SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 30, 1999
-------------------------------
Monaco Finance, Inc.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in charter)
Colorado
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
000-18819 84-1088131
- ------------------------ -----------------------
(Commission File (IRS Employee
Number) Identification No.)
370 Seventeenth Street, Suite 5060 80202
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 592-9411
------------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
As reported in the Registrant's Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 1999 ("Form 10-Q"), which was filed with the Securities
and Exchange Commission on August 23, 1999, the Registrant recently executed a
series of agreements with its creditors and other parties. Please refer to the
"Management's Discussion and Analysis of Operations - Liquidity and Capital
Resources" section of the Form 10-Q and to "Note 8 - Subsequent Events" of Notes
to Consolidated Financial Statements in the Form 10-Q. Copies of the agreements
are filed as exhibits to this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
Exhibit Description
Number
---------- ----------------------------------------------
10.1 Amended and Restated Credit Agreement among
MF Receivables Corp. IV, Monaco Finance,
Inc. and Daiwa Finance Corporation dated as
of June __, 1999.
10.2 Amended and Restated Security Agreement
among MF Receivables Corp. IV, Monaco
Finance, Inc. and The Chase Manhattan Bank
dated as of June __, 1999.
10.3 Amended and Restated Credit Agreement among
MF Receivables Corp. III, Monaco Finance,
Inc. and Daiwa Finance Corporation dated as
of July __, 1999.
10.4 Amended and Restated Security Agreement
among MF Receivables Corp. III, Monaco
Finance, Inc. and The Chase Manhattan Bank
dated as of July __, 1999.
10.5 Letter Amendment to Servicing Agreement,
dated as of December 4, 1997, originally
entered into by and among Monaco Finance,
Inc., MF Receivables Corp. III and The Chase
Manhattan Bank
10.6 Letter Amendment to Servicing Agreement,
dated as of December 22, 1997, originally
entered into by and among Monaco Finance,
Inc., MF Receivables Corp. IV and The Chase
Manhattan Bank
10.7 Pledge And Custodial Agreement, dated as
of July 28, 1999, among MF Receivables
Holding Corp., a Delaware corporation,
Norwest Bank Minnesota, Rothschild North
America, Inc., a Delaware Corporation,
and The Bank Of New York
10.8 Letter Agreement by and among MF Receivables
Corp. IV, The Bank of New York and Daiwa
Finance Corporation
10.9 Release Agreement, dated as of July 28,
1999, among Monaco Finance, Inc., Pacific
Usa Holdings Corp., Pacific Southwest Bank,
Rothschild North America, Inc., and Daiwa
Finance Corporation
10.10 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and Black
Diamond Advisors, Inc.
10.11 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and Heller
Financial, Inc.
10.12 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and BDC
Partners I, L.P.
10.13 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and Guarantee
Title & Trust Company
10.14 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and Lisa W.
Zenni
10.15 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and Steven
Deckoff
10.16 Amended And Restated 12% Senior Note among
MF Receivables Holding Corp. and James Walker
10.17 Consent and Amendment No. 2 to Indenture
and Related Documents, dated as of July 28,
1999, among Norwest Bank Minnesota, N.A., MF
Receivables Holding Corp., and Monaco Finance, Inc.
10.18 Form of Amended and Restated 12% Senior Note
among MF Receivables Holding Corp. and _______
10.19 Amendment to Amended and Restated Note
Purchase Agreement (this "Amendment"), dated
as of July 28, 1999, among Monaco Finance,
Inc., MF Receivables Holding Corp. and
Rothschild North America, Inc.
10.20 Amended and Restated Senior Note among MF
Receivables Holding Corp. and Rothschild
North America, Inc.
10.21 Supplementary Servicing Agreement, dated as
of April 1, 1999, by and among MF
Receivables Corp. III, Systems & Services
Technologies, Inc., and The Chase Manhattan
Bank
10.22 Supplementary Servicing Agreement, dated as
of April 1, 1999, by and among MF
Receivables Corp. IV, Systems & Services
Technologies, Inc., and The Chase Manhattan
Bank
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Monaco Finance, Inc.
-----------------------------------
(Registrant)
Date: September 9, 1999 By: /s/ Morris Ginsburg
------------------------------
Morris Ginsburg
Chief Executive Officer and
Director
MF RECEIVABLES CORP. IV
(as Borrower),
MONACO FINANCE, INC.
and
DAIWA FINANCE CORPORATION
(as Initial Lender)
---------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
---------------------------------
Dated as of July 29, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE IDEFINITIONS..............................................1
Section 1.01 Definitions.........................1
Section 1.02 General Information................12
Section 1.03 Headings...........................12
Section 1.04 Independence of Covenants, etc.....12
ARTICLE IIADVANCE................................................13
Section 2.02 Notes..............................13
Section 2.03 Reserved...........................14
Section 2.04 Reserved............................14
Section 2.05 Increased Costs....................14
Section 2.06 Taxes..............................16
Section 2.07 Payment Instructions...............18
ARTICLE IIIREPRESENTATIONS AND WARRANTIES........................18
Section 3.01 General Representations and
Warranties of the Borrower.......................18
Section 3.02 General Representations and
Warranties of Monaco.............................22
ARTICLE IVCONDITIONS PRECEDENT TO THE EFFECTIVENESS OF
THIS AGREEMENT..................................................23
Section 4.01 Merger.............................23
Section 4.02 Other Amendments...................23
Section 4.03 Releases...........................23
Section 4.04 Letter of Credit...................23
Section 4.05 Subordinated Debt..................23
Section 4.06 Resolutions........................24
ARTICLE V[Reserved]..............................................24
ARTICLE VI[Reserved].............................................24
ARTICLE VIICERTAIN SPECIAL RIGHTS................................24
Section 7.01 Home Office Payment................24
Section 7.02 Certain Taxes......................25
Section 7.03 Substitution of Initial Lender.....25
ARTICLE VIIIMATURITY.............................................26
ARTICLE IXASSIGNMENTS AND PARTICIPATIONS.........................26
Section 9.01 Assignments........................26
Section 9.02 Participations.....................27
ARTICLE XCERTAIN COVENANTS OF THE BORROWER.......................27
Section 10.01 Maintenance of Office.............27
Section 10.02 Existence.........................27
Section 10.03 General Maintenance of Business,
etc..............................................28
Section 10.04 Inspection........................28
Section 10.05 Compliance with Law, etc..........28
Section 10.06 Payment of Taxes and Claims.......28
Section 10.07 Limitations on Indebtedness.......28
Section 10.08 Restricted Investments............28
Section 10.09 Nature of Business................29
Section 10.10 Independence......................29
Section 10.11 Other Agreements and Parties......30
Section 10.12 Investment Company Act............31
Section 10.13 Liens.............................31
ARTICLE XICERTAIN COVENANTS OF MONACO............................31
Section 11.01 Loan Files, Etc...................31
Section 11.02 Further Assurances................31
Section 11.03 Independence......................31
Section 11.04 Other Agreements and Parties......32
ARTICLE XII[Reserved]............................................33
ARTICLE XIIIDEFAULTS.............................................33
Section 13.01 Default...........................33
Section 13.02 Default Remedies..................34
ARTICLE XIVINDEMNIFICATION AND FUNDING LOSSES....................35
Section 14.01 Indemnification...................35
Section 14.02 Indemnification with respect to
the Designated Auto Loans........................37
Section 14.03 Expenses..........................37
ARTICLE XVMISCELLANEOUS..........................................38
Section 15.01 Notices...........................38
Section 15.02 Survival..........................38
Section 15.03 Successors and Assigns............38
Section 15.04 Amendment and Waiver..............38
Section 15.05 Counterparts......................39
Section 15.06 Reproduction of Documents.........39
Section 15.07 Governing Law.....................39
Section 15.08 Consent to Jurisdiction and Venue.39
Section 15.09 Acts of Lender....................40
Section 15.10 Confidentiality...................40
<PAGE>
EXHIBITS
EXHIBIT A..Form of Notes
EXHIBIT B..Form of Security Agreement
EXHIBIT C..Monaco Guidelines
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
July 29, 1999, among MF Receivables Corp. IV, a Delaware corporation (the
"Borrower"), Monaco Finance, Inc., a Colorado corporation ("Monaco") and Daiwa
Finance Corporation (the "Initial
Lender").
W I T N E S S E T H
WHEREAS, the parties hereto are parties to that certain Credit
Agreement (as heretofore amended, modified or supplemented, the "Existing Credit
Agreement"), dated as of December 22, 1997; and
WHEREAS, the parties acknowledge and agree that one or more Events of
Default and Servicer Events of Default (as such terms are defined in the
Existing Credit Agreement) have occurred and are continuing; and
WHEREAS, the parties wish to amend and restate their rights and
obligations under the Existing Credit Agreement as set forth herein.
NOW, THEREFORE, the parties agree that upon the fulfillment of the
conditions precedent set forth in Article IV hereof, the Existing Credit
Agreement shall no longer be in effect and the rights and obligations of the
parties thereunder shall be amended and restated as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Except as the context shall otherwise require, the
following terms shall have the following meanings for all purposes of this
Agreement (the definitions to be applicable to both the singular and the plural
form of the terms defined, where either such form is used in this Agreement):
"Acquisition Agreement" means the Amended and Restated Asset Purchase
Agreement, dated as of December 22, 1997, among Monaco, Pacific USA Holdings
Corp., Pacific Southwest Bank, NAFCO Holding Company, L.L.C. and Advantage
Funding Group, Inc.
"Advance" means the advance provided for by Section 2.01 of the Existing
Credit Agreement.
"Affiliate" means, with respect to any Person (hereinafter "such Person"),
any other Person which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such Person or
another Affiliate of such Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
stock, by contract or otherwise.
"APR" means the annual percentage rate of an Auto Loan as determined
according to the related contractual documents with the Obligor thereof.
"Application for Certificate of Title" has the meaning set forth in the
Servicing Agreement.
"Assignee" has the meaning set forth in Section 9.01 hereof.
"Authorized Officer" means, with respect to Monaco or the Borrower, any
officer of Monaco or the Borrower, as the case may be, who is authorized to act
for Monaco or the Borrower, as the case may be, in matters relating to
transactions contemplated by this Agreement.
"Auto Loan" means a fixed-rate, fully amortizing, closed-end installment
loan (bearing interest calculable on a simple interest basis or based upon the
Rule of 78s) arising from the sale of a new or used Vehicle to a consumer which
includes, without limitation, (a) all security interests or liens and property
subject thereto from time to time purporting to secure payment by the obligor
thereunder, including, without limitation, Monaco's or the Originator's rights
under the related Dealer Agreement, (b) all guarantees, indemnities and
warranties, insurance policies, certificates of title and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such loan, (c) all collections and records with respect to the
foregoing and (d) all proceeds of any of the foregoing.
"Back-up Servicer" means the Person appointed by the Initial Lender
in accordance with Section 6.02(a) of the Servicing Agreement.
"Board" means, with respect to any Person, its board of directors or,
if it does not have a board of directors, its governing body which performs the
same duties as a board of directors.
"Business Day" means any day other than a Saturday or a Sunday, or
another day on which commercial banks in the State of New York or Colorado (or
in any other state as specified in writing by the Servicer in which the Servicer
is located) are required, or authorized by law, to close or, for purposes of
calculating the Interest Rate, on which commercial banks are not open for
domestic and foreign exchange business in New York, New York, and London,
England (as specified in writing from time to time by the Borrower).
"Calculation Date" means, with respect to any Collection Period, the
close of business on the last day of such Collection Period.
"Capital Lease" means any lease or other agreement for the use of
property which is required to be capitalized on a balance sheet of the lessee or
other user of property in accordance with generally accepted accounting
principles.
"Certificate of Title" has the meaning set forth in the
Servicing Agreement.
"Class A Interest Rate" means a rate equal to LIBOR plus 3.50% per
annum.
<PAGE>
"Class A Note(s)" means the Class A Notes issued in accordance with
the provisions of Section 2.02 of the Existing Credit Agreement.
"Class B Interest Rate" means a rate equal to 15% per annum.
"Class B Note(s)" means the Class B Notes issued in accordance with
the provisions of Section 2.02 of the Existing Credit Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time and any successor statute, together with the rules and regulations
thereunder.
"Collateral" has the meaning set forth in the Security
Agreement.
"Collateral Account" has the meaning specified in the
Security Agreement.
"Collateral Agent" means The Chase Manhattan Bank and any permitted
successors and assignees thereof.
"Collection Period" means each calendar month.
"Computer Tape" means the diskette, or other computer readable
medium, acceptable to the Initial Lender containing descriptions and payment
information on each Designated Auto Loan.
"Dealer" means each automobile dealer with whom Monaco or an
Originator entered into a Dealer Agreement.
"Dealer Agreement" means each agreement between a Dealer and either
Monaco or an Originator, which provides for acquisition of the Auto Loans.
"Default" has the meaning set forth in Section 13.01 hereof.
"Defaulted Auto Loan" means a Designated Auto Loan (a) which by its
terms has more than 10% of any installment of principal or interest which is 120
or more days contractually past due as measured from the date such Scheduled
Payment is due in accordance with the provisions of the related Auto Loan or (b)
which the Servicer has determined to be uncollectible in accordance with the
Servicing Agreement and the Credit and Collection Policies.
"Delinquency Rate" means, as of any Calculation Date, the aggregate
Unpaid Principal Balance of the Designated Auto Loans (other than Defaulted Auto
Loans) as to which Obligors are 31 days or more contractually past due as
measured from the date such Scheduled Payment is due in accordance with the
provisions of the related Loan Contract in making any portion of the Scheduled
Payments, divided by the aggregate Unpaid Principal Balance of the Designated
Auto Loans as of such Calculation Date.
<PAGE>
"Designated Auto Loan" means each Auto Loan pledged by the Borrower
to the Collateral Agent under the Security Agreement as security for its
obligations under the Existing Credit Agreement.
"Designated Financed Vehicle" means, with respect to a
Designated Auto Loan, the related Financed Vehicle.
"Determination Date" means the 10th day of each month (or the
immediately preceding Business Day if such day is not a Business Day).
"Dollars" or "$" means the lawful currency of the United States of
America, and in relation to any payment under this Agreement, same day or
immediately available funds.
"Eligible Dealer" means either an independent or a franchised Dealer
(a) duly licensed and authorized as a dealer in new or used Automobiles by
Governmental Authorities and (b) as to which Monaco or an Originator has entered
into a Dealer Agreement.
"Event of Default" has the meaning set forth in the
Existing Credit Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Executive Officer" with respect to a Person means the
Chief Executive Officer, Chief Operating Officer or Chief Financial
Officer of such Person.
"Fair Valuation" of the Properties of any Person shall be determined
on the basis of the amount which may be realized within a reasonable time,
either through collection or sale of such assets at the regular market value,
conceiving the latter as the amount which could be obtained for the property in
question within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling conditions.
"Financed Vehicle" means a Vehicle pledged to secure the obligations
of an Obligor under an Auto Loan.
"GAAP" means, as of the date of any determination with respect
thereto, generally accepted accounting principles as understood and applied in
the United States at the time in question.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
<PAGE>
"Guarantee" means, with respect to any Person, all obligations of
such Person guaranteeing or in effect guaranteeing any Indebtedness (including,
without limitation, liability in respect of a joint venture or a partnership),
dividend or other obligation or Investment of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including obligations
incurred through an agreement, contingent or otherwise, by such Person (a) to
purchase such Indebtedness, obligation or Investment or any property or assets
constituting security therefor, (b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness, obligation or Investment or (ii) to
maintain working capital or equity capital, or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness, obligation or
Investment, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, obligation or Investment of
the ability of the primary obligor to make payment of such Indebtedness,
obligation or Investment, or (d) otherwise to assure the owner of such
Indebtedness, obligation or Investment against loss in respect thereof.
"Guaranty Amounts" means, with respect to any Auto Loan, any and all
amounts paid by the individual guarantor indicated on the applicable Loan
Contract.
"Increased Cost" has the meaning set forth in
Section 2.06(d) hereof.
"Indebtedness" means, with respect to any Person, all items (other
than capital stock, capital surplus, retained earnings and deferred credits and
deferred income taxes), which in accordance with generally accepted accounting
principles would be included in determining total liabilities as shown on the
liability side of a balance sheet as at the date on which Indebtedness is to be
determined. The term "Indebtedness" shall also include, whether or not so
reflected, (a) indebtedness, obligations and liabilities secured by any Lien on
property of such Person, whether or not the indebtedness secured thereby shall
have been assumed by such Person, (b) all obligations of such Person in respect
of Capital Leases, and (c) all Guarantees.
"Indemnifying Party" has the meaning set forth in
Section 14.01 hereof.
"Independent Accountant" means Ehrhardt, Keefe, Steiner &
Hattman P.C. or such other certified public accountant as the
Borrower and the Initial Lender may agree.
"Initial Lender" means, subject to Section 7.03 hereof,
Daiwa Finance Corporation.
"Initial Reference Banks" means four major banks in the London
interbank market selected by the Initial Lender.
"Insurance Policy" means, with respect to a Financed Vehicle and a
Loan Contract, any insurance policy maintained by the Obligor pursuant to the
related Loan Contract that covers physical damage to the Financed Vehicle and
collision(including policies procured by the Servicer on behalf of the Obligor
or any VSI Policy), which policy shall name the Servicer as loss payee.
"Insurance Proceeds" means, with respect to any Auto Loan and the
related Financed Vehicle, any amount received during the related Collection
Period pursuant to an Insurance Policy issued with respect to the related
Financed Vehicle and such Auto Loan, net of any costs of collecting such amounts
not otherwise reimbursed.
<PAGE>
"Interest Payment Date" means each Payment Date and each date upon
which the Advance is repaid, either in whole or in part.
"Interest Period" means, with respect to the Advance, the period
commencing with the date of such Advance to and excluding the Payment Date
occurring in the month following the date of such Advance, and thereafter, the
period commencing with each Payment Date, to and excluding the following Payment
Date; provided that the final Interest Period in respect of the Advance shall
end on the date the Advance is repaid in full.
"Interest Rate" means, for any Interest Period, the Class A Interest
Rate with respect to the Class A Notes and the Class B Interest Rate with
respect to the Class B Notes.
"Investment" means any loan, advance, extension of credit (except for
accounts and notes receivable for merchandise sold or services furnished in the
ordinary course of business, and amounts paid in advance on account of the
purchase price of merchandise to be delivered to the payor within one year of
the date of the advance), or purchase of stock, notes, bonds or other securities
or capital contribution to any Person, whether in cash or other property. The
amount of any Investment shall be its cost (the amount of cash or the fair
market value of other property given in exchange therefor).
"Lender" means the Initial Lender and any Assignee thereof.
"LIBOR" means the per annum rate for deposits in United States
dollars for a period of one month which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the related LIBOR Determination Date. If such rate
does not appear on Telerate Page 3750 on such day, the rate will be determined
on the basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market for a period of one month commencing
on that day. The Initial Lender will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that day will be the arithmetic mean of the rates quoted by two or more
major banks in New York City, selected by the Initial Lender, in its sole
discretion at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a period of one
month.
"LIBOR Determination Date" means the second Business Day prior to the
commencement of each Interest Period.
<PAGE>
"Lien" means any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, civil law, statute, civil code or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien, privilege, security interest or other
encumbrance arising from a mortgage, deed of trust, hypothecation, cession,
transfer, assignment, pledge, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment or bailment for security purposes. The
term "Lien" shall also include reservations. exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale agreement
or other arrangement (including a leasing arrangement) pursuant to which title
to the property shall having been retained by or vested in some other Person for
security purposes.
"Loan Acquisition Agreement" means the Loan Sale and Contribution
Agreement, dated as of December 22, 1997, between the Borrower and Monaco,
pursuant to which Monaco agreed to sell or contribute, and the Borrower agreed
to acquire, Eligible Auto Loans, as from time to time further amended,
supplemented or modified.
"Loan Acquisition Price" means, with respect to each Auto Loan, the
price for transfer at which such Auto Loan was acquired by Monaco from a Dealer
or an Originator in accordance with the Monaco Guidelines.
"Loan Contract" means a fixed-rate, fully amortizing, closed-end
installment loan (bearing interest calculable on a simple interest basis or
based upon the Rule of 78s) arising from the sale of a new or used Vehicle to a
consumer.
"Loan Documents" means, with respect to an Auto Loan, (a) a copy of
the retail installment loan contract and security agreement evidencing such Auto
Loan, (b) a copy of the credit application, and (c) a copy of an executed
agreement to provide insurance signed by the Obligor or other written evidence
that such Auto Loan is covered by an Insurance Policy.
"Loan File" means, with respect to any Auto Loan, the original retail
installment loan contract and security agreement evidencing the Auto Loan and
originals or copies of such other documents and instruments relating to such
Auto Loan and the security interest on the selected Financed Vehicle as
specified in the Monaco Guidelines.
"Material Adverse Effect" means, with respect to any Person, any
event or circumstance that (a) would have a material adverse effect on the
business, results of operation, revenues or financial condition of such Person
and its consolidated Subsidiaries, taken as a whole, (b) would have a material
adverse effect on the ability of such Person to perform its obligations under
any Program Document to which it is a party or (c) would have a material adverse
effect on the value or enforceability of the Designated Auto Loans taken as a
whole.
"Merger" means the merger of MF3 with and into the Borrower.
"MF3" means MF Receivables Corp. III, a Delaware
corporation.
"MF3 Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of July 29, 1999, among MF3, Monaco and the Initial Lender,
as such agreement may be amended, supplemented or modified from time to time.
<PAGE>
"MF3 Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, MF3 and The Chase Manhattan
Bank, as Collateral Agent, as such agreement may be amended, supplemented or
modified from time to time.
"Minimum Assignment Denomination" means $500,000.
"Monaco" means Monaco Finance, Inc., a Colorado corporation.
"Monaco Guidelines" has the meaning set forth in the Loan
Acquisition Agreement.
"Monthly Servicer Fee" has the meaning set forth in the
Supplementary Servicing Agreement.
"Monthly Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Moody's" means Moody's Investors Service, Inc. and any
successor thereto.
"Net Payoff Balance" means, in respect of any Precomputed Auto Loan,
the net payoff less any accrued but unpaid late charges, as determined in
accordance with the Monaco Guidelines.
"Net Principal Balance" means, with respect to any Precomputed Auto
Loan, the Net Payoff Balance as of the due date of the last full Scheduled
Payment, or if more recent, the due date of the last periodic payment of
principal thereon.
"Net Unrealized Amount" means, (a) with respect to any Auto Loan
which is a Defaulted Auto Loan, the Unpaid Principal Balance of such Auto Loan
minus the amount of any Recoveries with respect thereto, and (b) with respect to
any Auto Loan where the related Obligor is in bankruptcy, the amount of losses
allocable to principal incurred thereon.
"Note(s)" means the Class A Notes and the Class B Notes.
"Obligor" means, with respect to any Auto Loan, the Person or Persons
primarily obligated to make payments in respect thereto.
"Officer's Certificate" means (a) with respect to the Collateral
Agent, any officer within the structured capital division (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers and (b) with
respect to Monaco, the Collateral Agent, the Servicer or the Borrower shall mean
a certificate executed on behalf of such party by the Chairman of the Board, the
President or any Vice President of the relevant entity.
"Originator" means any Person, other than Monaco, that acquired Auto
Loans directly from a Dealer.
<PAGE>
"Payment Date" means the 15th day of each month (or, if such day is
not a Business Day, the next succeeding Business Day).
"Permitted Investments" means, with respect to amounts on deposit in
the Collateral Account, cash and cash equivalents, reasonably available to the
Collateral Agent in compliance with regulatory requirements and the terms of
this Agreement.
"Permitted Liens" means:
(1) Liens created under the Security Agreement or under the MF3 Security
Agreement;
(2) Liens securing taxes, assessments, governmental charges or levies not yet
due or the payment of which is not then required by Section 10.6 hereof;
or
(3) any Lien which is a mechanics lien assessed against a Financed Vehicle
securing a Designated Auto Loan.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization or government (or any agency or political subsection thereof).
"Precomputed Auto Loan" means any Auto Loan under which earned
interest (which may be referred to in the Auto Loan as the add-on finance
charge) and principal is determined according to the sum of periodic balances or
the sum of monthly balances or the sum of the digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Program Documents" means this Agreement, the Security Agreement, the
Servicing Agreement, the Loan Acquisition Agreement, the Collateral Assignments,
the Notes and the Supplementary Servicing Agreement, and any document executed
or delivered by any party hereto in connection herewith or therewith, as any
such document may be amended, supplemented, restated or modified from time to
time. For purposes of Article XIV hereof, "Program Documents" shall also include
the Existing Credit Agreement and the "Program Documents" referred to therein.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualifying Auto Loan" means each Auto Loan which was acquired by
Monaco pursuant to the Acquisition Agreement.
<PAGE>
"Recoveries" means, with respect to a Defaulted Auto Loan and for any
Collection Period occurring after the date on which such Auto Loan becomes a
Defaulted Auto Loan, all payments that the Servicer received from or on behalf
of an Obligor regarding such Defaulted Auto Loan or from liquidation of the
related Financed Vehicle, including but not limited to Scheduled Payments,
Guaranty Amounts, any and all rebates and Insurance Proceeds, as reduced by any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Defaulted Auto Loan.
"Reference Banks" means four major banks in the London interbank
market selected by the Initial Lender.
"Repurchase Price" means, on any date of determination with respect
to any Designated Auto Loan, an amount equal to the sum of (a) the product of
(i) 0.9 and (ii) the total of (A) the Unpaid Principal Balance of such
Designated Auto Loan as of the end of the preceding Collection Period minus (B)
the amount of any principal deposit in the Collateral Account in respect of such
Designated Auto Loan since the end of such Collection Period and (b) accrued and
unpaid interest in respect thereof, calculated at the related APR from the last
day to which interest has been paid and credited to the Collateral Account
through the date of repurchase thereof.
"Requirement of Law" means, as to any Person, any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws, the federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Scheduled Payment" means each payment due in accordance with the
provisions of the related Auto Loan Contract.
"Securities" means. with respect to any Person, any shares of any
class of such Person's capital stock, or any options or warrants to purchase its
capital stock or other security exchangeable for or convertible into its capital
stock.
"Securities Act" means, the Securities Act of 1933, as amended from
time to time.
"Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, the Borrower and The Chase
Manhattan Bank, as Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Security Interest" means the security interest and rights created
under the Security Agreement in the Collateral in favor of the Collateral Agent.
"Selling Dealer" means, with respect to any Designated Auto Loan, the
Dealer that sold such Designated Auto Loan to Monaco or the Originator, as the
case may be.
"Servicer" means SST, or any other entity, in the capacity as
servicer under the Servicing Agreement.
"Servicer Event of Default" has the meaning set forth in
the Servicing Agreement.
<PAGE>
"Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated as of
December 22, 1997, among the Borrower, Monaco, as the Servicer and the
Verification Agent, as amended and restated by the Amended and Restated
Servicing Agreement, as amended, superseded and modified by the Supplementary
Services Agreement.
"Solvent" means, with respect to any Person, that:
(4) the Properties of such Person, at a Fair Valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person;
(5) based on current projections, which are based on underlying assumptions
which provide a reasonable basis for the projections and which reflect
such Person's judgment based on present circumstances of the most likely
set of conditions arid such Person's most likely course of action for the
period projected, such Person believes it has sufficient cash flow to
enable it to pay its debts as they mature; and
(6) such Person does not have an unreasonably small capital with which to
engage in its anticipated business.
"S&P" means Standard & Poor's Ratings Group, a division of the McGraw
Hill Companies and any successor thereto.
"SST" means Systems & Services Technologies, Inc., a
Delaware corporation.
"Subsidiary" means any corporation of which more than 50% (by number
of votes) of the Voting Stock shall be owned by such parent corporation and/or
one or more corporations which are themselves Subsidiaries of such parent
corporation.
"Successor Back-up Servicer" has the meaning set forth in
the Servicing Agreement.
"Successor Servicer" has the meaning set forth in the
Servicing Agreement.
"Supplementary Servicing Agreement" means the Supplementary Services
Agreement, dated as of April __, 1999, by and among the Initial Lender, the
Borrower, SST and the Collateral Agent, as the same may be amended, supplemented
or modified from time to time.
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
<PAGE>
"Unpaid Principal Balance" means, with respect to any Auto Loan as of
any date of determination, (a) for an Auto Loan bearing interest calculable on a
simple interest basis, the unpaid principal amount for such Auto Loan or (b) for
a Precomputed Auto Loan, the Net Principal Balance, in each case as of the
related Calculation Date; provided that, for any Auto Loan where the Net
Unrealized Amount equals the Unpaid Principal Balance, such Unpaid Principal
Balance shall thereafter equal zero (other than for purposes of calculating the
Net Unrealized Amounts).
"Vehicle" means a new or used automobile or light truck.
"VSI Policy" means a vendors' single interest insurance policy,
including any endorsements thereto, issued by an insurance company and covering
physical damage and collision in respect of Vehicles or other similar policy.
Section 1.2 General Information. (a) All accounting terms
used herein that are not otherwise expressly defined shall have the
respective meanings given to them in accordance with generally
accepted accounting principles at the particular time.
(1) The terms "hereof," "herein," "hereunder" and other words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular Article, Section or other subsection.
Section 1.3 Headings..The headings of the Articles, the Sections and other
subsections of this Agreement have been inserted for convenience of reference
only and shall not affect the meaning of this Agreement.
Section 1.4 Independence of Covenants, etc. Each representation and covenant
herein shall be given independent effect so that if any action or condition
would violate any of such covenants or would breach any of such representations,
the fact that such action or condition would not violate or breach, any other
covenant or representation shall not avoid the violation of such covenant or
representation.
ARTICLE II
ADVANCE
<PAGE>
Section 1.5 Advance. The Initial Lender has made the Advance to the Borrower
under the Existing Credit Agreement. Due to the occurrence of one or more Events
of Default, the Advance is now due and payable in full. Until the Advance is
repaid in full, the Advance shall continue to (a) be allocated between the Class
A Notes and the Class B Notes as provided in Section 2.02 of the Existing Credit
Agreement and (b) bear interest until such Advance shall be paid in accordance
with its terms at the per annum rate with respect to each Interest Period at the
Class A Interest Rate, with respect to that part of the Advance allocated to the
Class A Notes, or the Class B Interest Rate, with respect to that part of the
Advance allocated to the Class B Notes payable on each Interest Payment Date in
accordance with the provisions of the Security Agreement. Interest shall be
computed on the basis of the actual number of days in such Interest Period and a
360-day year and on each Interest Payment Date shall equal all unpaid interest
accrued in respect of each prior Interest Period. The Advance shall continue to
bear interest at the per annum rate with respect to each Interest Period equal
to the applicable Interest Rate plus 2.00%. If the Borrower shall have paid or
agreed to pay any interest on the Advance in excess of that permitted by law,
then it is the express intent of the parties hereto with respect thereto that
(i) to the extent possible given the term of the Advance, all excess amounts
previously paid or to be paid by the Borrower be applied to reduce the principal
amount of the Advance and the provisions thereof immediately be deemed reformed
and the amounts thereafter collectable thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the then applicable
law, but so as to permit the recovery of the fullest amount otherwise called for
thereunder and (ii) to the extent that the reduction of the principal amount of,
and the amounts collectible under, the Advance and the reformation of the
provisions thereof described in the immediately preceding clause (i) are not
possible given the term of the Advance, such excess amount shall be deemed to
have been paid with respect to the Advance as a result of an error and upon the
Lender obtaining actual knowledge of such error, such amount shall be refunded
to the Borrower. The Advance shall continue to be secured by the Collateral as
set forth in the Security Agreement. Except as provided in Section 2.07 hereof,
all sums payable by the Borrower under this Credit Agreement and the Advance
shall be paid without counterclaim, set-off, deduction or defense and without
abatement, suspension, deferment, diminution or reduction.
Section 1.6 Notes. (a) The Advance shall continue to be
evidenced by the Notes.
(1) The date and amount of the Advance and each payment made on account of the
principal thereof, shall be recorded by the Initial Lender on its books and,
prior to any transfer of either the Class A Notes or the Class B Notes, endorsed
by the Initial Lender on the schedule attached to such Class A Notes, Class B
Notes or any continuation thereof, as the case may be.
(2) The Initial Lender shall be entitled to have the Class A Note and the Class
B Note subdivided, by exchange for Notes of the same class of lesser
denominations or otherwise in connection with an assignment of all or any
portion of the Advance relating to such Class A Note or the Class B Note, as the
case may be, pursuant to the terms of this Agreement; provided that in no event
may the Class A Note or the Class B Note be subdivided into denominations of
less than $500,000.
Section 1.7 Reserved.
Section 1.8 Reserved.
Section 1.9 Increased Costs. (a) In the event that any change after the date
upon which the Lender makes the Advance in any Requirement of Law (including any
change to the certificate of incorporation, articles of association, by-laws or
other organizational or governing documents of the Lender, but only to the
extent that such change is the result of the compliance by the Lender with any
request or directive reflecting a change in Requirement of Law from any central
bank or other Governmental Authority in the United States of America), or in the
interpretation or application thereof or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority in the United States of America made after
the date upon which the Initial Lender makes its Advance:
<PAGE>
(1) shall subject the Lender to any tax of any kind whatsoever with respect to
this Agreement or the Notes, or change the basis of taxation of payments
in respect thereof (except for taxes referred to in Section 2.06(a) hereof
and Section 14.01(a)(iii) hereof and changes in the rate of tax on the
overall net income of the Lender);
(2) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by the Lender;
or
(3) shall impose on the Lender any other condition that has the result of
increasing the cost to such Lender of such Advance;
and the result of an, of the foregoing is to reduce the amount receivable
hereunder in respect of the Advance below that which such Lender would have
received but for such change or compliance, then after submission by the Lender
to the Borrower and the Collateral Agent of a written request therefor, the
Collateral Agent shall, subject to Section 2.05(c) hereof, on behalf of the
Borrower, pay to the Lender any additional amounts necessary to compensate the
Lender for such reduced amount receivable.
(2) In the event that the Lender shall have determined that any change after the
date upon which the Lender makes the Advance or acquires an interest in an
Advance in any Requirement of Law (including any change to the certificate of
incorporation, articles of association, by-laws or other organizational or
governing documents of the Lender, but only to the extent that such change is
the result of the compliance by the Lender with any request or directive
reflecting a change in Requirement of Law from any central bank or other
Governmental Authority in the United States of America) regarding capital
adequacy or in the interpretation or application thereof or compliance by the
Lender or any corporation controlling the Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
Governmental Authority in the United States of America made subsequent to the
date upon which such Lender makes the Advance or acquires its interest in an
Advance does or shall have the effect of reducing the rate of return on the
Lender's or such corporation's capital as a consequence of the transactions
contemplated hereby to a level below that which the Lender or such corporation
would have achieved but for such change or compliance (taking into consideration
the Lender's or such corporation's policies with respect to capital adequacy) by
an amount reasonably deemed thereby to be material, then, from time to time,
after submission by the Lender to the Borrower and the Collateral Agent of a
written request therefor, the Collateral Agent shall, subject to Section 2.05(c)
hereof, on behalf of the Borrower, pay to the Lender such additional amount or
amounts as will compensate the Lender for such reduction; provided that to the
extent that six months or more pass between the date upon which the Lender
obtains actual knowledge of the liability resulting in such reduction and the
date upon which the Lender provides notice of such reduction to the Borrower
hereunder, the Borrower shall not be liable for amounts relating to the period
six months or more prior to the date of such notice.
<PAGE>
(3) The Lender agrees that it shall use its best efforts to take any actions
that will avoid the need for, or reduce the amount of, any increased amounts
referred to in Section 2.05(a) or (b); hereof provided, that no Lender shall be
obligated to take any actions that would, in the sole opinion, of the Lender, be
disadvantageous to the Lender in any material respect.
(4) If the Lender claims the increased amounts described in Section 2.05(a) or
(b) hereof (such amount, an "Increased Cost"), the Lender will furnish to the
Borrower and the Collateral Agent a certificate setting forth the basis and
amount of each request by the Lender for any such Increased Cost.
(5) Failure on the part of the Lender to demand compensation for any Increased
Cost or amount pursuant to Section 2.05(a) hereof with respect to any period
shall not constitute a waiver of the Lender's right to demand compensation with
respect to such period; provided that to the extent that six months or more pass
between the date upon which the Lender obtains actual knowledge of the liability
resulting in such reduction and the date upon which the Lender provides notice
of such reduction to the Borrower hereunder, the Borrower shall not be liable
for amounts relating to the period six months or more prior to the date of such
notice.
(6) The Borrower shall have the right, and the Lender shall cooperate fully, to
replace any Lender which makes a claim pursuant to this Section 2.05 hereof with
a new lender that will succeed to the rights of such Lender under this
Agreement; provided that such Lender shall not be replaced hereunder with a new
lender until such Lender has been paid in full all amounts owed to it pursuant
to this Agreement; provided, further, that the Borrower shall provide such
Lender with an Officer's Certificate stating that such new lender is not subject
to, or has agreed not to seek, such increased costs.
(7) The provisions of this Section 2.05 hereof shall only apply to the Initial
Lender unless the Borrower has consented to the inclusion of one or more
additional Lenders in connection with the assignment by the Initial Lender (or
an additional Lender to which the Borrower has previously consented) of an
interest in an Advance in which case this Section 2.05 shall also apply to such
additional Lenders.
<PAGE>
Section 1.10 Taxes. (a) All payments made by the Collateral Agent on behalf of
the Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority in the United States of America, excluding, in the case of the Lender,
net income taxes and franchise taxes imposed on the Lender as a result of a
present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Lender (excluding a connection
arising solely from the Lender having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement) or any
political subdivision or taxing authority thereof or therein, and also excluding
United States of America withholding taxes to the extent that a Lender
incorporated in or under the laws of a jurisdiction other than the United
States; any state thereof or the District of Columbia falls to provide to the
Collateral Agent at such times as are required by law a duly completed and
executed Internal Revenue Service Form 1001 or 4224, as applicable (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"), provided that the Lender is not
subject to backup withholding or provides the Collateral Agent with a duly
completed and executed Internal Revenue Service Form W-8 or W-9, as appropriate.
If any Taxes are required to be withheld from any amounts payable to the Lender
hereunder, after submission by the Lender to the Borrower and the Collateral
Agent of a written request therefor, the amounts so payable to the Lender shall
be increased by the Collateral Agent, subject to Section 2.06(c) hereof, on
behalf of the Borrower, to the extent necessary to yield to the Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement, except that no increase
shall be made if the Lender is subject to backup withholding and falls to
provide the Collateral Agent with a duly completed and executed Internal Revenue
Service Form W-8 or W-9, as appropriate. Any Lender shall utilize available tax
credits to decrease amounts payable with respect to any such withholding which
the Lender in its sole judgment believes are directly related to this Agreement,
except that no increase shall be made if the Lender is subject to backup
withholding and falls to provide the Collateral Agent with a duly completed and
executed Internal Revenue Service Form W-8 or W-9, as appropriate. Nothing in
the preceding sentence shall give the Borrower or any other third party rights
to inspect, audit or otherwise request information regarding Lender records,
including records relating to available tax credits. If the Borrower falls to
pay any Taxes when due to the appropriate taxing authority the Collateral Agent
shall, subject to Section 2.06(c), on behalf of the Borrower, pay the Lender for
any incremental taxes, interest or penalties that may become payable by the
Lender as a result of any such failure.
<PAGE>
(1) If the Lender claims the amounts for Taxes referred to in Section 2.06(a)
hereof, the Lender will furnish to the Borrower and the Collateral Agent an
officer's certificate setting forth the basis and amount of each request by the
Lender for such Taxes. If the Borrower, within 30 days after receiving a notice
of the basis and amount of such Taxes, disputes the basis or amount set forth in
such notice, the Lender and the Borrower shall consult in good faith to resolve
such dispute. If such consultation does not resolve such dispute within 45 days
(or such longer period as the Lender and the Borrower may then agree) after the
Lender shall have provided the Borrower with such notice, the Borrower may
request that the Lender furnish to an Independent Accountant all information
reasonably necessary to permit the confirmation of the accuracy of the Lender's
computation of the Taxes described in such notice. Within 30 days of the receipt
of such information, the Independent Accountant either shall confirm the
accuracy of such computation or shall notify the Lender and the Borrower that
such computation proposed by the Lender is inaccurate. In the latter event, the
Lender shall consult with the Borrower and the Independent Accountant as to the
proper computation of the Taxes, whereupon the Lender shall recompute the Taxes
in such a manner as shall enable the Independent Accountant to confirm their
accuracy. The Borrower and the Lender agree that the sole responsibility of the
Independent Accountant shall be to verify the calculation of the Taxes and that
matters of interpretation of the Program Documents are not within the scope of
its responsibilities. All expenses incurred by the Lender and the Borrower in
connection with the verification procedures described in this Section 2.07
(including the fees and expenses of the Independent Accountant) shall be paid by
the Borrower unless the Independent Accountant reasonably concludes that
computation proposed by the Lender is inaccurate. Any information provided to
the Independent Accountant by the Lender shall be and remain the exclusive
property of the Lender and shall be deemed by the parties to be (and the
Independent Accountant shall confirm in writing that it will treat such
information as) the private, proprietary and confidential property of the
Lender, and no Person other than the Lender and the Independent Accountant shall
be entitled thereto or to any review thereof, and all such information shall be
returned to the Lender contemporaneously with the completion of the verification
procedure. Notwithstanding the foregoing, the Lender shall not be obligated to
disclose to any Person (other than the Independent Accountant, subject to the
agreement by the Independent Accountant to keep all information therein
confidential), or permit any Person (other than the Independent Accountant,
subject to the agreement by the Independent Accountant to keep all information
contained therein confidential) to examine, any federal, state or local income
tax returns of the Lender or any of its Affiliates.
(2) The Lender agrees that it shall use its best efforts to take any actions
that will avoid the need for, or reduce the amount of, any increased amounts
referred to in Section 2.06(a); provided that no Lender shall be obligated to
take any actions that would, in the sole reasonable opinion of the Lender, be
disadvantageous to the Lender in any material respect.
(3) The Lender, by its making of the Advance or acceptance of any interest in
the Advance, agrees to treat the interests evidenced by the Advance as
indebtedness for all tax purposes, and further agrees that any Person acquiring
an interest in the Advance from or through it may do so only subject to the
obligation to comply with this Agreement as to the treatment of such Advance as
indebtedness for all tax purposes.
(4) The provisions of this Section 2.06 shall only apply to the Initial Lender
unless the Borrower has consented to the inclusion of one or more additional
Lenders in connection with the assignment by the Initial Lender (or an
additional Lender to which the Borrower has previously consented) of an interest
in the Advance, in which case this Section 2.06 shall also apply to such
additional Lenders.
Section 1.11 Payment Instructions. The Initial Lender and the Borrower shall
provide written payment instructions (including the account number of the bank
account to which payments are to be directed and the name, address and ABA
number of the bank in which such account is maintained, if payments are to be
made to such party by the wire transfer of immediately available funds) to the
Collateral Agent. Failure to provide such notice shall not affect such party's
right to receive any funds to which it was otherwise entitled in accordance with
the Program Documents, but failure to deliver such notice may result in a delay
in the receipt of such funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender, as of the date
hereof, as follows:
Section 1.12 General Representations and Warranties of the
Borrower.
(a) Organization and Authority. The Borrower:
<PAGE>
(1) is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and each other State where the
nature of its business requires it to qualify, except to the extent that
the failure to so qualify would not, in the aggregate, materially and
adversely affect the ability of the Borrower to perform its obligations
under the Program Documents to which it is a party;
(2) has all requisite power, authority and legal right to own and operate its
properties and to conduct its business as currently conducted and as
proposed to be conducted by the Program Documents, to enter into the
Program Documents to which it is a party, to issue and deliver the Notes
and to perform its obligations under the Program Documents to which it is
a party and the Notes,
(3) has made all filings and holds all franchises, licenses, permits and
registrations which are required under the laws of each jurisdiction in
which the properties owned (or held under lease) by it or the nature of
its activities makes such filings, franchises, licenses, permits or
registrations necessary, except to the extent that the failure to do so
would not, in the aggregate, materially and adversely affect the ability
of the Borrower to perform its obligations under any of the Program
Documents to which it is a party.
(2) Place of Business. The address of the principal place of business and chief
executive office of the Borrower is 370 17th Street, Suite 5060F, Denver,
Colorado 80202 and there have been no other such locations during the four
months immediately preceding such Closing Date, except as may have been
previously disclosed in writing to the Initial Lender in accordance with the
provisions of Section 10.01 hereof.
(3) Compliance with Other Instruments, etc. The Borrower is not in violation of
any term of its certificate of incorporation or by-laws. Neither the execution,
delivery or performance by the Borrower of the Program Documents to which it is
a party or the Notes nor the borrowings under the Existing Credit Agreement does
or will (i) conflict with or violate the certificate of incorporation or by-laws
of the Borrower, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties of the Borrower pursuant to the terms of any instrument or
agreement to which the Borrower is a party or by which it is bound, or (iii)
require any consent of or other action by any Collateral Agent or any creditor
of, any lessor to or any investor in the Borrower.
(4) No Materially Adverse Contracts, etc. The Borrower is not a party to or
bound by (nor are any of its Properties affected by) any contract or agreement,
or subject to any order, writ, injunction or decree or other action of any court
or any governmental department, commission, bureau, board or other
administrative agency or official, or any charter or other corporate or
contractual restriction, which materially and adversely affects, or in the
future will materially and adversely affect, the business, earnings, prospects,
properties or condition (financial or other) of the Borrower.
<PAGE>
(5) Compliance with Law.The Borrower is in compliance with all statutes, laws
and ordinances and all governmental rules and regulations to which it or any of
its Properties are subject except to the extent that noncompliance therewith
would not result in a Material Adverse Effect. Neither the execution, delivery
or performance of the Program Documents to which it is a party or the Notes nor
the borrowings hereunder does or will cause the Borrower to be to the best of
its knowledge in violation of any law or ordinance, or any order, rule or
regulation, of any federal, state, municipal or other governmental or public
authority or agency.
(6) Pending Litigation, etc. There is no action at law, suit in equity or other
proceeding or investigation (whether or not purportedly on behalf of the
Borrower) in any court, tribunal or by or before any other governmental or
public authority or agency or any arbitrator or arbitration panel, pending or,
to the best knowledge of the Borrower, threatened against or affecting the
Borrower or any of its respective Properties (i) an adverse determination of
which is reasonably likely to result in a Material Adverse Effect or (ii) that
would question the validity of any Program Document to which it is a party or
the Notes or the priority or perfection of any Liens created under the Security
Agreement. The Borrower is not in default with respect to any order, writ,
injunction, judgment or decree of any court or other governmental or public
authority or agency or arbitrator or arbitration panel, which default is
reasonably likely to result in a Material Adverse Effect.
(7) Taxes. The Borrower and each entity which might have tax liabilities for
which the Borrower is or may be liable, has filed all tax returns and paid all
taxes required by law to be filed or paid, which are due pursuant to said
returns (or which to the knowledge of the Borrower are due and payable) and on
all assessments received by the Borrower or such entity, as the case may be,
other than taxes being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been established in
accordance with generally accepted accounting principles. There are no material
Liens on any Properties of the Borrower imposed or arising as a result of the
delinquent payment or the nonpayment of any tax, assessment, fee or other
governmental charge. There are no applicable taxes, fees or other governmental
charges due and payable by the Borrower in connection with the execution and
delivery by the Borrower of the Program Documents to which it is a party or the
Note or the borrowings hereunder.
(8) Investment Company Act. The Borrower is not an "investment company," or an
"affiliated person" of an "investment company," or a company "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, and the Borrower is not an "investment adviser" or an
"affiliated person" of an "investment adviser" as such terms are defined in the
Investment Advisers Act of 1940, as amended.
(9) Margin Rules. Without limiting the foregoing, the application in accordance
with the Program Documents of any part of the proceeds from the Advance by the
Borrower pursuant to this Agreement will not violate or result in a violation of
Section 7 of the Securities Exchange Act or any regulations issued pursuant
thereto, including, without limitation, Regulation G (12 C.F.R., Part 207), as
amended, Regulation T (12 C.F.R., Part 220), as amended, and Regulation X (12 C.
F. R., Part 224), as amended, of the Board of Governors of the Federal Reserve
System. The assets of the Borrower do not include any "margin stock" within the
meaning of such Regulation G, and the Borrower does not have any intention of
acquiring any such margin stock.
<PAGE>
(10) Proceedings. The Borrower has taken all action necessary to authorize the
execution and delivery of the Program Documents to which it is a party and the
Notes and the borrowings hereunder and the performance of all obligations to be
performed by it hereunder and thereunder.
(11) Reserved.
(12) No Consents. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any
federal, state or local governmental or public authority or agency, is or will
be required for (i) the valid execution, delivery and performance by the
Borrower of the Program Documents to which it is a party or the Notes, (ii) the
perfection or maintenance of the Liens intended to be created by the Security
Agreement (including the first priority status thereof) or (iii) the borrowings
hereunder, other than such UCC filings as have been provided to the Initial
Lender. The Borrower has obtained all consents, approvals or authorizations of,
made all declarations or filings with, or given all notices to, all federal,
state or local governmental or public authorities or agencies which are
necessary for the continued conduct by the Borrower of its business as now
conducted and as proposed to be conducted as contemplated by the Program
Documents, except to the extent that the failure to do so would not result in a
Material Adverse Effect.
(13) Validly of Program Documents and Note. The Program Documents to which it is
a party have each been duly executed and delivered by the Borrower and
constitute legal, valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms. Upon receipt by the Borrower of the
proceeds of the Advance as provided in this Agreement, the Notes will have been
duly issued and will constitute the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, and
entitled to the benefits of the Security Agreement.
(14) Representations and Warranties in Program Documents. The representations
and warranties of the Borrower contained in each of the Program Documents to
which it is a party and in any document, certificate or instrument delivered
pursuant to any such Program Document are, true and correct and the Lender may
rely on such representations and warranties, if not made directly to the Lender,
as if such representations and warranties were made directly to the Lender.
(15) Solvency. On the date the Advance was made, after giving effect to the
Advance, the Borrower was Solvent.
(16) Full Disclosure. The Program Documents to which it is a party and any
certificate, report, statement or other writing furnished to the Lender by or on
behalf of the Borrower in connection with the negotiation of any such Program
Document are accurate and complete in all material respects with respect to the
information purported to be set forth herein. There is no fact known to the
Borrower that has not been disclosed to the Initial Lender that has, or in the
future may have, a Material Adverse Effect.
(17) Non-Consolidation. The Borrower has been operated in such a manner that it
would not be substantively consolidated in the bankruptcy trust estate of any
Affiliate, such that the separate existence of the Borrower and any Affiliate
would be disregarded.
(1)
<PAGE>
(18) Transfer and Assignment. From and after the delivery to the Collateral
Agent of the Loan Contracts, the related Certificates of Title and the
Applications for Certificates of Title, the Collateral Agent for the benefit of
the Lender had a first priority perfected security interest in the Loan
Contracts, the Vehicles and the proceeds thereof, except for Permitted Liens and
limited with respect to proceeds to the extent set forth in Section 9-306 of the
UCC as in effect in the applicable jurisdiction. All filings (including, without
limitation, UCC filings) and other actions as are necessary in any jurisdiction
to perfect the ownership or other interest of the Collateral Agent in the
Collateral, including the transfer of the Certificates of Title and the
Applications for Certificates of Title and the Loan Contracts and the payment of
any fees, have been made.
(19) Parent of the Borrower. Monaco is the registered owner of all of the issued
and outstanding common stock of the Borrower, all of which common stock has been
validly issued. is fully paid and nonassessable.
(20) Reserved.
(21) Bulk Transfer Laws. The transfer, assignment and conveyance of the Auto
Loans by Monaco to the Borrower pursuant to the Loan Acquisition Agreement was
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction.
Section 1.13 General Representations and Warranties of Monaco.
Monaco represents and warrants to the Initial Lender, as of the date
hereof, as follows:
(1) Organization and Authority. Monaco:
(1) is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and each other State where
the nature of its business requires it to qualify, except to the extent
that the failure to so qualify would not, in the aggregate, materially and
adversely affect the ability of Monaco to perform its duties under the
Program Documents to which it is a party; and
(2) has all requisite power and authority to own and operate its properties
and to conduct its business as currently conducted and as proposed to be
conducted as contemplated by the Program Documents to which it is a party,
to enter into the Program Documents to which it is a party and to perform
its obligations under the Program Documents to which it is a party.
<PAGE>
(2) Compliance with Other Instruments, etc. Monaco is not in violation of any
term of its articles of incorporation or by-laws. The execution, delivery and
performance by Monaco of the Program Documents to which it is a party do not and
will not (i) conflict with or violate the articles of incorporation or by-laws
of Monaco, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties or assets of Monaco pursuant to the terms of any instrument or
agreement to which Monaco is a party or by which it is bound or (iii) require
any consent of or other action by any creditor of, any lessor to or any investor
in Monaco not already obtained.
(3) Proceedings. Monaco has taken all action necessary to authorize the
execution and delivery by it of the Program Documents to which it is a party and
the performance of all obligations to be performed by it under the Program
Documents.
(4) No Consents. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any
federal, state or local governmental or public authority or agency, is, was or
will be required for the valid execution, delivery and performance by Monaco of
the Program Documents to which it is a party. Monaco has obtained all consents,
approvals or authorizations of, made all declarations or filings with, or given
all notices to, all federal, state or local governmental or public authorities
or agencies which are necessary for the continued conduct by Monaco of its
respective businesses as now conducted, other than such consents, approvals,
authorizations, declarations, filings and notices which, neither individually
nor in the aggregate, materially and adversely affect, or in the future will
materially and adversely affect, the business, earnings, prospects, properties
or condition (financial or other) of Monaco.
(5) Validity of Agreement. The Program Documents to which it is a party have
been duly executed and delivered by Monaco and constitute the legal, valid and
binding obligation of Monaco, enforceable in accordance with their terms,
subject as to the enforcement of bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting the rights
of creditors generally and to general principles of equity, regardless of
whether enforcement is sought in a court of equity or law. The execution and
delivery of the Supplementary Servicing Agreement do not require the consent or
signature of Monaco.
(6) Representations and Warranties in Program Documents. Each acquisition of a
Designated Auto Loan by the Borrower was made in compliance with all
requirements specified in the Program Documents (as defined in the Existing
Credit Agreement); and Monaco performed all of its obligations with respect to
such Designated Auto Loan, including, without limitation, the payment to the
related Dealer of all amounts then owing to such Dealer by Monaco in respect of
such Designated Auto Loan.
ARTICLE IV
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT
This Agreement shall be effective on the date (the "Effective Date")
when each of the following conditions shall have been fulfilled:
Section 1.14 Merger. The Merger shall have been consummated on
such terms and conditions as are reasonably acceptable to the Initial
Lender.
Section 1.1
<PAGE>
Section 1.15 Other Amendments. The Security Agreement shall have
been executed by each of the parties thereto.
Section 1.16 Releases. The Initial Lender, the Borrower, MF3 and Pacific USA,
Holdings Corp., a Texas corporation ("PUSA", and, together with the Borrower,
MF3 and Monaco, the "Monaco Parties") shall each have executed the release (the
"Release") in the form attached hereto as Exhibit A.
Section 1.17 Letter of Credit. The Net Subsequent Losses Letter of Credit (the
"L/C") with a current face amount of approximately $2,300,000 delivered to
Monaco by PSB pursuant to the Loan Loss Reimbursement Agreement (the "Loss
Reimbursement Agreement"), dated as of January 8, 1998, between, inter alia, PSB
and Monaco, and then delivered to the Borrower pursuant to the terms of the Loan
Acquisition Agreement shall no longer constitute Collateral.
Section 1.18 Subordinated Debt. All of the holders of the subordinated debt of
Monaco (a) shall have entered into a comprehensive settlement agreement with the
Monaco Parties, in form reasonably acceptable to the Initial Lender, pursuant to
which, inter alia, such holders (x) agree to release the DFC Parties (as defined
in the Release) to the same extent as the DFC Parties are released by the Monaco
Parties pursuant to the Release and agree not to institute certain actions
against Monaco, the Borrower and MF3 to the same extent as PUSA agrees not to do
so in Paragraph __ of the Release and (ii) shall have been paid an aggregate
amount equal to the outstanding face amount of the L/C.
Section 1.19 Resolutions. The Borrower, Monaco and MF3 shall each have delivered
to the Initial Lender resolutions of their respective Boards of Directors
approving their execution, delivery and performance of this Agreement and each
document to which it is a party executed and delivered in connection herewith.
Monaco and the Borrower each agrees that (x) it will fulfill each of
the conditions precedent set forth in this Article IV to the extent it is
capable of fulfilling the same and (y) that remedies at law may be inadequate to
protect against a breach of this Agreement and agrees in advance to the granting
of injunctive relief for the performance of such agreements and obligations
without proof of actual damages.
ARTICLE V
[Reserved]
<PAGE>
ARTICLE VI
[Reserved]
ARTICLE VII
CERTAIN SPECIAL RIGHTS
Section 1.20 Home Office Payment.Notwithstanding any provision to the contrary
in the Program Documents, the Collateral Agent, on behalf of the Borrower, will
punctually pay in immediately available funds prior to noon, New York City time,
all amounts payable with respect to the Advance in accordance with the
provisions of this Agreement and the Security Agreement (without the necessity
for any presentation or surrender thereof or any notation of such payment
thereon) in the manner and at any address as the Lender may from time to time
direct in writing. The Initial Lender agrees that, as promptly as practicable
after the payment or prepayment of the Advance, the Initial Lender will record
such payment or prepayment on the Class A Notes and the Class B Notes ratably
such that 85% of any payment or prepayment of an Advance shall be applied and
recorded as a corresponding reduction of the outstanding principal amount of the
Class A Note and 15% of any payment or prepayment of an Advance shall be applied
and recorded as a corresponding reduction in the unpaid principal amount of the
Class B Notes. The Borrower will afford the benefits of this Section 7.01 to any
Assignee, each of which, by its receipt and acceptance of a Note, will be deemed
to have made the same agreement relating to the Advance as the Initial Lender
has made in this Section 7.01. The Borrower shall only be obligated to make
payments on any Advance to an Assignee in the manner provided in this Section
7.01 from and after the time such Assignee provides to the Borrower and the
Collateral Agent written notice of its election to receive payments in such
manner and the address to which payments are to be directed (including the
account number of Assignee's bank account to which payments are to be directed
and the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such Assignee by the wire transfer of
immediately available funds).
Section 1.21 Certain Taxes. The Borrower will pay all taxes (other than income
or franchise taxes incurred by the Lender) in connection with the execution and
delivery of this Agreement and the Security Agreement, the issuance of the Notes
by the Borrower, the borrowings under the Existing Credit Agreement and any
modification of the Program Documents or the Notes requested or required by the
Borrower and will save the Lender harmless, without limitation as to time,
against any and all liabilities (including, without limitation, any interest or
penalty for nonpayment or delay in payment, or any income taxes paid by the
Lender or any Assignee in connection with any reimbursement by the Borrower for
the payment by any other Person of any such taxes) with respect to all such
taxes. The obligations of the Borrower under this Section 7.02 shall survive the
payment in full of the Advance and the termination of the Program Documents.
<PAGE>
Section 1.22 Substitution of Initial Lender. The Initial Lender shall have the
right to substitute any of the Initial Lender's Affiliates as the maker of all
or any portion of the aggregate principal amount of the Advance to be made by
the Initial Lender (so long as any such Affiliate is not engaged in any
principal line of business substantially similar to the general nature of the
business presently conducted by the Borrower), by written notice delivered to
the Borrower, which notice shall be signed by both the Initial Lender and such
Affiliate and shall contain such Affiliate's agreement to be bound by this
Agreement. The Borrower agrees that upon receipt of such notice (a) wherever the
words "the Initial Lender" is used in this Agreement (other than in this Section
7.03) such word shall be deemed to refer to such Affiliate in addition to or
instead of to the Initial Lender, as the case may be, and (b) the Initial Lender
shall, to the extent of the assumption by such Affiliate of the Initial Lender's
obligations hereunder, be released from its obligations under this Agreement.
The Borrower also agrees that if the Initial Lender, at any time, acquires from
any Affiliate all or any portion of such Affiliate's rights under this
Agreement, wherever the word "the Initial Lender" is used in this Agreement such
word shall thereafter be deemed to refer to the Initial Lender in addition to or
instead of to such Affiliate, as the case may be, and such Affiliate shall, to
the extent of the assumption by the Initial Lender of such Affiliates
obligations hereunder, be released from all of its obligations under this
Agreement. Notwithstanding any other provision of this Section 7.03, neither the
Initial Lender nor any Affiliate thereof shall be entitled to substitute any
other party as the maker of the Advance if as a result of such substitution the
Borrower would be required to register as an "investment company" under the
Investment Company Act of 1940, as amended.
ARTICLE VIII
MATURITY
Subject to the provisions of the Security Agreement, the Advance
(together with interest thereon at the applicable Interest Rate plus 2.00%) is
currently due and payable in full. The Borrower may voluntarily prepay the
Advance, in whole or in part, at any time without premium or penalty. The
proceeds of any disposition of the Designated Auto Loans shall be distributed in
accordance with Section 6.04 of the Security Agreement.
ARTICLE IX
ASSIGNMENTS AND PARTICIPATIONS
Section 1.23 Assignments. (a The Borrower may not assign its rights or
obligations hereunder or under the Notes without the prior consent of the Lender
in its sole discretion (or, if multiple Lenders, the Lenders in respect of a
majority in aggregate principal amount of the Advance outstanding with respect
to the Class A Notes or the Class B Notes, as the case may be).
<PAGE>
(1) The Lender may assign to any commercial lending or financial institution
familiar with the asset-backed securities market (each, an "Assignee"), all or
any portion of the Advance and the Notes; provided that any assignment of a
portion of the Advance and the Notes shall be in an amount not less than the
Minimum Assignment Denomination. Upon written notice to the Borrower of an
assignment in accordance with the preceding sentence (which notice shall
identify the Assignee and the amount and the identity of the Advance and Notes
assigned), the Assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment), the obligations, rights and benefits of
the Lender hereunder with respect to the Advance assigned to it. For all
purposes of this Agreement, the Assignee shall, so long as the Advance assigned
to such Assignee remain unpaid, be entitled to the rights and benefits of this
Agreement with respect to the Advance assigned to it as if (and the Borrower
shall be directly obligated to such Assignee under this Agreement as if) such
Assignee were the "Lender" for purposes of this Agreement. Accordingly, unless
otherwise provided, whenever any action, waiver, notice or consent is to be
provided to or by the Lender as herein specified, such action, waiver, notice or
consent shall (unless otherwise expressly specified herein) also be provided to
or by each Assignee.
(2) The Lender shall provide notice of each assignment to the Collateral Agent,
the Borrower and the Servicer; provided that failure to provide such notice
shall not affect the validity of any assignment.
(3) Notwithstanding the provisions of this Section 9.01, no assignment of an
interest in the Advance to an entity outside the United States of America shall
be effective unless the prospective Assignee thereof certifies to the Borrower
and Monaco that payments to it in respect of the Advance will not be subject to
withholding taxes imposed by any Governmental Authority in the United States of
America or any political subdivision or taxing authority thereof or therein or
that if it is subject to such withholding taxes it will not seek reimbursement
or gross-up from the Borrower or Monaco.
Section 1.24 Participations.(a The Lender may sell or agree to sell to any
commercial lending or financial institution familiar with the asset-backed
securities market a participation in all or any part of the Advance held by it
or made or to be made by it, in which event each such participant shall be
entitled to the rights and benefits of the provisions of Sections 13.01(f) and
13.02(i) hereof with respect to its participation in such Advance as if (and the
Borrower and Monaco shall be directly obligated to such participant under such
provisions as if) such participant were the "Lender" for purposes of said
Sections, but shall not have any other rights or benefits under this Agreement
or any Note (the participant's rights against the Lender in respect of such
participation to be those set forth in the agreement executed by the Lender in
favor of the participant). All amounts payable by the Borrower to the Lender
under this Agreement shall be determined as if the Lender had not sold or agreed
to sell any participations in such Advance and as if the Lender were funding all
of such Advance in the same way that it is funding the Advance in which no
participations have been sold.
Section 1.25 Information. Subject to Section 15.11 hereof, the Lender may
furnish any information concerning the Designated Auto Loans, the Borrower,
Monaco or any of their other Affiliates in the possession of the Lender from
time to time to assignees and participants (including prospective assignees and
participants); provided, however, that, prior to receipt of any such
information, and prior to any inspection by a Lender, other than the Initial
Lender, such assignees and participants or prospective assignees and
participants, as the case may be, may be required by the Borrower to execute a
confidentiality agreement in form and substance reasonably acceptable to the
Borrower.
<PAGE>
ARTICLE X
CERTAIN COVENANTS OF THE BORROWER
The Borrower covenants and agrees that so long as the Advance shall
remain unpaid:
Section 1.26 Maintenance of Office. The Borrower will maintain at its office
located at its address specified in this Agreement an office where notices,
presentations and demands in respect of Designated Auto Loans and the Notes may
be given to and made upon it; provided, however, that it may, upon 15 Business
Days' prior written notice to the Lender, move such office to any other location
within the boundaries of the continental United States of America.
Section 1.27 Existence.The Borrower will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to preserve and keep in full
force and effect its existence, rights and privileges as a corporation and will
not liquidate or dissolve, and it will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to qualify, and to preserve
and keep in full force and effect its qualification, to do business in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires such qualification except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect on the
Borrower.
Section 1.28 General Maintenance of Business, etc. The Borrower
will:
(1) keep proper books of record and accounts in which entries will be made of
its business transactions in accordance with and to the extent required by
generally accepted accounting principles;
(2) use its best efforts to enforce (or cause the Servicer or the Collateral
Agent, as the case may be, to enforce) all of its rights under each of the
Program Documents to which it is a party and each other agreement entered into
in connection with the transactions contemplated hereby.
Section 1.29 Inspection. The Borrower will permit, upon reasonable notice to it,
the Lender, by its representatives, agents or attorneys: (a) to examine all
books of account, records, reports and other papers of the Borrower (including
the Loan Files), (b) to make copies and take extracts from any thereof, (c) to
discuss the affairs, finances and accounts of the Borrower with its respective
officers and independent certified public accountants (and by this provision the
Borrower hereby authorizes said accountants to discuss with the Lender the
finances and accounts of the Borrower) and (d) to visit and inspect, at
reasonable times during normal business hours, the properties of the Borrower.
It is understood and agreed by the parties hereto that all reasonable expenses
in connection with any such inspection or discussion incurred by the Lender or
any officers and employees thereof and the independent certified public
accountants therefor shall be expenses reimbursed to the Lender from the
proceeds of the Collateral under the Security Agreement.
<PAGE>
Section 1.30 Compliance with Law, etc. The Borrower will not (i) violate any
laws, ordinances, governmental rules or regulations to which it is or may become
subject, or (ii) fail to obtain or maintain any patents, trademarks, service
marks, trade names, copyrights, design patents, licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its property or
to the conduct of its business except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.
Section 1.31 Payment of Taxes and Claims. The Borrower will pay and discharge,
promptly when due, all taxes, assessments and governmental charges and levies
imposed upon it, its income or profits or any of its properties.
Section 1.32 Limitations on Indebtedness. The Borrower will not at any time
incur, create, assume or guarantee, or otherwise become or be liable in any
manner with respect to, any Indebtedness, except the Advance and other
Indebtedness arising under any of the Program Documents, and Indebtedness
incurred pursuant to the MF3 Credit Agreement.
Section 1.33 Restricted Investments. With respect to amounts on deposit in the
Collateral Account, the Borrower will not make any Restricted Investments except
in accordance with the Program Documents.
Section 1.34 Nature of Business. The Borrower will not engage in any business or
activity (whether or not pursued for gain or other pecuniary advantage) other
than financing, purchasing and disposing of Eligible Auto Loans and Permitted
Investments.
Section 1.35 Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder and under the Notes,
the Borrower shall be required to observe the applicable legal requirements for
the recognition of the Borrower as a legal entity separate and apart from Monaco
and each other Affiliate of Monaco, provided, that the foregoing shall not
prohibit or restrict the consummation of the Merger. Without limiting the
generality of the foregoing, the Borrower shall assure that each of the
following is complied with:
(1) the Borrower shall maintain separate records, books of account and financial
statements (each of which shall be sufficiently full and complete to permit a
determination of the Borrower's assets and liabilities separate and apart from
those of Monaco and each other Affiliate of Monaco and to permit a determination
of the obligees thereon and the time for performance of each of the Borrower's
obligations separate and apart from those of Monaco and each other Affiliate of
Monaco) from those of Monaco and each other Affiliate of Monaco;
(2) assets or funds of the Borrower shall be separately identified and shall not
be commingled with those of Monaco or any of the other Affiliates of Monaco;
(3) the Borrower shall maintain a separate board of directors (including an
"independent director" (as such term is defined in the Borrower's Certificate of
Incorporation)) and shall observe all separate corporate formalities, and all
decisions with respect to the Borrower's business and daily operations shall be
independently made by the officers of the Borrower pursuant to resolutions of
its board of directors;
<PAGE>
(4) other than payment of dividends and return of capital, no transactions shall
be entered into between the Borrower and Monaco or between the Borrower, and any
of the other Affiliates of Monaco except such transactions as are contemplated
by the Loan Acquisition Agreement or in connection with any Disposition;
(5) except for such origination, collection and servicing functions as Monaco
may perform on behalf of the Borrower pursuant to the Program Documents, the
Borrower shall act solely in its own name and through its own authorized
officers and agents and the Borrower will not act as agent of Monaco or any
other Person in any capacity;
(6) except for any funds received from Monaco as a capital contribution, the
Borrower shall not accept funds from Monaco or any of the other Affiliates of
Monaco; and the Borrower shall not allow Monaco or any of the other Affiliates
of Monaco otherwise to supply funds to, or guarantee any obligation of, the
Borrower;
(7) the Borrower shall not guarantee, otherwise become liable with respect to,
or otherwise hold out its assets or credit as being available to satisfy any
obligation of Monaco or any of the other Affiliates of Monaco including jointly
or as co-obligor;
(8) the Borrower shall at all times hold itself out to the public under the
Borrower's own name as a legal entity separate and distinct from Monaco and the
other Affiliates of Monaco and shall not hold itself out as a "department,"
"division" or "part of" Monaco or any of the other Affiliates of Monaco, and
shall correct any known misunderstanding regarding its separate identity from
Monaco;
(9) the Borrower shall observe all corporate and other legal formalities,
including obtaining necessary authorization from board of directors;
(10) the Borrower shall hold all regular meetings appropriate to authorize
corporate action;
(11) the Borrower shall maintain complete minutes of all board of director and
stockholder meetings;
(12) the Borrower shall maintain its bank and other investment accounts separate
and distinct from those of any Affiliate or other Person;
(13) the Borrower shall pay from its own funds all obligations of any kind
incurred by it. Without limiting the generality of the foregoing, the Borrower
shall pay from its own funds the salaries or other compensation and benefits of
its own officers and employees, if any, and will employ a reasonable number of
employees in light of its purpose;
(14) the Borrower shall use its own stationery, invoices and checks (i.e., not
such forms of another Person); and
<PAGE>
(15) the Borrower shall take all appropriate action necessary to maintain its
own existence as separate and distinct from the existence of any of its owners.
Section 1.36 Other Agreements and Parties. The Borrower will comply with all
terms of the Program Documents to which it is a party. The Borrower (a) will not
enter into any agreements (other than the Program Documents to which it is a
party and agreements approved by the Initial Lender necessary to effectuate the
Merger and any dispositions of Collateral) without the prior consent of the
Lender (or, if multiple Lenders, the Lender, in respect of a majority in the
principal amount of the Advance outstanding), such consent not to be
unreasonably withheld and (b) except as otherwise expressly set forth herein,
agree to any amendment, supplement or modification to or waiver of the terms of
the Program Documents to which it is a party or any document related thereto
without the consent of the Lender (or, if multiple Lenders, the Lenders in
respect of a majority in the principal amount of the Advance outstanding), such
consent not to be unreasonably withheld.
Section 1.37 Investment Company Act. The Borrower will not take any action which
would require it to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
Section 1.38 Liens. The Borrower will not permit any Lien to exist on any of its
Properties, whether now owned or hereafter acquired, other than Permitted Liens.
ARTICLE XI
CERTAIN COVENANTS OF MONACO
In order to induce the Initial Lender to enter this Agreement, Monaco
covenants and agrees that so long as the Advance shall remain unpaid:
Section 1.39 Loan Files, Etc. Monaco will, at its expense, (i) deliver (to the
extent not already delivered) all of the Loan Files to SST promptly upon
execution and delivery of this Agreement, (ii) deliver to the Collateral Agent
all proceeds of the Collateral, in the form received, within two Business Days
of its receipt thereof, (iii) deliver to SST all correspondence which it
receives in connection with the Designated Auto Loans within two Business Days
of its receipt thereof and (iv) not perform any collection activities with
respect to the Designated Auto Loans.
Section 1.40 Further Assurances. Monaco will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary in order to give effect to the provisions of the Program Documents and
the transactions contemplated hereby.
<PAGE>
Section 1.41 Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder in respect of the
Advance, Monaco shall be required to (and shall assure that each other Affiliate
of Monaco shall) observe the applicable legal requirements for the recognition
of the Borrower as a legal entity separate and apart from Monaco and each other
Affiliate of Monaco, including, without limitation, assuring that each of the
following is complied with:
(1) Monaco and each other Affiliate of Monaco shall maintain separate bank and
other investment accounts, records and books of account (each of which
shall be sufficiently full and complete to permit a determination of the
assets and liabilities of Monaco or such Affiliate, as the case may be,
separate and apart from those of the Borrower and to permit a
determination of the obligees thereon and the time for performance on each
of the obligations of Monaco or such Affiliate, as the case may be,
separate and apart from those of the Borrower) from those of the Borrower;
(2) neither Monaco nor any of its other Affiliates shall commingle any of its
assets or funds with those of the Borrower, and such assets or funds shall
be separately identified from those of the Borrower;
(3) the board of directors of Monaco shall not dictate decisions with respect
to the Borrower's business and daily operations and Monaco shall maintain
its own corporate formalities and shall otherwise respect the separate
corporate identity of the Borrower;
(4) other than the making of capital contributions and the transactions
contemplated by the Loan Acquisition Agreement and in connection with any
Disposition, neither Monaco nor any of its other Affiliates shall enter
into any transactions with the Borrower;
(5) neither Monaco nor any of its other Affiliates shall advance funds to the
Borrower (except for the making of capital contributions and in connection
with any Disposition); and neither Monaco nor any of its other Affiliates
will otherwise supply funds to, or guarantee or otherwise hold out its
assets or credit as being available to satisfy any obligation of, the
Borrower; and neither Monaco nor any of its Affiliates shall otherwise
pledge, mortgage or make similar arrangements with respect to its assets
for the benefit of the Borrower;
(6) neither Monaco nor any of its other Affiliates shall pay from its own
funds obligations of any kind incurred by the Borrower, or otherwise
become liable with respect to, any obligation of the Borrower,
(7) Monaco and each of its other Affiliates shall at all times hold itself out
to the public under its respective name as a legal entity separate and
distinct from the Borrower, and Monaco shall with respect to the Borrower
act solely in its own name and shall correct any known misunderstandings
regarding its separate identity from the Borrower;
<PAGE>
(8) all financial reports prepared by Monaco and each of its other Affiliates
shall comply with generally accepted accounting principles and Monaco will
not issue consolidated financial statements which include the Borrower
unless such consolidated financial statements clearly indicate that they
consolidate the financial statements of separate legal entities including
the Borrower with the Borrower identified by name;
(9) with respect its dealings with the Borrower, Monaco and its Affiliates
shall observe all corporate and other legal formalities and shall not take
(or omit to take) any action inconsistent with the maintenance of the
Borrower's existence as a corporation under the laws of the State of
Delaware separate and distinct from the existence of the Monaco or any of
its other affiliates; and
(10) Monaco and its Affiliates shall not direct the business or daily
operations of the Borrower.
Section 1.42 Other Agreements and Parties. Monaco will comply with all terms of
the Program Documents, the Acquisition Agreement and the related documents to
which it is a party. Monaco will not, except as otherwise expressly set forth
herein, agree to any amendment, supplement or modification to or waiver of the
terms of the Program Documents, the Acquisition Agreement and the related
documents to which it is a party or any document related thereto without the
consent of the Lender (or, if multiple Lenders, the Lenders in respect of a
majority in the principal amount of the Advance outstanding), such consent not
to be unreasonably withheld.
ARTICLE XII
[Reserved]
ARTICLE XIII
DEFAULTS
Section 1.43 Default. If any of the following conditions or events (each, a
"Default") shall occur and be continuing, it shall constitute a Default
hereunder:
(1) (i) failure by the Borrower to make any deposit when due under the Security
Agreement or failure by Monaco to remit to the Collateral Agent any payment
received by it directly or on behalf of the Borrower in respect of the
Collateral or (ii) failure of Monaco to repurchase any Auto Loans pursuant to
the Loan Acquisition Agreement or (iii) a "Default" shall occur under the MF3
Credit Agreement;
(2) the Borrower or Monaco shall default in the due and punctual performance of
or compliance with any covenant, condition or agreement to be performed or
observed by it under Sections 10.01, 10.02, 10.06, 10.07, 10.10, 10.11, 10.13 or
Article XI hereof; or
(3) the Borrower shall institute proceedings for liquidation, readjustment,
arrangement or composition (or for any related or similar purpose) under any law
relating to financially distressed debtors, their creditors or property, or
shall consent to (or fail to object to in a timely manner) the institution of
any such proceedings against the Borrower; or (1)
<PAGE>
(4) a court or other governmental authority or agency having jurisdiction in the
premises shall enter a decree or other (i) for the appointment of a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other similar
official) of the Borrower or of any part of its property, or for the winding-up
or liquidation of its affairs; and such decree or order shall remain in force
undischarged and unstayed for a period of more than 60 days, or (ii) for the
sequestration or attachment of any material party of the property of the
Borrower without its unconditional return to the possession of the Borrower, or
its unconditional release from such sequestration or attachment, within 60 days
thereafter; or
(5) a court or other governmental authority or agency having jurisdiction in the
premises shall enter a decree or order approving or acknowledging as properly
filed, or any party commences against the Borrower, a petition or proceedings
from liquidation, rehabilitation, readjustment or composition (or for any
related or similar purpose) under any law relating to financially distressed
debtors, their creditors or property, and any such decree or order shall remain
in force undischarged and unstayed for a period of more than 60 days; or
(6) the Borrower shall take action for the purpose or with the effect of
authorizing or confirming the taking or existence of any action or condition
specified in clause (d) or (e) above.
<PAGE>
Section 1.44 Default Remedies. Prior to the occurrence of a Default, all
collections on the Collateral shall be distributed solely as set forth in the
Security Agreement and the Collateral may be disposed of by the Initial Lender
only as and to the extent set forth in the Security Agreement. If a Default
shall occur and be continuing, the Lender may, notwithstanding any other
provision of this Agreement or any Program Document, instruct the Collateral
Agent to, exercise any right, power or remedy permitted to it by law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or agreement contained in the Program Documents or in the Notes or
for an injunction against a violation of any of the terms of the Program
Documents or such Advance or in aid of any exercise of any power granted to such
Lender or to the Collateral Agent in the Program Documents or in such Advance,
or may proceed to enforce payment of such Advance or to enforce any other legal
or equitable right of the Lender. No remedy herein or in the Security Agreement
conferred upon the Lender or the Collateral Agent is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, by statute or otherwise. No course of dealing on the part of the
Lender or the Collateral Agent, or any delay or failure on the part of the
Lender or the Collateral Agent to exercise any right or power, shall operate as
a waiver of such right or power or otherwise prejudice the rights, powers and
remedies of the Lender or the Collateral Agent or of any other Lender or the
Collateral Agent. No failure to insist upon strict compliance with any covenant,
term, condition or other provision of the Program Documents or the Note shall
constitute a waiver by the Lender or the Collateral Agent of any such covenant,
term, condition or other provision or of any Default in connection therewith. To
the extent effective under applicable law, the Borrower hereby agrees to waive,
and does hereby absolutely and irrevocably waive and relinquish, the benefit and
advantage of any valuation, stay, appraisement, extension or redemption laws now
existing or that may hereafter exist that, but for this provision, might be
applicable to any sale made under any judgment, order or decree of any court, or
otherwise, based on the Advance or on any claim for interest and fees in respect
of the Advance. If an Default shall occur, and be continuing, the Borrower will
pay to the Lender or the Collateral Agent, to the extent not prohibited by
applicable law and not paid in accordance with the Security Agreement, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection and of the taking of remedial actions and the maintenance of
enforcement proceedings, including, without limitation, reasonable and necessary
attorneys' fees and disbursements.
ARTICLE XIV
INDEMNIFICATION AND FUNDING LOSSES
Section 1.45 Indemnification. (a The Borrower agrees to indemnify and hold
harmless the Lender, the directors, officers, employees and agents of the Lender
and each Person who controls the Lender within the meaning of the Securities Act
or the Exchange Act from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which any of them may become subject to the
extent that any such claims, damages, losses, liabilities, costs or expenses
whatsoever are attributable to the transactions contemplated herein, including,
without limitation, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise; provided, that
the Borrower shall not be liable to the Lender for any (i) credit losses
incurred by the Lender in its capacity as a Lender with respect to the Advance
resulting from the performance of this Agreement, (ii) losses incurred by the
Lender as a result of breaches by the Lender of any of its obligations hereunder
or under any of the other Program Documents, the fraudulent actions,
misrepresentations, negligence or willful misconduct of the Lender or (iii)
losses, claims, damages, liabilities and expenses arising out of the imposition
by any taxing authority of any federal income, state or local income or
franchise taxes, or any other taxes imposed on or measured by gross or net
income, gross or net receipts, capital, net worth and similar items (including
any interest, penalties or additions with respect thereto) upon the Lender
(including any liabilities, costs or expenses with respect thereto)
(collectively, the "Indemnified Claims"). The foregoing is in addition to any
rights (including without limitation rights to indemnity) to which the Lender
may otherwise be entitled.
<PAGE>
(1) Promptly after receipt by the Lender of notice of the commencement of any
action, the Lender shall, if a claim in respect thereof is to be made against
the Borrower (the "Indemnifying Party") under this Section 14.01, notify the
Indemnifying Party in writing of the commencement thereof, but the omission so
to notify the Indemnifying Party will not relieve it from any liability which it
may have to the Lender except to the extent such Indemnifying Party is
prejudiced thereby. In case any action is brought against the Lender, and it
notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to appoint counsel satisfactory to such Indemnifying
Party (who shall not, except with the consent of the Lender, be counsel to the
Borrower or Monaco) to represent the Lender in such action; provided, however,
that, if the defendants in any action include both the Lender and an
Indemnifying Party and the Lender shall have reasonably concluded that there may
be legal defenses available to it which are different from or additional to
those available to the Indemnifying Party, the Lender shall have the right to
select separate counsel to defend such action on behalf of it. Upon receipt of
notice from the Indemnifying Party to the Lender of its election so to appoint
counsel to defend such action and approval by the Lender of such counsel, the
Indemnifying Party will not be liable to the Lender under this Section 14.01 for
any legal or other expenses subsequently incurred by the Lender in connection
with the defense thereof unless (i) the Lender shall have employed separate
counsel in accordance with the proviso to the next preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel satisfactory to the Lender to
represent the Lender within a reasonable time after notice of commencement of
the action or (iii) the Indemnifying Party has authorized the employment of
counsel for the Lender at the expense of the Indemnifying Party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
(2) If the indemnification provided for in this Section 14.01 is unavailable or
insufficient to hold harmless the Lender under subsection (a) or (b) above, then
the Indemnifying Party shall contribute to the amount paid or payable by the
Lender as a result of the Indemnified Claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Indemnifying Party
on the one hand and the Lender on the other from the transactions contemplated
by this Agreement or (ii) if the allocation by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Indemnifying Party on the one hand and the Lender on the other in connection
with the actions or omissions which resulted in such Indemnified Claims or
liabilities as well as any other relevant equitable considerations. The Lender
and the Indemnifying Party agree that it would not be just and equitable if
contributions pursuant to this subsection (c) were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the first sentence of this
subsection (c). The amount payable by the Indemnifying Party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by the Lender in connection with investigating or defending any action
or claim which is the subject of this subsection (c). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(3) The obligations of the Indemnifying Party and the Lender under this Section
14.01 shall be in addition to any liability which each of them may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls the Lender within the meaning of the Securities Act; and, with
respect to the obligation of the Indemnifying Party to the Lender as indemnified
party, shall extend, upon the same terms and conditions, to each director of the
Lender.
<PAGE>
(4) The Lender agrees to notify the Indemnifying Party in writing of the
commencement of any action with respect to which indemnification may be owed to
it pursuant to this Section 14.01 or Article V of the Servicing Agreement after
receipt by the Lender of notice of commencement thereof, but the omission so to
notify the Indemnifying Party will not relieve such Indemnifying Party from any
liability which it may have except to the extent the Indemnifying Party is
prejudiced thereby. For purposes of this Section 14.01(e), the Servicer shall be
a third party beneficiary of the agreements herein contained.
(5) The agreement, indemnities and other statements of the parties hereto in or
made pursuant to this Section 14.01 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14.01. The provisions of this
Section 14.01 shall survive the termination or cancellation of this Agreement.
Section 1.46 Indemnification with respect to the Designated Auto Loans. Without
limiting any other rights that the Collateral Agent or the Lenders (each an
"Indemnified Party") may have hereunder or under applicable law, Monaco hereby
agrees to pay on demand to each Indemnified Party any and all amounts necessary
to indemnify such Indemnified Party from and against any and all claims, losses,
damages and liabilities and related costs and expenses, including taxes and
reasonable attorneys' fees and disbursements ("Indemnified Amounts") which may
be imposed on, incurred by or asserted against an Indemnified Party in any way
arising out of or resulting from:
(1) the use by Monaco of proceeds of any sale of or in respect of
any Auto Loan;
(2) any representation or warranty made or deemed made by Monaco (or any of
its officers) under any Program Document, or any report delivered by
Monaco pursuant hereto, having been incorrect in any material respect when
made or deemed made or delivered in respect of a Designated Auto Loan (as
to which the remedies are set forth in Section 3.03(c) of the Loan
Acquisition Agreement);
(3) the failure by Monaco to comply with any applicable law, rule or
regulation with respect to any Designated Auto Loan, or the nonconformity
of any Designated Auto Loan with any such applicable law, rule or
regulation;
(4) [Reserved]; or
(5) the assessment of any tax or governmental fee or charge (and all interest
or penalties with respect thereto) as the result of the purchase or
ownership by Monaco of any Auto Loan, other than taxes on or measured by
the gross income of any Person,
excluding, however, (i) recourse for any uncollectible Designated Auto Loan;
provided, that the foregoing shall not be deemed to limit the Borrower's or the
Collateral Agent's rights under Section 3.03(c) of the Loan Acquisition
Agreement and (ii) Indemnified Amounts to the extent resulting from the gross
negligence or willful misconduct on the part of any Indemnified Party. Monaco
acknowledges that the Borrower has assigned its rights of indemnity granted
hereunder to the Collateral Agent. Monaco agrees that, upon such assignment,
such assignee may enforce directly, without joinder of the Borrower, the
indemnities set forth in this Section 14.02. It is understood and agreed that
the indemnity obligations of Monaco hereunder shall survive the termination of
this Agreement or of any Designated Auto Loan.
<PAGE>
Section 1.47 Expenses. In connection with any obligation of Monaco or the
Borrower under this Article XIV or under any other provision of this Agreement
or any other Program Document with respect to the payment by Monaco or the
Borrower of any costs, fees or expenses, including but not limited to Sections
2.06 and 2.07 hereof, the Lender shall deliver to Monaco and the Borrower a
statement (A) itemizing all such cost and expense items for which reimbursement
or indemnification is sought and (B) detailing how the Lender calculated such
items.
ARTICLE XV
MISCELLANEOUS
Section 1.48 Notices. (a) All communications under this Agreement or the Notes
shall be in writing and shall be delivered or mailed or sent by facsimile
transmission and confirmed in writing (i) if to the Lender, to the Lender, at
such address as the Lender may have furnished to the Borrower in writing, and
(ii) if to the Borrower, at the address set forth in Section 3.01(b) or at such
other address or facsimile number as it shall have furnished in writing to the
Lender and (iii) if to Monaco to it at the address set forth in Section 3.02(b)
or at such other address or facsimile number as it shall have furnished in
writing to the Lender.
(1) Any written communication so addressed and mailed by certified or registered
mail, return receipt requested, shall be deemed to have been given when so
mailed. All other written communications shall be deemed to have been given upon
receipt thereof.
Section 1.49 Survival. All representations, warranties and covenants made by the
Borrower or Monaco herein or in any certificate or other instrument delivered
under or in connection with this Agreement shall be considered to have been
relied upon by the Lender and shall survive regardless of any investigation made
by the Lender or on the Lender's behalf.
Section 1.50 Successors and Assigns. This Agreement shall be binding upon the
parties hereof and their respective successors and assigns, and shall inure to
the benefit of and be enforceable by the parties hereof and their respective
successors and assigns permitted hereunder.
Section 1.51 Amendment and Waiver. (a) This Agreement and the Notes may be
amended or supplemented, and the observance of any term hereof or thereof may be
waived, with the written consent of the Borrower, Monaco and the Lender (or, if
multiple Lenders, Lenders with respect to at least a majority in aggregate
unpaid principal amount of the Advance); provided, however, that no such
amendment, supplement or waiver shall, without the written consent of all
Lenders, (a) change, with respect to the Advance, the amount or time of any
required prepayment or payment of principal or premium or the rate or time of
payment of interest, or change the funds in which any prepayment or payment on
the Advance is required to be made; (b) reduce the percentage of the aggregate
principal amount of the Advance required for any amendment, consent or waiver
hereunder; or (c) release any material Lien of the Collateral Agent, held for
the benefit of the Lender, on any of the Collateral or affect the priority
thereof.
<PAGE>
(1) Any amendment, supplement or waiver effected in accordance with this Section
15.04 shall be binding upon the Lender, each Assignee and the Borrower.
(2) The Borrower will not solicit, request or negotiate for or with respect to
any proposed waiver or amendment of any of the provisions of the Program
Documents or the Notes unless the Initial Lender (irrespective of the amount of
the Advance made by it) shall be informed thereof by the Borrower and shall be
afforded the opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver effected
pursuant to the provisions of this Section 15.04 shall be delivered by the
Borrower to the Lender forthwith following the date on which the same shall have
been executed and delivered by the Lender of the requisite percentage of the
Advance.
Section 1.52 Counterparts. This Agreement may be executed and delivered
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 1.53 Reproduction of Documents. This Agreement and all documents
relating hereto (other than the Note), including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b)
documents received by the Initial Lender at the closing of the Initial Lender's
making of the Advance, and (c) financial statements, certificates and other
information heretofore or hereafter furnished to the Lender, may be reproduced
by the Lender by any photographic or other similar process and the Lender may
destroy any original document so reproduced. The Borrower agrees and stipulates
that, to the extent permitted by applicable law and court or agency rules, any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Lender in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall be admissible in evidence to the same
extent.
Section 1.54 Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK.
<PAGE>
Section 1.55 Consent to Jurisdiction and Venue. The Borrower and Monaco each
hereby irrevocably (i) agrees that any suit, action or other legal proceeding
arising out of or relating to the Program Documents or any Note may be brought
in a court of record in the State of New York or in the courts of the United
States of America located in such State, (ii) consents to the jurisdiction of
each such court in any such suit, action or proceeding, and (iii) waives any
objection which it may have to the laying of venue of any such claim that any
such suit, action or proceeding has been brought in an inconvenient forum and
covenants that it will not seek to challenge the jurisdiction of any such court
or seek to oust the jurisdiction of any such court, whether on the basis of
inconvenient forum or otherwise. The Borrower and Monaco each irrevocably
consent to the service of any and all process in any such suit, action or
proceeding by mail copies of such process to the Borrower and Monaco at their
respective addressees for notices provided in Section 15.01 hereof. The Borrower
and Monaco each agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. All mailings under this Section
15.08 shall be by registered or certified mail, return receipt requested.
Nothing in this Section 15.08 shall affect the Lender's right to serve legal
process in any other manner permitted by law or affect the Lender's right to
bring any suit, action or proceeding against the Borrower or any of its
properties in the courts of any other jurisdiction.
Section 1.56 No Petition. The Lender and each Assignee hereby covenant and agree
that, until the expiration of the date which is one year and one day after the
payment in full of all investor certificates or other securities outstanding and
issued pursuant to any disposition of Collateral, it will not institute against
the Borrower, or join in any institution against the Borrower of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any applicable bankruptcy or similar law in
connection with any obligations relating to the Advance or the Program
Documents.
Section 1.57 Acts of Lender.(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be given
or taken by the Lender may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the Lender in person or by
agents duly appointed in writing and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
is or are delivered to the Borrower. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 15.09.
(1) The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Borrower deems sufficient.
(2) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Lender or any Assignee shall bind the Lender and such
Assignee in respect of anything done, omitted or suffered to be done by the
Borrower in reliance thereon, whether or not notation of such action is made
upon such Note.
<PAGE>
Section 1.58 Confidentiality. Each Lender agrees to take, and to cause its
Affiliates to take, normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" and provided to the Lender by Monaco or the Borrower or any subsidiary
of Monaco or the Borrower under this Agreement or any other Program Document,
and neither any Lender nor any of its Affiliates shall use any such information
other than in connection with or in enforcement of this Agreement and the other
Program Documents or in connection with other business now or hereafter existing
or contemplated with Monaco, the Borrower or any subsidiary of Monaco or the
Borrower, except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender or
(ii) was or becomes available on a non-confidential basis from a source other
than Monaco or the Borrower, provided that such source is not bound by a
confidentiality agreement with Monaco or the Borrower known to the Lender;
provided, however, that the Lender may disclose such information (A) at the
request or pursuant to any requirement of any governmental authority to which
the Lender is subject or in connection with an examination of the Lender by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Lender may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Program Document; (F) to the Lender's independent auditors,
counsel and other professional advisors; or (G) to any participant or assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of Lender hereunder. Prior
to disclosing pursuant to clauses (B), (C) or (D) any information identified by
Monaco, the Borrower or any subsidiary of Monaco or the Borrower as
"confidential" or "secret," the Lender subject to such process, proceeding,
litigation or requirement of law shall provide Monaco and the Borrower with
notice thereof (so long as such notice does not violate any applicable
requirement of law) sufficient, if reasonable under the circumstances) to
provide Monaco or the Borrower with the opportunity to seek, at their expense, a
protective order or similar protections, and such Lender will reasonably
cooperate with Monaco and the Borrower, at their request and expense, to obtain
such protections.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed as of the day and year first above
written.
MF RECEIVABLES CORP. IV
By:_______________________________
Name: Irwin L. Sandler
Title: Vice President
MONACO FINANCE, INC.
By:_______________________________
Name: Irwin L. Sandler
Title: Executive Vice
President
DAIWA FINANCE CORPORATION
By:_______________________________
Name:
Title:
<PAGE>
Exhibit A
Form of Release
This Mutual Release (this "Release") is made as of the 29th day of
July, 1999, by and among MF Receivables Corp. III, a Delaware corporation
("MF3"), MF Receivables Corp. IV, a Delaware corporation ("MF4"), Monaco
Finance, Inc., a Colorado corporation ("MFI") and Pacific USA Holdings Corp., a
_______ corporation ("PUSA" and, together with MF3, MF4, MFI and PUSA, the
"Monaco Parties"), and Daiwa Finance Corporation , a Delaware corporation
("DFC")
RECITALS
A. MF3, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF3 Credit Agreement"), dated as of July 29, 1999.
B. MF4, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF4 Credit Agreement" and, together with MF3 Credit
Agreement, the "Credit Agreements"), dated as of July 29, 1999. Unless otherwise
specified or defined herein, each term used herein has the meaning ascribed
thereto in the Credit Agreements.
AGREEMENTS
1. Release by Monaco Parties. For good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged) each of the
Monaco Parties does hereby release and discharge DFC, and each of its
shareholders, directors, officers, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively with
any purchaser of the Collateral, the "DFC Parties"), of and from all manner of
actions, choses and causes of action, claims, demands, damages, expenses,
liabilities, losses, judgments and executions (in each case of whatever kind or
nature, whether in law or in equity, and whether known or unknown)
(collectively, the "Claims") at any time arising out of or relating in any
manner to any action or inaction by any of the DFC Parties in connection with or
relating to any matter.
2. Release by DFC.For good and valuable consideration (the receipt
and sufficiency of which are hereby acknowledged) DFC does hereby release and
discharge each of the Monaco Parties, and each of their respective shareholders,
directors, officers, members, partners, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively, the
"Monaco Released Parties"), of and from all manner of Claims at any time arising
out of or relating in any manner to any action or inaction by any of the Monaco
Released Parties in connection with or relating to any matter.
<PAGE>
3. Releases Generally. Notwithstanding paragraphs 1 and 2 above, (i)
DFC's release set forth in paragraph 2 above shall not apply to any moneys due
to DFC under any of the Program Documents and (ii) none of the releases set
forth in paragraphs 1 and 2 above shall apply to (x) any breach following the
Effective Date by any party of the agreements set forth herein or in any Program
Document or (y) any breach following the Effective Date by any party of any
Program Document or any agreement executed and delivered in connection with or
pursuant to this Agreement.
4. Non-Filing. The parties hereto acknowledge and agree that PUSA has
made certain advances to MFI which may be currently due and payable. From and
after the date hereof, PUSA agrees that, until the expiration of the date which
is one year and one day following the repayment in full of the Advances (or, if
earlier, a Collateral Disposition (as defined in the Security Agreement)), it
will not (i) bring any legal action against MFI to collect or enforce such
advances or (ii) institute against MFI, or join in any institution against MFI
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings. MFI and PUSA each represent and warrant to DFC that, as of the date
hereof, the Borrower has not incurred any Indebtedness to MFI or PUSA or any
Affiliate thereof.
5. MFI Servicing Responsibilities. MFI agrees that from and after
April 16, 1999, its rights and responsibilities under each of the Servicing
Agreements have been terminated (other than rights and responsibilities (a)
which, under such Servicing Agreements, survive MFI's replacement as Servicer
and (b) such rights and responsibilities as are specifically set forth in the
Supplementary Servicing Agreement). MFI further acknowledges and agrees that
neither the Collateral Agent nor DFC shall be required to deliver to MFI a
Servicer Termination Notice under such Servicing Agreements in order to
effectuate the agreements set forth in this Agreement.
6. Assignability. DFC's release under paragraph 2 hereof shall be
expressly assumed by any purchaser or assignee of the Notes. The Monaco Parties'
release under paragraph 1 hereof shall be expressly assumed by any purchaser or
assignee of any of the stock of MFI, MF3 or MF4 currently owned by a Monaco
Party. PUSA's and MFI's agreements under paragraph 4 hereof shall be expressly
assumed by any purchaser or assignee of MFI's debt to PUSA.
7. Counterparts. This Release may be executed in one or more
counterparts (including counterparts executed on facsimile copies or delivered
by facsimile), each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
8. Governing Law; Effectiveness. This Release shall be governed by
and construed in accordance with the laws of the State of New York. This Release
shall be effective concurrently with the effectiveness of the Credit Agreements.
9. Jurisdiction, Etc. Each of the parties hereto agrees that the
provisions of Section 15.08 of the Credit Agreements shall apply to them with
respect to this Release.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Release to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DAIWA FINANCE CORPORATION MONACO FINANCE, INC.
By:_________________________________
By:_________________________________
Name:_______________________________
Name:_______________________________
Title:______________________________
Title:______________________________
MF RECEIVABLES CORP. III MF RECEIVABLES CORP. IV
By:_________________________________
By:_________________________________
Name:_______________________________
Name:_______________________________
Title:______________________________
Title:______________________________
PACIFIC USA HOLDINGS CORP.
By:_________________________________
Name:_______________________________
Title:______________________________
AMENDED AND RESTATED SECURITY AGREEMENT
among
MF RECEIVABLES CORP. IV
(as Borrower)
and
THE CHASE MANHATTAN BANK
(as Collateral Agent)
Dated as of July 29, 1999
MF RECEIVABLES CORP. IV
<PAGE>
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as
of July 29, 1999, made by and among MF RECEIVABLES CORP. IV, a Delaware
corporation, as borrower (the "Borrower"), MONACO FINANCE, INC., a Colorado
corporation ("Monaco"), as servicer (the "Servicer") and The Chase Manhattan
Bank as collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the parties hereto entered into a Security Agreement, dated
as of December 22, 1997 (as previously amended, the "Existing Security
Agreement") in connection with a Credit Agreement, of even date therewith, among
the Borrower, Monaco and Daiwa Finance Corporation (the "Initial Lender"), as
lender (the "Existing Credit Agreement"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, Monaco and the Initial Lender are entering into the
Amended and Restated Credit Agreement, of even date herewith (the "Credit
Agreement"), which amends, restates and supersedes the Existing Credit Agreement
in its entirety; and
WHEREAS, the parties hereto intend that the security interests
granted under the Existing Security Agreement remain in full force and effect
and are executing and delivering this Agreement to ensure continuity of such
security interests and to make certain conforming changes;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged, the parties hereto agree that from and after the effective date
of the Credit Agreement, the Existing Security Agreement shall be deemed to be
amended and restated in its entirety as follows and the Borrower hereby agrees
with the Collateral Agent, for the benefit of the Secured Parties, as follows:
DEFINED TERMS.
The terms "goods", "accounts", "contract rights", "chattel paper",
"general intangibles", "checks", "instruments", "securities" and "documents"
have the respective meanings ascribed in the UCC.
Capitalized terms used herein shall, unless otherwise defined herein,
have the respective meanings ascribed in the Credit Agreement; and the following
terms shall have the following meanings:
"Accounts" means the Lockbox Account and the Collateral
Account.
"Amount Financed" means, with respect to any Sold Auto Loan, the
meaning ascribed thereto in the applicable disclosure documents given to the
obligor in satisfaction of the requirements of the Federal Truth-in-Lending Act.
<PAGE>
22
Doc #8K999.DOC
"Approval Date" means, with respect to any Auto Loan, the date on
which Monaco made its written credit approval with respect to the obligor under
such Auto Loan.
"Approved Contract/Policy Provider" means any provider of credit
default or vendor's single interest insurance approved by the Initial Lender.
"BT" means Bankers Trust Company.
"Collateral" has, subject to Section 2(b), the meaning
specified in Section 2(a).
"Collateral Account" has the meaning specified in Section
6.01 hereof.
"Collateral Agent Fee and Expenses" means the fees payable in
accordance with the fee letter between the Collateral Agent and the Borrower.
"Lockbox" means the segregated lockbox and account established in
the name of the Collateral Agent on behalf of the Lenders for the sole purpose
of receiving collections on the Designated Auto Loans, pursuant to the Lockbox
Agreement.
"Lockbox Agreement" means the Lockbox Agreement, dated as of _____
__, 1999, among the Initial Lender, the Servicer and the Collateral Agent.
"Lockbox Processor" means a Person designated from time to time by
the Initial Lender to perform the functions of the Lockbox Processor.
"MF3 Collateral" means all Collateral (as defined in the
MF3 Credit Agreement).
"Proceeds" has the meaning assigned such term under the UCC of the
States of Delaware, Colorado and New York, and of each other jurisdiction whose
law governs the grant or perfection of the Collateral Agent's interest in the
particular proceeds of the Collateral and shall also include (to the extent not
already included): (a) any and all proceeds of any insurance, indemnity,
warranty, guaranty or letter of credit payable to the Borrower from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or rights to amounts payable to the Borrower from time to time
in connection with any requisition, confiscation, condemnation seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), (c) any and all other amounts, products, off spring, rents or
profits from time to time paid or payable under or in connection with the
Collateral and (d) all additions to or substitutions or replacements for any of
the Collateral.
"Responsible Officer" means, when used with respect to the Collateral
Agent, any officer within the corporate trust department (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers.
<PAGE>
"Secured Parties" means the Lenders from time to time in
respect of the Advance.
"Servicer Fee and Expenses" means all fees payable to SST under the
Supplementary Servicing Agreement.
"Sold Auto Loans" has the meaning assigned thereto in the
Loan Acquisition Agreement.
"Subservicer" has the meaning set forth in Section 8.07.
SECURITY INTERESTS.
As security for the prompt, complete and unconditional payment and
performance of all obligations of the Borrower in respect of the Advance, the
Borrower hereby pledges, assigns, transfers and delivers to the Collateral Agent
for the benefit of the Secured Parties, and grants to the Collateral Agent for
the benefit of the Secured Parties, a continuing first lien on, and first and
prior security interest in, all of the Borrower's right, title and interest in,
to and under the following (collectively, the "Collateral"):
each Designated Auto Loan, including, without limitation, all rights
to payments thereunder, purchased by or otherwise conveyed to or at the
direction of the Borrower pursuant to the Loan Acquisition Agreement;
each Financed Vehicle and all other Property, now or hereafter
acquired, securing or evidenced by, each Designated Auto Loan, including,
without limitation, the certificate of title relating to each Financed
Vehicle, any Insurance Proceeds with respect to any such Financed Vehicle
or Designated Auto Loan, the proceeds of any repossession and liquidation
of any such Financed Vehicle, rights under judgments with respect to
defaulted obligors, rights to deficiency judgments with respect to
defaulted obligors and rights under any service contracts with respect to
any such Financed Vehicle;
the Collateral Account and all moneys, checks, instruments,
documents, securities, investments, deposits and other credits (whether or
not permitted by the Program Documents) credited to the Collateral
Account, or otherwise held by the Collateral Agent;
the Acquisition Agreement the NAFCO Loan Purchase Agreement
and the Advantage Loan Purchase Agreement (as each term is
defined in the Acquisition Agreement), the Loan Acquisition
Agreement, the Credit Agreement, the Lockbox Agreement and the
Servicing Agreement;
the MF3 Collateral; and
all proceeds of any of the foregoing excluding Specified
Distributions (as hereinafter defined).
<PAGE>
Notwithstanding the foregoing, "Collateral" shall in no event include
any of the Borrower's right, title or interest in the Loan Loss Reimbursement
Agreement or the Letters of Credit (as each term is defined in the Acquisition
Agreement) or any proceeds thereof, any other amounts payable to the Borrower
under the Loan Loss Reimbursement Agreement, any amounts paid to the Borrower
under Section 4 hereof, any account in which any of the foregoing is deposited,
maintained or held, any interest in such amounts and all proceeds of the
foregoing.
All rights of the Collateral Agent and the Secured Parties and all
liens and security interests granted hereunder shall be absolute, unconditional
and irrevocable unless and until released pursuant to the Program Documents,
irrespective of any condition or circumstance whatsoever.
The grant of the security interest to the Collateral Agent pursuant
to this Section 2 shall not: (i) relieve the Borrower from the performance of
any term, covenant, condition or agreement on the Borrower's part to be
performed or observed under or in connection with the Collateral, (ii) impose
any obligation on the Collateral Agent or the Secured Parties to perform or
observe any such term, covenant, condition or agreement on the Borrower's part
to be so performed or observed or (iii) impose any liability on the Collateral
Agent or the Secured Parties for any act or omission on the part of the
Borrower, or any Person acting as agent for or on behalf of the Borrower,
relative to or for any breach of any representation or warranty on the part of
the Borrower in connection with the Collateral.
CERTAIN RIGHTS OF SECURED PARTIES WITH RESPECT TO COLLATERAL.
The Borrower hereby irrevocably authorizes the Collateral Agent to
execute and deliver, as the attorney-in-fact of the Borrower, any consent,
waiver or amendment which, under the terms of any Program Document, is or may be
executed and delivered by the Borrower with respect to the Collateral, subject
to the provisions of the Program Documents; provided, however, that the
Collateral Agent shall have no duty or obligation to execute and deliver any
such consent, waiver or amendment unless directed in writing to take the actions
specified therein by the Initial Lender; and provided, further, that the
Collateral Agent shall not be required to take any action which the Collateral
Agent reasonably believes may be contrary to applicable law or which would
expose the Collateral Agent to financial liability if the Collateral Agent has
reasonable grounds to believe that repayment of such financial liability is not
reasonably assured to it. The Borrower hereby agrees to remit to the Collateral
Agent for deposit in accordance with this Agreement any and all Proceeds of any
Collateral received by the Borrower (other than any amounts received by the
Borrower pursuant to Section 6.04 hereof).
REMEDIES
<PAGE>
(i) If at any time a Default shall have occurred and be continuing,
the Initial Lender may, without demand of performance or other demand,
advertisement or notice of any kind (except for any notice required by law and
subject to receipt of notice of default as provided in Section 8.04 hereof) to
or, upon the Borrower or any other Person (all of which demands, advertisements
and/or notices are hereby expressly waived), and in its own name or in the name
of the Borrower, forthwith demand, collect, receive, sue for, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, grant an option or options to purchase, contract to sell or otherwise
dispose of and deliver said Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at any location or locations at the
option of the Initial Lender, all upon such terms and conditions and at such
prices as the Initial Lender may deem advisable, with the right of the Initial
Lender or any Secured Party upon any such public sale or sales to purchase the
whole or any part of said Collateral so sold, free of any right of redemption in
the Borrower, which right is hereby expressly waived and released. At the
instruction of the Lenders in respect of a majority in aggregate principal
amount of the Advance outstanding, the Initial Lender may, without notice or
publication, adjourn any public or private sale or the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be so adjourned.
If a Default shall have occurred and be continuing, then the Initial
Lender may, at any time thereafter, without demand of performance or other
demand, succeed to the Borrower's rights and privileges with respect to
the Loan Acquisition Agreement, the Credit Agreement, the Lockbox
Agreement and the Servicing Agreement; provided that the Initial Lender
will not have assumed and will not be obligated to perform any of the
duties, obligations, covenants or agreements of the Borrower under any
such agreement.
Notwithstanding anything to the contrary set forth herein or in any
Program Document (including any Program Document under the MF3 Credit
Agreement), except when a Default has occurred and is continuing:
<PAGE>
(A) The Initial Lender may sell all or any portion of the
Collateral at any time (such sale, a "Collateral Disposition") in
accordance with the provisions in this Section 4(a)(iii). With
respect to any Collateral Disposition which is consummated (1) on or
prior to December 31, 2000, the Initial Lender will remit or cause to
be remitted to the Borrower an amount equal to the product of (x) the
Applicable Disposition Percentage (as defined below) and (y) the
Specified Amount (as defined below)and (2) from and after January 1,
2001, the Initial Lender will (x) comply with its obligations as a
secured party under the UCC with respect to such Collateral
Disposition, (y) not less than five days prior to such Collateral
Disposition, provide the Borrower with: (I) written notice (a
"Disposition Notice") specifying the proposed purchase price for the
Collateral being sold and (II) deliver to the Borrower a fairness
opinion from a reputable investment bank, accounting firm or
valuation firm as to the fairness of the purchase price for the
Collateral (the cost of such opinion to be an expense of the Initial
Lender payable from the proceeds of such sale). The Borrower (or any
Affiliate thereof) shall have five days after receipt of a
Disposition Notice to notify the Initial Lender that it wishes to
purchase the Collateral at the proposed purchase price by delivering
to the Initial Lender its unconditional commitment unconditionally
guaranteed by Pacific USA Holdings Corp., a Texas corporation (each
in form and substance reasonably acceptable to the Initial Lender) to
effectuate such purchase within 45 days following the Borrower's
receipt of such Disposition Notice.
(B) On the date that is the earlier of the date upon which all
amounts owed to the Initial Lender under the Program Documents
(including the Program Documents under the MF3 Credit Agreement) are
paid in full and the date of the Collateral Disposition of all of the
remaining Designated Auto Loans, the Initial Lender shall (x) remit
or cause to be remitted to the Borrower the Residual Amount (as
defined below) and (y) release to the Borrower all remaining
Collateral, free and clear of all Liens created by the Secured
Parties.
For purposes of this Section 4(a)(iii), the following terms
shall have the following meanings:
"Applicable Disposition Percentage" means, with respect to a
Collateral Disposition, a fraction the numerator of which is the
aggregate principal balance of the Designated Auto Loans subject to
such Collateral Disposition on the date of such Collateral
Disposition and the denominator of which is the aggregate principal
balance of all Designated Auto Loans on the date of such Collateral
Disposition before giving effect to such Collateral Disposition.
"Loan Amount" means, on any date, the aggregate amount, without
duplication, owed the Initial Lender under the Program Documents
(including the Program Documents under the MF3 Credit Agreement) on
the Effective Date plus any amounts chargeable to the Borrower or
payable from the Collateral from and after the Effective Date to and
including such date less any amounts paid hereunder on or prior to
such date to or for the account of the Lender other than proceeds of
any Collateral Disposition.
"Residual Amount" means, on any date of determination thereof,
an amount equal to the difference, if positive, between (x) the net
proceeds of all Collateral Dispositions made on or prior to such date
less (y) the sum of (a) the Loan Amount on such date and (b) the
aggregate Specified Distributions made on or prior to such date.
"Specified Amount" means, with respect to any Collateral
Disposition occurring (x) on or prior to December 31, 1999,
$3,500,000 less the aggregate Specified Distributions made prior to
the date of such Collateral Disposition and (y) from and after
January 1, 2000 but on or prior to December 31, 2000, $1,000,000 less
the aggregate Specified Distributions made prior to the date of such
Collateral Disposition.
"Specified Distribution" means a remittance made to the Borrower
under Section 4(a)(iii)(A)(1) hereof.
<PAGE>
Subject to Section 4(a)(iii) above, if any notification of a proposed
disposition of the Collateral is required by law, such notification shall be
deemed reasonably and properly given if made in any manner provided in Section
10 hereof at least ten Business Days before such disposition.
In addition to the rights, powers and remedies granted to it in this
Security Agreement and in any other instrument or agreement securing, evidencing
or relating to the Advance, upon the occurrence and during the continuance of a
Default, the Collateral Agent shall have all of the rights, powers and remedies
now or hereafter permitted in law or equity, including, without limitation,
those of a secured party under the UCC of the States of New York, Colorado and
any other applicable jurisdiction.
The Collateral Agent shall apply the net proceeds of any collection,
recovery, receipt, appropriation, realization or sale referred to in this
Section 4 in accordance with the provisions of Section 6.04 hereof; provided,
that the Borrower shall not be liable for the amount, if any, by which the
amount due under the Advance exceeds the proceeds of any such collection,
recovery, receipt, appropriation, realization or sale.
The Borrower shall provide written payment instructions (including
the account number of the bank account to which payments are to be directed and
the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such party by the wire transfer of
immediately available funds) to the Collateral Agent and the Initial Lender.
Failure to provide such notice shall not affect the Borrower's right to receive
any funds to which it is otherwise entitled in accordance with the Program
Documents, but failure to deliver such notice may result in a delay in the
receipt of such funds.
REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Borrower represents, warrants and agrees that:
No security agreement, financing statement, equivalent security or
lien instrument or continuation statement listing the Borrower as debtor
covering all or any part of the Collateral is on file or of record in any
jurisdiction, except such as may have been filed, for the benefit of the Secured
Parties recorded or made by the Borrower in favor of the Collateral Agent
pursuant to this Security Agreement or the Credit Agreement.
Except to the extent that Monaco or BT remains the prior lienholder
with respect to each Financed Vehicle securing a Designated Auto Loan in
accordance with the terms of the Credit Agreement, this Security Agreement is
effective to create a valid and continuing Lien on the Collateral in favor of
the Collateral Agent for the benefit of the Secured Parties, which Lien is prior
to all other Liens except Permitted Liens, and is enforceable as such as against
creditors of and purchasers from the Borrower. All action necessary or desirable
to protect and perfect such security interest has been duly taken.
<PAGE>
The Borrower's chief executive office is at 370 17th Street, Suite
5060F, Denver, Colorado 80202 and there have been no other office locations
except to the extent the Borrower has provided written notice thereof in
accordance with Section 10.01 of the Credit Agreement. The Borrower will not
change its name and will not change its principal place of business or chief
executive office unless the Borrower shall have given the Collateral Agent at
least 30 days prior written notice thereof and the Borrower shall have taken all
action necessary to assure continuous perfection of the security interest held
by the Collateral Agent in the Collateral as evidenced by an opinion of counsel
addressed to the Collateral Agent and the Lenders to the effect that the lien
and security interest created by this Security Agreement with respect to such
Collateral will continue to be maintained, and that the priority thereof will
not be affected, after giving effect to such action or actions.
At any time and from time to time, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as the
Lenders in respect of a majority in aggregate principal amount of the Advance
outstanding may reasonably deem desirable in obtaining the full benefits of this
Security Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
liens and security interests granted hereby. The Borrower also hereby authorizes
the Collateral Agent to file any such financing or continuation statement
without the signature of the Borrower to the extent permitted by applicable law;
provided, however, that such authorization shall not be deemed to create a duty
in the Collateral Agent. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note or other
instrument, or any chattel paper, the Borrower shall immediately notify the
Collateral Agent and shall duly endorse such note, instrument or chattel paper
to the order of the Collateral Agent and deliver such note, instrument or
chattel paper to the Collateral Agent promptly, and shall take such other
actions and execute such other documents as may be required by law to perfect
the Collateral Agent's interest in such note, instrument or chattel paper.
The Borrower will warrant and defend the Collateral Agent's right,
title and interest in and to the Collateral, for the benefit of the Secured
Parties against the claims and demands of all Persons whomsoever.
All authorizations in this Security Agreement for the Collateral
Agent to endorse checks, instruments and securities and to execute, deliver and
file financing statements, continuation statements, security agreements and
other instruments with respect to the Collateral are powers coupled with an
interest and are irrevocable so long as the Advance is outstanding; provided,
however, the foregoing authorizations shall not create any duty or obligation on
the part of the Collateral Agent other than those obligations set forth in this
Agreement.
COLLATERAL ACCOUNT.
<PAGE>
Establishment and Maintenance of Lockbox and Collateral Account. The
Collateral Agent shall possess all right, title and interest in all
funds on deposit from time to time in the Lockbox and in all proceeds
thereof. The Lockbox shall be under the sole dominion and control of
the Collateral Agent on behalf of the Secured Parties. The Collateral
Agent agrees to cause the Lockbox Processor to sweep funds on an as
available basis, from the Lockbox to the Collateral Account at least
once each week. The Collateral Agent has established the following
segregated account entitled "MF IV Corp. Collection Account, The
Chase Manhattan Bank, as Collateral Agent" (the "Collateral
Account"). The Collateral Account shall be maintained in the State of
New York in either (i) segregated trust accounts with the corporate
trust department of The Chase Manhattan Bank or any replacement
collateral agent or (ii) segregated deposit accounts with banks or
trust companies (which may include the Collateral Agent or a
replacement collateral agent) the short-term debt obligations of
which are rated "A-1+" by S&P and the short-term deposits of which
are rated no less than "Baa3" by Moody's. The Borrower shall have no
right of withdrawal from the Collateral Account.
Required Deposits to the Accounts. (a) The following amounts
shall be paid to the Collateral Agent and deposited as
follows:
all amounts representing payments in respect of Designated Auto Loans
(including, without limitation, all Recoveries, all late charges, all
payments in respect of the Repurchase Price of Designated Auto Loans
repurchased by Monaco in accordance with the Loan Acquisition Agreement
and, subject to Section 4(a)(iii), all other Proceeds of the Collateral)
shall be deposited in the Collateral Account;
all amounts in respect of principal of Permitted
Investments shall be deposited in the Collateral Account;
all amounts representing Insurance Proceeds in respect of
Designated Auto Loans shall be deposited in the Collateral
Account;
all amounts representing repossession proceeds in respect
of Designated Auto Loans shall be deposited in the Collateral
Account; and
all other amounts paid to the Borrower under the Program Documents,
other than indemnity payments made to the Borrower in respect of
Designated Auto Loans, and all investment earnings on Permitted
Investments shall be deposited in the Collateral Account.
The Collateral Agent is hereby irrevocably authorized and empowered,
as the Borrower's attorney-in-fact, to endorse any check or any other instrument
or security presented for deposit in the Collateral Account requiring the
endorsement of the Borrower; provided, however, the foregoing authorizations
shall not create any duty or obligation on the part of the Collateral Agent.
<PAGE>
Notwithstanding the foregoing provisions of this Section 6.02, if at
any time the Borrower, Monaco or any Person on behalf of the Borrower or Monaco
(including the Servicer under the Servicing Agreement), receives any payments
required to be deposited in the Collateral Account, all such amounts shall be
held by the Borrower, Monaco or such other Person as the agent of, and in trust
for, the Collateral Agent and shall, forthwith upon receipt by and in any event
no later than two Business Days following receipt by the Borrower, Monaco or
such other Person, be turned over to the Collateral Agent for deposit to the
Collateral Account, in the same form as received by the Borrower, Monaco or such
other Person (and, if received in the form of a check, instrument or security
requiring endorsement, duly endorsed on behalf of the Borrower, Monaco or such
other Person to the order of the Collateral Agent).
Rightof Withdrawal from the Collateral Account. In furtherance of the
security interest provided in Section 2, the Collateral Agent, acting
on behalf of the Secured Parties, and the Borrower, agree that (a)
the Collateral Account shall be maintained in the name of the
Collateral Agent, (b) the Collateral Account shall be subject to the
exclusive dominion and control of the Collateral Agent and (c) the
Collateral Agent shall have the sole right of withdrawal from the
Collateral Account. The Borrower, the Lender and the Servicer shall
timely provide written remittance information to the Collateral Agent
specifying payment instructions with respect to amounts payable
pursuant to each provision of Section 6.04. The Collateral Agent
shall have no liability to the Borrower, any Lender or any other
Person for failure to pay funds to any Person in accordance with
Section 6.04 in the absence of timely receipt of such written
remittance instructions or in the event of any errors in such written
remittance instructions.
Application of Funds in the Collateral Account; Application of
Proceeds of Realization on Collateral. (a) [reserved]
(b) [reserved]
Except as specified in Section 4(a)(iii) above, the Collateral Agent
shall apply all amounts held in the Collateral Account and the proceeds of any
collection, recovery, receipt, appropriation, realization or sale of any
Collateral (after deducting all reasonable costs and expenses of every kind
incurred in any way relating to the exercise of rights of the Collateral Agent
or the Initial Lender with respect to the Collateral, including reasonable
attorneys' fees and expenses) in the following order of priority (in accordance
with the Monthly Servicer Report):
to the Collateral Agent, an amount equal to all fees, costs
and expenses owing to the Collateral Agent under this Agreement;
to the Initial Lender, an amount equal to reasonable out-of-pocket
costs and expenses incurred by the Initial Lender in its administration of
the Program Documents;
to the Servicer, an amount equal to all fees, costs and
expenses owing to the Servicer under the Servicing Agreement;
to the Lenders, pro rata, in the following order of
priority: (A) an amount equal to all unpaid interest (calculated
at the applicable Interest Rate as provided in the Credit
Agreement) on and (B) principal of, the Advance;
<PAGE>
to the discharge of all other obligations of the Borrower which are
then due (or, to the extent such obligations have not yet matured, to be
set aside and held in trust solely to satisfy such obligations, as and
when they mature or otherwise become due) in an amount equal to such
obligations; and
to the Borrower, an amount equal to any funds remaining in
the Collateral Account.
Investment of Funds Deposited in Collateral Account. The Collateral Agent
shall, in accordance with the provisions of this Section 6.05, invest
and reinvest, at the written direction of the Borrower, in the
Collateral Agent's own name or in the name of the Collateral Agent's
nominee, collected funds in the Collateral Account in Permitted
Investments which shall mature, or be redeemed at the option of the
holder, prior to the respective dates when the money invested in such
Permitted Investments is required for application in accordance with
this Section 6. If there is no written direction from the Borrower
collected funds in the Collateral Account will remain uninvested.
DISPOSITIONS OF AUTO LOANS.
The Collateral Agent at the written direction of the Initial Lender
shall release from the lien of this Agreement any of the Designated Auto Loans
held as Collateral upon a Collateral Disposition, a prepayment of the Advance or
a repurchase by the Borrower in accordance with the terms of the Credit
Agreement and Monaco in accordance with the Loan Acquisition Agreement;
provided, that the proceeds of any such Collateral Disposition, voluntary
prepayment or repurchase (net of expenses and costs) have been deposited into
the Collateral Account for application in accordance with Section 6.04(c);
provided, however, that, upon satisfaction of the conditions set forth in this
Section 7, the Collateral Agent will release to or at the direction of SST the
certificate of title with respect to a Designated Financed Vehicle subject to a
Collateral Disposition within three Business Days of such request by SST. In
addition, the Collateral Agent shall release Designated Auto Loans that have
been repaid in full as provided in Sections 8.01 and 8.08(ii) hereof.
THE COLLATERAL AGENT.
<PAGE>
Appointment. By accepting the benefits of the security interest granted
herein, each Secured Party hereby irrevocably designates and appoints
The Chase Manhattan Bank as the Collateral Agent of such Secured
Party under this Security Agreement, and each such Secured Party
irrevocably authorizes The Chase Manhattan Bank as the Collateral
Agent for such Secured Party, to take such action on its behalf under
the provisions of this Security Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Collateral
Agent by the terms of this Security Agreement together with such
other powers as are reasonably incidental thereto but in each
instance solely at the written instruction of the Lenders in respect
of at least a majority in aggregate principal amount of the Advance
outstanding. Notwithstanding any provision to the contrary elsewhere
in this Security Agreement, the Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein
and in the Servicing Agreement, or any fiduciary relationship with
any Secured Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Security Agreement or otherwise exist against the
Collateral Agent. The Chase Manhattan Bank hereby accepts its
appointment as Collateral Agent, subject to, and in reliance upon,
the provisions of this Section 8.01.
Exculpatory Provisions. Neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with
this Security Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to
any of the Secured Parties for any recitals, statements,
representations or warranties made by the Borrower or any officer
thereof contained herein or in the Loan Acquisition Agreement, the
Servicing Agreement, the Credit Agreement or in any certificate,
report, statement or other document referred to or provided for in,
or received by the Collateral Agent under or in connection with, this
Agreement, the Loan Acquisition Agreement, the Servicing Agreement or
the Credit Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency (except with respect to
enforceability of this Agreement and the Servicing Agreement as it
relates to the Collateral Agent) of this Agreement, the Loan
Acquisition Agreement, the Servicing Agreement, the Lockbox
Agreement, the Credit Agreement, the Advance or the Collateral or for
any failure of the Borrower to perform its obligations hereunder or
under the Loan Acquisition Agreement, the Servicing Agreement, the
Lockbox, the Credit Agreement or the Advance. The Collateral Agent
shall not be under any obligation to any Secured Party to ascertain
or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, any of the Program
Documents, or to inspect the properties, books or records of the
Borrower or the Servicer. Except for its duty to maintain possession
of the Auto Loans and as set forth in this Agreement, the Collateral
Agent shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any
security interest in any Financed Vehicle or any Auto Loan, or the
perfection or priority of such a security interest or the maintenance
of any such perfection or priority or for or with respect to the
ability of the Auto Loans to generate the payments to be distributed
to the Lender under the Credit Agreement, including, without
limitation, the existence, condition, location and ownership of any
Financed Vehicle; the existence of any insurance thereon; the
compliance by the Borrower, the Servicer or the Collection Agent with
any covenant or the breach by the Borrower, the Servicer or the
Collection Agent of any warranty or representation made under this
Agreement or the Servicing Agreement or in any related document; the
accuracy of any such warranty or representation; any investment of
monies by the Collateral Agent in accordance with the terms of this
Agreement or the Servicing Agreement or any loss resulting therefrom;
the acts or omissions of the Borrower, the Servicer, the Collection
Agent or any obligor; or any action of the Servicer or the Collection
Agent taken in the name of the Collateral Agent.
<PAGE>
Reliance by Collateral Agent. The Collateral Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing,
resolution, notice, letter, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper
person or Persons or upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or Monaco),
independent accountants and other experts selected by the Collateral
Agent not at its own expense. The Collateral Agent shall be fully
justified in failing or refusing to take any action under this
Security Agreement unless it shall first receive such written advice
or concurrence as it deems appropriate or it shall first be
indemnified to its satisfaction (by one or more Secured Parties)
against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The
Collateral Agent shall be under no duty to inquire into or
investigate the validity, accuracy or context of any such
aforementioned document. The Collateral Agent may from time to time
consult with legal counsel, independent accountants or other experts
of its own selection, and not at its own expense, in the event of any
disagreement, controversy, question or doubt as to the construction
of any provision of this Agreement or any of its duties hereunder,
and the Collateral Agent shall be fully protected in acting in good
faith in reliance upon the advice or opinion of any such counsel,
independent accountants or other expert.
Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default under the Credit
Agreement unless a Responsible Officer has received written notice
from the Lenders of a majority in aggregate principal amount of
Advance outstanding or the Borrower referring to this Security
Agreement and describing such Default.
Non-Reliance on Collateral Agent. Neither the Collateral Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to the Secured
Parties, and no act by the Collateral Agent hereafter taken,
including any review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by the Collateral Agent
to any Secured Party. Each Secured Party represents (or will be
deemed to have represented at such time as such party becomes a
Secured Party hereunder) to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent, and
based on such documents and information as it has deemed appropriate,
made its own appraisal of investigation into the business,
operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to extend
credit to the Borrower. Each Secured Party will, independently and
without reliance upon the Collateral Agent, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Security Agreement, and to
make such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished by the Collateral
Agent hereunder, the Collateral Agent shall have no duty or
responsibility to provide any Secured Party with any credit or other
information concerning the business, operations, property, financial
and other condition or creditworthiness of the Borrower which may
come into the possession of the Collateral Agent or any of its
officers, directors, employees, agencies, attorneys-in-fact or
affiliates.
<PAGE>
Successor Collateral Agent. The Collateral Agent may resign as collateral
agent hereunder and under the Servicing Agreement upon 30 days'
notice to the Borrower, the Servicer and the Lenders. The Collateral
Agent may be removed at any time by the Borrower acting at the
direction of, or with the consent of, the Lenders in respect of the
majority in aggregate principal amount of the Advance outstanding if
at any time the Collateral Agent shall fail to comply with its
obligations under this Security Agreement. No such resignation or
removal shall be effective unless and until a successor collateral
agent has accepted appointment as such pursuant to this Agreement and
in the case of a removal, any and all amounts then due to the
Collateral Agent hereunder have been paid in full. If the Collateral
Agent shall resign or be removed as collateral agent, then the
Borrower shall appoint a commercial bank having a combined capital
and surplus of at least $250,000,000, subject to supervision or
examination by federal or state authority and having an established
place of business in the United States as successor collateral agent
for the Secured Parties upon (a) acceptance of such appointment by
such successor collateral agent, (b) the approval of such appointment
by the Lenders in respect of a majority in aggregate principal amount
of the Advance outstanding, and (c) the filing of any necessary
amendments to any UCC financing statements to reflect such
appointment. Such successor collateral agent shall succeed to the
rights, powers and duties of the Collateral Agent, and the term
"Collateral Agent" shall mean such successor collateral agent
effective upon its appointment, and the former Collateral Agent's
rights, powers and duties as Collateral Agent shall be terminated,
without any other or further act or deed on the part of such former
Collateral Agent. Such successor collateral agent shall be entitled
to amend any UCC financing statements and any other filings,
recordation and declarations it deems advisable or necessary in
connection with such termination and cancellation. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Section 8 and Section 14 shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Security Agreement.
Notwithstanding the foregoing, if no successor collateral agent shall
be appointed as aforesaid, or if appointed, such successor shall not
have accepted its appointment within thirty (30) days after
resignation of the Collateral Agent, the Collateral Agent may
petition a court of competent jurisdiction to make such appointment.
Delivery of Collateral and Permitted Investments. All certificates
representing or evidencing the Collateral and Permitted Investments
from time to time shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto and shall, in the case of the
Collateral, be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank. Each Secured Party hereby appoints the Collateral Agent as its
agent for the purpose of holding any Auto Loans and Permitted
Investments. The Collateral Agent shall be the agent solely of the
Secured Parties and shall not be the agent of the Borrower. The
Collateral Agent shall not release possession of any Auto Loans or
any documents related thereto except (a) upon receipt of a trust
receipt substantially in the form attached hereto as Exhibit B
obligating the Servicer to return same when the need therefor no
longer exists, (b) upon receipt of written notification from the
Servicer that the Designated Auto Loan has been paid in full, (c) in
connection with a Collateral Disposition or prepayment in full of the
Advance or (d) in connection with any repurchase by Monaco in
accordance with the terms of the Loan Acquisition Agreement upon the
receipt by the Collateral Agent of the Repurchase Price.
Notwithstanding anything set forth in this Agreement or in any
Program Document, the Collateral Agent shall follow the instructions
of the Initial Lender and SST in delivering to SST, as agent for the
Collateral Agent, any and all documents relating to the Designated
Auto Loans (including certificates of title) and, upon such delivery,
shall be relieved of its custodial responsibilities hereunder to hold
such documents.
Duties and Covenants of Collateral Agent.(a) The Collateral Agent
undertakes to perform the duties as are set forth in this Agreement,
including, without limitation:
<PAGE>
upon the written request of the Borrower and/or the Servicer,
providing information reasonably within its possession and within
reasonable time constraints regarding payments and receipt of funds from
and to the Borrower and the Servicer;
acting as custodian of all documents delivered to it
related to the Collateral;
depositing funds received by it, whether as proceeds of the Advance,
as collections on Designated Auto Loans, as proceeds of repossession or
otherwise in accordance with the terms of this Agreement;
making payments from amounts held in the Collateral Account, whether
to the Servicer, to the Borrower or otherwise based solely upon timely
receipt of remittance information from the Borrower, the Lenders or the
Servicer in accordance with the terms of this Agreement;
upon the request of the Servicer, providing information reasonably
within its possession and within reasonable time constraints regarding
servicing, repossession and insurance with respect to the Auto Loans to
the Servicer;
providing the collateral agent report to the Initial Lender,
substantially in the form of Exhibit C hereto, with respect to the
Designated Auto Loans on or before the fifteenth day of each month (or if
such fifteenth day is not a Business Day, the next succeeding business
day), except in the case where the seventh Business Day of such month
falls on or after the eleventh day of the month, in which case, the
collateral agent report shall be provided on or before the seventeenth day
of such month (or if such seventeenth day is not a Business Day, on the
next succeeding Business Day); and
performing the duties contained in Section 2.05(a) and
2.05(b) of the Credit Agreement.
(b) The Collateral Agent covenants and agrees that it will:
not directly or indirectly create, incur, assume or suffer to exist
any Lien against the Collateral or any part thereof other than as set
forth herein;
upon receipt of written notice and request for release in the form of
Exhibit B of the Servicing Agreement from the Servicer that a Designated
Auto Loan has been paid in full (to the extent such amounts have been
deposited in the Collateral Account), or as otherwise permitted pursuant
to (b), (c) and (d) of Section 8.07 hereof, execute and return to the
Servicer documents prepared and furnished to the Collateral Agent by the
Servicer as shall be necessary to release the lien over the Designated
Financed Vehicle;
upon receipt pursuant to the Servicing Agreement of the Servicer
Report, annual financial statements or monthly compliance statements,
promptly forward a copy of such documents to the Lender;
<PAGE>
determine whether officer's certificates and opinions of counsel
delivered pursuant to the Servicing Agreement comply in form with the
Servicing Agreement and in making such determination the Collateral Agent
may request timely direction from the Lender (or, if multiple Lenders, the
Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding);
upon the written direction of a Lender, request from the Servicer
certification evidencing the fidelity bond and insurance coverage required
by the Servicing Agreement and upon receipt shall forward such
certification to the Lender and the Borrower;
upon receipt from the Servicer of a written notice of cancellation or
modification of the fidelity bond and insurance coverage required by the
Servicing Agreement, promptly forward a copy of such notice to the Lender
and the Borrow;
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding), consent to a change in business, merger,
consolidation or disposition of assets of the Servicer;
upon a Responsible Officer obtaining actual knowledge of the
occurrence of a change in business, merger, consolidation or disposition
of assets by the Servicer, promptly give notice of such event to the
Lender and the Borrower and, if notified by the Lender (or, if multiple
Lenders, the Lenders in respect of a majority in aggregate principal
amount of the Advance outstanding), that such occurrence constitutes a
breach or default by the Servicer under the terms of the Program Documents
and directed to do so by the Initial Lender terminate the responsibilities
of the Servicer, in accordance with the Servicing Agreement; and
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advance outstanding), deliver notice to the Servicer stating that a
Servicer Event of Default has occurred and thereby terminate the
responsibilities of the Servicer under the Servicing Agreement.
Annual Report and Quarterly Certificate. (a) If the Collateral Agent's
rating should fall below A+, the Collateral Agent shall deliver to
the Lender as soon as available, but in any event within 120 days
after the end of each of its fiscal years, a consolidated and
consolidating balance sheet of it or its parent and its subsidiaries,
if any, as at such last day of the fiscal year, consolidated
statements of income and retained earnings and statements of cash
flow, for each such fiscal year, each prepared in accordance with
generally accepted accounting principles, in reasonable detail, and
as to the consolidated statements, certified without qualification by
an independent public accountant, who may also render other services
to the Collateral Agent or any of its affiliates, and certified, as
to the consolidating statements, by the chief financial officer of
the Collateral Agent, as fairly presenting the financial position and
the results of operations of the Collateral Agent as at and for the
year ending on its date and as having been prepared in accordance
with generally accepted accounting principles.
<PAGE>
If the Collateral Agent's rating should fall below A+, the Collateral
Agent shall deliver to the Lender by the fifth Business Day following the end of
each fiscal year an Officer's Certificate stating, as to each signer thereof,
that (a) a review of the activities of the Collateral Agent during the preceding
fiscal quarter and of performance under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Collateral Agent has fulfilled all its obligations under this
Agreement throughout such fiscal quarter, or, if there has been a default in the
fulfillment of any such obligation, or if an event has occurred that with notice
or lapse of time or both would become a default under this Agreement specifying
each such default or event known to such officer and the nature and status
thereof and remedies therefor being pursued.
Reserved.
Instructions of the Lender. Whenever the Collateral Agent is required to
consent to any action hereunder or under the Servicing Agreement, the
Collateral Agent shall so notify the Lenders and shall act in
accordance with the written instructions of Lenders holding 51% of
the Advance outstanding.
Appointment of Subcollateral Agent. The Collateral Agent may appoint one
or more Subcollateral Agents to hold all or a portion of the
Collateral on behalf of the Secured Parties. Such appointment is
subject to the prior written consent of the Initial Lender. Following
such appointment, to the extent the context requires, all references
to the Collateral Agent shall be deemed to include the Subcollateral
Agent.
AMENDMENTS AND WAIVERS.
With the written consent of the Lenders in respect of a majority in
aggregate principal amount of the Advance outstanding, the Collateral Agent and
the Borrower may, from time to time, enter into written amendments, supplements
or modifications hereto for the purpose of adding any provision to this Security
Agreement or changing in any manner the rights of the Collateral Agent or the
Borrower hereunder, and, with the written consent of the Lenders in respect of
at least a majority in aggregate principal amount of the Advance outstanding,
the Collateral Agent on behalf of the Secured Parties may execute and deliver to
the Borrower a written instrument waiving, on such terms and conditions as may
be specified in such instrument, any of the requirements of this Security
Agreement; provided, however, that no such waiver and no such amendment,
supplement or modification shall (a) amend the definition of Secured Parties or
amend, modify or waive any provision of Section 6 hereof or this Section 9
without the written consent of each Secured Party whose rights under this
Security Agreement would be affected thereby or (b) amend, modify or waive any
provision of Section 8 or otherwise alter the duties, rights or obligations of
the Collateral Agent without the written consent of all the Secured Parties. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Secured Parties and shall be binding upon the Borrower,
the Secured Parties and the Collateral Agent.
<PAGE>
In executing any supplement, amendment or modification of this
Security Agreement, the Collateral Agent shall be entitled to receive and shall
be fully protected in relying upon an opinion of counsel stating that the
execution of such supplement, amendment or modification is authorized or
permitted by this Section 9. The Collateral Agent may, but shall not be
obligated to, enter into any such supplement, amendment or modification that
affects the Collateral Agent's own rights, duties or immunities under this
Security Agreement or otherwise.
The Borrower and the Secured Parties agree not to execute any
supplement, amendment or modification to any Program Document to which the
Collateral Agent is not a party, without the prior written consent of the
Collateral Agent, if the effect of such supplement, amendment or modification
would be to affect the Collateral Agent's rights, duties, or immunities under
this Security Agreement, and they agree to promptly forward to the Collateral
Agent any such supplement, amendment or modification.
NOTICES.
Unless otherwise expressly provided herein, all notices,
instructions, requests and demands to or upon the respective parties hereto to
be effective shall be in writing and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or when deposited in the mail, postage prepaid, or in the case of telegraphic
notice, when delivered to the telegraph company, or, in the case of facsimile
notice, when sent, confirmation received, addressed as follows, or to such other
addresses as may be hereafter notified by the respective parties hereto:
The Borrower:
MF Receivables Corp. IV
370 17th Street, Suite 5060F
Denver, Colorado 80202
Attention: President
Telecopy: (303) 405-6496
The Collateral Agent:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Structured Finance Services
Telecopy: (212) 946-8552
To the Lenders at the address as the Lenders shall have furnished to the
Borrower (with a copy to the Collateral Agent) in writing;
<PAGE>
provided, that any notice to or upon the Borrower shall be deemed to have been
duly given or made as aforesaid when so given or made to the Borrower whether or
not any other party indicated above as the recipient of a copy thereof shall
have received a copy of each notice.
LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF COLLATERAL.
Except as set forth herein and beyond the safe custody thereof, the
Collateral Agent shall not have any duty as to any Collateral in its possession
or control or the possession or control of any agent or nominee of it or any
income thereof or as to the preservation of rights against prior parties or any
other rights pertaining thereto. The Collateral Agent shall not in any way be
liable by reason of any insufficiency in the Collateral Account unless it is
determined by a court of competent jurisdiction that the Collateral Agent's
gross negligence or willful misconduct was the primary cause of such
insufficiency.
SEVERABILITY.
Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidation of
the remaining provisions hereof and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
NO WAIVER; CUMULATIVE REMEDIES.
Neither the Collateral Agent nor the Secured Parties shall by any
act, delay, omission or otherwise be deemed to have waived any of its or their
rights or remedies hereunder and no waiver shall be valid unless in writing,
signed by the Collateral Agent on behalf of the Secured Parties, and then only
to the extent therein set forth. A waiver by the Collateral Agent of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or the Secured Parties would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Collateral Agent or the Secured Parties any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently and are not exclusive of any rights and remedies provided by law.
PAYMENT OF EXPENSES AND TAXES.
<PAGE>
The Borrower hereby agrees to pay to the Collateral Agent a fee for
its services hereunder equal to the Collateral Agent Fee. The Borrower agrees to
pay, indemnify and to hold the Collateral Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Security Agreement, and any such other documents, and to pay,
indemnify, and hold the Collateral Agent and its officers, directors,
shareholders, employees, agents and representatives harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Security Agreement and any such other documents
(including, but not limited to, those incurred by any negligent actor negligent
omission to act of the Collateral Agent) (all the foregoing, collectively, the
"indemnified liabilities"); provided, that the Borrower shall not be liable to
the Collateral Agent for any (i) losses incurred by the Collateral Agent as a
result of the fraudulent actions, misrepresentations, gross negligence or
willful misconduct of the Collateral Agent or (ii) losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Collateral Agent with respect to its
receipt of the Collateral Agent Fee hereunder (including any liabilities, costs
or expenses with respect thereto). Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent be liable for special,
indirect or consequential loss or damages whatsoever (including but not limited
to lost profits). The obligations of the Borrower under this Section 14 shall
survive the termination of this Security Agreement and the discharge of the
other obligations of the Borrower hereunder and also shall survive the
resignation or removal of the Collateral Agent hereunder.
Promptly after receipt by the Collateral Agent of notice of the
commencement of any action, such Collateral Agent shall, if a claim in respect
thereof is to be made against the Borrower under this Section 14, notify the
Borrower in writing of the commencement thereof; but the omission so to notify
the Borrower will not relieve the Borrower from any liability which it may have
to the Collateral Agent except to the extent the Borrower is prejudiced thereby.
In case any action is brought against the Collateral Agent, and it notifies the
Borrower of the commencement thereof, the Borrower will be entitled to appoint
counsel satisfactory to the Collateral Agent to represent the Collateral Agent
in such action; provided, however, that, if the defendants in any action include
both the Collateral Agent and the Borrower and the Collateral Agent shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the Borrower, the Collateral
Agent shall have the right to select separate counsel to defend such action on
behalf of it. Upon receipt of notice from the Borrower to the Collateral Agent
of its election so to appoint counsel to defend such action and approval by the
Collateral Agent of such counsel, the Borrower will not be liable to the
Collateral Agent under this Section 14 for any legal or other expenses
subsequently incurred by the Collateral Agent in connection with the defense
thereof unless (i) the Collateral Agent shall have employed separate counsel in
accordance with the proviso to the next preceding sentence, (ii) the Borrower
shall not have employed counsel satisfactory to the Collateral Agent to
represent the Collateral Agent within a reasonable time after notice of
commencement of the action or (iii) the Borrower has authorized the employment
of counsel for the Collateral Agent at the expense of the Borrower; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
<PAGE>
If the indemnification provided for in this Section 14 is unavailable
or insufficient to hold harmless the Collateral Agent under subsection (a) or
(b) above, then the Borrower shall contribute to the amount paid or payable by
the Collateral Agent as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Borrower on the one
hand and the Collateral Agent on the other from the transactions contemplated by
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Borrower on the one hand and the Collateral Agent on the other in
connection with the actions or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable considerations.
The Collateral Agent and the Borrower agree that it would not be just and
equitable if contributions pursuant to this subsection (c) were to be determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (c). The amount payable by the Borrower as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by the Collateral Agent in connection with investigating or defending
any action or claim which is the subject of this subsection (c). No person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The obligations of the Borrower and the Collateral Agent under this
Section 14 shall be in addition to any liability which each of them may
otherwise have.
The agreement, indemnities and other statements of the parties hereto
in or made pursuant to this Section 14 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14. The provisions of this
Section 14 shall survive the termination or cancellation of this Agreement.
SUCCESSORS AND ASSIGNS; GOVERNING LAW.
This Security Agreement and all obligations of the Borrower hereunder
shall be binding upon the successors and assigns of the Borrower, and shall,
together with the rights and remedies of the Collateral Agent hereunder, inure
to the benefit of the Collateral Agent, the Secured Parties and their respective
successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
RESERVED
BANKRUPTCY PETITION AGAINST THE BORROWER.
<PAGE>
The Collateral Agent hereby covenants and agrees that, until the date
which is one year and one day after the payment in full of the Advance, it will
not institute against, or join any other Person in instituting against, the
Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other similar proceeding under the laws of the United States or
any state of the United States.
MISAPPLICATION OF FUNDS.
The Collateral Agent agrees that any funds incorrectly paid to it by
the Borrower shall be promptly returned to the Borrower upon receipt of written
notice from the Borrower that such funds were incorrectly paid to the Collateral
Agent prior to the Collateral Agent's transfer of such funds in accordance with
this Agreement. The Collateral Agent shall be completely protected against any
liability for returning such funds in reliance on such written notice that funds
were incorrectly paid.
COUNTERPART SIGNATURES.
This Agreement may be executed and delivered to you simultaneously in
two (2) or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.
THIRD PARTY BENEFICIARY.
For all purposes of this Agreement, each of the Lenders shall be a
third party beneficiary of the agreements and covenants herein contained.
STATUS OF COLLATERAL AGENT.
The parties hereto acknowledge and agree that upon payment in full of
all amounts owing under the Credit Agreement and the release of the Secured
Parties' security interest in the Collateral, the rights of the Collateral Agent
to indemnification and payment of its fees and expenses under this Agreement
shall continue.
ACTS OF LENDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Lender may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the Lender in person or by agents duly
appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments is or are
delivered to the Collateral Agent. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 22.
The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Collateral Agent
deems sufficient.
EXECUTION COPY
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Lender shall bind the Lender in respect of
anything done, omitted or suffered to be done by the Collateral Agent in
reliance thereon, whether or not notation of such action is made upon the
applicable Note.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Security Agreement to be executed by their duly authorized officers as
of the date first set forth above.
MF RECEIVABLES CORP. IV
By:
Name: Irwin L. Sandler
Title: Vice President
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
Name:
Title:
Acknowledged as of this 29th
day of July, 1999
DAIWA FINANCE CORP.,
as Initial Lender
By:
Name:
Title:
<PAGE>
MF RECEIVABLES CORP. III
(as Borrower),
MONACO FINANCE, INC.
and
DAIWA FINANCE CORPORATION
(as Initial Lender)
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 29, 1999
<PAGE>
Doc #8K999.DOC
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated as of
July 29, 1999, among MF Receivables Corp. III, a Delaware corporation (the
"Borrower"), Monaco Finance, Inc., a Colorado corporation ("Monaco") and Daiwa
Finance Corporation (the "Initial
Lender").
W I T N E S S E T H
WHEREAS, the parties hereto are parties to that certain Credit
Agreement (as heretofore amended, modified or supplemented, the "Existing Credit
Agreement"), dated as of December 4, 1997; and
WHEREAS, the parties acknowledge and agree that one or more Events of
Default, Funding Termination Events and Servicer Events of Default (as such
terms are defined in the Existing Credit Agreement) have occurred and are
continuing; and
WHEREAS, the parties wish to amend and restate their rights and
obligations under the Existing Credit Agreement as set forth herein.
NOW, THEREFORE, the parties agree that upon the fulfillment of the
conditions precedent set forth in Article IV hereof, the Existing Credit
Agreement shall no longer be in effect and the rights and obligations of the
parties thereunder shall be amended and restated as follows:
ARTICLE I
DEFINITIONS
Definitions. Except as the context shall otherwise require, the
following terms shall have the following meanings for all purposes of this
Agreement (the definitions to be applicable to both the singular and the plural
form of the terms defined, where either such form is used in this Agreement):
"Advances" means the advances provided for by Section 2.01
of the Existing Credit Agreement.
"Affiliate" means, with respect to any Person (hereinafter "such
Person"), any other Person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such Person or another Affiliate of such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting stock, by contract or otherwise.
"APR" means the annual percentage rate of an Auto Loan as determined
according to the related contractual documents with the Obligor thereof.
"Application for Certificate of Title" has the meaning set
forth in the Servicing Agreement.
<PAGE>
v
Doc #8K999.DOC
"Assignee" has the meaning set forth in Section 9.01 hereof.
"Authorized Officer" means, with respect to Monaco or the Borrower,
any officer of Monaco or the Borrower, as the case may be, who is authorized to
act for Monaco or the Borrower, as the case may be, in matters relating to
transactions contemplated by this Agreement.
"Auto Loan" means a fixed-rate, fully amortizing, closed-end
installment loan (bearing interest calculable on a simple interest basis or
based upon the Rule of 78s) arising from the sale of a new or used Vehicle to a
consumer which includes, without limitation, (a) all security interests or liens
and property subject thereto from time to time purporting to secure payment by
the obligor thereunder, including, without limitation, Monaco's or the
Originator's rights under the related Dealer Agreement, (b) all guarantees,
indemnities and warranties, insurance policies, certificates of title and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such loan, (c) all collections and records with respect to
the foregoing and (d) all proceeds of any of the foregoing.
"Back-up Servicer" means the Person appointed by the Initial Lender
in accordance with Section 6.02(a) of the Servicing Agreement.
"Board" means, with respect to any Person, its board of directors or,
if it does not have a board of directors, its governing body which performs the
same duties as a board of directors.
"Business Day" means any day other than a Saturday or a Sunday, or
another day on which commercial banks in the State of New York or Colorado (or
in any other state as specified in writing by the Servicer in which the Servicer
is located) are required, or authorized by law, to close or, for purposes of
calculating the Interest Rate, on which commercial banks are not open for
domestic and foreign exchange business in New York, New York, and London,
England (as specified in writing from time to time by the Borrower).
"Calculation Date" means, with respect to any Collection Period, the
close of business on the last day of such Collection Period.
"Capital Lease" means any lease or other agreement for the use of
property which is required to be capitalized on a balance sheet of the lessee or
other user of property in accordance with generally accepted accounting
principles.
"Certificate of Title" has the meaning set forth in the
Servicing Agreement.
"Class A Interest Rate" means a rate equal to LIBOR plus 2.50% per
annum.
"Class A Note(s)" means the Class A Notes issued in accordance with
the provisions of Section 2.02(b) of the Existing Credit Agreement and shall
include any subdivision of the Class A Note issued in accordance with the
provisions of Section 2.02(c) hereof.
"Class B Interest Rate" means a rate equal to 12% per annum.
<PAGE>
"Class B Note(s)" means the Class B Notes issued in accordance with
the provisions of Section 2.02(b) of of the Existing Credit Agreement and shall
include any subdivision of the Class B Note issued in accordance with the
provisions of Section 2.02(c) hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time and any successor statute, together with the rules and regulations
thereunder.
"Collateral" has the meaning set forth in the Security
Agreement.
"Collateral Account" has the meaning specified in the
Security Agreement.
"Collateral Agent" means The Chase Manhattan Bank and any permitted
successors and assignees thereof.
"Collection Period" means each calendar month.
"Computer Tape" means the diskette, or other computer readable
medium, acceptable to the Initial Lender containing descriptions and payment
information on each Designated Auto Loan.
"Dealer" means each automobile dealer with whom Monaco or an
Originator entered into a Dealer Agreement.
"Dealer Agreement" means each agreement between a Dealer and either
Monaco or an Originator, which provides for acquisition of the Auto Loans.
"Default" has the meaning set forth in Section 13.01 hereof.
"Defaulted Auto Loan" means a Designated Auto Loan (a) which by its
terms has more than 10% of any installment of principal or interest which is 120
or more days contractually past due as measured from the date such Scheduled
Payment is due in accordance with the provisions of the related Auto Loan or (b)
which the Servicer has determined to be uncollectible in accordance with the
Servicing Agreement and the Credit and Collection Policies.
"Delinquency Rate" means, as of any Calculation Date, the aggregate
Unpaid Principal Balance of the Designated Auto Loans (other than Defaulted Auto
Loans) as to which Obligors are 31 days or more contractually past due as
measured from the date such Scheduled Payment is due in accordance with the
provisions of the related Loan Contract in making any portion of the Scheduled
Payments, divided by the aggregate Unpaid Principal Balance of the Designated
Auto Loans as of such Calculation Date.
"Designated Auto Loan" means each Auto Loan pledged by the Borrower
to the Collateral Agent under the Security Agreement as security for its
obligations under the Existing Credit Agreement.
<PAGE>
"Designated Financed Vehicle" means, with respect to a
Designated Auto Loan, the related Financed Vehicle.
"Determination Date" means the 10th day of each month (or the
immediately preceding Business Day if such day is not a Business Day).
"Dollars" or "$" means the lawful currency of the United States of
America, and in relation to any payment under this Agreement, same day or
immediately available funds.
"Eligible Dealer" means either an independent or a franchised Dealer
(a) duly licensed and authorized as a dealer in new or used Automobiles by
Governmental Authorities and (b) as to which Monaco or an Originator has entered
into a Dealer Agreement.
"Event of Default" has the meaning set forth in the
Existing Credit Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Executive Officer" with respect to a Person means the
Chief Executive Officer, Chief Operating Officer or Chief Financial
Officer of such Person.
"Fair Valuation" of the Properties of any Person shall be determined
on the basis of the amount which may be realized within a reasonable time,
either through collection or sale of such assets at the regular market value,
conceiving the latter as the amount which could be obtained for the property in
question within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling conditions.
"Financed Vehicle" means a Vehicle pledged to secure the obligations
of an Obligor under an Auto Loan.
"Funding Termination Event" has the meaning specified in
the Existing Credit Agreement.
"GAAP" means, as of the date of any determination with respect
thereto, generally accepted accounting principles as understood and applied in
the United States at the time in question.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to government.
<PAGE>
"Guarantee" means, with respect to any Person, all obligations of such Person
guaranteeing or in effect guaranteeing any Indebtedness (including, without
limitation, liability in respect of a joint venture or a partnership), dividend
or other obligation or Investment of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including obligations incurred
through an agreement, contingent or otherwise, by such Person (a) to purchase
such Indebtedness, obligation or Investment or any property or assets
constituting security therefor, (b) to advance or supply funds (i) for the
purchase or payment of such Indebtedness, obligation or Investment or (ii) to
maintain working capital or equity capital, or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness, obligation or
Investment, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness, obligation or Investment of
the ability of the primary obligor to make payment of such Indebtedness,
obligation or Investment, or (d) otherwise to assure the owner of such
Indebtedness, obligation or Investment against loss in respect thereof.
"Guaranty Amounts" means, with respect to any Auto Loan, any and all
amounts paid by the individual guarantor indicated on the applicable Loan
Contract.
"Increased Cost" has the meaning set forth in
Section 2.06(d) hereof.
"Indebtedness" means, with respect to any Person, all items (other
than capital stock, capital surplus, retained earnings and deferred credits and
deferred income taxes), which in accordance with generally accepted accounting
principles would be included in determining total liabilities as shown on the
liability side of a balance sheet as at the date on which Indebtedness is to be
determined. The term "Indebtedness" shall also include, whether or not so
reflected, (a) indebtedness, obligations and liabilities secured by any Lien on
property of such Person, whether or not the indebtedness secured thereby shall
have been assumed by such Person, (b) all obligations of such Person in respect
of Capital Leases, and (c) all Guarantees.
"Indemnifying Party" has the meaning set forth in
Section 14.01 hereof.
"Independent Accountant" means Ehrhardt, Keefe, Steiner &
Hattman P.C. or such other certified public accountant as the
Borrower and the Initial Lender may agree.
"Initial Lender" means, subject to Section 7.03 hereof,
Daiwa Finance Corporation.
"Initial Reference Banks" means four major banks in the London
interbank market selected by the Initial Lender.
"Insurance Policy" means, with respect to a Financed Vehicle and a
Loan Contract, any insurance policy maintained by the Obligor pursuant to the
related Loan Contract that covers physical damage to the Financed Vehicle and
collision (including policies procured by the Servicer on behalf of the Obligor
or any VSI Policy), which policy shall name the Servicer as loss payee.
"Insurance Proceeds" means, with respect to any Auto Loan and the
related Financed Vehicle, any amount received during the related Collection
Period pursuant to an Insurance Policy issued with respect to the related
Financed Vehicle and such Auto Loan, net of any costs of collecting such amounts
not otherwise reimbursed.
"Interest Payment Date" means each Payment Date and each date upon
which Advances are repaid, either in whole or in part.
<PAGE>
"Interest Period" means, with respect to any Advance, the period
commencing with the date of such Advance to and excluding the Payment Date
occurring in the month following the date of such Advance, and thereafter, the
period commencing with each Payment Date, to and excluding the following Payment
Date; provided that the final Interest Period in respect of an Advance shall end
on the date such Advance is repaid in full.
"Interest Rate" means, for any Interest Period, the Class A Interest
Rate with respect to the Class A Notes and the Class B Interest Rate with
respect to the Class B Notes.
"Investment" means any loan, advance, extension of credit (except for
accounts and notes receivable for merchandise sold or services furnished in the
ordinary course of business, and amounts paid in advance on account of the
purchase price of merchandise to be delivered to the payor within one year of
the date of the advance), or purchase of stock, notes, bonds or other securities
or capital contribution to any Person, whether in cash or other property. The
amount of any Investment shall be its cost (the amount of cash or the fair
market value of other property given in exchange therefor).
"Lender" means the Initial Lender and any Assignee thereof.
"LIBOR" means the per annum rate for deposits in United States
dollars for a period of one month which appears on Telerate Page 3750 as of
11:00 a.m., London time, on the related LIBOR Determination Date. If such rate
does not appear on Telerate Page 3750 on such day, the rate will be determined
on the basis of the rates at which deposits in United States dollars are offered
by the Reference Banks at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market for a period of one month commencing
on that day. The Initial Lender will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that day will be the arithmetic mean of the rates quoted by two or more
major banks in New York City, selected by the Initial Lender, in its sole
discretion at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a period of one
month.
"LIBOR Determination Date" means the second Business Day prior to the
commencement of each Interest Period.
<PAGE>
"Lien" means any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, civil law, statute, civil code or
contract, whether or not such interest shall be recorded or perfected and
whether or not such interest shall be contingent upon the occurrence of some
future event or events or the existence of some future circumstance or
circumstances, and including the lien, privilege, security interest or other
encumbrance arising from a mortgage, deed of trust, hypothecation, cession,
transfer, assignment, pledge, adverse claim or charge, conditional sale or trust
receipt, or from a lease, consignment or bailment for security purposes. The
term "Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances affecting property. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any property that such
Person shall have acquired or shall hold subject to a conditional sale agreement
or other arrangement (including a leasing arrangement) pursuant to which title
to the property shall have been retained by or vested in some other Person for
security purposes.
"Loan Acquisition Agreement" means the Loan Sale and Contribution
Agreement dated as of December 4, 1997, between the Borrower and Monaco,
pursuant to which Monaco agreed to sell or contribute and the Borrower agreed to
acquire, Eligible Auto Loans, as from time to time further amended, supplemented
or modified.
"Loan Acquisition Price" means, with respect to each Auto Loan, the
price for transfer at which such Auto Loan was acquired by Monaco from a Dealer
or an Originator in accordance with the Monaco Program Manual.
"Loan Documents" means, with respect to an Auto Loan, (a) a copy of
the retail installment loan contract and security agreement evidencing such Auto
Loan, (b) a copy of the credit application and (c) a copy of an executed
agreement to provide insurance signed by the Obligor or other written evidence
that such Auto Loan is covered by an Insurance Policy.
"Loan File" means, with respect to any Auto Loan, the original retail
installment loan contract and security agreement evidencing the Auto Loan and
originals or copies of such other documents and instruments relating to such
Auto Loan and the security interest on the selected Financed Vehicle as
specified in the Monaco Program Manual.
"Material Adverse Effect" means, with respect to any Person, any
event or circumstance that (a) would have a material adverse effect on the
business, results of operation, revenues or financial condition of such Person
and its consolidated Subsidiaries, taken as a whole, (b) would have a material
adverse effect on the ability of such Person to perform its obligations under
any Program Document to which it is a party or (c) would have a material adverse
effect on the value or enforceability of the Designated Auto Loans taken as a
whole.
"Merger" means the merger of the Borrower with and into MF4.
"MF4" means MF Receivables Corp. IV, a Delaware corporation.
"MF4 Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of July 29, 1999, among MF4, Monaco and the Initial Lender,
as such agreement may be amended, supplemented or modified from time to time.
"MF4 Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, MF4 and The Chase Manhattan
Bank, as Collateral Agent, as such agreement may be amended, supplemented or
modified from time to time.
"Minimum Assignment Denomination" means $500,000.
<PAGE>
"Monaco" means Monaco Finance, Inc., a Colorado corporation.
"Monaco Program Manual" means the Monaco Program Manual (including
the Credit and Collection Policies with respect to the Qualifying Auto Loans,
without limitation) attached to the Existing Credit Agreement as Exhibit D, as
modified through February 1, 1999 in conformity with the terms of the Existing
Credit Agreement.
"Monthly Servicer Fee" has the meaning set forth in the
Supplementary Servicing Agreement.
"Monthly Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Moody's" means Moody's Investors Service, Inc. and any
successor thereto.
"Net Payoff Balance" means, in respect of any Precomputed Auto Loans,
the net payoff less any accrued but unpaid late charges, as determined in
accordance with the Monaco Program Manual.
"Net Principal Balance" means, with respect to any Precomputed Auto
Loan, the Net Payoff Balance as of the due date of the last full Scheduled
Payment, or if more recent, the due date of the last periodic payment of
principal thereon.
"Net Unrealized Amount" means, (a) with respect to any Auto Loan
which is a Defaulted Auto Loan, the Unpaid Principal Balance of such Auto Loan
minus the amount of any Recoveries with respect thereto, and (b) with respect to
any Auto Loan where the related Obligor is in bankruptcy, the amount of losses
allocable to principal incurred thereon.
"Note(s)" means the Class A Notes and the Class B Notes.
"Obligor" means, with respect to any Auto Loan, the Person or Persons
primarily obligated to make payments in respect thereto.
"Officer's Certificate" means (a) with respect to the Collateral
Agent, any officer within the structured capital division (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers and (b) with
respect to Monaco, the Collateral Agent, the Servicer or the Borrower shall mean
a certificate executed on behalf of such party by the Chairman of the Board, the
President or any Vice President of the relevant entity.
"Originator" means any Person, other than Monaco, that acquired Auto
Loans directly from a Dealer.
"Payment Date" means the 15th day of each month (or, if such day is
not a Business Day, the next succeeding Business Day), commencing January 15,
1998.
<PAGE>
"Permitted Investments" means with respect to amounts on deposit in
the Collateral Account, cash and cash equivalents, reasonably available to the
Collateral Agent in compliance with regulatory requirements and the terms of
this Agreement.
"Permitted Liens" means:
Liens created under the Security Agreement or under the MF3
Security Agreement;
Liens securing taxes, assessments, governmental charges or levies not
yet due or the payment of which is not then required by Section 10.6
hereof; or
any Lien which is a mechanics lien assessed against a Financed
Vehicle securing a Designated Auto Loan.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization or government (or any agency or political subsection thereof).
"Precomputed Auto Loan" means any Auto Loan under which earned
interest (which may be referred to in the Auto Loan as the add-on finance
charge) and principal is determined according to the sum of periodic balances or
the sum of monthly balances or the sum of the digits or any equivalent method
commonly referred to as the "Rule of 78s."
"Program Documents" means this Agreement, the Security Agreement, the
Servicing Agreement, the Loan Acquisition Agreement, the Collateral Assignments,
the Notes and the Supplementary Servicing Agreement, and any document executed
or delivered by any party hereto in connection herewith or therewith, as any
such document may be amended, supplemented, restated or modified from time to
time. For purposes of Article XIV hereof, "Program Documents" shall also include
the Existing Credit Agreement and the "Program Documents" referred to therein.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Qualifying Auto Loan" means each Auto Loan which was acquired by
Monaco in accordance with the Existing Credit Agreement.
"Recoveries" means, with respect to a Defaulted Auto Loan and for any
Collection Period occurring after the date on which such Auto Loan becomes a
Defaulted Auto Loan, all payments that the Servicer received from or on behalf
of an Obligor regarding such Defaulted Auto Loan or from liquidation of the
related Financed Vehicle, including but not limited to Scheduled Payments,
Guaranty Amounts, any and all rebates and Insurance Proceeds, as reduced by any
reasonably incurred out-of-pocket expenses incurred by the Servicer in enforcing
such Defaulted Auto Loan.
<PAGE>
"Reference Banks" means four major banks in the London interbank
market selected by the Initial Lender.
"Repurchase Price" means, on any date of determination with respect
to any Designated Auto Loan, an amount equal to the sum of (a) the product of
(i) 0.9 and (ii) the total of (A) the Unpaid Principal Balance of such
Designated Auto Loan as of the end of the preceding Collection Period minus (B)
the amount of any principal deposited in the Collateral Account in respect of
such Designated Auto Loan since the end of such Collection Period and (b)
accrued and unpaid interest in respect thereof, calculated at the related APR
from the last day to which interest has been paid and credited to the Collateral
Account through the date of repurchase thereof.
"Requirement of Law" means, as to any Person, any law, treaty, rule
or regulation, or determination of an arbitrator or Governmental Authority, in
each case applicable to or binding upon such Person or to which such Person is
subject, whether federal, state or local (including, without limitation, usury
laws, the federal Truth in Lending Act and Regulation Z and Regulation B of the
Board of Governors of the Federal Reserve System).
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Securities" means, with respect to any Person, any shares of any
class of such Person's capital stock, or any options or warrants to purchase its
capital stock or other security exchangeable for or convertible into its capital
stock.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Security Agreement" means the Amended and Restated Security
Agreement, dated as of July 29, 1999, among Monaco, the Borrower and The Chase
Manhattan Bank, as Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Security Interest" means the security interest and rights created
under the Security Agreement in the Collateral in favor of the Collateral Agent.
"Selling Dealer" means, with respect to each Designated Auto Loan,
the Dealer that sold such Designated Auto Loan to Monaco or the Originator, as
the case may be.
"Servicer" means SST, or any other entity, in the capacity as
servicer under the Servicing Agreement.
"Servicer Event of Default" has the meaning set forth in
the Servicing Agreement.
"Servicer Report" has the meaning set forth in the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated as of
December 4, 1997, between the Borrower, Monaco, as the Servicer and the
Verification Agent, as amended, and as amended, restated, superseded and
modified by the Supplementary Servicing Agreement.
<PAGE>
"Solvent" means, with respect to any Person, that:
the Properties of such Person, at a Fair Valuation, exceed the total
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person;
based on current projections, which are based on underlying
assumptions which provide a reasonable basis for the projections and which
reflect such Person's judgment based on present circumstances of the most
likely set of conditions and such Person's most likely course of action
for the period projected, such Person believes it has sufficient cash flow
to enable it to pay its debts as they mature; and
such Person does not have an unreasonably small capital with which to
engage in its anticipated business.
"S&P" means Standard & Poor's Ratings Group, a division of the McGraw
Hill Companies and any successor thereto.
"SST" means Systems & Services Technologies, Inc., a
Delaware corporation.
"Subsidiary" means any corporation of which more than 50% (by number
of votes) of the Voting Stock shall be owned by such parent corporation and/or
one or more corporations which are themselves Subsidiaries of such parent
corporation.
"Successor Back-up Servicer" has the meaning set forth in
the Servicing Agreement.
"Successor Servicer" has the meaning set forth in the
Servicing Agreement.
"Supplementary Servicing Agreement" means the Supplementary Services
Agreement, dated as of April __, 1999, by and among the Initial Lender, the
Borrower, SST and the Collateral Agent, as the same may be amended, supplemented
or modified from time to time.
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Unpaid Principal Balance" means, with respect to any Auto Loan as of
any date of determination, (a) for an Auto Loan bearing interest calculable on a
simple interest basis, the unpaid principal amount for such Auto Loan or (b) for
a Precomputed Auto Loan, the Net Principal Balance, in each case as of the
related Calculation Date; provided that, for any Auto Loan where the Net
Unrealized Amount equals the Unpaid Principal Balance, such unpaid Principal
Balance shall thereafter equal zero (other than for purposes of calculating the
Net Unrealized Amounts).
"Vehicle" means a new or used automobile or light truck.
<PAGE>
"VSI Policy" means a vendors' single interest insurance policy,
including any endorsements thereto, issued by an insurance company and covering
physical damage and collision in respect of Vehicles or other similar policy.
General Information. (a) All accounting terms used herein that are
not otherwise expressly defined shall have the respective meanings given to them
in accordance with generally accepted accounting principles at the particular
time.
The terms "hereof," "herein," "hereunder" and other words of similar
import shall be construed to refer to this Agreement as a whole and not to any
particular Article, Section or other subsection.
Headings. The headings of the Articles, the Sections
and other subsections of this Agreement have been inserted for
convenience of reference only and shall not affect the meaning of
this Agreement.
Independence of Covenants, etc. Each representation and covenant
herein shall be given independent effect so that if any action or condition
would violate any of such covenants or would breach any of such representations,
the fact that such action or condition would not violate or breach, any other
covenant or representation shall not avoid the violation of such covenant or
representation.
ARTICLE II
ADVANCES
<PAGE>
Advances. The Initial Lender has made the Advances to the Borrower
under the Existing Credit Agreement. Due to the occurrence of one or more Events
of Default, the Advances are now due and payable in full. Until the Advances are
paid in full, the Advances shall continue to (a) be allocated between the Class
A Notes and the Class B Notes as provided in Section 2.02 of the Existing Credit
Agreement and (b) bear interest until such Advances shall be paid in accordance
with their terms at the per annum rate with respect to each Interest Period at
the Class A Interest Rate, with respect to that part of the Advances allocated
to the Class A Notes, or the Class B Interest Rate, with respect to that part of
the Advances allocated to the Class B Notes, payable on each Interest Payment
Date in accordance with the provisions of the Security Agreement. Interest shall
be computed on the basis of the actual number of days in such Interest Period
and a 360-day year and on each Interest Payment Date shall equal all unpaid
interest accrued in respect of each prior Interest Period. Each Advance shall
continue to bear interest at the per annum rate with respect to each Interest
Period equal to the applicable Interest Rate plus 2.00 %. If the Borrower shall
have paid or agreed to pay any interest on any Advance in excess of that
permitted by law, then it is the express intent of the parties hereto with
respect thereto that (i) to the extent possible given the term of such Advance,
all excess amounts previously paid or to be paid by the Borrower be applied to
reduce the principal amount of such Advance and the provisions thereof
immediately be deemed reformed and the amounts thereafter collectable thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for thereunder and (ii) to the extent that the
reduction of the principal amount of, and the amounts collectible under, such
Advance and the reformation of the provisions thereof described in the
immediately preceding clause (i) are not possible given the term of such
Advance, such excess amount shall be deemed to have been paid with respect to
such Advance as a result of an error and upon the Lender obtaining actual
knowledge of such error, such amount shall be returned to the Borrower. Each
Advance shall continue to be secured by the Collateral as set forth in the
Security Agreement. Except as provided in Section 2.07 hereof, all sums payable
by the Borrower under this Credit Agreement and the Advances shall be paid
without counterclaim, set-off, deduction or defense and without abatement,
suspension, deferment, diminution or reduction.
Notes. (a) The Advances shall continue to be evidenced
by the Notes.
The date and amount of each Advance and each payment made on account
of the principal thereof, shall be recorded by the Initial Lender on its books
and, prior to any transfer of either the Class A Notes or the Class B Notes,
endorsed by the Initial Lender on the schedule attached to such Class A Notes,
Class B Notes or any continuation thereof, as the case may be.
The Initial Lender shall be entitled to have the Class A Note and the
Class B Note subdivided, by exchange for Notes of the same class of lesser
denominations or otherwise in connection with an assignment of all or any
portion of the Advances relating to such Class A Note or the Class B Note, as
the case may be, pursuant to the terms of this Agreement; provided that in no
event may the Class A Note or the Class B Note be subdivided into denominations
of less than $500,000.
Reserved.
Reserved.
Reserved.
Increased Costs. (a) In the event that any change after the date upon
which the Lender makes an Advance in any Requirement of Law (including any
change to the certificate of incorporation, articles of association, by-laws or
other organizational or governing documents of the Lender, but only to the
extent that such change is the result of the compliance by the Lender with any
request or directive reflecting a change in Requirement of Law from any central
bank or other Governmental Authority in the United States of America), or in the
interpretation or application thereof or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority in the United States of America made after
the date upon which the Initial Lender makes its Advances or acquires an
interest in an Advance:
<PAGE>
shall subject the Lender to any tax of any kind whatsoever with
respect to this Agreement or the Notes, or change the basis of taxation of
payments in respect thereof (except for taxes referred to in Section
2.07(a) hereof and Section 14.01(a)(iii) hereof and changes in the rate of
tax on the overall net income of the Lender);
shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by the
Lender; or
shall impose on the Lender any other condition that
has the result of increasing the cost to such Lender of such
Advance;
and the result of any of the foregoing is to reduce the amount receivable
hereunder in respect of the Advance below that which such Lender would have
received but for such change or compliance, then after submission by the Lender
to the Borrower and the Collateral Agent of a written request therefor, the
Collateral Agent shall, subject to Section 2.06(c) hereof, on behalf of the
Borrower, pay to the Lender any additional amounts necessary to compensate the
Lender for such reduced amount receivable.
In the event that the Lender shall have determined that any change
after the date upon which the Lender makes an Advance or acquires an interest in
an Advance in any Requirement of Law (including any change to the certificate of
incorporation, articles of association, by-laws or other organizational or
governing document of the Lender, but only to the extent that such change is the
result of the compliance by the Lender with any request or directive reflecting
a change in Requirement of Law from any central bank or other Governmental
Authority in the United States of America) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Lender or any
corporation controlling the Lender with any request or directive regarding
capital adequacy (whether or not having the force of Law) from any Governmental
Authority in the United States of America made subsequent to the date upon which
such Lender makes its Advances or acquires its interest in an Advance does or
shall have the effect of reducing the rate of return on the Lender's or such
corporation's capital as a consequence of the transactions contemplated hereby
to a level below that which the Lender or such corporation would have achieved
but for such change or compliance (taking into consideration the Lender's or
such corporation's policies with respect to capital adequacy) by an amount
reasonably deemed thereby to be material, then, from time to time, after
submission by the Lender to the Borrower and the Collateral Agent of a written
request therefor, the Collateral Agent shall, subject to Section 2.06(c) hereof,
on behalf of the Borrower, pay to the Lender such additional amount or amounts
as will compensate the Lender for such reduction; provided that to the extent
that six months or more pass between the date upon which the Lender obtains
actual knowledge of the liability resulting in such reduction and the date upon
which the Lender provides notice of such reduction to the Borrower hereunder,
the Borrower shall not be liable for amounts relating to the period six months
or more prior to the date of such notice.
The Lender agrees that it shall use its best efforts to take any
actions that will avoid the need for, or reduce the amount of, any increased
amounts referred to in Section 2.06(a) or (b); hereof provided, that no Lender
shall be obligated to take any actions that would, in the sole opinion, of the
Lender, be disadvantageous to the Lender in any material respect.
<PAGE>
If the Lender claims the increased amounts described in Section
2.06(a) or (b) hereof (such amount, an "Increased Cost"), the Lender will
furnish to the Borrower and the Collateral Agent a certificate setting forth the
basis and amount of each request by the Lender for any such Increased Cost.
Failure on the part of the Lender to demand compensation for any
Increased Cost or amount pursuant to Section 2.06(a) hereof with respect to any
period shall not constitute a waiver of the Lender's right to demand
compensation with respect to such period; provided that to the extent that six
months or more pass between the date upon which the Lender obtains actual
knowledge of the liability resulting in such reduction and the date upon which
the Lender provides notice of such reduction to the Borrower hereunder, the
Borrower shall not be liable for amounts relating to the period six months or
more prior to the date of such notice.
The Borrower shall have the right, and the Lender shall cooperate
fully, to replace any Lender which makes a claim pursuant to this Section 2.06
hereof with a new lender that will succeed to the rights of such Lender under
this Agreement; provided, that such Lender shall not be replaced hereunder with
a new lender until such Lender has been paid in full all amounts owed to it
pursuant to this Agreement; provided, further, that the Borrower shall provide
such Lender with an Officer's Certificate stating that such new lender is not
subject to, or has agreed not to seek, such increased costs.
The provisions of this Section 2.06 shall only apply to the Initial
Lender unless the Borrower has consented to the inclusion of one or more
additional Lenders in connection with the assignment by the Initial Lender (or
an additional Lender to which the Borrower has previously consented) of an
interest in an Advance in which case this Section 2.06 shall also apply to such
additional Lenders.
<PAGE>
Taxes. (a) All payments made by the Collateral Agent on behalf of the
Borrower, under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority in the United States of America, excluding, in the case of the Lender,
net income taxes and franchise taxes imposed on the Lender as a result of a
present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Lender (excluding a connection
arising solely from the Lender having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement) or any
political subdivision or taxing authority thereof or therein, and also excluding
United States of America withholding taxes to the extent that a Lender
incorporated in or under the laws of a jurisdiction other than the United
States; any state thereof or the District of Columbia fails to provide to the
Collateral Agent at such times as are required by law a duly completed and
executed Internal Revenue Service Form 1001 or 4224, as applicable (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"), provided that the Lender is not
subject to backup withholding or provides the Collateral Agent with a duly
completed and executed Internal Revenue Service Form W-8 or W-9, as appropriate.
If any Taxes are required to be withheld from any amount payable to the Lender
hereunder, after submission by the Lender to the Borrower and the Collateral
Agent of a written request therefor, the amounts so payable to the Lender shall
be increased by the Collateral Agent, subject to Section 2.07(c) hereof, on
behalf of the Borrower to the extent necessary to yield to the Lender (after
payment of all Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement except that no increase
shall be made if the Lender is subject to backup withholding and fails to
provide the Collateral Agent with a duly completed and executed Internal Revenue
Service Form W-8 or W-9, as appropriate. Any Lender shall utilize available tax
credits to decrease amounts payable with respect to any such withholding which
the lender in its sole judgment believes are directly related to this Agreement,
except that no increase shall be made if the Lender is subject to backup
withholding and fails to provide the Collateral Agent with a duly completed and
executed Internal Revenue Service Form W-8 or W-9, as appropriate. Nothing in
the preceding sentence shall give the Borrower or any other third party rights
to inspect, audit or otherwise request information regarding Lender records,
including records relating to available tax credits. If the Borrower fails to
pay any Taxes when due to the appropriate taxing authority the Collateral Agent
shall, subject to Section 2.07(c), on behalf of the Borrower, pay the Lender for
any incremental taxes, interest or penalties that may become payable by the
Lender as a result of any such failure.
<PAGE>
If the Lender claims the amounts for Taxes referred to in Section
2.07(a) hereof, the Lender will furnish to the Borrower and the Collateral Agent
an officer's certificate setting forth the basis and amount of each request by
the Lender for such Taxes. If the Borrower, within 30 days after receiving a
notice of the basis and amount of such Taxes disputes the basis or amount set
forth in such notice, the Lender and the Borrower shall consult in good faith to
resolve such dispute. If such consultation does not resolve such dispute within
45 days (or such longer period as the Lender and the Borrower may then agree)
after the Lender shall have provided the Borrower with such notice, the Borrower
may request that the Lender furnish to an Independent Accountant all information
reasonably necessary to permit the confirmation of the accuracy of the Lender's
computation of the Taxes described in such notice. Within 30 days of the receipt
of such information, the Independent Accountant either shall confirm the
accuracy of such computation or shall notify the Lender and the Borrower that
such computation proposed by the Lender is inaccurate. In the latter event, the
Lender shall consult with the Borrower and the Independent Accountant as to the
proper computation of the Taxes, whereupon the Lender shall recompute the Taxes
in such a manner as shall enable the Independent Accountant to confirm their
accuracy. The Borrower and the Lender agree that the sole responsibility of the
Independent Accountant shall be to verify the calculation of the Taxes and that
matters of interpretation of the Program Documents are not within the scope of
its responsibilities. All expenses incurred by the Lender and the Borrower in
connection with the verification procedures described in this Section 2.07
(including the fees and expenses of the Independent Accountant) shall be paid by
the Borrower unless the Independent Accountant reasonably concludes that
computation proposed by the Lender is inaccurate. Any information provided to
the Independent Accountant by the Lender shall be and remain the exclusive
property of the Lender and shall be deemed by the parties to be (and the
Independent Accountant shall confirm in writing that it will treat such
information as) the private, proprietary and confidential property of the
Lender, and no Person other than the Lender and the Independent Accountant shall
be entitled thereto or to any review thereof, and all such information shall be
returned to the Lender contemporaneously with the completion of the verification
procedure. Notwithstanding the foregoing, the Lender shall not be obligated to
disclose to any Person (other than the Independent Accountant, subject to the
agreement by the Independent Accountant to keep all information therein
confidential), or permit any Person (other than the Independent Accountant,
subject to the agreement by the Independent Accountant to keep all information
contained therein confidential) to examine, any federal, state or local income
tax returns of the Lender or any of its Affiliates.
The Lender agrees that it shall use its best efforts to take any
actions that will avoid the need for, or reduce the amount of, any increased
amounts referred to in Section 2.07(a); provided, that no Lender shall be
obligated to take any actions that would, in the sole reasonable opinion of the
Lender, be disadvantageous to the Lender in any material respect.
The Lender, by its making of an Advance or acceptance of any interest
in any Advance, agrees to treat the interests evidenced by the Advance as
indebtedness for all tax purposes, and further agrees that any Person acquiring
an interest in any Advance from or through it may do so only subject to the
obligation to comply with this Agreement as to the treatment of such Advance as
indebtedness for all tax purposes.
The provisions of this Section 2.07 shall only apply to the Initial
Lender unless the Borrower has consented to the inclusion of one or more
additional Lenders in connection with the assignment by the Initial Lender (or
an additional Lender to which the Borrower has previously consented) of an
interest in an Advance in which case this Section 2.07 shall also apply to such
additional Lenders.
Payment Instructions. The Initial Lender and the Borrower shall
provide written payment instructions (including the account number of the bank
account to which payments are to be directed and the name, address and ABA
number of the bank in which such account is maintained, if payments are to be
made to such party by the wire transfer of immediately available funds) to the
Collateral Agent. Failure to provide such notice shall not affect such party's
right to receive any funds to which it is otherwise entitled in accordance with
the Program Documents, but failure to deliver such notice may result in a delay
in the receipt of such funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
General Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Lender, as of the date
hereof, as follows:
(a) Organization and Authority. The Borrower:
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and each other State
where the nature of its business requires it to qualify, except to the
extent that the failure so to so qualify would not, in the aggregate,
materially and adversely affect the ability of the Borrower to perform its
obligations under the Program Documents to which it is a party;
<PAGE>
has all requisite power, authority and legal right to own and
operate its properties and to conduct its business as currently conducted
and as proposed to be conducted by the Program Documents, to enter into
the Program Documents to which it is a party, to issue and deliver the
Notes and to perform its obligations under the Program Documents to which
it is a party and the Notes;
has made all filings and holds all franchises, licenses, permits
and registrations which are required under the laws of each jurisdiction
in which the properties owned (or held under lease) by it or the nature of
its activities makes such filings, franchises, licenses, permits or
registrations necessary, except to the extent that the failure to do so
would not, in the aggregate, materially and adversely affect the ability
of the Borrower to perform its obligations under any of the Program
Documents to which it is a party.
Place of Business. The address of the principal place of business and
chief executive office of the Borrower is 370 17th Street, Suite 5060E, Denver,
Colorado 80202 and there have been no other such locations during the four
months immediately preceding such Closing Date, except as may have been
previously disclosed in writing to the Initial Lender in accordance with the
provisions of Section 10.01 hereof.
Compliance with Other Instruments, etc. The Borrower is not in
violation of any term of its certificate of incorporation or by-laws. Neither
the execution, delivery or performance by the Borrower of the Program Documents
to which it is a party or the Note nor the borrowings hereunder does or will (i)
conflict with or violate the Certificate of Incorporation or by-laws of the
Borrower, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties of the Borrower pursuant to the terms of any instrument or
agreement to which the Borrower is a party or by which it is bound, or (iii)
require any consent of or other action by any Collateral Agent or any creditor
of, any lessor to or any investor in the Borrower.
No Materially Adverse Contracts, etc. The Borrower is not a party to
or bound by (nor are any of its Properties affected by) any contract or
agreement, or subject to any order, writ, injunction or decree or other action
of any court or any governmental department, commission, bureau, board or other
administrative agency or official, or any charter or other corporate or
contractual restriction, which materially and adversely affects, or in the
future will materially and adversely affect, the business, earnings, prospects,
properties or condition (financial or other) of the Borrower.
Compliance with Law.The Borrower is in compliance with all statutes,
laws and ordinances and all governmental rules and regulations to which it or
any of its Properties are subject except to the extent that noncompliance
therewith would not result in a Material Adverse Effect. Neither the execution,
delivery or performance of the Program Documents to which it is a party or the
Notes nor the borrowings hereunder does or will cause the Borrower to be to the
best of its knowledge in violation of any law or ordinance, or any order, rule
or regulation, of any federal, state, municipal or other governmental or public
authority or agency.
<PAGE>
Pending Litigation, etc. There is no action at law, suit in equity or
other proceeding or investigation (whether or not purportedly on behalf of the
Borrower) in any court, tribunal or by or before any other governmental or
public authority or agency or any arbitration panel, pending or, to the best
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its respective Properties (i) an adverse determination of which is reasonably
likely to result in a Material Adverse Effect or (ii) that could question the
validity of any Program Document to which it is a party or the Notes or the
priority or perfection of any Liens created under the Security Agreement. The
Borrower is not in default with respect to any order, writ, injunction, judgment
or decree of any court or other governmental or public authority or agency or
arbitrator or arbitration panel, which default is reasonably likely to result in
a Material Adverse Effect.
Taxes. The Borrower and each entity which might have tax liabilities
for which the Borrower is or may be liable, has filed all tax returns and paid
all taxes required by law to be filed or paid, which are due pursuant to said
returns (or which to the knowledge of the Borrower are due and payable) and on
all assessments received by the Borrower or such entity, as the case may be,
other than taxes being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been established in
accordance with generally accepted accounting principles. There are no material
Liens on any Properties of the Borrower imposed or arising as a result of the
delinquent payment or the nonpayment of any tax, assessment, fee or other
governmental charge. There are no applicable taxes, fees or other governmental
charges due and payable by the Borrower in connection with the execution and
delivery by the Borrower of the Program Documents to which it is a party or the
Note or the borrowings hereunder.
Investment Company Act. The Borrower is not an "investment company",
or an "affiliated person" of an "investment company", or a company "controlled"
by an "investment company" as such terms are defined in the Investment, Company
Act of 1940, as amended, and the Borrower is not an "investment adviser" or an
"affiliated person" of an "investment adviser" as such terms are defined in the
Investment Advisers Act of 1940, as amended.
Margin Rules. Without limiting the foregoing, the application in
accordance with the Program Documents of any part of the proceeds from the
Advances by the Borrower pursuant to this Agreement will not violate or result
in a violation of Section 7 of the Securities Exchange Act or any regulations
issued pursuant thereto, including, without limitation, Regulation G (12 C.F.R.,
Part 207), as amended, Regulation T (12 C.F.R., Part 220), as amended, and
Regulation X (12 C.F.R., Part 224), as amended, of the Board of Governors of the
Federal Reserve System. The assets of the Borrower do not include any "margin
stock" within the meaning of such Regulation G, and the Borrower does not have
any intention of acquiring any such margin stock.
Proceedings. The Borrower has taken all action necessary to authorize
the execution and delivery of the Program Documents to which it is a party and
the Notes and the borrowings hereunder and the performance of all obligations to
be performed by it hereunder and thereunder.
Reserved.
<PAGE>
No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is or
will be required for (i) the valid execution, delivery and performance by the
Borrower of the Program Documents to which it is a party, or the Notes, (ii) the
perfection or maintenance of the Liens intended to be created by the Security
Agreement (including the first priority status thereof) or (iii) the borrowings
hereunder, other than such UCC filings as have been provided to the Initial
Lender. The Borrower has obtained all consents, approvals or authorizations of,
made all declarations or filings with, or given all notices to, all federal,
state or local governmental or public authorities or agencies which are
necessary for the continued conduct by the Borrower of its business as now
conducted and as proposed to be conducted as contemplated by the Program
Documents, except to the extent that the failure to do so would not result in a
Material Adverse Effect.
Validity of Program Documents and Notes. The Program Documents to
which it is a party have each been duly executed and delivered by the Borrower
and constitute legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms. Upon receipt by the Borrower of the
proceeds of the initial Advance as provided in this Agreement, the Notes will
have been duly issued and will constitute the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, and entitled to the benefits of the Security Agreement.
Representations and Warranties in Program Documents. The
representations and warranties of the Borrower contained in each of the Program
Documents to which it is a party and in any document, certificate or instrument
delivered pursuant to any such Program Document are, true and correct and the
Lender may rely on such representations and warranties, if not made directly to
the Lender, as if such representations and warranties were made directly to the
Lender.
Solvency. On the date each Advance was made, after giving
effect to such Advance, the Borrower was Solvent.
Full Disclosure. The Program Documents to which it is a party and any
certificate, report, statement or other writing furnished to the Lender by or on
behalf of the Borrower in connection with the negotiation of any such Program
Document are accurate and complete in all material respects with respect to the
information purported to be set forth therein. There is no fact known to the
Borrower that has not been disclosed to the Initial Lender in writing that has,
or in the future may have, a Material Adverse Effect.
Non-Consolidation. The Borrower has been operated in such a manner
that it would not be substantively consolidated in the bankruptcy trust estate
of any Affiliate, such that the separate existence of the Borrower and any
Affiliate would be disregarded.
<PAGE>
Transfer and Assignment. From and after the delivery to the
Collateral Agent of the Loan Contracts, the related Certificates of Title and
the Applications for Certificates of Title, the Collateral Agent for the benefit
of the Lender had a first priority perfected security interest in the Loan
Contracts, the Vehicles and the proceeds thereof, except for Permitted Liens and
limited with respect to proceeds to the extent set forth in Section 9-306 of the
UCC as in effect in the applicable jurisdiction. All filings (including, without
limitation, UCC filings) and other actions as are necessary in any jurisdiction
to perfect the ownership or other interest of the Collateral Agent in the
Collateral, including the transfer of the Certificates of Title and the
Applications for Certificates of Title and the Loan Contracts, and the payment
of any fees, have been made.
Parent of the Borrower. Monaco is the registered owner of all of the
issued and outstanding common stock of the Borrower, all of which common stock
has been validly issued, is fully paid and nonassessable.
Reserved.
Bulk Transfer Laws. The transfer, assignment and conveyance of the
Auto Loans by Monaco to the Borrower pursuant to the Loan Acquisition Agreement
was not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.
General Representations and Warranties of Monaco. Monaco
represents and warrants to the Lender, as of the date hereof, as
follows:
Organization and Authority. Monaco:
is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and each other State
where the nature of its business requires it to qualify, except to the
extent that the failure to so qualify would not, in the aggregate,
materially and adversely affect the ability of Monaco to perform its
duties under the Program Documents to which it is a party; and
has all requisite power and authority to own and operate its
properties and to conduct its business as currently conducted and as
proposed to be conducted as contemplated by the Program Documents to which
it is a party, to enter into the Program Documents to which it is a party
and to perform its obligations under the Program Documents to which it is
a party.
Compliance with Other Instruments, etc. Monaco is not in violation of
any term of its articles of incorporation or by-laws. The execution, delivery
and performance by Monaco of the Program Documents to which it is a party do not
and will not (i) conflict with or violate the articles of incorporation or
by-laws of Monaco, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation of any Lien other than as contemplated by the Program Documents on any
of the Properties or assets of Monaco pursuant to the terms of any instrument or
agreement to which Monaco is a party or by which it is bound or (iii) require
any consent of or other action by any creditor of, any lessor to or any investor
in Monaco not already obtained.
<PAGE>
Proceedings. Monaco has taken all action necessary to
authorize the execution and delivery by it of the Program Documents
to which it is a party and the performance of all obligations to be
performed by it under the Program Documents.
No Consents. No prior consent, approval or authorization of,
registration, qualification, designation, declaration or filing with, or notice
to any federal, state or local governmental or public authority or agency, is,
was or will be required for the valid execution, delivery and performance by
Monaco of the Program Documents to which it is a party. Monaco has obtained all
consents, approvals or authorizations of, made all declarations or filings with,
or given all notices to, all federal, state or local governmental or public
authorities or agencies which are necessary for the continued conduct by Monaco
of its respective businesses as now conducted, other than such consents,
approvals, authorizations, declarations, filings and notices which, neither
individually nor in the aggregate, materially and adversely affect, or in the
future will materially and adversely affect, the business, earnings, prospects,
properties or condition (financial or other) of Monaco.
Validity of Agreement. The Program Documents to which it is a party
have been duly executed and delivered by Monaco and constitute the legal, valid
and binding obligation of Monaco, enforceable in accordance with their terms,
subject as to the enforcement of bankruptcy, insolvency, reorganization and
other similar laws of general applicability relating to or affecting the rights
of creditors generally and to general principles of equity, regardless of
whether enforcement is sought in a court of equity or law. The execution and
delivery of the Supplementary Servicing Agreement do not require the consent or
signature of Monaco.
Representations and Warranties in Program Documents. Each acquisition
of a Designated Auto Loan by the Borrower was made in compliance with all
requirements specified in the Program Documents (as defined in the Existing
Credit Agreement); and Monaco performed all of its obligations with respect to
such Designated Auto Loan, including, without limitation, the payment to the
related Dealer of all amounts then owing to such Dealer by Monaco in respect of
such Designated Auto Loan.
ARTICLE IV
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT
This Agreement shall be effective on the date (the "Effective Date")
when each of the following conditions shall have been fulfilled:
Merger. The Merger shall have been consummated on such
terms and conditions as are reasonably acceptable to the Initial
Lender.
Other Amendments. The Security Agreement shall have been
executed by each of the parties thereto.
<PAGE>
Releases. The Initial Lender, the Borrower, MF4 and Pacific USA,
Holdings Corp., a Texas corporation ("PUSA", and, together with the Borrower,
MF3 and Monaco, the "Monaco Parties") shall each have executed the release (the
"Release") in the form attached hereto as Exhibit A.
Subordinated Debt. All of the holders of the subordinated debt of
Monaco shall have entered into a comprehensive settlement agreement with the
Monaco Parties, in form reasonably acceptable to the Initial Lender.
Resolutions. The Borrower, Monaco and MF4 shall each have delivered
to the Initial Lender resolutions of their respective Boards of Directors
approving their execution, delivery and performance of this Agreement and each
document to which it is a party executed and delivered in connection herewith.
Monaco and the Borrower each agrees that (x) it will fulfill each of
the conditions precedent set forth in this Article IV to the extent it is
capable of fulfilling the same and (y) that remedies at law may be inadequate to
protect against a breach of this Agreement and agrees in advance to the granting
of injunctive relief for the performance of such agreements and obligations
without proof of actual damages.
ARTICLE V
[Reserved]
ARTICLE VI
[Reserved]
ARTICLE VII
CERTAIN SPECIAL RIGHTS
<PAGE>
Home Office Payment.Notwithstanding any provision to the contrary in
the Program Documents, the Collateral Agent, on behalf of the Borrower, will
punctually pay in immediately available funds prior to noon, New York City time,
all amounts payable with respect to the Advances in accordance with the
provisions of this Agreement and the Security Agreement (without the necessity
for any presentation or surrender thereof or any notation of such payment
thereon) in the manner and at any address as the Lender may from time to time
direct in writing. The Initial Lender agrees that, as promptly as practicable
after the payment or prepayment of any Advance, the Initial Lender will record
such payment or prepayment on the Class A Notes and the Class B Notes ratably
such that 85% of any payment or prepayment of an Advance shall be applied and
recorded as a corresponding reduction of the outstanding principal amount of the
Class A Note and 15% of any payment or prepayment of an Advance shall be applied
and recorded as a corresponding reduction in the unpaid principal amount of the
Class B Notes. The Borrower will afford the benefits of this Section 7.01 to any
Assignee, each of which, by its receipt and acceptance of a Note, will be deemed
to have made the same agreement relating to the Advances as the Initial Lender
has made in this Section 7.01. The Borrower shall only be obligated to make
payments on any Advance to an Assignee in the manner provided in this Section
7.01 from and after the time such Assignee provides to the Borrower and the
Collateral Agent written notice of its election to receive payments in such
manner and the address to which payments are to be directed (including the
account number of Assignee's bank account to which payments are to be directed
and the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such Assignee by the wire transfer of
immediately available funds).
Certain Taxes. The Borrower will pay all taxes (other than income or
franchise taxes incurred by the Lender) in connection with the execution and
delivery of this Agreement and the Security Agreement, the issuance of the
Note(s) by the Borrower, the borrowings hereunder and any modification of the
Program Documents or the Note requested or required by the Borrower and will
save the Lender harmless, without limitation as to time, against any and all
liabilities (including, without limitation, any interest or penalty for
nonpayment or delay in payment, or any income taxes paid by the Lender or any
Assignee in connection with any reimbursement by the Borrower for the payment by
any other Person of any such taxes) with respect to all such taxes. The
obligations of the Borrower under this Section 7.02 shall survive the payment in
full of the Advances and the termination of the Program Documents.
Substitution of Initial Lender. The Initial Lender shall have the
right to substitute any of the Initial Lender's Affiliates as the maker of all
or any portion of the aggregate principal amount of Advances to be made by the
Initial Lender (so long as any such Affiliate is not engaged in any principal
line of business substantially similar to the general nature of the business
presently conducted by the Borrower), by written notice delivered to the
Borrower, which notice shall be signed by both the Initial Lender and such
Affiliate and shall contain such Affiliate's agreement to be bound by this
Agreement. The Borrower agrees that upon receipt of such notice (a) wherever the
word "the Initial Lender" is used in this Agreement (other than in this Section
7.03) such word shall be deemed to refer to such Affiliate in addition to or
instead of to the Initial Lender, as the case may be, and (b) the Initial Lender
shall, to the extent of the assumption by such Affiliate of the Initial Lender's
obligations hereunder, be released from its obligations under this Agreement.
The Borrower also agrees that if the Initial Lender, at any time, acquires from
any Affiliate all or any portion of such Affiliate's rights under this
Agreement, wherever the word "the Initial Lender" is used in this Agreement such
word shall thereafter be deemed to refer to the Initial Lender in addition to or
instead of to such Affiliate, as the case may be, and such Affiliate shall, to
the extent of the assumption by the Initial Lender of such Affiliate's
obligations hereunder, be released from all of its obligations under this
Agreement. Notwithstanding any other provision of this Section 7.03, neither the
Initial Lender nor any Affiliate thereof shall be entitled to substitute any
other party as the maker of any Advances if as a result of such substitution the
Borrower would be required to register as an "investment company" under the
Investment Company Act of 1940, as amended.
<PAGE>
ARTICLE VIII
ADVANCE MATURITY; ADVANCE PREPAYMENTS
Subject to the provisions of the Security Agreement, all Advances
(together with interest thereon at the applicable Interest Rate plus 2.00%) are
currently due and payable in full. The Borrower may voluntarily prepay the
Advances, in whole or in part, at any time without premium or penalty. The
proceeds of any disposition of the Designated Auto Loans shall be distributed in
accordance with Section 6.04 of the Security Agreement.
ARTICLE IX
ASSIGNMENTS AND PARTICIPATIONS
Assignments. (a) The Borrower may not assign its rights or
obligations hereunder or under the Notes without the prior consent of the Lender
in its sole discretion (or, if multiple Lenders, the Lenders in respect of a
majority in aggregate principal amount of Advances outstanding with respect to
the Class A Notes or the Class B Notes, as the case may be).
The Lender may assign to any commercial lending or financial
institution familiar with the asset-backed securities market (each, an
"Assignee"), all or any portion of the Advances and the Notes; provided that any
assignment of a portion of the Advances and the Notes shall be in an amount not
less than the Minimum Assignment Denomination. Upon written notice to the
Borrower of an assignment in accordance with the preceding sentence (which
notice shall identify the Assignee and the amount and the identity of the
Advances and Notes assigned), the Assignee shall have, to the extent of such
assignment (unless otherwise provided in such assignment), the obligations,
rights and benefits of the Lender hereunder with respect to the Advances
assigned to it. For all purposes of this Agreement, the Assignee shall, so long
as the Advances assigned to such Assignee remain unpaid, be entitled to the
rights and benefits of this Agreement with respect to the Advances assigned to
it as if (and the Borrower shall be directly obligated to such Assignee under
this Agreement as if) such Assignee were the "Lender" for purposes of this
Agreement. Accordingly, unless otherwise provided, whenever any action, waiver,
notice or consent is to be provided to or by the Lender as herein specified,
such action, waiver, notice or consent shall (unless otherwise expressly
specified herein) also be provided to or by each Assignee.
The Lender shall provide notice of each assignment to the Collateral
Agent, the Borrower and the Servicer; provided that failure to provide such
notice shall not affect the validity of any assignment.
<PAGE>
Notwithstanding the provisions of this Section 9.01, no assignment of
an interest in an Advance to an entity outside the United States of America
shall be effective unless the prospective Assignee thereof certifies to the
Borrower and Monaco that payments to it in respect of the Advances will not be
subject to withholding taxes imposed by any Governmental Authority in the United
States of America or any political subdivision or taxing authority thereof or
therein or that if it is subject to such withholding taxes it will not seek
reimbursement or grossup from the Borrower or Monaco.
Participations.The Lender may sell or agree to sell to any commercial
lending or financial institution familiar with the asset-backed securities
market a participation in all or any part of any Advance held by it or Advances
made or to be made by it, in which event each such participant shall be entitled
to the rights and benefits of the provisions of Sections 13.01(f) and 13.02(i)
hereof with respect to its participation in such Advance as if (and the Borrower
and Monaco shall be directly obligated to such participant under such provisions
as if) such participant were the "Lender" for purposes of said Sections, but
shall not have any other rights or benefits under this Agreement or any Note
(the participant's rights against the Lender in respect of such participation to
be those set forth in the agreement executed by the Lender in favor of the
participant). All amounts payable by the Borrower to the Lender under this
Agreement shall be determined as if the Lender had not sold or agreed to sell
any participations in such Advance and as if the Lender were funding all of such
Advance in the same way that it is funding the Advance in which no
participations have been sold.
Information. Subject to Section 15.11 hereof, the Lender may furnish
any information concerning the Designated Auto Loans, the Borrower, Monaco or
any of their other Affiliates in the possession of the Lender from time to time
to assignees and participants (including prospective assignees and
participants); provided, however, that, prior to receipt of any such
information, and prior to any inspection by a Lender, other than the Initial
Lender, such assignees and participants or prospective assignees and
participants, as the case may be, may be required by the Borrower to execute a
confidentiality agreement in form and substance reasonably acceptable to the
Borrower.
ARTICLE X
CERTAIN COVENANTS OF THE BORROWER
The Borrower covenants and agrees that so long as any Advance shall
remain unpaid:
Maintenance of Office. The Borrower will maintain at its office
located at its address specified in this Agreement an office where notices,
presentations and demands in respect of Designated Auto Loans and the Notes may
be given to and made upon it; provided, however, that it may, upon 15 Business
Days' prior written notice to the Lender, move such office to any other location
within the boundaries of the continental United States of America.
Existence. The Borrower will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to preserve and keep in full
force and effect its existence, rights and privileges as a corporation and will
not liquidate or dissolve, and it will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to qualify, and to preserve
and keep in full force and effect its qualification, to do business in each
jurisdiction in which the conduct of its business or the ownership or leasing of
its properties requires such qualification except where the failure to do so
would not reasonably be expected to have a Materially Adverse Effect on the
Borrower.
<PAGE>
General Maintenance of Business, etc. The Borrower will:
keep proper books of record and accounts in which entries will be
made of its business transactions in accordance with and to the extent required
by generally accepted accounting principles;
use its best efforts to enforce (or cause the Servicer or the
Collateral Agent, as the case may be, to enforce) all of its rights under each
of the Program Documents to which it is a party and each other agreement entered
into in connection with the transactions contemplated hereby.
Inspection. The Borrower will permit, upon reasonable notice to it,
the Lender, by its representatives, agents or attorneys: (a) to examine all
books of account, records, reports and other papers of the Borrower (including
the Loan Files), (b) to make copies and take extracts from any thereof, (c) to
discuss the affairs, finances and accounts of the Borrower with its respective
officers and independent certified public accountants (and by this provision the
Borrower hereby authorizes said accountants to discuss with the Lender the
finances and accounts of the Borrower) and (d) to visit and inspect, at
reasonable times during normal business hours, the properties of the Borrower.
It is understood and agreed by the parties hereto that all reasonable expenses
in connection with any such inspection or discussion incurred by the Lender or
any officers and employees thereof and the independent certified public
accountants therefor shall be expenses reimbursed to the Lender from the
proceeds of the Collateral under the Security Agreement.
Compliance with Law, etc. The Borrower will not (i) violate any laws,
ordinances, governmental rules or regulations to which it is or may become
subject, or (ii) fail to obtain or maintain any patents, trademarks, service
marks, trade names, copyrights, design patents, licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its property or
to the conduct of its business except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect on the Borrower.
Payment of Taxes and Claims. The Borrower will pay and discharge
promptly when due, all taxes, assessments and governmental charges and levies
imposed upon it, its income or profits or any of its properties.
Limitations on Indebtedness. The Borrower will not at any time incur,
create, assume or guarantee, or otherwise become or be liable in any manner with
respect to, any Indebtedness, except the Advances and other Indebtedness arising
under any of the Program Documents, and Indebtedness incurred pursuant to the
MF4 Credit Agreement.
Restricted Investments. With respect to amounts on deposit in the
Collateral Account, the Borrower will not make any Restricted Investments except
in accordance with the Program Documents.
<PAGE>
Nature of Business. The Borrower will not engage in any business or
activity (whether or not pursued for gain or other pecuniary advantage) other
than financing, purchasing and disposing of Eligible Auto Loans and Permitted
Investments.
Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder and under the Notes,
the Borrower shall be required to observe the applicable legal requirements for
the recognition of the Borrower as a legal entity separate and apart from Monaco
and each other Affiliate of Monaco, provided, that the foregoing shall not
prohibit or restrict the consummation of the Merger. Without limiting the
generality of the foregoing, the Borrower shall assure that each of the
following is complied with:
the Borrower shall maintain separate records, books of account and
financial statements (each of which shall be sufficiently full and complete to
permit a determination of the Borrower's assets and liabilities separate and
apart from those of Monaco and each other Affiliate of Monaco and to permit a
determination of the obligees thereon and the time for performance of each of
the Borrower's obligations separate and apart from those of Monaco and each
other Affiliate of Monaco) from those of Monaco and each other Affiliate of
Monaco;
assets or funds of the Borrower shall be separately identified and
shall not be commingled with those of Monaco or any of the other Affiliates of
Monaco;
the Borrower shall maintain a separate board of directors (including
an "independent director" (as such term is defined in the Borrower's Certificate
of Incorporation)) and shall observe all separate corporate formalities, and all
decisions with respect to the Borrower's business and daily operations shall be
independently made by the officers of the Borrower pursuant to resolutions of
its board of directors;
other than payment of dividends and return of capital, no
transactions shall be entered into between the Borrower and Monaco or between
the Borrower and any of the other Affiliates of Monaco except such transactions
as are contemplated by the Loan Acquisition Agreement;
except for such origination, collection and servicing functions as
Monaco may perform on behalf of the Borrower pursuant to the Program Documents,
the Borrower shall act solely in its own name and through its own authorized
officers and agents and the Borrower will not act as agent of Monaco or any
other person in any capacity;
except for any funds received from Monaco as a capital contribution,
the Borrower shall not accept funds from Monaco or any of the other Affiliates
of Monaco; and the Borrower shall not allow Monaco or any of the other
Affiliates of Monaco otherwise to supply funds to, or guarantee any obligation
of, the Borrower;
the Borrower shall not guarantee, otherwise become liable with
respect to, or otherwise hold out its assets or credit as being available to
satisfy any obligation of Monaco or any of the other Affiliates of Monaco
including jointly or as co-obligor;
<PAGE>
the Borrower shall at all times hold itself out to the public under
the Borrower's own name as a legal entity separate and distinct from Monaco and
the other Affiliates of Monaco and shall not hold itself out as a "department,"
"division" or "part of" Monaco or any of the other Affiliates of Monaco, and
shall correct any known misunderstanding regarding its separate identity from
Monaco;
the Borrower shall observe all corporate and other legal formalities,
including obtaining necessary authorization from its board of directors;
the Borrower shall hold all regular meetings appropriate to
authorize corporate action;
the Borrower shall maintain complete minutes of all board
of director and stockholder meetings;
the Borrower shall maintain its bank and other investment accounts
separate and distinct from those of any affiliate or other person; and
the Borrower shall pay from its own funds all obligations of any kind
incurred by it. Without limiting the generality of the foregoing, the Borrower
shall pay from its own funds the salaries or other compensation and benefits of
its own officers and employees, if any, and will employ a reasonable number of
employees in light of its purpose;
the Borrower shall use its own stationery, invoices and
checks (i.e., not such forms of another person); and
the Borrower shall take all appropriate action necessary to maintain
its own existence as separate and distinct from the existence of any of its
owners.
Other Agreements and Parties. The Borrower will comply with all terms
of the Program Documents to which it is a party. The Borrower (a) will not enter
into any agreements (other than the Program Documents to which it is a party and
agreements approved by the Initial Lender necessary to effectuate the Merger and
any dispositions of Collateral) without the prior consent of the Lender (or, if
multiple Lenders, the Lenders in respect of a majority in aggregate principal
amount of Advances outstanding), such consent not to be unreasonably withheld
and (b) except as otherwise expressly set forth herein, agree to any amendment,
supplement or modification to or waiver of the terms of the Program Documents to
which it is a party or any document related thereto without the consent of the
Lender (or, if multiple Lenders, the Lenders in respect of a majority in
aggregate principal amount of Advances outstanding), such consent not to be
unreasonably withheld.
Investment Company Act. The Borrower will not take any action which
would require it to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
<PAGE>
Liens. The Borrower will not permit any Lien to exist on
any of its Properties, whether now owned or hereafter acquired, other
than Permitted Liens.
ARTICLE XI
CERTAIN COVENANTS OF MONACO
In order to induce the Initial Lender to enter into this Agreement,
Monaco covenants and agrees that so long as any Advances shall remain unpaid:
Loan Files, Etc. Monaco will, at its expense, (i) deliver (to the
extent not already delivered) all of the Loan Files to SST promptly upon
execution and delivery of this Agreement, (ii) deliver to the Collateral Agent
all proceeds of the Collateral, in the form received, within two Business Days
of its receipt thereof, (iii) deliver to SST all correspondence which it
receives in connection with the Designated Auto Loans within two Business Days
of its receipt thereof and (iv) not perform any collection activities with
respect to the Designated Auto Loans.
Further Assurances. Monaco will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary in order to give effect to the provisions of the Program Documents and
the transactions contemplated hereby.
Independence. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Borrower hereunder in respect of the
Advances, Monaco shall be required to (and shall assure that each other
Affiliate of Monaco shall) observe the applicable legal requirements for the
recognition of the Borrower as a legal entity separate and apart from Monaco and
each other Affiliate of Monaco, including, without limitation, assuring that
each of the following is complied with:
Monaco and each other Affiliate of Monaco shall maintain separate
bank and other investment accounts, records and books of account (each of
which shall be sufficiently full and complete to permit a determination of
the assets and liabilities of Monaco or such Affiliate, as the case may
be, separate and apart from those of the Borrower and to permit a
determination of the obligees thereon and the time for performance on each
of the obligations of Monaco or such Affiliate, as the case may be,
separate and apart from those of the Borrower) from those of the Borrower;
neither Monaco nor any of its other Affiliates shall commingle any of
its assets or funds with those of the Borrower, and such assets or funds
shall be separately identified from those of the Borrower;
the board of directors of Monaco shall not dictate decisions with
respect to the Borrower's business and daily operations and Monaco shall
maintain its own corporate formalities and shall otherwise respect the
separate corporate identity of the Borrower;
<PAGE>
other than the making of capital contributions and the transactions
contemplated by the Loan Acquisition Agreement, neither Monaco nor any of
its other Affiliates shall enter into any transactions with the Borrower;
neither Monaco nor any of its other Affiliates shall advance funds to
the Borrower (except for the making of capital contributions); and neither
Monaco nor any of its other Affiliates will otherwise supply funds to, or
guarantee or otherwise hold out its assets or credit as being available to
satisfy any obligation of, the Borrower; and neither Monaco nor any of its
Affiliates shall pledge, mortgage or make similar arrangements with
respect to its assets for the benefit of the Borrower;
neither Monaco nor any of its other Affiliates shall pay from its own
funds obligations of any kind incurred by the Borrower, or otherwise
become liable with respect to, any obligation of the Borrower;
Monaco and each of its other Affiliates shall at all times hold
itself out to the public under its respective name as a legal entity
separate and distinct from the Borrower, and Monaco shall with respect to
the Borrower act solely in its own name and shall correct any known
misunderstandings regarding its separate identity from the Borrower;
all financial reports prepared by Monaco and each of its other
Affiliates shall comply with generally accepted accounting principles and
Monaco will not issue consolidated financial statements which include the
Borrower unless such consolidated financial statements clearly indicate
that they consolidate the financial statements of separate legal entities
including the Borrower with the Borrower identified by name;
with respect to its dealings with the Borrower, Monaco and its
Affiliates shall observe all corporate and other legal formalities and
shall not take (or omit to take) any action inconsistent with the
maintenance of the Borrower's existence as a corporation under the laws of
the State of Delaware separate and distinct from the existence of Monaco
or any of its other affiliates;
Monaco and its Affiliates shall allocate fairly and reasonably any
overhead for shared office space, personnel or other expenses used by the
Borrower; Monaco and its Affiliates shall not use the Borrower's
stationery, invoices or checks;
Monaco and its Affiliates shall not direct the business or
daily operations of the Borrower; and
Monaco and its Affiliates will not take, or omit to take, any action
that would cause the Borrower to fail to comply, or fail to cause the
compliance, with the provisions of Article X hereof.
<PAGE>
Other Agreements and Parties. Monaco will comply with all terms of
the Program Documents to which it is a party. Monaco will not, except as
otherwise expressly set forth herein, agree to any amendment, supplement or
modification to or waiver of the terms of the Program Documents to which it is a
party or any document related thereto without the consent of the Lender (or, if
multiple Lenders, the Lenders in respect of a majority in aggregate principal
amount of Advances outstanding), such consent not to be unreasonably withheld.
ARTICLE XII
[Reserved]
ARTICLE XIII
DEFAULTS
Defaults. If any of the following conditions or events
(each, a "Default") shall occur and be continuing, it shall
constitute a Default hereunder:
(i) failure by the Borrower to make any deposit when due under the
Security Agreement or failure by Monaco remit to the Collateral Agent any
payment received by it directly or on behalf of the Borrower in respect of the
Collateral or (ii) failure of Monaco to repurchase any Auto Loans pursuant to
the Loan Acquisition Agreement or (iii) a "Default" shall occur under the MF4
Credit Agreement; or
the Borrower or Monaco shall default in the due and punctual
performance of or compliance with any covenant, condition or agreement to be
performed or observed by it under Sections 10.01, 10.02, 10.06, 10.07, 10.10,
10.13 or Article XI hereof; or
the Borrower shall institute proceedings for liquidation,
readjustment, arrangement or composition (or for any related or similar purpose)
under any law relating to financially distressed debtors, their creditors or
property, or shall consent to (or fail to object to in a timely manner) the
institution of any such proceedings against the Borrower; or
a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or other (i) for the appointment of a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Borrower or of any part of its property, or for the
winding-up or liquidation of its affairs; and such decree or order shall remain
in force undischarged and unstayed for a period of more than 60 days, or (ii)
for the sequestration or attachment of any material part of the property of the
Borrower without its unconditional return to the possession of the Borrower, or
its unconditional release from such sequestration or attachment, within 60 days
thereafter, or
<PAGE>
a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or order approving or acknowledging as
properly filed, or any party commences against the Borrower, a petition or
proceedings from liquidation, rehabilitation, readjustment or composition (or
for any related or similar purpose) under any law relating to financially
distressed debtors, their creditors or property, and any such decree or order
shall remain in force undischarged and unstayed for a period of more than 60
days; or
the Borrower shall take action for the purpose or with the effect of
authorizing or confirming the taking or existence of any action or condition
specified in clause (d) or (e) above.
Default Remedies. Prior to the occurrence of a Default, all
collections on the Collateral shall be distributed solely as set forth in the
Security Agreement and the Collateral may be disposed of by the Initial Lender
only as and to the extent set forth in the Security Agreement. If a Default
shall occur and be continuing, the Lender may, notwithstanding any other
provision of this Agreement or any Program Document, instruct the Collateral
Agent to, exercise any right, power or remedy permitted to it by law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or agreement contained in the Program Documents or in the Notes or
for an injunction against a violation of any of the terms of the Program
Documents or such Advance or in aid of any exercise of any power granted to such
Lender or to the Collateral Agent in the Program Documents or in such Advance,
or may proceed to enforce payment of such Advance or to enforce any other legal
or equitable right of the Lender. No remedy herein or in the Security Agreement
conferred upon the Lender or the Collateral Agent is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, by statute or otherwise. No course of dealing on the part of the
Lender or the Collateral Agent, or any delay or failure on the part of the
Lender or the Collateral Agent to exercise any right or power, shall operate as
a waiver of such right or power or otherwise prejudice the rights, powers and
remedies of the Lender or the Collateral Agent or of any other Lender or the
Collateral Agent. No failure to insist upon strict compliance with any covenant,
term, condition or other provision of the Program Documents or the Note shall
constitute a waiver by the Lender or the Collateral Agent of any such covenant,
term, condition or other provision or of any Default in connection therewith. To
the extent effective under applicable law, the Borrower hereby agrees to waive,
and does hereby absolutely and irrevocably waive and relinquish, the benefit and
advantage of any valuation, stay, appraisement, extension or redemption laws now
existing or that may hereafter exist that, but for this provision, might be
applicable to any sale made under any judgment, order or decree of any court, or
otherwise, based on the Advance or on any claim for interest and fees in respect
of the Advance. If an Default shall occur, and be continuing, the Borrower will
pay to the Lender or the Collateral Agent, to the extent not prohibited by
applicable law and not paid in accordance with the Security Agreement, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection and of the taking of remedial actions and the maintenance of
enforcement proceedings, including, without limitation, reasonable and necessary
attorneys' fees and disbursements.
<PAGE>
ARTICLE XIV
INDEMNIFICATION AND FUNDING LOSSES
Indemnification. (a The Borrower agrees to indemnify and hold
harmless the Lender, the directors, officers, employees and agents of the Lender
and each Person who controls the Lender within the meaning of the Securities Act
or the Exchange Act from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which any of them may become subject to the
extent that any such claims, damages, losses, liabilities costs or expenses are
attributable to the transactions contemplated herein, including, without
limitation, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise; provided, that the
Borrower shall not be liable to the Lender for any (i) credit losses incurred by
the Lender in its capacity as a Lender with respect to the Advances resulting
from the performance of this Agreement, (ii) losses incurred by the Lender as a
result of breaches by the Lender of any of its obligations hereunder or under
any of the other Program Documents, the fraudulent actions, misrepresentations,
negligence or willful misconduct of the Lender or (iii) losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Lender (including any liabilities,
costs or expenses with respect thereto) (collectively, the "Indemnified
Claims"). The foregoing is in addition to any rights (including, without
limitation, rights to indemnity) to which the Lender may otherwise be entitled.
<PAGE>
Promptly after receipt by the Lender of notice of the commencement of
any action, the Lender shall, if a claim in respect thereof is to be made
against the Borrower (the "Indemnifying Party") under this Section 14.01, notify
the Indemnifying Party in writing of the commencement thereof; but the omission
so to notify the Indemnifying Party will not relieve it from any liability which
it may have to the Lender except to the extent such Indemnifying Party is
prejudiced thereby. In case any action is brought against the Lender, and it
notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to appoint counsel satisfactory to such Indemnifying
Party (who shall not, except with the consent of the Lender, be counsel to the
Borrower or Monaco) to represent the Lender in such action; provided, however,
that, if the defendants in any action include both the Lender and an
Indemnifying Party and the Lender shall have reasonably concluded that there may
be legal defenses available to it which are different from or additional to
those available to the Indemnifying Party, the Lender shall have the right to
select separate counsel to defend such action on behalf of it. Upon receipt of
notice from the Indemnifying Party to the Lender of its election so to appoint
counsel to defend such action and approval by the Lender of such counsel, the
Indemnifying Party will not be liable to the Lender under this Section 14.01 for
any legal or other expenses subsequently incurred by the Lender in connection
with the defense thereof unless (i) the Lender shall have employed separate
counsel in accordance with the proviso to the next preceding sentence, (ii) the
Indemnifying Party shall not have employed counsel satisfactory to the Lender to
represent the Lender within a reasonable time after notice of commencement of
the action or (iii) the Indemnifying Party has authorized the employment of
counsel for the Lender at the expense of the Indemnifying Party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
If the indemnification provided for in this Section 14.01 is
unavailable or insufficient to hold harmless the Lender under subsection (a) or
(b) above, then the Indemnifying Party shall contribute to the amount paid or
payable by the Lender as a result of the Indemnified Claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Indemnifying Party on the one hand and the Lender on the other from the
transactions contemplated by this Agreement or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Indemnifying Party on the one hand and
the Lender on the other in connection with the actions or omissions which
resulted in such Indemnified Claims or liabilities as well as any other relevant
equitable considerations. The Lender and the Indemnifying Party agree that it
would not be just and equitable if contributions pursuant to this subsection (c)
were to be determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the first sentence of this subsection (c). The amount payable by the
Indemnifying Party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (c) shall be deemed to
include any legal or other expenses reasonably incurred by the Lender in
connection with investigating or defending any action or claim which is the
subject of this subsection (c). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The obligations of the Indemnifying Party and the Lender under this
Section 14.01 shall be in addition to any liability which each of them may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Lender within the meaning of the Securities
Act; and, with respect to the obligation of the Indemnifying Party to the Lender
as indemnified party, shall extend, upon the same terms and conditions, to each
director of the Lender.
The Lender agrees to notify the Indemnifying Party in writing of the
commencement of any action with respect to which indemnification may be owed to
it pursuant to this Section 14.01 or Article V of the Servicing Agreement after
receipt by the Lender of notice of commencement thereof, but the omission so to
notify the Indemnifying Party will not relieve such Indemnifying Party from any
liability which it may have except to the extent the Indemnifying Party is
prejudiced thereby. For purposes of this Section 14.01(e), the Servicer shall be
a third party beneficiary of the agreements herein contained.
The agreement, indemnities and other statements of the parties hereto
in or made pursuant to this Section 14.01 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14.01. The provisions of this
Section 14.01 shall survive the termination or cancellation of this Agreement.
<PAGE>
Indemnification with respect to the Designated Auto Loans. Without
limiting any other rights that the Collateral Agent or the Lenders (each an
"Indemnified Party") may have hereunder or under applicable law, Monaco hereby
agrees to pay on demand to each Indemnified Party any and all amounts necessary
to indemnify such Indemnified Party from and against any and all claims, losses,
damages and liabilities and related costs and expenses, including taxes and
reasonable attorneys' fees and disbursements ("Indemnified Amounts") which may
be imposed on, incurred by or asserted against an Indemnified Party in any way
arising out of or resulting from:
the use by Monaco of proceeds of any sale of or in respect
of any Auto Loan;
any representation or warranty made or deemed made by Monaco (or any
of its officers) under any Program Document, or any report delivered by
Monaco pursuant hereto, having been incorrect in any material respect when
made or deemed made or delivered in respect of a Designated Auto Loan (as
to which the remedies are set forth in Section 3.03(c) of the Loan
Acquisition Agreement);
the failure by Monaco to comply with any applicable law, rule or
regulation with respect to any Designated Auto Loan, or the nonconformity
of any Designated Auto Loan with any such applicable law, rule or
regulation;
[Reserved]; or
the assessment of any tax or governmental fee or charge (and all
interest or penalties with respect thereto) as the result of the purchase
or ownership by Monaco of any Auto Loan, other than taxes on or measured
by the gross income of any Person,
excluding, however, (i) recourse for any uncollectible Designated Auto Loan;
provided, that the foregoing shall not be deemed to limit the Borrower's or the
Collateral Agent's rights under Section 3.03(c) of the Loan Acquisition
Agreement and (ii) Indemnified Amounts to the extent resulting from the gross
negligence or willful misconduct on the part of any Indemnified Party. Monaco
acknowledges that the Borrower has assigned its rights of indemnity granted
hereunder to the Collateral Agent. Monaco agrees that, upon such assignment,
such assignee may enforce directly, without joinder of the Borrower, the
indemnities set forth in this Section 14.02. It is understood and agreed that
the indemnity obligations of Monaco hereunder shall survive the termination of
this Agreement or of any Designated Auto Loan.
Expenses. In connection with any obligation of Monaco or the Borrower
under this Article XIV or under any other provision of this Agreement or any
other Program Document with respect to the payment by Monaco or the Borrower of
any costs, fees or expenses, including, but not limited to, Sections 2.06 and
2.07 hereof, the Lender shall deliver to Monaco and the Borrower a statement (A)
itemizing all such cost and expense items for which reimbursement or
indemnification is sought and (B) detailing how the Lender calculated such
items.
<PAGE>
ARTICLE XV
MISCELLANEOUS
Notices. (a All communications under this Agreement or the Notes
shall be in writing and shall be delivered or mailed or sent by facsimile
transmission and confirmed in writing (i) if to the Lender, to the Lender, at
such address as the Lender may have furnished to the Borrower in writing, and
(ii) if to the Borrower, at the address set forth in Section 3.01(b) or at such
other address or facsimile number as it shall have furnished in writing to the
Lender and (iii) if to Monaco to it at the address set forth in Section 3.02(b)
or at such other address or facsimile number as it shall have furnished in
writing to the Lender.
Any written communication so addressed and mailed by certified or
registered mail, return receipt requested, shall be deemed to have been given
when so mailed. All other written communications shall be deemed to have been
given upon receipt thereof.
Survival. All representations, warranties and covenants made by the
Borrower herein or by the Borrower in any certificate or other instrument
delivered under or in connection with this Agreement shall be considered to have
been relied upon by the Lender and shall survive regardless of any investigation
made by the Lender or on the Lender's behalf.
Successors and Assigns. This Agreement shall be binding upon the
parties hereof and their respective successors and assigns, and shall inure to
the benefit of and be enforceable by the parties hereof and their respective
successors and assigns permitted hereunder.
Amendment and Waiver. (a This Agreement and the Notes may be amended
or supplemented, and the observance of any term hereof or thereof may be waived,
with the written consent of the Borrower, Monaco and the Lender (or, if multiple
Lenders, Lenders with respect to at least a majority in aggregate unpaid
principal amount of the Advances); provided, however, that no such amendment,
supplement or waiver shall, without the written consent of all Lenders (a)
change, with respect to the Advances, the amount or time of any required
prepayment or payment of principal or premium or the rate or time of payment of
interest, or change the funds in which any prepayment or payment on the Advances
is required to be made; (b) reduce the percentage of the aggregate principal
amount of Advances required for any amendment, consent or waiver hereunder; or
(c) release any material Lien of the Collateral Agent, held for the benefit of
the Lender, on any of the Collateral or affect the priority thereof.
Any amendment, supplement or waiver effected in accordance with this
Section 15.04 shall be binding upon the Lender, each Assignee and the Borrower.
<PAGE>
The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of the
Program Documents or the Notes unless the Initial Lender (irrespective of the
amount of Advances made by it) shall be informed thereof by the Borrower and
shall be afforded the opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
effected pursuant to the provisions of this Section 15.04 shall be delivered by
the Borrower to the Lender forthwith following the date on which the same shall
have been executed and delivered by the Lender of the requisite percentage of
Advances.
Counterparts. This Agreement may be executed and delivered
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument.
Reproduction of Documents. This Agreement and all documents relating
hereto (other than the Note), including, without limitation, (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by the Initial Lender at the closing of the Initial Lender's making of Advances,
and (c) financial statements, certificates and other information heretofore or
hereafter furnished to the Lender, may be reproduced by the Lender by any
photographic or other similar process and the Lender may destroy any original
document so reproduced. The Borrower agrees and stipulates that, to the extent
permitted by applicable law and court or agency rules, any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Lender in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall be admissible in evidence to the same extent.
Governing Law. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LA\V OF THE STATE OF
NEW YORK.
Consent to Jurisdiction and Venue. The Borrower and Monaco each
hereby irrevocably (i) agrees that any suit, action or other legal proceeding
arising out of or relating to the Program Documents or any Note may be brought
in a court of record in the State of New York or in the courts of the United
States of America located in such State, (ii) consents to the jurisdiction of
each such court in any such suit, action or proceeding, and (iii) waives any
objection which it may have to the laying of venue of any such claim that any
such suit, action or proceeding has been brought in an inconvenient forum and
covenants that it will not seek to challenge the jurisdiction of any such court
or seek to oust the jurisdiction of any such court, whether on the basis of
inconvenient forum or otherwise. The Borrower and Monaco each irrevocably
consent to the service of any and all process in any such suit, action or
proceeding by mail copies of such process to the Borrower and Monaco at their
respective addressees for notices provided in Section 15.01 hereof. The Borrower
and Monaco each agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. All mailings under this Section
15.08 shall be by registered or certified mail, return receipt requested.
Nothing in this Section 15.08 shall affect the Lender's right to serve legal
process in any other manner permitted by law or affect the Lender's right to
bring any suit, action or proceeding against the Borrower or any of its
properties in the courts of any other jurisdiction.
<PAGE>
No Petition. The Lender and each Assignee hereby covenant and agree
that, until the expiration of the date which is one year and one day after the
payment in full of all investor certificates or other securities outstanding and
issued pursuant to any disposition of Collateral, it will not institute against
the Borrower, or join in any institution against the Borrower of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any applicable bankruptcy or similar law in
connection with any obligations relating to the Advances or the Program
Documents.
Acts of Lender.(a Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Agreement to be given
or taken by the Lender may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by the Lender in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
is or are delivered to the Borrower. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 15.10.
The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Borrower deems
sufficient.
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Lender or any Assignee shall bind the Lender and
such Assignee in respect of anything done, omitted or suffered to be done by the
Borrower in reliance thereon, whether or not notation of such action is made
upon such Note.
<PAGE>
Confidentiality. Each Lender agrees to take, and to cause its
Affiliates to take, normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" and provided to the Lender by Monaco or the Borrower or any subsidiary
of Monaco or the Borrower under this Agreement or any other Program Document,
and neither Lender nor any of its Affiliates shall use any such information
other than in connection with or in enforcement of this Agreement and the other
Program Documents or in connection with other business now or hereafter existing
or contemplated with Monaco, the Borrower or any subsidiary of Monaco or the
Borrower; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender, or
(ii) was or becomes available on a non-confidential basis from a source other
than Monaco or the Borrower, provided that such source is not bound by a
confidentiality agreement with Monaco or the Borrower known to the Lender;
provided, however, that the Lender may disclose such information (A) at the
request or pursuant to any requirement of any governmental authority to which
the Lender is subject or in connection with an examination of the Lender by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Lender may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Program Document; (F) to the Lender's independent auditors,
counsel and other professional advisors; or (G) to any participant or assignee,
actual or potential, provided that such Person agrees in writing to keep such
information confidential to the same extent required of Lender hereunder. Prior
to disclosing pursuant to clauses (B), (C) or (D) any information identified by
Monaco, the Borrower or any subsidiary of Monaco or the Borrower's
"confidential" or "secret," the Lender subject to such process, proceeding,
litigation or requirement of law shall provide Monaco and the Borrower with
notice thereof (so long as such notice does not violate any applicable
requirement of law) sufficient, if reasonable under the circumstances) to
provide Monaco or the Borrower with the opportunity to seek, at their expense, a
protective order or similar protections, and such Lender will reasonably
cooperate with Monaco and the Borrower, at their request and expense, to obtain
such protections.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed as of the day and year first above
written.
MF RECEIVABLE CORP. III
By: __________________________________
Name: Morris Ginsburg
Title: President
MONACO FINANCE, INC.
By: __________________________________
Name: Morris Ginsburg
Title: President
DAIWA FINANCE CORPORATION
By: __________________________________
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Release]
This Mutual Release (this "Release") is made as of the 29th day of
July, 1999, by andamong MF Receivables Corp. III, a Delaware corporation
("MF3"), MF Receivables Corp. IV, a Delaware corporation ("MF4"), Monaco
Finance, Inc., a Colorado corporation ("MFI") and Pacific USA Holdings Corp., a
_______ corporation ("PUSA" and, together with MF3, MF4, MFI and PUSA, the
"Monaco Parties"), and Daiwa Finance Corporation , a Delaware corporation
("DFC")
RECITALS
A. MF3, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF3 Credit Agreement"), dated as of July 29, 1999.
B. MF4, MFI and DFC are parties to that certain Amended and Restated
Credit Agreement (the "MF4 Credit Agreement" and, together with MF3 Credit
Agreement, the "Credit Agreements"), dated as of July 29, 1999. Unless otherwise
specified or defined herein, each term used herein has the meaning ascribed
thereto in the Credit Agreements.
AGREEMENTS
1. Release by Monaco Parties. For good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged) each of the
Monaco Parties does hereby release and discharge DFC, and each of its
shareholders, directors, officers, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively with
any purchaser of the Collateral, the "DFC Parties"), of and from all manner of
actions, choses and causes of action, claims, demands, damages, expenses,
liabilities, losses, judgments and executions (in each case of whatever kind or
nature, whether in law or in equity, and whether known or unknown)
(collectively, the "Claims") at any time arising out of or relating in any
manner to any action or inaction by any of the DFC Parties in connection with or
relating to any matter.
2. Release by DFC.For good and valuable consideration (the receipt
and sufficiency of which are hereby acknowledged) DFC does hereby release and
discharge each of the Monaco Parties, and each of their respective shareholders,
directors, officers, members, partners, employees, attorneys, accountants,
consultants, agents, representatives, successors and assigns (collectively, the
"Monaco Released Parties"), of and from all manner of Claims at any time arising
out of or relating in any manner to any action or inaction by any of the Monaco
Released Parties in connection with or relating to any matter.
<PAGE>
3. Releases Generally. Notwithstanding paragraphs 1 and 2 above, (i)
DFC's release set forth in paragraph 2 above shall not apply to any moneys due
to DFC under any of the Program Documents and (ii) none of the releases set
forth in paragraphs 1 and 2 above shall apply to (x) any breach following the
Effective Date by any party of the agreements set forth herein or in any Program
Document or (y) any breach following the Effective Date by any party of any
Program Document or any agreement executed and delivered in connection with or
pursuant to this Agreement.
4. Non-Filing. The parties hereto acknowledge and agree that PUSA has
made certain advances to MFI which may be currently due and payable. From and
after the date hereof, PUSA agrees that, until the expiration of the date which
is one year and one day following the repayment in full of the Advances (or, if
earlier, a Collateral Disposition (as defined in the Security Agreement)), it
will not (i) bring any legal action against MFI to collect or enforce such
advances or (ii) institute against MFI, or join in any institution against MFI
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings. MFI and PUSA each represent and warrant to DFC that, as of the date
hereof, the Borrower has not incurred any Indebtedness to MFI or PUSA or any
Affiliate thereof.
5. MFI Servicing Responsibilities. MFI agrees that from and after
April 16, 1999, its rights and responsibilities under each of the Servicing
Agreements have been terminated (other than rights and responsibilities (a)
which, under such Servicing Agreements, survive MFI's replacement as Servicer
and (b) such rights and responsibilities as are specifically set forth in the
Supplementary Servicing Agreement). MFI further acknowledges and agrees that
neither the Collateral Agent nor DFC shall be required to deliver to MFI a
Servicer Termination Notice under such Servicing Agreements in order to
effectuate the agreements set forth in this Agreement.
6. Assignability. DFC's release under paragraph 2 hereof shall be
expressly assumed by any purchaser or assignee of the Notes. The Monaco Parties'
release under paragraph 1 hereof shall be expressly assumed by any purchaser or
assignee of any of the stock of MFI, MF3 or MF4 currently owned by a Monaco
Party. PUSA's and MFI's agreements under paragraph 4 hereof shall be expressly
assumed by any purchaser or assignee of MFI's debt to PUSA.
7. Counterparts. This Release may be executed in one or more
counterparts (including counterparts executed on facsimile copies or delivered
by facsimile), each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
8. Governing Law; Effectiveness. This Release shall be governed by
and construed in accordance with the laws of the State of New York. This Release
shall be effective concurrently with the effectiveness of the Credit Agreements.
9. Jurisdiction, Etc. Each of the parties hereto agrees that the
provisions of Section 15.08 of the Credit Agreements shall apply to them with
respect to this Release.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Release to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DAIWA FINANCE CORPORATION MONACO FINANCE, INC.
By:_______________________________
By:_______________________________
Name:_____________________________
Name:_____________________________
Title:______________________________
Title:______________________________
MF RECEIVABLES CORP. III MF RECEIVABLES CORP. IV
By:_______________________________
By:_______________________________
Name:_____________________________
Name:_____________________________
Title:______________________________
Title:______________________________
PACIFIC USA HOLDINGS CORP.
By:_______________________________
Name:_____________________________
Title:______________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................1
Section 1.01......................................Definitions
1
Section 1.02..............................General Information
18
Section 1.03.........................................Headings
18
Section 1.04..................Independence of Covenants, etc.
18
ARTICLE II COMMITMENT ......................................18
Section 2.01.........................................Advances
18
Section 2.02.............................Borrowings; Closings
19
Section 2.03..............................Notices of Advances
20
Section 2.04..................................Use of Proceeds
20
Section 2.05...............................Security Agreement
21
Section 2.06..................................Increased Costs
21
Section 2.07............................................Taxes
23
Section 2.08.............................................Term
25
Section 2.09.............................Payment Instructions
25
ARTICLE III .....................REPRESENTATIONS AND WARRANTIES
25
Section 3.01General Representations and Warranties of the Borrower
25
Section 3.02.General Representations and Warranties of Monaco
29
Section 3.03 Representations and Warranties with Respect to
the Designated
Auto Loans.......................................33
Section 3.04 Representations and Warranties Relating to
Additional
Qualified Auto Loans.............................38
ARTICLE IV CONDITIONS OF OBLIGATION TO MAKE.................39
Section 4.01.................................Other Agreements
39
Section 4.02Opinion with Respect to Certain Bankruptcy Matters
39
Section 4.03........................Opinions of Local Counsel
39
Section 4.04...........................Officer's Certificates
39
Section 4.05...............Organizational and Other Documents
39
Section 4.06.............................Financing Statements
40
Section 4.07...............................Necessary Consents
40
Section 4.08........................Payment of Commitment Fee
40
Section 4.09.........................................Searches
40
ARTICLE V CONDITIONS OF OBLIGATION TO MAKE.................40
Section 5.01......Performance of Obligations; No Old Advances
40
Section 5.02........Representations True; No Event of Default
40
Section 5.03............................................Taxes
40
Section 5.04...................No Merger or Change in Control
41
Section 5.05...........................Consents and Approvals
41
Section 5.06....................Proceedings, Instruments, etc
41
Section 5.07......Loan Acquisition Agreement; Use of Proceeds
41
Section 5.08..................................Other Documents
41
Section 5.09 Continuance of a Funding Termination Event or an
Event
of Default.......................................41
ARTICLE VI ....................COVENANTS OF MONACO AND THE BORROWER
42
Section 6.01.............................Additional Covenants
42
ARTICLE VII CERTAIN SPECIAL RIGHTS...........................42
Section 7.01..............................Home Office Payment
42
Section 7.02....................................Certain Taxes
43
Section 7.03...................Substitution of Initial Lender
43
ARTICLE VIII ADVANCE MATURITY; ADVANCE PREPAYMENTS............43
Section 8.01.................................Advance Maturity
43
Section 8.02............................Voluntary Prepayments
44
Section 8.03............................Mandatory Prepayments
44
Section 8.04................................Prepayment Notice
44
ARTICLE IX ASSIGNMENTS AND PARTICIPATIONS...................44
Section 9.01......................................Assignments
44
Section 9.02...................................Participations
45
ARTICLE X CERTAIN COVENANTS OF THE BORROWER................46
Section 10.01...........................Maintenance of Office
46
Section 10.02.......................................Existence
46
Section 10.03............General Maintenance of Business, etc
46
Section 10.04......................................Inspection
46
Section 10.05........................Compliance with Law, etc
47
Section 10.06.....................Payment of Taxes and Claims
47
Section 10.07.....................Limitations on Indebtedness
47
Section 10.08..........................Restricted Investments
47
Section 10.09..............................Nature of Business
47
Section 10.10....................................Independence
47
Section 10.11....................Other Agreements and Parties
49
Section 10.12..........................Investment Company Act
49
Section 10.13.........................Purchases of Auto Loans
49
Section 10.14...........................................Liens
50
ARTICLE XI CERTAIN COVENANTS OF MONACO......................50
Section 11.01.......................................Existence
50
Section 11.02........................Compliance with Law, etc
50
Section 11.03.....................Payment of Taxes and Claims
51
Section 11.04......................................Inspection
51
Section 11.05........................Consolidation and Merger
51
Section 11.06..............................Further Assurances
51
Section 11.07....................................Independence
51
Section 11.08....................Other Agreements and Parties
53
Section 11.09..........................Servicing Arrangements
53
Section 11.10...........Preservation of Quality of Auto Loans
54
ARTICLE XII INFORMATION TO BE FURNISHED TO LENDER............54
Section 12.01.....Information to Be Furnished by the Borrower
54
Section 12.02...........Information to Be Furnished by Monaco
54
ARTICLE XIII DEFAULTS.........................................55
Section 13.01....Events of Default; Acceleration of Advancess
55
Section 13.02................................Default Remedies
57
Section 13.03...............................Notice of Default
58
Section 13.04...........Annulment of Acceleration of Advances
58
ARTICLE XIV INDEMNIFICATION AND FUNDING LOSSES...............59
Section 14.01.................................Indemnification
59
Section 14.02Indemnification with respect to the Designated Auto Loans
61
Section 14.03...................................Funding Losse
62
ARTICLE XV MISCELLANEOUS.........................................63
Section 15.01.........................................Notices
63
Section 15.02........................................Survival
63
Section 15.03..........................Successors and Assigns
63
Section 15.04............................Amendment and Waiver
63
Section 15.05....................................Counterparts
64
Section 15.06.......................Reproduction of Documents
64
Section 15.07...................................Governing Law
64
Section 15.08...............Consent to Jurisdiction and Venue
65
Section 15.09.....................................No Petition
65
Section 15.10.................................Acts of Lender.
65
Section 15.11.................................Confidentiality
66
<PAGE>
EXHIBITS
EXHIBIT A Form of Notes
EXHIBIT B Form of Borrowing Notice
EXHIBIT C Form of Security Agreement
EXHIBIT D Monaco Program Manual
EXECUTION COPY
SECURITY AGREEMENT
among
MF RECEIVABLES CORP. III
(as Borrower)
MONACO FINANCE, INC.
(as Servicer)
and
THE CHASE MANHATTAN BANK
(as Collateral Agent)
Dated as of July 29, 1999
MF RECEIVABLES CORP. III
<PAGE>
Doc #8K999.DOC
iii
TABLE OF CONTENTS
SECTION 1. DEFINED TERMS..........................................1
SECTION 2. SECURITY INTERESTS.....................................4
SECTION 3. CERTAIN RIGHTS OF SECURED PARTIES WITH RESPECT TO COLLATERAL
5
SECTION 4. REMEDIES UPON THE OCCURRENCE OF AN EVENT OF
DEFAULT................................................6
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS..............8
SECTION 6. COLLATERAL ACCOUNT.....................................9
SECTION 7. DISPOSITIONS OF AUTO LOANS............................14
SECTION 8. THE COLLATERAL AGENT..................................14
SECTION 9. AMENDMENTS AND WAIVERS................................20
SECTION 10.NOTICES...............................................21
SECTION 11.LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF
COLLATERAL............................................22
SECTION 12.SEVERABILITY..........................................22
SECTION 13.NO WAIVER; CUMULATIVE REMEDIES........................23
SECTION 14 PAYMENT OF EXPENSES AND TAXES.........................23
SECTION 15 SUCCESSORS AND ASSIGNS; GOVERNING LAW.................25
SECTION 16 ENFORCEMENT RIGHTS OF LENDERS.........................25
SECTION 17 BANKRUPTCY PETITION AGAINST THE BORROWER..............25
SECTION 18 MISAPPLICATION OF FUNDS...............................25
SECTION 19 COUNTERPART SIGNATURES................................26
SECTION 20 THIRD PARTY BENEFICIARY...............................26
SECTION 21 STATUS OF COLLATERAL AGENT............................26
SECTION 22 ACTS OF LENDERS.......................................26
<PAGE>
EXHIBITS
EXHIBIT A FORM OF COLLATERAL ASSIGNMENT
EXHIBIT B FORM OF TRUST RECEIPT
EXHIBIT C FORM OF COLLATERAL AGENT REPORT
<PAGE>
Doc #8K999.DOC
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of July 29, 1999,
made by and among MF RECEIVABLES CORP. III, a Delaware corporation, as borrower
(the "Borrower"), MONACO FINANCE, INC., a Colorado corporation ("Monaco"), as
servicer (the "Servicer") and The Chase Manhattan Bank as collateral agent (in
such capacity, the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the parties hereto entered into a Security Agreement, dated
as of December 4, 1997 (as previously amended, the "Existing Security
Agreement") in connection with a Credit Agreement, of even date therewith, among
the Borrower, Monaco and Daiwa Finance Corporation (the "Initial Lender"), as
lender (the "Existing Credit Agreement"); and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, Monaco and the Initial Lender are entering into the
Amended and Restated Credit Agreement, of even date herewith (the "Credit
Agreement"), which amends, restates and supersedes the Existing Credit Agreement
in its entirety; and
WHEREAS, the parties hereto intend that the security interests
granted under the Existing Security Agreement remain in full force and effect
and are executing and delivering this Agreement to ensure continuity of such
security interests and to make certain conforming changes;
NOW, THEREFORE, for good and valuable consideration, receipt of which
is acknowledged, the parties hereto agree that from and after the effective date
of the Credit Agreement, the Existing Security Agreement shall be deemed to be
amended and restated in its entirety as follows and the Borrower hereby agrees
with the Collateral Agent, for the benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS.
The terms"goods", "accounts", "contract rights", chattel paper",
"general intangibles", "checks", "instruments", "securities" and "documents"
have the respective meanings ascribed in the UCC.
Capitalized terms used herein shall, unless otherwise defined herein,
have the respective meanings ascribed in the Credit Agreement; and the following
terms shall have the following meanings:
"Accounts" means the Lockbox Account and the Collateral
Account.
"Amount Financed" means, with respect to any Sold Auto Loan, the
meaning ascribed thereto in the applicable disclosure documents given to the
obligor in satisfaction of the requirements of the Federal Truth-in-Lending Act.
<PAGE>
24
"Approval Date" means, with respect to any Auto Loan, the date on
which Monaco made its written credit approval with respect to the obligor under
such Auto Loan.
"Approved Contract/Policy Provider" means any provider of credit
default or vendor's single interest insurance approved by the Initial Lender.
"Collateral" has, subject to Section 2(b), the meaning
specified in Section 2(a).
"Collateral Account" has the meaning assigned to such term
in Section 6.01 hereof.
"Collateral Agent Fee and Expenses" means the fees payable in
accordance with the fee letter between the Collateral Agent and the Borrower.
"Lockbox" means the segregated lockbox and account established in the
name of the Collateral Agent on behalf of the Lenders for the sole purpose of
receiving collections on the Designated Auto Loans, pursuant to the Lockbox
Agreement.
"Lockbox Agreement" means the Lockbox Agreement, dated as of _____
__, 1999, among the Initial Lender, the Servicer and the Collateral Agent.
"Lockbox Processor" means a Person designated from time to time by
the Initial Lender to perform the functions of the Lockbox Processor.
"MF4 Collateral" means all Collateral (as defined in the
MF4 Credit Agreement).
"Proceeds" has the meaning assigned such term under the UCC of the
States of Delaware, Colorado and New York, and of each other jurisdiction whose
law governs the grant or perfection of the Collateral Agent's interest in the
particular proceeds of the Collateral and shall also include (to the extent not
already included): (a) any and all proceeds of any insurance, indemnity,
warranty, guaranty or letter of credit payable to the Borrower from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or rights to amounts payable to the Borrower from time to time
in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), (c) any and all other amounts, products, off spring, rents or
profits from time to time paid or payable under or in connection with the
Collateral and (d) all additions to or substitutions or replacements for any of
the Collateral.
"Responsible Officer" means, when used with respect to the Collateral
Agent, any officer within the corporate trust department (or any successor
thereof) including any vice president, assistant vice president, or any officer
or assistant officer of the Collateral Agent customarily performing functions
similar to those performed by any of the above-designated officers.
"Secured Parties" means the Lenders from time to time in
respect of the Advances.
<PAGE>
"Servicer Fee and Expenses" mean all fees payable to SST under the
Supplementary Servicing Agreement.
"Sold Auto Loans" shall have the meaning assigned thereto in the Loan
Acquisition Agreement.
"Subservicer" has the meaning set forth in Section 8.07.
SECTION 2. SECURITY INTERESTS.
As security for the prompt, complete and unconditional payment and
performance of all obligations of the Borrower in respect of the Advances, the
Borrower hereby pledges, assigns, transfers and delivers to the Collateral Agent
for the benefit of the Secured Parties, and grants to the Collateral Agent for
the benefit of the Secured Parties, a continuing first lien on, and first and
prior security interest in, all of the Borrower's right, title and interest in,
to and under the following (collectively the "Collateral"):
each Designated Auto Loan, including, without limitation, all rights
to payments thereunder, purchased by or otherwise conveyed to or at the
direction of the Borrower pursuant to the Loan Acquisition Agreement;
each Financed Vehicle and all other Property, now or hereafter
acquired, securing or evidenced by, each Designated Auto Loan, including,
without limitation, the certificate of title relating to each Financed
Vehicle, any Insurance Proceeds with respect to any such Financed Vehicle
or Designated Auto Loan, the proceeds of any repossession and liquidation
of any such Financed Vehicle, rights under judgments with respect to
defaulted obligors, rights to deficiency judgments with respect to
defaulted obligors and rights under any service contracts with respect to
any such Financed Vehicle;
the Collateral Account and all moneys, checks, instruments,
documents, securities, investments, deposits and other credits (whether or
not permitted by the Program Documents) credited to the Collateral
Account, or otherwise held by the Collateral Agent;
the Loan Acquisition Agreement, the Credit Agreement, the
Lockbox Agreement and the Servicing Agreement;
the MF4 Collateral; and
all proceeds of any of the foregoing.
All rights of the Collateral Agent and the Secured Parties and all
liens and security interests granted hereunder, shall be absolute, unconditional
and irrevocable unless and until released pursuant to the Program Documents,
irrespective of any condition or circumstance whatsoever.
<PAGE>
The grant of the security interest to the Collateral Agent pursuant
to this Section 2 shall not: (i) relieve the Borrower from the performance of
any term, covenant, condition or agreement on the Borrower's part to be
performed or observed under or in connection with the Collateral, (ii) impose
any obligation on the Collateral Agent or the Secured Parties to perform or
observe any such term, covenant, condition or agreement on the Borrower's part
to be so performed or observed, or (iii) impose any liability on the Collateral
Agent or the Secured Parties for any act or omission on the part of the
Borrower, or any Person acting as agent for or on behalf of the Borrower,
relative to or for any breach of any representation or warranty on the part of
the Borrower in connection with the Collateral.
SECTION 3. CERTAIN RIGHTS OF SECURED PARTIES WITH RESPECT TO
COLLATERAL.
The Borrower hereby irrevocably authorizes the Collateral Agent to
execute and deliver, as the attorney-in-fact of the Borrower, any consent,
waiver or amendment which, under the terms of any Program Document, is or may be
executed and delivered by the Borrower with respect to the Collateral, subject
to the provisions of the Program Documents; provided, however, that the
Collateral Agent shall have no duty or obligation to execute and deliver any
such consent, waiver or amendment unless directed in writing to take the actions
specified therein by the Initial Lender; and provided, further, that the
Collateral Agent shall not be required to take any action which the Collateral
Agent reasonably believes may be contrary to applicable law or which would
expose the Collateral Agent to financial liability if the Collateral Agent has
reasonable grounds to believe that repayment of such financial liability is not
reasonably assured to it. The Borrower hereby agrees to remit to the Collateral
Agent for deposit in accordance with this Agreement any and all Proceeds of any
Collateral received by the Borrower (other than any amounts received by the
Borrower pursuant to Section 6.04 hereof).
SECTION 4. REMEDIES
<PAGE>
(i) If at any time a Default shall have occurred and be continuing,
the Initial Lender may, without demand of performance or other demand,
advertisement or notice of any kind (except for any notice required by law and
subject to receipt of notice of default as provided in Section 8.04 hereof) to
or upon the Borrower or any other Person (all of which demands, advertisements
and/or notices are hereby expressly waived) , and in its own name or in the name
of the Borrower, forthwith demand, collect, receive, sue for, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, grant an option or options to purchase, contract to sell or otherwise
dispose of and deliver said Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at any location or locations at the
option of the Initial Lender, all upon such terms and conditions and at such
prices as the Initial Lender may deem advisable, with the right of the Initial
Lender or any Secured Party upon any such public sale or sales to purchase the
whole or any part of said Collateral so sold, free of any right of redemption in
the Borrower, which right is hereby expressly waived and released. At the
instruction of the Lenders in respect of a majority in aggregate principal
amount of the Advances outstanding, the Initial Lender may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned.
If a Default shall have occurred and be continuing, then the Initial
Lender may, at any time thereafter, without demand of performance or other
demand, succeed to the Borrower's rights and privileges with respect to
the Loan Acquisition Agreement, the Credit Agreement, the Lockbox
Agreement and the Servicing Agreement; provided that the Initial Lender
will not have assumed and will not be obligated to perform any of the
duties, obligations, covenants or agreements of the Borrower under any
such agreement.
Notwithstanding anything to the contrary set forth herein or in any
Program Document (including any Program Document under the MF4 Credit
Agreement), except when a Default has occurred and is continuing:
(A) The Initial Lender may sell all or any portion of the
Collateral at any time (such sale, a "Collateral Disposition") in
accordance with the provisions in this Section 4(a)(iii). With
respect to any Collateral Disposition which is consummated (1) on or
prior to December 31, 2000, the Initial Lender will remit or cause to
be remitted to the Borrower an amount equal to the product of (x) the
Applicable Disposition Percentage (as defined below) and (y) the
Specified Amount (as defined below)and (2) from and after January 1,
2001, the Initial Lender will (x) comply with its obligations as a
secured party under the UCC with respect to such Collateral
Disposition, (y) not less than five days prior to such Collateral
Disposition, provide the Borrower with: (I) written notice (a
"Disposition Notice") specifying the proposed purchase price for the
Collateral being sold and (II) deliver to the Borrower a fairness
opinion from a reputable investment bank, accounting firm or
valuation firm as to the fairness of the purchase price for the
Collateral (the cost of such opinion to be an expense of the Initial
Lender payable from the proceeds of such sale). The Borrower (or any
Affiliate thereof) shall have five days after receipt of a
Disposition Notice to notify the Initial Lender that it wishes to
purchase the Collateral at the proposed purchase price by delivering
to the Initial Lender its unconditional commitment unconditionally
guaranteed by Pacific USA Holdings Corp., a Texas corporation (each
in form and substance reasonably acceptable to the Initial Lender) to
effectuate such purchase within 45 days following the Borrower's
receipt of such Disposition Notice.
(B) On the date that is the earlier of the date upon which all
amounts owed to the Initial Lender under the Program Documents
(including the Program Documents under the MF4 Credit Agreement) are
paid in full and the date of the Collateral Disposition of all of the
remaining Designated Auto Loans, the Initial Lender shall (x) remit
or cause to be remitted to the Borrower the Residual Amount (as
defined below) and (y) release to the Borrower all remaining
Collateral, free and clear of all Liens created by the Secured
Parties.
<PAGE>
For purposes of this Section 4(a)(iii), the following terms
shall have the following meanings:
"Applicable Disposition Percentage" means, with respect to a
Collateral Disposition, a fraction the numerator of which is the
aggregate principal balance of the Designated Auto Loans subject to
such Collateral Disposition on the date of such Collateral
Disposition and the denominator of which is the aggregate principal
balance of all Designated Auto Loans on the date of such Collateral
Disposition before giving effect to such Collateral Disposition.
"Loan Amount" means, on any date, the aggregate amount, without
duplication, owed the Initial Lender under the Program Documents
(including the Program Documents under the MF4 Credit Agreement) on
the Effective Date plus any amounts chargeable to the Borrower or
payable from the Collateral from and after the Effective Date to and
including such date less any amounts paid hereunder on or prior to
such date to or for the account of the Lender other than proceeds of
any Collateral Disposition.
"Residual Amount" means, on any date of determination thereof,
an amount equal to the difference, if positive, between (x) the net
proceeds of all Collateral Dispositions made on or prior to such date
less (y) the sum of (a) the Loan Amount on such date and (b) the
aggregate Specified Distributions made on or prior to such date.
"Specified Amount" means, with respect to any Collateral
Disposition occurring (x) on or prior to December 31, 1999,
$3,500,000 less the aggregate Specified Distributions made prior to
the date of such Collateral Disposition and (y) from and after
January 1, 2000 but on or prior to December 31, 2000, $1,000,000 less
the aggregate Specified Distributions made prior to the date of such
Collateral Disposition.
"Specified Distribution" means a remittance made to the Borrower
under Section 4(a)(iii)(A)(1) hereof.
Subject to Section 4(a)(iii) above, if any notification of a proposed
disposition of the Collateral is required by law, such notification shall be
deemed reasonably and properly given if made in any manner provided in Section
10 hereof at least ten Business Days before such disposition.
In addition to the rights, powers and remedies granted to it in this
Security Agreement and in any other instrument or agreement securing, evidencing
or relating to the Advances, upon the occurrence and during the continuance of a
Default, the Collateral Agent shall have all of the rights, powers and remedies
now or hereafter permitted in law or equity, including, without limitation,
those of a secured party under the UCC of the States of New York, Colorado and
any other applicable jurisdiction.
<PAGE>
The Collateral Agent shall apply the net proceeds of any collection,
recovery, receipt, appropriation, realization or sale referred to above in this
Section 4 in accordance with the provisions of Section 6.04 hereof; provided,
that the Borrower shall not be liable for the amount, if any, by which the
amount due under the Advances exceeds the proceeds of any such collection,
recovery, receipt, appropriation, realization or sale.
The Borrower shall provide written payment instructions (including
the account number of the bank account to which payments are to be directed and
the name, address and ABA number of the bank in which such account is
maintained, if payments are to be made to such party by the wire transfer of
immediately available funds) to the Collateral Agent and the Initial Lender.
Failure to provide such notice shall not affect the Borrower's right to receive
any funds to which it is otherwise entitled in accordance with the Program
Documents, but failure to deliver such notice may result in a delay in the
receipt of such funds.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS.
The Borrower represents, warrants and agrees that:
No security agreement, financing statement, equivalent security or
lien instrument or continuation statement listing the Borrower as debtor
covering all or any part of the Collateral is on file or of record in any
jurisdiction, except such as may have been filed, for the benefit of the Secured
Parties recorded or made by the Borrower in favor of the Collateral Agent
pursuant to this Security Agreement or the Credit Agreement.
Except to the extent that Monaco remains the prior lienholder with
respect to each Financed Vehicle securing a Designated Auto Loan in accordance
with the terms of the Credit Agreement, this Security Agreement is effective to
create a valid and continuing Lien on the Collateral in favor of the Collateral
Agent for the benefit of the Secured Parties, which Lien is prior to all other
Liens except Permitted Liens, and is enforceable as such as against creditors of
and purchasers from the Borrower. All action necessary or desirable to protect
and perfect such security interest has been duly taken.
The Borrower's chief executive office is at 370 17th Street, Suite
5060E, Denver, Colorado 80202 and there have been no other office locations
except to the extent the Borrower has provided written notice thereof in
accordance with Section 10.01 of the Credit Agreement. The Borrower will not
change its name and will not change its principal place of business or chief
executive office unless the Borrower shall have given the Collateral Agent at
least 30 days prior written notice thereof and the Borrower shall have taken all
action necessary to assure continuous perfection of the security interest held
by the Collateral Agent in the Collateral as evidenced by an opinion of counsel
addressed to the Collateral Agent and the Lenders to the effect that the lien
and security interest created by this Security Agreement with respect to such
Collateral will continue to be maintained, and that the priority thereof will
not be affected, after giving effect to such action or actions.
<PAGE>
At any time and from time to time, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as the
Lenders in respect of a majority in aggregate principal amount of Advances
outstanding may reasonably deem desirable in obtaining the full benefits of this
Security Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
liens and security interests granted hereby. The Borrower also hereby authorizes
the Collateral Agent to file any such financing or continuation statement
without the signature of the Borrower to the extent permitted by applicable law;
provided, however, that such authorization shall not be deemed to create a duty
in the Collateral Agent. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note or other
instrument, or any chattel paper, the Borrower shall immediately notify the
Collateral Agent and shall duly endorse such note, instrument or chattel paper
to the order of the Collateral Agent and deliver such note, instrument or
chattel paper to the Collateral Agent promptly, and shall take such other
actions and execute such other documents as may be required by law to perfect
the Collateral Agent's interest in such note, instrument or chattel paper.
The Borrower will warrant and defend the Collateral Agent's right,
title and interest in and to the Collateral, for the benefit of the Secured
Parties against the claims and demands of all Persons whomsoever.
All authorizations in this Security Agreement for the Collateral
Agent to endorse checks, instruments and securities and to execute, deliver and
file financing statements, continuation statements, security agreements and
other instruments with respect to the Collateral are powers coupled with an
interest and are irrevocable so long as any Advances are outstanding; provided,
however, the foregoing authorizations shall not create any duty or obligation on
the part of the Collateral Agent other than those obligations set forth in this
Agreement.
SECTION 6. COLLATERAL ACCOUNT.
Establishment and Maintenance of Lockbox and Collateral Account. The
Collateral Agent shall possess all right, title and interest in all funds on
deposit from time to time in the Lockbox and in all proceeds thereof. The
Lockbox shall be under the sole dominion and control of the Collateral Agent on
behalf of the Secured Parties. The Collateral Agent agrees to cause the Lockbox
Processor to sweep funds on an as available basis, from the Lockbox to the
Collateral Account at least once each week. The Collateral Agent has established
the following segregated accounts entitled (a) the "MF III Corp. Collection
Account, The Chase Manhattan Bank, as Collateral Agent" (the "Collateral
Account"). The Collateral Account shall be maintained in the State of New York
in either (i) segregated trust accounts with the corporate trust department of
The Chase Manhattan Bank or any replacement collateral agent or (ii) segregated
deposit accounts with banks or trust companies (which may include the Collateral
Agent or a replacement collateral agent) the short-term debt obligations of
which are rated "A-1+" by S&P and the short-term deposits of which are rated no
less than "Baa3" by Moody's. The Borrower shall have no right of withdrawal from
the Collateral Account.
<PAGE>
Required Deposits to the Accounts. (a) The following
amounts shall be paid to the Collateral Agent and deposited as
follows:
all amounts representing payments in respect of Designated Auto Loans
(including, without limitation, all Recoveries, all late charges, all
payments in respect of the Repurchase Price of Designated Auto Loans
repurchased by Monaco in accordance with the Loan Acquisition Agreement
and, subject to Section 4(a)(iii), all other Proceeds of the Collateral)
shall be deposited in the Collateral Account;
all amounts in respect of principal of Permitted
Investments shall be deposited in the Collateral Account;
all amounts representing Insurance Proceeds in respect of
Designated Auto Loans shall be deposited in the Collateral
Account;
all amounts representing repossession proceeds in respect
of Designated Auto Loans shall be deposited in the Collateral
Account; and
all other amounts paid to the Borrower under the Program Documents,
other than indemnity payments made to the Borrower in respect of
Designated Auto Loans, and all investment earnings on Permitted
Investments shall be deposited in the Collateral Account.
The Collateral Agent is hereby irrevocably authorized and empowered,
as the Borrower's attorney-in-fact, to endorse any check or any other instrument
or security presented for deposit in the Collateral Account requiring the
endorsement of the Borrower; provided, however, the foregoing authorizations
shall not create any duty or obligation on the part of the Collateral Agent.
Notwithstanding the foregoing provisions of this Section 6.02, if at
any time the Borrower, Monaco or any Person on behalf of the Borrower or Monaco
(including the Servicer under the Servicing Agreement), receives any proceeds or
payments required to be deposited in the Collateral Account, all such amounts
shall be held by the Borrower, Monaco or such other person as the agent of, and
in trust for, the Collateral Agent and shall, forthwith upon receipt by and in
any event no later than two Business Days following receipt by the Borrower,
Monaco or such other Person, be turned over to the Collateral Agent for deposit
to the Collateral Account, in the same form as received by the Borrower, Monaco
or such other Person (and, if received in the form of a check, instrument or
security requiring endorsement, duly endorsed on behalf of the Borrower, Monaco
or such other Person to the order of the Collateral Agent).
<PAGE>
Right of Withdrawal from the Collateral Account. In furtherance of
the security interest provided in Section 2, the Collateral Agent, acting on
behalf of the Secured Parties, and the Borrower, agree (a) that the Collateral
Account shall be maintained in the name of the Collateral Agent, (b) that the
Collateral Account shall be subject to the exclusive dominion of the Collateral
Agent and (c) that the Collateral Agent shall have the sole right of withdrawal
from the Collateral Account. The Borrower, the Lender and the Servicer shall
timely provide written remittance information to the Collateral Agent specifying
payment instructions with respect to amounts payable pursuant to each provision
of Section 6.04. The Collateral Agent shall have no liability to the Borrower,
any Lender or any other Person for failure to pay funds to any Person in
accordance with Section 6.04 in the absence of timely receipt of such written
remittance instructions or in the event of any errors in such written remittance
instructions.
Application of Funds in the Collateral Account; Application
of Proceeds of Realization on Collateral. (a) [Reserved].
[Reserved].
Except as specified in Section 4(a)(iii) above, the Collateral Agent
shall apply all amounts held in the Collateral Account and the proceeds of any
collection, recovery, receipt, appropriation, realization or sale of any
Collateral (after deducting all reasonable costs and expenses of every kind
incurred in any way relating to the exercise of rights of the Collateral Agent
or the Initial Lender with respect to the Collateral, including reasonable
attorney's fees and expenses) in the following order of priority (in accordance
with the Monthly Servicer Report):
to the Collateral Agent, an amount equal to all fees, costs
and expenses owing to the Collateral Agent under this Agreement;
to the Initial Lender, an amount equal to reasonable out-of-pocket
costs and expenses incurred by the Initial Lender in its administration of
the Program Documents;
to the Servicer, an amount equal to all fees, costs and
expenses owing to the Servicer under the Servicing Agreement;
to the Lenders, pro rata, in the following order of
priority: (A) an amount equal to all unpaid interest (calculated
at the applicable Interest Rate as provided in the Credit
Agreement) on, and (B) principal of, the Advances;
to the discharge of all other obligations of the Borrower which are
then due (or, to the extent such obligations have not yet matured, to be
set aside and held in trust solely to satisfy such obligations, as and
when they mature or otherwise become due) in an amount equal to such
obligations; and
to the Borrower, an amount equal to any funds remaining in
the Collateral Account.
<PAGE>
Investment of Funds Deposited in Collateral Account. The Collateral
Agent shall, in accordance with the provisions of this Section 6.05, invest and
reinvest, at the written direction of the Borrower, in the Collateral Agent's
own name or in the name of the Collateral Agent's nominee, collected funds in
the Collateral Account in Permitted Investments which shall mature, or be
redeemed at the option of the holder, prior to the respective dates when the
money invested in such Permitted Investments is required for application in
accordance with this Section 6. If there is no written direction from the
Borrower collected funds in the Collateral Account will remain uninvested.
SECTION 7. DISPOSITIONS OF AUTO LOANS.
The Collateral Agent at the written direction of the Initial Lender
shall release from the lien of this Agreement any of the Designated Auto Loans
held as Collateral upon a Collateral Disposition, a prepayment of Advances or a
repurchase by the Borrower in accordance with the terms of the Credit Agreement
and Monaco in accordance with the Loan Acquisition Agreement; provided, that the
proceeds of any such Collateral Disposition, voluntary prepayment or repurchase
(net of expenses and costs) have been deposited into the Loan Revenue Account
for application in accordance with Section 6.04(c); provided, however, that,
upon satisfaction of the conditions set forth in this Section 7, the Collateral
Agent will release to or at the direction of SST the certificate of title with
respect to a Designated Financed Vehicle subject to a Collateral Disposition
within three Business Days of such request by SST. In addition, the Collateral
Agent shall release Designated Auto Loans that have been repaid in full as
provided in Sections 8.01 and 8.08(ii) hereof.
SECTION 8. THE COLLATERAL AGENT.
Appointment. By accepting the benefits of the security interest
granted herein, each Secured Party hereby irrevocably designates and appoints
The Chase Manhattan Bank as the Collateral Agent of such Secured Party under
this Security Agreement, and each such Secured Party irrevocably authorizes The
Chase Manhattan Bank as the Collateral Agent for such Secured Party, to take
such action on its behalf under the provisions of this Security Agreement and to
exercise such powers and perform such duties as are; expressly delegated to the
Collateral Agent by the terms of this Security Agreement together with such
other powers as are reasonably incidental thereto but in each instance solely at
the written instruction of the Lenders in respect of at least a majority in
aggregate principal amount of Advances outstanding. Notwithstanding any
provision to the contrary elsewhere in this Security Agreement, the Collateral
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and in the Servicing Agreement, or any fiduciary relationship with
any Secured Party, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Security Agreement or
otherwise exist against the Collateral Agent. The Chase Manhattan Bank hereby
accepts its appointment as Collateral Agent, subject to, and in reliance upon,
the provisions of this Section 8.01.
<PAGE>
Exculpatory Provisions. Neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Security Agreement (except for its or
such Person's own gross negligence or willful misconduct), or (b) responsible in
any manner to any of the Secured Parties for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained herein or in the Loan Acquisition Agreement, the Servicing Agreement,
the Credit Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received by the Collateral Agent under or in
connection with, this Agreement, the Loan Acquisition Agreement, the Servicing
Agreement or the Credit Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency (except with respect to
enforceability of this Agreement and the Servicing Agreement as it relates to
the Collateral Agent) of this Agreement, the Loan Acquisition Agreement, the
Servicing Agreement, the Lockbox Agreement, the Credit Agreement, the Advances
or the Collateral or for any failure of the Borrower to perform its obligations
hereunder or under the Loan Acquisition Agreement, the Servicing Agreement, the
Lockbox, the Credit Agreement or the Advances. The Collateral Agent shall not be
under any obligation to any Secured Party to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, any of the Program Documents, or to inspect the properties, books or records
of the Borrower or the Servicer. Except for its duty to maintain possession of
the Auto Loans and as set forth in this Agreement, the Collateral Agent shall at
no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any security interest in any Financed
Vehicle or any Auto Loan, or the perfection or priority of such a security
interest or the maintenance of any such perfection or priority or for or with
respect to the ability of the Auto Loans to generate the payments to be
distributed to the Lender under the Credit Agreement, including, without
limitation, the existence, condition, location and ownership of any Financed
Vehicle; the existence of any insurance thereon; the compliance by the Borrower,
the Servicer or the Collection Agent with any covenant or the breach by the
Borrower, the Servicer or the Collection Agent of any warranty or representation
made under this Agreement or the Servicing Agreement or in any related document;
the accuracy of any such warranty or representation; any investment of monies by
the Collateral Agent in accordance with the terms of this Agreement or the
Servicing Agreement or any loss resulting therefrom; the acts or omissions of
the Borrower, the Servicer, the Collection Agent or any obligor; or any action
of the Servicer or the Collection Agent taken in the name of the Collateral
Agent.
Reliance by Collateral Agent. The Collateral Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or Persons or upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or Monaco), independent
accountants and other experts selected by the Collateral Agent not at its own
expense. The Collateral Agent shall be fully justified in failing or refusing to
take any action under this Security Agreement unless it shall first receive such
written advice or concurrence as it deems appropriate or it shall first be
indemnified to its satisfaction (by one or more Secured Parties) against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent shall be under no duty
to inquire into or investigate the validity, accuracy or context of any such
aforementioned document. The Collateral Agent may from time to time consult with
legal counsel, independent accountants or other experts of its own selection,
and not at its own expense, in the event of any disagreement, controversy,
question or doubt as to the construction of any provision of this Agreement or
any of its duties hereunder, and the Collateral Agent shall be fully protected
in acting in good faith in reliance upon the advice or opinion of any such
counsel, independent accountants or other expert.
<PAGE>
Notice of Default. The Collateral Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default under the Credit Agreement
unless a Responsible Officer has received written notice from the Lenders of a
majority in aggregate principal amount of Advances outstanding or the Borrower
referring to this Security Agreement and describing such Event of Default.
Non-Reliance on Collateral Agent. Neither the Collateral Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to the Secured Parties,
and no act by the Collateral Agent hereafter taken, including any review of the
affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Collateral Agent to any Secured Party. Each Secured Party
represents (or will be deemed to have represented at such time as such party
becomes a Secured Party hereunder) to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and made its own decision
to extend credit to the Borrower. Each Secured Party will, independently and
without reliance upon the Collateral Agent, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Security Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished by the Collateral Agent
hereunder, the Collateral Agent shall have no duty or responsibility to provide
any Secured Party with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower which may come into the possession of the Collateral Agent or any of
its officers, directors, employees, agencies, attorneys-in-fact or affiliates.
<PAGE>
Successor Collateral Agent. The Collateral Agent may resign as
collateral agent hereunder and under the Servicing Agreement upon 30 days'
notice to the Borrower, the Servicer and the Lenders. The Collateral Agent may
be removed at any time by the Borrower acting at the direction of, or with the
consent of, the Lenders in respect of the majority in aggregate principal amount
of the Advances outstanding if at any time the Collateral Agent shall fall to
comply with its obligations under this Security Agreement. No such resignation
or removal shall be effective unless and until a successor collateral agent has
accepted appointment as such pursuant to this Agreement and in the case of a
removal, any and all amounts then due to the Collateral Agent hereunder have
been paid in full. If the Collateral Agent shall resign or be removed as
collateral agent, then the Borrower shall appoint a commercial bank having a
combined capital and surplus of at least $250,000,000, subject to supervision or
examination by federal or state authority and having an established place of
business in the United States as successor collateral agent for the Secured
Parties upon (a) acceptance of such appointment by such successor collateral
agent, (b) the approval of such appointment by the Lenders in respect of a
majority in aggregate principal amount of the Advances outstanding, and (c) the
filing of any necessary amendments to any UCC financing statements to reflect
such appointment. Such successor collateral agent shall succeed to the rights,
powers and duties of the Collateral Agent, and the term "Collateral Agent" shall
mean such successor collateral agent effective upon its appointment, and the
former Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent. Such successor collateral agent shall be entitled to amend any
UCC financing statements and any other filings, recordation and declarations it
deems advisable or necessary in connection with such termination and
cancellation. After any retiring Collateral Agent's resignation or removal
hereunder as Collateral Agent, the provisions of this Section 8 and Section 14
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Collateral Agent under this Security Agreement. Notwithstanding the
foregoing, if no successor collateral agent shall be appointed as aforesaid, or
if appointed, such successor shall not have accepted its appointment within
thirty (30) days after resignation of the Collateral Agent, the Collateral Agent
may petition a court of competent jurisdiction to make such appointment.
Delivery of Collateral and Permitted Investments. All certificates
representing or evidencing the Collateral and Permitted Investments from time to
time shall be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto and shall, in the case of the Collateral, be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank. Each Secured Party hereby appoints the
Collateral Agent as its agent for the purpose of holding any Auto Loans and
Permitted Investments. The Collateral Agent shall be the agent solely of the
Secured Parties and shall not be the agent of the Borrower. The Collateral Agent
shall not release possession of any Auto Loans or any documents related thereto
except (a) upon receipt of a trust receipt substantially in the form attached
hereto as Exhibit B obligating the Servicer to return same when the need
therefor no longer exists, (b) upon receipt of written notification from the
Servicer that the Designated Auto Loan has been paid in full, (c) in connection
with a Collateral Disposition or prepayment in full of the Advances or (d) in
connection with any repurchase by Monaco in accordance with the terms of the
Loan Acquisition Agreement upon the receipt by the Collateral Agent of the
Repurchase Price. Notwithstanding anything set forth in this Agreement or in any
Program Document, the Collateral Agent shall follow the instructions of the
Initial Lender and SST in delivering to SST, as agent for the Collateral Agent,
any and all documents relating to the Designated Auto Loans (including
certificates of title) and, upon such delivery, shall be relieved of its
custodial responsibilities hereunder to hold such documents.
Duties and Covenants of Collateral Agent. (a) The
Collateral Agent undertakes to perform the duties as are set forth in
this Agreement, including, without limitation:
upon the written request of the Borrower and/or the Servicer,
providing information reasonably within its possession and within
reasonable time constraints regarding payments and receipt of funds from
and to the Borrower and the Servicer;
acting as custodian of all documents delivered to it
related to the Collateral;
depositing funds received by it, whether as proceeds of Advances, as
collections on Designated Auto Loans, as proceeds of repossession or
otherwise in accordance with the terms of this Agreement;
<PAGE>
making payments from amounts held in the Collateral Account, whether
to the Servicer, to the Borrower or otherwise based solely upon timely
receipt of remittance information from the Borrower, the Lenders or the
Servicer in accordance with the terms of this Agreement;
upon the request of the Servicer, providing information reasonably
within its possession and within reasonable time constraints regarding
servicing, repossession and insurance with respect to the Auto Loans to
the Servicer;
providing the collateral agent report to the Initial Lender,
substantially in the form of Exhibit C hereto, with respect to the
Designated Auto Loans on or before the fifteenth day of each month (or if
such fifteenth day is not a Business Day, the next succeeding business
day), except in the case where the seventh Business Day of such month
falls on or after the eleventh day of the month, in which case, the
collateral agent report shall be provided on or before the seventeenth day
of such month (or if such seventeenth day is not a Business Day, on the
next succeeding Business Day); and
performing the duties contained in Section 2.06(a) and
2.06(b) of the Credit Agreement.
The Collateral Agent covenants and agrees that it will:
not directly or indirectly create, incur, assume or suffer to exist
any Lien against the Collateral or any part thereof other than as set
forth herein;
upon receipt of written notice and request for release in the form of
Exhibit B of the Servicing Agreement from the Servicer that a Designated
Auto Loan has been paid in full (to the extent such amounts have been
deposited in the Loan Revenue Account), or as otherwise permitted pursuant
to (b), (c) and (d) of Section 8.07 hereof, execute and return to the
Servicer documents prepared and furnished to the Collateral Agent by the
Servicer as shall be necessary to release the lien over the Designated
Financed Vehicle;
upon receipt pursuant to the Servicing Agreement of the Servicer
Report, annual financial statements or monthly compliance statements,
promptly forward a copy of such documents to the Lender;
determine whether officer's certificates and opinions of counsel
delivered pursuant to the Servicing Agreement comply in form with the
Servicing Agreement and in making such determination the Collateral Agent
may request timely direction from the Lender (or, if multiple Lenders, the
Lenders in respect of a majority in aggregate principal amount of the
Advances outstanding);
upon the written direction of a Lender, request from the Servicer
certification evidencing the fidelity bond and insurance coverage required
by the Servicing Agreement and upon receipt shall forward such
certification to the Lender and the Borrower;
<PAGE>
upon receipt from the Servicer of a written notice of cancellation or
modification of the fidelity bond and insurance coverage required by the
Servicing Agreement, promptly forward a copy of such notice to the Lender
and the Borrower;
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advances outstanding), consent to a change in business, merger,
consolidation or disposition of assets of the Servicer;
upon a Responsible Officer obtaining actual knowledge of the
occurrence of a change in business, merger, consolidation or disposition
of assets by the Servicer, promptly give notice of such event to the
Lender and the Borrower and, if notified by the Lender (or, if multiple
Lenders, the Lenders in respect of a majority in aggregate principal
amount of the Advances outstanding), that such occurrence constitutes a
breach or default by the Servicer under the terms of the Program Documents
and directed to do so by the Initial Lender terminate the responsibilities
of the Servicer, in accordance with the Servicing Agreement; and;
upon the written direction of the Lender (or, if multiple Lenders,
the Lenders in respect of a majority in aggregate principal amount of the
Advances outstanding), deliver notice to the Servicer stating that a
Servicer Event of Default has occurred and thereby terminate the
responsibilities of the Servicer under the Servicing Agreement.
Annual Report and Quarterly Certificate. (a) If the Collateral
Agent's rating should fall below A+, the Collateral Agent shall deliver to the
Lender as soon as available, but in any event within 120 days after the end of
each of its fiscal years, a consolidated and consolidating balance sheet of it
or its parent and its subsidiaries, if any, as at such last day of the fiscal
year, consolidated statements of income and retained earnings and statements of
cash flow, for each such fiscal year, each prepared in accordance with generally
accepted accounting principles, in reasonable detail, and as to the consolidated
statements, certified without qualification by an independent public accountant,
who may also render other services to the Collateral Agent or any of its
affiliates, and certified, as to the consolidating statements, by the chief
financial officer of the Collateral Agent, as fairly presenting the financial
position and the results of operations of the Collateral Agent as at and for the
year ending on its date and as having been prepared in accordance with generally
accepted accounting principles.
If the Collateral Agent's rating should fall below A+, the Collateral
Agent shall deliver to the Lender by the fifth Business Day following the end of
each fiscal year an Officer's Certificate stating, as to each signer thereof,
that (a) a review of the activities of the Collateral Agent during the preceding
fiscal quarter and of performance under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Collateral Agent has fulfilled all its obligations under this
Agreement throughout such fiscal quarter, or, if there has been a default in the
fulfillment of any such obligation, or if an event has occurred that with notice
or lapse of time or both would become a default under this Agreement specifying
each such default or event known to such officer and the nature and status
thereof and remedies therefor being pursued.
<PAGE>
Reserved.
Instructions of the Lender. Whenever the Collateral Agent is required
to consent to any action hereunder or under the Servicing Agreement, the
Collateral Agent shall so notify the Lenders and shall act in accordance with
the written instructions of Lenders holding 51% of Advances outstanding.
Appointment of Subcollateral Agent. The Collateral Agent may appoint
one or more Subcollateral Agents to hold all or a portion of the Collateral on
behalf of the Secured Parties. Such appointment is subject to the prior written
consent of the Initial Lender. Following such appointment, to the extent the
context requires, all references to the Collateral Agent shall be deemed to
include the Subcollateral Agent.
SECTION 9. AMENDMENTS AND WAIVERS.
With the written consent of the Lenders in respect of a majority in
aggregate principal amount of Advances outstanding, the Collateral Agent and the
Borrower may, from time to time, enter into written amendments, supplements or
modifications hereto for the purpose of adding any provision to this Security
Agreement or changing in any manner the rights of the Collateral Agent or the
Borrower hereunder, and, with the written consent of the Lenders in respect of
at least a majority in aggregate principal amount of Advances outstanding, the
Collateral Agent on behalf of the Secured Parties may execute and deliver to the
Borrower a written instrument waiving, on such terms and conditions as may be
specified in such instrument, any of the requirements of this Security
Agreement; provided, however, that no such waiver and no such amendment,
supplement or modification shall (a) amend the definition of Secured Parties or
amend, modify or waive any provision of Section 6 hereof or this Section 9
without the written consent of each Secured Party whose rights under this
Security Agreement would be affected thereby or (b) amend, modify or waive any
provision of Section 8 or otherwise alter the duties, rights or obligations of
the Collateral Agent without the written consent of all the Secured Parties. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Secured Parties and shall be binding upon the Borrower,
the Secured Parties and the Collateral Agent.
In executing any supplement, amendment or modification of this
Security Agreement, the Collateral Agent shall be entitled to receive and shall
be fully protected in relying upon an opinion of counsel stating that the
execution of such supplement, amendment or modification is authorized or
permitted by this Section 9. The Collateral Agent may, but shall not be
obligated to, enter into any such supplement, amendment or modification that
affects the Collateral Agent's own rights, duties or immunities under this
Security Agreement or otherwise.
<PAGE>
The Borrower and the Secured Parties agree not to execute any
supplement, amendment or modification to any Program Document to which the
Collateral Agent is not a party, without the prior written consent of the
Collateral Agent, if the effect of such supplement, amendment or modification
would be to affect the Collateral Agent's rights, duties, or immunities under
this Security Agreement, and they agree to promptly forward to the Collateral
Agent any such supplement, amendment or modification.
SECTION 10. NOTICES.
Unless otherwise expressly provided herein, all notices,
instructions, requests and demands to or upon the respective parties hereto to
be effective shall be in writing and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or when deposited in the mail, postage prepaid, or in the case of telegraphic
notice, when delivered to the telegraph company, or, in the case of facsimile
notice, when sent, confirmation received, addressed as follows, or to such other
addresses as may be hereafter notified by the respective parties hereto:
The Borrower:
MF Receivables Corp. III
370 17th Street, Suite 5060E
Denver, Colorado 80202
Attention: President
Telecopy: (303) 405-6496
The Collateral Agent:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Structured Finance Services
Telecopy: (212) 946-8552
To the Lenders at the address as the Lenders shall have furnished to the
Borrower (with a copy to the Collateral Agent) in writing;
provided, that any notice to or upon the Borrower shall be deemed to have been
duly given or made as aforesaid when so given or made to the Borrower whether or
not any other party indicated above as the recipient of a copy thereof shall
have received a copy of each notice.
SECTION 11. LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT
OF COLLATERAL.
<PAGE>
Except as set forth herein and beyond the safe custody thereof, the
Collateral Agent shall not have any duty as to any Collateral in its possession
or control or the possession or control of any agent or nominee of it or any
income thereof or as to the preservation of rights against prior parties or any
other rights pertaining thereto. The Collateral Agent shall not in any way be
liable by reason of any insufficiency in the Collateral Account unless it is
determined by a court of competent jurisdiction that the Collateral Agent's
gross negligence or willful misconduct was the primary cause of such
insufficiency.
SECTION 12. SEVERABILITY.
Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidation of
the remaining provisions hereof and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
SECTION 13. NO WAIVER; CUMULATIVE REMEDIES.
Neither the Collateral Agent nor the Secured Parties shall by any
act, delay, omission or otherwise be deemed to have waived any of its or their
rights or remedies hereunder and no waiver shall be valid unless in writing,
signed by the Collateral Agent on behalf of the Secured Parties, and then only
to the extent therein set forth. A waiver by the Collateral Agent of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or the Secured Parties would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Collateral Agent or the Secured Parties any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently and are not exclusive of any rights and remedies provided by law.
SECTION 14. PAYMENT OF EXPENSES AND TAXES.
<PAGE>
The Borrower hereby agrees to pay to the Collateral Agent a fee for
its services hereunder equal to the Collateral Agent Fee. The Borrower agrees to
pay, indemnify, and to hold the Collateral Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Security Agreement, and any such other documents, and to pay,
indemnify, and hold the Collateral Agent and its officers, directors,
shareholders, employees, agents and representatives harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Security Agreement and any such other documents
(including, but not limited to, those incurred by any negligent act or negligent
omission to act of the Collateral Agent) (all the foregoing, collectively, the
"indemnified liabilities"); provided, that the Borrower shall not be liable to
the Collateral Agent for any (i) losses incurred by the Collateral Agent as a
result of the fraudulent actions, misrepresentations, gross negligence or
willful misconduct of the Collateral Agent or (ii) losses, claims, damages,
liabilities and expenses arising out of the imposition by any taxing authority
of any federal income, state or local income or franchise taxes, or any other
taxes imposed on or measured by gross or net income, gross or net receipts,
capital, net worth and similar items (including any interest, penalties or
additions with respect thereto) upon the Collateral Agent with respect to its
receipt of the Collateral Agent Fee hereunder (including any liabilities, costs
or expenses with respect thereto). Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent be liable for special,
indirect or consequential loss or damages whatsoever (including but not limited
to lost profits). The obligations of the Borrower under this Section 14 shall
survive the termination of this Security Agreement and the discharge of the
other obligations of the Borrower hereunder and also shall survive the
resignation or removal of the Collateral Agent hereunder.
Promptly after receipt by the Collateral Agent of notice of the
commencement of any action, such Collateral Agent shall, if a claim in respect
thereof is to be made against the Borrower under this Section 14, notify the
Borrower in writing of the commencement thereof, but the omission so to notify
the Borrower will not relieve the Borrower from any liability which it may have
to the Collateral Agent except to the extent the Borrower is prejudiced thereby.
In case any action is brought against the Collateral Agent, and it notifies the
Borrower of the commencement thereof, the Borrower will be entitled to appoint
counsel satisfactory to the Collateral Agent to represent the Collateral Agent
in such action; provided, however, that, if the defendants in any action include
both the Collateral Agent and the Borrower and the Collateral Agent shall have
reasonably concluded that there may be legal defenses available to it which are
different from or additional to those available to the Borrower, the Collateral
Agent shall have the right to select separate counsel to defend such action on
behalf of it. Upon receipt of notice from the Borrower to the Collateral Agent
of its election so to appoint counsel to defend such action and approval by the
Collateral Agent of such counsel, the Borrower will not be liable to the
Collateral Agent under this Section 14 for any legal or other expenses
subsequently incurred by the Collateral Agent in connection with the defense
thereof unless (i) the Collateral Agent shall have employed separate counsel in
accordance with the proviso to the next preceding sentence, (ii) the Borrower
shall not have employed counsel satisfactory to the Collateral Agent to
represent the Collateral Agent within a reasonable time after notice of
commencement of the action or (iii) the Borrower has authorized the employment
of counsel for the Collateral Agent at the expense of the Borrower; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii).
<PAGE>
If the indemnification provided for in this Section 14 is unavailable
or insufficient to hold harmless the Collateral Agent under subsection (a) or
(b) above, then the Borrower shall contribute to the amount paid or payable by
the Collateral Agent as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Borrower on the one
hand and the Collateral Agent on the other from the transactions contemplated by
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Borrower on the one hand and the Collateral Agent on the other in
connection with the actions or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable considerations.
The Collateral Agent and the Borrower agree that it would not be just and
equitable if contributions pursuant to this subsection (c) were to be determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this subsection (c). The amount payable by the Borrower as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by the Collateral Agent in connection with investigating or defending
any action or claim which is the subject of this subsection (c). No person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
The obligations of the Borrower and the Collateral Agent under this
Section 14 shall be in addition to any liability which each of them may
otherwise have.
The agreement, indemnities and other statements of the parties hereto
in or made pursuant to this Section 14 will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any other parties hereto or any of the officers, directors or
controlling persons referred to in this Section 14. The provisions of this
Section 14 shall survive the termination or cancellation of this Agreement.
SECTION 15. SUCCESSORS AND ASSIGNS; GOVERNING LAW.
This Security Agreement and all obligations of the Borrower hereunder
shall be binding upon the successors and assigns of the Borrower, and shall,
together with the rights and remedies of the Collateral Agent hereunder, inure
to the benefit of the Collateral Agent, the Secured Parties and their respective
successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 16. RESERVED
SECTION 17. BANKRUPTCY PETITION AGAINST THE BORROWER.
The Collateral Agent hereby covenants and agrees that, until the date
which is one year and one day after the payment in full of the Advances, it will
not institute against, or join any other Person in instituting against, the
Borrower any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other similar proceeding under the laws of the United States or
any state of the United States.
SECTION 18. MISAPPLICATION OF FUNDS.
The Collateral Agent agrees that any funds incorrectly paid to it by
the Borrower shall be promptly returned to the Borrower upon receipt of written
notice from the Borrower that such funds were incorrectly paid to the Collateral
Agent prior to the Collateral Agent's transfer of such funds in accordance with
this Agreement. The Collateral Agent shall be completely protected against any
liability for returning such funds in reliance on such written notice that funds
were incorrectly paid.
<PAGE>
SECTION 19. COUNTERPART SIGNATURES.
This Agreement may be executed and delivered to you simultaneously in
two (2) or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.
SECTION 20. THIRD PARTY BENEFICIARY.
For all purposes of this Agreement, each of the Lenders shall be a
third party beneficiary of the agreements and covenants herein contained.
SECTION 21. STATUS OF COLLATERAL AGENT.
The parties hereto acknowledge and agree that upon payment in full of
all amounts owing under the Credit Agreement and the release of the Secured
Parties' security interest in the Collateral, the rights of the Collateral Agent
to indemnification and payment of its fees and expenses under this Agreement
shall continue.
SECTION 22. ACTS OF LENDERS.
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Lender may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the Lender in person or by agents duly
appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments is or are
delivered to the Collateral Agent. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Agreement if made in the manner provided in this Section 22.
The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Collateral Agent
deems sufficient.
Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Lender shall bind the Lender in respect of
anything done, omitted or suffered to be done by the Collateral Agent in
reliance thereon, whether or not notation of such action is made upon the
applicable Note.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed by their duly authorized officers as of the date first
set forth above.
MF RECEIVABLES CORP. III
By:
Name:
Title:
MONACO FINANCE, INC.
By:
Name:
Title:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
Name:
Title:
Acknowledged as of this
29th day of July, 1999
DAIWA FINANCE CORP.,
as Initial Lender
By: ..........
Name:
Title:
dated as of
April 16, 1999
Daiwa Finance Corporation
Financial Square
32 Old Slip
New York, NY 10005-3438
Attention: Mr. Harold Gartner
Vice President
Re: Servicing Agreement, dated as of December 4, 1997 (the
"Servicing Agreement"), originally entered into by and
among Monaco Finance, Inc. (the "Monaco"), MF Receivables
Corp. III (the "Borrower"), The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent") and as
Verification Agent (the "Verification Agent"), as amended,
superseded and modified by that certain Supplementary
Servicing Agreement, dated as of even date herewith (the
"Supplementary Servicing Agreement"), by and among Daiwa
Finance Corporation (the "Initial Lender"), the Borrower,
Systems & Services Technologies, Inc., a Delaware
corporation ("SST"), and the Collateral Agent
Ladies and Gentlemen:
Reference is hereby made to the fact that the Servicer, the Borrower, the
Collateral Agent, and the Verification Agent have previously entered into the
Servicing Agreement, which agreement was subsequently amended, superseded and
modified by the Supplementary Servicing Agreement. Each capitalized term used
but not otherwise defined herein has the meaning ascribed thereto in the
Servicing Agreement.
Notwithstanding anything to the contrary contained in the Servicing
Agreement or the Supplementary Servicing Agreement:
(a) Section 4.03(c)(i) of the Servicing Agreement is hereby amended
by deleting the phrase "(and each Subservicer)" as it appears therein;
(b) Section 4.03(c)(ii) of the Servicing Agreement is hereby amended
to read in full as follows: "to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its respective obligations under
this Agreement throughout such quarter.";
(c) Section 4.04(d)(iii) of the Servicing Agreement is
hereby amended to read in full as follows: "removed by the
Borrower."; and
(d) Section 4.05(ii) of the Servicing Agreement is hereby amended by
deleting the phrase "on and after a Servicer Event of Default or Trigger Event,"
as it appears therein.
The terms and provisions set forth in this letter shall modify and
supersede all inconsistent terms and provisions set forth in the Servicing
Agreement and the Supplementary Servicing Agreement and, except as expressly
modified and superseded by this letter, the Servicing Agreement, as amended,
superseded and modified by the Supplementary Servicing Agreement, is ratified
and confirmed in all respects and shall continue in full force and effect.
<PAGE>
Daiwa Finance Corporation
dated as of April 16, 1999
Page 28
This letter may be executed in two or more counterparts, each of which
will be deemed to be an original but all of which together will constitute one
and the same instrument. This letter shall be governed by and construed in
accordance with the internal laws of the State of New York.
Very truly yours,
<PAGE>
MF RECEIVABLES CORP. III
By: _____________________
Name:
Title:
MONACO FINANCE, INC.
By: ______________________
Name:
Title:
<PAGE>
ACKNOWLEDGED AND AGREED:
THE CHASE MANHATTAN BANK
By: _______________________
Name:
Title:
DAIWA FINANCE CORPORATION
By: _______________________
Name:
Title:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By: _______________________
Name:
Title:
dated as of
April 16, 1999
Daiwa Finance Corporation
Financial Square
32 Old Slip
New York, NY 10005-3438
Attention: Mr. Harold Gartner
Vice President
Re: Servicing Agreement, dated as of December 22, 1997 (the
"Servicing Agreement"), originally entered into by and
among Monaco Finance, Inc. (the "Monaco"), MF Receivables
Corp. IV (the "Borrower"), The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent") and as
Verification Agent (the "Verification Agent"), as amended,
superseded and modified by that certain Supplementary
Servicing Agreement, dated as of even date herewith (the
"Supplementary Servicing Agreement"), by and among Daiwa
Finance Corporation (the "Initial Lender"), the Borrower,
Systems & Services Technologies, Inc., a Delaware
corporation ("SST"), and the Collateral Agent
Ladies and Gentlemen:
Reference is hereby made to the fact that the Servicer, the Borrower, the
Collateral Agent, and the Verification Agent have previously entered into the
Servicing Agreement, which agreement was subsequently amended, superseded and
modified by the Supplementary Servicing Agreement. Each capitalized term used
but not otherwise defined herein has the meaning ascribed thereto in the
Servicing Agreement.
Notwithstanding anything to the contrary contained in the Servicing
Agreement or the Supplementary Servicing Agreement:
(a) Section 4.03(c)(i) of the Servicing Agreement is hereby amended
by deleting the phrase "(and each Subservicer)" as it appears therein;
(b) Section 4.03(c)(ii) of the Servicing Agreement is hereby amended
to read in full as follows: "to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its respective obligations under
this Agreement throughout such quarter.";
(c) Section 4.04(d)(iii) of the Servicing Agreement is
hereby amended to read in full as follows: "removed by the
Borrower."; and
(d) Section 4.05(ii) of the Servicing Agreement is hereby amended by
deleting the phrase "on and after a Servicer Event of Default or Trigger Event,"
as it appears therein.
The terms and provisions set forth in this letter shall modify and
supersede all inconsistent terms and provisions set forth in the Servicing
Agreement and the Supplementary Servicing Agreement and, except as expressly
modified and superseded by this letter, the Servicing Agreement, as amended,
superseded and modified by the Supplementary Servicing Agreement, is ratified
and confirmed in all respects and shall continue in full force and effect.
<PAGE>
Daiwa Finance Corporation
dated as of April 16, 1999
Page 18
This letter may be executed in two or more counterparts, each of which
will be deemed to be an original but all of which together will constitute one
and the same instrument. This letter shall be governed by and construed in
accordance with the internal laws of the State of New York.
Very truly yours,
<PAGE>
MF RECEIVABLES CORP. IV
By: _____________________
Name:
Title:
MONACO FINANCE, INC.
By: ______________________
Name:
Title:
<PAGE>
ACKNOWLEDGED AND AGREED:
THE CHASE MANHATTAN BANK
By: _______________________
Name:
Title:
DAIWA FINANCE CORPORATION
By: _______________________
Name:
Title:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By: _______________________
Name:
Title:
PLEDGE AND CUSTODIAL AGREEMENT
This PLEDGE AND CUSTODIAL AGREEMENT, dated as of July 28, 1999 (this
"Agreement"), is entered into among MF RECEIVABLES HOLDING CORP., a Delaware
corporation (the "Company"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, as trustee under the Indenture Documents (the
"Indenture Trustee"), ROTHSCHILD NORTH AMERICA, INC., a Delaware corporation
("Rothschild"), and THE BANK OF NEW YORK, a New York banking corporation, as
collateral agent (the "Collateral Agent").
RECITALS
(Capitalized terms have the meaning defined below.)
WHEREAS, Monaco Finance, Inc., a Colorado corporation ("Monaco"), and the
Indenture Trustee have previously entered into the Indenture Documents, pursuant
to which, among other things, Monaco has incurred the Indenture Obligations;
WHEREAS, Monaco, the Company and the Indenture Trustee, with the consent
of the holders of notes issued pursuant to the Indenture Documents, have agreed
to enter into that certain Consent and Amendment No. 2 to Indenture and Related
Documents, dated as of even date herewith (the "Indenture Amendment"), pursuant
to which, among other things, the Company has agreed to assume all of the
obligations of Monaco in respect of the Indenture Obligations;
WHEREAS, Monaco and Rothschild have previously entered into the Rothschild
Documents, pursuant to which, among other things, Monaco has incurred the
Rothschild Obligations; and
WHEREAS, Monaco, the Company and Rothschild have agreed to enter into that
certain Amendment to Amended and Restated Note Purchase Agreement, dated as of
even date herewith, (the "Rothschild Amendment"), pursuant to which, among other
things, the Company has agreed to assume all of the obligations of Monaco in
respect of the Rothschild Obligations;
WHEREAS, the execution and delivery hereof is a condition to the
effectiveness of each of the Indenture Amendment and the Rothschild
Amendment;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and agreements contained herein and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
AGREEMENT
Section 1. Certain Defined Terms; Certain Rules of Construction.
(a) Certain Defined Terms. As used herein:
"Agreement" means this Pledge and Custodial Agreement.
<PAGE>
48
3360.03/Pledge&Custodial
"Ancillary Rights" means all rights, claims and benefits of the Company
against any Person arising out of, relating to or in connection with the Pledged
Shares, whether arising in contract, in tort or otherwise.
"Applicable Percentage" means: (i) as to the Indenture Trustee, (A) if the
Indenture Obligations are still outstanding but the Rothschild Obligations have
been repaid in full, 100% and (B) otherwise, a fraction, the numerator of which
is the outstanding principal amount of the Indenture Obligations as of the
Effective Date and the denominator of which is the outstanding principal amount
of the Secured Obligations as of the Effective Date (in each case, after giving
effect to all payments made on account of such Secured Obligations on or before
the Effective Date); and (ii) as to Rothschild, (A) if the Rothschild
Obligations are still outstanding but the Indenture Obligations have been repaid
in full, 100% and (B) otherwise, a fraction, the numerator of which is the
outstanding principal amount of the Rothschild Obligations as of the Effective
Date and the denominator of which is the outstanding principal amount of the
Secured Obligations as of the Effective Date (in each case, after giving effect
to all payments made on account of such Secured Obligations on or before the
Effective Date).
"Collateral" means, collectively, the Pledged Shares, the
Ancillary Rights and all Proceeds.
"Collateral Agent" has the meaning set forth in the introductory paragraph
of this Agreement or any successor under this Agreement as provided in Section
13.
"Company" has the meaning set forth in the introductory
paragraph of this Agreement.
"Default Notice" means a written notice, substantially in the form
attached hereto as Exhibit A, delivered by a Secured Party to the Collateral
Agent, the other Secured Party and the Company pursuant to Section 12(c).
"Directing Party" means, collectively, until such time as the Secured
Obligations have been finally repaid in full, Heller Financial, Inc., BDC
Partners I, L.P. and Rothschild; provided that, from and after the date that any
Secured Obligation has been finally repaid in full, the term "Directing Party"
shall no longer include the Person to whom such Secured Obligation was owed.
"Effective Date" has the meaning set forth in Section 15(e)(ii).
"Event of Default" has the meaning ascribed to such term in any
Transaction Document.
"Indenture Amendment" has the meaning set forth in the recitals
hereof.
"Indenture Documents" means, collectively, the Indenture, dated as of
January 9, 1996, between the Company and the Indenture Trustee, all outstanding
notes issued pursuant thereto by the Company and all agreements, documents and
instruments entered into in connection therewith (including the Indenture
Amendment).
"Indenture Obligations" means the Obligations of the Company
under the Indenture Documents.
"Indenture Trustee" has the meaning set forth in the introductory
paragraph of this Agreement or any successor under the Indenture Documents.
"Lien" means any lien, security interest, charge or encumbrance or other
similar right or claim of any Person.
"Merger" has the meaning ascribed thereto in Section 6(b).
<PAGE>
"MF III" means MF Receivables Corp. III, a Delaware corporation, which,
prior to the effectiveness of the Merger, was a wholly owned subsidiary of
Monaco and, as of the Effective Date, is a wholly owned Subsidiary of the
Company.
"MF IV" means MF Receivables Corp. IV, a Delaware corporation, which,
prior to the effectiveness of the Merger, was a wholly owned subsidiary of
Monaco and, as of the Effective Date, is a wholly owned Subsidiary of the
Company.
"Obligations" means, with respect to any Person, without duplication of
amounts and at any time any determination thereof is to be made, the aggregate
then outstanding amount of all obligations, indebtedness and liabilities of such
Person of every kind and character, including: (i) all obligations,
indebtedness, and liabilities arising under successive transactions renewing,
increasing, extending or continuing any indebtedness, changing the interest rate
or other terms thereof or creating new or additional indebtedness after prior
indebtedness has been in whole or in part satisfied; and (ii) all obligations,
indebtedness and liabilities, whether for principal, interest (including
interest that, but for the filing of a petition in bankruptcy with respect to
such Person, would have accrued on any such obligations, indebtedness or
liabilities), reimbursement obligations (including reimbursement obligations
with respect to letters of credit and guaranties), fees, costs, expenses,
premiums, charges, attorneys' fees, and indemnity obligations; in all cases,
whether previously, now or hereafter made, incurred, or created, whether
voluntarily or involuntarily and however arising, whether now due or due in the
future, whether absolute or contingent, whether liquidated or unliquidated,
whether determined or undetermined, whether such Person may be liable
individually or jointly with others, and whether recovery may be or hereafter
become barred by any statute of limitations or become otherwise unenforceable
for any reason whatsoever.
"Permitted Lien" means, with respect to all or any portion of the
Collateral, the Lien in favor of the Collateral Agent granted hereunder.
"Person" means any individual, corporation, partnership, association,
joint-stock company, limited liability company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Pledged Shares" means 100% of the outstanding common stock of MF IV,
together with all related certificates, options or rights of any nature
whatsoever that may be issued or granted to the Company in respect of such
common stock while this Agreement is in effect.
"Proceeds" means all "proceeds" as such term is defined in Section 9306(l)
of the UCC in effect on the date hereof and, in any event, shall include all
payments or other income from the Pledged Shares, collections thereon or
distributions with respect thereto and all proceeds and amounts received in
respect of the Ancillary Rights.
"Rothschild" has the meaning set forth in the introductory
paragraph of this Agreement.
"Rothschild Amendment" has the meaning set forth in the recitals
hereof.
"Rothschild Documents" means, collectively, that certain Amended and
Restated Note Purchase Agreement, dated as of January 9, 1996, between the
Company and Rothschild, all outstanding notes issued pursuant thereto by the
Company in favor of Rothschild, and all agreements, documents and instruments
entered into in connection therewith (including the Rothschild Amendment).
<PAGE>
"Rothschild Obligations" means the Obligations of the Company
owing under the Rothschild Documents.
"Securities Act" means the Securities Act of 1933, as amended.
"Secured Obligations" means, collectively, the Indenture
Obligations and the Rothschild Obligations.
"Secured Parties" means, collectively Rothschild and the Indenture
Trustee; provided that, from and after the date that any Secured Obligation has
been finally repaid in full, the term "Secured Parties" shall no longer include
the Person to whom such Secured Obligation was owed.
"Termination Date" means the date on which all Secured Obligations shall
have been finally repaid in full.
"Transaction Documents" means, collectively, the Indenture Documents and
the Rothschild Documents; provided that, from and after the date that all of the
Secured Obligations evidenced by any of the foregoing Transaction Documents are
finally repaid in full, the term "Transaction Documents" shall no longer include
such documents.
"UCC" means the Uniform Commercial Code from time to time in effect in the
State of New York.
(b) Certain Rules of Construction. Unless the context of this Agreement
clearly requires otherwise: (i) references to the plural include the singular
and to the singular include the plural; (ii) references to any gender include
any other gender; (iii) the words "include" and "including" are not limiting;
(iv) the word "or" has the inclusive meaning represented by the phrase "and/or";
(v) the words "hereof," "herein," "hereby" and "hereunder," and any other
similar words, refer to this Agreement as a whole and not to any particular
provision hereof; (vi) section, subsection, clause, exhibit and schedule
references are to this Agreement; and (vii) each term used herein that is
defined in Article 8 or Article 9 of the UCC has the meaning ascribed thereto in
the UCC. Section and subsection headings are for convenience of reference only,
shall not constitute a part of this Agreement for any other purpose and shall
not affect the construction of this Agreement. All exhibits and schedules
attached hereto are incorporated herein by this reference. Any reference herein
to this Agreement or any other agreement, document or instrument includes all
permitted alterations, amendments, changes, extensions, modifications, renewals
or supplements thereto or thereof, as applicable.
Section 2. Statements as to Outstanding Obligations; Amendments of
Documents.
(a) Current Obligations. As of the Effective Date (after crediting all
payments of principal and interest made on or before such date):
(i) Rothschild represents and warrants to the other Secured Party,
the Company and the Collateral Agent that the outstanding amount of the
Rothschild Obligations equals $511,446.21; and
(ii) The Indenture Trustee represents and warrants to the other
Secured Party, the Company and the Collateral Agent that the outstanding
amount of the Indenture Obligations equals $1,935,827.79.
<PAGE>
(b) Future Statements of Obligations. Upon the reasonable request of the
Collateral Agent made at any time and from time to time hereunder, each Secured
Party shall provide the other Secured Party, the Company and the Collateral
Agent with a written statement as to the then outstanding principal amount of
the Secured Obligations owed to such Person, and such statement shall be
conclusive and binding on such Secured Party, absent manifest error.
(c) Amendments of Documents. Notwithstanding anything to the contrary
contained in the Indenture Documents and the Rothschild Documents, from and
after the Effective Date: (i) neither the Indenture Trustee nor the Company may
amend, modify or otherwise alter the Indenture Documents in any material respect
without the prior written consent of Rothschild; and (ii) neither Rothschild nor
the Company may amend, modify or otherwise alter the Rothschild Documents in any
material respect without the prior written consent of the Indenture Trustee.
Section 3. Appointment and Basic Duties of Collateral Agent.
(a) Appointment. Each Secured Party hereby appoints and authorizes the
Collateral Agent to act on its behalf with such powers as are specifically
delegated to the Collateral Agent by the terms of this Agreement, together with
such other powers as are reasonably incidental thereto, and the Collateral Agent
hereby accepts such appointment and agrees to perform the duties of the
Collateral Agent hereunder for the benefit of the Secured Parties.
(b) Ministerial Duties. The role of the Collateral Agent shall be
ministerial and shall consist of carrying out the will of the Directing Party in
accordance with the provisions of this Agreement, and the Collateral Agent shall
not, and shall not be deemed by any other party hereto to, be acting as, or
making the representations of, a broker. The Collateral Agent shall act or
refrain from acting solely in accordance with the instruction of the Directing
Party, provided that the Collateral Agent shall not be required to take any
action, or refrain from taking any action, if the Collateral Agent in good faith
believes that, in doing so or not doing so, it will not be adequately
indemnified, or that to do so (or not to do so) would violate applicable legal
or contractual duties or obligations of the Collateral Agent, or otherwise would
result in the imposition of liability upon the Collateral Agent. Any
instructions by the Directing Party to the Collateral Agent shall be in writing
and shall be sufficiently specific and explicit as to make compliance a
ministerial rather than a discretionary action. Such instructions shall include
not merely objectives but also the means to be used to achieve those objectives.
In carrying out its duties set forth herein, the parties hereto agree that: (i)
the Collateral Agent shall cause all Collateral to be held at all times in
segregated accounts identified as held for the benefit of the Secured Parties
and none of the Collateral shall be commingled with any other assets at any time
held by the Collateral Agent; and (ii) unless otherwise agreed, the Directing
Party, the Secured Parties and the Company shall give the Collateral Agent all
notices, instructions or directions in connection herewith in writing.
(c) Agreement of Collateral Agent and Secured Parties Respecting MF IV.
Notwithstanding anything to the contrary contained herein, in the Transaction
Documents or in any other agreement, document or instrument entered into in
connection with the foregoing, each of the Secured Parties and the Collateral
Agent agrees that, irrespective of whether any such Person has become the
registered owner of the Pledged Shares in accordance with the provisions hereof,
no such Person will: (i) take any action that would cause MF IV to breach any of
its covenants in respect of any of its material contracts or agreements; or (ii)
prior to the date that is one year and one day after the final repayment in full
of all obligations owed under any material agreement or contract of MF IV, file
any involuntary petition or otherwise institute any bankruptcy, reorganization,
insolvency or liquidation proceeding or other proceeding under any federal or
state bankruptcy or similar law against MF IV or cause MF IV to institute any
such proceeding.
<PAGE>
Section 4. Pledge; Grant of Security Interest; Collateral
Maintenance.
(a) Grant of Security Interest. On and as of the Effective Date, the
Company hereby grants to the Collateral Agent, for the equal and ratable benefit
of the Secured Parties, a first priority security interest in the Collateral, as
collateral security for the prompt payment and performance when due (whether at
the stated maturity, by acceleration or otherwise) of the Secured Obligations.
(b) Delivery of Collateral. On the Effective Date, the Company shall
deliver to the Collateral Agent, on behalf of all Secured Parties, all
certificates evidencing the Pledged Shares, together with stock powers in blank
fully executed by the Company in respect of the Pledged Shares. In addition, on
the Effective Date, the Company shall cause MF IV to execute and deliver to
Daiwa Finance Corporation an irrevocable instruction letter in the form attached
hereto as Exhibit B, and thereafter, the Company shall cause MF IV to execute
and deliver to such other party as the Directing Party shall reasonably request,
an irrevocable instruction letter in substantially the form attached hereto as
Exhibit B.
(c) Duty of Collateral Agent Respecting the Collateral. The Collateral
Agent shall hold and safeguard the Collateral for the benefit of the Secured
Parties as provided herein, provided that its sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9207 of the UCC or otherwise, shall be to deal with it
in the same manner as the Collateral Agent deals with similar securities and
property for its own account, provided further that the Collateral Agent shall
have no obligation to invest funds held hereunder.
(d) Collateral Agent as Secured Party. The Collateral Agent shall be named
as the secured party and lienholder in its capacity as the Collateral Agent for
the benefit of Secured Parties on each UCC-1 financing statement pertaining to
the Collateral. Except as otherwise expressly permitted hereby and
notwithstanding anything to the contrary contained in any Transaction Document,
all security interests in and liens upon the Collateral in favor of the Secured
Parties shall be administered solely by the Collateral Agent, acting in a
ministerial capacity on behalf of the Secured Parties in accordance with the
terms hereof. From and after the date of this Agreement, all material decisions
with respect to the taking and perfection of security interests in and liens
upon the Collateral shall be approved by the Directing Party, but the Collateral
Agent and its counsel shall be responsible for the ministerial details of
implementing the decisions of the Directing Party. Notwithstanding anything to
the contrary contained herein, during the term of this Agreement, the Collateral
Agent: (i) is and will be acting on behalf of the Secured Parties as a
securities intermediary under Article 8 of the UCC and a "bailee" (as such term
is used in Section 9305) of the UCC in connection herewith; (ii) shall maintain
all Collateral in the name of, and for the benefit of, the Secured Parties as
the holders of security interests in and liens upon the Collateral; (iii) shall
treat all of the assets held by it as financial assets under Article 8 of the
UCC; (iv) shall not hold, or exercise control (within the meaning of Article 8
of the UCC) over, all or any portion of the Collateral for the benefit of any
other Person; (v) has received notice of each Secured Party's interest in the
Collateral; and (vi) shall take instructions only from the Directing Party
(without any consent of the Company) with respect to the Collateral.
(e) Execution of Financing Statements. Pursuant to Section 9402 of the
UCC, the Company authorizes the Collateral Agent (without imposing any
obligation on the part of the Collateral Agent) to file financing statements
with respect to the Collateral without the signature of the Company in such form
and in such filing offices as the Directing Party reasonably determines
appropriate to perfect the security interests of the Collateral Agent under this
Agreement. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement for filing in any jurisdiction.
<PAGE>
(f) Maintenance of Collateral. To the extent expressly directed by the
Directing Party (and subject to all of the Collateral Agent's indemnification
and other rights with respect to the Directing Party), the Collateral Agent
shall take the steps designated by the Directing Party to administer, protect or
otherwise deal with the Collateral.
(g) Voting Rights. Subject to Section 12(d)(ii), the organizational
documents of MF IV and the terms and conditions of the Transaction Documents,
the Company shall be permitted to exercise all voting rights with respect to the
Pledged Shares; provided that no vote shall be cast or corporate right exercised
or other action taken that could reasonably be expected to impair all or any
portion of the Collateral or the Secured Obligations or that would be
inconsistent with or result in any violation of any provision of the Transaction
Documents or this Agreement.
Section 5. Collateral Agent's Appointment as Attorney-in-Fact.
The Company hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent of the Collateral Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Company and in the name of the
Company or in the Collateral Agent's own name, at the direction of the Directed
Party, for the purpose of carrying out the terms of this Agreement and to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, including any financing statements, endorsements, assignments or
other instruments of transfer. All powers, authorizations and agencies contained
in this Section, being coupled with an interest, are irrevocable until the
Termination Date.
Section 6. Representations and Warranties of the Company.
The Company represents and warrants to the Collateral Agent, for the
benefit of the Secured Parties, as follows (which representations and warranties
shall be true and correct at all times during the term hereof):
(a) Chief Executive Office. Except to the extent the Company has provided
notice to the contrary in accordance with Section 7(a), the Company's chief
executive office is located at 370 17th Street, Suite 5060G, Denver, Colorado
80202.
(b) Merger of MF IV. On or before the Effective Date, MF IV shall have
merged (the "Merger") with MF III, with MF IV (i) being the surviving
corporation and (ii) among other things, acquiring all the assets, and assuming
all of the Obligations, of MF III. The Merger does not violate any provisions of
any law or any order of any court or governmental authority or agency and does
not conflict with, violate or result in any breach of the terms, conditions or
provisions of, or constitute a default under the organizational documents of MF
III or MF IV or any indenture or other material agreement or instrument to which
either MF III or MF IV is a party or by which either MF III or MF IV may be
bound or result in the imposition of any liens or encumbrances on any property
of MF IV (other than those in existence on the date hereof in favor of Daiwa
Finance Corporation).
(c) Pledged Shares. The Pledged Shares (i) constitute all of the common
stock of MF IV and (ii) have been duly and validly issued and are fully paid and
non-assessable.
<PAGE>
(d) Ownership. The Company is the record and beneficial owner of, and has
good and marketable title to, the Pledged Shares, free of any and all Liens or
options in favor of, or claims of, any other Person, except Permitted Liens.
Section 7. Covenants of the Company.
The Company covenants and agrees with the Collateral Agent, for the
benefit of the Secured Parties, that, from and after the date of this Agreement
until the Termination Date:
(a) Change of Chief Executive Office, Name, Identity or Structure. The
Company will not, unless it shall have given the Collateral Agent and each
Secured Party at least 30 days prior written notice of such change, (i) change
the location of its chief executive office from that specified in paragraph 5(a)
or (ii) change its name, identity or corporate structure to such an extent that
any financing statement filed by the Collateral Agent in connection with this
Agreement would become seriously misleading.
(b) Trust Arrangement. If the Company shall, as a result of its ownership
of the Collateral, become entitled to receive or shall receive any certificate,
option or rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for the Collateral, or otherwise in respect thereof, the
Company shall accept the same as the agent of the Collateral Agent, hold the
same in trust for the Collateral Agent and deliver the same forthwith to the
Collateral Agent in the exact form received, duly endorsed by the Company to the
Collateral Agent, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Secured Obligations; provided
that the Company shall direct that all amounts or property paid or to be paid
upon or in respect of the Collateral shall be paid to the Collateral Agent for
the benefit of the Secured Parties to be applied to the repayment of the Secured
Obligations as provided herein. If any money or property so paid or distributed
in respect of the Collateral shall be received by the Company, the Company
shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Collateral Agent, segregated
from other funds of the Company, as additional collateral security for the
Secured Obligations.
(c) Sales; Liens; Restrictive Agreements. Without the prior written
consent of the Collateral Agent, the Company will not (i) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, (ii) create, incur or permit to exist any Lien, option or
claim in favor of any Person on or with respect to all or any portion of the
Collateral, except for Permitted Liens or (iii) enter into any agreement or
undertaking restricting the right or ability of the Company or the Collateral
Agent to sell, assign or transfer all or any portion of the Collateral.
(d) Further Assurances. At any time and from time to time, upon the
written request of the Collateral Agent, and at the sole expense of the Company,
the Company will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the Collateral Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the Collateral
Agent, duly endorsed in a manner satisfactory to the Collateral Agent, to be
held as Collateral pursuant to this Agreement.
(e) Taxes and Other Charges. The Company shall pay, and save the
Collateral Agent harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to all or
any portion of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
<PAGE>
(f) No Further Issuances. Without the prior written consent of the Secured
Parties, the Company shall not cause MF IV to issue any additional shares of
capital stock or instruments convertible into, or options for the purchase of,
the same.
(g) Certain Prohibited Actions. The Company shall not: (i) take any action
that would cause MF IV to breach any of its covenants in respect of any of its
material contracts or agreements; or (ii) prior to the date that is one year and
one day after the final repayment in full of all obligations owed under any
material agreement or contract of MF IV, file any involuntary petition or
otherwise institute any bankruptcy, reorganization, insolvency or liquidation
proceeding or other proceeding under any federal or state bankruptcy or similar
law against MF IV or cause MF IV to institute any such proceeding.
Section 8. Representations and Warranties of All Parties.
Each of the parties hereto represents and warrants to the other parties
hereto as follows:
(a) Authority. Such Person has full corporate power, authority and legal
right to enter into this Agreement and the other agreements entered into in
connection herewith to which such Person is a party. The execution and delivery
by such Person of this Agreement and the agreements entered into in connection
herewith to which such Person is a party: (i) have been duly authorized by all
necessary corporate action on the part of such Person; (ii) are not in
contravention of the terms of the organizational documents of such Person or of
any indenture, agreement or undertaking to which such Person is a party or by
which such Person or any of its property is bound; (iii) do not and will not
require any governmental consent, registration or approval; (iv) do not and will
not contravene any contractual or governmental restriction to which such Person
or any of its property may be subject; and (v) do not and will not, except as
contemplated herein, result in the imposition of any lien, charge, security
interest or encumbrance upon any property of such Person under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other material
agreement or instrument to which such Person is a party or by which such Person
or any of its property may be bound or affected.
(b) Binding Effect. This Agreement and all of the other agreements entered
into by such Person in connection herewith have been duly executed and delivered
by such Person, are the legal, valid and binding obligations of such Person and
are enforceable against such Person in accordance with their respective terms,
subject to applicable bankruptcy, reorganization, receivership, conservatorship,
insolvency, moratorium and other laws relating to or affecting creditors' rights
generally or the rights of creditors of banks and to the general principles of
equity (whether such enforceability is considered in a proceeding in equity or
at law).
Section 9. No Limitation Intended.
Except as set forth in Section 10, each Secured Party reserves any rights,
Liens and other interests it may have against the Company under the Transaction
Documents to which it is a party.
Section 10. Priorities.
Notwithstanding anything to the contrary contained in the Transaction
Documents and notwithstanding the time of granting of any Liens in favor of any
Secured Party, or the time of filing or recording of any financing statements,
fixture filings, or assignments or other notices under the UCC or any other
applicable law:
<PAGE>
(a) Secured Parties Pari Passu. The Liens and beneficial rights of the
Secured Parties in and to the Collateral shall be pari passu. In this regard:
(i) no Secured Party shall enforce or otherwise apply its Lien in, or
otherwise attempt to realize upon, any Collateral until the date that is
five (5) business days following the delivery of written notice of its
intention to so enforce or apply such Lien to the other Secured Party in
compliance with Section 15(d); and
(ii) upon the delivery of written notice as required in clause (i)
above, each Secured Party shall share (unless such sharing is prohibited
by applicable law), on a pro rata basis according to its Applicable
Percentage, in the net proceeds of the sale or other disposition of, or
any realization upon, any Collateral.
(b) Other Priorities. Except as otherwise specifically provided herein,
the priority of the Lien of each Secured Party in the assets of the Company and
in the Collateral shall be determined in accordance with the provisions of the
UCC or other applicable law.
Section 11. Waiver of Marshaling.
Except as specifically set forth herein, each of the Secured Parties
hereby specifically waives and renounces any rights which it may have, whether
at law or in equity, to require any party hereto to marshal any collateral it
may hold, or any portion thereof or otherwise to require any other party to seek
satisfaction from any particular Person.
Section 12. Application of Payments; Rights of the Collateral
Agent; Remedies.
(a) Receipt of Moneys and Property. The Collateral Agent shall receive all
amounts paid to it or property received by it in respect of the Collateral
(including Proceeds) in trust (as collateral security on account of all of the
Secured Obligations) for the benefit of the Secured Parties and shall distribute
the foregoing solely as provided in Section 12(b).
(b) Priority of Distributions. Irrespective of whether an Event of Default
shall have occurred and be continuing, the Collateral Agent shall distribute all
monies paid to it or property received by it in respect of the Collateral
(including Proceeds) in the following order of priority:
(i) first, to the Collateral Agent, on account of any fees, costs and
expenses (including reasonable attorneys' fees, costs and expenses)
incurred by it in connection with the performance of its obligations
hereunder as directed by the Directed Party;
(ii) next, to each Secured Party, pro rata in accordance with its
respective Application Percentage, until the Secured Obligations have been
reduced to zero; and
(iii)finally, to the Company, any remainder.
<PAGE>
(c) Default Notices. Upon the occurrence of an Event of Default, the
applicable Secured Party shall deliver to the Collateral Agent a Default Notice,
with a copy to each other Secured Party and the Company. Such Secured Party
shall rescind such Default Notice upon the earlier of: (i) the waiver or cure of
the Event(s) of Default referred to in such Default Notice in accordance with
the provisions of the related Transaction Document; and (ii) the final repayment
in full of the Secured Obligations related to such Transaction Document.
(d) Rights Following Default Notice. On and after the date of receipt of a
Default Notice delivered pursuant to the terms hereof:
(i) The Collateral Agent may, and at the direction of the Directing
Party shall, exercise, in addition to all other rights and remedies
granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights
and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, the Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice
of any kind (except any notice required by law referred to below) to or
upon the Company or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, or may forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Collateral Agent or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk, all
as fiduciary for the Secured Parties. The Collateral Agent, any Secured
Party and any holder of any of the Secured Obligations (and any affiliate
of any of the foregoing) shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in the Company, which right or equity
is hereby waived or released. The Collateral Agent shall apply any
Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale (after
deducting all reasonable costs and expenses of every kind incurred in
respect thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or its rights of the
Collateral Agent hereunder, including reasonable attorneys' fees, costs
and expenses of counsel to the Collateral Agent), to the payment in whole
or in part of the Secured Obligations, in accordance with Section 12(b),
and only after such application and after the payment by the Collateral
Agent of any other amount required by any provision of law, including
Section 9504(l)(c) of the UCC, need the Collateral Agent account for the
surplus, if any, to the Company. To the extent permitted by applicable
law, the Company waives all claims, damages and demands it may acquire
against the Collateral Agent or any Secured Party arising out of the
exercise by the Collateral Agent of any rights hereunder. If any notice of
a proposed sale or other disposition of Collateral shall be required by
law, such notice shall be deemed reasonable and proper if given at least
10 days before such sale or other disposition.
<PAGE>
(ii) All Pledged Shares may and, at the direction of the Directing
Party, shall be registered in the name of the Collateral Agent or its
nominee, and the Collateral Agent or its nominee may thereafter exercise
(A) all voting and other rights pertaining to the Pledged Shares at any
meeting of shareholders of MF IV or otherwise and (B) all rights,
privileges or options pertaining to the Collateral as if it were the
absolute owner thereof (including upon the exercise by the Company, at the
direction of the Collateral Agent, or the Collateral Agent of any right,
privilege or option pertaining to the Collateral, and, in connection
therewith, the right to deposit and deliver all or any portion of the
Collateral with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Collateral
Agent may determine), all without liability (to the extent permitted by
law) except to account for property actually received by it, provided that
the Collateral Agent shall have no duty to the Company to exercise any
such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing. To permit the Collateral Agent to
exercise the voting and other rights which it is entitled to exercise
pursuant to this Section, the Company shall, if necessary, upon written
demand therefor by the Collateral Agent, from time to time execute and
deliver (or cause to be executed and delivered) to the Collateral Agent
all such proxies, payment orders and other instruments as the Collateral
Agent may reasonably request.
(iii)The Company recognizes that the Collateral Agent may be unable
to effect a public sale of any or all of the Collateral, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution
or resale thereof. The Company acknowledges and agrees that any such
private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit MF IV or the Company to register such securities for
public sale under the Securities Act, or under applicable state securities
laws, even if MF IV or the Company would agree to do so.
(iv) The Company further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale
or sales of all or any portion of the Collateral pursuant to this Section
valid and binding and in compliance with any and all other applicable
requirements of law. The Company further agrees that a breach of any of
the covenants contained in this Section will cause irreparable injury to
the Secured Parties and that the Secured Parties have no adequate remedy
at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against the Company, and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default had occurred and
was continuing at the time that the Collateral Agent gave notice or took
any action pursuant to this Section.
(e) No Condition to Exercise Rights. The rights of the Collateral Agent
hereunder shall not be conditioned or contingent upon the pursuit by the
Collateral Agent of any right or remedy against MF IV or against any other
Person which may be or become liable in respect of all or any part of the
Secured Obligations or against any collateral security therefor, guarantee
thereof or right of offset with respect thereto. The Collateral Agent shall not
be liable for any failure to demand, collect or realize upon all or any part of
the Collateral or for any delay in doing so, nor shall the Collateral Agent be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Company or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
(f) Distributions by Wire Transfer. All distributions of amounts required
to be made by the Collateral Agent to any Person hereunder shall be made by wire
transfer of immediately available funds in accordance with the wire instructions
set forth in Section 15(d).
<PAGE>
Section 13. The Collateral Agent.
(a) Merger. Any Person into which the Collateral Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Collateral Agent shall be a
party, or any Person succeeding to all or substantially all of the corporate
trust business of the Collateral Agent shall be the successor of the Collateral
Agent hereunder without any further act on the part of any party hereto.
(b) Removal; Resignation.
(i) The Directing Party may at any time remove and discharge the
Collateral Agent or any successor to the Collateral Agent thereafter
appointed from the performance of its duties under this Agreement by
written notice from the Directing Party to the Collateral Agent or any
successor to the Collateral Agent, as applicable, with a copy to each
other Secured Party and the Company. Such removal shall take effect upon
the appointment of a successor to the Collateral Agent by the Secured
Parties, which successor shall be a bank or trust company acceptable to
each Secured Party and the Company, which approval shall not be
unreasonably withheld.
(ii) The Collateral Agent or any successor to the Collateral Agent
may resign at any time by giving thirty (30) days prior written notice to
each other party hereto. Such resignation shall take effect upon the
appointment of a successor to the Collateral Agent by the Secured Parties,
which successor shall be a bank or trust company acceptable to each
Secured Party and the Company, which approval shall not be unreasonably
withheld.
(iii)Each of the parties hereto agrees that it shall cooperate with
the other parties hereto in connection with the appointment of a
replacement for the Collateral Agent.
(c) Representations and Warranties. The Collateral Agent represents and
warrants that: (i) it is a banking corporation, duly organized, validly existing
and in good standing under the laws of the State of New York and has the power
and authority to own it assets and transact the business in which it is
presently engaged; (ii) it has the full power and authority to execute, deliver
and perform and to enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, deliver and performance of
this Agreement; (iii) the consummation of the transactions contemplated hereby,
and the fulfillment of the terms hereof will not conflict with, result in any
breach of nor constitute a default under, the articles of association or by-laws
of the Collateral Agent, or any indenture, agreement, or other instrument to
which the Collateral Agent is a party or by which it shall be bound, nor violate
any law or any order, rule or regulation applicable to the Collateral Agent;
(iv) all approval, licenses, authorization, consents, orders or other actions or
registrations with any person or any governmental body or official required to
be obtained on or prior to the date hereof in connection with the execution and
delivery of this Agreement and the performance of the terms hereof have been
obtained; (v) it is a trust company which regularly accepts in the ordinary
course of business securities of the same type as the Collateral as custodial
service for customers and maintains in the State of New York securities accounts
for its customers; and (vi) it is not a clearing corporation or a broker.
Section 14. Limitation of Liability; Indemnification; Compensation.
<PAGE>
(a) Limitation of Liability. The Collateral Agent may conclusively rely on
and shall be protected in acting upon any certificate, instrument, opinion,
notice, letter, facsimile, telegram or other document delivered to it and which
in good faith it believes complies with the terms of this Agreement. The
Collateral Agent may rely conclusively on and shall be protected in acting upon
the written instructions of any designated officer of the Directing Party or,
following the final payment in full of the Secured Obligations, the Company. In
addition, the Collateral Agent may consult counsel satisfactory to it and the
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion of such counsel. The Collateral Agent
shall not be liable for any error of judgment, or for any act done or step taken
or omitted by it, in good faith, or for any mistakes of fact or law, or for
anything which it may do or refrain from doing in connection herewith, except in
the case of its gross negligence or willful misconduct.
(b) No Independent Obligation. The Collateral Agent shall not be required
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder; provided that the foregoing shall
not limit the obligations that the Collateral Agent has expressly agreed to
perform and observe hereunder.
(c) Indemnification by Directing Party. The Directing Party shall
indemnify and hold the Collateral Agent harmless from and against any and all
liabilities, damages, losses, and fees, costs and expenses (including reasonable
attorneys' fees, costs and expenses) incurred by the Collateral Agent as a
result of any action taken by the Collateral Agent either in the performance of
its duties hereunder or at the direction of the Directing Party, or in
connection with any legal proceedings relating to the performance of its duties
hereunder, unless such liabilities, damages, losses, or fees, costs and expenses
arise from the Collateral Agent's gross negligence or willful misconduct. The
Collateral Agent's rights to indemnification shall survive the termination of
this Agreement.
Section 15. General Provisions.
(a) Term and Termination. Following the Effective Date, this Agreement
shall terminate upon the earliest to occur of: (i) upon written notice of
termination from the Company and each Secured Party to the Collateral Agent; and
(ii) following the final repayment in full of the Secured Obligations, upon
written notice of termination from the Company to the Collateral Agent. Upon
termination of this Agreement, the Collateral Agent shall execute and deliver
to, or at the direction of, the Company and, if terminated pursuant to clause
(ii) above, each Secured Party or, if terminated pursuant to clause (iii) above,
the Company, such documents and instruments as the Company and any other such
terminating party may require in order to effect such termination and release of
the Collateral Agent's role on behalf of such Person hereunder. Except as
otherwise expressly permitted hereby, the Collateral Agent shall not release all
or any portion of the Collateral until all of the Secured Obligations have been
paid in full.
(b) Modification and Amendment. This Agreement shall not be amended or
modified except by a writing executed and delivered by all of the parties
hereto.
(c) Effect of Bankruptcy. This Agreement shall remain in full force and
effect notwithstanding the filing of a petition for relief by or against the
Company under any federal or state bankruptcy or other similar law.
<PAGE>
(d) Notices. Unless otherwise specifically provided, all notices,
requests, consents and demands and other communications required under this
Agreement or pursuant to any other instrument or document delivered hereunder
shall be in writing and may be delivered by overnight (next-day) delivery, or by
telegram, or by facsimile transmission (with an original forwarded thereafter by
first class mail), or by registered or certified mail, postage prepaid, return
receipt requested, or personally, at the addresses specified below (unless
changed by the particular party whose address is stated herein by similar notice
in writing to all other parties hereto). All such notices, requests, consents
and demands and other communications shall, when delivered by overnight
(next-day) delivery or telegram, or faxed, be effective when delivered for
overnight (next-day) delivery or telegram, or transmitted in legible form by
facsimile machine, respectively, or if mailed, upon the third business day after
the date deposited into the U.S. mail, or if delivered, upon delivery. Each
party's address is:
(i) the Company: MF Receivables Holding Corp.
370 17th Street, Suite 5060G
Denver, Colorado 80202
Attn: Irwin L. Sandler
Fax: (303) 892-7910
Wire Instructions:
Guaranty Bank and Trust
ABA Number: 102000966
For the account of: MF Receivables
Holding Corp.
Account Number: 1359883
with a copy to: Monaco Finance, Inc.
370 17th Street, Suite 5060
Denver, Colorado 80202
Attn: Irwin L. Sandler
Fax: (303) 405-6496
with a copy to: Pacific USA Holdings Corp.
3200 Southwest Freeway, Suite 1220
Houston, Texas 77027
Attn: Cathryn L. Porter, Esq.
Fax: (713) 871-6155
(ii) Rothschild: Rothschild North America, Inc.
1251 Avenue of the Americas, 51st Floor
New York, NY 10020
Attn: Rick Fingeret
Fax: (212) 403-3734
Wire Instructions:
Morgan Guaranty Trust Company
ABA Number: 021000238
For account of: Rothschild North
America, Inc.
A/C: 00045181
(iii)the Indenture Trustee: Norwest Bank Minnesota,
National Association
6th Street and Marquette Avenue
Minneapolis, Minnesota 55479-0070
Attn: Corporate Trust Group
Fax: (612) 667-7323
Wire Transfer Instructions:
Norwest Bank Minnesota, National
Association
ABA Number: 091000019
Corp. Trust Clearing Account Number:
0001038377
For further credit: Account Number:
13206900
<PAGE>
(iv) the Collateral Agent: The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attn: Kevin Cremin, Vice President,
Corporate Trust
Fax: (212) 815-7157
Wire Instructions:
The Bank of New York
ABA #: 021000018
REF GLA 111565
A/C 245267
A/C Name MF Receivables Holding
Attn: Kevin Cremin
(e) Counterparts; Effectiveness.
(i) This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of such counterparts taken together shall
be deemed to constitute one and the same instrument.
(ii) This Agreement shall become effective as of the date (the
"Effective Date") upon which all of the following conditions have been
satisfied: (A) the execution and delivery of this Agreement by all of the
parties hereto; (B) the delivery by the Company to the Collateral Agent,
on behalf of the Secured Parties, of (1) all certificates evidencing the
Pledged Shares, together with stock powers in blank fully executed by the
Company in respect of the Pledged Shares and (2) a UCC-1 Financing
Statement pertaining to the Collateral; (C) the delivery by the Company to
the Secured Parties of an opinion or opinions of counsel, in form and
substance reasonably satisfactory to the Secured Parties, as to (1) the
beneficial ownership of record of the Pledged Shares, (2) the creation,
validity and perfection of the security interest of the Collateral Agent
in the Pledged Shares and (3) the substantive non-consolidation of Monaco
and the Company under federal bankruptcy law; (D) the payment to the
Collateral Agent of the fees to be paid on the Effective Date pursuant to
agreement between the Company and the Collateral Agent; (E) the delivery
of written notice by the Indenture Trustee to all of the other parties
hereto that all of the conditions to the effectiveness of the Indenture
Amendment have been satisfied in accordance with the terms of the
Indenture Amendment (other than the effectiveness of this Agreement); and
(F) the delivery of written notice by Rothschild to the other parties
hereto that all of the conditions to the effectiveness of the Rothschild
Amendment have been satisfied in accordance with the terms of the
Rothschild Amendment (other than the effectiveness of this Agreement).
(f) Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(g) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.
<PAGE>
(h) No Waiver. The failure of any party herein to enforce any rights it
has under this Agreement against any other party at any time shall not be deemed
a waiver of its right to enforce such rights at any other or future time.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF NEW YORK.
[Document continues with signature page.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
By:
Name:
Title:
ROTHSCHILD NORTH AMERICA, INC.
By:
Name:
Title:
THE BANK OF NEW YORK, as
Collateral Agent
By:
Name:
Title:
CONSENTED AND AGREED:
<PAGE>
A-2
3360.03/Pledge&Custodial
BDC PARTNERS, I, L.P.
By: BLACK DIAMOND CAPITAL MANAGEMENT, L.L.C.
Title: General Partner
By:
Name:
Title:....
HELLER FINANCIAL, INC.
By:
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF DEFAULT NOTICE
[date]
The Bank of New York,
as Collateral Agent
One Wall Street, 27th Floor
New York, New York 10286
Attn: Robert D. Thorson, Jr.
Ladies and Gentlemen:
Reference is made to that certain Pledge and Custodial Agreement, dated as
of July 28, 1999 (the "Pledge and Custodial Agreement"), among MF Receivables
Holding Corp., Norwest Bank Minnesota, National Association, as Indenture
Trustee, Rothschild North America, Inc., and you, as collateral agent. In
accordance with the provisions of the Pledge and Custodial Agreement, this
notice will serve to confirm that: (a) the undersigned is a "Secured Party"
under the Pledge and Custodial Agreement; (b) an Event of Default under the
[Indenture/Rothschild] Documents has occurred and is continuing; and (c) this
letter constitutes a "Default Notice" for all purposes under the Pledge and
Custodial Agreement.
Very truly yours,
[SECURED
PARTY]
By:__________________________________
Name:
Title:
cc: MF Receivables Holding Corp.
[Each other Secured Party]
<PAGE>
B-1
Pledge&Custodial
EXHIBIT B
FORM OF IRREVOCABLE INSTRUCTION LETTER
July 28, 1999
Daiwa Finance Corporation
32 Old Slip, 12th Floor
New York, NY 10005
Attn: Harold Gartner
Re: MF Receivables Corp. IV
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement,
dated as of July 28, 1999, and that certain Amended and Restated Credit
Agreement, dated as of July 28, 1999 (collectively, the "Daiwa Agreements"),
each among the MF Receivables Corp. IV, a Delaware corporation ("MF IV"), Monaco
Finance, Inc., a Colorado corporation ("Monaco"), and Daiwa Finance Corporation.
Capitalized terms used but not otherwise defined herein have the meanings
ascribed thereto in the Daiwa Agreements. Pursuant to the provisions of the
applicable Program Documents (and, in particular, the Security Agreements), you,
or the Servicer (as that term is defined in the Daiwa Agreements) at your
direction, are required to disburse certain funds or release assets to or upon
the order of MF IV (any such property, the "Specified Property") in accordance
with the instructions delivered under the Security Agreements and/or the
Servicing Agreements.
This letter hereby constitutes irrevocable notice to you that all
Specified Property payable or deliverable to or upon the order of MF IV
(including any and all money and property to which MF IV is entitled in
accordance with the Program Documents) is to be paid or delivered solely in
accordance with the instructions provided by The Bank of New York, as collateral
agent (in such capacity, the "Collateral Agent"), under that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp. ("Pacific"), Norwest Bank
Minnesota, National Association, as Indenture Trustee (as defined therein),
Rothschild North America, Inc. and Collateral Agent. Such Specified Property
represents dividends payable on account of the MF IV's outstanding shares of
common stock.
<PAGE>
These instructions are irrevocable and shall not be revised without the
prior written consent of the Collateral Agent, unless the Collateral Agent has
notified you otherwise in writing, and shall be binding on you and your
successors and assigns.
<PAGE>
Very truly yours,
MF RECEIVABLES CORP. IV
By:
Name:
Title:
THE BANK OF NEW YORK, as Collateral Agent
By: _______________________________
Name:
Title:
<PAGE>
ACKNOWLEDGED AND AGREED:
DAIWA FINANCE CORPORATION
By: _______________________________
Name:
Title:
July 28, 1999
Daiwa Finance Corporation
32 Old Slip, 12th Floor
New York, NY 10005
Attn: Harold Gartner
Re: MF Receivables Corp. IV
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement,
dated as of July 28, 1999, and that certain Amended and Restated Credit
Agreement, dated as of July 28, 1999 (collectively, the "Daiwa Agreements"),
each among the MF Receivables Corp. IV, a Delaware corporation ("MF IV"), Monaco
Finance, Inc., a Colorado corporation ("Monaco"), and Daiwa Finance Corporation.
Capitalized terms used but not otherwise defined herein have the meanings
ascribed thereto in the Daiwa Agreements. Pursuant to the provisions of the
applicable Program Documents (and, in particular, the Security Agreements), you,
or the Servicer (as that term is defined in the Daiwa Agreements) at your
direction, are required to disburse certain funds or release assets to or upon
the order of MF IV (any such property, the "Specified Property") in accordance
with the instructions delivered under the Security Agreements and/or the
Servicing Agreements.
This letter hereby constitutes irrevocable notice to you that all
Specified Property payable or deliverable to or upon the order of MF IV
(including any and all money and property to which MF IV is entitled in
accordance with the Program Documents) is to be paid or delivered solely in
accordance with the instructions provided by The Bank of New York, as collateral
agent (in such capacity, the "Collateral Agent"), under that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp. ("Pacific"), Norwest Bank
Minnesota, National Association, as Indenture Trustee (as defined therein),
Rothschild North America, Inc. and Collateral Agent. Such Specified Property
represents dividends payable on account of the MF IV's outstanding shares of
common stock.
<PAGE>
These instructions are irrevocable and shall not be revised without the
prior written consent of the Collateral Agent, unless the Collateral Agent has
notified you otherwise in writing, and shall be binding on you and your
successors and assigns.
<PAGE>
Very truly yours,
MF RECEIVABLES CORP. IV
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK, as Collateral Agent
By: _______________________________
Name:
Title:
<PAGE>
ACKNOWLEDGED AND AGREED:
DAIWA FINANCE CORPORATION
By: _______________________________
Name:
Title:
RELEASE AGREEMENT
This RELEASE AGREEMENT, dated as of July 28, 1999 (this "Agreement"), is
entered into among MONACO FINANCE, INC., a Colorado corporation ("Monaco"),
PACIFIC USA HOLDINGS CORP., a Texas corporation ("Pacific"), PACIFIC SOUTHWEST
BANK, a federally chartered savings bank ("PSB"), the parties identified on the
signature page hereof as the "Indenture Parties" (collectively, the "Indenture
Parties"), ROTHSCHILD NORTH AMERICA, INC., a Delaware corporation
("Rothschild"), and DAIWA FINANCE CORPORATION, a Delaware corporation ("Daiwa")
(Pacific, PSB, the Indenture Parties, Rothschild and Daiwa are sometimes
hereinafter collectively referred to as the "Specified Parties" and individually
as a "Specified Party").
RECITALS
WHEREAS, Monaco and Norwest Bank Minnesota, National Association (as
trustee on behalf of the other Indenture Parties, the "Indenture Trustee"), have
previously entered into that certain Indenture, dated as of January 9, 1996
(together with all outstanding notes issued pursuant thereto, and all
agreements, documents and instruments entered into in connection therewith, all
as amended modified or supplemented, the "Indenture Documents");
WHEREAS, Monaco, MF Receivables Holding Corp., a Delaware corporation (the
"Company"), and the Indenture Trustee, with the consent of the holders of notes
issued pursuant to the Indenture Documents, have agreed to enter into that
certain Consent and Amendment No. 2 to Indenture and Related Documents, dated as
of even date herewith (the "Indenture Amendment"), pursuant to which, among
other things, the Company has agreed to assume all of the obligations of Monaco
in respect of the Indenture Documents;
WHEREAS, Monaco and Rothschild have previously entered into that certain
Amended and Restated Note Purchase Agreement, dated as of January 9, 1996
(together with all outstanding notes issued pursuant thereto in favor of
Rothschild, and all agreements, documents and instruments entered into in
connection therewith, all as amended, modified or supplemented, the "Rothschild
Documents");
WHEREAS, Monaco, the Company and Rothschild have agreed to enter into that
certain Amendment to Amended and Restated Note Purchase Agreement, dated as of
even date herewith, (the "Rothschild Amendment"), pursuant to which, among other
things, the Company has agreed to assume all of the obligations of Monaco in
respect of the Rothschild Documents;
WHEREAS, the execution and delivery hereof is a condition to the
effectiveness of each of the Indenture Amendment and the Rothschild
Amendment; and
<PAGE>
10
3360.03/Release
WHEREAS, Daiwa has provided various financial accommodations to MF
Receivables Corp. IV, a Delaware corporation ("MF IV") (which is a wholly owned
subsidiary of the Company and the successor by merger to MF Receivables Corp.
III, a Delaware corporation ("MF III") which, prior to the effectiveness of such
merger and along with MF IV, was a wholly owned subsidiary of Monaco), the terms
and conditions of which have been amended and restated pursuant to the terms of
two separate Amended and Restated Credit Agreements, each dated as of July 28,
1999 (the "Daiwa Amendments") (together with all outstanding notes issued
pursuant thereto and all agreements, documents and instruments entered into in
connection therewith, all as amended, modified or supplemented, the "Daiwa
Documents"), and the execution and delivery hereof is a condition to the Daiwa
Amendments; and
WHEREAS, in connection with the Indenture Amendment and the Rothschild
Amendment, the Company, the Indenture Trustee, Rothschild and The Bank of New
York, as collateral agent (in such capacity, the "Collateral Agent"), have
entered or are in the process of entering into that certain Pledge and Custodial
Agreement, dated as of even date herewith (as amended, modified or supplemented
from time to time, the "Pledge and Custodial Agreement");
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
Section 1. Mutual Releases.
Each of the Specified Parties does hereby release and discharge each other
Specified Party, and each of such Specified Party's shareholders, directors,
partners, members, officers, employees, attorneys, accountants, consultants,
agents, representatives, successors and assigns (each, a "Released Party"), of
and from all manner of actions, choses and causes of action, claims, demands,
damages, expenses, liabilities, losses, judgments and executions, in each case
of whatever kind or nature, whether in law or in equity, and whether known or
unknown, at any time arising out of or relating in any manner to any action or
inaction by such Released Party prior to the effective date hereof in connection
with or relating to Monaco, the Company, MF IV, MF III, the Indenture Documents,
the Rothschild Documents and/or the Daiwa Documents.
Section 2. Covenants of Pacific USA, PSB, Monaco and Daiwa.
(a) Neither Pacific USA nor PSB shall: (i) take any action that would
cause or permit the Company or MF IV to breach any of its covenants in respect
of any of their respective contracts or agreements (including the Indenture
Documents, the Rothschild Documents and the Daiwa Documents); (ii) prior to the
date that is ninety-one days after the Effective Date (as that term is defined
in the Pledge Agreement), file any involuntary petition or otherwise institute
any bankruptcy, reorganization, insolvency or liquidation proceeding or other
proceeding under any federal or state bankruptcy or similar law against Monaco
or cause Monaco to institute any such proceeding; or (iii) prior to the date
that is one year and one day after the final repayment in full of all
obligations owed under any agreement or contract of the Company and/or MF IV
(including the Indenture Documents, the Rothschild Documents and the Daiwa
Documents), file any involuntary petition or otherwise institute any bankruptcy,
reorganization, insolvency or liquidation proceeding or other proceeding under
any federal or state bankruptcy or similar law against the Company and/or MF IV
or cause the Company and/or MF IV to institute any such proceeding or take any
action in furtherance of the foregoing.
<PAGE>
(b) Monaco shall not: (i) take any action that would cause or permit the
Company or MF IV to breach any of its covenants in respect of any of its
contracts or agreements (including the Indenture Documents, the Rothschild
Documents and the Daiwa Documents); or (ii) prior to the date that is one year
and one day after the final repayment in full of all obligations owed under any
agreement or contract of the Company and/or MF IV (including the Indenture
Documents, the Rothschild Documents and the Daiwa Documents), file any
involuntary petition or otherwise institute any bankruptcy, reorganization,
insolvency or liquidation proceeding or other proceeding under any federal or
state bankruptcy or similar law against the Company and/or MF IV or cause or
permit the Company and/or MF IV to institute any such proceeding or take any
action in furtherance of the foregoing.
(c) So long as any of the obligations of the Company owing under the
Rothschild Documents and/or the Indenture Documents remain outstanding, Daiwa
shall not amend, supplement or otherwise modify any of the provisions of the
Daiwa Documents as in effect on the date hereof relating to: (i) the interest
rate applicable to any of the obligations owing under the Daiwa Documents; and
(ii) the order or amount of any distributions to be made under the Daiwa
Documents in respect of the Designated Auto Loans (as defined in the Daiwa
Documents) as set forth in Sections 4 and 6 of the Security Agreements (as
defined in the Daiwa Documents).
Section 3. Representations of the Parties.
Each party hereto by its execution hereof represents and warrants to and
for the benefit of each other party hereto that the person executing this
Agreement on behalf of such party is duly authorized to do so, such party has
full right and authority to enter into this Agreement, and this Agreement
constitutes the valid and legally binding obligation of such party and is
enforceable against such party in accordance with its terms.
Section 4. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, or by each
of the parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be as effective as delivery
of a manually executed counterpart of this Agreement.
Section 5. Entire Agreement.
This Agreement constitutes the entire agreement and understanding of the
parties hereto with respect to the matters and transactions contemplated hereby
and supersedes all prior written and prior and contemporaneous oral agreements
and understandings relating to such matters and transactions.
Section 6. Amendment.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the changes, waiver, discharge or
termination is sought.
Section 7. Headings.
The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
<PAGE>
Section 8. Severability.
Any covenant, provision, agreement or term of this Agreement which is
prohibited or is held to be void or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
Section 9. Governing Law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
Section 10. Effectiveness.
Upon execution by the parties hereto, this Agreement shall become
effective as of the Effective Date (as that term is defined in the Pledge and
Custodial Agreement).
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as of the date first written above.
<PAGE>
ROTHSCHILD NORTH AMERICA, INC.
By: _________________________
Name: _________________________
Title: _________________________
DAIWA FINANCE CORPORATION
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
MONACO FINANCE, INC.
By: _________________________
Name: _________________________
Title: _________________________
PACIFIC USA HOLDINGS CORP.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
PACIFIC SOUTHWEST BANK
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
INDENTURE PARTIES:
<PAGE>
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture Trustee
By: _________________________
Name: _________________________
Title: _________________________
BDC PARTNERS, I, L.P.
By: BLACK DIAMOND CAPITAL MANAGEMENT, L.L.C.
Title: General Partner
By: ______________________
Name:______________________
Title: ______________________
<PAGE>
BLACK DIAMOND ADVISORS, INC.
By: _________________________
Name: _________________________
Title: _________________________
HELLER FINANCIAL, INC.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
Page 18 of 1
GUARANTEE TITLE & TRUST CO.
By: _________________________
Name: _________________________
Title: _________________________
- -------------------------------
LISA W. ZENNI
- -------------------------------
STEVEN DECKOFF
- -------------------------------
JAMES WALKER
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 1 $77,433.11
MF RECEIVABLES HOLDING CORP.
promises to pay to Black Diamond Advisors, Inc., or registered assigns, the
principal sum of Seventy-Seven Thousand Four Hundred Thirty-Three and 11/100
Dollars ($77,433.11), payable to the extent described in the Indenture referred
to below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
1. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
2. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
4. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
5. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
6. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
7. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
8. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
9. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
10. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
11. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
12. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 28 of 1
13. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
14. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 2 $1,161,496.68
MF RECEIVABLES HOLDING CORP.
promises to pay to Heller Financial, Inc., or registered assigns, the principal
sum of One Million One Hundred Sixty-One Thousand Four Hundred Ninety-Six and
68/100 Dollars ($1,161,496.68), payable to the extent described in the Indenture
referred to below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
15. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
16. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
17. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
18. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
19. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
20. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
<PAGE>
21. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
22. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
23. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
24. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
25. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
26. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 35 of 1
27. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
28. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 3 $329,090.72
MF RECEIVABLES HOLDING CORP.
promises to pay to BDC Partners I, L.P., or registered assigns, the principal
sum of Three Hundred Twenty-Nine Thousand Ninety and 72/100 Dollars
($329,090.72), payable to the extent described in the Indenture referred to
below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
29. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
30. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
31. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
32. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
33. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
34. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
35. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
36. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
37. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
38. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
39. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
40. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 42 of 1
41. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
42. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 4 $96,791.39
MF RECEIVABLES HOLDING CORP.
promises to pay to Guarantee Title & Trust Company, or registered assigns, the
principal sum of Ninety-Six Thousand Seven Hundred Ninety-One and 39/100 Dollars
($96,791.39), payable to the extent described in the Indenture referred to
below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
43. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
44. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
45. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
46. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
47. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
48. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
49. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
50. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
51. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
52. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
53. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
54. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 49 of 1
55. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
56. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 5 $77,433.11
MF RECEIVABLES HOLDING CORP.
promises to pay to Lisa W. Zenni, or registered assigns, the principal sum of
Seventy-Seven Thousand Four Hundred Thirty-Three and 11/100 Dollars
($77,433.11), payable to the extent described in the Indenture referred to
below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
57. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
58. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
59. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
60. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
61. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
62. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
63. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
64. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
65. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
66. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
67. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
68. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 56 of 1
69. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
70. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 6 $96,791.39
MF RECEIVABLES HOLDING CORP.
promises to pay to Steven Deckoff, or registered assigns, the principal sum of
Ninety-Six Thousand Seven Hundred Ninety-One and 39/100 Dollars ($96,791.39),
payable to the extent described in the Indenture referred to below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
71. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
72. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
73. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
74. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
75. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
76. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
77. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
78. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
79. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
80. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
81. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
82. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
Page 63 of 1
83. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
84. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. 7 $96,791.39
MF RECEIVABLES HOLDING CORP.
promises to pay to James Walker, or registered assigns, the principal sum of
Ninety-Six Thousand Seven Hundred Ninety-One and 39/100 Dollars ($96,791.39),
payable to the extent described in the Indenture referred to below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
85. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
86. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
87. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
88. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
89. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
90. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
91. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
92. Defaults and Remedies. Events of Default include: (i) default for 10 days in
the payment when due of principal installments, interest or Liquidated Damages
on the Notes; (ii) certain cross-defaults with other obligations of the Company;
and (iii) certain events of bankruptcy or insolvency with respect to the Company
or any of its Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
93. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
94. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
95. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
96. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
3360.03/Cons&AmIndenture
97. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
98. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
CONSENT AND AMENDMENT NO. 2
TO
INDENTURE AND RELATED DOCUMENTS
This Consent and Amendment No. 2 to Indenture and Related Documents (this
"Amendment"), dated as of July 28, 1999, is entered between, on the one hand,
Norwest Bank Minnesota, N.A., as trustee (the "Trustee"), and, on the other
hand, MF Receivables Holding Corp., a Delaware corporation (the "Company"), and
Monaco Finance, Inc., a Colorado corporation ("Monaco"), and is consented and
agreed to by each of the Holders of the outstanding Notes issued pursuant to the
Indenture, dated as of January 9, 1996 (as amended, supplemented, restated or
otherwise modified to the date hereof, the "Indenture"), originally entered into
between Monaco and the Trustee.
RECITALS
WHEREAS, Black Diamond Advisors, Inc. ("Black Diamond") and
Heller Financial, Inc. ("Heller"), who constitute the Holders of a
majority of the aggregate principal amount of the Notes, have
previously informed Monaco that such Holders believe that various
Defaults and/or Events of Default exist under the Indenture;
WHEREAS, on and subject to the terms and conditions contained herein,
Monaco has requested, among other things: (a) that the Holders waive all
existing Defaults and/or Events of Default; and (b) that the Trustee, with the
consent of the Holders of all Notes: (i) allow the Company to assume all of the
obligations of Monaco arising under or with respect to the Indenture and the
Credit Documents; (ii) amend various provisions of the Indenture and certain
documents and instruments related thereto; and (iii) enter into such additional
documents and instruments with the Company as are required pursuant to the terms
hereof; and
WHEREAS, on and subject to the terms and conditions contained herein,
among other things: (A) the Holders of all Notes have agreed to waive all
existing Defaults and/or Events of Default; (B) the Trustee, with the consent of
the Holders of all Notes, has agreed: (1) to allow the Company to assume all of
the obligations of Monaco arising under or with respect to the Indenture and the
Credit Documents; (2) to amend various provisions of the Indenture and certain
documents and instruments related thereto; and (3) to enter into such additional
documents and instruments with the Company as are required pursuant to the terms
hereof;
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree as
follows:
1. Definitions. Each capitalized term used but not otherwise
defined herein has the meaning ascribed thereto in the Indenture.
<PAGE>
78
3360.03/Cons&AmIndenture
2. Waiver by the Holders of the Notes. Subject to the satisfaction of the
conditions set forth in Section 7 hereof and notwithstanding anything to the
contrary contained in the Indenture and any of the other Credit Documents, the
Holders of all of the Notes hereby waive any and all Events of Default under the
Indenture which occurred prior to the Effective Date (as hereinafter defined);
provided that the Holders do not hereby waive any Events of Default which occur
on and after the Effective Date, including, without limitation, any failure to
make payments under the Indenture (as amended hereby).
3. Assumption of Obligations. Subject to satisfaction of the conditions
set forth in the Section 7 hereof and notwithstanding anything to the contrary
contained in the Indenture and any of the other Credit Documents, the Trustee,
with the consent of the Holders of all of the Notes, the Company and Monaco
hereby agree that, upon the Effective Date: (a) the Company shall expressly
assume, and shall succeed to, all of the rights, obligations and duties of
Monaco under the Indenture and all other Credit Documents and Monaco shall have
no further rights, obligations and/or duties thereunder; and (b) all references
to the "Company" or "Monaco Finance, Inc." contained in the Indenture or any of
the other Credit Documents shall be deemed to be references to "MF Receivables
Holding Corp."
4. Amendments to the Indenture. Subject to satisfaction of the conditions
set forth in Section 7 hereof, the Company and the Trustee, with the consent of
the Holders of all Notes, agree to amend the Indenture as of the Effective Date
as follows:
(a) The definition of the term "Notes" in the second paragraph of the
Indenture is hereby amended from "the 12% Convertible Senior Subordinated Notes
due 2001 as amended and restated by the Amended and Restated 12% Senior
Subordinated Notes due 1999" to "the 12% Convertible Senior Subordinated Notes
due 2001, as amended and restated by the Amended and Restated 12% Senior
Subordinated Notes due 1999, as further amended and restated by the Amended and
Restated 12% Senior Notes" and the former clause is hereby deleted and replaced
with the later clause in each place the former clause appears in the Indenture
and in Exhibit B to the Indenture.
(b) Section 1.01 of the Indenture is hereby amended by adding the
following defined term in alphabetical order:
"Monaco" means Monaco Finance, Inc., a Colorado
corporation.
"Pledge Agreement" means that certain Pledge and Custodial
Agreement, dated as of July 28, 1999, among the Company, the Trustee,
Rothschild North America, Inc. and The Bank of New York, as collateral
agent, together with any permitted amendments, modifications and/or
supplements
thereto or thereof.
"Release Agreement" means that certain Release Agreement, dated
as of July 28, 1999, among Monaco, Pacific USA Holdings Corp., Pacific
Southwest Bank, Rothschild North America, Inc., Daiwa Finance Corporation,
and certain parties identifies on the signature page thereof.
(c) Article 3 of the Indenture is hereby deleted in its entirety and
replaced with the following:
Article 3
[INTENTIONALLY DELETED]
(d) The text of each of Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.22
and 4.23 of the Indenture is hereby deleted in its entirety and replaced with
the following: "[Intentionally deleted]."
<PAGE>
(e) Section 4.14(a) of the Indenture is hereby deleted in its
entirety and replaced with the following:
(a) Liens in existence on the "Effective Date" (as that term is
defined in the Pledge Agreement and including, without limitation, the
Liens granted pursuant to the Pledge Agreement) and Liens to secure
replacements, extensions and renewals of the Indebtedness or other
obligations secured by such Liens only if (i) the principal amount of the
Indebtedness or other obligation secured thereby is not increased, (ii)
such Lien does not extend to any Property not previously subject thereto
and (iii) such Lien does not conflict with any Lien in favor of the
Trustee;
(f) The text of each of Sections 4.14(b), (c), (d), (e), (f), (g) and
(h) of the Indenture is hereby deleted in its entirety and replaced with the
following: "[Intentionally deleted]."
(g) The text of Section 4.16 of the Indenture is hereby deleted in
its entirety and replaced with the following:
The Company will not, nor will it permit any Subsidiary to,
become or be liable in respect of any Guaranty.
(h) Section 4.17 of the Indenture is hereby deleted in its entirety
and replaced with the following:
Section 4.17 Independence
Until 367 days have elapsed following payment and satisfaction of all
obligations of the Company hereunder and under the Notes, the Company
shall be required to observe the applicable legal requirements for the
recognition of the Company as a legal entity separate and apart from
Monaco and each other Affiliate of Monaco. Without limiting the generality
of the foregoing, the Company shall assure that each of the following is
complied with:
(a) the Company shall maintain separate records, books of
account and financial statements (each of which shall be sufficiently full
and complete to permit a determination of the Company's assets and
liabilities separate and apart from those of Monaco and each other
Affiliate of Monaco and to permit a determination of the obligees thereon
and the time for performance of each of the Company's obligations separate
and apart from those of Monaco and each other Affiliate of Monaco) from
those of Monaco and each other Affiliate of Monaco;
(b) assets or funds of the Company shall be separately
identified, shall be held in the name of the Company and shall not be
commingled with those of Monaco or any of the other Affiliates of Monaco;
<PAGE>
(c) the Company shall maintain a separate board of directors
(including two "independent directors" (as such term is defined in the
Company's Certificate of Incorporation)) and shall observe all separate
corporate formalities, and all decisions with respect to the Company's
business and daily operations shall be independently made by the officers
of the Company pursuant to resolutions of its board of directors;
(d) other than payment of dividends and return of capital, no
transactions shall be entered into between the Company and Monaco (other
than capital contributions made by Monaco to the Company) or between the
Company and any of the other Affiliates of Monaco;
(e) except as contemplated by the Pledge Agreement, the Company
shall act solely in its own name and through its own authorized officers
and agents and the Company will not act as agent of Monaco or any other
person in any capacity;
(f) the Company shall not guarantee, otherwise become liable
with respect to, or otherwise hold out any of its assets or credit as
being available to satisfy any obligation of Monaco or any of the other
Affiliates of Monaco including jointly or as co-obligor;
(g) the Company shall at all times hold itself out to the public
under the Company's own name as a legal entity separate and distinct from
Monaco and the other Affiliates of Monaco and shall not hold itself out as
a "department," "division" or "part of" Monaco or any of the other
Affiliates of Monaco, and shall correct any known misunderstanding or
confusion regarding its separate identity from Monaco;
(h) the Company shall observe all corporate and other legal
formalities, including obtaining necessary authorization from board of
directors;
(i) the Company shall hold all regular meetings appropriate to
authorize corporate action and shall permit, upon reasonable advance
written notice, any of the Holders of the Notes to attend board meetings
of the Company;
(j) the Company shall maintain complete minutes
of all board of director and stockholder meetings;
(k) the Company shall maintain its bank and other investment
accounts separate and distinct from those of any Affiliate or other
Person;
(l) the Company shall pay from its own funds all obligations of
any kind incurred by it. Without limiting the generality of the foregoing,
the Company shall pay from its own funds the salaries or other
compensation and benefits of its own officers and employees, if any, and
will employ a reasonable number of employees in light of its purpose;
(m) the Company shall use its own stationery, invoices and
checks (i.e., not such forms of another Person) and shall have and
maintain a separate telephone number from that of Monaco and its
Affiliates;
<PAGE>
(n) the Company shall file its own tax returns,
if any, as may be required under applicable law;
(o) the Company shall establish and maintain an office through
which its business is conducted separate and apart from that of Monaco and
its Affiliates;
(p) the Company shall not acquire or incur any Indebtedness
(including, without limitation, any Indebtedness of Monaco) except for (i)
the Indenture Obligations (as such term is defined in the Pledge
Agreement), (ii) the Rothschild Obligations (as such term is defined in
the Pledge Agreement) and (iii) ordinary course trade payables and other
Indebtedness incurred in the ordinary course of its business operations;
(q) the Company shall not acquire any equity
interest of or in Monaco;
(r) to the fullest extent permitted by law, the Company shall
not engage in any merger, asset sale, encumbrance or transfer of any
property or assets, or transfer of equity interests in it other than such
activities as are expressly permitted pursuant to any provision of the
Indenture Documents, the Rothschild Documents and the Pledge Agreement (as
each of those terms is defined in the Pledge Agreement); and
(n) the Company shall take all appropriate action necessary to
maintain its own existence as separate and distinct from the existence of
any of its owners.
(i) The text of Section 4.19 of the Indenture is hereby deleted in
its entirety and replaced with the following:
Within three (3) Business Days following the earlier of the
receipt by Monaco, the Company or MF Receivables Corp. IV, a Delaware
corporation ("MF IV"), of any servicing report relating to the assets of
MF IV, the Company shall provide a copy of same to the Holders of the
Notes.
(j) The text of each of Sections 5.01(b) of the Indenture is hereby
deleted in its entirety and replaced with the following:
"[Intentionally deleted]."
(k) The text of Section 5.01(d) of the Indenture is hereby deleted in
its entirety and replaced with the following:
(e) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of the
principal of or interest on any Indebtedness (other than the Indebtedness
evidenced by the Notes) of the Company (including the Rothschild Debt) or
any Subsidiary and such default shall continue beyond the period of grace,
if any, allowed with respect thereto;
(l) The text of Section 5.01(f) of the Indenture is hereby deleted in
its entirety and replaced with the following:
<PAGE>
(f) (i) Default shall occur in the due and punctual observance
or performance of any covenant or agreement contained in Sections 4.11,
4.14 or 4.17 or in the Pledge Agreement or (ii) the occurrence of any
amendment, modification or other revision of or supplement to any of the
terms of the Daiwa Documents (as defined in the Release Agreement) which
would reasonably be expected to have a material adverse effect on the
Holders of the Notes or the Lien granted pursuant to the Pledge Agreement;
(m) The first sentence of Section 5.04 of the Indenture is hereby
deleted in its entirety and replaced with the following:
If an Event of Default occurs and is continuing, the Trustee may only
pursue the remedies available to it (including, without limitation, all
remedies pertaining to the assets of the Company) as provided in this
Agreement and the Pledge Agreement or otherwise available under applicable
law, except as expressly waived under this Agreement or any other
agreement.
(n) Article 9 of the Indenture is hereby deleted in its entirety and
replaced with the following (which amendment is being effected to make clear
that, from and after the Effective Date, the Indebtedness under the Indenture
and the Notes shall not constitute subordinated Indebtedness of Monaco but
rather senior Indebtedness of the Company subject to the terms and conditions
hereof and of the Pledge Agreement):
Article 9
[INTENTIONALLY DELETED]
(o) Exhibit A to the indenture is hereby deleted in its entirety and
replaced with Exhibit A attached hereto.
5. Amendments to the Purchase Agreement. Subject to satisfaction of the
conditions set forth in Section 7 hereof, Company and the Holders of all Notes
agree that, as of the Effective Date, the first paragraph of Exhibit A to the
Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
Reference is made to the Purchase Agreement, dated as of January 9,
1996 (as amended from time to time, the "Purchase Agreement"), among MF
Receivables Holding Corp., a Delaware corporation (as successor to Monaco
Finance, Inc., the "Company") and certain purchasers of the Company's 12%
Convertible Senior Subordinated Notes due 2001, as amended and restated by
the Company's Amended and Restated 12% Senior Subordinated Notes due 1999,
as further amended and restated by the Company's Amended and Restated 12%
Senior Notes (collectively and as further amended or amended and restated
from time to time, the "Notes") listed on the Purchaser Schedule thereto.
All capitalized terms used but not otherwise defined herein are used with
the meanings ascribed to such terms in the Agreement.
<PAGE>
6. Cancellation of the Registration Rights Agreement. Subject to
satisfaction of the conditions set forth in Section 7 hereof, the Company and
the Holders of all Notes agree that, as of the Effective Date, the Registration
Rights Agreement shall be of no further force and effect and shall no longer
constitute a Credit Document.
7. Conditions to Effectiveness. This Amendment shall become effective as
of the date first written above (the "Effective Date") upon the effectiveness of
the Pledge Agreement (as hereinafter defined), contingent upon the prior or
concurrent satisfaction of the following conditions:
(a) The Trustee shall have received a fully executed copy of this
Amendment.
(b) The Trustee shall have received: (i) in substitution and exchange
for all existing Notes, new, fully executed Amended and Restated 12% Senior
Notes in the form attached hereto as Exhibit A; and (ii) for delivery to the
Company, originals of all currently outstanding Notes.
(c) The Trustee shall have received certified copies of all
resolutions of each of the Company and Monaco approving the execution, delivery
and performance of this Amendment and the transactions contemplated hereby.
(d) The Holders (or the Trustee on behalf of, and for distribution
to, the Holders in accordance with the Indenture) shall have received: (i) a
payment of principal on account of the Notes in an aggregate amount equal to
$1,849,172.21; and (ii) a payment equal to all accrued and unpaid interest on
the outstanding principal balance of the Notes through to the Effective Date.
(e) The Trustee, Heller and Black Diamond shall have received payment
of all costs and expenses required to be paid by the Company pursuant to Section
15 hereof.
(f) The Trustee shall have received a fully executed copy of the
Pledge and Custodial Agreement in the form attached hereto as Exhibit B (the
"Pledge Agreement"), together with copies of all original stock certificates,
blank stock powers and other documents required to be delivered thereunder on or
before the Effective Date.
(g) The Trustee shall have received a fully executed copy of the
Release Agreement in the form attached hereto as Exhibit C (the "Release
Agreement").
(h) The Trustee shall have received a favorable opinion from counsel
reasonably satisfactory to the Holders, in form satisfactory to the Holders, as
to the enforceability against each of the Company and Monaco (to the extent each
is a party thereto) of this Amendment, the new Notes referred to in Section 7(b)
hereof and the Pledge Agreement.
Upon the satisfaction of all of the foregoing conditions, the Trustee
shall immediately provide written notice to all of the parties to the Pledge
Agreement that all of such conditions have been satisfied. Notwithstanding
anything to the contrary contained herein, none of the amendments contemplated
by this Amendment shall become effective, and this Amendment shall automatically
terminate, if all of the foregoing conditions are not satisfied on or before
July 30, 1999.
<PAGE>
8. Releases; No Recourse. Upon the effectiveness of this Amendment in
accordance with the provisions hereof, and for good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged): (a) each of
Monaco (on its behalf and on behalf of its respective officers and directors)
and the Company (on its behalf and on behalf of its respective officers and
directors) does hereby release and discharge the Trustee, the Holders, and all
of their respective shareholders, directors, officers, members, partners,
employees, affiliates, successors and assigns (collectively, the "Indenture
Released Parties"), of and from all manner of actions, choses and causes of
action, claims, demands, damages, expenses, liabilities, losses, judgments, and
executions (in each case of whatever kind or nature, whether in law or in
equity, and whether known or unknown) (collectively, the "Claims") at any time
arising out of or relating in any manner to any action or inaction at any time
by any of the Indenture Released Parties in connection with or relating to any
matter involving Monaco and/or any of its subsidiaries, and/or any of their
respective, officers, shareholders and/or directors; and (b) the Trustee and the
Holders, on their behalf and on behalf of all other Indenture Released Parties:
(i) do hereby release and discharge the Company, Monaco and all of their
respective shareholders, directors, officers, members, partners, employees,
affiliates, successors and assigns (collectively, the "Company Released
Parties"), of and from all manner of Claims at any time arising out of or
relating in any manner to any action or inaction at any time by any of the
Company Released Parties in connection with or relating to any matter involving
Monaco and/or any of its subsidiaries, and/or any of their respective, officers,
shareholders and/or directors; provided that the foregoing release shall not
release (A) the Company from its obligations arising under the Indenture (as
amended hereby), the Notes, and/or any other Credit Document (including, without
limitation, the Pledge Agreement and the Release Agreement) or in connection
therewith or (B) Monaco from its obligations hereunder and under the Release
Agreement or in connection therewith; and (ii) acknowledge and agree that,
notwithstanding anything to the contrary contained in the Indenture, the Notes
and/or any other Credit Document (including the Pledge Agreement): (A) no
recourse under or upon any obligation, covenant or agreement of the Company
contained in the Indenture, the Notes and/or any other Credit Document
(including the Pledge Agreement) may be had against any of the Company Released
Parties other than the Company; and (B) no such person or entity will file any
involuntary petition or otherwise institute, directly or indirectly, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law against
the Company.
9. Representations and Warranties of the Company. The Company represents
and warrants to the Trustee and each of the Holders of the Notes as follows:
(a) Authority. The Company has full corporate power, authority and
legal right to enter into this Amendment and the other agreements entered into
in connection herewith to which the Company is a party (including, without
limitation, the new Notes and the Pledge Agreement). The execution and delivery
by the Company of, and the performance by the Company of its obligations under,
this Amendment and the other agreements entered into in connection herewith to
which the Company is a party (including, without limitation, the new Notes and
the Pledge Agreement) and the Credit Documents, as amended hereby: (i) have been
duly authorized by all necessary corporate action on the part of the Company;
(ii) are not in contravention of the terms of the organizational documents of
the Company or of any indenture, agreement or undertaking to which the Company
is a party or by which the Company or any of its property is bound; (iii) do not
and will not require any governmental consent, registration or approval
pertaining to the Company; (iv) do not and will not contravene any contractual
or governmental restriction to which the Company or any of its property may be
subject; and (v) do not and will not, except as contemplated herein, result in
the imposition of any lien, charge, security interest or encumbrance upon any
property of the Company under any existing indenture, mortgage, deed of trust,
loan or credit agreement or other material agreement or instrument to which the
Company is a party or by which the Company or any of its property may be bound
or affected.
<PAGE>
(b) Binding Effect. This Amendment and all of the other agreements
entered into by the Company in connection herewith (including, without
limitation, the new Notes and the Pledge Agreement) have been duly executed and
delivered by the Company, and such documents, together with the Credit Documents
(as amended hereby) are the legal, valid and binding obligations of the Company
and are enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by federal bankruptcy laws.
(c) No Default. No Default or Event of Default will result under the
Indenture (as amended hereby) from the execution and delivery of this Amendment
or the other agreements executed and delivered by the Company in connection
herewith (including, without limitation, the new Notes and the Pledge Agreement)
or the consummation of the transactions contemplated hereby.
10. Representations, Warranties and Covenants of Monaco.
(a) Representations and Warranties. Monaco represents and warrants to
the Trustee and each of the Holders of the Notes as follows:
(i)..Authority. Monaco has full corporate power, authority and
legal right to enter into this Amendment and the other agreements entered into
in connection herewith to which Monaco is a party. The execution and delivery by
Monaco of, and the performance by Monaco of its obligations under, this
Amendment and the other agreements entered into in connection herewith to which
Monaco is a party: (A) have been duly authorized by all necessary corporate
action on the part of Monaco; (B) are not in contravention of the terms of the
organizational documents of Monaco or of any indenture, agreement or undertaking
to which Monaco is a party or by which Monaco or any of its property is bound;
(C) do not and will not require any governmental consent, registration or
approval pertaining to Monaco; (D) do not and will not contravene any
contractual or governmental restriction to which Monaco or any of its property
may be subject; and (E) do not and will not, except as contemplated herein,
result in the imposition of any lien, charge, security interest or encumbrance
upon any property of Monaco under any existing indenture, mortgage, deed of
trust, loan or credit agreement or other material agreement or instrument to
which Monaco is a party or by which Monaco or any of its property may be bound
or affected.
(ii).Binding Effect. This Amendment and the other agreements
entered into in connection herewith to which Monaco is a party have been duly
executed and delivered by Monaco, are the legal, valid and binding obligations
of Monaco and are enforceable against Monaco in accordance with their respective
terms, except as enforceability may be limited by federal bankruptcy laws.
(iii)No Default. No Default or Event of Default will result
under the Indenture (as amended hereby) from the execution and delivery of this
Amendment or the other agreements executed by Monaco in connection herewith or
the consummation of the transactions contemplated hereby.
(b) Covenants. Until 367 days have elapsed following payment and
satisfaction of all obligations of the Company under the Indenture and under the
Notes, Monaco covenants and agrees that it will comply with and, if applicable,
cause each of its Affiliates to comply with the following provisions:
(i)..Ownership. Monaco shall at all times own 100% of
the outstanding shares of stock of the Company;
<PAGE>
(ii).Separateness. Monaco shall observe all customary
formalities necessary to maintain its identity as an entity separate and
distinct from the Company and shall hold itself out as a separate and distinct
entity from the Company and not identify the Company as a division of Monaco;
(iii)Waiver. To the fullest extent permitted by applicable law,
Monaco will waive any right it may have to reject this Amendment or avoid the
transactions contemplated hereby in any proceeding brought under Title 11 of the
United States Code, or any successor statutes, involving the Company;
(iv).Actions. Monaco shall not bring any action or proceeding
against the Company, including, without limitation, any action or proceeding
challenging the identity of the Company as an entity legally separate and apart
from Monaco; and
(v)..Certain Company Actions. The Company shall not pledge,
transfer, assign or purport to pledge, transfer or assign any of its equity or
other interests or grant a security interest in any of such interests to any
Person.
(vi).Appointment of Independent Director. Notwithstanding
anything to the contrary contained in the organizational documents of the
Company, Monaco hereby agrees that, until such time as all of the obligations,
liabilities and indebtedness of the Company under the Indenture and the Notes
are finally repaid in full: (A) Heller Financial, Inc. and/or BDC Partners I,
L.P. shall have the right, but not the obligation, upon written notice to Monaco
to cause Monaco to appoint one (1) (but not more than one (1) in the aggregate)
director of the Company (the "Additional Director") so long as the Additional
Director is an Independent Director (as that term is defined in the Company's
Certificate of Incorporation); provided that (1) neither Heller Financial, Inc.
nor BDC Partners I, L.P. shall have any responsibility or obligation in respect
of the payment of the costs and expenses of the Additional Director (which shall
be an obligation of the Company); and (2) the Additional Director's term shall
automatically expire upon the final repayment in full of all of the obligations,
liabilities and indebtedness of the Company under the Indenture and the Notes;
(B) the Company shall provide each of Heller Financial, Inc. and BDC Partners I,
L.P. with five (5) Business Days prior written notice by facsimile of any
meeting of the board of directors of the Company (which notice shall include the
agenda for such board meeting); and (C) Monaco shall promptly appoint the
Additional Director following written notice requesting the appointment thereof;
provided that Monaco shall appoint the Additional Director within two (2)
Business Days if such written notice is received by Monaco within two (2)
Business Days of the notice delivered by the Company pursuant to the immediately
preceding clause (B).
11. Representations and Warranties of the Trustee and the Holders. The
Trustee and each Holder of the Notes each represents and warrants to the Company
and Monaco as follows:
<PAGE>
(a) Authority. Such Person has full power and authority (corporate or
otherwise) or legal capacity, as applicable, and legal right to enter into this
Amendment and the other agreements entered into in connection herewith to which
such Person is a party (including, without limitation, the new Notes, the Pledge
Agreement and the Release Agreement). The execution and delivery by such Person
of, and the performance by such Person of its obligations under, this Amendment
and the other agreements entered into in connection herewith to which such
Person is a party (including, without limitation, the new Notes, the Pledge
Agreement and the Release Agreement): (i) have been duly authorized by all
necessary corporate action on the part of such Person; (ii) are not in
contravention of the terms of the organizational documents (if any) of such
Person or of any indenture, agreement or undertaking to which such Person is a
party or by which such Person or any of such Person's property is bound; (iii)
do not and will not require any governmental consent, registration or approval
pertaining to such Person; and (iv) do not and will not contravene any
contractual or governmental restriction to which such Person or any of such
Person's property may be subject.
(b) Binding Effect. This Amendment and all of the other agreements
entered into by such Person in connection herewith (including, without
limitation, the new Notes, the Pledge Agreement and the Release Agreement) have
been duly executed and delivered by such Person, are the legal, valid and
binding obligations of such Person and are enforceable against such Person in
accordance with their respective terms, except as enforceability may be limited
by federal bankruptcy laws.
12. Reference to and Effect Upon the Indenture and the Credit Documents.
(a) Except as specifically amended above, the Indenture and each of
the Credit Documents, as amended hereby, shall remain in full force and effect
and are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment shall
be limited precisely as written and shall not be deemed to (i) be a consent to
any waiver or modification of any other term or condition of the Indenture or
any other Credit Document or (ii) prejudice any right, power or remedy which
Trustee or any Holder of any Note may now have or may have in the future under
or in connection with the Indenture or any other Credit Document (after giving
effect to this Amendment). Upon the effectiveness of this Amendment: (A) each
reference in the Indenture or any other Credit Document to "this Agreement,"
"hereunder," "hereof," "herein" or words of similar import shall mean and be a
reference to the Indenture as amended hereby; and (B) each reference in the
Indenture or any other Credit Document to any Credit Document amended hereby
shall mean and be a reference to such Credit Document as amended hereby.
13. Further Assurances. The Company shall, at its sole expense and without
expense to the Trustee or the Holders, do, execute and deliver such further acts
and documents as the Trustee or any Holder from time to time may reasonably
require fro the purpose of assuring and confirming unto the Trustee or such
Holder the rights hereby created, now or hereafter so to be, or for carrying out
the intention or facilitating the performance of the terms of this Amendment,
the Indenture or any documents or instruments related hereto or thereto, or for
assuring the validity of any security interest or pledge granted in connection
herewith.
14. Counterparts; Facsimile Signatures. This Amendment may be executed in
any number of counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument. Facsimile copies of signatures hereto shall be deemed originals for
all purposes.
15. Costs and Expenses. The Company agrees to pay on demand (a) all
reasonable fees, costs and expenses incurred by the Trustee in connection with
the negotiation, preparation, execution and delivery of this Amendment
(including, without limitation, reasonable attorneys' fees and expenses) and (b)
all reasonable fees, costs and expenses, in an aggregate amount not to exceed
$33,600, incurred by Heller and Black Diamond arising in connection with the
negotiation of this Amendment (including, without limitation, reasonable
attorneys' fees and expenses).
<PAGE>
16. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purposes.
17. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
and year first written above.
<PAGE>
MONACO FINANCE, INC.
By: _________________________
Name: _________________________
Title: _________________________
NORWEST BANK MINNESOTA, N.A., as Trustee
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
MF RECEIVABLES HOLDING CORP.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
CONSENTED AND AGREED:
<PAGE>
BLACK DIAMOND ADVISORS, INC.
By: _________________________
Name: _________________________
Title: _________________________
BDC PARTNERS, I, L.P.
By: BLACK DIAMOND CAPITAL MANAGEMENT, L.L.C.
Title: General Partner
By: ______________________
Name:______________________
Title: ______________________
<PAGE>
HELLER FINANCIAL, INC.
By: _________________________
Name: _________________________
Title: _________________________
GUARANTEE TITLE & TRUST CO.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
- -------------------------------
LISA W. ZENNI
- -------------------------------
STEVEN DECKOFF
- -------------------------------
JAMES WALKER
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE. THIS NOTE IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AGREEMENT DATED AS OF
JANUARY 9, 1996 (AS AMENDED TO DATE), BETWEEN THE HOLDER AND CERTAIN OTHER
HOLDERS OF THE COMPANY'S SECURITIES.
<PAGE>
AMENDED AND RESTATED 12% SENIOR NOTE
No. $__________
MF RECEIVABLES HOLDING CORP.
promises to pay to ____________________, or registered assigns, the principal
sum of ____________________ ($__________), payable to the extent described in
the Indenture referred to below.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
By:
Name:
Title:
(SEAL)
<PAGE>
Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
By:
Authorized Signatory
Dated:
<PAGE>
Amended and Restated 12% Senior Note
Unless otherwise defined herein, each capitalized term used herein has the
meaning assigned to it in the Indenture referred to below.
99. Payment. In accordance with the provisions of that certain Pledge and
Custodial Agreement, dated as of July 28, 1999 (the "Pledge and Custodial
Agreement"), among MF Receivables Holding Corp., (the "Company"), Norwest Bank
Minnesota, National Association, as trustee under the Indenture referred to
below (in such capacity, the "Trustee"), Rothschild North America, Inc., and The
Bank of New York, as collateral agent (in such capacity, the "Collateral
Agent"), the Company will cause payments to be made in respect of this Amended
and Restated 12% Senior Note (this "Note"), up to a maximum principal amount as
indicated on the face of this Note together with interest thereon at twelve
percent per annum, as, when and if received by the Collateral Agent under the
Pledge and Custodial Agreement. Payments in respect of this Note will be made to
the Trustee, as Paying Agent under the Indenture, for ratable distribution to
the Holders of Notes in accordance with the provisions of the Indenture.
100. Method of Payment. The Notes will be payable as to principal, premium, if
any, and interest at the office or agency of the Company maintained for such
purpose, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium, if
any, on all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
101. Paying Agent and Registrar. Initially, Norwest Bank Minnesota,
N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar.
102. Indenture. The Company issued the Notes under an Indenture dated as of
January 9, 1996 (as heretofore, now or hereafter amended, supplemented, restated
or otherwise modified (including, without limitation, pursuant to the terms of
that certain Consent and Amendment No. 2 to Indenture and Related Documents,
dated as of July 28, 1999), the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are secured obligations of the Company.
103. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Payment Date.
104. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
1.
<PAGE>
105. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
106. Defaults and Remedies. Events of Default include: (i) default for 10 days
in the payment when due of principal installments, interest or Liquidated
Damages on the Notes; (ii) certain cross-defaults with other obligations of the
Company; and (iii) certain events of bankruptcy or insolvency with respect to
the Company or any of its Subsidiaries. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all of the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes.
107. Trustee Dealings with Company. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not the Trustee.
108. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
109. Abbreviations. Customary abbreviations may be used in the name if a Holder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
110. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon. 1.
<PAGE>
3360.03/AmendNotePurch
111. Copies on Request. The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
MF Receivables Holding Corp.
Attention: Chief Financial Officer
370 17th Street, Suite 5060G
Denver, Colorado 80202
112. Amendment and Restatement; Substitution. This Note amends and restates in
its entirety, and is issued in substitution for, that certain Amended and
Restated 12% Senior Subordinated Note due 1999, dated as of August 8, 1998
(which note amended and restated a 12% Convertible Senior Subordinated Note due
2001, dated January 9, 1996), made by Monaco Finance, Inc., a Colorado
corporation, to the payee hereof.
AMENDMENT
TO
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This Amendment to Amended and Restated Note Purchase Agreement (this
"Amendment"), dated as of July 28, 1999, is entered between, on the one hand,
Monaco Finance, Inc., a Colorado corporation ("Monaco"), and MF Receivables
Holding Corp., a Delaware corporation (the "Company"), and, on the other hand,
Rothschild North America, Inc., a Delaware corporation ("Rothschild"), in
connection with that certain Amended and Restated Note Purchase Agreement, dated
as of January 9, 1996 (as amended, supplemented, restated or otherwise modified
to the date hereof, the "Note Purchase Agreement"), originally entered into
between Monaco and Rothschild.
RECITALS
WHEREAS, Rothschild, as the holder of all of the existing Notes (the
"Existing Notes") issued by Monaco pursuant to the terms of the Note Purchase
Agreement, has informed Monaco that it believes that various Defaults and/or
Events of Default exist under the Note Purchase Agreement;
WHEREAS, on and subject to the terms and conditions contained herein, the
Company has requested, among other things, that Rothschild: (a) waive all
existing Defaults and/or Events of Default; (b) allow the Company to assume all
of the obligations of Monaco arising under or with respect to the Note Purchase
Agreement and the agreements, documents and instruments related thereto; (c)
amend various provisions of the Note Purchase Agreement and certain of the
agreements, documents and instruments related thereto; and (d) enter into such
additional agreements, documents and instruments with the Company as are
required pursuant to the terms hereof; and
WHEREAS, on and subject to the terms and conditions contained herein,
among other things, Rothschild has agreed: (i) to waive all existing Defaults
and/or Events of Default; (ii) to allow the Company to assume all of the
obligations of Monaco arising under or with respect to the Note Purchase
Agreement and the agreements, documents and instruments related thereto; (iii)
to amend various provisions of the Note Purchase Agreement and certain of the
agreements, documents and instruments related thereto; and (iv) to enter into
such additional agreements, documents and instruments with the Company as are
required pursuant to the terms hereof;
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein and for other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto agree as
follows:
1. Definitions. Each capitalized term used but not otherwise
defined herein has the meaning ascribed thereto in the Note Purchase
Agreement.
2. Waiver by the Holders of the Notes. Subject to the satisfaction of the
conditions set forth in Section 5 hereof and notwithstanding anything to the
contrary contained in the Note Purchase Agreement or any of the agreements,
documents or instruments entered into in connection therewith, Rothschild, as
the holder of all of the Existing Notes, hereby waives any and all Defaults
and/or Events of Default that occurred prior to the Effective Date (as
hereinafter defined).
<PAGE>
100
3360.03/AmendNotePurch
3. Assumption of Obligations. Subject to satisfaction of the conditions
set forth in the Section 5 hereof and notwithstanding anything to the contrary
contained in the Note Purchase Agreement or any of the agreements, documents or
instruments entered into in connection therewith, each of Rothschild, as the
holder of all of the Existing Notes, the Company and Monaco hereby agrees that,
upon the Effective Date: (a) the Company shall expressly assume, and shall
succeed to, all of the obligations and duties of Monaco under the Note Purchase
Agreement and all of the agreements, documents and instruments entered into in
connection therewith and shall be assigned all of the rights of Monaco
thereunder, and Monaco shall have no further obligations or duties, nor any
rights, thereunder; and (b) all references to the "Company" or "Monaco Finance,
Inc." contained in the Note Purchase Agreement or any of the agreements,
documents or instruments entered into in connection therewith shall be deemed to
be references to "MF Receivables Holding Corp.".
4. Amendments to the Note Purchase Agreement. Subject to satisfaction of
the conditions set forth in Section 5 hereof, the Company and Rothschild, as the
holder of all of the Existing Notes, agree to amend the Note Purchase Agreement
and the Existing Notes as follows:
(a) Notwithstanding anything to the contrary contained in the Note
Purchase Agreement (and, specifically, Section 1.1 thereof) and the Existing
Notes: (i) each of the Existing Notes shall be replaced, as provided in Section
5 hereof, by substitute Notes (collectively, the "Substitute Notes"), each in
the form of Exhibit A attached hereto; (ii) any reference to the "Notes" shall
be a reference to the "$5,000,000 Senior Subordinated Notes Originally Due
October 1, 1999 (as amended, amended and restated, modified, substituted or
otherwise supplemented from time to time)"; (iii) the unpaid principal balance
of the Substitute Notes shall bear interest at the Interest Rate (which shall be
computed on the basis of a 360 day year of twelve 30-day months); (iv) principal
and interest with respect to the Substitute Notes shall be due and payable as
provided in the Substitute Notes, with the due date of any payment falling on a
day that is not a Banking Day automatically being extended to be the next
succeeding Banking Day; and (v) the Substitute Notes shall have no fixed
maturity date.
(b) The text of Section 2.1 of the Note Purchase Agreement is hereby
deleted in its entirety and replaced with the following:
2.1 Payments on the Notes.
The Company promises to pay or to cause payments to be made
in respect of the Notes, up to a maximum principal amount as indicated on
the face of the Notes, together with interest accrued thereon (computed on
the basis of a 360-day year of twelve 30-day months) at the applicable
Interest Rate, all as, when and if received by the Collateral Agent under
and as defined in the Pledge Agreement (as defined below).
(c) Section 2.3 of the Note Purchase Agreement is hereby amended by
deleting the reference to "10 days nor more than 60 days" contained therein and
by substituting therefor a reference to "2 Banking Days."
(d) Section 3.1 of the Note Purchase Agreement is hereby amended by
inserting the following term in alphabetical order:
<PAGE>
"Pledge Agreement" means that certain Pledge and Custodial
Agreement, dated as of July 28, 1999, among the Company, Rothschild North
America, Inc. (as the holder of all of the Notes), Norwest Bank Minnesota,
National Association (as trustee (the "Trustee") under that certain
Indenture, dated as of January 9, 1996 (as amended, modified and/or
supplemented), between the Company (as successor to Monaco Finance, Inc.,
a Colorado corporation) and the Trustee), and The Bank of New York, as
collateral agent, together with any permitted amendments, modifications
and/or supplements thereto or thereof.
(e) Section 4 of the Note Purchase Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 4. [INTENTIONALLY DELETED]
(f) Section 5 of the Note Purchase Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 5. [INTENTIONALLY DELETED]
(g) The text of each of Sections 6.6, 6.7, 6.8, 6.9, 6.11, 6.12 and
6.21 of the Note Purchase Agreement is hereby deleted in its entirety and
replaced with the following: "[Intentionally deleted]."
(h) The text of Section 6.10 of the Note Purchase Agreement is hereby
deleted in its entirety and replaced with the following:
The Company will not, and will not permit any Subsidiary to,
incur or maintain any Debt other than Debt in existence on the "Effective
Date" (as that term is defined in the Pledge Agreement).
(i) Section 6.13(a) of the Note Purchase Agreement is hereby deleted
in its entirety and replaced with the following:
(a) Liens in existence on the "Effective Date" (as that term is
defined in the Pledge Agreement and including, without limitation, the
Liens granted pursuant to the Pledge Agreement) and Liens to secure
replacements, extensions and renewals of the Debt or other obligations
secured by such Liens only if (i) the principal amount of the Debt or
other obligation secured thereby is not increased, (ii) such Lien does not
extend to any Property not previously subject thereto and (iii) such Lien
does not conflict with any Lien in favor of the holders of the Notes;
(j) The text of each of Sections 6.13(f), (g), (h) and (i) of the
Note Purchase Agreement is hereby deleted in its entirety and replaced with the
following: "[Intentionally deleted]."
(k) The text of Section 6.15 of the Note Purchase Agreement is hereby
deleted in its entirety and replaced with the following:
<PAGE>
The Company will not, nor will it permit any Subsidiary to,
become or be liable in respect of any Guaranty.
(l) Section 6.16 of the Note Purchase Agreement is hereby deleted in
its entirety and replaced with the following:
Section 6.16 Independence.
Until 367 days have elapsed following payment and satisfaction of all
obligations of the Company hereunder and under the Notes, the Company
shall be required to observe the applicable legal requirements for the
recognition of the Company as a legal entity separate and apart from
Monaco Finance, Inc., a Colorado corporation ("Monaco"), and each other
Affiliate of Monaco. Without limiting the generality of the foregoing, the
Company shall assure that each of the following is complied with:
(a) the Company shall maintain separate records, books of
account and financial statements (each of which shall be sufficiently full
and complete to permit a determination of the Company's assets and
liabilities separate and apart from those of Monaco and each other
Affiliate of Monaco and to permit a determination of the obligees thereon
and the time for performance of each of the Company's obligations separate
and apart from those of Monaco and each other Affiliate of Monaco) from
those of Monaco and each other Affiliate of Monaco;
(b) assets or funds of the Company shall be separately
identified and shall not be commingled with those of Monaco or any of the
other Affiliates of Monaco;
(c) the Company shall maintain a separate board of directors
(including two "independent directors" (as such term is defined in the
Company's Certificate of Incorporation)) and shall observe all separate
corporate formalities, and all decisions with respect to the Company's
business and daily operations shall be independently made by the officers
of the Company pursuant to resolutions of its board of directors;
(d) other than payment of dividends and return of capital, no
transactions shall be entered into between the Company and Monaco (other
than capital contributions made by Monaco to the Company) or between the
Company and any of the other Affiliates of Monaco;
(e) except as contemplated by the Pledge Agreement, the Company
shall act solely in its own name and through its own authorized officers
and agents and the Company will not act as agent of Monaco or any other
person in any capacity;
(f) the Company shall not guarantee, otherwise become liable
with respect to, or otherwise hold out its assets or credit as being
available to satisfy any obligation of Monaco or any of the other
Affiliates of Monaco including jointly or as co-obligor;
<PAGE>
(g) the Company shall at all times hold itself out to the public
under the Company's own name as a legal entity separate and distinct from
Monaco and the other Affiliates of Monaco and shall not hold itself out as
a "department," "division" or "part of" Monaco or any of the other
Affiliates of Monaco, and shall correct any known misunderstanding
regarding its separate identity from Monaco;
(h) the Company shall observe all corporate and other legal
formalities, including obtaining necessary authorization from board of
directors;
(i) the Company shall hold all regular meetings appropriate to
authorize corporate action and shall permit, upon reasonable advance
written notice, any of the Holders of the Notes to attend board meetings
of the Company;
(j) the Company shall maintain complete minutes
of all board of director and stockholder meetings;
(k) the Company shall maintain its bank and other investment
accounts separate and distinct from those of any Affiliate or other
Person;
(l) the Company shall pay from its own funds all obligations of
any kind incurred by it. Without limiting the generality of the foregoing,
the Company shall pay from its own funds the salaries or other
compensation and benefits of its own officers and employees, if any, and
will employ a reasonable number of employees in light of its purpose;
(m) the Company shall use its own stationery, invoices and
checks (i.e., not such forms of another Person); and
(n) the Company shall take all appropriate action necessary to
maintain its own existence as separate and distinct from the existence of
any of its owners.
(m) The text of Section 6.18 of the Note Purchase Agreement is hereby
deleted in its entirety and replaced with the following:
Within three (3) Banking Days following the earlier of the
receipt by Monaco, the Company or MF Receivables Corp. IV, a Delaware
corporation ("MF IV"), of any servicing report relating to the assets of
MF IV, the Company shall provide a copy of same to the holders of the
Notes.
(n) Section 7 of the Note Purchase Agreement is hereby deleted in its
entirety and replaced with the following:
SECTION 7. [INTENTIONALLY DELETED]
(o) The text of each of sections 8.1(b) and (d) of the Note Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"[Intentionally deleted]."
<PAGE>
(p) The text of Section 8.1(e) of the Note Purchase Agreement is
hereby deleted in its entirety and replaced with the following:
(e) Default shall occur under the Indenture, dated as of January
9, 1996 (as amended, modified or supplemented from time to time), between
the Company (as successor to Monaco Finance, Inc., a Colorado corporation)
and Norwest Bank Minnesota, National Association, as indenture trustee, or
any notes issued and outstanding thereunder, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any Indebtedness of the Company outstanding thereunder or
shall not have been cured, remedied or waived in writing within any
applicable grace period.
(q) The text of Section 8.1(f) of the Note Purchase Agreement is
hereby deleted in its entirety and replaced with the following:
(f) (i) Default shall occur in the observance or performance of
any covenant or agreement contained in Sections 6.10, 6.13 or 6.16 or in
the Pledge Agreement or (ii) the occurrence of any amendment, modification
or other revision of or supplement to any of the terms of the Daiwa
Agreements that would reasonably be expected to have a material adverse
effect on the holders of the Notes or the Lien granted pursuant to the
Pledge Agreement;
5. Conditions to Effectiveness. This Amendment shall become effective as
of the date first written above (the "Effective Date") upon the effectiveness of
the Pledge Agreement (as hereinafter defined), contingent upon the prior or
concurrent satisfaction of the following conditions:
(a) Rothschild shall have received a fully executed copy of this
Amendment.
(b) Rothschild shall have received, in substitution and exchange for
all Existing Notes, original Substitute Notes in the form attached hereto as
Exhibit A, and the Company shall have received the originals of all Existing
Notes.
(c) Rothschild shall have received certified copies of all
resolutions of the Company approving the execution, delivery and performance of
this Amendment and the transactions contemplated hereby.
(d) Rothschild shall have received: (i) a payment of principal on
account of the Existing Notes in an aggregate amount equal to $488,551.79; and
(ii) a payment equal to all accrued and unpaid interest on the outstanding
principal balance of the Existing Notes through to the Effective Date.
(e) Rothschild shall have received payment of all costs and expenses
required to be paid by the Company pursuant to Section 12 hereof.
(f) Rothschild shall have received a fully executed copy of the
Pledge and Custodial Agreement in the form attached hereto as Exhibit B (the
"Pledge Agreement"), together with copies of all original stock certificates,
blank stock powers and other documents required to delivered thereunder on or
before the Effective Date.
<PAGE>
(g) Rothschild shall have received a fully executed copy of the
Release Agreement in the form attached hereto as Exhibit C (the "Release
Agreement").
(h) Rothschild shall have received the written opinion of counsel to
the Company as to the following matters (which opinion may, in the case of items
(iv) and (v), be contained in the opinion delivered pursuant to the terms of the
Pledge Agreement): (i) an opinion as to the due authorization, execution and
delivery by the Company of this Amendment and the other agreements entered into
in connection herewith to which the Company is a party (including, without
limitation, the Substitute Notes and the Pledge Agreement); (ii) the fact that
the execution and delivery by the Company of, and the performance by the Company
of its obligations under, this Amendment and the other agreements entered into
in connection herewith to which the Company is a party (including, without
limitation, the Substitute Notes and the Pledge Agreement) does not contravene
(A) any material contractual restriction to which the Company or any of its
property may be subject, (B) any provision of law, statute, rule or regulation
having applicability to the Company or (C) to the best of such counsel's
knowledge, any judicial order or decree having applicability to the Company;
(iii) the effectiveness of the merger of MF Receivables Corp. IV, a Delaware
corporation and a wholly owned subsidiary of the Company with and into MF
Receivables Corp. IV, a Delaware corporation and a wholly owned subsidiary of
the Company; (iv) the beneficial ownership of record of the Pledged Shares (as
that term is defined in the Pledge Agreement); and (v) the creation, validity
and perfection of the security interest of the Collateral Agent (as that term is
defined in the Pledge Agreement) in the Collateral (as that term is defined in
the Pledge Agreement).
Upon the satisfaction of all of the foregoing conditions, Rothschild
shall immediately provide written notice to all of the parties to the Pledge
Agreement that all of such conditions have been satisfied. Notwithstanding
anything to the contrary contained herein, none of the amendments contemplated
by this Amendment shall become effective, and this Amendment shall automatically
terminate, if all of the foregoing conditions are not satisfied on or before
July 30, 1999.
<PAGE>
6. Releases; No Recourse. Upon the effectiveness of this Amendment in
accordance with Section 5 hereof, and for good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged): (a) the Company does
hereby release and discharge Rothschild, and all of its shareholders, directors,
officers, members, partners, employees, attorneys, accountants, consultants,
agents, representatives, successors and assigns (collectively, the "Rothschild
Released Parties"), of and from all manner of actions, choses and causes of
action, claims, demands, damages, expenses, liabilities, losses, judgments, and
executions (in each case of whatever kind or nature, whether in law or in
equity, and whether known or unknown) (collectively, the "Claims") at any time
arising out of or relating in any manner to any action or inaction at any time
by any of the Rothschild Released Parties in connection with or relating to any
matter; and (b) Rothschild, on its behalf and on behalf of all other Rothschild
Released Parties: (i) does hereby release and discharge the Company, and all of
its shareholders, directors, officers, members, partners, employees, attorneys,
accountants, consultants, agents, representatives, successors and assigns
(collectively, the "Company Released Parties"), of and from all manner of Claims
at any time arising out of or relating in any manner to any action or inaction
at any time by any of the Company Released Parties in connection with or
relating to any matter; provided that the foregoing release shall not release
the Company from its obligations arising under the Note Purchase Agreement (as
amended hereby), the Substitute Notes issued pursuant to the terms hereof,
and/or the Pledge Agreement and the Release Agreement (collectively, the
"Related Documents"); and (ii) acknowledge and agree that, notwithstanding
anything to the contrary contained in the Note Purchase Agreement, the
Substitute Notes and/or the Related Documents, no recourse under or upon any
obligation, covenant or agreement of the Company contained in the Note Purchase
Agreement, the Substitute Notes and/or any Related Document may be had against:
(A) any of the Company Released Parties other than the Company; and (B) the
Company, other than against the assets of the Company pledged as security
pursuant to the terms of the Pledge Agreement; and (iii) acknowledge and agree
that, notwithstanding anything to the contrary contained in the Note Purchase
Agreement, the Substitute Notes and/or the Related Documents, no such person or
entity will file any involuntary petition or otherwise institute or cooperate in
the institution of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding under any federal or state bankruptcy
or similar law against the Company.
7. Representations and Warranties of the Company. The Company represents
and warrants to Rothschild as follows:
(a) Authority. The Company has full corporate power, authority and
legal right to enter into this Amendment and the other agreements entered into
in connection herewith to which the Company is a party (including, without
limitation, the Substitute Notes and the Pledge Agreement). The execution and
delivery by the Company of this Amendment and the other agreements entered into
in connection herewith to which the Company is a party (including, without
limitation, the Substitute Notes and the Pledge Agreement): (i) have been duly
authorized by all necessary corporate action on the part of the Company; (ii)
are not in contravention of the terms of the organizational documents of the
Company or of any indenture, agreement or undertaking to which the Company is a
party or by which the Company or any of its property is bound; (iii) do not and
will not require any governmental consent, registration or approval; (iv) do not
and will not contravene any contractual or governmental restriction to which the
Company or any of its property may be subject; and (v) do not and will not,
except as contemplated herein, result in the imposition of any lien, charge,
security interest or encumbrance upon any property of the Company under any
existing indenture, mortgage, deed of trust, loan or credit agreement or other
material agreement or instrument to which the Company is a party or by which the
Company or any of its property may be bound or affected.
(b) Binding Effect. This Amendment and all of the other agreements
entered into by the Company in connection herewith (including, without
limitation, the Substitute Notes and the Pledge Agreement), have been duly
executed and delivered by the Company, as applicable, are the legal, valid and
binding obligations of the Company and are enforceable against the Company in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles related to
enforceability.
(c) No Default. No Default or Event of Default will result under the
Note Purchase Agreement (as amended hereby) from the execution and delivery of
this Amendment and/or the other agreements executed and delivered by the Company
in connection herewith (including, without limitation, the Substitute Notes and
the Pledge Agreement) or the consummation of the transactions contemplated
hereby.
8. Representations and Warranties of Monaco. Monaco represents and
warrants to Rothschild as follows:
<PAGE>
(a) Authority. Monaco has full corporate power, authority and legal
right to enter into this Amendment and the other agreements entered into in
connection herewith to which Monaco is a party. The execution and delivery by
Monaco of this Amendment and the other agreements entered into in connection
herewith to which Monaco is a party: (i) have been duly authorized by all
necessary corporate action on the part of Monaco; (ii) are not in contravention
of the terms of the organizational documents of Monaco or of any indenture,
agreement or undertaking to which Monaco is a party or by which Monaco or any of
its property is bound; (iii) do not and will not require any governmental
consent, registration or approval; (iv) do not and will not contravene any
contractual or governmental restriction to which Monaco or any of its property
may be subject; and (v) do not and will not, except as contemplated herein,
result in the imposition of any lien, charge, security interest or encumbrance
upon any property of Monaco under any existing indenture, mortgage, deed of
trust, loan or credit agreement or other material agreement or instrument to
which Monaco is a party or by which Monaco or any of its property may be bound
or affected.
(b) Binding Effect. This Amendment and all of the other agreements
entered into by Monaco in connection herewith have been duly executed and
delivered by Monaco, are the legal, valid and binding obligations of Monaco and
are enforceable against Monaco in accordance with their respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles related to enforceability.
(c) No Default. No Default or Event of Default will result under the
Note Purchase Agreement (as amended hereby) from the execution and delivery of
this Amendment and/or the other agreements executed and delivered by Monaco in
connection herewith or the consummation of the transactions contemplated hereby.
(d) Distributions. With respect to the period commencing February 1,
1999 and ending on the Effective Date, Monaco has received no distributions from
MF Receivables Corp. III, a Delaware corporation, and/or MF Receivables Corp.
IV, a Delaware corporation, other than the stated servicing fees to which Monaco
was otherwise entitled.
9. Representations and Warranties of Rothschild. Rothschild represents and
warrants to Monaco and the Company as follows:
(a) Authority. Rothschild has full corporate power, authority and
legal right to enter into this Amendment and the other agreements entered into
in connection herewith to which Rothschild is a party (including, without
limitation, the Pledge Agreement and the Release Agreement). The execution and
delivery by Rothschild of this Amendment and the other agreements entered into
in connection herewith to which Rothschild is a party (including, without
limitation, the Pledge Agreement and the Release Agreement) have been duly
authorized by all necessary corporate action on the part of Rothschild.
(b) Binding Effect. This Amendment and all of the other agreements
entered into by Rothschild in connection herewith (including, without
limitation, the Pledge Agreement and the Release Agreement) have been duly
executed and delivered by Rothschild, are the legal, valid and binding
obligations of Rothschild and are enforceable against Rothschild in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles related to
enforceability.
10. Reference to and Effect Upon the Note Purchase Agreement.
<PAGE>
(a) Except as specifically amended above, the Note Purchase
Agreement, as amended hereby, shall remain in full force and effect and are
hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment shall
be limited precisely as written and shall not be deemed to (i) be a consent to
any waiver or modification of any other term or condition of the Note Purchase
Agreement, the Substitute Notes or any other Related Document (except as
otherwise expressly provided herein) or (ii) prejudice any right, power or
remedy which Rothschild or any Holder of any Substitute Note may now have or may
have in the future under or in connection with the Note Purchase Agreement, the
Substitute Notes or any other Related Document (after giving effect to this
Amendment). Upon the effectiveness of this Amendment, each reference in the Note
Purchase Agreement, the Substitute Notes and/or any Related Document to "this
Agreement," "hereunder," "hereof," "herein" or words of similar import shall
mean and be a reference to the Note Purchase Agreement as amended hereby.
11. Counterparts; Facsimile Signatures. This Amendment may be executed in
any number of counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument. Facsimile copies of signatures hereto shall be deemed originals for
all purposes.
12. Costs and Expenses. The Company agrees to pay on demand all reasonable
fees, costs and expenses incurred by Rothschild and arising in connection with
the negotiation of this Amendment (including, without limitation, reasonable
attorneys' fees and expenses).
13. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purposes.
14. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS (AS OPPOSED TO CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
and year first written above.
<PAGE>
MONACO FINANCE, INC.
By: _________________________
Name: _________________________
Title: _________________________
ROTHSCHILD NORTH AMERICA, INC.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
MF RECEIVABLES HOLDING CORP.
By: _________________________
Name: _________________________
Title: _________________________
<PAGE>
Page 103 of 1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SOLD OR TRANSFERRED IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND APPLICABLE STATE LAWS
AND SUBJECT TO THE REQUIREMENTS OF THE NOTE PURCHASE AGREEMENT REFERRED TO
HEREIN.
MF RECEIVABLES HOLDING CORP.
Amended and Restated Senior Note
No. 1
$511,446.21 July 28, 1999
REGISTERED HOLDER: ROTHSCHILD NORTH AMERICA, INC.
MF RECEIVABLES HOLDING CORP., a Delaware corporation (hereinafter referred
to as the "Company"), for value received, in accordance with the provisions of
that certain Pledge and Custodial Agreement, dated as of July 28, 1999 (the
"Pledge and Custodial Agreement"), among the Company, Norwest Bank Minnesota,
National Association, as trustee (in such capacity, the "Trustee") under an
Indenture between the Company (as successor to Monaco Finance, Inc., a Colorado
corporation ("Monaco")), and the Trustee, dated as of January 9, 1996 (as
amended, modified or otherwise supplemented), Rothschild North America, Inc., a
Delaware corporation, and The Bank of New York, as collateral agent (in such
capacity, the "Collateral Agent"), promises to make payments, or cause payments
to be made, in respect of this Amended and Restated Senior Note (this "Note"),
up to a maximum principal amount as indicated on the face of this Note together
with interest accrued thereon (computed on the basis of a 360-day year of twelve
30-day months) at the applicable Interest Rate, all as, when and if received by
the Collateral Agent under the Pledge and Custodial Agreement. Payments in
respect of this Note will be made to the Holder of this Note on the terms and in
the manner as provided herein, in the Note Purchase Agreement (as hereinafter
defined) and in the Pledge and Custodial Agreement, in coin or currency of the
United States of America which at the time of payment shall be legal tender for
the payment of public and private debts.
This Note is one of the "Notes" of the Company issued or to be issued
under and pursuant to the terms and provisions of the Amended and Restated Note
Purchase Agreement, dated as of January 9, 1996 (as heretofore, now or hereafter
amended, supplemented, restated or otherwise modified (including, without
limitation, pursuant to the terms of that certain Amendment to Amended and
Restated Note Purchase Agreement, dated as of July 28, 1999), the "Note Purchase
Agreement"), between the Company (as successor to Monaco) and Rothschild North
America, Inc., a Delaware corporation, the original purchaser, and this Note and
the holder hereof are entitled equally and ratably with the holders of all other
Notes outstanding under the Note Purchase Agreement to all the benefits provided
for thereby or referred to therein. Reference is hereby made to the Note
Purchase Agreement for a statement of such rights and benefits. Each capitalized
term used and not otherwise herein shall have the meaning ascribed thereto in
the Note Purchase Agreement.
<PAGE>
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company in Denver,
Colorado, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered Holder of this Note or its attorney duly authorized
in writing. Payment of or on account of principal, Make-Whole Amount, if any,
and interest on this Note shall be made only to or upon the order in writing of
the registered Holder.
This Note amends and restates in its entirety, and is issued in
substitution for, that certain $5,000,000 Senior Subordinated Note Originally
Due October 1, 1999, made by Monaco to the payee hereof.
<PAGE>
Dated:
MF RECEIVABLES HOLDING CORP.
By:
Name:
Title:
<PAGE>
1691284
- -----------------------------------------------------------------------
121
- -----------------------------------------------------------------------
<PAGE>
SUPPLEMENTARY SERVICING AGREEMENT
This Supplementary Servicing Agreement (this "Agreement"), dated as of
April 1, 1999, by and among MF Receivables Corp. III, a Delaware corporation
(the "Borrower"), Systems & Services Technologies, Inc., a Delaware corporation,
as Substitute Servicer (the "Substitute Servicer"), and The Chase Manhattan
Bank, in its capacity as verification agent (the "Verification Agent") and as
collateral agent (the "Collateral Agent").
R E C I T A L S:
WHEREAS, the Borrower, the Verification Agent, the Collateral Agent and
Monaco Finance, Inc., a Colorado corporation ("Monaco") are parties to a
Servicing Agreement, dated as of December 4, 1997 (as heretofore modified,
amended or supplemented, the "Existing Servicing Agreement"), pursuant to which
Monaco has acted as the servicer of certain auto loans owned by the Borrower;
and
WHEREAS, unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned in the Existing Servicing Agreement; and
WHEREAS, due to the occurrence of one or more Servicer Events of Default,
Monaco's responsibilities as the Servicer under the Existing Servicing Agreement
have been terminated; and
WHEREAS, the Substitute Servicer provides portfolio management services,
including loan administration, payment collection and processing, back-up
servicing, insurance claim processing, custodial services, third party
repossession, liquidation and recovery collections and financial reporting to
financial institutions in connection with Designated Auto Loans; and
WHEREAS, the Borrower desires to avail itself of the services provided by
the Substitute Servicer to assume the duties of the Servicer, on the terms
provided herein;
NOW THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall, unless the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
<PAGE>
"Active Receivable" means any Designated Auto Loan other than: (i) an
Inactive Receivable, (ii) a fully satisfied Designated Auto Loan, (iii) a
Designated Auto Loan where the Vehicle secured thereby has been liquidated and
the Substitute Servicer has posted the liquidation proceeds or any other
anticipated proceeds (e.g., credit enhancement insurance and financed product
rebates); and (iv) any Designated Auto Loan where the Substitute Servicer has
completed all work in connection with processing and receiving insurance
payoffs.
"Change of Control" means that a person or group of persons acting
together has, following the date hereof, directly or indirectly acquired more
than 50% of the outstanding capital stock of the Substitute Servicer.
"Fees, Expenses & Distributions" means the fees, expenses and
distributions described in Schedule 1, attached hereto and by this reference
made a part hereof.
"Inactive Receivable" means a Receivable as to which the Substitute
Servicer has exhausted all remedies in accordance with its Policies and
Procedures Manual and has ceased all servicing activities with the exception of
posting payments received from Obligors in connection with deficiency account
balances but the principal balance of which remains unpaid.
"Lock-Box Account" means a lockbox or other segregated account into which
Obligors shall, by no later than April 30, 1999, be directed by the Substitute
Servicer to deposit funds with respect to the Designated Auto Loans.
"Transfer Period" means the period following the Substitute Servicer's
receipt of a Transfer Notice and prior to the date the Substitute Servicer is to
begin as the active servicer for all of the Designated Auto Loans.
ARTICLE II
NATURE AND SCOPE OF RELATIONSHIP
The Substitute Servicer agrees to assume the duties of the active servicer
as described in this Agreement and Paragraph II of the attached Exhibit A for
all of the Designated Auto Loans. In performing its duties under this Agreement,
the Substitute Servicer shall report to such officers or other employees of the
Initial Lender and the Borrower as the Initial Lender and the Borrower may
designate from time to time.
In performing its duties hereunder, the Substitute Servicer shall: (i) act
prudently in accordance with customary and usual servicing procedures for other
institutional servicers; (ii) comply with all applicable Federal and State laws
and regulations governing the Substitute Servicer and the Designated Auto Loans;
and (iii) use and exercise that degree of skill and attention that is customary
with other servicers in the industry that provide servicing relating to
Designated Auto Loans.
<PAGE>
The Substitute Servicer shall perform those duties specified in the
Existing Servicing Agreement and in this Agreement and contained in the attached
Exhibit A and shall receive the fees as outlined in Schedule 1 as full
compensation for its services. The Initial Lender or the Borrower with the
consent of the Initial Lender, such consent not to be unreasonably withheld, may
reasonably request the Substitute Servicer to modify or supplement its duties or
methods of performing those duties; provided that the Borrower shall compensate
the Substitute Servicer at a reasonable fee for any increase in expense
experienced by the Substitute Servicer due to the Initial Lender's requests.
Except to the extent specifically reimbursed under the Existing Servicing
Agreement and this Agreement, all costs and expenses of the Substitute Servicer
in connection with its duties hereunder shall be the sole responsibility of the
Substitute Servicer.
ARTICLE IIA
EFFECT OF THIS AGREEMENT
The parties hereto agree that, except as specifically set forth herein,
the Existing Servicing Agreement shall remain in full force and effect and the
Substitute Servicer shall be the Servicer thereunder. Notwithstanding the above,
from and after the date of this Agreement, the Existing Servicing Agreement
shall be amended as follows:
113. ARTICLE ONE:
(A) Add the following new definition: "Supplementary Servicing Agreement"
means the Supplementary Servicing Agreement, dated as of April 1, 1999, among
the Borrower, the Collateral Agent, the Verification Agent and Systems &
Services Technologies, Inc. (the "Substitute Servicer"), as the same may be
modified, amended or supplemented.
(B) Amend the definition of "Servicer Fee" to read as follows: "Servicer
Fee" means the fees payable to the Substitute Servicer under the Supplementary
Servicing Agreement and includes any indemnification payment required to be made
under Article X of the Supplementary Servicing Agreement.
114. ARTICLE TWO: Deleted in its entirety.
115. ARTICLE THREE:
(A) Section 3.01: Deleted in its entirety.
(B) Section 3.03: Deleted in its entirety.
(C) Section 3.05: Delete all but the first two sentences.
(D) Section 3.07: Deleted in its entirety.
(E) Section 3.08(a): Delete the words "or the Servicer has complied with
Section 3.01(b) hereof," and the last sentence.
(F) Section 3.08(d): Delete "the Servicer" and substitute therefor "the
Initial Lender".
116. ARTICLE FOUR:
1.
<PAGE>
(A) Section 4.02: Delete Subsections (a)(ii)-(iv) and (vii).
(B) Section 4.03 (b): Deleted in its entirety.
(C) Section 4.04: Delete the words "under the Program Documents that the
Servicer may possess" and substitute the words "under the Servicing Agreement
and the Supplementary Servicing Agreement"; delete the last two words of the
Section and substitute the words "Servicing Agreement and the Supplementary
Servicing Agreement".
117. ARTICLE FIVE:
Delete in its entirety as to the Substitute Servicer. It is the intention
of the Borrower, the Collateral Agent and the Verification Agent (and of the
Initial Lender and Monaco, although they are not parties hereto) that the
provisions of ARTICLE FIVE of the Existing Servicing Agreement remain in full
force and effect with respect to the rights and responsibilities of Monaco in
relation to its activities prior to April 1, 1999.
118. ARTICLE SIX:
Sections 6.01 and 6.02: Delete in their entirety.
119. ARTICLE EIGHT
Section 8.01: Delete in its entirety.
ARTICLE III
ERRORS AND OMISSIONS AND BLANKET CRIME INSURANCE
The Substitute Servicer shall maintain, at its own expense, (i) an errors
and omissions insurance policy and (ii) a blanket crime policy, in each case
with broad coverage with established insurance companies, covering all officers,
employees or other persons acting on behalf of the Substitute Servicer with
regard to the Designated Auto Loans to handle funds, money, documents,
computerized information and papers relating to the Designated Auto Loans. Any
such insurance shall protect and insure the Substitute Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such the Substitute Servicer and shall be maintained in a form
and amount that would meet the requirements of prudent loan servicing companies.
<PAGE>
No provision of this Article III requiring such insurance shall diminish
the duties of the Substitute Servicer as set forth in this Agreement and the
Existing Servicing Agreement or relieve the Substitute Servicer from its duties
and obligations as set forth in this Agreement and the Existing Servicing
Agreement. Upon the request of the Initial Lender, the Substitute Servicer shall
cause to be delivered to the Initial Lender and to the Collateral Agent a
certificate evidencing coverage under such errors and omissions and/or blanket
crime policies. Any such policies shall not be canceled without prior written
consent of the Borrower and Initial Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE SUBSTITUTE SERVICER
The Substitute Servicer makes the following representations and warranties
to the Borrower, the Collateral Agent and the Initial Lender:
1. The Substitute Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and in each other jurisdiction where the conduct of its business
requires it to be in good standing. The Substitute Servicer has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Substitute
Servicer. This Agreement has been duly and validly
executed and delivered by the Substitute Servicer and,
assuming due authorization, execution and delivery by each
other party hereto, this Agreement is a valid and legally
binding agreement of the Substitute Servicer enforceable in
accordance with its terms.
3. The execution and delivery of this Agreement by the
Substitute Servicer and the compliance by the Substitute
Servicer with all provisions of this Agreement do not
conflict with or violate any applicable law, regulation or
order and do not conflict with or result in a breach of or
default under any of the terms or provisions of any
contract or agreement to which the Substitute Servicer is
subject or by which it or its property is bound, nor does
such execution, delivery or compliance violate the Articles
of Incorporation or By-laws of the Substitute Servicer.
4. The practices used or to be used by the Substitute Servicer
to monitor collections with respect to the Designated Auto
Loans and repossess and dispose of the Vehicles related to
the Designated Auto Loans will be, in all material
respects, legal, proper and in conformity with the
requirements of all applicable federal and state laws,
rules and regulations, and VSI policy procedures (if
applicable). The Substitute Servicer is in possession of
all state and local licenses (including all debt collection
licenses) required for it to perform its services
hereunder, and none of such licenses has been suspended,
revoked or terminated.
<PAGE>
5. The Initial Lender has been given a true and accurate copy of the
Policies and Procedures Manual of the Substitute Servicer. All of the
responsibilities of the Substitute Servicer hereunder will be in
compliance with such Policies and Procedures Manual, as the same may
be amended from time to time upon notice to the Initial Lender.
B. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower makes the following representations and warranties to the
Substitute Servicer:
1. The Borrower is a corporation, validly existing and in good standing
under the laws of the State of Delaware. The Borrower has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Borrower.
This Agreement has been duly and validly executed and
delivered by the Borrower and assuming due authorization,
execution and delivery by each other party hereto, this
Agreement is a valid and legally binding agreement of the
Borrower enforceable in accordance with its terms.
3. The execution and delivery of this Agreement by the
Borrower and the compliance by the Borrower with all
provisions of this Agreement do not conflict with or
violate any applicable law, regulation or order and do not
conflict with or result in a breach of or default under any
of the terms or provisions of any contract or agreement to
which the Borrower is subject or by which it or its
property is bound, nor does such execution, delivery or
compliance violate the Certificate of Incorporation or
By-laws of the Borrower.
The representations and warranties contained in this Article IV shall survive
the execution and delivery of this Agreement.
ARTICLE V
SUBSTITUTE SERVICER EVENTS OF DEFAULT
A. If any one of the following events (each, a "Substitute Servicer Event of
Default") shall occur and be continuing:
<PAGE>
1. Any failure by the Substitute Servicer to deposit into the Lock-Box
Account any proceeds or payments received from an Obligor or in
respect of the Designated Auto Loans and required to be so delivered
or deposited under the terms of this Agreement or the Existing
Servicing Agreement that continues unremedied until 10:00 a.m. St.
Louis time on the following Business Day; or
2. Failure on the part of the Substitute Servicer (a) to
observe or to perform in any material respect any other
covenant or agreement set forth in this Agreement or the
Existing Servicing Agreement, which failure shall adversely
affect the rights of the Initial Lender and continue
unremedied for a period of 30 days after the date on which
written notice of such failure shall have been received by
the Substitute Servicer or (b) to deliver the Monthly
Servicer Report as required by the Existing Servicing
Agreement; or
3. The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, or
liquidator for the Substitute Servicer in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or the winding-up or
liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 30
consecutive days; or
4. (a) The admission by the Substitute Servicer of its
inability to pay its debts generally as they become due; or
(b) the filing by the Substitute Servicer of a petition
under any applicable bankruptcy, insolvency or
reorganization of any applicable statute; or (c) if the
Substitute Servicer makes an arrangement for the benefit of
its creditors or voluntarily suspend payment of its
obligations; or (d) the filing by a third party of a
bankruptcy case under Federal or State law against the
Substitute Servicer; or
5. If there is breach of any representation or warranty as set forth in
Article IV and such breach shall not be cured in all material respects
within 30 consecutive days after receipt of written notice from one
party to the breaching party or upon discovery by the breaching party;
then, and in each and every case and so long as a Substitute Servicer Event of
Default described above shall not have been remedied, the Initial Lender may
terminate all of the rights and obligations of the Substitute Servicer under
this Agreement.
ARTICLE VI
REMEDIES
<PAGE>
In addition to the indemnification rights contained in Article X and the
right to terminate contained in Article XI, the Substitute Servicer agrees that
upon the occurrence of any Substitute Servicer Event of Default, both the
Initial Lender and the Borrower may avail itself of any other relief to which it
may be legally or equitably entitled. In the event of any default of this
Agreement by the Borrower, the Borrower acknowledges the remedies of the
Substitute Servicer contained in Articles XI and XII may be inadequate and that
the Substitute Servicer may also avail itself of any other relief to which it
may be legally or equitably entitled.
ARTICLE VII
RESPONSIBILITY AND AUTHORITY OF THE SUBSTITUTE SERVICER
A. The Substitute Servicer shall have the full power and authority
acting alone and without the consent of any other party hereto,
to do any and all things in connection with the servicing of any
Designated Auto Loan that it may deem reasonably necessary or
desirable, consistent with the duties and obligations imposed
upon the Substitute Servicer by this Agreement including, but
not limited to, the right to subcontract any of its duties
hereunder. Notwithstanding the foregoing, the Substitute
Servicer shall cooperate fully with the Initial Lender and the
Borrower and promptly inform the Initial Lender and the Borrower
of any and all changes or developments of which the Substitute
Servicer becomes aware that may affect the Designated Auto Loans.
B. The Substitute Servicer is hereby authorized to communicate with third
parties and the Obligors in the name of the Borrower as necessary and
proper to perform the services anticipated by this Agreement.
C. The Substitute Servicer shall have the right to commence a legal
proceeding on behalf of the Borrower to enforce any Designated
Auto Loan. As reasonably requested by the Substitute Servicer,
the Borrower shall furnish the Substitute Servicer with any
necessary and appropriate powers of attorney and other documents
needed in order to enable the Substitute Servicer to carry out
such proceeding and with respect to its servicing and
administrative duties hereunder.
ARTICLE VIII
BANK ACCOUNTS
Following the expiration of the Transfer Period:
A. The Substitute Servicer shall maintain the Lock-Box Account, and
shall collect and hold in trust (for the benefit of the
Collateral Agent) in such accounts all funds received from
Obligors or in respect of Designated Auto Loans. The Substitute
Servicer shall use its best efforts to ensure that all
Collections are directed to and/or deposited into the Lock-Box
Account. The financial institution in which the Lock-Box
Account is opened shall be under irrevocable instructions (which
can be modified only with the consent of the Initial Lender)
that upon receipt of cleared funds in the Lock-Box Account, such
funds shall be transferred to the Collateral Account.
B. The Substitute Servicer shall immediately notify the Initial Lender and
the Collateral Agent of the identity of the financial institution
maintaining the Lock-Box Account and obtain the agreement of such
financial institution to the irrevocable instructions described above.
<PAGE>
ARTICLE IX
DOCUMENTS AND RECORDS
The Substitute Servicer shall provide the Initial Lender and its designees
access to the its facility, but only (except following the occurrence of a
Substitute Servicer Event of Default) upon reasonable request and during normal
business hours of the Substitute Servicer and to the extent that such access
would not significantly disrupt the orderly conduct of business at such
facility. The Substitute Servicer will accept all deliveries of loan files and
similar data as specified by the Initial Lender from time to time.
ARTICLE X
INDEMNIFICATION
A. The Substitute Servicer shall indemnify and hold harmless the
Initial Lender, the Borrower, the Servicer, the Collateral Agent
and the Verification Agent and each of their respective
officers, employees and agents against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, fees and expenses that any
of such Persons may sustain in any way related to the negligence
or misconduct of the Substitute Servicer in its performance
under the terms of this Agreement or the Existing Servicing
Agreement, or arising from any breach of the representations and
warranties of the Substitute Servicer set forth in Article IV
hereof. The Substitute Servicer shall notify the Initial Lender
as soon as possible if a claim is made by a third party with
respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
B. The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
related to the negligence or misconduct of the Borrower in its
performance under the terms of this Agreement or the Existing
Servicing Agreement, or arising from any breach of the
representations and warranties of the Borrower set forth in
Article IV hereof. The Borrower shall notify the Substitute
Servicer as soon as possible if a claim is made by a third party
with respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
<PAGE>
C. The Substitute Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation
provided to the Substitute Servicer by or at the direction of
the Borrower, including documents prepared or maintained by any
originator or the Servicer, or any party providing services
related to the Designated Auto Loans (each, a "third party").
------------
The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
solely related to the negligence or misconduct of any third
party with respect to the Designated Auto Loans. The Substitute
Servicer shall have no duty, responsibility, obligation or
liability (collectively "liability") for the acts or omissions
---------
of any third party. If any error, inaccuracy or omission
(collectively "error") exists in any information provided to the
-----
Substitute Servicer and such error causes or materially
contributes to the Substitute Servicer making or continuing any
error (a "continuing error"), the Substitute Servicer shall have
-----------------
no liability for such continued error; provided, however, that
-------- -------
this provision shall not protect the Substitute Servicer against
any liability arising from its willful misconduct, bad faith or
gross negligence in discovering or correcting or failing to
discover or correct any error or in the performance of its
duties contemplated herein.
If the Substitute Servicer becomes aware of any error or continuing error
which in the opinion of the Substitute Servicer impairs its ability to
perform its services hereunder, the Substitute Servicer shall promptly
notify the Initial Lender thereof; the Substitute Servicer may undertake
such data or records reconstruction as it deems appropriate to correct any
such error or continued error and to prevent future continued error. To
the extent it is not otherwise reimbursed under the Existing Servicing
Agreement, the Substitute Servicer shall be entitled to recover its costs
thereby expended.
ARTICLE XI
TERM AND TERMINATION
A. The term of this Agreement shall be for one year from the date first
written above and will automatically renew for additional successive
one-year terms unless the Initial Lender or the Substitute Servicer shall
upon 90 days written notice elect not to renew this Agreement.
Notwithstanding the above, this Agreement shall automatically terminate
when the Notes are repaid in full.
<PAGE>
B. The Initial Lender shall have the right to terminate this
Agreement (i) at any time prior to the delivery of a Transfer
Notice, and, (ii) following such delivery, during any term upon
not less than 60 days written notice delivered by overnight mail
to the Substitute Servicer. In the event of any such
termination under clause (ii) above, the Substitute Servicer
shall be entitled to a termination fee equal to the greater of
$20,000.00 or the servicing fee for each Designated Auto Loan so
transferred for the month preceding the month in which the
notice of termination is delivered, such fee to be paid by the
Borrower unless the Initial Lender affects such termination
without the prior written consent of the Borrower (which consent
shall not be unreasonably withheld), in which case the Initial
Lender shall be responsible therefor; provided, that no such
--------
termination fee shall be payable if (x) a Substitute Servicer
Event of Default shall have occurred or (y) the effective date
of such termination is within 90 days following the date upon
which the Substitute Servicer has been merged with or into
another entity or a Change of Control has occurred. The
Substitute Servicer shall not, however, be entitled to receive
any such termination fee if the Substitute Servicer is
terminated due to the occurrence of a Substitute Servicer Event
of Default.
C. The Substitute Servicer shall have the right to resign under
this Agreement by giving 90 days prior written notice to the
Initial Lender; provided, however, that in no event shall any
-------- -------
such resignation be effective unless the Substitute Servicer
shall have provided the Initial Lender with a successor which is
acceptable to the Initial Lender in its sole discretion and such
successor shall agree, by written instrument delivered to each
party hereto, to be bound by all of the terms and conditions of
this Agreement.
ARTICLE XII
WAIVERS
No failure or delay on the part of the Initial Lender or any party hereto
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 or further exercise thereof or the exercise of any
other power, right or remedy except by a written instrument signed by the party
to be charged or as otherwise expressly provided herein.
ARTICLE XIII
NOTICES
Except as otherwise provided herein, all notices, requests, consents,
demands and other formal communications given hereunder shall be in writing. All
notices of whatever kind shall be either personally delivered or sent by
telecopy or other form of rapid transmission and confirmed by United States
mail, properly addressed and with full postage prepaid to the following:
To Servicer: Systems & Services Technologies, Inc.
4315 Pickett Road
St. Joseph, Missouri 64503
Attn: John J. Chappell, President
Telecopy No.: (816) 671-2029
To any other party hereto: At its address referred to in the Existing
Servicing Agreement. Any party hereto delivering any notice to any other party
hereto shall also deliver a copy thereof to the Initial Lender at its address
set forth in the Credit Agreement.
Daiwa Finance Corp.
32 Old Slip
New York, NY 10005
Attn: Harold Gartner
Telecopy No.: (212) 612-7122
<PAGE>
or to such other address as such party shall have specified in writing in the
manner set forth above.
ARTICLE XIV
FURTHER ASSURANCES
Each party agrees, if reasonably requested by any other party, to execute
and deliver such additional documents or instruments and take such further
actions as may be reasonably necessary to effect the transactions contemplated
by this Agreement.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in counterparts (including counterparts
evidenced by facsimile transmission), each of which shall be deemed an original
but all of which taken together shall constitute but one and the same document.
ARTICLE XVI
ENTIRE AGREEMENT; AMENDMENTS
This Agreement, together with the Program Documents and including the
Exhibits and Schedules attached hereto and the documents referred to herein,
contains the entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior understandings,
negotiations, commitments and writings with respect hereto. This Agreement may
not be modified, changed or supplemented except upon the express written consent
of each party hereto.
ARTICLE XVII
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
ARTICLE XVIII
CONFIDENTIALITY
The parties agree that they will execute and deliver a mutually
satisfactory confidentiality agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
SUBSTITUTE SERVICER:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By:
Name: John J. Chappell
Title: President
BORROWER
MF RECEIVABLES CORP. III
By:
Name: Morris Ginsburg
Title: President
COLLATERAL AGENT
THE CHASE MANHATTAN BANK
By:
Name:
Title:
<PAGE>
EXHIBIT A
SUMMARY OF SERVICES
SUBSTITUTE SERVICING
The following outlines the services to be provided by the Substitute Servicer
from and after the end of the Transfer Period. The procedures identified herein
are to be implemented at the discretion of the Substitute Servicer depending on
the needs and circumstances of the Designated Auto Loans:
A. CUSTODIAL DUTIES
1. Upon transfer of the Designated Auto Loans to the Substitute Servicer,
the Substitute Servicer shall establish all necessary records in its computer
system, and shall separate the physical loan package for storage. Any perfection
of interest documents to be maintained by the Substitute Servicer shall be filed
in appropriate fireproof facilities. All physical files regarding the Designated
Auto Loans shall be kept in separate filing cabinets being distinctly marked as
the property of the Borrower. All Designated Auto Loans shall be distinctly
marked on the computer files of the Substitute Servicer as belonging to the
Borrower.
B. OBLIGOR ACCOUNTING
1. The Substitute Servicer shall process all monies received by or on behalf of
an Obligor through the Lock-Box Account.
2. The Substitute Servicer may, from time to time, utilize the services of
third-party vendors to assist in the receipt and processing of payments by or on
behalf of Obligors, i.e., Western Union "Quick Collect" or Speedpay.
3. To the extent possible, the Substitute Servicer shall cause all monies
received by or on behalf of an Obligor to post to the Obligor's account within
one Business Day following receipt.
4. The Substitute Servicer shall cause the Obligor's next scheduled due date to
roll when the Obligor payment received is within $25.00 of the expected monthly
payment unless the aggregate unpaid payment shortfalls exceeds $75.00 at the
time of posting.
<PAGE>
5. The Substitute Servicer shall advance monies as necessary to cover the
expenses incurred in the process of servicing as provided in Schedules 1 and 2,
to include repossession of an Obligor's Vehicle. These expenses include, but are
not limited to, field calls, repossession costs, storage and transportation
costs, legal fees, mailing costs, skip tracing, mechanics liens and liquidation
costs. Such "out-of-pocket" expenses shall be reimbursed to the Substitute
Servicer as Servicer Fees. Such expenses shall be posted to the Obligor's
account, as applicable and in accordance with law.
C. CUSTOMER SERVICE
1. The Substitute Servicer shall respond to all inquiries from Obligors
regarding their Designated Auto Loans.
2. The Substitute Servicer shall send to Obligors or their approved
representatives (i) payment books or monthly payment statements, as the case may
be; and (ii) account payoff information.
3. The Substitute Servicer shall (i) subcontract physical damage insurance
tracking services, if so requested and (ii) coordinate and assist with
electronic data transfers as needed. All such subcontractor fees and costs shall
be reimbursable to the Substitute Servicer as Servicer Fees.
D. COLLECTIONS
1. The Substitute Servicer shall use its best efforts to collect all outstanding
sums due on every delinquent account. Such efforts shall include diligent
contact with the Obligor by phone or by letter as set forth in the Substitute
Servicer's policy manual delivered to the Initial Lender.
2. Field calls may be utilized at the Substitute Servicer's discretion.
3. The Substitute Servicer may implement any legally permissible collection
methods, including telephone calls, mailed notices and outside field calls.
4. If the Substitute Servicer determines that an Obligor is or may become a
"Skip", the Substitute Servicer shall make all reasonable attempts to locate the
Obligor or related Vehicle using internal skip tracing procedures, and may
sub-contract for outside assistance.
5. The Substitute Servicer shall report all appropriate Obligor account
developments to one or more nationally recognized credit agencies on a monthly
basis.
E. SPECIAL RECOVERIES
1. The Substitute Servicer shall make all reasonable attempts to collect
delinquent Obligor accounts. Promptly after such efforts have been exhausted,
and in the judgment of the Substitute Servicer required payments will not be
forthcoming from the Obligor, the Substitute Servicer shall use its best efforts
to repossess or otherwise recover the Vehicle securing the Designated Auto Loan.
The Substitute Servicer shall pursue repossession or recovery of a Vehicle only
after it has determined that eventual repayment in full is unlikely and such
repossession or recovery is permitted under the terms of the receivable and all
applicable laws.
<PAGE>
2. At such time as a Vehicle has been authorized for repossession, the
Substitute Servicer shall assign the account to an authorized, qualified,
licensed and bonded regional repossession agency. Such agent shall be a member
of a nationally recognized association requiring adequate insurance and bonding
(e.g., National Finance Adjusters). Any such assignment shall not relieve the
Substitute Servicer of any of its obligations hereunder.
3. Upon receipt of notification that a repossession has been made, the
Substitute Servicer shall mail to the Obligor and any co-borrower or guarantor,
a Notice of Intent ("NOI") to sell the Vehicle, and shall therein provide the
Obligor with an opportunity to reinstate or redeem the Vehicle.
4. Upon repossession, the repossession agency shall deliver the Vehicle to the
specified destination. At that time, the Substitute Servicer will engage an
inspection agent to assess physical damage to the Vehicle, and will arrange for
any necessary repairs to be made.
5. Assuming no reinstatement or redemption is made by the Obligor, the
Substitute Servicer will determine the appropriate method of resale/liquidation.
Such determination shall weigh federal and state law requirements, market
factors and other variables so as to maximize the liquidation proceeds.
6. The Substitute Servicer shall send notices of deficiencies and manage all
aspects of collateral liquidation including title transfers.
7. Following the liquidation of a Vehicle, the Substitute Servicer shall post
all receipts and apply all credits that may exist to the applicable Obligor
account. If the account is insured under a credit enhancement policy, the
Substitute Servicer shall file a claim as specified in the policy.
8. The Substitute Servicer may perform deficiency balance collections under
separate agreement.
F. ADDITIONAL DUTIES
1. The Substitute Servicer shall establish a physical file for each Designated
Auto Loan, and shall keep complete books and records pertaining to the same.
2. Upon request, the Substitute Servicer shall make available to the Initial
Lender or its designee, the physical files, records and computer systems for
audit or inspection on the premises of the Substitute Servicer, so long as such
audit or inspection does not unreasonably interfere with the operations of the
Substitute Servicer.
3. The Substitute Servicer shall act as custodian of all documents delivered to
it related to the Collateral.
<PAGE>
SCHEDULE 1
FEES, EXPENSES & DISTRIBUTIONS
The Fees and Expenses described herein shall be considered Servicer Fees for all
purposes of the Program Documents. All fees and expenses of the Substitute
Servicer will be paid only from the proceeds of the Designated Auto Loans as set
forth in Section 6.04(d) of the Security Agreement.
I. FEES
A. Monthly Fee
(1.) Remaining term of 30 or more months: greater of: $17.00 per
Active Receivable or 320 basis
points
(2.) Remaining term of less than 30 months: $20.00 per Active
Receivable
(3.) Remaining term of less than 24 months: $22.00 per Active
Receivable
(4.) Inactive Receivables: $0.50 per Inactive Receivable
B. Minimum Monthly Fee $1,000.00 per loan pool
II. EXPENSES
The Substitute Servicer shall be reimbursed in accordance with the Existing
Servicing Agreement for all out-of-pocket expenses, including, but not limited
to, those associated with Vehicle recovery, Vehicle liquidation, legal
proceedings related to replevin actions or Obligor bankruptcies, mailing costs,
title processing, bank charges and insurance tracking. All such expenses,
together with a Substitute Servicer administrative fee of 8% of the advanced
funds, shall be billed to the Borrower as provided in Section III. B. below.
Alternatively, the Borrower may at any time during the term of the Agreement
establish an advance account to be used by the Substitute Servicer to cover
out-of-pocket expenses. If such an advance account is implemented, the
Substitute Servicer administration fee shall not apply.
All reimbursable expenses of Monaco previously incurred by Monaco, but not yet
paid, have been submitted to the Substitute Servicer for payment. A schedule of
these expenses is attached hereto as Schedule
2 and by this reference made part hereof. All such expenses will be paid by
the Substitute Servicer upon: (i) receipt of invoices from the Servicer; and
(ii) verification by the Substitute Servicer that the expenses reflected of
any such invoice are proper, reimbursable servicing-related expenses. In the
event the Substitute Servicer is unable to so verify any expense item, the
Substitute Servicer will
return the invoice in question ("Disputed Invoice") to Monaco with a
copy to the Initial Lender. The Substitute Servicer will pay
Disputed Invoices only upon the approval of the Initial Lender. The Substitute
Servicer will only advance such expenses upon confirmation
that the same are fully reimburseable to the Substitute Servicer.
III. DISTRIBUTIONS
Servicer Fees for each Payment Date shall be reflected on the Monthly Servicing
Report for such month. All fees and reimbursable expenses and other amounts due
the Substitute Servicer as reflected on a Monthly Servicing Report shall be paid
to the Substitute Servicer on the related Payment Date.
<PAGE>
1691284
- -----------------------------------------------------------------------
140
- -----------------------------------------------------------------------
IV. MISCELLANEOUS
A. Claim Filing Costs
If the Substitute Servicer files VSI claims in connection with any Designated
Auto Loan, the Substitute Servicer shall receive $25.00 per filing.
B. Late Fees and Extension Fees
All extension fees received by the Substitute Servicer in respect of Designated
Auto Loans shall be deposited by the Substitute Servicer into the Collection
Account and the amount thereof collected shall be paid to the Substitute
Servicer as Servicer Fees. All late fees received by the Substitute Servicer in
respect of Designated Auto Loans shall be deposited into the Collection Account
and the amount thereof collected shall be paid in accordance with Section
6.04(d) of the Security Agreement.
C. Deficiency Collections
Under separate agreement, the Substitute Servicer may provide deficiency balance
collections services on a contingency fee basis.
<PAGE>
SUPPLEMENTARY SERVICING AGREEMENT
This Supplementary Servicing Agreement (this "Agreement"), dated as of
April 1, 1999, by and among MF Receivables Corp. IV, a Delaware corporation (the
"Borrower"), Systems & Services Technologies, Inc., a Delaware corporation, as
Substitute Servicer (the "Substitute Servicer"), and The Chase Manhattan Bank,
in its capacity as verification agent (the "Verification Agent") and as
collateral agent (the "Collateral Agent").
R E C I T A L S:
WHEREAS, the Borrower, the Verification Agent, the Collateral Agent and
Monaco Finance, Inc., a Colorado corporation ("Monaco") are parties to a
Servicing Agreement, dated as of December 22, 1997 (as heretofore modified,
amended or supplemented, the "Existing Servicing Agreement"), pursuant to which
Monaco has acted as the servicer of certain auto loans owned by the Borrower;
and
WHEREAS, unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned in the Existing Servicing Agreement; and
WHEREAS, due to the occurrence of one or more Servicer Events of Default,
Monaco's responsibilities as the Servicer under the Existing Servicing Agreement
have been terminated; and
WHEREAS, the Substitute Servicer provides portfolio management services,
including loan administration, payment collection and processing, back-up
servicing, insurance claim processing, custodial services, third party
repossession, liquidation and recovery collections and financial reporting to
financial institutions in connection with Designated Auto Loans; and
WHEREAS, the Borrower desires to avail itself of the services provided by
the Substitute Servicer to assume the duties of the Servicer, on the terms
provided herein;
NOW THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall, unless the context
otherwise requires, have the following meanings (such meanings to be equally
applicable to the singular and plural forms of the terms defined):
<PAGE>
"Active Receivable" means any Designated Auto Loan other than: (i) an
Inactive Receivable, (ii) a fully satisfied Designated Auto Loan, (iii) a
Designated Auto Loan where the Vehicle secured thereby has been liquidated and
the Substitute Servicer has posted the liquidation proceeds or any other
anticipated proceeds (e.g., credit enhancement insurance and financed product
rebates); and (iv) any Designated Auto Loan where the Substitute Servicer has
completed all work in connection with processing and receiving insurance
payoffs.
"Change of Control" means that a person or group of persons acting
together has, following the date hereof, directly or indirectly acquired more
than 50% of the outstanding capital stock of the Substitute Servicer.
"Fees, Expenses & Distributions" means the fees, expenses and
distributions described in Schedule 1, attached hereto and by this reference
made a part hereof.
"Inactive Receivable" means a Receivable as to which the Substitute
Servicer has exhausted all remedies in accordance with its Policies and
Procedures Manual and has ceased all servicing activities with the exception of
posting payments received from Obligors in connection with deficiency account
balances but the principal balance of which remains unpaid.
"Lock-Box Account" means a lockbox or other segregated account into which
Obligors shall, by no later than April 30, 1999, be directed by the Substitute
Servicer to deposit funds with respect to the Designated Auto Loans.
"Transfer Period" means the period following the Substitute Servicer's
receipt of a Transfer Notice and prior to the date the Substitute Servicer is to
begin as the active servicer for all of the Designated Auto Loans.
ARTICLE II
NATURE AND SCOPE OF RELATIONSHIP
The Substitute Servicer agrees to assume the duties of the active servicer
as described in this Agreement and Paragraph II of the attached Exhibit A for
all of the Designated Auto Loans. In performing its duties under this Agreement,
the Substitute Servicer shall report to such officers or other employees of the
Initial Lender and the Borrower as the Initial Lender and the Borrower may
designate from time to time.
In performing its duties hereunder, the Substitute Servicer shall: (i) act
prudently in accordance with customary and usual servicing procedures for other
institutional servicers; (ii) comply with all applicable Federal and State laws
and regulations governing the Substitute Servicer and the Designated Auto Loans;
and (iii) use and exercise that degree of skill and attention that is customary
with other servicers in the industry that provide servicing relating to
Designated Auto Loans.
<PAGE>
The Substitute Servicer shall perform those duties specified in the
Existing Servicing Agreement and in this Agreement and contained in the attached
Exhibit A and shall receive the fees as outlined in Schedule 1 as full
compensation for its services. The Initial Lender or the Borrower with the
consent of the Initial Lender, such consent not to be unreasonably withheld, may
reasonably request the Substitute Servicer to modify or supplement its duties or
methods of performing those duties; provided that the Borrower shall compensate
the Substitute Servicer at a reasonable fee for any increase in expense
experienced by the Substitute Servicer due to the Initial Lender's requests.
Except to the extent specifically reimbursed under the Existing Servicing
Agreement and this Agreement, all costs and expenses of the Substitute Servicer
in connection with its duties hereunder shall be the sole responsibility of the
Substitute Servicer.
ARTICLE IIA
EFFECT OF THIS AGREEMENT
The parties hereto agree that, except as specifically set forth herein,
the Existing Servicing Agreement shall remain in full force and effect and the
Substitute Servicer shall be the Servicer thereunder. Notwithstanding the above,
from and after the date of this Agreement, the Existing Servicing Agreement
shall be amended as follows:
120. ARTICLE ONE:
(A) Add the following new definition: "Supplementary Servicing Agreement"
means the Supplementary Servicing Agreement, dated as of April 1, 1999, among
the Borrower, the Collateral Agent, the Verification Agent and Systems &
Services Technologies, Inc. (the "Substitute Servicer"), as the same may be
modified, amended or supplemented.
(B) Amend the definition of "Servicer Fee" to read as follows: "Servicer
Fee" means the fees payable to the Substitute Servicer under the Supplementary
Servicing Agreement and includes any indemnification payment required to be made
under Article X of the Supplementary Servicing Agreement.
121. ARTICLE TWO: Deleted in its entirety.
122. ARTICLE THREE:
(A) Section 3.01: Deleted in its entirety.
(B) Section 3.03: Deleted in its entirety.
(C) Section 3.05: Delete all but the first two sentences.
(D) Section 3.07: Deleted in its entirety.
(E) Section 3.08(a): Delete the words "or the Servicer has complied with
Section 3.01(b) hereof," and the last sentence.
(F) Section 3.08(d): Delete "the Servicer" and substitute therefor "the
Initial Lender".
123. ARTICLE FOUR:
1.
<PAGE>
(A) Section 4.02: Delete Subsections (a)(ii)-(iv) and (vii).
(B) Section 4.03 (b): Deleted in its entirety.
(C) Section 4.04: Delete the words "under the Program Documents that the
Servicer may possess" and substitute the words "under the Servicing Agreement
and the Supplementary Servicing Agreement"; delete the last two words of the
Section and substitute the words "Servicing Agreement and the Supplementary
Servicing Agreement".
124. ARTICLE FIVE:
Delete in its entirety as to the Substitute Servicer. It is the intention
of the Borrower, the Collateral Agent and the Verification Agent (and of the
Initial Lender and Monaco, although they are not parties hereto) that the
provisions of ARTICLE FIVE of the Existing Servicing Agreement remain in full
force and effect with respect to the rights and responsibilities of Monaco in
relation to its activities prior to April 1, 1999.
125. ARTICLE SIX:
Sections 6.01 and 6.02: Delete in their entirety.
126. ARTICLE EIGHT
Section 8.01: Delete in its entirety.
ARTICLE III
ERRORS AND OMISSIONS AND BLANKET CRIME INSURANCE
The Substitute Servicer shall maintain, at its own expense, (i) an errors
and omissions insurance policy and (ii) a blanket crime policy, in each case
with broad coverage with established insurance companies, covering all officers,
employees or other persons acting on behalf of the Substitute Servicer with
regard to the Designated Auto Loans to handle funds, money, documents,
computerized information and papers relating to the Designated Auto Loans. Any
such insurance shall protect and insure the Substitute Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such the Substitute Servicer and shall be maintained in a form
and amount that would meet the requirements of prudent loan servicing companies.
<PAGE>
No provision of this Article III requiring such insurance shall diminish
the duties of the Substitute Servicer as set forth in this Agreement and the
Existing Servicing Agreement or relieve the Substitute Servicer from its duties
and obligations as set forth in this Agreement and the Existing Servicing
Agreement. Upon the request of the Initial Lender, the Substitute Servicer shall
cause to be delivered to the Initial Lender and to the Collateral Agent a
certificate evidencing coverage under such errors and omissions and/or blanket
crime policies. Any such policies shall not be canceled without prior written
consent of the Borrower and Initial Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE SUBSTITUTE SERVICER
The Substitute Servicer makes the following representations and warranties
to the Borrower, the Collateral Agent and the Initial Lender:
1. The Substitute Servicer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and in each other jurisdiction where the conduct of its business
requires it to be in good standing. The Substitute Servicer has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Substitute
Servicer. This Agreement has been duly and validly
executed and delivered by the Substitute Servicer and,
assuming due authorization, execution and delivery by each
other party hereto, this Agreement is a valid and legally
binding agreement of the Substitute Servicer enforceable in
accordance with its terms.
3. The execution and delivery of this Agreement by the
Substitute Servicer and the compliance by the Substitute
Servicer with all provisions of this Agreement do not
conflict with or violate any applicable law, regulation or
order and do not conflict with or result in a breach of or
default under any of the terms or provisions of any
contract or agreement to which the Substitute Servicer is
subject or by which it or its property is bound, nor does
such execution, delivery or compliance violate the Articles
of Incorporation or By-laws of the Substitute Servicer.
4. The practices used or to be used by the Substitute Servicer
to monitor collections with respect to the Designated Auto
Loans and repossess and dispose of the Vehicles related to
the Designated Auto Loans will be, in all material
respects, legal, proper and in conformity with the
requirements of all applicable federal and state laws,
rules and regulations, and VSI policy procedures (if
applicable). The Substitute Servicer is in possession of
all state and local licenses (including all debt collection
licenses) required for it to perform its services
hereunder, and none of such licenses has been suspended,
revoked or terminated.
<PAGE>
5. The Initial Lender has been given a true and accurate copy of the
Policies and Procedures Manual of the Substitute Servicer. All of the
responsibilities of the Substitute Servicer hereunder will be in
compliance with such Policies and Procedures Manual, as the same may
be amended from time to time upon notice to the Initial Lender.
B. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower makes the following representations and warranties to the
Substitute Servicer:
1. The Borrower is a corporation, validly existing and in good standing
under the laws of the State of Delaware. The Borrower has full
corporate power and authority to enter into this Agreement and to
carry out the provisions of this Agreement.
2. This Agreement and all other instruments or documents to be
delivered hereunder or pursuant hereto, and the
transactions contemplated hereby, have been duly authorized
by all necessary corporate proceedings of the Borrower.
This Agreement has been duly and validly executed and
delivered by the Borrower and assuming due authorization,
execution and delivery by each other party hereto, this
Agreement is a valid and legally binding agreement of the
Borrower enforceable in accordance with its terms.
3. The execution and delivery of this Agreement by the
Borrower and the compliance by the Borrower with all
provisions of this Agreement do not conflict with or
violate any applicable law, regulation or order and do not
conflict with or result in a breach of or default under any
of the terms or provisions of any contract or agreement to
which the Borrower is subject or by which it or its
property is bound, nor does such execution, delivery or
compliance violate the Certificate of Incorporation or
By-laws of the Borrower.
The representations and warranties contained in this Article IV shall survive
the execution and delivery of this Agreement.
ARTICLE V
SUBSTITUTE SERVICER EVENTS OF DEFAULT
A. If any one of the following events (each, a "Substitute Servicer Event of
Default") shall occur and be continuing:
<PAGE>
1. Any failure by the Substitute Servicer to deposit into the Lock-Box
Account any proceeds or payments received from an Obligor or in
respect of the Designated Auto Loans and required to be so delivered
or deposited under the terms of this Agreement or the Existing
Servicing Agreement that continues unremedied until 10:00 a.m. St.
Louis time on the following Business Day; or
2. Failure on the part of the Substitute Servicer (a) to
observe or to perform in any material respect any other
covenant or agreement set forth in this Agreement or the
Existing Servicing Agreement, which failure shall adversely
affect the rights of the Initial Lender and continue
unremedied for a period of 30 days after the date on which
written notice of such failure shall have been received by
the Substitute Servicer or (b) to deliver the Monthly
Servicer Report as required by the Existing Servicing
Agreement; or
3. The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, or
liquidator for the Substitute Servicer in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and
liabilities, or similar proceedings, or the winding-up or
liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 30
consecutive days; or
4. (a) The admission by the Substitute Servicer of its
inability to pay its debts generally as they become due; or
(b) the filing by the Substitute Servicer of a petition
under any applicable bankruptcy, insolvency or
reorganization of any applicable statute; or (c) if the
Substitute Servicer makes an arrangement for the benefit of
its creditors or voluntarily suspend payment of its
obligations; or (d) the filing by a third party of a
bankruptcy case under Federal or State law against the
Substitute Servicer; or
5. If there is breach of any representation or warranty as set forth in
Article IV and such breach shall not be cured in all material respects
within 30 consecutive days after receipt of written notice from one
party to the breaching party or upon discovery by the breaching party;
then, and in each and every case and so long as a Substitute Servicer Event of
Default described above shall not have been remedied, the Initial Lender may
terminate all of the rights and obligations of the Substitute Servicer under
this Agreement.
ARTICLE VI
REMEDIES
<PAGE>
In addition to the indemnification rights contained in Article X and the
right to terminate contained in Article XI, the Substitute Servicer agrees that
upon the occurrence of any Substitute Servicer Event of Default, both the
Initial Lender and the Borrower may avail itself of any other relief to which it
may be legally or equitably entitled. In the event of any default of this
Agreement by the Borrower, the Borrower acknowledges the remedies of the
Substitute Servicer contained in Articles XI and XII may be inadequate and that
the Substitute Servicer may also avail itself of any other relief to which it
may be legally or equitably entitled.
ARTICLE VII
RESPONSIBILITY AND AUTHORITY OF THE SUBSTITUTE SERVICER
A. The Substitute Servicer shall have the full power and authority
acting alone and without the consent of any other party hereto,
to do any and all things in connection with the servicing of any
Designated Auto Loan that it may deem reasonably necessary or
desirable, consistent with the duties and obligations imposed
upon the Substitute Servicer by this Agreement including, but
not limited to, the right to subcontract any of its duties
hereunder. Notwithstanding the foregoing, the Substitute
Servicer shall cooperate fully with the Initial Lender and the
Borrower and promptly inform the Initial Lender and the Borrower
of any and all changes or developments of which the Substitute
Servicer becomes aware that may affect the Designated Auto Loans.
B. The Substitute Servicer is hereby authorized to communicate with third
parties and the Obligors in the name of the Borrower as necessary and
proper to perform the services anticipated by this Agreement.
C. The Substitute Servicer shall have the right to commence a legal
proceeding on behalf of the Borrower to enforce any Designated
Auto Loan. As reasonably requested by the Substitute Servicer,
the Borrower shall furnish the Substitute Servicer with any
necessary and appropriate powers of attorney and other documents
needed in order to enable the Substitute Servicer to carry out
such proceeding and with respect to its servicing and
administrative duties hereunder.
ARTICLE VIII
BANK ACCOUNTS
Following the expiration of the Transfer Period:
A. The Substitute Servicer shall maintain the Lock-Box Account, and
shall collect and hold in trust (for the benefit of the
Collateral Agent) in such accounts all funds received from
Obligors or in respect of Designated Auto Loans. The Substitute
Servicer shall use its best efforts to ensure that all
Collections are directed to and/or deposited into the Lock-Box
Account. The financial institution in which the Lock-Box
Account is opened shall be under irrevocable instructions (which
can be modified only with the consent of the Initial Lender)
that upon receipt of cleared funds in the Lock-Box Account, such
funds shall be transferred to the Collateral Account.
B. The Substitute Servicer shall immediately notify the Initial Lender and
the Collateral Agent of the identity of the financial institution
maintaining the Lock-Box Account and obtain the agreement of such
financial institution to the irrevocable instructions described above.
<PAGE>
ARTICLE IX
DOCUMENTS AND RECORDS
The Substitute Servicer shall provide the Initial Lender and its designees
access to the its facility, but only (except following the occurrence of a
Substitute Servicer Event of Default) upon reasonable request and during normal
business hours of the Substitute Servicer and to the extent that such access
would not significantly disrupt the orderly conduct of business at such
facility. The Substitute Servicer will accept all deliveries of loan files and
similar data as specified by the Initial Lender from time to time.
ARTICLE X
INDEMNIFICATION
A. The Substitute Servicer shall indemnify and hold harmless the
Initial Lender, the Borrower, the Servicer, the Collateral Agent
and the Verification Agent and each of their respective
officers, employees and agents against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and any other costs, fees and expenses that any
of such Persons may sustain in any way related to the negligence
or misconduct of the Substitute Servicer in its performance
under the terms of this Agreement or the Existing Servicing
Agreement, or arising from any breach of the representations and
warranties of the Substitute Servicer set forth in Article IV
hereof. The Substitute Servicer shall notify the Initial Lender
as soon as possible if a claim is made by a third party with
respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
B. The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
related to the negligence or misconduct of the Borrower in its
performance under the terms of this Agreement or the Existing
Servicing Agreement, or arising from any breach of the
representations and warranties of the Borrower set forth in
Article IV hereof. The Borrower shall notify the Substitute
Servicer as soon as possible if a claim is made by a third party
with respect to this Agreement, any Program Document or any
Designated Auto Loan. The right to indemnification set forth in
this paragraph shall survive the termination of this Agreement.
<PAGE>
C. The Substitute Servicer may accept and reasonably rely on all
accounting and servicing records and other documentation
provided to the Substitute Servicer by or at the direction of
the Borrower, including documents prepared or maintained by any
originator or the Servicer, or any party providing services
related to the Designated Auto Loans (each, a "third party").
------------
The Borrower shall indemnify and hold harmless the Substitute
Servicer and its officers, employees and agents against any and
all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and
expenses that the Substitute Servicer may sustain in any way
solely related to the negligence or misconduct of any third
party with respect to the Designated Auto Loans. The Substitute
Servicer shall have no duty, responsibility, obligation or
liability (collectively "liability") for the acts or omissions
---------
of any third party. If any error, inaccuracy or omission
(collectively "error") exists in any information provided to the
-----
Substitute Servicer and such error causes or materially
contributes to the Substitute Servicer making or continuing any
error (a "continuing error"), the Substitute Servicer shall have
-----------------
no liability for such continued error; provided, however, that
-------- -------
this provision shall not protect the Substitute Servicer against
any liability arising from its willful misconduct, bad faith or
gross negligence in discovering or correcting or failing to
discover or correct any error or in the performance of its
duties contemplated herein.
If the Substitute Servicer becomes aware of any error or continuing error
which in the opinion of the Substitute Servicer impairs its ability to
perform its services hereunder, the Substitute Servicer shall promptly
notify the Initial Lender thereof; the Substitute Servicer may undertake
such data or records reconstruction as it deems appropriate to correct any
such error or continued error and to prevent future continued error. To
the extent it is not otherwise reimbursed under the Existing Servicing
Agreement, the Substitute Servicer shall be entitled to recover its costs
thereby expended.
ARTICLE XI
TERM AND TERMINATION
A. The term of this Agreement shall be for one year from the date first
written above and will automatically renew for additional successive
one-year terms unless the Initial Lender or the Substitute Servicer shall
upon 90 days written notice elect not to renew this Agreement.
Notwithstanding the above, this Agreement shall automatically terminate
when the Notes are repaid in full.
<PAGE>
B. The Initial Lender shall have the right to terminate this
Agreement (i) at any time prior to the delivery of a Transfer
Notice, and, (ii) following such delivery, during any term upon
not less than 60 days written notice delivered by overnight mail
to the Substitute Servicer. In the event of any such
termination under clause (ii) above, the Substitute Servicer
shall be entitled to a termination fee equal to the greater of
$20,000.00 or the servicing fee for each Designated Auto Loan so
transferred for the month preceding the month in which the
notice of termination is delivered, such fee to be paid by the
Borrower unless the Initial Lender affects such termination
without the prior written consent of the Borrower (which consent
shall not be unreasonably withheld), in which case the Initial
Lender shall be responsible therefor; provided, that no such
--------
termination fee shall be payable if (x) a Substitute Servicer
Event of Default shall have occurred or (y) the effective date
of such termination is within 90 days following the date upon
which the Substitute Servicer has been merged with or into
another entity or a Change of Control has occurred. The
Substitute Servicer shall not, however, be entitled to receive
any such termination fee if the Substitute Servicer is
terminated due to the occurrence of a Substitute Servicer Event
of Default.
C. The Substitute Servicer shall have the right to resign under
this Agreement by giving 90 days prior written notice to the
Initial Lender; provided, however, that in no event shall any
-------- -------
such resignation be effective unless the Substitute Servicer
shall have provided the Initial Lender with a successor which is
acceptable to the Initial Lender in its sole discretion and such
successor shall agree, by written instrument delivered to each
party hereto, to be bound by all of the terms and conditions of
this Agreement.
ARTICLE XII
WAIVERS
No failure or delay on the part of the Initial Lender or any party hereto
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 or further exercise thereof or the exercise of any
other power, right or remedy except by a written instrument signed by the party
to be charged or as otherwise expressly provided herein.
ARTICLE XIII
NOTICES
Except as otherwise provided herein, all notices, requests, consents,
demands and other formal communications given hereunder shall be in writing. All
notices of whatever kind shall be either personally delivered or sent by
telecopy or other form of rapid transmission and confirmed by United States
mail, properly addressed and with full postage prepaid to the following:
To Servicer: Systems & Services Technologies, Inc.
4315 Pickett Road
St. Joseph, Missouri 64503
Attn: John J. Chappell, President
Telecopy No.: (816) 671-2029
To any other party hereto: At its address referred to in the Existing
Servicing Agreement. Any party hereto delivering any notice to any other party
hereto shall also deliver a copy thereof to the Initial Lender at its address
set forth in the Credit Agreement.
Daiwa Finance Corp.
32 Old Slip
New York, NY 10005
Attn: Harold Gartner
Telecopy No.: (212) 612-7122
<PAGE>
or to such other address as such party shall have specified in writing in the
manner set forth above.
ARTICLE XIV
FURTHER ASSURANCES
Each party agrees, if reasonably requested by any other party, to execute
and deliver such additional documents or instruments and take such further
actions as may be reasonably necessary to effect the transactions contemplated
by this Agreement.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in counterparts (including counterparts
evidenced by facsimile transmission), each of which shall be deemed an original
but all of which taken together shall constitute but one and the same document.
ARTICLE XVI
ENTIRE AGREEMENT; AMENDMENTS
This Agreement, together with the Program Documents and including the
Exhibits and Schedules attached hereto and the documents referred to herein,
contains the entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior understandings,
negotiations, commitments and writings with respect hereto. This Agreement may
not be modified, changed or supplemented except upon the express written consent
of each party hereto.
ARTICLE XVII
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
ARTICLE XVIII
CONFIDENTIALITY
The parties agree that they will execute and deliver a mutually
satisfactory confidentiality agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
SUBSTITUTE SERVICER:
SYSTEMS & SERVICES TECHNOLOGIES, INC.
By:
Name: John J. Chappell
Title: President
BORROWER
MF RECEIVABLES CORP. IV
By:
Name: Morris Ginsburg
Title: President
COLLATERAL AGENT
THE CHASE MANHATTAN BANK
By:
Name:
Title:
<PAGE>
EXHIBIT A
SUMMARY OF SERVICES
SUBSTITUTE SERVICING
The following outlines the services to be provided by the Substitute Servicer
from and after the end of the Transfer Period. The procedures identified herein
are to be implemented at the discretion of the Substitute Servicer depending on
the needs and circumstances of the Designated Auto Loans:
A. CUSTODIAL DUTIES
1. Upon transfer of the Designated Auto Loans to the Substitute Servicer,
the Substitute Servicer shall establish all necessary records in its computer
system, and shall separate the physical loan package for storage. Any perfection
of interest documents to be maintained by the Substitute Servicer shall be filed
in appropriate fireproof facilities. All physical files regarding the Designated
Auto Loans shall be kept in separate filing cabinets being distinctly marked as
the property of the Borrower. All Designated Auto Loans shall be distinctly
marked on the computer files of the Substitute Servicer as belonging to the
Borrower.
B. OBLIGOR ACCOUNTING
1. The Substitute Servicer shall process all monies received by or on behalf of
an Obligor through the Lock-Box Account.
2. The Substitute Servicer may, from time to time, utilize the services of
third-party vendors to assist in the receipt and processing of payments by or on
behalf of Obligors, i.e., Western Union "Quick Collect" or Speedpay.
3. To the extent possible, the Substitute Servicer shall cause all monies
received by or on behalf of an Obligor to post to the Obligor's account within
one Business Day following receipt.
4. The Substitute Servicer shall cause the Obligor's next scheduled due date to
roll when the Obligor payment received is within $25.00 of the expected monthly
payment unless the aggregate unpaid payment shortfalls exceeds $75.00 at the
time of posting.
<PAGE>
5. The Substitute Servicer shall advance monies as necessary to cover the
expenses incurred in the process of servicing as provided in Schedules 1 and 2,
to include repossession of an Obligor's Vehicle. These expenses include, but are
not limited to, field calls, repossession costs, storage and transportation
costs, legal fees, mailing costs, skip tracing, mechanics liens and liquidation
costs. Such "out-of-pocket" expenses shall be reimbursed to the Substitute
Servicer as Servicer Fees. Such expenses shall be posted to the Obligor's
account, as applicable and in accordance with law.
C. CUSTOMER SERVICE
1. The Substitute Servicer shall respond to all inquiries from Obligors
regarding their Designated Auto Loans.
2. The Substitute Servicer shall send to Obligors or their approved
representatives (i) payment books or monthly payment statements, as the case may
be; and (ii) account payoff information.
3. The Substitute Servicer shall (i) subcontract physical damage insurance
tracking services, if so requested and (ii) coordinate and assist with
electronic data transfers as needed. All such subcontractor fees and costs shall
be reimbursable to the Substitute Servicer as Servicer Fees.
D. COLLECTIONS
1. The Substitute Servicer shall use its best efforts to collect all outstanding
sums due on every delinquent account. Such efforts shall include diligent
contact with the Obligor by phone or by letter as set forth in the Substitute
Servicer's policy manual delivered to the Initial Lender.
2. Field calls may be utilized at the Substitute Servicer's discretion.
3. The Substitute Servicer may implement any legally permissible collection
methods, including telephone calls, mailed notices and outside field calls.
4. If the Substitute Servicer determines that an Obligor is or may become a
"Skip", the Substitute Servicer shall make all reasonable attempts to locate the
Obligor or related Vehicle using internal skip tracing procedures, and may
sub-contract for outside assistance.
5. The Substitute Servicer shall report all appropriate Obligor account
developments to one or more nationally recognized credit agencies on a monthly
basis.
E. SPECIAL RECOVERIES
1. The Substitute Servicer shall make all reasonable attempts to collect
delinquent Obligor accounts. Promptly after such efforts have been exhausted,
and in the judgment of the Substitute Servicer required payments will not be
forthcoming from the Obligor, the Substitute Servicer shall use its best efforts
to repossess or otherwise recover the Vehicle securing the Designated Auto Loan.
The Substitute Servicer shall pursue repossession or recovery of a Vehicle only
after it has determined that eventual repayment in full is unlikely and such
repossession or recovery is permitted under the terms of the receivable and all
applicable laws.
<PAGE>
2. At such time as a Vehicle has been authorized for repossession, the
Substitute Servicer shall assign the account to an authorized, qualified,
licensed and bonded regional repossession agency. Such agent shall be a member
of a nationally recognized association requiring adequate insurance and bonding
(e.g., National Finance Adjusters). Any such assignment shall not relieve the
Substitute Servicer of any of its obligations hereunder.
3. Upon receipt of notification that a repossession has been made, the
Substitute Servicer shall mail to the Obligor and any co-borrower or guarantor,
a Notice of Intent ("NOI") to sell the Vehicle, and shall therein provide the
Obligor with an opportunity to reinstate or redeem the Vehicle.
4. Upon repossession, the repossession agency shall deliver the Vehicle to the
specified destination. At that time, the Substitute Servicer will engage an
inspection agent to assess physical damage to the Vehicle, and will arrange for
any necessary repairs to be made.
5. Assuming no reinstatement or redemption is made by the Obligor, the
Substitute Servicer will determine the appropriate method of resale/liquidation.
Such determination shall weigh federal and state law requirements, market
factors and other variables so as to maximize the liquidation proceeds.
6. The Substitute Servicer shall send notices of deficiencies and manage all
aspects of collateral liquidation including title transfers.
7. Following the liquidation of a Vehicle, the Substitute Servicer shall post
all receipts and apply all credits that may exist to the applicable Obligor
account. If the account is insured under a credit enhancement policy, the
Substitute Servicer shall file a claim as specified in the policy.
8. The Substitute Servicer may perform deficiency balance collections under
separate agreement.
F. ADDITIONAL DUTIES
1. The Substitute Servicer shall establish a physical file for each Designated
Auto Loan, and shall keep complete books and records pertaining to the same.
2. Upon request, the Substitute Servicer shall make available to the Initial
Lender or its designee, the physical files, records and computer systems for
audit or inspection on the premises of the Substitute Servicer, so long as such
audit or inspection does not unreasonably interfere with the operations of the
Substitute Servicer.
3. The Substitute Servicer shall act as custodian of all documents delivered to
it related to the Collateral.
<PAGE>
SCHEDULE 1
FEES, EXPENSES & DISTRIBUTIONS
The Fees and Expenses described herein shall be considered Servicer Fees for all
purposes of the Program Documents. All fees and expenses of the Substitute
Servicer will be paid only from the proceeds of the Designated Auto Loans as set
forth in Section 6.04(d) of the Security Agreement.
I. FEES
A. Monthly Fee
(1.) Remaining term of 30 or more months: greater of: $17.00 per
Active Receivable or 320 basis
points
(2.) Remaining term of less than 30 months: $20.00 per Active
Receivable
(3.) Remaining term of less than 24 months: $22.00 per Active
Receivable
(4.) Inactive Receivables: $0.50 per Inactive Receivable
B. Minimum Monthly Fee $1,000.00 per loan pool
II. EXPENSES
The Substitute Servicer shall be reimbursed in accordance with the Existing
Servicing Agreement for all out-of-pocket expenses, including, but not limited
to, those associated with Vehicle recovery, Vehicle liquidation, legal
proceedings related to replevin actions or Obligor bankruptcies, mailing costs,
title processing, bank charges and insurance tracking. All such expenses,
together with a Substitute Servicer administrative fee of 8% of the advanced
funds, shall be billed to the Borrower as provided in Section III. B. below.
Alternatively, the Borrower may at any time during the term of the Agreement
establish an advance account to be used by the Substitute Servicer to cover
out-of-pocket expenses. If such an advance account is implemented, the
Substitute Servicer administration fee shall not apply.
All reimbursable expenses of Monaco previously incurred by Monaco, but not yet
paid, have been submitted to the Substitute Servicer for payment. A schedule of
these expenses is attached hereto as Schedule
2 and by this reference made part hereof. All such expenses will be paid by
the Substitute Servicer upon: (i) receipt of invoices from the Servicer; and
(ii) verification by the Substitute Servicer that the expenses reflected of
any such invoice are proper, reimbursable servicing-related expenses. In the
event the Substitute Servicer is unable to so verify any expense item, the
Substitute Servicer will
return the invoice in question ("Disputed Invoice") to Monaco with a
copy to the Initial Lender. The Substitute Servicer will pay
Disputed Invoices only upon the approval of the Initial Lender. The Substitute
Servicer will only advance such expenses upon confirmation
that the same are fully reimburseable to the Substitute Servicer.
III. DISTRIBUTIONS
Servicer Fees for each Payment Date shall be reflected on the Monthly Servicing
Report for such month. All fees and reimbursable expenses and other amounts due
the Substitute Servicer as reflected on a Monthly Servicing Report shall be paid
to the Substitute Servicer on the related Payment Date.
<PAGE>
IV. MISCELLANEOUS
A. Claim Filing Costs
If the Substitute Servicer files VSI claims in connection with any Designated
Auto Loan, the Substitute Servicer shall receive $25.00 per filing.
B. Late Fees and Extension Fees
All extension fees received by the Substitute Servicer in respect of Designated
Auto Loans shall be deposited by the Substitute Servicer into the Collection
Account and the amount thereof collected shall be paid to the Substitute
Servicer as Servicer Fees. All late fees received by the Substitute Servicer in
respect of Designated Auto Loans shall be deposited into the Collection Account
and the amount thereof collected shall be paid in accordance with Section
6.04(d) of the Security Agreement.
C. Deficiency Collections
Under separate agreement, the Substitute Servicer may provide deficiency balance
collections services on a contingency fee basis.
<PAGE>
