
Equipment.
(xx) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Borrower as the debtor in favor of Purchase Facility Pledgors as
the secured parties and the Agent, for the benefit of the Company and
the Bank Investors, as assignee or other similar instruments or
documents as may be necessary or in the reasonable opinion of the Agent
desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Agent's interest in the Financing
Facility Free Cash Flow.
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(xxi) For the Borrower, copies of proper financing statements
(Form UCC-1), dated a date reasonably near to the Closing Date naming
the Purchase Facility Pledgors as the debtors in favor of the Borrower
as the secured party and the Agent, for the benefit of the Company and
the Bank Investors, as assignee of the secured party or other similar
instruments or documents as may be necessary or in the reasonable
opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Borrower's interest
in the Purchase Facility Release Amounts.
(xxii) Certified copies of request for information or copies
(Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Advance listing all effective financing statements which name
the Borrower or the Seller (under their respective present names and
any previous names) as debtor and which are filed in jurisdictions in
which the filings were made pursuant to items (xvii) or (xviii) above
together with copies of such financing statements (none of which shall
cover any Receivables or Contracts).
(b) On or prior to the date of execution hereof and, on or prior to the
related Borrowing Date, the Borrower shall deliver to the Agent the following
documents and instruments all of which shall be in a form and substance
acceptable to the Agent:
(i) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by the Borrower.
(ii) Copies of proper financing statements (Form UCC-3), if
any, necessary to terminate all security interests and other rights of
any person in Receivables previously granted by the Seller.
(iii) A computer tape setting forth all Receivables subject to
such related Borrowing and the Outstanding
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Balances thereon and such other information as the Agent may reasonably
request.
(iv) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
ARTICLE V
COVENANTS
SECTION 5. 1. Affirmative Covenants of Borrower. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) Financial Reporting. The Borrower will, and will cause the
Parent and each of its Subsidiaries to, maintain, for itself and each
of its respective Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish to the Agent:
(i) Annual Reporting. As soon as practical and in any
event within 90 days after the end of each fiscal year of the
Parent, (x) consolidated and unaudited consolidating balance
sheets of the Parent and its Subsidiaries as at the end of
such fiscal year, and the notes thereto, and the related
consolidated and unaudited consolidating statements of income,
stockholders' equity and cash flows, and the respective notes
thereto, for such fiscal year, setting forth (other than for
consolidating statements) comparative financial statements for
the preceding fiscal year, all prepared in accordance with
GAAP applied on a consistent basis and containing, with
respect to the consolidated financial statements, opinions of
Price Waterhouse L.L.P., or other such independent certified
public accountants selected by the Parent and approved
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by the Agent, which are unqualified as to the scope of the
audit performed and as to the "going concern" status of the
Parent and without any exception not acceptable to the Agent
and (y) a certificate of the chief financial officer of the
Parent or any other Person expressly designated by the Board
of Directors of the Parent as an authorized representative
demonstrating compliance with Section 5.2(k).
(ii) Quarterly Reporting. As soon as practical and in
any event within 45 days after the end of each fiscal quarter
(except the last fiscal quarter of the fiscal year of the
Parent), consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows for
such fiscal quarter and for the period from the beginning of
the then-current fiscal year through the end of such reporting
period, and accompanied by a certificate of the chief
financial officer of the Parent or any other Person expressly
designated by the Board of Directors of the Parent as an
authorized representative to the effect that such financial
statements present fairly the financial position of the Parent
and its Subsidiaries as of the end of such fiscal period and
the results of their operations and the changes in their
financial position for such fiscal period, in conformity with
the standards typically used in preparation of the interim
financial statements.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate signed by the Borrower's or the Parent's, as
applicable, chief financial officer stating that to the best
of such Person's knowledge, no Termination Event exists and no
event which but for the lapse of time or the giving of notice,
or both, would constitute Termination Event exists, or if any
such event exists, stating the nature and status thereof.
(iv) Shareholders and Partners Statements and
Reports. Promptly upon the furnishing thereof to the
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partners of the Borrower or the shareholders of the
Parent, copies of all financial statements, reports and
proxy statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports which Parent or any
subsidiary files with the Securities and Exchange Commission.
(vi) Notice of Termination Events. As soon as
possible and in any event within two (2) days after the
knowledge of the occurrence of each Termination Event or event
which but for the lapse of time or the giving of notice, or
both, would constitute a Termination Event, a statement of the
chief financial officer or chief accounting officer of the
Borrower setting forth details of such event and the action
which the Borrower proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt
Ratings. Within ten (10) days after the date any material
change in or amendment to the Credit and Collection Policy is
made, a copy of such amendment and, if requested by the Agent,
a copy of the Credit and Collection Policy then in effect.
Within five days after the date of any change in the
Borrower's or Parent's public debt ratings (other than any
asset-backed ratings), if any, a written certification of the
Borrower's or the Seller's public debt ratings (other than any
asset-backed ratings) after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety
(90) days after the close of each of the Parent's and the
Borrower's fiscal years, a complete copy of the Credit and
Collection Policy then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which the
Borrower, the Seller or any ERISA Affiliate of the Borrower or
the Seller files
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under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor
or which the Borrower, the Seller or any ERISA Affiliates of
the Borrower or the Seller receives from the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor.
(x) Other Information. Such other information
(including non-financial information) as the Agent or the
Administrative Agent may from time to time reasonably request
with respect to the Seller, the Borrower or any Subsidiary of
any of the foregoing.
(b) Conduct of Business. The Borrower will carry on and
conduct its business in substantially the same fields of enterprise as
it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(c) Compliance with Laws. The Borrower will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be
subject.
(d) Furnishing of Information and Inspection of Records. The
Borrower will furnish to the Agent from time to time such information
with respect to the Receivables as the Agent may reasonably request,
including, without limitation, listings identifying the Obligor and the
Outstanding Balance for each Receivable. The Borrower will at any time
and from time to time upon reasonable notice during regular business
hours permit the Agent, or its agents or representatives, (i) to
examine and make copies of and take abstracts from all Records and (ii)
to visit the offices and properties of the Borrower for the purpose of
examining such Records, and to discuss matters relating to Receivables
or the Borrower's performance hereunder and under the other Transaction
Documents to which such Person is a party with any of the officers,
directors, employees or
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independent public accountants of the Borrower having knowledge of such
matters.
(e) Keeping of Records and Books of Account. The Borrower will
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing 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 Receivables (including, without limitation, records adequate to
permit the daily identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). The
Borrower will give the Agent notice of any material change in the
administrative and operating procedures of the Borrower or the Seller,
as applicable, referred to in the previous sentence.
(f) Performance and Compliance with Receivables and Contracts.
The Borrower, at its expense, will timely and fully perform and comply
with all material provisions, covenants and other promises required to
be observed by the Borrower or the Seller under the Contracts related
to the Receivables.
(g) Credit and Collection Policies. The Borrower will comply
in all material respects with the Credit and Collection Policy in
regard to each Receivable and the related Contract.
(h) Collections Received. The Borrower shall hold in trust,
and deposit, immediately, but in any event not later than within two
Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Borrower or the Seller,
as the case may be.
(i) [Reserved]
(j) Partnership Documents. The Borrower shall only amend,
alter, change or repeal Article 2, Section 16.1, Section 20.1, or
Section 21.6 of its Agreement of Limited Partnership with the prior
written consent of the Agent.
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SECTION 5.2. Negative Covenants of the Borrower. At all times from the
date hereof to the later to occur of (i) the Termination Date, or (ii) the date
on which the Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees shall have been paid in full and all other Aggregate Unpaids
shall have been paid in full, in cash, unless the Agent shall otherwise consent
in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and in the Receivables Purchase Agreement, the Borrower will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (or the filing of any
financing statement) or with respect to any of the Affected Assets or
any account which concentrates in a Lock-Box Bank to which any
Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Borrower will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(c) No Change in Business or Credit and Collection Policy. The
Borrower will not make any material change in the Credit and Collection
Policy without providing the Agent with prior written notice of the
proposed change; provided that the Borrower will reverse any such
change if the Agent disapproves of such change within 30 days of
receiving prior written notice of such change. The Borrower will not
make any change in the character of its business which would have a
Material Adverse Effect.
(d) No Mergers, Etc. The Borrower will not (i) consolidate or
merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other Person unless, in
the case of the Seller, the Seller is the surviving entity.
(e) Change in Payment Instructions to Obligors. The Borrower
will not make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box
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Account, unless such instructions are to deposit such payments to
another existing Lock-Box Account and the Agent shall have received
written notice of such change at least 30 days prior thereto.
(f) Change of Name, Etc. The Borrower will not change its
name, identity or structure or the location of its chief executive
office, unless at least 10 days prior to the effective date of any such
change the Borrower delivers to the Agent such documents, instruments
or agreements, executed by the Borrower, as are necessary to reflect
such change and to continue the perfection of the Agent's security or
other interests in the Affected Assets.
(g) Amendment to Receivables Purchase Agreement. The Borrower
will not amend, modify, or supplement the Receivables Purchase
Agreement or waive any provision thereof, in each case except with the
prior written consent of the Agent and the Administrative Agent; nor
shall the Borrower take any other action under the Receivables Purchase
Agreement that shall have a Material Adverse Effect or which is
inconsistent with the terms of this Agreement.
(h) Other Debt. Except as provided for herein, the Borrower
will not create, incur, assume or suffer to exist any indebtedness
whether current or funded, or any other liability other than (i)
indebtedness of the Borrower representing fees, expenses and
indemnities arising hereunder or under the Receivables Purchase
Agreement for the purchase price of the Receivables under the
Receivables Purchase Agreement, and (ii) other indebtedness incurred in
the ordinary course of its business in an amount not to exceed $50,000
in any fiscal year; provided, however, that the Borrower may incur
indebtedness in order to finance the value or residual value of any
Equipment related to a Receivable hereunder, so long as such
indebtedness is non-recourse, not subject to petition and fully
subordinated to the payment of the related Receivable hereunder.
(i) ERISA Matters. The Borrower will not (i) engage or permit
any of its respective ERISA Affiliates to engage in any prohibited
transaction (as defined in Section 4975 of the Code and Section 406 of
ERISA) for which an exemption is
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not available or has not previously been obtained from the U.S.
Department of Labor; (ii) permit to exist any accumulated funding
deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of
the Code) or funding deficiency with respect to any Benefit Plan other
than a Multiemployer Plan; (iii) fail to make any payments to any
Multiemployer Plan that the Borrower or any ERISA Affiliate of the
Borrower is required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate any
Benefit Plan so as to result in any liability; or (v) permit to exist
any occurrence of any reportable event described in Title IV of ERISA
which represents a material risk of a liability to the Borrower or any
ERISA Affiliate of the Borrower under ERISA or the Code, if such
prohibited transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year of
the Borrower, in the aggregate, involve a payment of money or an
incurring of liability by the Borrower or any ERISA Affiliate of the
Borrower, in an amount in excess of $1,000,000.
(j) Payment to the Seller. With respect to any Receivable
transferred by the Seller to the Borrower, the Borrower shall, and
shall cause the Seller to, effect such transferred under, and pursuant
to the terms of, the Receivables Purchase Agreement, including, without
limitation, the payment by the Borrower to the Seller of an amount
equal to the purchase price for such Receivable as required by the
terms of the Receivables Purchase Agreement.
(k) Financial Covenants. The Borrower shall not permit:
(i) the Consolidated Net Worth of the Parent to be
less than (i) on June 10, 1998, the greater of either (A)
$630,000,000 or (B) 90% of Consolidated Net Worth on June 30,
1998 and (ii) on the last day of each succeeding fiscal
quarter of the Parent until (but excluding) the last day of
the next following fiscal quarter of the Parent, the sum of
(A) the amount of Consolidated Net Worth required to be
maintained pursuant to this Section 5.2(k) at the end of the
immediately preceding fiscal quarter plus (B) 75% of
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Consolidated Net Income (with no reduction for net losses
during any period) for the fiscal quarter of the Parent ending
on such day (including within "Consolidated Net Income"
certain items otherwise excluded, as provided for in the
definition of "Consolidated Net Income") plus (C) 100% of the
aggregated amount of all the Net Proceeds of any Equity
Offering of the Parent during the fiscal quarter of the Parent
ending on such date;
(ii) the Consolidated Leverage Ratio of the Parent as
of the end of any Applicable Period to be greater than 2.50 to
1.00; and
(iii) the Adjusted Consolidated Fixed Charge Ratio of
the Parent as of the end of the any Applicable Period to be
less than 2.50 to 1.00.
Capitalized terms used in this Section 5.2(k) and not
otherwise defined in this Agreement shall have the meaning assigned to
such terms in the Revolving Credit Facility Agreement.
SECTION 5.3. [Reserved.]
SECTION 5.4. [Reserved.]
SECTION 5.5. Affirmative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) Conduct of Business. The Master Servicer will carry on and
conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
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conduct its business in each jurisdiction in which its business is
conducted.
(b) Compliance with Laws. The Master Servicer will comply in
all material respects with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it or its respective
properties may be subject.
(c) Furnishing of Information and Inspection of Records. The
Master Servicer will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. The Master
Servicer will, at any time and from time to time upon reasonable notice
during regular business hours permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts
from all Records and (ii) to visit the offices and properties of the
Master Servicer for the purpose of examining such Records, and to
discuss matters relating to Receivables or the Borrower's, the Seller's
or the Master Servicer's performance hereunder and under the other
Transaction Documents to which such Person is a party with any of the
officers, directors, employees or independent public accountants of the
Master Servicer having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Master
Servicer will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other infor mation reasonably necessary or advisable for
the collection of all Receivables (including, without limitation,
records adequate to permit the daily identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Master Servicer will give the Agent notice of any
material change in the administrative and operating procedures of the
Master Servicer referred to in the previous sentence.
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(e) Notice of Agent's Interest. In the event that the Borrower
or the Seller shall sell or otherwise transfer any interest in accounts
receivable, any computer tapes or files or other documents or
instruments provided by the Master Servicer in connection with any such
sale or transfer shall disclose the Borrower's ownership of the
Receivables and the Agent's interest therein.
(f) Credit and Collection Policies. The Master Servicer will
comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Collections. The Master Servicer shall instruct all
Obligors to cause all Collections other than Collections remitted
directly to be deposited directly to a Lock-Box Account.
(h) Collections Received. The Master Servicer shall hold in
trust, and deposit, immediately, but in any event not later than within
two Business Days of its receipt thereof, to the Lock-Box Account all
Collections received from time to time by the Master Servicer.
SECTION 5.6. [Reserved.]
SECTION 5.7. Negative Covenants of the Master Servicer. At all times
from the date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment has been reduced to zero, all accrued
Discount and Servicing Fees shall have been paid in full and all other Aggregate
Unpaids shall have been paid in full, in cash, unless the Agent shall otherwise
consent in writing:
(a) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Master Servicer will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(b) No Change in Business or Credit and Collection Policy. The
Master Servicer will not make any material change in the Credit and
Collection Policy without providing
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the Agent with prior written notice of such change; provided that the
Master Servicer will reverse any such change if the Agent disapproves
of such change within 30 days of receiving prior written notice of such
change. The Master Servicer will not make any change in the character
of its business which would have a Material Adverse Effect.
(c) No Mergers, Etc. The Master Servicer will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person
unless the Master Servicer is the surviving entity.
(d) Change in Payment Instructions to Obligors. The Master
Servicer will not make any change in its instructions to Obligors
regarding payments to be made to the Lock-Box Account, unless such
instructions are to deposit such payments to another existing Lock-Box
Account and the Agent shall have received written notice of such change
at least 30 days prior thereto.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6. 1. Appointment of the Master Servicer. The servicing,
administering and collection of the Receivables shall be conducted by the Person
(the "Master Servicer") so designated from time to time in accordance with this
Section 6.1. Until the Company gives notice to the Borrower of the designation
of a new Master Servicer, Portfolio Financial Services Company is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Master Servicer pursuant to the terms hereof. The Master Servicer may not
delegate any of its rights, duties or obligations hereunder, or designate a
substitute Master Servicer, without the prior written consent of the Agent;
provided that it is understood that the Master Servicer's duties hereunder with
respect to particular Receivables may and shall be delegated to the respective
Originators thereof; and provided, further, that the Master Servicer shall
continue to remain solely liable for the performance of the duties as Master
Servicer hereunder
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notwithstanding any such delegation hereunder. The Agent may, and upon the
direction of the Majority Investors the Agent shall, after the occurrence of a
Master Servicer Default or any other Termination Event (other than those
specified in clauses (k), (l), (q) and (r) of Section 7.1) designate as Master
Servicer any Person (including itself) to succeed Portfolio Financial Services
Company or any successor Master Servicer, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Master Servicer pursuant to the terms hereof. Following the occurrence and
continuance of a Master Servicer Default or any Termination Event (other than
those specified above), the Agent may notify any Obligor of the Advances.
SECTION 6.2. Duties of the Master Servicer.
(a) The Master Servicer shall take or cause to be taken all
such action as may be necessary or advisable to collect all payments
due under each Receivable and the related Contract from time to time,
all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policy. The Master Servicer's duties will include, without
limitation, collection and posting of all payments, responding to
inquiries of Obligors regarding the Receivables and related Contracts,
investigating delinquencies and remitting payments to the Agent in a
timely manner. Each of the Borrower, the Company, the Agent and the
Bank Investors hereby appoints as its agent the Master Servicer, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To
the extent permitted by applicable law, each of the Borrower and the
Seller hereby grants to any Master Servicer appointed hereunder an
irrevocable power of attorney to take any and all steps in the
Borrower's and/or the Seller's name and on behalf of the Borrower or
the Seller necessary or desirable, in the reasonable determination of
the Master Servicer, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the Borrower's
and/or the Seller's name on checks and other instruments representing
Collections and enforcing such Receivables and the related Contracts.
The Master Servicer shall set aside
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for the account of the Borrower and the Agent their respective
allocable shares of the Collections of Receivables in accordance with
Sections 2.5 and 2.6 hereof. The Master Servicer shall segregate and
deposit to the Agent's account the Agent's allocable share of
Collections of Receivables when required pursuant to Article II hereof.
So long as no Termination Event shall have occurred and be continuing,
the Master Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of Receivables; provided, however, that
such extension or adjustment shall not alter the status of such
Receivable as a Delinquent Receivable or a Defaulted Receivable, as
applicable. The Master Servicer may not otherwise waive, modify or
otherwise vary any provision of a Contract except as consistent with
the Credit and Collection Policy. The Master Servicer may not permit a
Receivable to be terminated prior to the scheduled termination date
thereof unless such termination results in a payment at least equal to
the Required Payoff Amount being deposited into the Collection Account
with respect to the related Payment Date. The Borrower shall deliver to
the Master Servicer and the Master Servicer shall hold in trust for the
Borrower and the Agent, on behalf of the Company and the Bank
Investors, in accordance with their respective interests, all Records
which evidence or relate to Receivables or Related Security. The Master
Servicer shall not make the Agent, the Company or any of the Bank
Investors a party to any litigation without the prior written consent
of such Person.
(b) If the Master Servicer commences a legal proceeding to
enforce a Defaulted Receivable or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or involving
a Contract, the Agent will be deemed to have automatically assigned its
security interest in the related Contract to the Master Servicer for
purposes of commencing or participating in any such proceeding as a
party or claimant, and the Master Servicer is authorized and empowered
by the Agent, the Company and the Bank Investors, to execute and
deliver, on behalf of itself and the Agent for the benefit of the
Company and Bank Investors, any and all instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other
notices, demands, claims, complaints, responses,
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affidavits or other documents or instruments in connection with any
such proceedings. If in any enforcement suit or legal proceeding it is
held that the Master Servicer may not enforce a Contract on the ground
that it is not a real party in interest entitled to enforce the
Contract, then the Agent will, at the Master Servicer's expense and
direction, take steps on behalf of the Agent as agent for the Company
and the Bank Investors to enforce the Contract, including bringing suit
in the name of the Agent for the benefit of the Company and the Bank
Investors.
Upon termination of a Contract as a result of a default by the
Obligor thereunder, the Master Servicer will use best efforts to
repossess or otherwise comparably covert the ownership of and to
re-lease or otherwise dispose of any related Equipment. Without
limiting the generality of the foregoing, the Master Servicer may
dispose of any such Equipment by purchasing such Equipment or by
selling such Equipment at a public or private sale to any of its
Affiliates for a purchase price equal to the fair market value thereof.
(c) The Master Servicer shall take and retain custody of the
Contracts and other Records in accordance with the terms and conditions
of this Agreement, all for the benefit of the Company and the Bank
Investors and subject to the lien thereon in favor of the Agent, as
agent for the Company and the Bank Investors. Within five Business Days
of its receipt of any Records, the Master Servicer shall review the
related Contract to verify that such Contract has been executed and has
no mutilated pages and to confirm (in reliance on the related contract
number and Obligor name) that such Contract is referenced on the
related list of Receivables. In order to facilitate the foregoing
review by the Master Servicer, in connection with each delivery of
Records hereunder to the Master Servicer, the Master Servicer shall
maintain an electronic file, in EXCEL or a comparable format, that
contains the related list of Receivables or which otherwise contains
the Contract number and the name of the Obligor with respect to each
related Contract. If, at the conclusion of such review, the Master
Servicer shall determine that such Contract is not executed or has
mutilated pages, or that it is not referenced on such
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list of Receivables, the Master Servicer shall promptly notify the
Seller, the Borrower and the Agent of such determination by providing a
written report to such Persons setting forth, with particularity, the
lack of execution of such Contract, that such Contract has mutilated
pages, or the fact that such Contract was not referenced on the related
list of Receivables. In addition, unless instructed otherwise by the
Seller or the Agent within 10 days of the Master Servicer's delivery of
such report, the Master Servicer shall return any Contract not
referenced on such list of Receivables to the Seller.
In taking and retaining custody of the Contracts and other
Records, the Master Servicer shall be deemed to be acting as the agent
of the Agent, as agent for the Company and as agent of the Bank
Investors. The Master Servicer shall clearly indicate that such Records
are the sole property of the Borrower and that the Borrower has granted
a security interest therein to the Agent on behalf of the Company. All
Contracts shall be clearly segregated from any other documents or
instruments maintained by the Master Servicer and shall be kept in
fireproof vaults or cabinets at such locations as shall be reasonably
acceptable to the Agent. The Master Servicer shall notify the Agent of
any change in location by a written notice delivered at least 45 days
prior to such change.
(d) To the extent provided for in any Contract, the Master
Servicer will use its commercially reasonable efforts to collect all
payments with respect to amounts due for taxes and assessments relating
to the related Receivables or the Equipment and remit such amounts to
the appropriate governmental authority or insurer on or prior to the
date such payments are due.
(e) The Master Servicer will use its commercially reasonable
efforts to ensure that each Obligor maintains casualty insurance
coverage with respect to the related Equipment in an amount that is
consistent with prudent leasing industry standards. Additionally, the
Master Servicer will require that each Obligor maintain third party
liability insurance for property damage during the term of each
Contract in amounts and against risks customarily
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insured against by the Obligor on equipment owned by it.
Notwithstanding the preceding two sentences, the Master Servicer, in
accordance with the Credit and Collection Policy, may not require
insurance or may allow Obligors to self-insure. If an Obligor fails to
maintain casualty or property damage liability insurance, the Master
Servicer may purchase and maintain such insurance on behalf of, and at
the expense of, the Obligor. In connection with its activities as
Master Servicer the Master Servicer agrees to present, on behalf of the
Agent as agent for the Company and the Bank Investors, claims to the
insurer under each casualty insurance policy and any such property
damage liability policy, and to settle, adjust and compromise such
claims, in each case, consistent with the terms of each such Contract.
Such Master Servicer's insurance policies with respect to the related
Equipment will insure against liability for personal injury relating to
such Equipment, thereunder will name the Seller as an insured
thereunder and will contain a breach of warranty clause.
(f) The Master Servicer will be required to pay all expenses
incurred by it in connection with its activities under this Agreement,
including fees and disbursements of the Master Servicer, independent
accountants, Taxes imposed on the Master Servicer, and expenses
incurred in connection with payments and reports pursuant to this
Agreement. The Master Servicer will be required to pay all reasonable
fees and expenses owing to any bank or trust company in connection with
the maintenance of the Lock-Box Account. The Master Servicer shall be
required to pay such expenses for its own account and shall not be
entitled to any payment therefor other than the Servicing Fee.
(g) The Master Servicer shall, as soon as practicable
following receipt thereof, turn over to the Borrower any collections
received hereunder or under any of the other Transaction Documents of
any indebtedness of any Person which is not on account of a Receivable.
(h) If the Master Servicer is not the Borrower or the Seller
or an Affiliate of the Borrower or the Seller, the Master Servicer, by
giving three Business Days' prior written notice to the Agent, may
revise the percentage used
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to calculate the Servicing Fee so long as the revised percentage will
not result in a Servicing Fee that exceeds 110% of the current
Servicing Fee.
(i) The Master Servicer, if other than the Borrower or the
Seller or an Affiliate of the Borrower or Seller, shall as soon as
practicable upon demand, deliver to the Seller all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(j) The Master Servicer will provide to the Agent, on or prior
to March 31 of each year, commencing March 31, 1999, an annual report
signed by a officer of the Master Servicer certifying that (a) a review
of the activities of the Master Servicer, and the Master Servicer's
performance pursuant to this Agreement, for the period ending on the
last day of the immediately preceding fiscal year has been made under
such Person's supervision and (b) the Master Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year and no Master
Servicer Default has occurred and is continuing (or if a Master
Servicer Default has so occurred and is continuing, specifying each
such event, the nature and status thereof and the steps necessary to
remedy such event, and, if a Master Servicer Default occurred during
such year and no notice thereof has been given to the Agent, specifying
such Master Servicer Default and the steps taken to remedy such event).
On or before the Closing Date and on a semi-annual basis
thereafter, the Agent shall have the option to have the Agent or its
designees conduct a sample audit of the Receivables and the related
Records in conjunction with a review of the Master Servicer's
collection and administration practices with respect to the Contracts
and the related Receivables in order to assess the performance of such
Receivables and to verify the Master Servicer's compliance with its
written policies and procedures and with this Agreement and the other
Transaction Documents. The Originator shall pay, or reimburse the Agent
for all of the Agent's out-of-pocket expenses relating to any such
audit and review which shall be limited to $5,000 annually except
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during the continuance of a Termination Event; provided, however, that
the Agent shall be responsible for the fees and expenses of a third
party firm engaged by the Agent to perform a sample audit only with
respect to the initial sample audit and one of the semi-annual audits
in each year.
(k) Notwithstanding anything to the contrary contained in this
Article VI, the Master Servicer, if not the Borrower, the Seller or any
Affiliate of the Borrower or the Seller, shall have no obligation to
collect, enforce or take any other action described in this Article VI
with respect to any indebtedness that is not included in the Pledged
Interest other than to deliver to the Borrower the collections and
documents with respect to any such indebtedness as described in Section
6.2 hereof.
(l) For each Payment Date the Master Servicer shall make an
advance (a "Servicer Advance") to the Collection Account in an amount
equal to any Contract Payment on any Receivable due during the
preceding Collection Period and not received on or prior to the
Determination Date immediately preceding such Payment Date.
Notwithstanding the preceding sentence, (i) the Master Servicer shall
be required to make a Servicer Advance if, and only if, the Master
Servicer determines (such determination to be conclusive and binding)
in good faith that such Servicer Advance will be recoverable from the
payment of future collections on, or the liquidation of, the Receivable
as to which such advance is to be made, and (ii) the Master Servicer's
obligation to make a Servicer Advance for any Receivable shall cease on
the day such Receivable becomes a Defaulted Receivable. The Master
Servicer will deposit any Servicer Advances into the Collection Account
on or prior to 11:00 a.m. (New York City time) on the related Payment
Date, in immediately available funds.
SECTION 6.3. Rights After Designation of New Master Servicer. At any
time following the designation of a Master Servicer (other than the Borrower,
the Seller or any Affiliate of the Borrower or the Seller) pursuant to Section
6.1 hereof:
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(i) The Agent may direct that payment of all amounts
payable under any Receivable be made directly to the Agent or
its designee.
(ii) The Borrower shall, at the Agent's request and
at the Borrower's expense, give notice of the Agent's, the
Borrower's and/or the Bank Investors' interest in the
Receivables to each Obligor and direct that payments be made
directly to the Agent or its designee.
(iii) The Borrower shall, at the Agent's request, (A)
deliver all of the Records, to the Agent or its designee at a
place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from
time to time constituting Collections of Receivables in a
manner acceptable to the Agent and shall, promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Agent or its designee.
(iv) The Borrower and the Master Servicer hereby
authorize the Agent to take any and all steps in the
Borrower's or the Master Servicer's name and on behalf of the
Borrower and the Master Servicer necessary or desirable, in
the sole determination of the Agent, to collect all amounts
due under any and all Receivables, including, without
limitation, endorsing the Borrower's or the Master Servicer's
name on checks and other instruments representing Collections
and enforcing such Receivables and the related Contracts.
SECTION 6.4. Master Servicer Default. The occurrence of any one or more
of the following events shall constitute a Master Servicer Default:
(a)(i) the Master Servicer shall fail in any material respect
to observe or perform any term, covenant or agreement hereunder (other
than as referred to in clause (ii) of this Section 6.4(a)) or under any
of the other Transaction Documents to which the Master Servicer is a
party or by which the Master Servicer is bound, and such
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failure shall remain unremedied for a period of thirty (30) days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto, or
(ii) the Master Servicer shall fail to make any payment or deposit
required to be made by it hereunder when due and such failure shall
continue for 48 hours; or
(b) any representation or warranty made by the Master Servicer
in this Agreement, any of the other Transaction Documents or in any
other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made and
shall not have been cured and corrected for a period of 30 days after
the earlier of (x) the date it first became known to any officer of the
Master Servicer or (y) the date on which written notice thereof shall
have been given to the Master Servicer by any other party hereto; or
(c) any certification or statement made by the Master Servicer
in this Agreement, or in any of the other Transaction Documents or in
any certificate or report delivered by it pursuant to any of the
foregoing shall prove to have been incorrect in any material respect
when made or deemed made, and a Material Adverse Effect shall result
which shall not have been cured and corrected for a period of 30 days
after the earlier of (x) the date it first became known to any officer
of the Master Servicer or (y) the date on which written notice thereof
shall have been given to the Master Servicer by any other party hereto;
or
(d) failure of the Master Servicer or any of its Subsidiaries
to pay when due any amounts due under any agreement under which any
Indebtedness greater than $5 million is governed; or the default by the
Master Servicer or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness greater than $5 million was created or is governed,
regardless of whether such event is an "event of default" or "default"
under any such agreement; or any Indebtedness of the Master Servicer or
any of its Subsidiaries greater than $5 million shall be declared to be
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due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to the
Master Servicer or any of its Subsidiaries; or
(f) there shall have occurred any material adverse change in
the operations of the Master Servicer since the end of the last fiscal
year ending prior to the date of its appointment as Master Servicer
hereunder which, in the commercially reasonably judgment of the Agent,
materially and adversely affects the Master Servicer's ability to
perform under this Agreement.
SECTION 6.5. Responsibilities of the Borrower and the Seller. Anything
herein to the contrary notwithstanding, the Borrower shall, and/or shall cause
the Seller to, (i) perform all of their obligations under the Contracts related
to the Receivables to the same extent as if interests in such Receivables had
not been pledged hereunder and under the Receivables Purchase Agreement and the
exercise by the Agent, the Company and the Bank Investors of their rights
hereunder and under the Receivables Purchase Agreements shall not relieve the
Borrower or the Seller from such obligations and (ii) pay, or cause the Obligor
or the Master Servicer to pay, when due any taxes, including without limitation,
any sales taxes payable in connection with the Receivables and their creation
and satisfaction. Neither the Agent, the Company nor any of the Bank Investors
shall have any obligation or liability with respect to any Receivable or related
Contracts, nor shall it be obligated to perform any of the obligations of the
Seller thereunder.
SECTION 6.6. Limitation on Liability of the Master Servicer and Others.
Except as provided herein, neither the Master Servicer nor any of the directors
of officers or employees or agents of the Master Servicer shall be under any
liability to the Agent, the Company, the Bank Investors or any other Person for
any action taken or for refraining from the taking of any action pursuant to
this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the Master
Servicer or any such Person against any liability which would otherwise be
imposed by
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reason of its willful misconduct, bad faith or negligence in the performance of
duties or by reason of its willful misconduct hereunder.
SECTION 6.7. The Master Servicer Not to Resign. The Master Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that (i) the performance of its duties hereunder is or
becomes impermissible under applicable law and (ii) there is no reasonable
action which the Master Servicer could take to make the performance of its
duties hereunder permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced as to
clause (i) above by an opinion of legal counsel to such effect delivered to the
Agent. No such resignation shall become effective until a successor Master
Servicer shall have assumed the responsibilities and obligations of the Master
Servicer in accordance with Section 6.1.
ARTICLE VII
TERMINATION EVENTS
SECTION 7. 1. Termination Events. The occurrence of any one or more of
the following events shall constitute a Termination Event:
(a) the Borrower shall fail to make any payment or deposit to
be made by it hereunder or under the Receivables Purchase Agreement
when due hereunder or thereunder; or
(b) any representation or warranty made by the Borrower, the
Seller or an Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when
made or deemed made and shall not have been cured and corrected for a
period of 30 days after by the earlier of (x) the date it first became
known to any officer of the Borrower or (y) the date on which written
notice thereof shall have been given to the Borrower by any other party
hereto; or
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(c) any certification or statement made by the Borrower, the
Seller or an Originator in, as applicable, this Agreement, the
Receivables Purchase Agreement, any other Transaction Document to which
it is a party or in any or any certificate or report delivered by it
pursuant to any of the foregoing shall prove to have been incorrect in
any material respect when made or deemed made and a Material Adverse
Effect shall result which shall not have been cured and corrected for a
period of 30 days after the earlier of (x) the date it first became
known to any officer of a Pledgor or (y) the date on which written
notice thereof shall have been given to a Pledgor by any other party
hereto; or
(d) the Borrower shall default in any material respect in the
performance of any payment or undertaking (other than those covered by
clause (a) above) (i) to be performed or observed under Sections
5.1(a)(vi), 5.1(h), 5.1(l), 5.2(a), (c), (d), (e), or (f), or (ii) to
be performed or observed under any other provision hereof and such
failure shall remain unremedied for a period of thirty (30) days after
the earlier of (x) the date it first became known to any officer of the
Borrower or (y) the date on which written notice thereof shall have
been given to the Borrower by any other party hereto; or
(e) failure of the Borrower to pay when due any amounts due
under any agreement to which the Borrower is a party and under which
any Indebtedness is governed; failure of the Parent or the Seller to
pay when due any amounts due under any agreement to which the Borrower
is a party and under which any Indebtedness greater than $5,000,000 is
governed; or the default by the Borrower, the Parent or the Seller in
the performance of any term, provision or condition contained in any
agreement to which the Borrower is a party and under which any
Indebtedness owing by the Borrower, the Parent or the Seller was
created or is governed and for which in the case of the Parent or the
Seller the amount of such Indebtedness is greater than $5,000,000; or
any Indebtedness owing by the Borrower, the Parent or the Seller
greater than $5,000,000 shall be declared to be due and payable or
required to be prepaid
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(other than by a regularly scheduled payment) prior to the date of
maturity thereof; or
(f) any Event of Bankruptcy shall occur with respect to the
Borrower, Parent or the Seller; or
(g) the Agent, on behalf of the Company and the Bank
Investors, shall, for any reason, fail or cease to have a valid and
perfected first priority security interest in the Affected Assets free
and clear of any Adverse Claims (except as otherwise contemplated
herein); or
(h) a Master Servicer Default shall have occurred; or
(i) the Receivables Purchase Agreement shall have terminated;
or
(j) a Revolving Credit Facility Default shall have occurred;
or
(k) the Borrower or the Parent shall enter into any
transaction or merger whereby it is not the surviving entity and where,
in the case of the Parent, the surviving entity is not acceptable to
the Agent; or
(l) there shall have occurred any Material Adverse Effect; or
(m) at any time, a Borrowing Base Deficiency shall occur and
be continuing and such deficiency is not cured on or prior to the next
succeeding Payment Date; or
(n) after giving effect to any Payment Date, a Borrowing Base
Deficiency shall exist; or
(o) after giving effect to any Payment Date, the Net
Investment is greater than the Maximum Net Investment; or
(p) at any time, the Net Asset Test is not met; or
(q) the Three Month Average Net Portfolio Yield is less than
1.25%; or
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(r) a Take-Out does not occur within the fifteen months of the
initial Advance under this Agreement or at least once every six-months
after the initial Take-Out under this Agreement; or
(s) at any time the Receivables are not subject to Hedging
Agreements in accordance with Section 2.15, and such failure is not
cured within five Business Days of the earlier of (x) the date it first
became known to any officer of a Borrower or (y) the date on which
written notice thereof shall have been given to the Borrower by any
other party hereto; or
(t) a default shall have occurred and be continuing under the
Parent Guaranty.
SECTION 7.2. Termination. (a) Upon the occurrence of any Termination
Event, the Agent may, or at the direction of the Majority Investors shall, by
notice to the Borrower and the Master Servicer declare the Termination Date to
have occurred; provided that in the case of any event described in Section
7.1(f) or 7.1(g) above, the Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence
of the Termination Date pursuant to Section 7.2(a), the Base Rate plus 2.00%
shall be the Tranche Rate applicable to the Net Investment for all existing and
future Tranches.
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8. 1. Indemnities by the Borrower. Without limiting any other
rights which the Agent, the Company or each Bank Investors may have hereunder or
under applicable law, the Borrower hereby
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agrees to indemnify the Company, the Bank Investors, the Agent, the
Administrative Agent, the Collateral Agent, the Liquidity Provider and the
Credit Support Provider and any successors and permitted assigns and their
respective officers, directors and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable external
attorneys' fees (which such attorneys may be employees of the Liquidity
Provider, the Credit Support Provider, the Agent, the Administrative Agent or
the Collateral Agent, as applicable) and disbursements (all of the foregoing
being collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them in any action or proceeding between the Borrower, the
Parent or the Master Servicer (if an Affiliate of the Borrower) and any of the
Indemnified Parties or between any of the Indemnified Parties and any third
party or otherwise arising out of or as a result of this Agreement, the other
Transaction Documents, the ownership or maintenance, either directly or
indirectly, by the Agent, the Company or any Bank Investor of the Net Investment
or any of the other transactions contemplated hereby or thereby, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of an Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for uncollectible
or uncollected Receivables. Without limiting the generality of the foregoing,
the Borrower shall indemnify each Indemnified Party for Indemnified Amounts
relating to or resulting from:
(i) any representation or warranty made by the
Borrower, the Seller or the Master Servicer (if an Affiliate
of the Borrower) or any officers of the Borrower, the Seller
or the Master Servicer under or in connection with this
Agreement, the Receivables Purchase Agreement, any of the
other Transaction Documents, any Investor Report or any other
information or report delivered by the Borrower or the Master
Servicer pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made;
(ii) the failure by the Borrower, the Seller or the
Master Servicer (if an Affiliate of the Borrower)
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to comply with any applicable law, rule or regulation with
respect to any Receivable or the related Contract, or the
nonconformity of any Receivable or the related Contract with
any such applicable law, rule or regulation;
(iii) the failure to create or maintain a valid and
perfected first priority security interest in favor of the
Agent, for the benefit of the Company and the Bank Investors,
in the Affected Assets as contemplated pursuant to Section
10.11, free and clear of any Adverse Claim;
(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other
similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect
to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limita tion, a defense based on
such Receivable or the related Contract not being the legal,
valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim
resulting from the sale of merchandise or services related to
such Receivable or the furnishing or failure to furnish such
merchandise or services; provided that the indemnification
provided hereby shall not extend to credit losses on the
Affected Assets or any payment failure resulting solely from
such credit losses;
(vi) any failure of the Master Servicer (if an
Affiliate of the Borrower) to perform its duties or
obligations in accordance with the provisions hereof; or
(vii) any products liability claim or personal injury
or property damage suit or other similar or related claim or
action of whatever sort arising out of or in connection with
Equipment which is the subject of any Receivable;
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(viii) the pledge hereunder of any Receivable other
than an Eligible Receivable;
(ix) the failure by the Borrower, the Seller or the
Master Servicer (if an Affiliate of the Borrower) to comply
with any term, provision or covenant contained in this
Agreement or any of the other Transaction Documents to which
it is a party or to perform any of its respective duties under
the Contracts; provided that the indemnification provided
hereby shall not extend to credit losses on the Affected
Assets or any payment failure resulting solely from such
credit losses;
(x) the failure of the Seller to pay when due any
taxes, including without limitation, sales, excise or personal
property taxes payable in connection with any of the
Receivables;
(xi) any repayment by any Indemnified Party of any
amount previously distributed in reduction of Net Investment
which such Indemnified Party believes in good faith is
required to be made;
(xii) the commingling by the Borrower, the Seller or
the Master Servicer (if an Affiliate of the Borrower) of
Collections of Receivables at any time with other funds;
(xiii) any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction
Documents, the use of Advance Amounts, the ownership of
Pledged Interests, or any Receivable, Related Security or
Contract;
(xiv) any inability to obtain any judgment in or
utilize the court or other adjudication system of, any state
in which an Obligor may be located as a result of the failure
of the Borrower or the Seller to qualify to do business or
file any notice of business activity report or any similar
report;
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(xv) any failure of the Borrower to give reasonably
equivalent value to the Seller in consideration of the
purchase by the Borrower from the Seller of any Receivable, or
any attempt by any Person to void, rescind or set-aside any
such transfer under statutory provisions or common law or
equitable action, including, without limitation, any provision
of the Bankruptcy Code; or
(xvi) any action taken by the Borrower, the Seller or
the Master Servicer (if an Affiliate of the Borrower) in the
enforcement or collection of any Receivable;
provided, however, that if the Company enters into agreements for the purchase
of interests in receivables from one or more Other Conduit Participants, the
Company shall allocate such Indemnified Amounts which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Borrower and each Other Conduit
Participant; and provided, further, that if such Indemnified Amounts are
attributable to the Borrower, the Seller or the Master Servicer and not
attributable to any Other Conduit Participant, the Borrower shall be solely
liable for such Indemnified Amounts or if such Indemnified Amounts are
attributable to Other Conduit Participants and not attributable to the Borrower,
the Seller or the Master Servicer, such Other Conduit Participants shall be
solely liable for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a) If after
the date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or bank
regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of
any Official Body (in the case of any bank regulatory guideline, whether or not
having the force of Law):
(i) shall subject any Indemnified Party to any tax,
duty or other charge (other than Excluded Taxes) with respect
to this Agreement, the other Transaction Documents, the
maintenance or financing of the Pledged
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Interest, the Receivables or payments of amounts due
hereunder, or shall change the basis of taxation of payments
to any Indemnified Party of amounts payable in respect of this
Agreement, the other Transaction Documents, maintenance or
financing of the Pledged Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the
credit support furnished by the Credit Support Provider or
otherwise in respect of this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged
Interest or the Receivables (except for changes in the rate of
general corporate, franchise, net income or other income tax
imposed on such Indemnified Party by any jurisdiction;
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by,
any Indemnified Party or shall impose on any Indemnified Party
or on the United States market for certificates of deposit or
the London interbank market any other condition affecting this
Agreement, the other Transaction Documents, the maintenance or
financing of the Pledged Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the
credit support provided by the Credit Support Provider or
otherwise in respect of this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged
Interests or the Receivables; or
(iii) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable external
attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing) with
respect to this Agreement, the other Transaction Documents,
the maintenance or financing of the Pledged Interest, the
Receivables or payments of amounts due hereunder or its
obligation to
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advance funds hereunder under the Liquidity Provider Agreement
or the credit support furnished by the Credit Support Provider
or otherwise in respect of this Agreement, the other
Transaction Documents, the maintenance or financing of the
Pledged Interest or the
Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the maintenance or financing of the Pledged Interest, the
Receivables, the obligations hereunder, the funding of any purchases hereunder,
the Liquidity Provider Agreement or the Credit Support Agreement, by an amount
deemed by such Indemnified Party to be material, then, within ten (10) days
after written demand (including an explanation of the basis for such demand) by
such Indemnified Party through the Agent, the Borrower shall pay to the Agent,
for the benefit of such Indemnified Party, such additional amount or amounts as
will compensate such Indemnified Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof by any Official Body, or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not having
the force of law) of any such Official Body, has or would have the effect of
reducing the rate of return on capital of such Indemnified Party (or its parent)
as a consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or its
parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time to time,
within ten (10) days after demand by such Indemnified Party through the Agent,
the Borrower shall pay to the Agent, for the benefit of such Indemnified Party,
such additional amount or amounts as will compensate such Indemnified Party (or
its parent) for such reduction.
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(c) The Agent will promptly notify the Borrower of any event
of which it has knowledge, occurring after the date hereof, which will entitle
an Indemnified Party to compensation pursuant to this Section 8.2. A notice
(including an explanation of the basis for such demand) by the Agent or the
applicable Indemnified Party claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining such amount, the
Agent or any applicable Indemnified Party may use any reasonable averaging and
attributing methods consistent with those used for similar transactions.
(d) With respect to any liability to any Indemnified Party for
any amounts under this Section 8.2 ("Section 8.2 Costs"), the Agent agrees that
it shall, upon the incurring of any Section 8.2 Costs, take such steps as may be
reasonable, and consult with the Borrower in good faith with a view toward
agreeing to alternative arrangements, for avoiding or mitigating (consistent
with the internal policies and governance and legal and regulatory restrictions
of the applicable Indemnified Party and without requiring the incurring of any
additional costs by, or otherwise being disadvantageous to, such party)
additional Section 8.2 Costs.
(e) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the acquisition of
interests in receivables from one or more Other Conduit Participants, the
Company shall allocate any Section 8.2 costs which are in connection with the
Liquidity Provider Agreement, the Credit Support Agreement or the credit support
provided by the Credit Support Provider to the Borrower and each Other Conduit
Participant; provided, however, that if such Section 8.2 Costs are attributable
to the Borrower, the Seller or the Master Servicer and not attributable to any
Other Conduit Participant, the Borrower shall be solely liable for such Section
8.2 Costs or if such Section 8.2 Costs are attributable to Other Conduit
Participants and not attributable to the Borrower, the Seller or the Master
Servicer, such Other Conduit Participants shall be solely liable for such
Section 8.2 Costs.
SECTION 8.3. Taxes. All payments made hereunder by the Borrower or the
Master Servicer (each, a "payor") to the Company, any Bank Investor or the Agent
(each, a "recipient") shall be
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made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and any other taxes, fees, duties, withholdings
or other charges of any nature whatsoever imposed by any taxing authority on any
recipient (or any assignee of such parties) (such non-excluded items being
called "Taxes"), but excluding franchise taxes and taxes imposed on or measured
by the recipient's net income or gross receipts ("Excluded Taxes"). In the event
that any withholding or deduction from any payment made by the payor hereunder
is required in respect of any Taxes, then such payor shall:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with respect
to any payment received by such recipient hereunder, the recipient may pay such
Taxes and the payor will promptly pay such additional amounts (including any
penalties, interest or expenses) as shall be necessary in order that the net
amount received by the recipient after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such recipient would
have received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the recipient the required receipts or other
required documentary evidence, the payor shall indemnify the recipient for any
incremental Taxes, interest, or penalties that may become payable by any
recipient as a result of any such failure.
SECTION 8.4. Other Costs, Expenses and Related Matters. (a) The
Borrower agrees, upon receipt of a written invoice, to
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pay and to save the Company, the Bank Investors (subject to Section 9.9(b)) and
the Agent harmless against liability for the payment of, all reasonable
out-of-pocket documented expenses (including, without limitation, reasonable
attorneys', accountants' and other third parties' fees and reasonable expenses,
any filing fees and expenses incurred by officers or employees of the Company,
the Bank Investors and/or the Agent) or intangible, documentary or recording
taxes incurred by or on behalf of the Company, any Bank Investor and the Agent
(i) in connection with the negotiation, execution, delivery and preparation of
this Agreement, the other Transaction Documents and any documents or instruments
delivered pursuant hereto and thereto and the transactions contemplated hereby
or thereby (including, without limitation, the perfection or protection of the
Pledged Interest) and (ii) from time to time (a) relating to any amendments,
waivers or consents under this Agreement and the other Transaction Documents,
(b) arising in connection with the Company's, any Bank Investor's, the Agent's
or the Collateral Agent's enforcement or preservation of rights (including,
without limitation, the perfection and protection of the Pledged Interest under
this Agreement), or (c) arising in connection with any audit, dispute,
disagreement, litigation or preparation for litigation involving this Agreement
or any of the other Transaction Documents (all of such amounts, collectively,
"Transaction Costs").
(b) The Borrower shall pay the Agent, for the account of the
Company and the Bank Investors, as applicable, on demand any Early Collection
Fee due on account of the reduction of a Tranche on a day prior to the last day
of its Tranche Period.
SECTION 8.5. [Reserved.]
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION 9. 1. Authorization and Action. The Company and each Bank
Investor hereby irrevocably appoints and authorizes the Agent to act as its
agent under this Agreement and the other Transaction Documents with such powers
and discretion as are specifically
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delegated to the Agent by the terms of this Agreement and the other Transaction
Documents, together with such other powers as are reasonably incidental thereto.
The Agent (which term as used in this sentence and in Section 9.05 and the first
sentence of Section 9.06 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and shall not be a trustee or fiduciary for the Company or any Bank Investor;
(b) shall not be responsible to the Company or any Bank Investor for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Transaction Document or any certificate or other
document referred to or provided for in, or received by any of them under, any
Transaction Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Transaction Document, or any other
document referred to or provided for therein or for any failure by any of the
Borrower, the Seller or the Master Servicer or any other Person to perform any
of its obligations thereunder; (c) shall not be responsible for or have any duty
to ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any of the Borrower, the Seller or the Master
Servicer or the satisfaction of any condition or to inspect the property
(including the books and records) of any of the Borrower, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Transaction Document; and (e) shall not be responsible for any action taken
or omitted to be taken by it under or in connection with any Transaction
Document, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
SECTION 9.2. Agent's Reliance, Etc. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Borrower, the Seller or the Master
Servicer), independent
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accountants, and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Investors, and such
instructions shall be binding on the Company and all of the Bank Investors;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Transaction
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Bank Investors against any and all liability and expense
which may be incurred by it by reason of taking any such action.
SECTION 9.3. Termination Events. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Termination Event or an event which
but for the lapse of time or the giving of notice or both, would constitute a
Termination Event, unless the Agent has received written notice specifying such
event and stating that such notice is a "Notice of Termination Event". In the
event that the Agent receives such a notice of the occurrence of a Termination
Event or potential Termination Event, the Agent shall give prompt notice thereof
to the Company. The Agent shall (subject to Section 9.02 hereof) take such
action with respect to such Termination Event or potential Termination Event as
shall reasonably be directed by the Majority Investors; provided 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 Termination Event or potential Termination Event as it
shall deem advisable in the best interest of the Company and the Bank Investors.
SECTION 9.4. Rights as Bank Investor. With respect to its Commitment,
NationsBank (and any successor acting as Agent) in its capacity as a Bank
Investor hereunder shall have the same rights and powers hereunder as any other
Bank Investor and may exercise the same as though it were not acting as the
Agent, and the term "Bank Investor" or "Bank Investors" shall, unless the
context otherwise indicates, include the Agent in its individual capacity.
NationsBank (and any successor acting as Agent) and its affiliates may (without
having to account therefor to the
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Company or any Bank Investor) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any of the Borrower, the Seller and the
Master Servicer or any of their Subsidiaries or affiliates as if it were not
acting as Agent, and NationsBank (and any successor acting as Agent) and its
affiliates may accept fees and other consideration from any of the Borrower, the
Seller and the Master Servicer or any of their Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Company or any Bank Investor.
SECTION 9.5. Indemnification of the Agent. The Bank Investors agree to
indemnify the Agent (to the extent not reimbursed by the Borrower), ratably in
accordance with their Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
(including by the Company or any Bank Investor) in any way relating to or
arising out of this Agreement or any other Transaction Document or the
transactions contemplated thereby or any action taken or omitted by the Agent
under this Agreement or any other Transaction Document; provided that no Bank
Investors shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person indemnified. Without
limitation of the foregoing, the Bank Investors agree to reimburse the Agent,
ratably in accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the Agent in
connection with the administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and the
other Transaction Documents, to the extent that such expenses are incurred in
the interests of or otherwise in respect of the Bank Investors hereunder and/or
thereunder and to the extent that the Agent is not reimbursed for such expenses
by the Borrower. The agreements contained in this Section shall survive payment
in full of the Net Investment and all other amounts payable under this
Agreement.
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SECTION 9.6. Non-Reliance. The Company and each Bank Investor agrees
that it has, independently and without reliance on the Agent or the Company or
any Bank Investor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower, the Seller, the
Originators and the Master Servicer and their Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent, the Company or any Bank Investor, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Transaction
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Company and the Bank Investors by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Company with any credit or other information concerning the affairs,
financial condition, or business of any of the Borrower, the Seller or the
Master Servicer or any of their Subsidiaries or affiliates that may come into
the possession of the Agent or any of its affiliates.
SECTION 9.7. Resignation of Agent. The Agent may resign at any time by
giving notice thereof to the Company, the Bank Investors and the Borrower. Upon
any such resignation, the Majority Investors shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Investors and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Company and the Bank Investors, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
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SECTION 9.8. Payments by the Agent. Unless specifically allocated to a
Bank Investor pursuant to the terms of this Agreement, all amounts received by
the Agent on behalf of the Bank Investors shall be paid by the Agent to the Bank
Investors (at their respective accounts specified in their respective Assignment
and Assumption Agreements) in accordance with their respective related pro rata
interests in the Net Investment on the Business Day received by the Agent,
unless such amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to the Bank
Investors on such Business Day, but, in any event, shall pay such amounts to the
Bank Investors in accordance with their respective related pro rata interests in
the Net Investment not later than the following Business Day.
SECTION 9.9. Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect an
Advance as requested under Section 2.2(a), then at any time, the
Borrower shall have the right to require the Company to assign its
interest in the Net Investment in whole to the Bank Investors pursuant
to this Section 9.9. In addition, if at any time on or prior to the
Commitment Termination Date (i) a Termination Event occurs that results
in the Termination Date or (ii) the Company elects to give notice to
the Borrower of a Reinvestment Termination Date, the Borrower hereby
requests and directs that the Company assign its interest in the Net
Investment in whole to the Bank Investors pursuant to this Section 9.9
and the Borrower hereby agrees to pay the amounts described in Section
9.9(d) below. Provided that the Net Asset Test is satisfied, upon any
such election by the Company or any such request by the Borrower, the
Company shall make such assignment and the Bank Investors shall accept
such assignment and shall assume all of the Company's obligations
hereunder. In connection with any assignment from the Company to the
Bank Investors pursuant to this Section 9.9, each Bank Investor shall,
on the date of such assignment, pay to the Company an amount equal to
its Assignment Amount. In addition, at any time on or prior to the
Commitment Termination Date, the Borrower shall have the right to
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request funding under this Agreement directly from the Bank Investors;
provided, however, that at such time all conditions precedent set forth
herein for an Advance shall be satisfied. In connection with such
funding by the Bank Investors, the Bank Investors shall accept the
assignment of all of the Company's interest in the Net Investment and
assume all of the Company's obligations hereunder concurrently with or
prior to any such Advance. Upon any assignment by the Company to the
Bank Investors contemplated hereunder, the Company shall cease to make
any additional Advances hereunder.
(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Net Investment, the Receivables and Related
Security with respect thereto and its rights and obligations hereunder
to any Person unless approved in writing by the Parent (which consent
will not be unreasonably withheld), the Administrative Agent, on behalf
of the Company, and the Agent (which consent will not be unreasonably
withheld). In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment,
the Receivables and Related Security with respect thereto and the
assignor's rights and obligations hereunder and the assignor shall
promptly execute and deliver all further instruments and documents, and
take all further action, that the assignee may reasonably request, in
order to protect, or more fully evidence the assignee's right, title
and interest in and to such interest and to enable the Agent, on behalf
of such assignee, to exercise or enforce any rights hereunder and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. Upon any such
assignment, (i) the assignee shall have all of the rights and
obligations of the assignor hereunder and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party with respect to such interest for all purposes
of this Agreement and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment,
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was a party (it being understood that the Bank Investors, as assignees,
shall (x) be obligated to fund Advances under Section 2.2(a) in
accordance with the terms thereof, notwithstanding that the Company was
not so obligated and (y) not have the right to elect the commencement
of the amortization of the Net Investment pursuant to the definition of
"Reinvestment Termination Date", notwithstanding that the Company had
such right) and (ii) the assignor shall relinquish its rights with
respect to such interest for all purposes of this Agreement and under
the other Transaction Documents to which such assignor is or,
immediately prior to such assignment, was a party. No such assignment
shall be effective unless a fully executed copy of the related
Assignment and Assumption Agreement shall be delivered to the Agent and
the Borrower. All Transaction Costs incurred in connection with the
initial assignment hereunder of NationsBank's Pro Rata Share of its
interests as Bank Investor shall be borne by the Borrower, but the
costs associated with any other such assignment by Bank Investors shall
not be borne by the Borrower. No Bank Investor shall assign any portion
of its Commitment hereunder without also simultaneously assigning an
equal portion of its interest in the Liquidity Provider Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any state ments,
warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
or this Agreement, the other Transaction Documents or any such other
instrument or document; (ii) the assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower, the Seller or the Master Servicer or the
performance or observance by the Borrower, the Seller or the Master
Servicer of any of their respective obligations under this
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Agreement, the Receivables Purchase Agreement, the other Transaction
Documents or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, the Receivables Purchase Agreement and such other
instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Assumption Agreement and to purchase such interest; (iv) such
assignee will, independently and without reliance upon the Agent, or
any of its Affiliates, or the assignor and based on such agreements,
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 this Agreement and the other Transaction Documents; (v)
such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement,
the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and
interests in and under this Agreement, the other Transaction Documents,
the Receivables, the Contracts and the Related Security; (vi) such
assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the
assignee of the assignor; and (vii) such assignee agrees that it will
not institute against the Company any proceeding of the type referred
to in Section 10.9 prior to the date which is one year and one day
after the payment in full of all Commercial Paper issued by the
Company.
(d) Borrower's Obligation to Pay Certain Amounts; Additional
Assignment Amount. The Borrower shall pay to the Agent, for the account
of the Company from the sources set forth in Section 2.5, in connection
with any assignment by the Company to the Bank Investors pursuant to
this Section 9.9, an aggregate amount equal to all Discount to accrue
through the end of each outstanding Tranche Period plus all other
Aggregate Unpaids (other than the Net Investment). To the extent that
such Discount relates to interest or discount on Related Commercial
Paper, if the Borrower fails
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to make payment of such amounts at or prior to the time of assignment
by the Company to the Bank Investors, such amount shall be paid by the
Bank Investors (in accordance with their respective Pro Rata Shares) to
the Company as additional consideration for the interests assigned to
the Bank Investors and the amount of the "Net Investment" hereunder
held by the Bank Investors shall be increased by an amount equal to the
additional amount so paid by the Bank Investors.
(e) Administration of Agreement After Assignment. After any
assignment by the Company to the Bank Investors pursuant to this
Section 9.9 (and the payment of all amounts owing to the Company in
connection therewith), all rights of the Administrative Agent and the
Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.9, all payments to be made
hereunder by the Borrower or the Master Servicer to the Company shall
be made to the Agent's account as such account shall have been notified
to the Borrower and the Master Servicer.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 9.9, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or Moody's, respectively (or such
rating shall have been withdrawn by Standard & Poor's or Moody's), such
Bank Investor, upon request of the Agent, shall, within five (5)
Business Days of such request, assign its rights and obligations
hereunder to another financial
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institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). In
either such case, if any such Bank Investor shall not have assigned its
rights and obligations under this Agreement within the applicable time
period described above, the Company shall have the right to require
such Bank Investor to accept the assignment of such Bank Investor's Pro
Rata Share of the Net Investment; such assignment shall occur in
accordance with the applicable provisions of this Section 9.9. Such
Bank Investor shall be obligated to pay to the Company, in connection
with such assignment, in addition to the Pro Rata Share of the Net
Investment, an amount equal to the interest component of the
outstanding Commercial Paper issued to fund the portion of the Net
Investment being assigned to such Bank Investor, as reasonably
determined by the Agent, such amount when paid to constitute an
addition to the Net Investment held by such Bank Investor.
Notwithstanding anything contained herein to the contrary, upon any
such assignment to a downgraded Bank Investor as contemplated pursuant
to the immediately preceding sentence, the aggregate available amount
of the Facility Limit, solely as it relates to new Advances by the
Company, shall be reduced by the amount of unused Commitment of such
downgraded Bank Investor; it being understood and agreed, that nothing
in this sentence or the two preceding sentences shall affect or
diminish in any way any such downgraded Bank Investor's Commitment to
the Borrower or such downgraded Bank Investor's other obligations and
liabilities hereunder and under the other Transaction Documents.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement. This Agreement shall terminate on the
date following the Termination Date upon which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees have been paid in full
and all other Aggregate Unpaids have been paid in full, in each case, in cash;
provided that (i) the rights
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and remedies of the Agent, the Company, the Bank Investors and the
Administrative Agent with respect to any representation and warranty made or
deemed to be made by the Borrower pursuant to this Agreement, (ii) the
indemnification and payment provisions of Article VIII, and (iii) the agreement
set forth in Section 10.9 hereof, shall be continuing and shall survive any
termination of this Agreement.
SECTION 10.2. Waivers; Amendments. (a) No failure or delay on the part
of the Agent, the Company, the Administrative Agent or any Bank Investor in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law.
(b) Any provision of this Agreement or any other Transaction
Document may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower, the Master Servicer, the Company and
the Majority Investors (and, if Article IX or the rights or duties of the Agent
are affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by each Bank Investor directly affected thereby, (i)
increase the Commitment of a Bank Investor, (ii) reduce the Net Investment or
rate of interest to accrue thereon or any fees or other amounts payable
hereunder, (iii) postpone any date fixed for the payment of any scheduled
distribution in respect of the Net Investment or interest with respect thereto
or any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments or the number of Bank
Investors, which shall be required for the Bank Investors or any of them to take
any action under this Section or any other provision of this Agreement, (v)
release all or substantially all of the property with respect to which a
security or other interest therein has been granted hereunder to the Agent or
the Bank Investors or (vi) extend or permit the extension of the Commitment
Termination Date. In the event the Agent requests the Company's or a Bank
Investor's consent pursuant to the foregoing provisions and the Agent does not
receive a consent (either positive or negative) from the Company or such Bank
Investor within 10 Business Days of the
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Company's or Bank Investor's receipt of such request, then the Company or such
Bank Investor (and its percentage ownership interest hereunder) shall be
disregarded in determining whether the Agent shall have obtained sufficient
consent hereunder.
SECTION 10.3. Notices. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 10.3 and confirmation is received,
(ii) if given by mail 3 Business Days following such posting, postage prepaid,
U.S. certified or registered, (iii) if given by overnight courier, one (1)
Business Day after deposit thereof with a national overnight courier service, or
(iv) if given by any other means, when received at the address specified in this
Section 10.3. However, anything in this Section to the contrary notwithstanding,
the Borrower hereby authorizes the Company to effect Advances, Tranche Period
and Tranche Rate selections based on telephonic notices made by any Person which
the Company in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Company a written confirmation of
each telephonic notice signed by an authorized officer of the Borrower. However,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs in any material respect from the action
taken by the Company, the records of the Company shall govern absent manifest
error.
If to the Company:
Kitty Hawk Funding Corporation
c/o Lord Securities
Two Wall Street - 19th Floor
New York, New York 10005
Telephone: (212) 346-9006
Telecopy: (212) 346-9012
(with a copy to the Administrative Agent)
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If to the Borrower:
UCP Borrowing SPE 1998-1 Limited Partnership
One First Street
Suite 1600
Reno, Nevada, 89501
with a copy to:
UCP Borrowing SPE 1998-1 Limited Partnership
c/o Daniel Chait, Treasurer
10800 Biscayne Boulevard
Suite 300
Miami, Florida 33161
Telephone: (305) 899-5000
Telecopy: (305) 899-5050
Payment Information:
Bank: NationsBank, N.A.
ABA No.: 111 000 012
Account Name: UCP Borrowing SPE 1998-1 Limited
Partnership
Account No.: 37510 59352
If to the Master Servicer
Portfolio Financial Servicing Company, L.P.
2121 SW Broadway
Portland, Oregon 97201
Attention: Gerald Hudspeth
Telephone: (503) 228-1245
Telecopy: (503) 721-1712
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If to the Seller:
UniCapital Funding Corporation
10800 Biscayne Boulevard
Suite 300
Miami, Florida 33161
Attention: Treasurer
Telephone: (305) 899-5000
Telecopy: (305) 899-5050
Payment Information:
NationsBank, N.A.
ABA No.: 111 000 012
Account 37510 33 747
Reference: UniCapital Lease Funding
If to the Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
Payment Information:
NationsBank, N.A.
ABA No.: 053-000-196
for the account of NationsBank Charlotte
Account No. 10822016511
Attn.: Camille Zerbinos
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
113
<PAGE> 119
If to the Collateral Agent:
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--Structured Finance
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
If to the Bank Investors, at their respective addresses set
forth on the signature pages hereto or of the Assignment and
Assumption Agreement pursuant to which it became a party
hereto.
SECTION 10.4. Governing Law; Submission to Jurisdiction; Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. THE BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY. The Borrower hereby irrevocably waives,
to the fullest extent it may effectively do so, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum. Nothing in this Section 10.4 shall affect
the right of the Company to bring any action or proceeding against the Borrower
or its respective properties in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete integration
of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the
114
<PAGE> 120
entire Agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.
SECTION 10.5. Severability; Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or unenforce
able in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.6. Successors and Assigns. (a) This Agreement shall be
binding on the parties hereto and their respective successors and assigns;
provided, however, that neither the Borrower nor Master Servicer may assign any
of its rights or delegate any of its duties hereunder or under the Receivables
Purchase Agreement or under any of the other Transaction Documents to which it
is a party without the prior written consent of the Agent. No provision of this
Agreement shall in any manner restrict the ability of the Company or any Bank
Investor to assign, participate, grant security interests in, or otherwise
transfer any portion of the Pledged Interest.
(b) Without limiting the foregoing, the Company may, from time
to time, with prior or concurrent notice to the Borrower, the Parent and the
Master Servicer, in one transaction or a series of transactions, assign all or a
portion of the Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to a
Conduit Assignee; provided that if such Conduit Assignee is not administered by
NationsBank, the Company shall only make such assignment if the Borrower
consents to such assignment. Upon and to the extent of such assignment by the
Company to a Conduit Assignee, (i) such Conduit Assignee shall be the owner of
the assigned portion of the Net Investment, (ii) the related administrative or
managing agent for such Conduit Assignee will act as the Administrative Agent
for such Conduit Assignee, with
115
<PAGE> 121
all corresponding rights and powers, express or implied, granted to the
Administrative Agent hereunder or under the other Transaction Documents, (iii)
such Conduit Assignee and its liquidity support provider(s) and credit support
provider(s) and other related parties shall have the benefit of all the rights
and protections provided to the Company and its Liquidity Support Provider(s)
and Credit Support Provider(s), respectively, herein and in the other
Transaction Documents (including, without limitation, any limitation on recourse
against such Conduit Assignee or related parties, any agreement not to file or
join in the filing of a petition to commence an insolvency proceeding against
such Conduit Assignee, and the right to assign to another Conduit Assignee as
provided in this paragraph), (iv) such Conduit Assignee shall assume all (or the
assigned or assumed portion) of the Company's obligations, if any, hereunder or
any other Transaction Document, and the Company shall be released from such
obligations, in each case to the extent of such assignment, and the obligations
of the Company and such Conduit Assignee shall be several and not joint, (v) all
distributions in respect of the Net Investment shall be made to the applicable
agent or administrative agent, as applicable, on behalf of the Company and such
Conduit Assignee on a pro rata basis according to their respective interests,
(vi) the definition of the term "CP Rate" with respect to the portion of the Net
Investment funded with commercial paper issued by the Company from time to time
shall be determined in the manner set forth in the definition of "CP Rate"
applicable to the Company on the basis of the interest rate or discount
applicable to commercial paper issued by such Conduit Assignee (rather than the
Company), (vii) the defined terms and other terms and provisions of this
Agreement and the other Transaction Documents shall be interpreted in accordance
with the foregoing, and (viii) if requested by the Agent or the agent or
administrative agent with respect to the Conduit Assignee, the parties will
execute and deliver such further agreements and documents and take such other
actions as the Agent or such agent or administrative agent may reasonably
request to evidence and give effect to the foregoing. No Assignment by the
Company to a Conduit Assignee of all or any portion of the Net Investment shall
in any way diminish the related Bank Investors' obligation under Section 9.9 to
fund any Advance not funded by the Company or such Conduit Assignee or to
acquire from the Company or such Conduit Assignee all or any portion of the Net
Investment.
116
<PAGE> 122
(c) Each of the Borrower, the Seller and Master Servicer
hereby agrees and consents to the assignment by the Company from time to time of
all or any part of its rights under, interest in and title to this Agreement and
the Pledged Interest to any Liquidity Provider or to any Conduit Assignee as set
forth in section 10.6(b). In addition, each of the Borrower and the Seller
hereby consents to and acknowledges the assignment by the Company of all of its
rights under, interest in and title to this Agreement and the Pledged Interest
to the Master Servicer.
SECTION 10.7. Waiver of Confidentiality. Each of the Borrower, the
Seller and the Master Servicer hereby consents to the disclosure of any
non-public information (other than the identity of the Obligors and other
information relating to the identity of the Obligors) with respect to it
received by the Company, the Agent, any Bank Investor or the Administrative
Agent to any of the Company, the Agent, any nationally recognized rating agency
rating the Company's Commercial Paper (informing such agency of the highly
confidential nature of such information), the Administrative Agent, the
Collateral Agent, any Bank Investor, the Liquidity Provider or the Credit
Support Provider in relation to this Agreement. Each of the Agent, the Company
and each Bank Investor agrees that, other than as set forth in the preceding
sentence, it shall not disclose such information to any other Person except (i)
its auditors and attorneys and employees, (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction or, (iii) to a
potential Bank Investor upon its agreement to abide by the provisions of this
Section with respect to such information.
SECTION 10.8. Confidentiality Agreement. Each of the Borrower and the
Master Servicer hereby agrees that it will not disclose the contents of this
Agreement or any other proprietary or confidential information of the Company,
the Agent, the Administrative Agent, the Collateral Agent, any Liquidity
Provider or any Bank Investor to any other Person except (i) its auditors and
attorneys, employees or financial advisors (other than any commercial bank) and
any nationally recognized rating agency, provided such auditors, attorneys,
employees, financial advisors or rating agencies are informed of the highly
confidential nature of such information or (ii) as otherwise required by
applicable law or order of a court of competent jurisdiction.
117
<PAGE> 123
SECTION 10.9. No Bankruptcy Petition Against the Company. Each of the
Borrower, the Master Servicer and the Seller hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
SECTION 10.10. No Recourse Against Stockholders, Officers or Directors.
No recourse under any obligation, covenant or agreement of the Company contained
in this Agreement shall be had against Merrill Lynch Money Markets Inc. (or any
affiliate thereof), or any stockholder, officer or director of the Company, as
such, 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 the Company,
and that no personal liability whatsoever shall attach to or be incurred by
Merrill Lynch Money Markets Inc. (or any affiliate thereof), or the
stockholders, officers or directors of the buyer, as such, or any of them, under
or by reason of any of the obligations, covenants or agreements of the Company
contained in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by the Company of any of such obligations, covenants or
agreements, either at common law or at equity, or by statute or constitution, of
Merrill Lynch Money Markets Inc. (or any affiliate thereof) and every such
stockholder, officer or director of the Company is hereby expressly waived as a
condition of and consideration for the execution of this Agreement].
118
<PAGE> 124
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Loan and Security Agreement as of the date first written above.
KITTY HAWK FUNDING CORPORATION,
as Company
By: _________________________
Name:
Title:
UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP, as Borrower
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: Andrew L. Stidd
Title: Manager
PORTFOLIO FINANCIAL SERVICING
COMPANY, L.P., as Master Servicer
By: PFSC ACQUISITION CORP.,
as general partner
By: _________________________
Name:
Title:
Commitment NATIONSBANK, N.A., as Agent
and a Bank Investor
$---------
By: ________________________
Name:
Title:
<PAGE> 125
EXHIBIT A
FORM OF NOTICE OF CHANGE IN FACILITY LIMIT
[Date]
NationsBank, N.A.
NationsBank Corporate Center--10th Floor
Charlotte, North Carolina 28255
Attention:Michelle M. Heath--
Structured Finance
Dear Ms. Heath:
Reference is made to the Loan and Security Agreement dated as of July
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as Borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company, L.P.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
Pursuant to the Agreement, the undersigned hereby request that the
Facility Limit be [increased][decreased] from $__________ to $_______________,
concurrently with an equivalent [decrease][increase] in the facility limit under
the Purchase Facility Agreement. A separate request under that facility is being
made concurrently herewith. The undersigned request that such change be
effective as of [date], which is at least three Business Days from the date of
delivery hereof.
A-1
<PAGE> 126
UCP BORROWING SPE 1998-1 Limited
Partnership, as Borrower
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:_________________________
Name:
Title:
Confirmed and Accepted as of this
___ day of _______, ____
NATIONSBANK, N.A., as Agent
By:________________________
Name:
Title:
A-2
<PAGE> 127
EXHIBIT B
CREDIT POLICY MANUAL AND CREDIT POLICY PROCEDURE MEMORANDA
Each of the Parent's Credit Policy Manual and Credit Policy Procedure Memoranda
were delivered by the Borrower on June 25, 1998 to the Agent and the receipt of
which has been separately acknowledged by the Agent.
B-1
<PAGE> 128
EXHIBIT C
[RESERVED.]
C-1
<PAGE> 129
EXHIBIT D
[RESERVED.]
D-1
<PAGE> 130
EXHIBIT E
FORM OF INVESTOR REPORT
E-1
<PAGE> 131
EXHIBIT F
FORM OF BORROWING REQUEST
NationsBank, N.A.
NationsBank Corporate Center - 10th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath - Structured Finance
Reference is made to the Loan and Security Agreement dated as of July
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as Borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company, L.P.,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
The Borrower, pursuant to Section 2.2(a) of the Agreement, hereby
requests that the Company make an Advance to it pursuant to the following
instructions:
Borrowing Date:
________________________________________
Borrowing request is made to:
[Company] [Bank Investors]
Advance Amount:
________________________________________
Tranche Period(s):
________________________________________
Account to be credited:
____________________________[bank name]
F-1
<PAGE> 132
ABA No.
________________________________________
Account No.
________________________________________
Reference No.
________________________________________
Please credit the above-mentioned account by 11:00 a.m. (New
York City time) on the Borrowing Date.
The Borrower hereby certifies as of the date hereof that $__________ is
available for additional Advances based on the following calculation:
$________________ (Maximum Net Investment)
- $________________ (Net Investment)
= $________________ (amount available for Borrowing)
F-2
<PAGE> 133
IN WITNESS WHEREOF, the undersigned has caused this Borrowing Request
to be duly executed and delivered by its duly authorized officer as of the date
first above written.
UCP BORROWING SPE 1998-1
Limited Partnership
By: UCP GP SPE 1998-1 LLC,
as General Partner
By:___________________________
Name:
Title:
Dated:____________________________
F-3
<PAGE> 134
SCHEDULE I TO EXHIBIT F
CONTRACT SCHEDULE
Lease Specific Information -- Origination
Account Number
Serial Number
Lessee Name
Street Address
City
State
Zip Code
Credit Rating of Lessee, if attainable (D&B)
Credit Score as per UniCapital Corporation's Credit and
Collection Policy
Location of Collateral
City
State
Zip Code
Location of Contracts (Name and Institution where held)
Collateral Type (ex. Personal Computer, Printing Press)
Type of Lease
Operating
Sales-type
Finance
Promissory Note
Vendor/Manufacturer
Flag for "unique funding arrangements"
Advance Vendor Payments
Progress Funding
Wet Funding
PPR-type leases
Gross Contractual Receivable Balance
Outstanding Remaining Lease Balance
Amount of Rent (Lease Payment)
Frequency of Lease Payments (Monthly, quarterly,
or semi-annually)
Lease Rate (Yield)
Discount Rate (Applicable Hedge Rate Pursuant to TAA)
Term (months)
Amount Financed
Original Cost of Equipment (OEC)
F-4
<PAGE> 135
End of Term Provision(s)
nominal: guaranteed/unguaranteed
or fair market value
Current Status of Lease Pool
Gross Receivables Serviced And Owned
Fair market Value of Collateral
Date of Fair Market Value determination
Booked Value of Equipment
Residual Value booked
Actual Residual Realized
Remarketing Revenue
Remarketing Fees
Delinquent Status
1-30 Day
31-60 Day
61-90 Day
91-120 Day
121-150 Day
151-180 Day
180+ Day
Defaulted Receivables (Y/N)
Cause of Default (Why Lessee cannot pay?)
Gross Charge-offs
Net Charge-offs
Recoveries
Flag for Repossessed Collateral
Flag for Prepay
Amount Prepaid
Accrued Interest
Outstanding Principal of Receivable
Maturity Date of Lease Term
Cut-Off Date
F-5
<PAGE> 136
ANNEX 1 TO EXHIBIT F
GRID
Date of Advance:
Amount of Advance:
Increase in Net Investment (Giving effect to Advance):
Decrease in Net Investment (Giving effect to Advance):
F-6
<PAGE> 137
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Loan and Security Agreement dated as of June
1, 1998 (such agreement as amended, modified or supplemented from time to time,
the "Agreement") among UCP Borrowing SPE 1998-1 Limited Partnership, as borrower
(in such capacity, the "Borrower"), Portfolio Financial Servicing Company,
individually and as master servicer (the "Master Servicer"), Kitty Hawk Funding
Corporation (the "Company"), NationsBank, N.A., as agent for the Company and the
Bank Investors (in such capacity, the "Agent") and as a Bank Investor, and each
other bank that may become a party to the Agreement in the capacity of a Bank
Investor. Terms defined in the Agreement are used herein with the same meaning.
___________________ (the "Assignor") and _____________________ (the "Assignee")
agree as follows:
(a) The Assignor hereby sells and assigns to the Assignee,
without recourse and without representation and warranty, and the
Assignee hereby purchases and assumes from the Assignor, that interest
in and to all of the Assignor's rights and obligations under the
Agreement and the other Transaction Documents, as of the date hereof.
Such interest is expressed as a percentage of all rights and
obligations of the Bank Investors being equal to the percentage
equivalent of a fraction the numerator of which is $________, and the
denominator of which is $________ the current Facility Limit. After
giving effect to such sale and assignment, the Assignee's Commitment
will be as set forth on the signature page hereto.
(b) [In consideration of the payment of $___________, being
___% of the existing Net Investment, and of $___________, being ___% of
the aggregate unpaid accrued Discount, receipt of which payment is
hereby acknowledged, the Assignor hereby assigns to the Agent for the
account of the Assignee, and the Assignee hereby purchases from the
Assignor, a ___% interest in and to all of the Assignor's
G-1
<PAGE> 138
right, title and interest in and to the Net Investment purchased by the
undersigned on _______________, 1998 under the Agreement.][INCLUDE IF
AN EXISTING NET INVESTMENT IS BEING ASSIGNED.]
(c) The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other
Transaction Document or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or the Receivables,
any other Transaction Document or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower, [the Master Servicer], the Agent or the
Seller or the performance or observance by the Borrower, [the Master
Servicer], the Agent or the Seller of any of their respective
obligations under the Agreement, any other Transaction Document, or any
instrument or document furnished pursuant thereto.
(d) The Assignee (i) confirms that it has received a copy of
the Agreement, the related Receivables Purchase Agreement, the VFN, the
Facility Fee Letter and the Fee Letter, together with copies of the
financial statements referred to in Section 5.1 of the Agreement, to
the extent delivered through the date of this Agreement, and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and
Assumption Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent, any of its Affiliates, the Assignor or
any other [Bank Investor], 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
and/or any other Transaction Document; (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise
such powers and
G-2
<PAGE> 139
discretion under the Agreement and/or the other Transaction Documents
as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (iv) agrees
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 [Bank Investor]; and (vi) specifies as its address
for notices and its account for payments the office and account set
forth beneath its name on the signature pages hereof[; and (vii)
attaches the forms prescribed by the Internal Revenue Service of the
United States of America certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes
with respect to all payments to be made to the Assignee under the
Agreement or such other documents as are necessary to indicate that all
such payments are subject to such rates at a rate reduced by an
applicable tax treaty]. [The Assignee also covenants with each of the
Agent and the Master Servicer that the Assignee will not make a public
offering of the interest being assigned to and accepted by it hereby,
and will not reoffer or resell such interest, in a manner that would
render the issuance and sale of such interest, whether considered
together with the resale or otherwise, a violation of the Securities
Act of 1933 or any state securities or "Blue Sky" laws or require
registration pursuant thereto.]
(e) The effective date for this Assignment and Assumption
Agreement shall be the later of (i) the date on which the Agent
receives this Assignment executed by the parties hereto and receives
the consent of [the Borrower and] the Administrative Agent, on behalf
of the Company, and (ii) the date of this Assignment and Assumption
Agreement (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement and the consent of [the Borrower
and] the Administrative Agent, on behalf of the Company, this
Assignment and Assumption Agreement will be delivered to the Agent for
acceptance and recording.
(f) Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Agreement and,
to the extent provided in this Assignment and Assumption Agreement,
shall have the rights
G-3
<PAGE> 140
and obligations of a Bank Investor thereunder; and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations
under the Agreement.
(g) Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make, or cause to be made, all payments
under the Agreement in respect of the interest assigned hereby
(including, without limitation, all payments in respect of such
interest in Net Investment, Discount and fees) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Agreement for periods prior to the Effective Date
directly between themselves.
(h) This Assignment and Assumption Agreement shall be governed
by, and construed in accordance with, the laws of the State of New
York.
(i) This Assignment and Assumption Agreement may be executed
in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of the
signature page to this Assignment by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
G-4
<PAGE> 141
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized as of the ____ day of July , 1998.
Remaining [NAME OF ASSIGNOR]
Commitment
$___________
By:____________________________
Name:
Title:
Commitment [NAME OF ASSIGNEE]
$___________
By: ____________________________
Name:
Title:
[Address]
Address for notices
[Account]
Account for payments:
Consented to this __ day
of _________, 1998
NATIONSBANK, N.A., as
Administrative Agent
By: ________________________
Name:
Title:
NATIONSBANK, N.A.,
as Agent
By: ________________________
Name:
Title:
G-5
<PAGE> 142
EXHIBIT H
LIST OF ACTIONS AND SUITS
None.
H-1
<PAGE> 143
EXHIBIT I
LOCATION OF RECORDS
Portfolio Financial Servicing Company, L.P.
2121 SW Broadway
Portland, Oregon 97201
Attention: Gerald Hudspeth
K.L.C., Inc. (Keystone) - with respect to
Receivables for which it is Originator
433 New Park
West Hartford, Connecticut 06110
Attention: Edgar Lee
I-1
<PAGE> 144
EXHIBIT J
LIST OF SUBSIDIARIES AND TRADENAMES
None.
J-1
<PAGE> 145
EXHIBIT K
[Reserved.]
K-2
<PAGE> 146
EXHIBIT L-1
FORM OF OFFICER'S CERTIFICATE OF THE BORROWER
I, __________________, the undersigned _________ of UniCapital
Funding Corporation, the member (in such capacity, the "Member") of UCP GP SPE
1998-1 LLC, which is the general partner of UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP (the "Partnership"), a Nevada limited partnership, DO HEREBY CERTIFY
that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Member on behalf of the general partner of the
Partnership adopted by consent as of June 19, 1998, authorizing the execution,
delivery and performance of each of the documents mentioned therein, which
resolutions have not been revoked, modified, amended or rescinded and are still
in full force and effect.
L-1-1
<PAGE> 147
WITNESS my hand as of this ____ day of ________, 1998.
_____________________________
Name:
Title:
I, the undersigned, of UniCapital Funding Corporation DO HEREBY CERTIFY
that _____________________ is the duly elected and qualified _________ of
UniCapital Funding Corporation and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
_____________________________
Name:
Title:
L-1-2
<PAGE> 148
EXHIBIT L-2
FORM OF OFFICER'S CERTIFICATE OF THE SELLER
I, __________________, the undersigned _________ of UniCapital
Funding Corporation (the "Company"), a Delaware corporation, DO HEREBY CERTIFY
that as of the date hereof and
since June 26, 1998:
1. There has been no modification or amendment to the Certificate of
Incorporation of the Company.
2. There has been no modification or amendment to the By-laws of the
Company.
3. The resolutions duly adopted by the Board of Directors of the
Company adopted by consent as of June 9, 1998 and June 19, 1998 have not been
revoked, modified, amended or rescinded and are still in full force and effect.
L-2-1
<PAGE> 149
WITNESS my hand as of this ____ day of ________, 1998.
By: _____________________
Name:
Title:
I, the undersigned, ______________ of the Company, DO HEREBY CERTIFY
that _____________________ is the duly elected and qualified _________ of the
Company and the signature above is his/her genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
By: __________________________
Name:
Title:
L-2-2
<PAGE> 150
EXHIBIT L-3
FORM OF OFFICER'S CERTIFICATE OF THE GENERAL PARTNER
I, __________________, the undersigned ________________ of
UniCapital Funding Corporation, the member (in such capacity, the "Member") of
UCP GP SPE 1998-1 LLC, a Nevada limited liability company (the "Company"), DO
HEREBY CERTIFY that as of the date hereof and since June 26, 1998:
1. There has been no modification or amendment to the Articles of
Organization of the Company.
2. There has been no modification or amendment to the Operating
Agreement of the Company.
L-3-1
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WITNESS my hand as of this ____ day of ________, 1998.
_____________________________
Name:
Title: Secretary
I, the undersigned, ___________________ of the Company, DO HEREBY
CERTIFY that _____________________ is the duly elected and qualified
______________ of the Company and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
_____________________________
Name:
Title:
L-3-2
<PAGE> 152
EXHIBIT L-4
FORM OF OFFICER'S CERTIFICATE OF THE PARENT
I, __________________, the undersigned __________________ of
UniCapital Corporation (the "Company"), a Delaware corporation, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Incorporation of the Company as in effect on the date hereof.
2. Attached hereto as Annex B is a true and complete copy of the
By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Company adopted by
consent as of May 24, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
4. The below-named persons, as of the date hereof, have been elected
and duly qualified as officers or representatives of the Company holding the
respective offices or positions below set opposite their names and the
signatures below set opposite their names are their genuine signatures:
Name Office Signature
---- ------ ---------
__________________________
__________________________
__________________________
__________________________
L-4-1
<PAGE> 153
WITNESS my hand as of this ____ day of ________, 1998.
By:____________________________
Name:
Title:
I, the undersigned, ___________________ of UniCapital Corporation, DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
______________ of UniCapital Corporation and the signature above is his/her
genuine signature.
WITNESS my hand as of this ____ day of _______, 1998.
By:____________________________
Name:
Title:
L-4-2
<PAGE> 154
EXHIBIT L-5
FORM OF OFFICER'S CERTIFICATE OF THE MASTER SERVICER
I, __________________, the undersigned ______________ of PFSC
Acquisition Corp., the general partner of PORTFOLIO FINANCIAL SERVICING COMPANY,
L.P. (the "Partnership"), a Delaware limited partnership, DO HEREBY CERTIFY
that:
1. Attached hereto as Annex A is a true and complete copy of the
Certificate of Limited Partnership of the Partnership as in effect on the date
hereof.
2. Attached hereto as Annex B is a true and complete copy of the
Agreement of Limited Partnership of the Partnership as in effect on the date
hereof.
3. Attached hereto as Annex C is a true and complete copy of the
resolutions duly adopted by the general partner of the Partnership adopted by
consent as of June 8, 1998, which resolutions have not been revoked, modified,
amended or rescinded and are still in full force and effect.
L-5-1
<PAGE> 155
WITNESS my hand as of this ____ day of ________, 1998.
By:____________________________
Name:
Title:
I, the undersigned, __________________ of PFSC Acquisition Corp., DO
HEREBY CERTIFY that _____________________ is the duly elected and qualified
___________ of PFSC Acquisition Corp. and the signature above is his/her genuine
signature.
WITNESS my hand as of this ____ day of _______, 1998.
By:____________________________
Name:
Title:
L-5-2
<PAGE> 156
EXHIBIT M
FORM OF VARIABLE FUNDING NOTE
THIS NOTE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED, ASSIGNED,
EXCHANGED OR CONVEYED EXCEPT IN ACCORDANCE WITH THE LOAN AND SECURITY AGREEMENT
REFERRED TO HEREIN. THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND NO
TRANSFER HEREOF MAY BE MADE EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT OF
1933, AS AMENDED AND ANY OTHER APPLICABLE LAWS.
$375,000,000
[Date]
This Note is secured solely by a pool of equipment lease and contract
receivables generated from time to time in the ordinary course of business by
UniCapital Funding Corporation (the "Seller") and acquired by UCP Borrowing SPE
1998-1 Limited Partnership (the "Borrower").
(By way of clarification, this Note does not represent any interest
(equity or otherwise) in the Borrower).
FOR VALUE RECEIVED, the Borrower promises to pay to Nationsbank, N.A.,
on behalf of and as agent for Kitty Hawk Funding Corporation (the "Buyer") and
the Bank Investors (as defined in the Agreement), the principal sum of
$375,000,000 (Three hundred and seventy-five million dollars) or such other
amount as shall represent the outstanding Net Investment together with all other
Aggregate Unpaids, at the times and on the dates and all as more fully provided
in the Loan and Security Agreement dated as of July 1, 1998 among the Buyer, the
Borrower, Portfolio Financial Servicing Company, L.P., individually and as
master servicer, Kitty Hawk Funding Corporation (the "Company"), NationsBank,
N.A. as agent for the Company and the Bank Investors, and certain financial
institutions that may become a party thereto in the capacity of a Bank Investor
(such agreement as amended, supplemented or modified from time to time, the
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"Agreement"). The Receivables consist of all receivables generated under the
Contracts from time to time hereafter, all monies due or to become due in
payment of the Receivables and the other assets and interests as provided in the
Agreement.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned to such terms in the Agreement. This Note is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement, as amended from time to time, the holder hereof by virtue of
the acceptance hereof assents and by which the holder hereof is bound. In the
event of any inconsistency or conflict between the terms of this Note and the
terms of the Agreement, the terms of the Agreement shall prevail.
This Note is secured by the Receivables and Related Security, including
the right to receive Collections and other amounts at the times and in the
amounts specified in the Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of New York. This Note is issued
pursuant to, and is entitled to the benefits of, the Agreement.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed.
UCP BORROWING SPE 1998-1
LIMITED PARTNERSHIP
By: UCP GP SPE 1998-1 LLC,
as General Partner
By: _________________________
Name: Andrew L. Stidd
Title: Manager
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<PAGE> 159
EXHIBIT N
FORM OF PARENT GUARANTY
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this "Guaranty"),
dated as of July 1, 1998, is made by UNICAPITAL CORPORATION, a Delaware
corporation (the "Guarantor") in favor of UCP BORROWING SPE 1998-1 LIMITED
PARTNERSHIP, a Nevada limited partnership ("Borrrowing"), KITTY HAWK FUNDING
CORPORATION, a Delaware corporation (the "Conduit"), NATIONSBANK, N.A., a
national banking association organized and existing under the laws of the United
States, as agent (the "Agent") for the Bank Investors (as defined herein) and
the Conduit and as Bank Investor and the other BANK INVESTORS from time to time.
All capitalized terms used but not otherwise defined herein shall have, unless
otherwise specified, the meaning assigned to such terms in the LSA (as defined
herein).
WITNESSETH:
WHEREAS, UniCapital Funding Corporation (the "Seller") has entered into
that certain Receivables Purchase Agreement (as the same may from time to time
be amended, restated, supplemented or otherwise modified, the "Purchase
Agreement") dated as of even date herewith with the Guarantor and Borrowing,
under which the Seller has agreed to sell and assign from time to time hereafter
all of its right, title and interest in and to certain "Contracts," the related
"Equipment" (each as defined therein) and various related assets as described
therein;
WHEREAS, Borrowing has entered into that certain Loan and Security
Agreement (as the same may from time to time be amended, restated, supplemented
or otherwise modified, the "LSA") dated as of even date herewith with the
Conduit, Portfolio Financial Servicing Company, L.P., as master servicer
thereunder, certain bank investors from time to time (the "Bank Investors" and,
together with the Conduit, the "Investors") and the Agent, under which Borrowing
shall from time to time borrow amounts secured by a pledge and assignment of its
right, title and interest in all Receivables and Related Security, arising from
the Contracts and
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Equipment and related assets acquired by Borrowing from the Seller under the
Purchase Agreement; and
WHEREAS, the Seller, which is a wholly owned subsidiary of the
Guarantor, owns all of the issued membership interests in Borrowing, and it is a
condition precedent to the effectiveness of the LSA that the Guarantor enter
into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Guarantor hereby agrees as follows:
1. GUARANTY. The Guarantor hereby unconditionally and irrevocably
undertakes and agrees with and for the benefit of the Investors and the Agent to
cause the due and punctual performance and observance by Borrowing with each of
Borrowing's obligations under the LSA and other Transaction Documents including
without limitation (i) by Borrowing of all of the terms, covenants conditions,
agreements and undertakings on the part of Borrowing to be performed or observed
by it under the LSA and the other Transaction Documents, and (ii) the due and
punctual payment of all sums of every kind, nature and character which are or
may become due and owing by Borrowing under the terms and provisions of the LSA
and the other Transaction Documents, whether for any Carrying Costs (including
the Discount and any other amount accrued with respect thereto, the Advances
made under the LSA in each case at the applicable rate provided for pursuant to
the LSA), fees, expenses, indemnified amounts or otherwise, whether on any
Payment Date, upon the occurrence of any Termination Event or for any other
reason whatsoever (collectively the "Borrower's Obligations"). All such
covenants, agreements and obligations on the part of Borrowing to be paid or
performed and together with all convenants or other obligations in the
Transaction Documents ascribed to the Guarantor (and, in each case, regardless
of whether incurred after the commencement of any bankruptcy proceeding with
respect to Borrowing) are collectively referred to herein as "Guarantor's
Obligations". The liability of the Guarantor individually with respect to the
Guarantor's Obligations shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
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The Guarantor agrees that it is directly and primarily liable for the
Guarantor's Obligations.
2. PAYMENT AND PERFORMANCE. In the event that Borrowing shall fail to
perform or observe any of the Guarantor's Obligations when the same shall be
required to be performed or observed under any Transaction Document, then the
Guarantor will itself (to the fullest extent permitted by law) duly and
punctually perform or observe, or cause to be duly and punctually performed or
observed, such Guarantor's Obligation, and it shall not be a condition to the
accrual of the Guarantor's Obligations of the Guarantor hereunder to perform or
observe, or cause the performance or observance of, any Guarantor's Obligation
that Borrowing, any Investor or the Agent shall have first made any request of
or demand upon or give any notice to the Guarantor or its respective successors
or assigns, or have instituted any action or proceeding against the Guarantor or
Borrowing or their respective successors or assigns in respect thereof.
3. UNCONDITIONAL OBLIGATIONS. The Guarantor's Obligations under this
Guaranty Agreement shall be absolute and unconditional irrespective of the
validity, legality or enforceability of the LSA, any other Transaction Documents
or any other any other guaranty of the Borrower's Obligations, and shall not be
affected by any action taken under the LSA, any other Transaction Document, any
other guaranty of the Borrower's Obligations or any other agreement between the
Investors and the Borrower or any other Person, in the exercise of any right or
power therein conferred, or by any failure or omission to enforce any right
conferred thereby, or by any waiver of any covenant or condition therein
provided, or by any acceleration of the maturity of any of the Borrower's
Obligations, or by the release or other disposal of any security for any of the
Borrower's Obligations, or by the dissolution of the Borrower or any transfer or
disposition of any assets of the Borrower or by any extension or renewal of the
LSA or any other Transaction Document, in whole or in part, or by any
modification, alteration, amendment or addition of or to the LSA, any other
Transaction Document, any other guaranty of the Borrower's Obligations or any
other agreement between any of the Investors and the Borrower or any other
Person, or by any other circumstance whatsoever (with or without notice to or
knowledge of the Guarantor) which may or might in any manner or to any extent
vary the risks of the
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Guarantor, or might otherwise constitute a legal or equitable discharge of a
surety or a guarantor; it being the purpose and intent of the parties hereto
that this Guaranty Agreement and the Guarantor's Obligations hereunder shall be
absolute and unconditional under any and all circumstances and shall not be
discharged except by performance or payment as herein provided.
4. CURRENCY AND FUNDS OF PAYMENT. The Guarantor hereby guarantees that
any payment of Guarantor's Obligations will be paid in lawful currency of the
United States of America and in immediately available funds, regardless of any
law, regulation or decree now or hereafter in effect that might in any manner
affect the Borrower's Obligations, or the rights of the Investors with respect
thereto as against the Borrower, or cause or permit to be invoked any alteration
in the time, amount or manner of payment by the Borrower of any or all of the
Borrower's Obligations.
5. SUITS. The Guarantor from time to time shall perform or pay to the
Agent for the benefit of the Investors, on demand, at the Agent's place of
business set forth in the LSA or such other address as the Agent shall give
notice of to the Guarantor, any Guarantor's Obligations as they become or are
declared due, and in the event such performance or payment is not made
forthwith, the Agent or the Conduit or any of them may proceed to suit against
the Guarantor. At the Agent's election, one or more and successive or concurrent
suits may be brought hereon by the Agent against the Guarantor, whether or not
suit has been commenced against the Borrower, any other guarantor of the
Borrower's Obligations or any other Person and whether or not the Investors have
taken or failed to take any other action to collect all or any portion of the
Borrower's Obligations or have taken or failed to take any actions against any
collateral securing payment or performance of all or any portion of the
Borrower's Obligations.
6. SET-OFF AND WAIVER. The Guarantor waives any right to assert against
the Investors as a defense, counterclaim, set-off or cross claim, any defense
(legal or equitable) or other claim which the Guarantor may now or at any time
hereafter have against the Borrower or any Investor without waiving any
additional defenses, set-off, counterclaims or other claims otherwise available
to the Guarantor. If at any time hereafter the Agent or any Investor employs
counsel for advice or other
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representation to enforce the Guarantor's Obligations that arise out of a
Termination Event, then, in any of the foregoing events, all of the reasonable
attorneys' fees arising from such services and all expenses, costs and charges
in any way or respect arising in connection therewith or relating thereto shall
be paid by the Guarantor to the Agent, for the benefit of the Investors, on
demand.
7. WAIVER; SUBROGATION.
(a) The Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Conduit's heretofore, now or from time to time hereafter making Advances and
otherwise loaning monies or giving or extending credit to or for the benefit of
the Borrower, whether pursuant to the LSA or any other Transaction Document or
any amendments, modifications, or supplements thereto, or replacements or
extensions thereof, (iii) the Investors or the Borrower heretofore, now or at
any time hereafter, obtaining, amending, substituting for, releasing, waiving or
modifying the LSA or any other Transaction Documents; (iv) presentment, demand,
default, non-payment, partial payment and protest; (v) any Investor heretofore,
now or at any time hereafter granting to the Borrower (or any other party liable
to the Conduit on account of the Borrower's Obligations) or to the Guarantor any
indulgence or extensions of time of payment of the Borrower's Obligations or the
Guarantor's Obligations, respectively; and (vi) any Investor heretofore, now or
at any time hereafter accepting from the Borrower, the Guarantor, any other
guarantor of the Borrower's Obligations or any other Person, any partial payment
or payments on account of the Borrower's Obligations or any collateral securing
the payment thereof or the Agent settling, subordinating, compromising,
discharging or releasing the same. The Guarantor agrees that each Investor may
heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as each Investor, in its sole and
absolute discretion, deems advisable, without in any way or respect impairing,
affecting, reducing or releasing the Guarantor from the Guarantor's Obligations,
and the Guarantor hereby consents to each and all of the foregoing events or
occurrences.
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(b) The Guarantor hereby agrees that payment or performance by the
Guarantor of the Guarantor's Obligations under this Guaranty Agreement may be
enforced by the Agent on behalf of the Conduit upon demand by the Agent to such
Guarantor without the Agent being required, such Guarantor expressly waiving any
right it may have to require the Agent, to (i) prosecute collection or seek to
enforce or resort to any remedies against the Borrower or any other guarantor of
the Borrower's Obligations, or (ii) seek to enforce or resort to any remedies
with respect to any security interests, liens or encumbrances granted to the
Agent by the Borrower, or any other Person on account of the Borrower's
Obligations or any guaranty thereof, IT BEING EXPRESSLY UNDERSTOOD, ACKNOWLEDGED
AND AGREED TO BY THE GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE
MADE BY THE AGENT, AND THE PROVISIONS HEREOF ENFORCED BY THE AGENT ON BEHALF OF
THE INVESTORS. Neither the Agent nor the Conduit shall have any obligation to
protect, secure or insure any of the foregoing security interests, liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantor's Obligations shall in no way be impaired, affected, reduced, or
released by reason of any Investor's failure or delay to do or take any of the
acts, actions or things described in this Guaranty including, without limiting
the generality of the foregoing, those acts, actions and things described in
this Section 7.
(c) The Guarantor further agrees with respect to this Guaranty that the
Guarantor shall have no right of subrogation, reimbursement or indemnity, nor
any right of recourse to security for the Borrower's Obligations until the
Facility Termination Date and the indefeasible payment in full of all Aggregate
Unpaids and any other amounts due to the Agent and the Investors under the
Transaction Documents.
8. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall be
effective as of the date hereof and shall continue in full force and effect
until the later of the Facility Termination Date and the indefeasible payment in
full of all Aggregate Unpaids and any other amounts due to the Agent and the
Investors under the Transaction Documents. This Guaranty Agreement shall be
binding upon and inure to the benefit of the Guarantor, the Agent and the
Investors and their respective successors and assigns. Notwithstanding the
foregoing, the Guarantor may not, without the
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prior written consent of the Agent, assign any rights, powers, duties or
obligations hereunder. Any claim or claims that the Investors may at any time
hereafter have against the Guarantor under this Guaranty Agreement may be
asserted by the Agent or any Investor by written notice directed to such
Guarantor.
9. REPRESENTATIONS AND WARRANTIES. The Guarantor warrants and
represents to the Agent for the benefit of the Investors that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against the
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that the Guarantor's execution, delivery and performance of this
Guaranty Agreement does not violate or constitute a breach of its certificate of
incorporation or other documents of corporate governance or any agreement to
which the Guarantor is a party, or any applicable laws, orders, regulations,
decrees or awards of any applicable governmental authority or arbitral body.
10. EXPENSES. The Guarantor agrees to be liable for the payment of all
reasonable fees and expenses, including attorney's fees, incurred by the Agent
in connection with the enforcement of this Guaranty Agreement.
11. REINSTATEMENT. The Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment received by the Agent or the Investors under the LSA or this Guaranty
Agreement is rescinded or must be restored for any reason.
12. ATTORNEY-IN-FACT. The Guarantor hereby appoints the Agent as the
Guarantor's attorney-in-fact for the purposes of carrying out the provisions of
this Guaranty Agreement and taking any action and executing any instrument which
the Agent may deem necessary or advisable to accomplish the purposes hereof,
which appointment is coupled with an interest and is irrevocable; provided, that
the Agent shall have and may exercise rights under this power of attorney only
upon the occurrence and during the continuance of a Termination Event.
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13. ABSOLUTE RIGHTS AND OBLIGATIONS. All rights of the Investors, and
all obligations of the Guarantor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the LSA, any other
Transaction Document or any other agreement or instrument relating to any of the
Guarantor's Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guarantor's Obligations, or any other amendment
or waiver of or any consent to any departure from the LSA, any other Transaction
Document or any other agreement or instrument relating to any of the Guarantor's
Obligations;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Guarantor's Obligations; or
(d) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, the Guarantor in respect of the Guarantor's
Obligations or of this Guaranty Agreement.
14. RELIANCE. The Guarantor represents and warrants to the Agent, for
the benefit of the Investors, that: (a) the Guarantor has adequate means to
obtain from the Borrower, on a continuing basis, information concerning the
Borrower and the Borrower's financial condition and affairs and has full and
complete access to the Borrower's books and records; (b) the Guarantor is
executing this Guaranty freely and deliberately, and understands the obligations
and financial risk undertaken by providing this Guaranty; (c) the Guarantor has
relied solely on the Guarantor's own independent investigation, appraisal and
analysis of the Borrower and the Borrower's financial condition and affairs in
deciding to provide this Guaranty and is fully aware of the same; and (d) the
Guarantor has not depended or relied on the Agent or any Investor, its or their
employees, agents or representatives, for any information whatsoever concerning
the Borrower or the Borrower's financial condition and affairs or other matters
material to the Guarantor's decision to provide this Guaranty or for any
counseling, guidance, or special consideration or any
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promise therefor with respect to such decision. The Guarantor agrees that
neither the Agent nor any Investor has any duty or responsibility whatsoever,
now or in the future, to provide to the Guarantor any information concerning the
Borrower or the Borrower's financial condition and affairs, and that, if the
Guarantor receives any such information from the Agent or any Investor, its or
their employees, agents or other representatives, the Guarantor will
independently verify the information and will not rely on the Agent or any
Investor, or its or their employees, agents or other representatives, with
respect to such information.
15. ENTIRE AGREEMENT This Guaranty Agreement, together with the LSA and
the other Transaction Documents, constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements,
commitments or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
Neither this Guaranty Agreement nor any portion or provision hereof may be
changed, altered, modified, supplemented, discharged, canceled, terminated, or
amended orally or in any manner other than by an agreement, in writing signed by
the parties hereto.
16. SEVERABILITY. In case any lien, security interest or other right of
the Agent or any Investor or any provision hereof shall be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other lien, security interest or other right granted hereby or
provision hereof
17. COUNTERPARTS. This Guaranty Agreement may be executed in any number
of counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.
18. INDEMNIFICATION. Without limitation of Article VIII of the LSA or
any other indemnification provision in any Transaction Document, the Guarantor
hereby covenants and agrees to pay, indemnify, and hold the Investors harmless
from and against any and all other out-of-pocket liabilities, costs, expenses or
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disbursements of any kind or nature whatsoever arising in connection with any
claim or litigation by any Person resulting from the execution, delivery,
enforcement, performance and administration of this Guaranty Agreement or the
Transaction Documents, or the transactions contemplated hereby or thereby, or in
any respect relating to the Collateral or any transaction pursuant to which such
Guarantor has incurred any Guarantor's Obligations (all the foregoing,
collectively, the "indemnified liabilities"); provided, however, that the
Guarantor shall have no obligation hereunder with respect to indemnified
liabilities directly or primarily arising from the willful misconduct or gross
negligence of the Agent or any Investor. The agreements in this subsection shall
survive termination or expiration of this Guaranty Agreement, the LSA and the
Facility Termination Date.
19. REMEDIES CUMULATIVE. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies provided by law or under the LSA,
the other Transaction Documents or other applicable agreements or instruments.
The making of Advances to the Borrower pursuant to the LSA shall be conclusively
presumed to have been made in reliance upon the Guarantor's guaranty of the
Guarantor's Obligations pursuant to the terms hereof.
20. NOTICES. Any notice required or permitted hereunder shall be given,
(a) with respect to the Guarantor, at the address of the Borrower indicated in
Section 10.3 of the LSA (b) with respect to the Agent or the Conduit, at the
Agent's address indicated in Section 10.3 of the LSA. All such notices shall be
given and shall be effective as provided in Section 10.3 of the LSA. All notices
to the Bank Investors shall be directed in care of the Agent at the above
referenced address.
21. GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE NOTWITHSTANDING ITS
EXECUTION AND DELIVERY OUTSIDE SUCH STATE.
(b) THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT
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OF OR RELATING TO THIS GUARANTY AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN THE COUNTY OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES ANY
OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE
OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
IRREVOCABLY SUBMITS GENERALLY AND UNCONDMONALLY TO THE JURISDICTION OF
ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) AND IN ACCORDANCE WITH SECTION 10.3 OF
THE LSA OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF SHALL PRECLUDE
THE AGENT OR ANY INVESTOR FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION
DOCUMENT IN THE COURTS OF ANY PLACE WHERE THE GUARANTOR OR OF THE
GUARANTOR'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO THIS GUARANTY AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE GUARANTOR HEREBY
AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND
THE GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT
N-11
<PAGE> 170
MAY HAVE THAT EACH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
N-12
<PAGE> 171
IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
UNICAPITAL CORPORATION,
as Guarantor
By:________________________________
Name:
Title:
UCP BORROWING SPE 1998-1 Limited
Partnership
By: UCP GP SPE 1998-1 LLC,
as general partner
By:________________________________
Name:
Title:
KITTY HAWK FUNDING CORPORATION
By:________________________________
Name:
Title:
NATIONSBANK, N.A.,
as Agent
By:________________________________
Name:
Title:
N-13
<PAGE> 1
Exhibit 11.01
Statement Regarding Computation of Per Share Earnings
Computations of earnings (loss) per share are as follows (Dollars in thousands
except share and per share data):
<TABLE>
<CAPTION>
Three months Six months
ended June 30, 1998 ended June 30, 1998
------------------- -------------------
BASIC:
- ------
<S> <C> <C>
Weighted average common shares outstanding 25,631,827 16,024,865
=========== ===========
Net income (loss) $ 9,254 $ (8,061)
----------- -----------
Income (loss) available to common shareholders $ 9,254 $ (8,061)
=========== ===========
Basic earnings (loss) per share $ .36 $ (.50)
=========== ===========
DILUTED:
- --------
Weighted average common shares outstanding 25,631,827 16,024,865
=========== ===========
Assumed exercise of stock options 149,888 123,160
----------- -----------
Total shares used in computation 25,781,715 16,148,025
=========== ===========
Income (loss) available to common shareholders $ 9,254 $ (8,061)
=========== ===========
Diluted earnings (loss) per share $ .36 $ (.50)
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 20,003
<SECURITIES> 17,214
<RECEIVABLES> 383,799
<ALLOWANCES> 2,658
<INVENTORY> 20,930
<CURRENT-ASSETS> 0
<PP&E> 3,087
<DEPRECIATION> 143
<TOTAL-ASSETS> 1,214,906
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 48
<OTHER-SE> 728,023
<TOTAL-LIABILITY-AND-EQUITY> 1,214,906
<SALES> 54,390
<TOTAL-REVENUES> 54,390
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 49,094
<LOSS-PROVISION> 298
<INTEREST-EXPENSE> 6,423
<INCOME-PRETAX> (1,383)
<INCOME-TAX> 6,678
<INCOME-CONTINUING> (8,061)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,061)
<EPS-PRIMARY> (0.50)
<EPS-DILUTED> (0.50)
</TABLE>
