EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
Dated as of August 31, 2000
Among
APR FUNDING CORPORATION
as Borrower
and
UNIVERSAL PREMIUM ACCEPTANCE CORPORATION
individually and as Servicer,
and
AUTOBAHN FUNDING COMPANY LLC
as Lender
and
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG
as Agent
1
TABLE OF CONTENTS
ARTICLE I AMENDMENT AND RESTATEMENT; LOANS ..................6
SECTION 1.01. Amendment and Restatement...................6
SECTION 1.02. Loans.......................................6
SECTION 1.03. Borrowing Procedures; Security Interest; Collateral
Assignment............................................7
SECTION 1.04. Selection of Yield Periods; Continuation of Loans 8
SECTION 1.05. Evidence of Debt............................9
ARTICLE II RESERVED .........................................9
ARTICLE III SETTLEMENTS .....................................9
SECTION 3.01. Settlement Procedures.......................9
SECTION 3.02. Reserved...................................14
SECTION 3.03. General Settlement Procedures..............14
SECTION 3.04. Deemed Collections.........................17
SECTION 3.05. Payments and Computations, Etc.............19
SECTION 3.06. Treatment of Collections and Deemed Collections 20
SECTION 3.07. Optional Facility Termination..............20
SECTION 3.08. Custody Arrangement........................21
SECTION 3.09. Establishment of Collection Account; Investments by
Agent................................................22
ARTICLE IV FEES AND YIELD PROTECTION .......................25
SECTION 4.01. Fees.......................................25
SECTION 4.02. Yield Protection...........................26
SECTION 4.03. Funding Losses.............................29
ARTICLE V CONDITIONS OF LOANS ..............................29
SECTION 5.01. Conditions Precedent to Initial Loan.......29
SECTION 5.02. Conditions Precedent to All Loans..........32
ARTICLE VI REPRESENTATIONS AND WARRANTIES ..................33
SECTION 6.01. Representations and Warranties of Borrower.34
SECTION 6.02. Representations and Warranties of UPAC.....40
SECTION 6.03. Reserved...................................45
SECTION 6.04. Breach of Representations and Warranties...45
ARTICLE VII GENERAL COVENANTS ..............................45
SECTION 7.01. Affirmative Covenants of Borrower..........45
SECTION 7.02. Reporting Requirements of Borrower.........47
SECTION 7.03. Negative Covenants of Borrower.............51
SECTION 7.04. Affirmative Covenants of UPAC..............52
SECTION 7.05. Reporting Requirements of UPAC.............55
SECTION 7.06. Negative Covenants of UPAC.................57
SECTION 7.07. Reserved...................................60
SECTION 7.08. Reserved...................................60
SECTION 7.09. Reserved...................................60
SECTION 7.10. Special Covenant of Borrower and UPAC......60
ARTICLE VIII ADMINISTRATION AND COLLECTION .................63
SECTION 8.01. Designation of Servicer....................63
SECTION 8.02. Duties of Servicer.........................64
SECTION 8.03. Rights of the Agent........................66
SECTION 8.04. Responsibilities of Borrower...............68
SECTION 8.05. Further Action Evidencing Loans............68
SECTION 8.06. Application of Collections.................69
ARTICLE IX SECURITY INTEREST ...............................70
SECTION 9.01. Grant of Security Interest.................70
SECTION 9.02. Remedies...................................70
ARTICLE X LIQUIDATION EVENTS ...............................71
SECTION 10.01. Liquidation Events........................71
SECTION 10.02. Remedies..................................76
ARTICLE XI THE AGENT .......................................77
SECTION 11.01. Authorization and Action..................77
SECTION 11.02. Agent's Reliance, Etc.....................77
SECTION 11.03. DG Bank and Affiliates....................78
ARTICLE XII ASSIGNMENT OF LENDER'S INTEREST ................78
SECTION 12.01. Restrictions on Assignments...............78
SECTION 12.02. Rights of Assignee........................79
SECTION 12.03. Evidence of Assignment....................79
ARTICLE XIII INDEMNIFICATION ...............................79
SECTION 13.01. Indemnities by Borrower...................79
ARTICLE XIV MISCELLANEOUS ..................................83
SECTION 14.01. Amendments, Etc...........................83
SECTION 14.02. Notices, Etc..............................84
SECTION 14.03. No Waiver; Remedies.......................84
SECTION 14.04. Binding Effect; Survival..................85
SECTION 14.05. Costs, Expenses and Taxes.................85
SECTION 14.06. No Proceedings............................86
SECTION 14.07. Confidentiality of Borrower Information...86
SECTION 14.08. Confidentiality of Program Information....88
SECTION 14.09. Captions and Cross References.............90
SECTION 14.10. Integration...............................90
SECTION 14.11. Governing Law.............................90
SECTION 14.12. Waiver Of Jury Trial......................91
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities 91
SECTION 14.14. Execution in Counterparts.................91
SECTION 14.15. No Recourse Against Other Parties.........92
SECTION 14.16. Covenant to Cooperate.....................92
SECTION 14.17. Advice From Independent Counsel...........92
LOAN AND SECURITY AGREEMENT
Dated as of August 31, 2000
This LOAN AND SECURITY AGREEMENT, among APR FUNDING CORPORATION, a
Delaware corporation ("Borrower"), UNIVERSAL PREMIUM ACCEPTANCE CORPORATION, a
Missouri corporation, individually ("UPAC") and as Servicer (in such capacity,
the "Servicer"), AUTOBAHN FUNDING COMPANY LLC, a Delaware limited liability
company ("Lender"), and DG BANK GENOSSENSCHAFTSBANK AG (as "Agent" and in its
individual capacity, "DG Bank"). Unless otherwise indicated, capitalized terms
used in this Agreement are defined in Appendix A.
Background
The parties hereto are parties to that certain Receivables Purchase
Agreement dated as of December 31, 1996, as amended by Amendment Nos. 1-12
thereto (the "Receivables Purchase Agreement") and desire to amend and restate
the Receivables Purchase Agreement in its entirety by this Agreement.
Borrower has, and expects to have and/or to purchase from the
"Originators" pursuant to the terms and subject to the conditions of that
certain Amended and Restated Purchase and Sale Agreement of even date herewith
(as the same may be amended, restated, supplemented or otherwise modified from
time to time (the "Purchase and Sale Agreement") among the Borrower, UPAC and
UPAC of California, Pool Receivables originated in the ordinary course of the
Originators' respective premium finance loan businesses. Borrower has requested
Lender, and Lender has agreed, subject to the terms and conditions contained in
this Agreement, to make loans to Borrower secured by the Pool Receivables and
certain other collateral from time to time during the term of this Agreement.
Autobahn Funding Company LLC, as Lender, expects to fund its loans
through the issuance of Commercial Paper Notes. Commercial paper funding
hereunder is available solely from the Lender. The Lender has entered into a
Liquidity Agreement which generally provides for the purchase by the Liquidity
Providers of portions of the loans from the Lender to facilitate the making of
loans by the Lender in the event the Lender is unable or unwilling to fund its
loans with Commercial Paper Notes.
UPAC has been requested, and is willing, to act as initial Servicer.
DG Bank has been requested, and is willing, to act as the Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
AMENDMENT AND RESTATEMENT; LOANS
Amendment and Restatement. The Borrower, UPAC, the Servicer, the Lender,
the Agent and DG Bank hereby agree that, effective upon the execution and
delivery of this Agreement by each such party: (a) the terms and provisions of
the Receivables Purchase Agreement shall be and hereby are amended, superseded
and restated in their entirety by the terms and provisions of this Agreement,
except that any grant of security or other property interest by the Borrower
pursuant to the Receivables Purchase Agreement shall remain effective as of the
date any such grant first became effective, (b) "Purchaser's Total Investment"
(as defined in the Receivables Purchase Agreement) shall constitute the initial
outstanding Loans under this Agreement, and (c) the execution and delivery of
this Agreement shall not effectuate a refinancing or novation of such
Purchaser's Total Investment.
Loans. Upon the terms and subject to the conditions of this Agreement
(including, without limitation, those contained in Article V), from time to time
prior to the Liquidation Date, Borrower may request on or before the last
Business Day of any calendar week that Lender make loans ("Loans") to the
Borrower on the last Business Day of the immediately succeeding calendar week
and Lender shall make such Loans at such times and upon the terms and subject to
the conditions set forth herein; provided, that under no circumstances shall the
Lender make any Loan if, after giving effect to such Loan, either (a) the
aggregate principal amount of the Loans outstanding hereunder would exceed the
Commitment Amount or (b) a Borrowing Base Deficiency would exist. Each Loan
made pursuant to this Section 1.01 shall be in a minimum principal amount of at
least $250,000. Each Loan shall be secured by the Pool Receivables, all related
Contracts, all Related Security, Collections and all other proceeds, including
books and records with respect to such Pool Receivables
Borrowing Procedures; Security Interest; Collateral Assignment.
Notice of Borrowing. Each Loan from Lender to Borrower shall be made
on notice from Borrower to the Agent (substantially in the form of Exhibit
1.03) received by the Agent not later than 12:00 noon (New York City) time
on the last Business Day of the calendar week preceding the date of such
proposed Loan (which shall be the last Business Day of the calendar week
following the date of such notice). Each such notice of a proposed Loan
shall specify the desired amount and date of such Loan and the requested
Yield Periods, funding sources and allocations of such Loan; it being
understood and agreed, that the Lender shall have no obligation or
commitment to fund any Loan with Commercial Paper Notes, but may agree to
do so at its option. The Agent will notify the Lender of the request for a
Loan and the terms thereof. The Lender shall notify the Agent as to
whether the proposed Yield Period, funding sources and allocations of the
amount of such Loan to such Yield Period are reasonably acceptable to it,
and if not, what Yield Periods and allocations are acceptable to it. If
the Lender and the Borrower cannot agree on terms prior to the close of
business on the date of such notice, then the Lender shall make a Loan
accruing Earned Discount at the Adjusted Eurodollar Rate or the CP Rate, as
selected by the Lender in its sole discretion, for Yield Periods of not
more than 30 days (as selected by the Agent); it being understood and
agreed, that if the Lender is then able to issue Commercial Paper Notes in
respect of this transaction, such Loan shall accrue Earned Discount at the
CP Rate.
Funding of Loan. On the date of each Loan, Lender shall, upon
satisfaction of the applicable conditions set forth in Article V make
available to the Agent at the Agent's Office the amount of such Loan in
same day funds, and after receipt by the Agent of such funds, the Agent
will make such funds immediately available to Borrower at such office.
Selection of Yield Periods; Continuation of Loans. At all times hereafter
until the Liquidation Date, the Borrower shall, subject to the Agent's and the
Lender's approval and subject to the limitations described below, select (i)
Yield Periods and allocate a portion of the outstanding Loans to each selected
Yield Period, so that each outstanding Loan is at all times allocated to a Yield
Period and (ii) Yield Rates to apply to such Loans for such Fixed Periods. The
initial Yield Period(s) and Yield Rate(s) applicable to the Loans included in
any Borrowing shall be specified in the notice relating to such Borrowing
described in Section 1.03(a). Subject to the satisfaction of the conditions
precedent contained in Section 5.02, each Loan whose initial or any subsequent
Yield Period has been expired may be continued (a "Continuation") for an
additional Yield Period. Each subsequent Yield Period shall commence on the
last day of the immediately preceding Yield Period, and the duration of and
Yield Rate applicable to such subsequent Yield Period shall be such as the
Borrower shall select and the Agent shall approve on notice from the Borrower
received by the Agent (including notice by telephone, confirmed in writing) not
later than 12:00 noon (New York City time) on such last day, except that (A) if
the Agent shall not have received such notice before 12:00 noon. or the Agent
and the Borrower shall not have so mutually agreed on terms prior to the close
of business on the date of such notice, then such Yield Period shall be for not
more than 30 days (as selected by the Agent) and the Yield Rate shall be the
Adjusted Eurodollar Rate or the CP Rate, as selected by the Lender in its sole
discretion (it being understood and agreed that if the Lender is then able to
issue Commercial Paper Notes in respect of this transaction, such Loan shall
accrue Earned Discount at the CP Rate) and (B) if the Borrower is requesting
that Earned Discount accrue at the Adjusted Eurodollar Rate for such Yield
Period, such notice must be received by the Agent no later than 12:00 noon on
the second Business Day prior to such last day. On or after the Liquidation
Date, the Agent shall have the right to allocate outstanding Loans to Yield
Periods of such duration as shall be selected by the Agent. The Lender shall,
on the first day of each Yield Period, notify the Agent of the Yield Rate for
the Loans allocated to such Yield Period.
Evidence of Debt. The Lender shall maintain an account or accounts
evidencing the indebtedness of the Borrower to the Lender resulting from each
Loan owing to the Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder. The
entries made in such account(s) of the Lender shall be conclusive and binding
for all purposes, absent manifest error. The Loans shall also be evidenced by a
promissory note in the form attached hereto as Exhibit 1.05 (the "Note") having
a stated principal amount equal to the Commitment Amount.
RESERVED
SETTLEMENTS
Settlement Procedures. The Servicer, as agent for the Agent and the Lender
will apply the funds on deposit in the Collection Account as described in this
Section 3.01.
Earned Discount and Liquidation Fees. The Servicer shall on each
Business Day (including any Settlement Date), out of moneys then on deposit
in the Collection Account and not previously set aside pursuant to this
Section 3.01(a) or Section 3.01(c), set aside in the Collection Account for
transfer at the further direction of the Lender or the Agent (whether on
such day or on a subsequent day) an amount equal to the Earned Discount
accrued through such day and not so previously set aside and the amount of
any unpaid Liquidation Fees owed to the Lender on such day. Prior to the
occurrence of the Termination Date, the Servicer, and thereafter the Agent,
shall, on each Business Day preceding an Earned Discount Payment Date,
withdraw from the Collection Account and deliver to the Agent, from the
funds set aside pursuant to the preceding sentence (but only to the extent
that such amounts exceed from and after the Servicer Transfer Event,
accrued and unpaid fees and expenses due to the Servicer) and not paid over
to the Lender pursuant to the preceding sentence, an amount equal to
accrued and unpaid Earned Discount payable on such Earned Discount Payment
Date, and on such Earned Discount Payment Date, the Agent shall pay such
amount to the Lender. On any Business Day on which an amount is set aside
in respect of Liquidation Fees pursuant to this Section 3.01(a), the Agent
shall direct the Servicer to pay such funds to the Lender in payment of
such Liquidation Fees.
Loan Repayment and Prepayment. The Servicer shall, on the last day of
each Yield Period that is not a Settlement Date transfer moneys held by the
Servicer in the Collection Account in excess of the Accrued Facility Costs,
to pay the Agent for the account of the Lender in repayment of the Loans,
an amount equal to (i) on and after the Liquidation Date, the aggregate
outstanding principal amount of the Loans allocated to such Yield Period
and (ii) prior to the Liquidation Date, the greater of (A) the Borrowing
Base Deficiency (if any) as of such date and (B) the amount of the Loans to
be prepaid on such date pursuant to the next sentence. The Borrower shall
have the right, subject to the obligations contained in that certain side
letter agreement dated as of May 26, 2000 among the Borrower, the Servicer,
the Originators, the Agent and the Lender, at any time and from time to
time to prepay the Loans, in whole or in part, upon at least three Business
Days' written notice to the Agent with respect to any partial prepayment
and five Business Days' written notice with respect to any prepayment in
full of the Loans, which notice shall specify the proposed prepayment date
and the amount of such prepayment, provided that (i) any partial prepayment
shall be not less than $250,000 and shall be an integral multiple of
$100,000 in excess of such amount, and (ii) the outstanding principal
balance of the Loans after giving effect to any prepayment shall be not
less than $10,000,000 unless the Loans are being prepaid in full. Each
notice of prepayment shall be irrevocable and binding on the Borrower.
Settlement Date Transfers from Collection Account. Prior to the
occurrence of the Termination Date, Agent shall, on the Business Day
preceding each Settlement Date, withdraw from the Collection Account and
deliver to the Agent from the funds in excess of the amounts set aside
pursuant to Section 3.01(a) or previously set aside pursuant to this
Section 3.01(c), such amount of funds as is necessary to make the payments
described below according to the priority set forth below. On each
Settlement Date the Agent shall then distribute such funds in the amounts
and according to the priority set forth below. After the occurrence of the
Termination Date, the Agent shall withdraw such amounts on such Settlement
Date, as applicable, from the Collection Account (to the extent on deposit
therein):
(i) transfer to the Custodian an amount equal to (and for
payment of) (A) the Custodian Fees which have accrued and are unpaid
as of such Settlement Date, less (B) the amount, if any, of the moneys
then on deposit in the Collection Account theretofore allocated to the
payment of such Custodian Fees pursuant to this Section 3.01(c);
(ii) transfer to the Servicer, if not an Originator or the
Parent or any Affiliate of an Originator or the Parent, an amount
equal to the Servicer's Fee which is accrued and unpaid as of such
Settlement Date less (B) the amount, if any, of the moneys then on
deposit in the Collection Account theretofore allocated to the payment
of such Servicer's Fee pursuant to this Section 3.01(c);
(iii) allocate to the Agent for the account of the Lender and
the Liquidity Banks an amount equal to (and for payment of) (A) the
Program Fee and Non-Use Fee which have accrued and are unpaid as of
such Settlement Date less (B) the amount, if any, of the moneys then
on deposit in the Collection Account theretofore allocated to the
payment of such Program Fee and Non-Use Fee pursuant to this
Section 3.01(c) ;
(iv) transfer to the Backup Servicer an amount equal to
(A) the Backup Servicer Fee which is accrued and unpaid as of such
Settlement Date less (B) the amount, if any, of the moneys then on
deposit in the Collection Account theretofore allocated to the payment
of such Backup Servicer Fee pursuant to this Section 3.01(c);
(v) allocate to the Servicer (if the Servicer is an
Originator, the Parent or any Affiliate of an Originator or the
Parent) an amount equal to (A) fifty percent (50.0%) of the accrued
and unpaid Servicer's Fee as of such Settlement Date less (B) the
amount, if any, of the moneys then on deposit in the Collection
Account theretofore allocated to the payment of such portion of the
Servicer's Fee pursuant to this Section 3.01(c);
(vi) transfer to the Agent an amount equal to the Borrowing
Base Deficiency (if any) as of such Settlement Date;
(vii) allocate to the Agent for the account of the Lender, the
Agent, any Liquidity Bank, or any other Person (other than the Parent
or any of its Subsidiaries or Affiliates), as the case may be, an
amount equal to (a) the aggregate amount of any Designated Obligations
owing to such Person hereunder less (B) the amount, if any, of the
moneys then on deposit in the Collection Account theretofore allocated
to the payment of such Obligations pursuant to this Section 3.01(c);
(viii) so long as no Borrowing Base Deficiency shall exist or
would be created by such transfer, allocate to the Servicer (if the
Servicer is an Originator, the Parent or any Affiliate of an
Originator or the Parent) an amount equal to (A) the remaining fifty
percent (50.0%) of the accrued and unpaid Servicer's Fee as of such
Settlement Date less (B) the amount, if any, of the moneys then on
deposit in the Collection Account theretofore allocated to the payment
of such portion of the Servicer's Fee pursuant to this Section
3.01(c);
(ix) if any Loans are to be prepaid on such Settlement Date
pursuant to subsection (b) above, transfer to the Agent an amount
equal to the amount of such prepayment;
(x) prior to the Liquidation Date, first, so long as no
Borrowing Base Deficiency would be created thereby, transfer to the
Borrower an amount equal to the Borrowing Base Surplus on such date,
if any, immediately prior to such distribution; second, if such
Settlement Date is the last day of any Yield Period(s) for any Loan(s)
then outstanding, transfer to the Agent for the account of the Lender
the amount necessary to repay such Loans in full if such Loans are not
being Continued; and third, set aside in the Collection Account an
amount equal to the remainder of such moneys for application on the
succeeding Business Day in accordance with this Section 3.01;
(xi) on and after the Liquidation Date, first, if such
Settlement Date is the last day of any Yield Period(s) for any Loan(s)
then outstanding, to the Agent for the account of the Lender in an
amount necessary to repay such Loans in full, and second, set aside in
the Collection Account an amount equal to the remainder of such moneys
for application on the succeeding Business Day in accordance with this
Section 3.01; and
(xii) transfer to the Borrower (by wire transfer or ACH
transfer, as directed by the Borrower), any remaining amounts.
To the extent insufficient funds exist to pay all of the foregoing amounts,
such amounts shall be paid in the order of priority set forth above and pro
rata as among such amounts of equal priority. Any moneys allocated to the
payment of Custodian's Fees, Servicer's Fee, Program Fee, Non-Use Fee,
Backup Servicer Fees and Designated Obligations pursuant to this
Section 3.01(c) on any Settlement Date shall be either (A) transferred on
such Settlement Date to the applicable payee, to the extent such
Obligations are then due and payable or (B) set aside in the Collection
Account and transferred to the applicable payee at the time such
Obligations become due and payable. The Servicer shall make the foregoing
transfers in accordance with this Section 3.01(c)
Borrowing Base Deficiency Payments. Notwithstanding anything to the
contrary contained in this Section 3.01 or in any other provision in this
Agreement, if, on any Business Day a Borrowing Base Deficiency shall exist,
then, the Borrower shall remit to the Agent, prior to any Borrowing and in
any event no later than the close of business of the Agent on the next
succeeding Business Day, a payment (to be applied by the Agent to repay
Loans allocated to Yield Periods selected by the Agent) in such amount as
may be necessary to eliminate such Borrowing Base Deficiency.
Reserved.
General Settlement Procedures. The parties hereto will take the following
actions:
Settlement Statement. On the fifth Business Day following the Cut-Off
Date for each Settlement Period, Servicer shall deliver to the Agent a
report (together, if requested by the Agent, with a computer diskette
containing such information) containing the information described in
Exhibit 3.03(a) (each, a "Settlement Statement"), including a listing of
all Contracts (by contract number, Direct Obligor and amount financed)
transferred by the Originators to the Borrower during such Settlement
Period.
Weekly Report. On each Weekly Report Date, Servicer shall deliver to
the Agent a report (together, if requested by the Agent, with a computer
diskette containing such information) containing the information described
in Exhibit 3.03(b) (each a "Weekly Report"); provided, however, that no
Weekly Report shall be required to be delivered to the Agent in any week to
the extent that a Settlement Statement which is required to be delivered
during such week pursuant to Section 3.03(a) above is so delivered to the
Agent during such week.
Notification of Earned Discount: Other Amounts Due. On the Business
Day immediately preceding any Earned Discount Payment Date, the Agent shall
notify Servicer of the approximate amount of Earned Discount that will be
payable on such Earned Discount Payment Date. In addition, on the second
Business Day following such Cut-Off Date, the Agent shall notify Servicer
of the amount of all fees (including the Program Fee, Non-Use Fee, the
Servicer's Fee, the Backup Servicer Fee and the Custodian's Fee) and
Designated Obligations and other amounts accrued and payable by Borrower
under this Agreement.
Non-Distribution of Servicer's Fee. If the Agent consents (which
consent may be revoked at any time), the amounts (if any) set aside
pursuant to Section 3.01 in respect of Servicer's Fee may be retained by
Servicer, in which case no distribution shall be made in respect of
Servicer's Fee pursuant to Section 3.01 above.
Allocations of Obligor's Payments. Except as provided for herein or
as otherwise required by law or the underlying Contract, all Collections
received from an Obligor of any Receivable shall be applied to Pool
Receivables then outstanding of such Obligor in the order of the age of
such Pool Receivables, starting with the oldest such Pool Receivable,
except if payment is designated by such Obligor for application to specific
Receivables or can be readily identified to specific Receivables, in which
case it shall be applied to such specified Receivables. For each
Settlement Period Collections will be allocated so that all Collections up
to the amount of Finance Charge Receivables billed in respect of the
immediately preceding Settlement Period will be deemed Collections of
Finance Charge Receivables and the remaining amount of such Collections
will be deemed Collections of Principal Receivables.
Collection Account: Deposits and Withdrawals.
Deposits to Collection Account. Each of Borrower and Servicer
will, with respect to Collections in respect of Pool Receivables
received by them, and will cause each Lock-Box Bank, with respect to
Collections in respect of Pool Receivables received in any lock-box
to, deposit such Collections in the Collection Account immediately
upon identification thereof, but in no event later than one Business
Day after receipt thereof. Such amounts to be deposited in the
Collection Account by Borrower, Servicer or the applicable Lock-Box
Banks shall include, but not be limited to, the following: (x) any and
all Collections and other payments in respect of Receivables (whether
on account of Principal Receivables, Finance Charge Receivables or
otherwise), related Contracts, and Related Security and any proceeds
thereof, (y) all amounts transferred from the Lock-Box Accounts, and
(z) all Indemnified Amounts paid by Borrower or the Originators for
Receivables which have become Adverse Determination Receivables or on
account of a breach of representation or warranty with respect thereto
or for any other reason. Servicer (or its designee or successor)
shall notify the Agent of the amount of funds deposited in the
Collection Account not received from Pool Receivables and the Agent
(if it shall agree with Servicer) shall remit (or cause the Servicer
to remit) such funds as soon as practicable after such notification to
such account as Servicer (or its designee or successor) shall
designate.
Withdrawals from Collection Account. Prior to the Termination
Date, the Agent shall permit the Servicer, to access the Collection
Account in connection with its duties as Servicer and, in that
connection the Servicer, may withdraw funds on deposit therein in
accordance with, and for the purposes permitted under, the provisions
of the Transaction Documents. Upon the occurrence of the Termination
Date, (x) the Servicer's right of access to the Collection Account
shall terminate immediately without any further action by any Person
being required (but the Servicer shall be permitted to make deposits
in each case with the consent of the Agent) and (y) the Agent or its
designee (which may be the Backup Servicer) shall thereafter make all
withdrawals in accordance with the terms hereof or may transfer funds
to the Liquidation Collection Account and shall make such withdrawals
from the Liquidation Collection Account as if it were the Collection
Account.
Permitted Dividends. So long as no Liquidation Event or Unmatured
Liquidation Event then exists or would result therefrom, the Borrower may
remit Permitted Dividends, if any, to UPAC on the Business Day next
following each Settlement Date. Unless specifically permitted hereunder or
under any other Transaction Document to pay for Receivables, in payment of
fees, etc., Borrower shall make no other payments to UPAC or any of the
Originators or any of their Subsidiaries or any Affiliate.
Deemed Collections.
Deemed Collections. If on any day
the Unpaid Balance of any Pool Receivable is
reduced as a result of any dispute or complaint, any cash
discount, or any adjustment by Borrower, the applicable
Originator or Servicer or any Affiliate of Borrower, the
applicable Originator or Servicer, or
reduced or canceled as a result of a setoff in respect of any
claim by the Obligor thereof against Borrower, the
applicable Originator or any Affiliate of Borrower or the
applicable Originator (whether such claim arises out of the
same or a related or an unrelated transaction), or
reduced on account of the obligation of Borrower or any Affiliate
of Borrower or the applicable Originator to pay to the
related Obligor any rebate or refund, or
less than the amount included in calculating the Net Pool Balance
for purposes of any Settlement Statement, or
any of the representations or warranties of Borrower set forth in
Section 6.01(l) or (p) were not true when made with respect to any
Eligible Receivable that is a Pool Receivable or any Pool Receivable
represented to be an Eligible Receivable, or any of the
representations or warranties of Borrower set forth in Section 6.01(l)
are no longer true with respect to any Eligible Receivable that is a
Pool Receivable, or
any Pool Receivable becomes an Adverse Determination Receivable.
then, on such day, in the case of clauses (i) and (ii) above and in the
case of clause (iii) above upon demand of the Lender in its sole
discretion, within three Business Days after notice has been given to the
Lender by the Borrowers or by the Lender to the Borrower of any Adverse
Determination or at the end of the related applicable Yield Periods,
Borrower shall be deemed to have received a Collection (such Collection, a
"Deemed Collection") of such Pool Receivable
in the case of clause (i) above, in the amount of such reduction
or cancellation or the difference between the actual Unpaid
Balance and the amount included in calculating such Net Pool
Balance, as applicable;
in the case of clause (ii) above, in the amount of the Unpaid
Balance of such Pool Receivable;
in the case of clause (iii) above, in the amount of the Unpaid
Balance of such Pool Receivable;
On any day the Borrower is deemed to have received a Deemed
Collection pursuant to this Section 3.04, the Borrower shall
deposit the amount of such Deemed Collection in the
Collection Account for application in accordance with this
Article III; and
In the event that any Indemnified Party shall incur or expects to
incur any demonstrable loss or expense as a result of the
redeployment of amounts received pursuant to clause iii of
Section 3.04(a), then, within three Business Days after
written notice from Lender to Borrower, Borrower shall pay
to Lender such additional amounts as will (in the reasonable
determination of the Indemnified Parties) reimburse the
Indemnified Parties for such demonstrable loss or expense.
Such written notice shall, in the absence of demonstrable
error, be conclusive and binding on Borrower. This clause
(E) shall survive the termination of this Agreement.
PAYMENTS AND COMPUTATIONS, ETC.
Payments. All amounts to be paid or deposited by Borrower or Servicer
to the Agent or any other Person hereunder (other than amounts payable
under Section 4.02) shall be paid or deposited in accordance with the terms
hereof no later than 12:00 noon (New York time) on the day when due in
lawful money of the United States of America in same day funds to the
Agent's account at Bank of New York, Account No. 8900433876, ABA No.: 021-
000-018; Credit: DG Bank, New York.
Late Payments. Borrower or Servicer, as applicable, shall, to the
extent permitted by law, pay to Lender interest on all amounts not paid or
deposited when due hereunder at 2% per annum above the Base Rate, payable
on demand, provided, however, that such interest rate shall not at any time
exceed the maximum rate permitted by applicable law.
Method of Computation. All computations of interest, Earned Discount
any fees payable under Sections 4.01(b) and (c) and any other fees payable
by Borrower to the Lender or the Agent hereunder shall be made on the basis
of a year of 360 days for the actual number of days (including the first
day but excluding the last day) elapsed.
Treatment of Collections and Deemed Collections. Borrower shall forthwith
deposit in the Collection Account all Collections deemed received by Borrower
pursuant to Section 3.04 and such Collections shall be held or distributed as
Earned Discount, accrued Servicer's Fee, accrued Backup Servicer Fee, accrued
Custodian's Fee, accrued Program Fees, accrued Non-Use Fees, repayment of the
Loans, etc. to the same extent as if such Collections had actually been received
on the date of such deposit in the Collection Account. So long as Borrower shall
hold any Collections or deemed Collections required to be paid to Servicer,
Lender or the Agent, it shall hold such Collections in trust and shall clearly
mark its records to reflect such trust.
OPTIONAL FACILITY TERMINATION. If on any Settlement Date the outstanding
principal balance of the Loans shall equal or be less than 25% of the greatest
outstanding principal balance of the Loans at any time prior to such Settlement
Date, Borrower shall, subject to the obligations contained in that certain side
letter agreement dated as of May 26, 2000 among the Borrower, the Servicer, the
Originators, the Agent and the Lender, be entitled, upon payment in full in cash
of all the Obligations, to terminate this Agreement on such Settlement Date.
Borrower shall give Lender at least five Business Days' prior written notice of
such termination and upon payment of all Obligations as specified below, Agent
shall, at the sole cost and expense of the Borrower, release its security
interest in all Collateral to the Borrower pursuant to a release acceptable to
the parties, but without representation or warranty except that the Collateral
is free of offset, liens and other encumbrances created by the Agent or the
Lender. Borrower shall pay the Obligations in cash to the Agent on behalf of
Lender in an amount equal to the sum of (i) all accrued and unpaid Earned
Discount plus any Liquidation Fee owing with respect thereto as a result of the
early termination of any Yield Period, (ii) the outstanding principal balance of
the Loans, (iii) the aggregate of other amounts then owed hereunder by Borrower
to Lender, any Liquidity Bank, the Agent or the Custodian (including, without
limitation, the accrued and unpaid Custodian's Fee), (iv) the accrued and unpaid
Servicer's Fee, and (v) the accrued and unpaid Backup Servicer Fee. Upon
receipt of the aforesaid amounts the Agent shall distribute them (i) to Lender
or the Agent, as applicable (a) in payment of the accrued and unpaid Earned
Discount and Liquidation Fee (if any), (b) in repayment of the Loans and (c) in
payment of any other amounts owed by Borrower hereunder to Lender, any Liquidity
Bank or Agent, (ii) to Servicer in payment of the accrued and unpaid Servicer's
Fee, (iii) to the Backup Servicer in payment of the accrued and unpaid Backup
Servicer Fee, and (iv) to the Custodian in payment of the accrued and unpaid
Custodian's Fee.
Custody Arrangement. The Agent shall enter into the Custody Agreement
with the Custodian on or prior to the date hereof. On each Friday of each
calendar week Borrower and Servicer shall, unless the Agent shall otherwise
agree in writing, deliver to the Custodian on behalf of Lender and Borrower in
accordance with their respective interests each and every Contract (not
previously delivered to the Custodian) purchased by the Borrower under the
Purchase and Sale Agreement and prior to such Friday; provided that, with
respect to any Contract as to which adequate reproductions cannot be made for
servicing purposes due to the poor quality of the original thereof, Servicer may
retain custody of such Contract, but shall hold it in trust for the benefit of
the Agent, the Lender and Borrower in accordance with their respective
interests; provided, further, that the number of Contracts so held by the
Servicer in trust shall not exceed 1% of all Contracts then owned by Borrower.
A schedule identifying the Contracts by contract number, Direct Obligor and
amount financed thereunder shall be delivered to the Agent and the Custodian on
or before the delivery of such Contracts on such Friday; all such schedules for
each Settlement Period shall be attached to the Settlement Statement for such
Settlement Period along with a certification by Borrower and Servicer as to the
accuracy of such schedules.
Establishment of Collection Account; Investments by Agent.
Collection Account. On or before the first Borrowing, the Agent shall
establish, for the benefit of the Lender and the Borrower, to the extent of
their respective interests therein, an account (the "Collection Account"),
which shall be a demand deposit account maintained by the Originators, the
exclusive dominion and control of which have been conveyed by the
Originators to the Borrower and by the Borrower to the Agent, for the
benefit of the Lender, pursuant to the Lock-Box Agreement. Subject to the
further provisions of this Section 3.09(a), the Agent shall, upon receipt
or upon transfer from another account, as the case may be, deposit into the
Collection Account all amounts received by it which are required to be
deposited therein in accordance with the provisions hereof. All such
amounts and all investments made with such amounts, including all income
and other gain from such investments, shall be held by the Agent in the
Collection Account or the Liquidation Collection Account as part of the
Receivables Pool as herein provided, subject to withdrawal for the purposes
specified in the provisions of, this Agreement. The Agent (other than for
the account of the Lender) shall not have any right of set-off with respect
to the Collection Account or the Liquidation Collection Account or any
investments therein, whether or not commingled. Notwithstanding any other
provision herein, it shall be understood that the Agent, after the
occurrence of the Termination Date, shall have the right to transfer any of
the amounts at any time on deposit (whether or not required to be held in
the Collection Account) in the Collection Account to a segregated trust
account maintained with and in the name of the Agent for the benefit of
Lender and Borrower to the extent of their respective interests therein
(such account the "Liquidation Collection Account").
Administration of Payments. Unless otherwise advised by Servicer in
writing, the Agent may assume that any amount remitted to it by Servicer,
the Borrower or any Lock-Box Bank is to be deposited into the Collection
Account. The Agent may establish from time to time such deadline or
deadlines as it shall determine are reasonable or necessary in the
administration hereof after which all amounts received or collected by the
Agent on any day shall not be deemed to have been received or collected
until the next succeeding Business Day.
Investments. Pursuant to one or more Borrower Orders received from
Borrower, all or a portion of the amounts in the Collection Account and the
Liquidation Collection Account shall be invested and reinvested by the
Agent in one or more Eligible Investments. Subject to the restrictions on
the maturity of investments set forth in Section 3.09(e), each such
Borrower Order may authorize the Agent to make the specific Eligible
Investments set forth therein, to make Eligible Investments from time to
time consistent with the general instructions set forth therein, or to make
specific Eligible Investments pursuant to instructions received in writing
or by facsimile transmission from the employees or agents of Borrower or
the Servicer, as the case may be, identified therein, in each case in such
amounts as such Borrower Order shall specify. Borrower agrees to report as
income for financial reporting and tax purposes (to the extent reportable)
all investment earnings on amounts in the Collection Account. Each of
Borrower and Servicer agrees to give appropriate and timely investment
directions to the Agent so that there will not be more than two Business
Days in any one calendar year at the end of which funds in the Collection
Account or the Liquidation Collection Account are not invested, directly or
indirectly, pursuant to a Borrower Order in Eligible Investments that
mature on or after the opening of business on the next Business Day.
Investments in the Absence of a Borrower Order. In the event that (i)
Borrower shall have failed to give investment directions to the Agent by
9:30 A.M. on any Business Day on which there may be uninvested cash or (ii)
a Liquidation Event or Unmatured Liquidation Event shall have occurred and
be continuing, then the Agent shall invest such funds in Eligible
Investments as it deems appropriate in its sole discretion. All
investments made by the Agent shall mature no later than the maturity date
therefor permitted by Section 3.09(e).
Maturity of Investments. No investment of any amount held in the
Collection Account or the Liquidation Collection Account shall mature later
than the Business Day immediately preceding the Earned Discount Payment
Date or Settlement Date which is scheduled to occur immediately following
the date of investment for application in accordance with the provisions of
this Agreement. All income or other gains from the investment of moneys
deposited in the Collection Account or the Liquidation Collection Account,
as applicable, shall be deposited by the Agent in the affected account
immediately upon receipt. Any net loss (determined on a month by month
basis) resulting from such investment of amounts in the Collection Account
or the Liquidation Collection Account, as applicable, shall be charged to
Borrower, which, upon notice thereof by the Agent, shall reimburse the
Collection Account or the Liquidation Collection Account, as applicable,
for such loss.
Form of Investment. Any investment of funds in the Collection Account
or the Liquidation Collection Account shall be made under the following
terms and conditions:
each such investment shall be made in the name of the Agent (in
its capacity as such) or in the name of a nominee of the Agent, in
either case for the benefit of the Lender and the other Secured
Parties; and
any certificate or other instrument evidencing such investment
shall be delivered directly to the Agent or its agent and the Agent
shall have sole possession of such instrument, and all income on such
investment.
Agent Not Liable. The Agent shall not in any way be held liable by
reason of any insufficiency in the Collection Account or the Liquidation
Collection Account resulting from losses on investments made in accordance
with the provisions of this Section 3.09 (but the Agent shall at all times
remain liable for its own debt obligations, if any, constituting part of
such investments). The Agent shall not be liable for any investment made
by it in accordance with this Section 3.09 on the grounds that it could
have made a more favorable investment.
FEES AND YIELD PROTECTION
Fees.
Structuring Fee. Borrower has paid to the Agent on May 26, 2000, for
its own account, a structuring fee ("Structuring Fee") in the amount set
forth in the Fee Letter.
Program Fee. From the date hereof until the date, following the
Termination Date on which the outstanding principal balance of the Loans
and Earned Discount thereon shall have been paid in full, Borrower shall
pay to the Agent, a program fee ("Program Fee") equal to the product of (x)
the average daily amount of the outstanding principal balance of the Loans
during the period for which such fee is being calculated, times (y) the
Program Fee Rate. Such Program Fee shall be paid in arrears, on the
Settlement Date for each Settlement Period and on the Final Payout Date, in
the amount of such Program Fee that shall have accrued during such
Settlement Period (or portion thereof) or other period then ending and
which shall not have been previously paid.
Non-Use Fee. From the date hereof until the Termination Date,
Borrower shall pay to Agent a non-use fee (the "Non-Use Fee") equal to the
product of (x) the daily average amount of the difference between the
Commitment Amount and the average daily amount of the outstanding principal
balance of the Loans during the period for which such fee is being
calculated, times (y) the Non-Use Fee Rate. Such Non-Use Fee shall be paid
in arrears, on the Settlement Date for each Settlement Period and on the
Termination Date, in the amount of such Non-Use Fee that shall have accrued
during such Settlement Period (or portion thereof) or other period then
ending and which shall not have been previously paid.
Yield Protection.
If (i) Regulation D or (ii) any Regulatory Change occurring after the
date hereof
shall subject an Affected Party to any tax, duty or other charge
with respect to any Loan owned by or funded by it, or any
obligations or right to make or maintain Loans or to provide
funding therefor, or shall change the basis of taxation of
payments to the Affected Party of any Lender's Loans or
Earned Discount owned by, owed to or funded in whole or in
part by it or any other amounts due under this Agreement in
respect of the Loans owned by or funded by it or its
obligations or rights, if any, to make or maintain Loans or
to provide funding there for (except for changes in the rate
of tax on the overall net income of such Affected Party
imposed by the United States of America or any state thereof
(unless, with respect to a state, other than the state in
which such Affected Party's chief executive offices are
located, resulting from, or arising out of, the transactions
contemplated under the Transaction Documents) and, if such
Affected Party's principal executive office is not in the
United States of America, by the jurisdiction where such
Affected Party's principal office in the United States is
located); or
shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve included in the
determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate
(or entity deemed by the Federal Reserve Board to be an
affiliate) of any Affected Party, or credit extended by any
Affected Party; or
shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected
Party;
shall impose any other condition affecting any Loans owned or
funded in whole or in part by any Affected Party, or its
obligations or rights, if any, to make or maintain Loans or
to provide funding therefor; or
shall change the rate for, or the manner in which the Federal
Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to (or in the case of Regulation D
referred to above, to impose a cost on) (I) an Affected Party funding
or making or maintaining any Loans or other extensions of credit under
the Liquidity Agreement or any commitment of such Affected Party with
respect to any of the foregoing, or (II) the Agent for continuing its
or Borrower's or the Originator's relationship with Lender (Borrower
shall at no time, with regard to Regulation D, be required to pay an
increased cost hereunder in excess of the actual increased cost
imposed on the Affected Party),
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement or under the Liquidity Agreement
with respect thereto, or
(z) in the sole determination of such Affected Party, to reduce
the rate of return on the capital of an Affected Party as a
consequence of its obligations hereunder or arising in connection
herewith to a level below that which such Affected Party could
otherwise have achieved,
then within thirty days after demand by such Affected Party (which
demand shall be accompanied by a statement setting forth the basis of
such demand), Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party
for such additional or increased cost or such reduction.
Each Affected Party will promptly notify Borrower and the Agent of any
event of which it has knowledge which will entitle such Affected Party to
compensation pursuant to this Section 4.02; provided, however, no failure
to give or delay in giving such notification shall adversely affect the
rights of any Affected Party to such compensation.
In determining any amount provided for or referred to in this Section
4.02, an Affected Party may use any reasonable averaging and attribution
methods that it (in its sole discretion) shall deem applicable. Any
Affected Party when making a claim under this Section 4.02 shall submit to
Borrower a statement as to such increased cost or reduced return (including
calculation thereof in reasonable detail), which statement shall, in the
absence of demonstrable error, be conclusive and binding upon Borrower.
Funding Losses. In the event that the Lender shall incur any loss or
expense (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the Lender to make or
maintain any Loan) as a result of (i) any payment with respect to any Loan being
made on any day other than the scheduled last day of an applicable Yield Period
or Settlement Date with respect thereto, or (ii) any Loan not being made in
accordance with a request therefore under Section 1.03, then, upon written
notice from the Agent to Borrower and Servicer, Borrower shall pay to Servicer,
and Servicer shall pay to the Agent for the Account of the Lender, the amount of
such loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding upon the Borrower and Servicer.
CONDITIONS OF LOANS
Conditions Precedent to Initial Loan. The initial Loan to be made
hereunder is subject to the condition precedent that the Agent shall have
received, on or before the date of such Loan, the following, each (unless
otherwise indicated) dated such date and in form and substance satisfactory to
the Agent:
A copy of the resolutions of the Board of Directors of each of the
Borrower, UPAC and UPAC of California approving this Agreement, the
Purchase and Sale Agreement and the other Transaction Documents, as
applicable, to be delivered by them hereunder and the transactions
contemplated hereby and thereby, certified in each case by its respective
Secretary or Assistant Secretary;
Good standing certificates (i) for Borrower issued by the Secretaries
of State of Delaware and Kansas, (ii) for UPAC issued by the Secretaries of
State of Missouri and Kansas, and (iii) for UPAC of California issued by
the Secretaries of State of California and Kansas.
A certificate of the Secretary or Assistant Secretary of each of the
Borrower, UPAC and UPAC of California certifying the names and true
signatures of the officers authorized on their behalf to sign, as
applicable, this Agreement, the Purchase and Sale Agreement and the other
Transaction Documents to be delivered by them hereunder (on which
certificate the Agent and Lender may conclusively rely until such time as
the Agent shall receive from Borrower, UPAC and/or UPAC of California, as
applicable, a revised certificate meeting the requirements of this
subsection (c));
The Articles of Incorporation of Borrower, UPAC and UPAC of
California, duly certified by the Secretary of State of their respective
states of incorporation, as of a recent date acceptable to the Agent,
together with a copy of the By-laws of Borrower, UPAC and UPAC of
California, duly certified by the Secretary or an Assistant Secretary of
Borrower, UPAC and UPAC of California, respectively;
Copies of acknowledgment copies of (i) proper amendments to Financing
Statements (Form UCC-2), naming Oxford, as Originator, as the assignor of
Receivables, Borrower, as secured party/purchaser, and the Agent as
assignee of such Financing Statements, (ii) proper amendments to Financing
Statements (Form UCC-2), naming UPAC as the assignor of Receivables,
Borrower as secured party/purchaser, and the Agent as assignee of such
Financing Statements, (iii) proper amendments to Financing Statements (Form
UCC-2), naming UPAC of California as the assignor of Receivables, Borrower
as secured party/purchaser, and the Agent as assignee of such Financing
Statements, (iv) proper amendments to Financing Statements (Form UCC-2),
naming Borrower as the assignor of Receivables or an undivided interest
therein and the Agent as assignee and (v) proper terminations of Financing
Statements (Form UCC-3), terminating any and all Financing Statements which
cover any Receivable or Contract other than pursuant to this Agreement or
the Purchase and Sale Agreement;
Copies of search reports (including tax, UCC, ERISA and judgment
liens) provided in writing to the Agent, listing all effective financing
statements that name Borrower, Oxford, UPAC or UPAC of California as debtor
and that are filed in or relate to the jurisdictions in which filings were
made pursuant to subsection (e) above, together with copies of such
financing statements (none of which shall cover any Receivables or
Contracts);
Duly executed Lock-Box Agreements with the Lock-Box Banks;
Duly executed Purchase and Sale Agreement satisfactory to the Agent;
Duly executed Custody Agreement satisfactory to the Agent;
Duly executed Backup Servicing Agreement satisfactory to the Agent;
Opinion of Kutak Rock, counsel to Borrower and the Originators as to
perfection, authority and other matters in substantially the form attached
as Exhibit 5.01(k)-1;
Opinion of Kutak Rock, counsel to Borrower, as to "true sale" and
"non-substantive consolidation" in substantially the forms attached as
Exhibits 5.01(l)-1 and 5.01(l)-2;
[Reserved];
Such sublicenses as Lender or the Agent shall require with regard to
all programs leased by Borrower, UPAC or UPAC of California and used in the
servicing of the Receivables Pool;
Such powers of attorney as Lender or the Agent shall reasonably
request to enable them to collect all amounts due under any and all Pool
Receivables;
Evidence that each of the Originators and the Borrower has marked its
master data processing records to reflect the Agent's security interest in
each Pool Receivable;
[Reserved]
An executed copy of the Tax Sharing Agreement among Parent and its
"affiliated group of companies" (including UPAC, UPAC of California and
Borrower), a copy of which is attached as Exhibit 5.01(r);
(i) A Settlement Statement, prepared in respect of the proposed Loan,
assuming a Cut-Off Date of July 15, 2000, (ii) a Weekly Report covering the
week ended August 25, 2000, (iii) schedule of information for Receivables
related to such Loan in an electronic format acceptable to the Agent, and
(iv) implementation of Settlement reporting procedures and formats
satisfactory to the Agent;
[Reserved];
Duly executed Liquidity Agreement;
Duly executed Fee Letter;
Certified copy of the Credit and Collection Policy of each of UPAC,
UPAC of California and Oxford;
Satisfactory completion of due diligence (including the collateral
audit) by the Agent;
Letters from the rating agencies then rating the Commercial Paper
Notes, confirming in effect that the existing ratings of the Commercial
Paper Notes will remain in effect after giving effect to the transactions
contemplated hereby;
Letter Agreement among the Borrower, the Originators, the Servicer and
the Agent regarding exclusivity.
Such other further documents, certificates, information and/or
approvals as Lender, the Agent or any Liquidity Bank shall reasonably
request.
Conditions Precedent to All Loans. Each Loan (including the initial Loan)
and each Continuation of each Loan beyond its initial Yield Period shall be
subject to the further conditions precedent that on the date of such Loan or any
Continuation thereof (i) in the case of a Loan, the Borrower shall have
delivered the Weekly Report or Settlement Statement required to be delivered
during such week pursuant to Section 3.03(b) or 3.03(a), respectively, covering
the calendar week or Settlement Period, as applicable, most recently ended, and
(ii) the following statements shall be true (and Borrower by accepting the
amount of such Loan or by having such Loan continued on each date that its Yield
Period ends shall be deemed to have certified that):
the representations and warranties contained in Sections 6.01 and 6.02
hereof and in the Purchase and Sale Agreement are correct on and as of such
day as though made on and as of such day and shall be deemed to have been
made on such day,
no event has occurred and is continuing, or would result from such
Loan or Continuation thereof, that constitutes a Liquidation Event or
Unmatured Liquidation Event,
except as provided in Section 3.08, for each Receivable financed by a
Loan or Continuation thereof, a fully executed Contract shall have been
delivered to the Custodian (as Lender's designee), no later than the Friday
following such Loan or Continuation thereof,
after giving effect to each proposed Loan or Continuation thereof, the
aggregate outstanding principal balance of the Loans will not exceed the
lesser of the Borrowing Base or the Commitment Amount, the Advance Rate
shall not exceed the Maximum Advance Rate and the Effective Advance Rate
shall not exceed the Maximum Effective Advance Rate, and
the Liquidation Date shall not have occurred;
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Continuation of a
Loan on any day which does not cause the outstanding principal balance of all
Loans, after giving effect to such Continuation, to exceed the outstanding
principal balance of all Loans as of the opening of business on such day.
REPRESENTATIONS AND WARRANTIES
Representations and Warranties of Borrower. In order to induce the Lender
and the Agent to enter into this Agreement and the other Transaction Documents,
Borrower represents and warrants to each of them as follows:
Organization and Good Standing. Borrower has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and now
has, all necessary power, authority, and legal right to acquire, own,
dispose of, and otherwise deal with, the Pool Receivables.
Due Qualification. Borrower is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business (including, without limitation, such
business as a "premium finance company") requires such qualification or
approvals.
Power and Authority: Due Authorization. Borrower has (i) duly
authorized by all necessary action, and has all necessary power, authority
and legal right to (A) execute and deliver this Agreement, the Purchase and
Sale Agreement and the other Transaction Documents to which it is a party,
and (B) carry out the terms of the Transaction Documents, and (ii) has duly
authorized by all necessary corporate action the execution, delivery and
performance of this Agreement, the Purchase and Sale Agreement and the
other Transaction Documents on the terms and conditions herein provided.
Binding Obligations. This Agreement constitutes, and each other
Transaction Document to be signed by Borrower when duly executed and
delivered will constitute, a legal, valid and binding obligation of
Borrower enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, or other similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
No Violation. The consummation of the transactions contemplated by
this Agreement, the Purchase and Sale Agreement and the other Transaction
Documents and the fulfillment of the terms hereof will not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or by-laws of Borrower, or any indenture, loan agreement,
mortgage, deed of trust, receivables purchase or other securitization
agreement or other agreement or instrument to which Borrower is a party or
by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
loan agreement, mortgage, deed of trust, receivables purchase agreement or
other securitization agreement or other agreement or instrument, other than
this Agreement and the Purchase and Sale Agreement, or violate any law or
any order, rule, or regulation applicable to Borrower or (except for
Adverse Determinations disclosed in writing to Lender and except as
described in Schedule 6.01(e)) of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over Borrower (or Lender as a result of
any of the transactions contemplated by the Transaction Documents) or any
of its properties.
No Proceedings. There are no proceedings or investigations pending,
or threatened, against Borrower or its Affiliates, or any other Person,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (A) asserting the invalidity of this
Agreement, the Purchase and Sale Agreement or any other Transaction
Document, (B) seeking to prevent the consummation of any of the
transactions contemplated by this or any other Transaction Document, (C)
seeking any determination or ruling that might adversely affect (i) the
performance by Borrower, the Servicer or any of the Originators of its
respective obligations under this Agreement or any of the other Transaction
Documents, or (ii) the validity or enforceability of this Agreement, the
Purchase and Sale Agreement, any other Transaction Document, the
Receivables or the Contracts or (D) seeking to adversely affect the federal
income tax attributes of the transactions contemplated hereunder.
Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
Government Approvals. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by Borrower of this Agreement, the Purchase and Sale Agreement or any other
Transaction Document except for the filing of the UCC Financing Statements
referred to in Article V, all of which, at the time required in Article V,
shall have been duly made and shall be in full force and effect.
Financial Condition. Since December 31, 1999 there has been no
material adverse change in the financial condition, business, business
prospects or operations of the Borrower.
Litigation. No injunction, decree or other decision has been issued
or made by any court, government or agency or instrumentality thereof that
has, and no threat by any person has been made to attempt to obtain any
such decision that would have, a material adverse effect on a significant
part of its business operations except as described in Schedule 6.01(j).
Margin Regulations. The use of all funds acquired by Borrower under
this Agreement will not conflict with or contravene any of Regulations G,
T, U and X promulgated by the Board of Governors of the Federal Reserve
system from time to time.
Quality of Title. Each Pool Receivable is, together with the related
Contract and all other agreements related to such Pool Receivable (other
than the related insurance policy, with respect to which Borrower has a
first priority and sole perfected security interest therein), owned by
Borrower free and clear of any Lien (other than any Lien arising solely as
the result of any action taken by the Agent or the Lender (or any assignee
thereof)) except as provided herein; and when Lender makes a Loan it shall
have acquired and shall continue to have maintained a valid and perfected
first priority security interest in each Pool Receivable, each related
Contract and in the Related Security and Collections with respect thereto
free and clear of any Lien (other than any Lien arising solely as the
result of any action taken by the Agent or the Lender (or any assignee
thereof)); and no financing statement or other instrument similar in effect
covering any Pool Receivable, any interest therein, the related Contracts,
or the Related Security or Collections with respect thereto is on file in
any recording office except such as may be filed in favor of (i) the
Originators in accordance with the Contracts, (ii) in favor of Borrower and
the Agent in accordance with the Purchase and Sale Agreement or (iii) in
favor of the Agent in accordance with this Agreement or in connection with
any Lien arising solely as the result of any action taken by the Agent or
the Lender (or any assignee thereof).
Accurate Reports. No Settlement Statement (if prepared by Borrower or
any Affiliate of Borrower, or to the extent that information contained
therein was supplied by Borrower or any Affiliate of Borrower),
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by Borrower to the Agent or Lender in
connection with this Agreement or any other Transaction Document was or
will be inaccurate in any material respect as of the date it was or will be
dated or (except as otherwise disclosed to the Agent and Lender, as the
case may be, at such time) as of the date so furnished, or contained or
will contain any material misstatement of fact or omitted or will omit to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
Offices. The chief place of business and chief executive office of
Borrower are located at the address of Borrower referred to in Section
14.02 and the offices where Borrower keeps all its books, records and
documents evidencing Pool Receivables, the related Contracts and all
purchase orders and other agreements related to such Pool Receivables are
located at the addresses specified in Schedule 6.01(n) (or at such other
locations, notified to the Agent in accordance with Section 7.01(e), in
jurisdictions where all action required by Section 8.05 has been taken and
completed).
Lock-Box Accounts. The names and addresses of all the Lock-Box Banks,
together with the account numbers of the lock-box accounts of Borrower at
such Lock-Box Banks, are specified in Schedule 6.01(o) (or have been
notified to Lender in accordance with Section 7.03(d)).
Eligible Receivables. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Loan or Continuation
thereof shall in fact be an Eligible Receivable.
Investment Company Act. Borrower is not an investment company or a
company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended.
Solvency. After giving effect to each Loan and each Continuation of
any Loan and immediately after giving effect to Borrower's and each
Originator's obligations now or hereafter arising pursuant to any
Transaction Document and to each transaction contemplated thereby, (i) the
fair saleable value of the assets of Borrower will exceed its liabilities,
and (ii) Borrower will be solvent, will be able to pay its debts generally
as they mature, will own property with a fair saleable value greater than
the amount required to pay its debts, and will have capital sufficient to
carry on its business as then constituted.
Servicing Programs No license or approval is required for the Agent's
or the Servicer's use of any program used by Servicer or any of the
Originators in the servicing of the Receivables, other than those which
have been obtained and are in full force and effect. The Borrower hereby
unconditionally and irrevocably grants to the Agent, the Lender and the
Servicer a royalty free, non-exclusive license or sublicense to use all
programs and other computer software used by the Borrower or any Originator
in the monitoring, servicing and/or collection of any Contracts or related
Receivables and upon such licensee's or sublicensee's request, the Borrower
shall make available to such licensee or sublicensee a copy of such program
or software in machine-readable form and to the extent necessary or
convenient to operate such program or software, access during normal
business hours to any of the Borrower's computer or computer hardware to
facilitate the use of such program or software.
Direct Obligor. No funds have been advanced by Borrower to or on
behalf of any Direct Obligor.
Contractual Due Dates, Etc. No Contract has been extended or
otherwise modified, unless in manner, scope and content in accordance with
the provisions of this Agreement and the Credit and Collection Policy of
the Originator originating such Receivable.
Licensing. Each Originator is properly licensed as a premium finance
loan company in each jurisdiction in which licensing is required for it to
own premium finance loans with a nexus to such jurisdiction.
Transfers. No transfer of an interest in Receivables by Borrower to
Lender or by any Originator to Borrower constitutes a fraudulent transfer
or fraudulent conveyance or is otherwise void or voidable under similar
laws or principles, the doctrine of equitable subordination or for any
other reason.
Purchase and Sale Agreement. Each of the representations and
warranties made by Borrower and the Originators in the Purchase and Sale
Agreement is true and correct as of the date or dates made, and each such
agreement is in full force and effect.
Use of Proceeds. Neither Borrower nor any Originator will use the
proceeds of the Loans hereunder to acquire a security in a transaction
subject to Section 13 or 14 of the Securities Exchange Act of 1934.
Tax. Borrower has filed each and every tax return required to be
filed by it in each jurisdiction in which it is required to do so and has
paid in each such jurisdiction all taxes required to be paid by it on a
consolidated basis.
No Liquidation Event. No event has occurred and is continuing and no
condition exists which constitutes a Liquidation Event or an Unmatured
Liquidation Event.
ERISA. The Borrower is in compliance in all material respects with
ERISA and there exists no lien in favor of the Pension Benefit Guaranty
Corporation on any of the Receivables.
Collateral. The Collateral is owned by the Borrower free and clear of
any Lien, except as provided herein, and the Agent for the benefit of
Secured Parties has a valid and perfected first priority security interest
in the Collateral. No effective financing statement or other instrument
similar in effect covering any Collateral is on file in any recording
office except such as has been filed in favor of the Agent relating to this
Agreement.
Representations and Warranties of UPAC. UPAC (individually and as Servicer
hereunder), in order to induce the Lender and the Agent to enter into this
Agreement and the other Transaction Documents, represents and warrants to each
of them as follows:
Organization and Good Standing. UPAC has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Missouri, with power and authority to own its properties and to
conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and now
has, all necessary power, authority, and legal right to acquire, own,
dispose of, and service the Pool Receivables.
Due Qualification. UPAC is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary approvals, in
all jurisdictions in which the ownership or lease of property or the
conduct of its business (including, without limitation, such business as a
"premium finance company") requires such qualification or approvals.
Power and Authority: Due Authorization. UPAC has (i) duly authorized
by all necessary action, and has all necessary power, authority and legal
right to (A) execute and deliver this Agreement, the Purchase and Sale
Agreement and the other Transaction Documents to which it is a party, (B)
carry out the terms of the Transaction Documents, (C) sell and assign the
Receivables on the terms and conditions provided in the Purchase and Sale
Agreement and (D) service the Receivables on the terms and conditions
herein provided and (ii) has duly authorized by all necessary corporate
action the execution, delivery and performance of this Agreement, the
Purchase and Sale Agreement and the other Transaction Documents on the
terms and conditions herein provided.
Binding Obligations. This Agreement constitutes, and each other
Transaction Document to be signed by UPAC when duly executed and delivered
will constitute, a legal, valid and binding obligation of UPAC enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
No Violation. The consummation of the transactions contemplated by
this Agreement, the Purchase and Sale Agreement and the other Transaction
Documents and the fulfillment of the terms hereof and thereof will not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the articles of incorporation or by-laws of UPAC, or any indenture, loan
agreement, mortgage, deed of trust, receivables purchase or other
securitization agreement or other agreement or instrument to which UPAC is
a party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, loan agreement, mortgage, deed of trust, receivables purchase
agreement or other securitization agreement or other agreement or
instrument, other than this Agreement and the Purchase and Sale Agreement,
or violate any law or any order, rule, or regulation applicable to UPAC or
(except for Adverse Determinations disclosed in writing to Borrower, the
Agent and Lender as assignees of UPAC and except as described in Schedule
6.02(e)) of any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over UPAC (or Lender, the Agent and Borrower as assignees of
UPAC) or any of its properties.
No Proceedings. There are no proceedings or investigations pending,
or threatened, against UPAC or its Affiliates, or any other Person, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (A) asserting the invalidity of this
Agreement, the Purchase and Sale Agreement or any other Transaction
Document, (B) seeking to prevent the consummation of any of the
transactions contemplated by this or any other Transaction Document, (C)
seeking any determination or ruling that might adversely affect (i) the
performance by UPAC or Servicer of its obligations under this Agreement, or
(ii) the validity or enforceability of this Agreement, the Purchase and
Sale Agreement, any other Transaction Document, the Receivables or the
Contracts or (D) seeking to adversely affect the federal income tax
attributes of the transactions contemplated hereunder.
Government Approvals. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by UPAC of this Agreement, the Purchase and Sale Agreement or any other
Transaction Document except for the filing of the UCC Financing Statements
referred to in Article V, all of which, at the time required in Article V,
shall have been duly made and shall be in full force and effect.
Financial Condition. (x) The consolidated balance sheet of UPAC, UPAC
of California, APR and their consolidated subsidiaries, if any, as at
December 31, 1999, and the related statements of income and cash flow of
UPAC, UPAC of California, APR and their consolidated subsidiaries, if any,
for the year then ended certified by their independent certified public
accounting firm, and the unaudited consolidated interim balance sheet of
UPAC, UPAC of California, APR and their consolidated subsidiaries as at
March 31, 2000, and the related interim statement of income, copies of each
of which have been furnished to the Agent and Lender, each fairly present
the consolidated financial position of UPAC, UPAC of California, APR and
their consolidated subsidiaries as at such date and the consolidated
results of the operations of UPAC, UPAC of California, APR and their
consolidated subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied, and (y) since March 31, 2000 there has been no material adverse
change in any such condition, business, business prospects or operations
except as described in Schedule 6.02(h).
Litigation. No injunction, decree or other decision has been issued
or made by any court, government or agency or instrumentality thereof that
has, and no threat by any person has been made to attempt to obtain any
such decision that would have, a material adverse effect on a significant
part of its business operations except as described in Schedule 6.02(i).
Accurate Reports. No Settlement Statement (if prepared by UPAC or any
Affiliate of UPAC, or to the extent that information contained therein was
supplied by UPAC or any Affiliate of UPAC), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished by
UPAC to the Agent or Lender in connection with this Agreement or any other
Transaction Document was or will be inaccurate in any material respect as
of the date it was or will be dated or (except as otherwise disclosed to
the Agent and Lender, as the case may be, at such time) as of the date so
furnished, or contained or will contain any material misstatement of fact
or omitted or will omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading.
Offices. The chief place of business and chief executive office of
UPAC are located at the address of UPAC referred to in Section 14.02 and
the offices where UPAC keeps all its books, records and documents
evidencing Pool Receivables, the related Contracts and all purchase
orders and other agreements related to such Pool Receivables are located at
the addresses specified in Schedule 6.02(k) (or at such other locations,
notified to the Agent in accordance with Section 7.01(e), in jurisdictions
where all action required by Section 8.05 has been taken and completed).
Servicing Programs. No license or approval is required for the
Agent's use of any program used by UPAC in the servicing of the
Receivables, other than those which have been obtained and are in full
force and effect.
Contractual Due Dates, Etc. No Contract has been extended or
otherwise modified, unless in manner, scope and content in accordance with
the provisions of this Agreement and the Credit and Collection Policy of
the applicable Originator originating such Receivable.
Licensing. UPAC is properly licensed as a premium finance loan
company in each jurisdiction in which licensing is required and in which it
is originating, enforcing and/or servicing Receivables pursuant to the
terms of the Transaction Documents.
Confirmation. With respect to each Contract and related Receivable
serviced by it and included in the Receivables Pool, Servicer has either
obtained written confirmation of the existence, accuracy and terms of the
related insurance policy or has otherwise verified the existence, accuracy
and terms of the related insurance policy in accordance with its policies
and procedures.
Reserved.
Breach of Representations and Warranties.
Breach of Representations and Warranties. Upon discovery by UPAC,
Servicer or Borrower of a breach of any of the representations and
warranties set forth in this Article VI, the party discovering such breach
shall give written notice thereof to the Agent and the Lender within one
(1) Business Day of such discovery.
Survival of Certain Representations and Warranties. The
representation and warranties provided in this Article VI shall survive the
purchase of the related Receivables under the Purchase and Sale Agreement,
the making and Continuation of Loans by the Lender hereunder, the delivery
of the Contracts to Lender or Lender's designee and the termination of this
Agreement or any other Transaction Document.
GENERAL COVENANTS
Affirmative Covenants of Borrower. From the date hereof until the Final
Payout Date, Borrower will, unless the Agent shall otherwise consent in writing:
Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders with respect to (i) the Pool
Receivables and related Contracts and (ii) its business operations except
where noncompliance would not have a material adverse effect on such
business operations.
Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of the
Agent and the Lender hereunder or (ii) the ability of the Borrower or the
Servicer to perform their respective obligations hereunder.
Audits. At any time and from time to time during regular business
hours, upon such notice, if any, as shall be reasonable under the
circumstances, permit the Agent (at Agent's expense), or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of Borrower relating to
Pool Receivables, including, without limitation, the related Contracts and
other agreements, and (ii) to visit the offices and properties of Borrower
for the purpose of examining such materials described in clause (i) next
above, and to discuss matters relating to Pool Receivables or Borrower's
performance hereunder or under any other Transaction Document with any of
the officers or employees of Borrower having knowledge of such matters; and
without limiting the foregoing, from time to time upon request of the
Agent, permit certified public accountants or other auditors acceptable to
them to conduct, at Borrower's expense, a review of Borrower's books and
records.
Performance and Compliance with Receivables and Contracts. At its
expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all other agreements related
to such Pool Receivables.
Location of Records. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all other agreements related to
such Pool Receivables (and all original documents relating thereto), at the
address(es) of Borrower referred to in Section 6.01(n) or, upon 30 days'
prior written notice to the Agent, at such other locations in jurisdictions
where all action required by Section 8.05 shall have been taken and
completed.
Credit and Collection Policies. Comply in all material respects with
the applicable Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.
Collections. Cause all Collections of Pool Receivables to be
deposited within one Business Day directly with a Lock-Box Bank.
Reserved.
Rights and Obligations under Purchase and Sale Agreement. Exercise all
of its rights and perform all of its obligations under or in connection
with the Purchase and Sale Agreement to the fullest extent thereof except
to the extent otherwise consented to in writing by the Agent.
Reporting Requirements of Borrower. From the date hereof until the Final
Payout Date, Borrower will, unless the Agent shall otherwise consent in writing,
furnish to the Agent.
Financial Statements. As soon as available and (i) in any event
within 30 days after the end of each calendar month, copies of the
unaudited monthly consolidating financial statements of Borrower, UPAC
,UPAC of California and APR prepared in accordance with generally accepted
accounting principles consistently applied and (ii) in any event within 90
days after the end of each fiscal year of the Borrower, (x) unaudited
annual consolidating financial statements of each of the Borrower, UPAC,
UPAC of California and APR for the fiscal year then ended, prepared in
accordance with generally accepted accounting principles consistently
applied and (y) audited annual consolidated financial statement of the
Parent and its consolidated subsidiaries for the fiscal year then ended,
prepared in accordance with generally accepted accounting principles
consistently applied and certified by the Parent's accountants (which shall
be a nationally recognized independent certified public accounting firm) as
fairly presenting the financial condition and results of operations of the
Parent and its consolidated subsidiaries for the period covered thereby.
ERISA. Promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event defined in Article
IV of ERISA which Borrower or any ERISA Affiliate of Borrower files under
ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which Borrower or any ERISA
Affiliate of Borrower receives from the Pension Benefit Guaranty
Corporation;
Liquidation Events. As soon as possible and in any event within one
Business Day after the occurrence of each Liquidation Event and each
Unmatured Liquidation Event, a written statement of the chief financial
officer or chief accounting officer of Borrower setting forth details of
such event and the action that Borrower proposes to take or cause to be
taken with respect thereto, and the Lender shall promptly after its receipt
thereof forward a copy of such notice (or otherwise give notice of its
receipt of such notice) to each of the rating agencies then rating its
Commercial Paper Notes;
Litigation and Other Proceedings. As soon as possible and in any
event within one Business Day of Borrower's knowledge thereof, notice from
the Borrower of (i) any litigation, investigation, inquiry or proceeding
which may exist at any time which could have a material adverse effect on
the business, operations, property or financial condition of Borrower or
any Originator or impair the ability of Borrower or any Originator to
perform its respective obligations under this Agreement or any other
Transaction Document or which could result in an Adverse Determination,
(ii) any material adverse development in any previously disclosed
litigation, investigation, inquiry or proceeding and (iii) any Adverse
Determination, and, in each case, the Lender shall promptly after its
receipt thereof forward a copy of such notice (or otherwise give notice of
its receipt of such notice) to each of the rating agencies then rating its
Commercial Paper Notes;
Audit of Pool Receivables. Together with the annual financial
statements required to be delivered pursuant to Section 7.02(a)(y), a copy
of an audit report, prepared by Borrower's accountants (which shall be a
nationally recognized independent certified public accounting firm), of the
Pool Receivables, as at the end of the fiscal year of Borrower, verifying
the aggregate Unpaid Balance of the Pool Receivables and the Defaulted
Receivables.
Change in Credit and Collection Policies. Immediately upon becoming
aware thereof, notice of any material change or proposed material change in
the character of any Originator's business or in any Originator's Credit
and Collection Policy, and the Lender shall promptly after its receipt of
any such notice forward a copy of such notice (or otherwise give notice of
its receipt of such notice) to each of the rating agencies then rating its
Commercial Paper Notes.
Material Change. As soon as practicable but in no event later than
the first Business Day following the occurrence, notice of any material
adverse change in Borrower's or any Originator's financial or operating
condition.
Purchase and Sale Agreement. Promptly after receipt thereof, copies
of all documents and other information delivered by the Originators to
Borrower pursuant to the Purchase and Sale Agreement.
Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition
or operations, financial or otherwise, of Borrower or the Originators as
the Agent may from time to time reasonably request in order to protect the
interests of the Agent and/or the Lender under or as contemplated by this
Agreement.
Notice. Within three Business Days of its acquisition, generation or
other origination of a Contract and/or its related Receivable, provide
notice (or otherwise cause notice to be provided) to (x) the relevant
Obligors of its ownership interest in such Receivable and subsequent grant
of a security interest therein thereof to the Lender (which notice may be
set forth in the form of Contract to be executed by such Obligor), (y) to
the relevant insurance carrier obligated to pay unearned premiums under any
relevant insurance policy of the assignment to the relevant Originator of
the right to payment of such unearned premiums and the subsequent
assignment thereof to the Borrower and the Lender, it being agreed that,
notice in the form of Exhibit 7.02(j)-1 and Exhibit 7.02(j)-2 will be
sufficient for clauses (x) and (y), respectively, above. Any notice which
in accordance with applicable policies and procedures is to be given to the
relevant insurance agent of the assignment of the right to payment of
unearned premiums shall be substantially in the form of Exhibit 7.02(j)-3.
Negative Covenants of Borrower. From the date hereof until the Final
Payout Date, Borrower will not, without the prior written consent of the Agent:
Sales, Liens, Etc. Except as otherwise provided herein and in the
Purchase and Sale Agreement, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Lien
upon or with respect to, any Pool Receivable or related Contract or Related
Security, or any interest therein, or any lock-box account to which any
Collections of any Pool Receivable are sent, or any right to receive income
or proceeds from or in respect of any of the foregoing.
Extension or Amendment of Receivables. Except as otherwise permitted
in Section 8.02, extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto.
Change in Business. Make any change in the character of its business.
Change in Payment Instructions to Obligors Add or terminate any bank
as a Lock-Box Bank from those listed in Schedule 6.01(o), make or permit
any change in Servicer's instructions to Obligors regarding payments to be
made to Borrower or Servicer or payments to be made to any Lock-Box Bank,
unless, in any case, the Agent shall have received notice of such addition,
termination or change and duly executed copies of Lock-Box Agreements with
each new Lock-Box Bank.
Mergers, Acquisitions, Sales, etc. Be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person, or, except in the ordinary course of
its business, sell, transfer, convey or lease all or any substantial part
of its assets, or sell or assign with or without recourse any Receivables
or any interest therein (other than pursuant hereto).
Restricted Payments. Purchase or redeem, or permit any Subsidiary to
purchase or redeem, any shares of the capital stock of Borrower, declare or
pay any dividends thereon (other than Permitted Dividends and stock
dividends which may be paid no more frequently than monthly), make any
distribution to stockholders or set aside any funds for any such purpose,
or prepay, purchase or redeem, or permit any Subsidiary to purchase, any
subordinated indebtedness of Borrower except as permitted under the Tax
Sharing Agreement and any agreement allocating overhead to the extent such
agreement has been approved by the Agent.
Deposits to Special Accounts. Deposit or otherwise credit, or cause
or permit to be so deposited or credited, to any Lock-Box Account or the
Collection Account cash or cash proceeds other than Collections of Pool
Receivables.
Incurrence of Indebtedness. Incur or permit to exist any indebtedness
or liability on account of deposits or advances or for borrowed money or
for the deferred purchase price of any property or services, other than (i)
under the Subordinated Notes or (ii) any other indebtedness approved by the
Agent and listed in Schedule 7.03(h).
Amendments to Purchase and Sale Agreement. Amend, supplement, waive
the application of any provision of, amend and restate or otherwise modify
the Purchase and Sale Agreement (including, adding any Originators
thereunder) except (x) in accordance with the terms thereof and (y) with
the prior written consent of the Agent.
No Subsidiaries. Acquire any voting or economic interest in any other
Person.
Affirmative Covenants of UPAC. From the date hereof until the Final Payout
Date, UPAC (individually and as Servicer) will, unless the Agent shall otherwise
consent in writing:
Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders with respect to (i) the Pool
Receivables and related Contracts and (ii) its business operations
(particularly relating to origination and servicing) except where
noncompliance would not have a material adverse effect on such business
operations.
Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect (i) the interests of Lender
hereunder or (ii) the ability of UPAC or Borrower to perform their
obligations hereunder or under the other Transaction Documents.
Audits. At any time and from time to time during regular business
hours, upon such notice, if any, as shall be reasonable under the
circumstances, permit the Agent (at the expense of Agent), or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of UPAC relating to Pool
Receivables, including, without limitation, the related Contracts and other
agreements, and (ii) to visit the offices and properties of UPAC for the
purpose of examining such materials described in clause (i) immediately
above, and to discuss matters relating to Pool Receivables or UPAC's
performance hereunder or under any other Transaction Document with any of
the officers or employees of UPAC having knowledge of such matters; and
without limiting the foregoing, from time to time upon request of the
Agent, permit certified public accountants or other auditors acceptable to
them to conduct, at the reasonable expense of UPAC, a review of UPAC's
books and records.
Keeping of Records and Books of Account. (i) Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables in the event of the
destruction of the originals thereof) and keep and maintain, all documents,
books, records and other information, in each case, reasonably necessary or
advisable for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each new
Pool Receivable and all Collections of and adjustments to each existing
Pool Receivable) and (ii) identify (and mark) in each of its records and on
each Contract (including computer records) each Receivable included in the
Receivables Pool as so included.
Performance and Compliance with Receivables and Contracts. At its
expense timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables and all other agreements related
to such Pool Receivables.
Location of Records. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pool Receivables, all related Contracts and all other agreements related to
such Pool Receivables (and all original documents relating thereto), at the
address(es) of UPAC referred to in Section 6.01(n) or, upon 30 days' prior
written notice to the Agent, at such other locations in jurisdictions where
all action required by Section 8.05 shall have been taken and completed.
Credit and Collection Policies. Comply in all material respects with
the applicable Credit and Collection Policy in regard to each Pool
Receivable and the related Contract.
Collections. Cause all Collections of Pool Receivables to be
deposited within one Business Day directly with a Lock-Box Bank.
Cancellation of Certain Insurance Policies. With regard to any Pool
Receivable, cancel the related insurance policy in accordance with the
applicable Credit and Collection Policy, unless non-cancellation thereof
will not materially and adversely impact the related Pool Receivable or the
Receivables Pool taken as a whole.
Purchase and Sale Agreement. Comply with all of its obligations under
the Purchase and Sale Agreement.
Reporting Requirements of UPAC. From the date hereof until the Final
Payout Date, UPAC will, unless the Agent shall otherwise consent in writing,
furnish to the Agent:
Financial Statements. As soon as available and in any event within 90
days after each fiscal year of UPAC, and within 30 days after each fiscal
month of UPAC, copies of the consolidated financial statements of UPAC,
UPAC of California, APR and their consolidated Subsidiaries prepared on a
consolidated basis and on a consolidating basis, in each case in conformity
with generally accepted accounting principles, duly certified by the
treasurer of UPAC; together with a monthly certificate from the treasurer,
in each case containing a computation (so long as UPAC is the Servicer) of
the Default Ratio, the Monthly Payment Rate, the Excess Yield Ratio and the
Cancellation Ratio and containing a computation of, and showing compliance
with, the financial restrictions contained in Section 7.06(f), 7.06(h),
10.01(h), 10.01(i), 10.01(j), 10.01(v), 10.01(w), and 10.01(x).
ERISA. Promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any Reportable Event defined in Article
IV of ERISA which UPAC or any ERISA Affiliate of UPAC files under ERISA
with the Internal Revenue Service, the Pension Benefit Guaranty Corporation
or the U.S. Department of Labor or which UPAC or any ERISA Affiliate of
UPAC receives from the Pension Benefit Guaranty Corporation:
Liquidation Events. As soon as possible and in any event within one
Business Day after the occurrence of each Liquidation Event and each
Unmatured Liquidation Event, a written statement of the chief financial
officer or chief accounting officer of UPAC setting forth details of such
event and the action that UPAC proposes to take with respect thereto;
Litigation and Other Proceedings. As soon as possible and in any
event within two Business Days of UPAC's knowledge thereof, notice of (i)
any litigation, investigation, inquiry or proceeding which may exist at any
time which could have a material adverse effect on the business,
operations, property or financial condition of UPAC or impair the ability
of UPAC or the Borrower to perform its respective obligations under this
Agreement or the other Transaction Documents or which could result in an
Adverse Determination, (ii) any material adverse development in any
previously disclosed litigation, investigation, inquiry or proceeding,
(iii) any Adverse Determination, and (iv) any change in applicable laws or
regulations which change could reasonably be expected to result in an
Adverse Determination;
Change in Credit and Collection Policy. Prior to its effective date,
notice of any material change in the character of UPAC's business or in its
Credit and Collection Policy.
Material Change. As soon as practicable but in no event later than
the first Business Day following the occurrence, notification of any
material adverse change in UPAC's financial or operating condition.
Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition
or operations, financial or otherwise, of UPAC or, to the extent it is
Servicer, any other Originator or the Borrower, as in any case the Agent
may from time to time reasonably request in order to protect the interests
of the Agent or Lender under or as contemplated by this Agreement.
Negative Covenants of UPAC. From the date hereof until the Final Payout
Date, UPAC will not, without the prior written consent of the Agent:
Sales, Liens, Etc. Except as otherwise provided herein sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Lien upon or with respect to, any Pool Receivable or
related Contract or Related Security, or any interest (including Borrower's
retained interest) therein, or any lock-box account to which any
Collections of any Pool Receivable are sent, or any right to receive income
or proceeds from or in respect of any of the foregoing.
Extension or Amendment of Receivables. Except as otherwise permitted
in Section 8.02, extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto.
Change in Business or Credit and Collection Policy. Make any material
change in the character of its business or in its Credit and Collection
Policy.
Change in Payment Instructions to Obligors. Add or terminate any bank
as a Lock-Box Bank from those listed in Schedule 6.01(o) or make any change
in its instructions to Obligors regarding payments to be made to Borrower
or Servicer or payments to be made to any Lock-Box Bank, unless the Agent
shall have received notice of such addition, termination or change and duly
executed copies of Lock-Box Agreements with each new Lock-Box Bank.
Reserved.
Mergers, Acquisitions, Sales, etc. Be a party to any merger or
consolidation, or convey, transfer, lease or otherwise dispose of (whether
in one transaction or in a series of transactions), all or substantially
all of its assets (whether now owned or hereafter acquired), or acquire all
or substantially all of the assets or capital stock or other ownership
interest of any Person; provided, however, that (i) UPAC may merge or
consolidate with, or acquire all or substantially all of the assets of any
other Originator and (ii) UPAC may merge or consolidate with, or acquire
all or substantially all of the assets or capital stock or other ownership
interest of any other Person so long as (1) no Liquidation Event or
Unmatured Liquidation Event is then outstanding or would result therefrom
and (2) immediately after giving effect to such merger, consolidation or
acquisition, as the case may be, UPAC shall be the surviving entity of such
merger, consolidation or acquisition and the net worth of UPAC on a
consolidated basis will equal or exceed that of UPAC immediately prior to
such merger, consolidation or acquisition; and provided, further, it is
expressly understood and agreed that, unless otherwise agreed to by the
Agent and the Lender, neither (x) the accounts receivable and other similar
assets of such other party to such merger, consolidation or acquisition
(whether such accounts receivable or other similar assets existed prior to
such merger, consolidation or acquisition or arise or are created
thereafter out of or in connection with what had been the operations of
such other party), nor (y) the accounts receivable and other similar assets
acquired by an Originator from a Person (other than another Originator) in
an acquisition of less than all or substantially all of such Person's
assets (by way of example and not limitation, the purchase by an Originator
of a single portfolio of Receivables from a third party), shall be deemed
in any event to be Eligible Receivables hereunder except to the extent
that:
the aggregate Unpaid Principal Balance of all such Receivables
acquired through purchase, merger or consolidation and which have not
been previously designated by the Agent and the Lender as being
Eligible Receivables does not exceed, at any time, 5% of the Net Pool
Balance at such time; and
the aggregate Unpaid Principal Balance of all such Receivables
acquired through any specific merger, consolidation or any acquisition
or purchase (or any related series of acquisitions or purchases) and
which have not previously been designated by the Agent and the Lender
as being Eligible Receivables does not exceed, at any time, 2.5% of
the Net Pool Balance at such time.
Restricted Payments. Purchase or redeem, or permit any Subsidiary to
purchase or redeem, any shares of the capital stock of UPAC, declare or pay
any dividends thereon, make any distribution to stockholders or set aside
any funds for any such purpose, or prepay, purchase or redeem, or permit
any Subsidiary to prepay, purchase or redeem, any subordinated indebtedness
of UPAC, or purchase any debt owed by any Affiliate of UPAC or make any
loan to any Affiliate of UPAC, if in any such case, after giving effect
thereto, the Liquidation Event described in Section 10.01(w) would occur.
Incurrence of Indebtedness. Incur, guaranty or permit to exist any
indebtedness or liability on account of deposits or advances or for
borrowed money or for the deferred purchase price of any property or
services, except (i) indebtedness to other Subsidiaries not exceeding in
the aggregate $100,000 at any one time outstanding, (ii) current accounts
payable arising in the ordinary course of business, (iii) indebtedness of
the Borrower to any Originators or Oxford under the Subordinated Notes for
the purchase price of Receivables purchased by the Borrower from the
Originators or Oxford pursuant to the Purchase and Sale Agreement, (iv)
unsecured indebtedness of UPAC in respect of outstanding deposits made to
such Originator by referring agents in the ordinary course of its
respective business, not to exceed at any time of determination hereunder,
in the aggregate for UPAC and UPAC of California, the sum of $1,000,000
plus 10% of the excess (if any) of the consolidated tangible net worth of
UPAC and UPAC of California and their consolidated subsidiaries at such
time over $5,000,000, and (v) other indebtedness outstanding on the date
hereof and listed on Schedule 7.06(i); notwithstanding the foregoing, UPAC
may obtain subordinated loans from other Persons in an amount not to exceed
$5,000,000, in the aggregate, provided that each such Person enters into a
subordination agreement with the Agent on terms and conditions satisfactory
to the Agent.
Deposits to Special Accounts. Deposit or otherwise credit, or cause
or permit to be so deposited or credited, to Lock-Boxes or the Collection
Account cash or cash proceeds other than Collections of Pool Receivables.
Reserved.
Reserved.
Reserved.
Special Covenant of Borrower and UPAC. From the date hereof until the
Final Payout Date, Borrower and UPAC agree that Borrower shall be operated in
such a manner that it will not be substantively consolidated in the bankruptcy
estate of any Affiliate such that the separate corporate existence of Borrower
would be disregarded in the event of a bankruptcy or insolvency of any
Affiliate, and Borrower is and shall be operated in such a manner that no
Affiliate shall be substantively consolidated in the bankruptcy estate of
Borrower, such that, in the event that Borrower were to be a debtor in a case
under the Bankruptcy Code, the separate existence of Borrower or the separate
corporate existence of UPAC, or the separate existence of any other Affiliate or
Originator, would be disregarded so as to lead to substantive consolidation of
the assets and liabilities of UPAC, any other Originator, Parent or any other
Affiliate with the bankruptcy estate of Borrower, and in that regard:
Borrower shall maintain separate corporate records and books of
account from that of any Affiliate, including, but not limited to, the
Originators and Parent, hold regular meetings and otherwise observe
corporate formalities and shall keep and maintain its place of business
separate and apart from the place of business of any Affiliate, including
the Originators and Parent, and Borrower shall have a separately designated
address and phone listing for its business offices;
the financial statements and books and records of Borrower prepared
after the date hereof (which may be consolidated statements for certain
financial and tax reporting purposes) shall reflect the separate existence
of and separate financial condition of the Borrower, each of the
Originators and Parent and any other Affiliate and shall disclose (i) the
effects of the transactions pursuant hereto and the Purchase and Sale
Agreement in accordance with generally accepted accounting principles and
(ii) that the assets of Borrower will only be available to satisfy the
claims of Borrower's creditors;
Borrower shall maintain its funds and other assets separately from the
funds and other assets of any Affiliate, including, but not limited to the
Originators and Parent (including through the maintenance of a separate
bank account); Borrower's funds and other assets and records relating
thereto will be separately identifiable and shall not be commingled with
those of any Affiliate, including, but not limited to the Originators and
Parent, and the creditors of the Originators and Parent shall be entitled
to be satisfied out of their own assets prior to any value becoming
available to the shareholders of Borrower;
except to the limited extent permitted under Section 7.10(p) or as
expressly permitted under the Purchase and Sale Agreement, no Affiliate of
Borrower shall guarantee Borrower's obligations or advance funds to
Borrower for the payment of expenses or otherwise;
Borrower will conduct its business solely in its own name so as not to
mislead others as to its identity, and will use its best efforts to avoid
the appearance of conducting business on behalf of the Originators and
Parent or that any of Borrower's assets are available to pay the creditors
of any Originator or Parent or any other Affiliates, and, without limiting
the generality of the foregoing, all oral or written communications shall
be conducted by Borrower in its own name and on its own stationary;
except in the limited instances set forth herein, Borrower will not
act as an agent of Parent or any Originator or any Affiliate, but instead
Borrower shall present itself to the public as a corporation separate from
any other Person, independently engaged in the business of purchasing
Receivables and related Contracts;
Borrower will act and conduct its business in such a way that it would
not be reasonable for a third party to rely on the assets of any Originator
or Parent to satisfy the obligations of Borrower, or vice versa;
Borrower shall obtain proper authorization from its board of directors
for any material corporate action to be engaged in by Borrower;
Borrower will maintain its own separate bank account and will pay all
of its own operating expenses and liabilities solely and exclusively from
its own funds;
all resolutions, consents to action, agreements, and any other
instruments of Borrower underlying the transactions described in this
Agreement and in the other Transaction Documents shall be continuously
maintained as official records by Borrower, separately identified and held
apart from the records of the Originators, Parent and each of the
Affiliates thereof;
Borrower shall remain a limited purpose corporation whose activities
are restricted in accordance with its Certificate of Incorporation;
Borrower shall hold no ownership or equity interests in any Person;
Borrower shall not engage in any intercompany transactions with any
of the Originators or Parent or any other Affiliate except for the
transactions set forth or expressly contemplated in this Agreement (or
reasonably related thereto), the Purchase and Sale Agreement and the other
Transaction Documents;
at least one of the directors of Borrower shall be an independent
director, which independent director shall at no time be a member, partner,
director (other than as the independent director of Borrower), officer or
employee of Borrower, any Originator or Parent or any Affiliate of any of
the foregoing;
although the organization expenses of Borrower have been paid by APR,
operating expenses and liabilities of Borrower shall be paid solely and
exclusively by Borrower from its own funds (it being understood that UPAC
may from time to time make capital contributions to Borrower); and
Borrower shall comply with all assumptions regarding the maintenance
of Borrower's separate corporate existence set forth in the opinions of
counsel described in Section 5.01(l).
ADMINISTRATION AND COLLECTION
Designation of Servicer.
UPAC as Initial Servicer. The servicing, administering and collection
of the Pool Receivables shall be conducted by the Person designated as
Servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.01. Until the Agent gives to UPAC a Successor Notice (as defined
in Section 8.01(b)), UPAC is hereby designated as, and hereby agrees to
perform the duties and obligations of, Servicer pursuant to the terms
hereof.
Successor Notice; Servicer Transfer Events. Upon UPAC's receipt of a
notice from the Agent of the Agent's designation of the Backup Servicer or
any other Person acceptable to the Agent as Servicer (a "Successor
Notice"), UPAC agrees that it will terminate its activities as Servicer
hereunder in a manner that the Agent believes will facilitate the
transition of the performance of such activities to the new Servicer, and
such new Servicer shall assume each and all of UPAC's obligations to
service and administer such Receivables, on the terms and subject to the
conditions herein set forth, and UPAC shall use its best efforts to assist
the Agent (or its designee) in assuming such obligations. The Agent agrees
not to give UPAC a Successor Notice until after the occurrence of any
Liquidation Event (any such Liquidation Event being herein called a
"Servicer Transfer Event"), in which case such Successor Notice may be
given at any time in the Agent's discretion. If UPAC disputes the
occurrence of a Servicer Transfer Event, UPAC may take appropriate action
to resolve such dispute; provided that UPAC must terminate its activities
hereunder as Servicer and allow the newly designated Servicer to perform
such activities on the date provided by the Agent as described above,
notwithstanding the commencement or continuation of any proceeding to
resolve the aforementioned dispute. Each successor Servicer and the Backup
Servicer agree to be bound by the provisions of Section 2.1 of the Purchase
and Sale Agreement.
Subcontracts. Servicer may, with the prior consent of the Agent,
subcontract with any other person for servicing, administering or
collecting the Pool Receivables, provided that Servicer shall remain liable
for the performance of the duties and obligations of Servicer pursuant to
the terms hereof; and provided, further that the Agent shall be deemed to
have consented to the Servicer's subcontracting with any Originator to
perform the servicing, administering and collecting of such Originator's
own Receivables until such time as a Successor Notice shall be delivered in
accordance with the immediately preceding Section 8.01(b).
Duties of Servicer.
Appointment; Duties in General. Each of Borrower, Lender and Agent
hereby appoints as its agent Servicer, as from time to time designated
pursuant to Section 8.01, to enforce its rights and interests in and under
the Pool Receivables, the Related Security, the related Contracts and the
other Collateral. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable
from time to time, all in accordance with applicable laws, rules and
regulations, with such care and diligence as is customary in servicing
insurance premium finance contracts in the industry or, if higher, the
servicing standards it applies to such contracts, and in accordance with
the Credit and Collection Policies; such duties to include, but not be
limited to, the following: (i) documentation, collection, enforcement and
administration of the Receivables, (ii) servicing in accordance with stated
contract processing, collections, and cash disbursement policies and
procedures, and all other procedures and standards set forth in the Credit
and Collection Policies, (iii) maintaining and documenting Lender's and
Agent's first priority perfected security interest in the Collateral,
including those steps necessary to ensure a perfected security interest in
the unearned premiums, (iv) depositing and paying over of all amounts to
such Persons or accounts and as and when required by the terms of any
Transaction Document, (v) preparing and delivering reports and electronic
data to facilitate Settlements, Borrowings, Continuation of Loans, periodic
audits, etc., (vi) delivering periodic data to the Backup Servicer as
required pursuant to the Backup Servicing Agreement and (vii) using its
best efforts to fully cooperate with any new Servicer at any time
designated hereunder.
Documents and Records. The Borrower shall deliver to the Servicer,
and Servicer shall hold in trust for Borrower, the Originators, the Agent
and Lender in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or
disks) that evidence or relate to Pool Receivables.
Certain Duties to Borrower. Servicer shall, as soon as practicable
following receipt, subject to Article III, turn over to Borrower (i) that
portion of Collections of Pool Receivables representing its interest
therein, less, in the event UPAC, the Parent, any other Originator or any
Affiliate of any of the foregoing is no longer Servicer, all reasonable and
appropriate out-of-pocket costs and expenses of Servicer of servicing,
collecting and administering the Pool Receivables to the extent not covered
by the Servicer's Fee received by it, and (ii) the Collections of any
Receivable which is not a Pool Receivable. Servicer, if other than UPAC,
the Parent, any other Originator or any Affiliate of any of the foregoing,
shall, as soon as practicable upon demand, deliver to Borrower all
documents, instruments and records in its possession that evidence or
relate to Receivables of Borrower other than Pool Receivables, and copies
of documents, instruments and records in its possession that evidence or
relate to Pool Receivables.
Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
Power of Attorney. Borrower hereby grants to Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an
interest, to take in the name of Borrower all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or
other right of any kind held or transmitted by Borrower or transmitted or
received by Lender (whether or not from Borrower) in connection with any
Receivable.
Rights of the Agent.
Notice to Obligors. At any time the Agent may notify the Obligors of
Pool Receivables, or any of them, of the security interest of the Agent in
the Collateral.
Notice to Lock-Box Banks. Borrower hereby transfers to the Agent
exclusive dominion and control of all of its bank accounts and related
lock-boxes into which Collections are remitted, deposited or concentrated,
and hereby agrees to take any further action that the Agent may reasonably
request to effect such transfer. The Agent agrees to permit the Borrower
and the Originators to continue to operate such accounts in accordance with
their customary business practices until such time following the earliest
to occur of (i) the occurrence of the Liquidation Date, (ii) the
commencement of the Liquidation Period, and (iii) the breach of the
warranty in Section 6.02(h)(y) as the Agent may elect to notify the Lock-
Box Banks to cease taking directions with respect to any such accounts or
lock-boxes from the Borrower, the Servicer and/or the applicable
Originator, as the case may be.
Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than UPAC, the Parent, any other Originator
or any Affiliate of any of the foregoing pursuant to Section 8.01:
The Agent may direct the Obligors of Pool Receivables, or any of
them, to pay all amounts payable under any Pool Receivable directly to
the Agent.
Borrower and UPAC shall, at the Agent's request and at Borrower's
expense, give notice of such change to each said Obligor and direct
that payments be made directly to the Agent.
Borrower and UPAC shall, and shall cause each of the other
Originators to, at the Agent's request, (A) assemble all of the
documents, instruments and other records (including, without
limitation, computer programs, tapes and disks) which evidence the
Pool Receivables, and the related Contracts and Related Security, or
which are otherwise necessary or desirable to collect such Pool
Receivables, and make the same available to the Agent at a place
selected by the Agent, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting Collections
of Pool Receivables in a manner acceptable to the Agent and promptly
upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Agent.
Each of Borrower and Lender hereby authorizes the Agent, and
grants to the Agent an irrevocable power of attorney, to take any and
all steps in Borrower's name and on behalf of Borrower and Lender
which are necessary or desirable, in the determination of the Agent,
to collect all amounts due under any and all Pool Receivables,
including, without limitation, endorsing Borrower's and/or the
applicable Originator's name on checks and other instruments
representing Collections and enforcing such Pool Receivables and the
related Contracts; provided that the Agent shall not exercise their
rights under such Power of Attorney unless a Servicer Transfer Event
shall have occurred and be continuing.
Responsibilities of Borrower. Anything herein to the contrary
notwithstanding:
Contracts. Borrower and UPAC shall perform all of their respective
obligations under the Contracts related to the Pool Receivables and under
other agreements or under the Purchase and Sale Agreement and the exercise
by the Agent or its designees of their rights hereunder shall not relieve
Borrower or UPAC from such obligations.
Limitation of Liability. Neither the Agent nor the Lender shall have
any obligation or liability with respect to any Pool Receivables, Contracts
related thereto or any other related purchase orders or other agreements,
nor shall either of them be obligated to perform any of the obligations of
Borrower, the applicable Originator or UPAC thereunder.
Further Action Evidencing Loans.
Further Assurances. Borrower and UPAC agree that from time to time,
at the reasonable expense of the Borrower, they will promptly execute and
deliver all further instruments and documents, and take all further action
that the Agent or its designees may reasonably request in order to perfect,
protect or more fully evidence the security interest of the Agent in the
Collateral, or to enable Lender, the Agent or its designees to exercise or
enforce any of their respective rights hereunder or under any Transaction
Document. Without limiting the generality of the foregoing, Borrower and
UPAC will, upon the request of the Agent or its designee:
execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments
or notices, as may be necessary or appropriate;
mark conspicuously each Contract evidencing each Pool Receivable
with a legend, acceptable to the Agent, evidencing the security
interest of the Agent in such Contract; and
mark the master data processing records evidencing such Pool
Receivables and related Contracts with such legend.
Additional Financing Statements; Performance by Agent. Borrower and
UPAC hereby authorize the Agent or its designees to file one or more
financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Receivables and the
Related Security now existing or hereafter arising in the name of Borrower
or UPAC. If Borrower or UPAC fails to perform any of its agreements or
obligations under this Agreement, the Agent or its designees may (but shall
not be required to) itself perform, or cause performance of, such agreement
or obligation, and the expenses of the Agent and its designees, as the case
may be, incurred in connection therewith shall be payable by Borrower as
provided in Section 14.05.
Continuation Statements; Opinion. Without limiting the generality of
subsection (a), Borrower will not earlier than six (6) months and not later
than three (3) months prior to the fifth anniversary of the date of filing
of the financing statements referred to in Section 5.01(e) or any other
financing statement filed pursuant to this Agreement or the Purchase and
Sale Agreement or in connection with any Loan hereunder, unless the
Termination Date shall have occurred and the Obligations shall have been
paid in full in cash, execute and deliver and file or cause to be filed an
appropriate continuation statements with respect to such financing
statements.
Application of Collections. Any payment by an Obligor in respect of any
indebtedness owed by it to Borrower or an Originator shall, except as otherwise
specified by such Obligor, required by the underlying Contract or law or unless
the Agent instructs otherwise, be applied, first, as a Collection of any Pool
Receivable or Receivables then outstanding of such Obligor in the order of the
age of such Pool Receivables, starting with the oldest of such Pool Receivable
and, second, to any other indebtedness of such Obligor.
SECURITY INTEREST
Grant of Security Interest. To secure all obligations of Borrower, and
Servicer (if UPAC, any Originator, the Parent or any Affiliate of any of the
foregoing) in its capacity as Servicer, arising in connection with this
Agreement and each other Transaction Document, whether now or hereafter
existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, payments on account of
Collections received or deemed to be received and fees, in each case pro rata
according to the respective amounts thereof, and the payments and performance of
all other Obligations, Borrower hereby assigns and grants to the Agent, for the
benefit of the Secured Parties, a security interest in all of the following
property and interests in property of the Borrower (collectively, the
"Collateral"): (i) Borrower's right, title and interest now or hereafter
existing in, to and under all the Receivables, the Related Security, the related
Contracts and all Collections with regard thereto and proceeds thereof and (ii)
Borrower's rights, remedies, powers and privileges under and in respect of the
Purchase and Sale Agreement, the Lock-Box Agreements and related lock-box
accounts.
Remedies. Upon the occurrence of a Liquidation Event, Lender and the Agent
shall have, with respect to the collateral granted pursuant to Section 9.01, and
in addition to all other rights and remedies available to Lender or the Agent
under this Agreement or other applicable law, all the rights and remedies of a
secured party upon default under the UCC.
LIQUIDATION EVENTS
Liquidation Events. The following events shall be "Liquidation Events"
hereunder:
(i) Servicer (if UPAC, any Originator, the Parent or any Affiliate of
any of the foregoing) shall fail to perform or observe any term, covenant
or agreement that is an obligation of Servicer hereunder (other than as
referred to in clause (ii) next following) and such failure shall remain
unremedied for ten days after written notice thereof shall have been given
by the Agent to Servicer, or ten days after Servicer obtained actual
knowledge thereof or (ii) Servicer (if UPAC, any Originator, the Parent or
any Affiliate of any of the foregoing) shall fail to make any payment or
deposit to be made by it hereunder when due and such failure shall continue
unremedied for two days; or
Any representation or warranty made or deemed to be made by Borrower,
UPAC or any other Originator (or any of their officers) under or in
connection with this Agreement or any other Transaction Document or any
Settlement Statement or other information or report delivered pursuant
hereto shall prove to have been false or incorrect in any material respect
when made and within ten days after the earlier of Borrower, UPAC or any
other Originator obtaining actual knowledge of such false or incorrect
representation or warranty or written notice thereof shall have been given
by the Agent to Borrower, UPAC or any other Originator, as applicable, such
falseness or incorrectness is not cured or Borrower has failed to repay the
Loans affected by such false or incorrect representation or warranty, which
repayment option may be exercised not more than three times in any calendar
year; or
Borrower, UPAC or any other Originator shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement
or any of the other Transaction Documents on their part to be performed or
observed and any such failure shall remain unremedied for ten days after
(i) written notice thereof shall have been given by the Agent to Borrower,
UPAC or any such other Originator, as applicable, or (ii) either Borrower
or UPAC obtained actual knowledge thereof; or
(i) A default or a similar event, as the case may be, shall have
occurred and be continuing under any instrument or agreement evidencing,
securing or providing for (A) the issuance of indebtedness for borrowed
money aggregating for all such agreements in excess of $150,000 of, or
guaranteed by, any Originator or (B) pursuant to which any Originator shall
have sold interests in receivables to, or shall otherwise have financed
receivables with, any Person, where the purchaser's investment is in the
aggregate for all such transactions in excess of $150,000 in the case of
such Originator, which default or similar event, if unremedied, uncured, or
unwaived (with or without the passage of time or the giving of notice)
would permit acceleration of the maturity of such indebtedness or would
require the permanent reduction of such purchaser's investment and such
default or similar event shall have continued unremedied, uncured or
unwaived for a period long enough to permit such acceleration or reduction
and any notice of default or similar event required to permit acceleration
or reduction shall have been given; or
Adverse Determinations shall have occurred in three or more states or
in states in which Direct or Insurance Obligors reside representing the
aggregate of 5% or more of the Receivables in the Receivables Pool; or
An Event of Bankruptcy shall have occurred and remain continuing with
respect to Borrower, UPAC, any Originator or Parent or any Affiliate of any
thereof; or
(i) Any material litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed
in writing by Borrower or any Originator to the Agent and Lender prior to
the date of execution and delivery of this Agreement is pending against
Borrower or any Originator or any Affiliate of any thereof, or (ii) any
material development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions), arbitration
proceedings or governmental proceedings so disclosed, which, in the case of
clause (i) or (ii), in the opinion of the Agent, has a reasonable
likelihood of having a Material Adverse Effect; or
The average Excess Yield Ratio at any Cut-Off Date calculated for the
three most recent Settlement Periods (calculated with pro forma
calculations of the Excess Yield Ratio for the number of calendar months
preceding the date hereof necessary to make the calculations required by
this paragraph (h)) is less than 4.00%; or
The average Default Ratio at any Cut-Off Date calculated for the three
most recent Settlement Periods (calculated with pro forma calculations of
the Default Ratio for the number of calendar months preceding the date
hereof necessary to make the calculations required by this paragraph (i))
exceeds 1.00%; or
The average Cancellation Ratio at any Cut-Off Date calculated for the
three most recent Settlement Periods (calculated with pro forma
calculations of the Cancellation Ratio for the number of calendar months
preceding the date hereof necessary to make the calculations required by
this paragraph (j)) exceeds 5.00%; or
Reserved; or
There shall exist any event or occurrence that has a reasonable
possibility of causing a Material Adverse Effect; or
A Borrowing Base Deficiency shall at any time exist and such Borrowing
Base Deficiency shall not have been eliminated within 2 Business Days after
the date of any Weekly Report, Settlement Statement or other report
disclosing such Borrowing Base Deficiency; or
Any of Borrower, Parent or any Originator is subject to a Change-in-
Control, unless the Agent shall have given prior written approval to any
such Change-in-Control; or
The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Internal Revenue Code with regard to any of the assets
of Borrower, any Originator or any ERISA Affiliate of any of the foregoing
and such lien shall not have been released within five days, or the Pension
Benefit Guaranty Corporation shall, or shall indicate its intention to,
file notice of a lien pursuant to Section 4068 of the Employee Retirement
Income Security Act of 1974 with regard to any of the assets of Borrower,
any such Originator, Parent or any such ERISA Affiliate; or
Failure to obtain a Liquidity Agreement in substitution for the then
existing Liquidity Agreement on or before 30-days prior to the expiration
of the commitments of the Liquidity Banks thereunder or the Liquidity
Agreement is otherwise terminated (unless immediately prior to such
termination, the Liquidity Agreement shall have been funded or
collateralized in such a manner that such failure to substitute or such
termination will not result in a reduction or withdrawal of the credit
rating applied to the Commercial Paper Notes by any of the rating agencies
then rating the Commercial Paper Notes); it being understood and agreed
that the Agent shall use reasonable efforts to obtain such a substitute
Liquidity Agreement, but neither the Agent nor DG Bank shall have any
liability for failing to do so nor shall they have any obligation to
provide such a facility themselves; or
(i) A Downgrading Event with respect to a Liquidity Bank shall have
occurred and been continuing for not less than 45 days, (ii) the Downgraded
Liquidity Bank shall not have been replaced by a Qualifying Liquidity Bank
under the Liquidity Agreement, and (iii) the commitment of such Downgraded
Liquidity Bank under the Liquidity Agreement shall not have been funded or
collateralized in such a manner that such Downgrading Event will not result
in a reduction or withdrawal of the credit rating applied to the Commercial
Paper Notes by any of the rating agencies then rating the Commercial Paper
Notes; provided, that no Termination Event shall be deemed to have occurred
pursuant to this Section 10.01(q) if (x) the parties hereto agree to
permanently reduce the Commitment Amount by the commitment amount of such
Downgraded Liquidity Bank at the end of the 45 day period referred to in
clause (i) and (y) the aggregate outstanding principal balance of the Loans
does not exceed such revised Commitment Amount after such time; it being
understood and agreed that the Agent shall use reasonable efforts to
replace any Downgraded Liquidity Bank, but neither the Agent nor DG Bank
shall have any liability for failing to do so nor shall they have any
obligation to assume the commitment of such Downgraded Liquidity Bank
themselves; or
Any Liquidity Bank terminates, refuses to perform or defaults in the
performance of its Funding commitment under the Liquidity Agreements,
provided, that no Termination Event shall be deemed to have occurred
pursuant to this Section 10.01(r) if (x) the parties hereto agree to
permanently reduce the Commitment Amount by the unfunded commitment amount
of such terminating or defaulting Liquidity Bank and after giving effect
thereto to the aggregate outstanding principal balance of the Loans would
not exceed such revised Commitment Amount or (y) such terminating or
defaulting Liquidity Bank is replaced under the Liquidity Agreement by a
Qualifying Liquidity Bank or such default is cured, in either case, within
one Business Day after the Agent's receipt of actual knowledge of the
termination or default by such Liquidity Bank under the Liquidity Agreement
; it being understood and agreed that the Agent shall use reasonable
efforts to obtain a replacement Liquidity Bank to substitute for such
recalcitrant or defaulting Liquidity Bank, but neither the Agent nor DG
Bank shall have any liability for failing to do so nor shall they have any
obligation to assume the commitment of such Liquidity Bank themselves; or
A Purchase and Sale Termination Event shall have occurred; or
Lender shall become an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; or
The Borrower ceases to purchase Receivables under the Purchase and
Sale Agreement; or
The average Monthly Payment Rate at any Cut-Off Date calculated for
the three most recent Settlement Periods (calculated with pro forma
calculations) of the Monthly Payment Rate for the number of calendar months
preceding the date hereof necessary to make the calculations required by
this paragraph (v)) is less than fifteen percent (15.0%); or
At the end of any fiscal quarter of the Servicer, the Consolidated
Tangible Net Worth of the Servicer (if UPAC, any Originator, the Parent or
any Affiliate of any of the foregoing) becomes less than the sum of (i)
$10,000,000, (ii) the aggregate amount of equity investments made in the
Servicer by the Servicer's shareholders on and after May 26, 2000, and
(iii) twenty-five percent (25.0%) of the Servicer's future net income, such
sum to be calculated in accordance with GAAP, exclusive of the effect,
however, of FASB Statement No. 125.
At any time the sum of (i) the amount of equity of the Borrower plus
(ii) the outstanding principal balance of the Subordinated Notes, but in no
event to exceed the maximum amount thereof permitted under the Purchase and
Sale Agreement, becomes less than (i) the sum of the Unpaid Principal
Balance of Eligible Receivables having the four Insurance Obligors with the
largest concentrations of Insurance Obligors in the Receivables Pool, (ii)
the sum of the Unpaid Principal Balance of Eligible Receivables having the
four insurance agents with the largest concentrations of all insurance
agents in the Receivables Pool, or (iii) $10,000,000.
Remedies.
Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsections (f),(p),(q) or r
of Section 10.01), or the occurrence and continuance of an Event of
Bankruptcy with respect to any Person that is not an Originator, the
Borrower or UPAC, the Agent shall, at the request, or may with the consent,
of Lender, by notice to Borrower declare the Purchase Termination Date to
have occurred and the Liquidation Period to have commenced.
Automatic Liquidation. Upon the occurrence of a Liquidation Event
described in subsections (f),(p),(q), or (r) of Section 10.01, with respect
to any Originator, the Borrower or UPAC, the Purchase Termination Date
shall occur and the Liquidation Period shall commence automatically.
Additional Remedies. Upon any Purchase Termination Date pursuant to
this Section 10.02, no Loans or Continuations of Loans thereafter will be
made, and the Agent and Lender shall have, in addition to all other rights
and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC and other laws of each applicable
jurisdiction and other applicable laws, which rights shall be cumulative.
THE AGENT
Authorization and Action. Lender has appointed and authorized the Agent
(or its respective designees) to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
Agent's Reliance, Etc. The Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
or them under or in connection with the Transaction Documents (including,
without limitation, the servicing, administering or collecting Pool Receivables
as Servicer pursuant to Section 8.01), except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Agent: (a) may consult with legal counsel (including counsel for
Borrower), independent certified public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to Lender or any other holder
of any interest in Pool Receivables and shall not be responsible to Lender or
any such other holder for any statements, warranties or representations made in
or in connection with any Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Transaction Document on the part of Borrower or
any of the Originators or to inspect the property (including the books and
records) of Borrower or any of the Originators, (d) shall not be responsible to
Lender or any other Secured Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction Document;
and (e) shall incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
DG Bank and Affiliates. DG Bank and any of its respective Affiliates may
generally engage in any kind of business with Borrower, any of the Originators
or Parent or any Obligor, any of their respective Affiliates and any Person who
may do business with or own securities of Borrower, any of the Originators or
Parent or any Obligor or any of their respective Affiliates, all as if DG Bank
was not the Agent hereunder and without any duty to account there for to Lender
or any other holder of an interest in Pool Receivables.
ASSIGNMENT OF LENDER'S INTEREST
Restrictions on Assignments.
Neither Borrower nor UPAC, may assign its rights, or delegate its
duties hereunder or any interest herein without the prior written consent
of the Agent. Lender may not assign its rights hereunder (although it may
delegate its duties hereunder as expressly indicated herein) or under the
Loans to any Person without the prior written consent of Borrower, which
consent shall not be unreasonably withheld; provided, however, that,
without the prior consent of any Person:
Lender may assign all or any part of its rights and interests in
the Transaction Documents, together with all or any portion of its
interest in the Loans, to any "bankruptcy remote" special purpose
entity the business of which is administered by DG Bank or any
Affiliate; and
Lender may assign all or any part of its rights and interests in
the Transaction Documents, together with all or any portion thereof of
its rights and interest in the Loans, to the Liquidity Agent for the
benefit of the Liquidity Banks pursuant to the terms of the Liquidity
Agreement.
Borrower agrees to advise the Agent within five Business Days after
notice to Borrower of any proposed assignment by Lender of any Loans (or
any portion thereof), not otherwise permitted under subsection (a), of
Borrower's consent or non-consent to such assignment and if it does not
consent, the reasons therefor. If Borrower does not consent to such
assignment, Lender may immediately assign such Loans (or portion thereof)
to DG Bank or any Affiliate of DG Bank. All of the aforementioned
assignments shall be upon such terms and conditions as Lender and the
assignee may mutually agree.
Rights of Assignee. Upon the assignment by Lender in accordance with this
Article XII, the assignee receiving such assignment shall have all of the rights
of Lender with respect to the Transaction Documents and the Loans (or such
portion thereof as has been assigned)
Evidence of Assignment. Any assignment of the Loans (or any portion
thereof) to any Person may be evidenced by such instrument(s) or document(s) as
may be satisfactory to Lender, the Agent and the assignee.
INDEMNIFICATION
Indemnities by Borrower.
General Indemnity. Without limiting any other rights which any such
Person may have hereunder or under applicable law, Borrower hereby agrees
to indemnify each of the Lender, the Liquidity Banks, the Custodian, the
Enhancement Providers, the Backup Servicer and the Agent, each of the
foregoing's respective Affiliates, and all successors, transferees,
participants and assigns and all officers, directors, shareholders,
controlling persons, employees and agents of any of the foregoing (each an
"Indemnified Party"), forthwith on demand, from and against any and all
damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or relating to the
Transaction Documents or the ownership or funding of the Loans or in
respect of any Receivable or any Contract, excluding, however,
(a) Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct
on the part of such Indemnified Party, or (b) recourse (except as otherwise
specifically provided in this Agreement) for Defaulted Receivables.
Without limiting the foregoing, Borrower hereby indemnifies each
Indemnified Party for Indemnified Amounts arising out of or relating to:
the transfer by Borrower of any interest in any Receivable other
than the grant of a security interest to the Agent pursuant to Section
9.01;
any representation or warranty made by Borrower or UPAC
(individually or as Servicer) (or any of their officers or Affiliates)
under or in connection with any Transaction Document, any Settlement
Statement or any other information or report delivered by or on behalf
of Borrower or UPAC (individually or as Servicer) pursuant hereto,
which shall have been false, incorrect or misleading in any material
respect when made or deemed made;
the failure by Borrower or any applicable Originator to comply
with any applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract, or the nonconformity of any Pool
Receivable or the related Contract with any such applicable law, rule
or regulation;
the failure to vest and maintain vested in the Agent on behalf of
the Secured Parties a sole, first priority security interest in the
Collateral, free and clear of any Lien, other than a Lien arising
solely as a result of an act of Lender or the Agent, whether existing
at the time of any Loan or Continuation thereof or at any time
thereafter;
the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC or similar
laws of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool, whether at the time of any Borrowing or Continuation or at any
time thereafter;
any dispute, claim, offset or defense (other than discharge in
bankruptcy) of any Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool (including, without
limitation, a defense based on such Receivable's or the related
Contract's not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the making of loans or the sale or
provision of services related to such Receivable or the furnishing or
failure to furnish such loans or services;
any failure of Borrower, Servicer (if UPAC or an Affiliate of
UPAC) or any Originator to perform their respective duties or
obligations in accordance with the provisions of this Agreement,
including, without limitation, Article VIII and Sections 4.02 and
3.04, or any of the other Transaction Documents;
any products liability claim arising out of or in connection with
loans, products or services that are the subject of any Pool
Receivable;
any tax or governmental fee or charge (but not including taxes
upon or measured by net income), all interest and penalties thereon or
with respect thereto, and all out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending
against the same, which may arise by reason of the ownership of any
Loan or in any goods which secure any such Pool Receivables or the
security interest in the Collateral;
the failure by Borrower or UPAC to vest and maintain vested in
Lender a valid and first priority security interest in any and all
unearned premium related to each Pool Receivable;
(A) any proceeding, investigation or inquiry which does or could
result in an Adverse Determination, (B) any Adverse Determination or
(C) Borrower's, any Originator's or the Lender's failure to be
qualified, licensed or to have obtained necessary approvals as a
premium finance company in any jurisdiction in which such
qualification, license or approvals are required;
the failure to cancel any insurance policy on which a payment is
more than 31 days (or, if earlier, the date specified in the related
Contract) past due; or
the occurrence of a Liquidation Event or Unmatured Liquidation
Event under Section 10.01(e); or
any insurance fraud relating to any Receivable.
Contest of Tax Claim; After-Tax Basis. If any Indemnified Party shall
have notice of any attempt to impose or collect any tax or governmental fee
or charge for which indemnification will be sought from Borrower under
Section 13.01(a)(ix), such Indemnified Party shall give prompt and timely
notice of such attempt to it and Borrower shall have the right, at its
expense, to participate in any proceedings resisting or objecting to the
imposition or collection of any such tax, governmental fee or charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to
the Indemnified Party of the payment of any of the aforesaid taxes and the
receipt of the indemnity provided hereunder or of any refund of any such
tax previously indemnified hereunder, including the effect of such tax or
refund on the amount of tax measured by net income or profits which is or
was payable by the Indemnified Party.
Contribution. If for any reason the indemnification provided above in
this Section 13.01 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then Borrower shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Borrower on the other hand but also
the relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
MISCELLANEOUS
Amendments, Etc. No amendment or waiver of any provision of this Agreement
nor consent to any departure by Borrower or UPAC therefrom shall in any event
(unless otherwise provided herein) be effective unless the same shall be in
writing and signed by (a) Borrower, UPAC, the Agent and Lender (with respect to
an amendment) or (b) the Agent and Lender (with respect to a waiver or consent
by them) or Borrower or UPAC (with respect to a waiver or consent by them), as
the case may be, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. The parties
acknowledge that, before entering into such an amendment or granting such a
waiver or consent, Lender may also be required to obtain the approval of some or
all of the Liquidity Banks. In addition, the parties acknowledge that prior to
entering into any material amendment to this Agreement or any amendment or
modification to the definition hereunder of "Excess Concentration Deduction" at
any time that the Commercial Paper Notes are being rated, the Lender shall be
required to obtain written confirmation from each of the rating agencies then
rating the Commercial Paper Notes that such amendment, waiver or consent will
not result in a withdrawal or reduction of the ratings of the Commercial Paper
Notes. The Lender shall send or cause to be sent to each such rating agency,
copies of all amendments, waivers or other modifications to this agreement prior
to the execution thereof by all of the parties thereto.
Notices, Etc. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including facsimile
communication) and shall be personally delivered or sent by express mail or
courier or by certified mail, postage prepaid, or by facsimile, to the intended
party at the address or facsimile number of such party set forth under its name
on the signature pages hereof or at such other address or facsimile number as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
No Waiver; Remedies. No failure on the part of the Agent, any Affected
Party, any Indemnified Party, Lender, the Collateral Agent or any other holder
of the Loans (or any portion thereof) to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Without limiting
the foregoing, each of the Affected Parties and the Indemnified Parties is
hereby authorized by Borrower or UPAC at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by any such Affected Party or Indemnified
Party to or for the credit or the account of Borrower or UPAC, now or hereafter
existing under this Agreement, to any such Affected Party or Indemnified Party,
or their respective successors and assigns.
Binding Effect; Survival. This Agreement shall be binding upon and inure
to the benefit of Borrower, UPAC, the Agent, the Lender and their respective
successors and assigns, and the provisions of Sections 4.02 and 14.03 and
Article XIII shall inure to the benefit of the Affected Parties and the
Indemnified Parties, respectively, and their respective successors and assigns;
provided, however, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by Section 12.01. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until the Final Payout
Date. The rights and remedies with respect to any breach of any representation
and warranty made by Borrower or UPAC pursuant to Article VI and the
indemnification and payment provisions of Article XIII and Sections 4.02, 14.05,
14.06, 14.07, 14.08 and 14.15 shall be continuing and shall survive any
termination of this Agreement.
Costs, Expenses and Taxes. In addition to its obligations under Article
XIII, the Borrower hereby agrees to jointly and severally pay on demand:
all costs and expenses incurred by the Agent, the Custodian, the
Liquidity Banks, the Liquidity Agent and the Lender and their respective
Affiliates in connection with the negotiation, preparation (including,
without limitation, electronic data preparation), execution and delivery,
the administration (including periodic auditing) or the enforcement of, or
any actual or claimed breach of, this Agreement and the other Transaction
Documents, including, without limitation (i) the reasonable fees and
expenses of counsel to any of such Persons incurred in connection with any
of the foregoing or in advising such Persons as to their respective rights
and remedies under any of the Transaction Documents, and (ii) all
reasonable out-of-pocket expenses (including reasonable fees and expenses
of independent accountants), incurred in connection with any review of
Borrower's, the Originators' and/or UPAC's books and records either prior
to the execution and delivery hereof or pursuant to Sections 7.01(c) and
7.04(c); and
all stamp and other taxes and fees payable or determined to be payable
in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees.
No Proceedings. Borrower, UPAC, Servicer, each hereby agrees that it will
not, and will not permit any other Originator to, institute against Lender, or
join any other Person in instituting against Lender, any insolvency proceeding
(namely, any proceeding of the type referred to in the definition of Event of
Bankruptcy) so long as any Commercial Paper Notes issued by Lender shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such Commercial Paper Notes shall have been outstanding. The
foregoing shall not limit Borrower's, UPAC's, Servicer's or any other
Originator's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person other
than Borrower, UPAC, Servicer or any such other Originator.
Confidentiality of Borrower Information.
Confidential Borrower Information. Each party hereto (other than
Borrower and its Affiliates) acknowledges that certain of the information
provided to such party by or on behalf of Borrower, UPAC or any Originator
in connection with this Agreement and the transactions contemplated hereby
is or may be confidential, and each such party severally agrees that,
unless Borrower shall otherwise agree in writing, and except as provided in
subsection (b), such party will not disclose to any other person or entity:
(i) any information regarding, or copies of, any non-public financial
statements, reports and other information furnished by Borrower, UPAC or
any Originator to Lender or the Agent and designated by them as being
confidential, or (ii) any other information regarding Borrower, UPAC or any
Originator ("Borrower Parties") which is designated by Borrower to such
party in writing as confidential (collectively, "Borrower Information");
provided, however, "Borrower Information" shall not include (A) any
information which is or becomes generally available on a nonconfidential
basis from a source other than any Borrower Party, or which was known to
such party on a nonconfidential basis prior to its disclosure by any
Borrower Party, or (B) information regarding the nature, scope and
structure of this Agreement, the other Transaction Documents and the basic
terms hereof.
Disclosure. Notwithstanding subsection (a), each party may disclose
any Borrower Information:
to any of such party's independent attorneys, consultants and
auditors, and to each Liquidity Bank, Enhancement Provider, Liquidity
Agent, any dealer or placement agent for Lender's commercial paper,
and any actual or potential assignees of, or participants in, any of
the rights or obligations of Lender, any Liquidity Bank, the
Enhancement Provider, or the Agent under or in connection with this
Agreement, who (A) in the good faith belief of such party, have a need
to know such Borrower Information, (B) are informed by such party of
the confidential nature of the Borrower Information and the terms of
this Section 14.07, and are subject to confidentiality restrictions
generally consistent with this Section 14.07,
to any rating agency that maintains a rating for Lender's
commercial paper or is considering the issuance of such a rating, for
the purposes of reviewing the credit of Lender in connection with such
rating,
to any other party to this Agreement or any agreement relating to
the Lender's receivables purchase program, for the purposes
contemplated hereby or relating hereto,
as may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over such
party, in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party,
subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose
such Borrower Information, or,
if it or any of its representatives is requested or becomes
legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to
disclose any of the Borrower Information.
Survival. This Section 14.07 shall survive termination of this
Agreement.
Confidentiality of Program Information.
Confidential Information. Each party hereto acknowledges that DG Bank
and the Lender regard the structure of the transactions contemplated by
this Agreement to be proprietary, and each such party severally agrees
that:
it will not disclose without the prior consent of DG Bank (other
than to the directors, employees, auditors, counsel or affiliates
(collectively, "representatives")) of such party, each of whom shall
be informed by such party of the confidential nature of the
Information (as defined below) and of the terms of this Section 14.08,
(A) any information regarding the pricing in, or copies of, this
Agreement or any transaction contemplated hereby, (B) any information
regarding the organization, business or operations of Lender or the
Liquidity Agreement or Enhancement Agreements generally or the
services performed by the Agent for Lender, or (C) any information
which is furnished by DG Bank, the Agent, the Lender, the Liquidity
Agent, the Liquidity Banks or the Enhancement Provider to such party
and which is designated by such disclosing party to such other party
in writing or otherwise as confidential or not otherwise available to
the general public (the information referred to in clauses (A), (B)
and (C) is collectively referred to as the "Program Information");
provided, however, that such party may disclose any such Program
Information (I) to any other party to this Agreement for the purposes
contemplated hereby, (II) as may be required by any municipal, state,
federal or other regulatory body having or claiming to have
jurisdiction over such party, (III) in order to comply with any law,
order, regulation, regulatory request or ruling applicable to such
party, or (IV) in the event such party is legally compelled (by
interrogatories, requests for information or copies, subpoena, civil
investigative demand or similar process) to disclose any such Program
Information (provided that such party provides DG Bank the opportunity
to contest such actions on behalf of such party);
it will use the Program Information solely for the purposes of
evaluating, administering and enforcing the transactions contemplated
by this Agreement and making any necessary business judgments with
respect thereto; and
it will, upon demand, return (and cause each of its
representatives to return) to DG Bank, all documents or other written
material received from any of the disclosing parties described
therein, in connection with (a)(i)(B) or (C) above, and all copies
thereof made by such party which contain the confidential Program
Information.
Availability of Confidential Information. This Section 14.08 shall be
inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than any of the persons described in clause
(a)(i)(C) above or were known to such party on a nonconfidential basis
prior to its disclosure by any of the persons described in clause (a)(i)(C)
above.
Survival. This Section 14.08 shall survive termination of this
Agreement.
Captions and Cross References. The various captions (including, without
limitation, the table of contents) in this Agreement are provided solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement. Unless otherwise indicated, references in this
Agreement to any Section, Appendix, Schedule or Exhibit are to such Section of
or Appendix, Schedule or Exhibit to this Agreement, as the case may be, and
references in any Section, subsection, or clause to any subsection, clause or
subclause are to such subsection, clause or subclause of such Section,
subsection or clause.
Integration. This Agreement, together with the Fee Letter and that certain
side letter agreement dated as of May 26, 2000 among the Agent, the Borrower,
the Servicer and the Originators, contains a final and complete integration of
all prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire understanding among the parties hereto
with respect to the subject matter hereof, superseding all prior oral or written
understandings, including that certain commitment letter dated May 23, 2000
between the Agent and the Servicer.
Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE
PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE PERFECTION
OF THE SECURITY INTEREST OF LENDER IN THE RECEIVABLES IS GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Waiver Of Jury Trial. BORROWER AND UPAC HEREBY EXPRESSLY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREE
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.
Consent To Jurisdiction; Waiver Of Immunities. EACH OF BORROWER AND UPAC
HEREBY ACKNOWLEDGES AND AGREES THAT:
IT IRREVOCABLY (I) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED
STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE,
OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
(II) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT
IN ANY OTHER COURT, AND (III) WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING.
TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY,
IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same Agreement.
No Recourse Against Other Parties. No recourse under any obligation,
covenant or agreement of Lender contained in this Agreement shall be had against
any stockholder, employee, officer, director, or incorporator of Lender,
provided, however, that nothing in this Section 14.15 shall relieve any of the
foregoing Persons from any liability which such Person may otherwise have for
his/her or its gross negligence or willful misconduct.
Covenant to Cooperate. Borrower, Servicer, UPAC, the Agent and Lender
covenant to provide each other with all data and information required to be
provided by them hereunder at the times required hereunder, and additionally
covenant to reasonably cooperate with each other in providing any additional
information required by any of them in connection with their respective duties
hereunder.
Advice From Independent Counsel. The parties hereto understand that this
Agreement is a legally binding agreement that may affect such party's rights.
Each party hereto represents to the other that it has received legal advice from
counsel of its choice regarding the meaning and legal significance of this
Agreement and that it is satisfied with its legal counsel and the advice
received from it.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
APR FUNDING CORPORATION,
as Borrower
By:
Title:
8245 Nieman Road, Suite 123
Lenexa, Kansas 66214
Telephone No.: (913) 859-0055
Facsimile No.: (913) 859-0011
Attention: Kurt Huffman
UNIVERSAL PREMIUM ACCEPTANCE CORPORATION,
individually and as initial Servicer
By:
Title:
8245 Nieman Road, Suite 100
Lenexa, Kansas 66214
Telephone No.: (913) 894-6150
Facsimile No.: (913) 894-4988
Attention: Kurt Huffman
AUTOBAHN FUNDING COMPANY, LLC, as Lender
By: DG Bank Deutsche
Genossenschaftsbank
AG, as its attorney-in-fact
By:
Title:
c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, New York 10005
Telephone No. (212) 346-9008
Facsimile No.: (212) 346-9012
Attention: Frank Bilotta
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG,
as Agent
By:
Title:
609 Fifth Avenue, Suite 911
New York, New York 10017
Telephone No.: (212) 745-1665
Facsimile No.: (212) 745-1651
Attention: Patrick Preece
APPENDIX A
DEFINITIONS
This is Appendix A to the Loan and Security Agreement dated as of
August 31, 2000, among APR Funding Corporation, Universal Premium Acceptance
Corporation, Autobahn Funding Company, LLC and DG Bank Deutsche
Genossenschaftsbank AG, as Agent (as amended, supplemented or otherwise modified
from time to time, this "Agreement"). Each reference in this Appendix A to any
Section, Appendix or Exhibit refers to such Section of or Appendix or Exhibit to
this Agreement.
(A) Defined Terms. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
herein below:
"Accrued Facility Costs" means, on any day, the aggregate of (a) the
accrued and unpaid Earned Discount and Liquidation Fees, (b) the accrued and
unpaid Program Fee and Non-Use Fee, (c) the accrued and unpaid Custodian's Fee,
(d) the accrued and unpaid Servicer's Fee, (e) the accrued and unpaid Backup
Servicer Fee and (f) all other accrued and unpaid Designated Obligations.
"Adjusted Eurodollar Rate" means, with respect to any Yield Period for
any Loan, an interest rate per annum equal to the sum of:
the LIBOR Spread; plus
the quotient, stated as a percentage, of (i) the per annum rate
determined by Agent (rounded upwards if necessary to the next multiple of
1/16th of 1%) at which Dollar deposits in an amount equal to the
outstanding principal amount of such Loan for a period approximating such
Yield Period are offered by DG Bank based on information presented on
Telerate Page 3750 as of 11:00 a.m. London time on the second Business Day
prior to the first day of such Yield Period, divided by (ii) a number equal
to 1.00 minus the Eurodollar Reserve Percentage, if applicable.
"Advance Rate" means for any day, after giving effect to any Loans
repaid or borrowed on such day, the outstanding principal balance of the Loans
divided by the Net Pool Balance.
"Adverse Determination" means any formal act, conclusion, ruling,
determination, finding, opinion, law, regulation or formal pronouncement by or
of any Regulator having authority, the result of which is that (i) Lender was,
is or will be required to be regulated, licensed or qualified as a premium
finance company or its equivalent under any applicable law, order, rule or
regulation on account of Lender's making or Continuation of Loans hereunder, or
(ii) any Person, other than the Lender and which is not already licensed or
qualified as an insurance premium finance company, engaged in a transaction
similar, in the reasonable judgment of Lender or the Agent, to that under this
Agreement whereby such Person purchases or holds an ownership interest in
receivables or undivided interests in receivables evidenced by insurance premium
finance contracts, or makes loans secured by such contracts, such Person is, was
or will be required to be regulated, licensed or qualified as a premium finance
company or its equivalent under any applicable law, order, rule or regulation on
account of such Person's purchase or holding of such receivables or undivided
interests in such receivables.
"Adverse Determination Receivables" means those Pool Receivables that
create or support a nexus with a jurisdiction, as determined by the applicable
laws, orders, rules or regulations of that jurisdiction, the result of such
nexus being that Lender is directly subject to an Adverse Determination pursuant
to clause (i) of the definition of Adverse Determination, or could eventually be
directly subject to an Adverse Determination similar to any Adverse
Determination described in clause (ii) of the definition of Adverse
Determination.
"Affected Party" means each of the Agent, the Lender, the Liquidity
Agent, the Enhancement Providers, each Liquidity Bank, and any agent of any of
the foregoing and all of the foregoing's successors, assigns and/or
participants.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.
"Agent" has the meaning set forth in the preamble.
"Agent's Office" means the office of the Agent at 609 Fifth Avenue,
New York, NY 10017, Attention: Asset Securitization Group, or such other
address as shall be designated by the Agent in writing to Borrower and Lender.
"Allocated Expenses means the share of expenses reasonably determined
by Parent to be incurred by Parent as holding company for APR, UPAC, UPAC of
California, Oxford and each of their respective subsidiaries in such capacity as
such holding company and reasonably allocated to any of APR, UPAC, UPAC of
California, Oxford and such Person's respective subsidiaries.
"Alternate Base Rate" means, with respect to any Yield Period for any
Loan, an interest rate per annum equal to the Adjusted Eurodollar Rate or the
Base Rate as the Borrower shall so select and the Agent shall approve in
accordance with the terms of this Agreement; provided, however, that the
"Alternate Base Rate" for such Loan allocated to such Yield Period shall be the
Base Rate if (a) on or before the first day of such Yield Period, a Liquidity
Bank shall have notified the Agent that a Eurodollar Disruption Event has
occurred, (b) such Yield Period is a period of 1 to 29 days, or (c) the Loan to
be allocated to such Yield Period is less than $1,000,000.
"APR" means Agency Premium Resource, Inc., a Kansas corporation.
"Backup Servicer" means Input 1, LLC, as Backup Servicer pursuant to
the Backup Servicing Agreement.
"Backup Servicer Fee" means the fees payable by the Borrower to the
Backup Servicer pursuant to the Backup Servicing Agreement.
"Backup Servicing Agreement" means that certain Backup Servicing
Agreement dated as of May 26, 2000, as amended, among the Backup Servicer, the
Agent, the Servicer and the Borrower, as the same may be amended or otherwise
modified from time to time.
"Base Rate" means, on any date, a fluctuating rate of interest per
annum equal to the higher of (a) the per annum rate of interest announced from
time to time by DG Bank by its head of office in New York, New York as its "base
rate" and (b) 0.50% per annum above the Federal Funds Rate. The Base Rate is
not necessarily intended to be the lowest rate of interest offered to its
customers.
"Best's Rating" means at any time the rating published in the then
most recent edition of Best's Insurance Reports, Property-Casualty for the
Insurance Obligor in question. If Best's Insurance Reports, Property-Casualty
ceases to be published at any time, Lender shall choose a reasonably equivalent
substitute rating criteria, and appropriate modifications to this Agreement will
be made to reflect such substitution.
"Book Net Worth" means, for any period, total assets less total
liabilities, as determined in accordance with GAAP.
"Borrower" has the meaning set forth in the preamble.
"Borrower Information" has the meaning set forth in Section 14.07(a).
"Borrower Party" has the meaning set forth in Section 14.07(a).
"Borrower Order" means a direction letter, in such form as the Agent
and Borrower may approve, specifying the Eligible Investments in which funds in
the Collection Account shall be invested pursuant to Section 3.09.
"Borrowing" means a borrowing of Loans under this Agreement.
"Borrowing Base" means, at any time, an amount equal to the product of
(a) the Net Pool Balance and (b) the Advance Rate, not to exceed the Maximum
Advance Rate.
"Borrowing Base Deficiency" means, at any time, the amount, if any, by
which the Obligations exceed the lesser of (i) the Borrowing Base and (ii) the
Commitment Amount.
"Borrowing Base Surplus" means, at any time, the amount, if any, by
which the Borrowing Base exceeds the lesser of (i) the Obligations and (ii) the
Commitment Amount.
"Business Day" means a day on which (a) the Agent at its principal
office in New York, New York is open for business, (b) commercial banks in New
York City are not authorized or required to be closed for business and (c) if
the term "Business Day" is used in connection with the Adjusted Eurodollar Rate,
dealings in Dollars are carried on in the London Interbank Market.
"Cancellation Ratio" means, as of the Cut-Off Date for any Settlement
Period, a fraction (expressed as a percentage) (a) the numerator of which is the
difference between (1) the average Unpaid Principal Balance of all Pool
Receivables the related insurance policies of which were cancelled during the
preceding Settlement Period on account of non-payment by the related Obligor and
(2) the average Unpaid Principal Balance of those Pool Receivables described in
clause (1) relating to any such canceled insurance policies to the extent that
such canceled insurance policies (and such related Pool Receivables) were
reinstated during the Settlement Period for which such ratio is being
calculated or, to the extent that the Direct Obligor of any such canceled
insurance policy is a resident of the Commonwealth of Massachusetts, a new Pool
Receivable in respect of an insurance policy issued in replacement of such
canceled Pool Receivable was created during such Settlement Period) and (b) the
denominator of which is the average aggregate Unpaid Principal Balance of all
Pool Receivables during such Settlement Period.
"Change in Control" means any of the following:
(a) the acquisition, by any Person or two or more Persons acting
on concert, of beneficial ownership (within the meaning of Sections 13(d)
and 14(d) (2) of the Exchange Act), of 50% or more of the issued and
outstanding shares of the capital stock (including all warrants, options,
conversion rights, and other rights to purchase or convert into such stock)
of Parent on a fully diluted basis, except for (i) acquisitions of newly
issued shares of the capital stock of Parent for fair market value, and
(ii) acquisitions of newly issued shares of the capital stock of Parent by
employee benefit plans sponsored by Parent or any of its Subsidiaries for
fair market value;
(b) the failure of Parent to own (directly or through wholly-
owned Subsidiaries, free and clear of all liens, 100% of the outstanding
voting stock of each of the Originators or the failure of UPAC to own
(directly or through wholly-owned Subsidiaries of UPAC), free and clear of
all liens, 100% of the outstanding voting stock of Borrower; or
(c) the creation or imposition of any Lien on any shares of
capital stock of Borrower.
"Collateral" has the meaning set forth in Section 9.01.
"Collection Account" has the meaning set forth in Section 3.09.
"Collections" means, with respect to any Receivable, all funds (a)
received from or on behalf of the related Obligors in payment of any amounts
owed (including, without limitation, principal, finance charges, interest and
all other charges and fees) in respect of such Receivable, or applied to such
amounts owed by such Obligors (including, without limitation, payments under
guaranties, from state guaranty funds or other Related Security, refunds of
unearned insurance premiums upon termination of insurance policies, insurance
payments that Borrower, any of the Originators or Servicer applies in the
ordinary course of its business to amounts owed in respect of such Receivables
and net proceeds of sale or other disposition of repossessed goods or other
collateral or property of the Obligor or any other party directly or indirectly
liable for payment of such Receivable and available to be applied thereon), and
(b) deemed to have been received by Borrower, any of the Originators or any
other party as a Collection pursuant to Section 3.04.
"Commercial Paper Notes" means short-term promissory notes issued or
to be issued by Lender to fund its investments in accounts receivable or other
financial assets.
"Commitment Amount" means $80,000,000, as such amount may be adjusted
by the Borrower and Lender pursuant to a written agreement.
"Concentration Limit" means the amount by which (x) the Unpaid
Principal Balance of Eligible Receivables of an Obligor or relating to a
specified Person exceeds (y) the percentage specified under certain categories
in the definition of "Excess Concentration Deductions" of the Unpaid Principal
Balance of all Eligible Receivables.
"Consolidated Tangible Net Worth" means the consolidated Book Net
Worth of UPAC, UPAC of California, APR and their Subsidiaries after subtracting
therefrom the aggregate amount of any intangible assets of UPAC, UPAC of
California, APR and their Subsidiaries required to be subtracted in accordance
with GAAP.
"Continuation" has the meaning set forth in Section 1.04.
"Contract" means any contract, instrument or other writing entered
into by Borrower or an Originator in the ordinary course of its business in
connection with, or evidencing, loans made by Borrower or such Originator to any
Obligor to finance such Obligor's payment of unearned insurance premiums in
respect of one or more insurance policies issued by one or more insurance
carriers, including, without limitation, any writing relating to the assignment
of all unearned premiums pertaining to the insurance policy or policies for
which premium payments are being financed, any designation of Borrower or such
Originator as a loss payee thereunder, and any guaranty by the insurance agents
that sold the related insurance policy or policies.
"CP Disruption Event" means the inability of the Lender, at any time,
whether as a result of a prohibition, a contractual restriction or any other
event or circumstance whatsoever, to raise funds through the issuance of its
Commercial Paper Notes (whether or not constituting Commercial Paper Notes
issued to fund Loans hereunder) in the United States commercial paper market.
"CP Rate" means, with respect to any Yield Period for any Loan, the
rate equivalent to the rate (or if more than one rate, the weighted average of
the rates) at which Commercial Paper Notes of the Lender having a term equal to
such Yield Period and issued to fund the applicable Loan or Continuation thereof
by the Lender may be sold by any placement agent or commercial paper dealer
selected by the Lender, as agreed between each such agent or dealer and the
Lender and notified by the Lender to the Agent; provided, however, if the rate
(or rates) as agreed between any such agent or dealer and the Lender with regard
to any Yield Period for the applicable Loan is a discount rate (or rates), the
"CP Rate" for such Yield Period shall be the rate (or if more than one rate, the
weighted average of the rates) resulting from converting such discount rate (or
rates) to an interest-bearing equivalent rate per annum.
"Credit and Collection Policy" means, with respect to any Receivables
originated by an Originator, the credit and collection policies and practices of
such Originator relating to such Receivables and the contracts relating thereto,
copies of each of which shall have been provided to the Agent concurrently
herewith (or, in the case of any new Originator, prior to or concurrently with
such Person becoming an Originator), as the same may be modified from time to
time without violating Section 7.03(c).
"Custodian" means Iron Mountain Incorporated or any successor
custodian acceptable to the Agent and the Servicer.
"Custodian's Fee" means the fees payable to the Custodian pursuant to
the Custody Agreement.
"Custody Agreement" means the agreement between the Agent and the
Custodian providing for the transit and storage of Contracts at premises of the
Custodian, as amended, supplemented or otherwise modified from time to time or
any successor custody agreement acceptable to the Agent and reasonably
acceptable to the Servicer.
"Cut-Off Date" means the last day of each Settlement Period.
"Deemed Collection" has the meaning set forth in Section 3.04.
"Default Ratio" means, at any time, the fraction, expressed as a
percentage, computed as of the most recent Cut-Off Date (i) the numerator of
which is the Unpaid Principal Balance of Receivables that became Defaulted
Receivables (net of recoveries) during the preceding Settlement Period ending on
such Cut-Off Date and (ii) the denominator of which is the average aggregate
Unpaid Principal Balance of all Pool Receivables during such Settlement Period.
"Defaulted Receivable" means a Receivable and related Contract: (i) as
to which any payment, or part thereof, remains unpaid for (x) 31 (or, to the
extent the Direct Obligor thereon is a resident of Massachusetts, 40) or more
days (or such earlier date as specified in the related Contract) from the
original due date for such payment without cancellation of all of the related
insurance policies or (y) 181 or more days after cancellation of all such
policies, (ii) as to which the Obligor thereof becomes the subject of an Event
of Bankruptcy or, if applicable, becomes subject to rehabilitation or similar
proceeding (it being understood that Direct Obligors wishing to enter into a new
Contract that are subject to bankruptcy proceedings and which have obtained a
court order permitting Servicer (without further notification to the Court) to
cancel the related Contract, the Receivables under which are or will be included
in the Receivables Pool shall not be subject to this clause (ii)) or is seized
by any governmental authority, (iii) as to which payments have, unless as a
result of any Endorsement, been extended, or the terms of payment thereof
rewritten, whether by amendment, modification or through a new contract without
Lender's consent, (iv) as to which 45 or more days have passed since receipt of
the related unearned premium or notification to Borrower or Servicer that the
related unearned premium has been fully earned or (v) which is a charged-off
Receivable in accordance with the Credit and Collection Policy.
"Designated Obligations" means any amounts then owed under this
Agreement by Borrower or UPAC, which amounts shall have been so designated by
the Agent to Borrower and UPAC, whether owed to Lender, Agent, Custodian, any
other Affected Party or Servicer, other than Earned Discount, Program Fee and
Servicer's Fee.
"Designated Obligor" means, at any time, all Obligors of the
Originators except any such Obligor as to which the Agent has, at least three
Business Days prior to the date of determination, given notice to Borrower that
such Obligor shall not be considered a Designated Obligor.
"Direct Obligor" means, with respect to any Receivable, the borrower
of the loan under any Contract.
"Dollars" means dollars in lawful money of the United States of
America.
"Downgraded Liquidity Bank" means a Liquidity Bank which has been the
subject of a Downgrading Event.
"Downgrading Event" with respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below (i)
A-1 by S&P, (ii) P-1 by Moody's, or (iii) F-1 by Fitch IBCA Inc. or any
successor thereof.
"Earned Discount" means, for any Yield Period with respect to any
Loan,
PTI x ER x ED + LF
360
where:
PTI = the daily average (calculated at the close of
business each day) of the outstanding principal
balance of such Loan during such Yield Period,
ER = the Earned Discount Rate for such Yield Period,
ED = the actual number of days elapsed during such Yield
Period, and
LF = the Liquidation Fee, if any, during such Yield
Period.
"Earned Discount Payment Date" with respect to any Yield Period for
any Loan means the last day of such Yield Period; provided, that with respect to
any Loan accruing Earned Discount at the Adjusted Eurodollar Rate and having an
initial Yield Period in excess of one month, the "Earned Discount Payment Date"
for such Loan shall be deemed to occur at the end of each 30-day period that
such Loan is outstanding and on the last day of such Yield Period.
"Earned Discount Rate" means for any Yield Period with respect to any
Loan:
(a) in the case of a Loan funded by a Liquidity Purchase, either
the Adjusted LIBOR Rate or the Base Rate applicable to such Loan for
such Yield Period; and
(b) for any Loan funded by Commercial Paper Notes, the CP Rate
applicable to such Loan for the related Yield Period;
provided, however, that on any day when any Liquidation Event or Unmatured
Liquidation Event shall have occurred and be continuing the Earned Discount Rate
for each Loan shall mean a rate per annum equal to the Base Rate plus 2% per
annum.
"Effective Advance Rate" means for any day, after giving effect to any
Loans repaid or borrowed on such day, the outstanding principal balance of the
Loans divided by the unpaid principal balance of the Receivables in the
Receivables Pool as of the then most recent Cut-Off Date.
"Eligible Agent" means a licensed agent of an Eligible Insurance
Carrier approved by an Originator in accordance with its Credit and Collection
Policy.
"Eligible Contract" means a Contract substantially in one of the forms
set forth in Schedule 6.01(p)-1 or otherwise satisfying the criteria set forth
on Schedule 6.01(p)-3.
"Eligible Insurance Carrier" shall mean at any date any insurance
company that meets each of the following requirements: it is not the subject of
any Event of Bankruptcy, and is not otherwise being rehabilitated or supervised.
"Eligible Investments" means any one or more of the following
obligations or securities:
(a) direct non-callable obligations of, and non-callable
obligations fully guaranteed by, the United States of America, or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(b) demand and time deposits in, certificates of deposits of,
and bankers' acceptances issued by, any depository institution or
trust company (including an indenture trustee acting in its commercial
capacity) incorporated under the laws of the United States of America
or any state thereof, having a combined capital and surplus of at
least $500,000,000, and subject to supervision and examination by
federal and/or state banking authorities, so long as at the time of
such investment or contractual commitment providing for such
investment the commercial paper or other short-term debt obligations
of such depository institution or trust company (or, in the case of a
depository institution that is the principal subsidiary of a holding
company, the commercial paper or other short-term debt obligations of
such holding company) have one of the two highest short-term credit
rating available from Moody's, S&P and Fitch;
(c) repurchase obligations with respect to and collateralized by
(i) any security described in clause (b) above or (ii) any other
security issued or guaranteed by an agency or instrumentality of the
United States of America, in each case entered into with a depository
institution or trust company (acting as principal) of the type
described in clause (b) above, provided that the Agent has taken
delivery of such security;
(d) commercial paper (including both non- interest-bearing
discount obligations and interest-bearing obligations, but excluding
Commercial Paper Notes) payable on demand or on a specified date not
more than one year after the date of issuance thereof having the
highest short-term credit rating from Moody's and S&P at the time of
such investment; and
(e) shares in a mutual fund investing solely in short term
securities of the United States government and/or securities described
in clause (c) above where the mutual fund custodian has taken delivery
of the collateralizing securities, provided that (i) such fund shall
have one of the two highest short-term credit rating available from
Moody's, S&P and Fitch and (ii) such shares shall be freely
transferable by the holder on a daily basis.
"Eligible Receivable" means, at any time, a Receivable which meets
each of the criteria set forth below or an Eligible Unfunded Receivable:
the Obligor of which, if an Affiliate of the Borrower or the
Servicer, is not the Obligor of Pool Receivables, the Unpaid Principal
Balance of which exceeds $950,000 in the aggregate;
the loan giving rise thereto was (1) made (either directly or by
purchase of an existing loan) in the ordinary course of business by
Borrower or an Originator to or on behalf of a Person that used all of
the proceeds of such loan to pay premiums on property, business
liability, workman's compensation, casualty insurance and other
similar types of insurance policies or personal auto insurance
policies issued by an Eligible Insurance Carrier and owned by such
Person, (2) subject to a draft written by the Eligible Agent to the
Eligible Insurance Carrier and drawn on the Borrower, which draft has
been cashed, (3) evidenced by an Eligible Contract and was fully
disbursed to such Eligible Insurance Carrier, its agent or such
Person, and (4) customary in the insurance premium finance business;
which, (x) if the perfection of Lender's security interest
therein is governed by the laws of a jurisdiction where the Uniform
Commercial Code - Secured Transactions is in force, constitutes a
general intangible as defined in the Uniform Commercial Code as in
effect in such jurisdiction, and (y) if the perfection of Lender's
security interest therein is governed by the law of any jurisdiction
where the Uniform Commercial Code - Secured Transactions is not in
force, Borrower has furnished to Lender such opinions of counsel and
other evidence as has reasonably been requested, establishing to the
reasonable satisfaction of Lender that such Lender's security interest
and other rights with respect thereto are not significantly less
protected and favorable than such rights under the Uniform Commercial
Code;
the Obligor of which is a United States resident and is not a
government or a governmental subdivision or agency unless (i) the
Borrower and the Originators shall have complied with the Assignment
of Claims Act to the satisfaction of the Agent and (ii) the Unpaid
Principal Balance of such Receivable when combined with all other Pool
Receivables of which a government or governmental subdivision or
agency is the Obligor, would not exceed $500,000;
the related originating insurance agent of which is an Eligible
Agent of an Eligible Insurance Carrier;
the Obligor of which is not, solely at the time eligibility is
being determined, the Obligor of Receivables, ten percent (10.0 %) or
more of which (as determined based on the Principal Receivables) are
Defaulted Receivables;
which is not a Defaulted Receivable;
the related insurance policy of which is required to be canceled
if payment on such Receivable is not received within 30 days of its
due date (or, if earlier, the date required in the related Contract);
with regard to which the warranty of Borrower in Section 6.01(l)
is true and correct;
(A) the sale of an undivided interest in which or the grant of a
security interest therein does not contravene or conflict with any
law, and (B) in the case of Receivables generated by the Originator,
the sale of which to Borrower does not contravene or conflict with any
law;
which is denominated and payable only in Dollars in the United
States;
which arises under a Contract, substantially in the form of
Schedule 6.01(p)-1 hereto (or, if not in the form of Schedule 6.01(p)-
1, in such form as does not deviate in any material substantive manner
from Schedule 6.01(p)-1 or the requirements of Schedule 6.01(p)-3, in
either case, without the express written consent of the Agent), that
(1) is in the possession of the Custodian, (2) has been duly
authorized and that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such Obligor in
accordance with its terms, (3) the terms of which (including payment
instructions to the Obligors thereon and the due date thereon) have
not been modified unless in accordance with the applicable Credit and
Collection Policy, (4) was stamped with an assignment to Borrower and
further grant of a security interest therein to the Agent, (5) permits
the powers of attorneys granted by the Originators, the Borrower and
the Servicer to the Agent, and (6) permits the unearned premium for
the insurance policy to which such Contract relates to be assigned to
the Borrower;
which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable;
which is secured by a first priority perfected security interest
in and assignment of the right to cancel all of the insurance policies
financed in whole or in part with the proceeds of the related loan
upon the occurrence of a default under the related Contract and the
right to receive all payments of unearned premiums owed upon such
cancellation and, to the extent permitted by applicable law or
regulation, the designation of Borrower as a loss payee under such
policies;
which at the time of its designation as a Pool Receivable is not
an Adverse Determination Receivable; provided, that upon the Borrower
becoming obligated to repay any Loan or portion thereof as a result of
any such Pool Receivable becoming an Adverse Determination Receivable,
such Pool Receivable shall cease to be an Eligible Receivable
hereunder;
which at the time of its designation as a Pool Receivable does
not create or support a nexus with a jurisdiction (x) conducting a
formal proceeding, investigation or inquiry that could in the Agent's
judgment result in an Adverse Determination or (y) that could require
Lender to be licensed as a premium finance loan company;
if any Receivables to be financed with a Loan shall result from a
bulk or portfolio purchase, unless otherwise provided pursuant to
Section 7.06(f) of this Agreement or Section 5.3(e) of the Purchase
and Sale Agreement, the Agent shall have approved the inclusion of
such Receivables in writing after conducting a collateral audit of the
Receivables purchased by Borrower or any applicable Originator in a
bulk or portfolio purchase;
which (x) satisfies all applicable requirements of the applicable
Credit and Collection Policy and (y) complies with such other criteria
and requirements (other than those relating to the collectibility of
such Receivable) as the Agent may from time to time specify to
Borrower following thirty days' notice;
which at the time of its designation as a Pool Receivable would
not cause the Excess Yield Ratio, calculated in the manner described
in Section 10.01(h) to be less than 4.00%; and
as to which the Agent has not notified Borrower that the Agent
has determined, in its reasonable discretion, that such Receivable (or
class of Receivables) is not acceptable for financing hereunder.
"Eligible Unfunded Receivable" means a Receivable (i) which would
otherwise be an Eligible Receivable except for the funding requirement in clause
(b) of the definition thereof, (ii) which after giving effect to the funding
thereof would comply with all the criteria set forth in clause (b) of the
definition of "Eligible Receivable", (iii) which has not remained unfunded for
more than thirty (30) days after the execution and the delivery of the Eligible
Contract related thereto, and (iv) which when combined with all other
Receivables complying with the criteria set forth in clauses (i) through (iii)
above, (A) would not cause the aggregate outstanding amount of such Receivables
to exceed $1,000,000 and (B) would not cause the Effective Advance Rate after
giving effect to the minimum equity requirement set forth in Section 10.01(x) of
this Agreement to exceed the Maximum Effective Advance Rate.
"Endorsement" means any increase or decrease to a Receivable
originated by an Originator that results solely from an increase or decrease to
the premium amount payable under the related insurance policy as a result of an
endorsement to such insurance policy reflecting a change in the coverage
thereof.
"Enhancement Provider" means any provider of any credit enhancement or
credit support to the Lender in connection with receivables purchase facilities
entered into by the Lender.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal Revenue Code, as in effect
from time to time (the "Code") as such Person; (ii) a trade or business (whether
or not incorporated) under common control (within the meaning of Section 414(c)
of the Code) with such Person, or (iii) a member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Disruption Event" means, with respect to all Loans in
respect of which Earned Discount for the applicable Yield Period is accruing at
the Adjusted Eurodollar Rate, any of the following: (a) a determination by the
Lender, any Liquidity Bank or the Liquidity Agent that it would be contrary to
law or to the directive of any central bank or other governmental authority
(whether or not having the force of law) to obtain United States dollars in the
London interbank market to make, fund or maintain any Loan for such Yield
Period, (b) the failure of DG Bank to furnish timely information for purposes of
determining the Adjusted Eurodollar Rate, (c) a determination by a Liquidity
Bank that the Adjusted Eurodollar Rate does not accurately reflect the cost to
such Liquidity Bank of making, funding or maintaining any such Loan for such
Yield Period or (d) the inability of a Liquidity Bank to obtain United States
dollars in the London interbank market to make, fund or maintain such Loan for
such Yield Period.
"Eurodollar Reserve Percentage" means, for any day with respect to a
Loan allocated to Yield Period in respect of which Earned Discount accrues at
the Adjusted Eurodollar Rate, means the maximum rate (expressed as a decimal) at
which any lender subject thereto would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulations relating to such reserve requirements) against
Eurocurrency Liabilities, if such liabilities were outstanding. The Eurodollar
Reserve Percentage shall be adjusted automatically on and as of the effective
date of any change in the maximum rate described above.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such person, the
appointment of a trustee, receiver, conservator, custodian,
liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect
to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, and
in the case of any Person other than an Insurance Obligor such case or
proceeding shall continue undismissed, or unstayed and in effect, for
a period of 60 consecutive days; or an order for relief in respect of
such Person shall be entered in an involuntary case under the federal
bankruptcy laws or other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail to, or admit in
writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall
vote to implement any of the foregoing. It shall be understood and
agreed that Parent's and American Freight System, Inc.' s 1988
insolvency shall not be deemed Events of Bankruptcy hereunder.
"Excess Concentration Deduction" means the aggregate of each of the
following categories:
(a) Four Largest Agents. The amount by which (x) the Unpaid
Principal Balance of Eligible Receivables having the four insurance agents
with the largest concentrations in the Receivables Pool exceeds (y)
$11,000,000.
(b) Four Largest Insurance Obligors. The amount by which (x)
the Unpaid Principal Balance of Eligible Receivables having the four
Insurance Obligors with the largest concentrations of all Insurance
Obligors in the Receivables Pool exceeds (y) $10,000,000.
(c) Individual Insurance Obligors.
(1) If the Insurance Obligor is rated by one of Moody's, S&P, Fitch
or A.M. Best:
Lower of Moody's/S&P/Fitch/AM Best Ratings Concentration Limit
Aaa/AAA/AAA/AA+ 15.0%
>Aa3/AA-/AA-/A+ and < Aaa/AAA/AAA/A++ 10.0%
>A3/A-/A-/A and < Aa3/AA-/AA-/A+ 5.0%
>Baa3/BBB-/BBB-/B++ and <A3/A-/A-/A 3.0%
(2) If the unsecured long-term debt of the Insurance Obligor is rated
by none of Moody's, S&P, Fitch or A.M. Best, the Concentration Limit shall be
0.50%
(d) Certain Insurance Obligors.
(1) With respect to Insurance Obligors the long-term debt of which
is rated below A2 by Moody's, below A by S&P, below A by Fitch and below A by
A.M. Best, the amount by which the unpaid principal balance of Eligible
Receivables having the fifteen such Insurance Obligors with the largest
concentrations of such Insurance Obligors in the Receivables Pool exceeds
$10,000,000.
(2) With respect to all Insurance Obligors the long-term debt of
which is rated below B- by A.M. Best, the Concentration Limit in the aggregate
shall be five percent (5.0%).
(e) Single Obligors. With respect to any single Obligor, the
Concentration Limit shall be two and one-half percent (2.50%).
(f) Auto Insurance. The amount by which (x) the Unpaid Principal
Balance of Eligible Receivables for personal automobile insurance policies
exceeds (y) ten percent (10.0%) of the Unpaid Principal Balance of all Eligible
Receivables.
(g) Policy Type. The amount by which (x) the Unpaid Principal
Balance of Eligible Receivables having a policy type of voluntary or involuntary
worker's compensation (non-monoline) or liquor liability exceeds (y) in the
aggregate fifteen percent (15.0%) of the Unpaid Principal Balance of all
Eligible Receivables.
(h) Loan Terms. The amount by which (x) the Unpaid Principal Balance
of Eligible Receivables arising from loans with payment terms of longer than
twelve months exceeds (y) ten percent (10.0%) of the Unpaid Balance of all
Eligible Receivables; provided, however, that with respect to such Eligible
Receivables the Insurance Obligors of which have an unsecured long-term debt
rating of B- or below by A. M. Best, the amount by which the unpaid principal
balance of such Receivables exceeds one percent (1.0%) of the Unpaid Principal
Balance of all Eligible Receivables.
(i) Down Payments. With respect to all Obligors which made down
payments on the loans giving rise to Eligible Receivables of less than twenty
percent (20.0%) of the original principal balances of the loans, the
Concentration Limit shall be twenty-five percent (25.0%).
"Excess Yield Ratio" means, at any time, the fraction, expressed as an
annualized percentage, computed as of the most recent Cut-Off Date (a) the
numerator of which is (i) the amount of, calculated for such Settlement Period
of Finance Charge Receivables at such time less (ii) the sum of (v) the
Servicer's Fee for such Settlement Period plus (w) the Custodian's Fee for such
Settlement Period plus (x) the Backup Servicer Fee for such Settlement Period
plus (y) the Program Fee for such Settlement Period plus (z) the Earned Discount
for such Settlement Period, and (b) the denominator of which is the average
aggregate Unpaid Principal Balance of all Pool Receivables during such
Settlement Period.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal (for each day during such period) to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Fee Letter" means the Fee Letter dated as of May 26, 2000.
"Final Payout Date" means the date following the Termination Date on
which all Obligations shall have been paid in full.
"Finance Charge Receivable" means the portion of any Pool Receivable
that is not the related Principal Receivable, including, without limitation, the
right to the payment of finance charges, interest payments, late payment
charges, collection fees, extension fees and other amounts actually accrued
thereon on a current basis.
"Fitch" means Fitch, Inc., or any successor thereof.
"GAAP" means generally accepted accounting principles consistently
applied.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Insurance Obligor" with respect to any Receivable, means any
insurance carrier that has issued and is carrying any of the insurance policies
for which premiums are financed in whole or in part with the proceeds of such
Receivable; and related Insurance Obligor means with respect to any such
Receivable, such insurance carrier.
"Lender" has the meaning set forth in the preamble.
"LIBOR Spread" means the per annum rate set forth in the Fee Letter.
"Lien" means a lien, security interest, charge, or encumbrance, or
other right or claim of any Person other than (i) a potential claim or right
(that has not yet been asserted) of a trustee appointed for an Obligor in
connection with any Event of Bankruptcy and (ii) an unfiled lien for taxes
accrued but not yet payable.
"Liquidation Collection Account" has the meaning set forth in Section
3.09(a).
"Liquidation Date" means the occurrence of any of the following: (i) a
Liquidation Event, (ii) the Termination Date and (iii) the first day of a
Liquidation Period; provided, however, that in the case of a Liquidation Date
occurring and existing solely as a result of the occurrence of a Liquidation
Event, then upon the waiver or cure of such Liquidation Event, such Liquidation
Date shall be deemed not to have occurred.
"Liquidation Event" has the meaning set forth in Section 10.01.
"Liquidation Fee" means, for the Loans allocated to each Yield
Period (computed without regard to any shortened duration of such
Yield Period as a result of the occurrence of the Liquidation Date)
during which such Loans are repaid (in whole or in part) or the
applicable Yield Rate for such Loans is for any reason changed, the
amount, if any, by which (a) the Earned Discount (calculated without
taking into account any Liquidation Fee) which would have accrued on
the amount of the payment of such Loans during such Yield Period (as
so computed) if such payment had not been made or if the applicable
Yield Rate had remained unchanged, as the case may be, exceeds (b) the
sum of (i) Yield actually received by the Lender in respect of such
Loans for such Yield Period and (ii) if applicable, the income, if
any, received by the Lender from the Lender's investing the proceeds
of such payments on such Loans.
"Liquidation Period" means the period commencing on the date on which
the conditions precedent to Loans and Continuations thereof set forth in Section
5.02 are not satisfied (or expressly waived by Lender) and the Agent shall have
notified Borrower and the Servicer in writing that the Liquidation Period has
commenced, and ending on the Final Payout Date.
"Liquidity Agent" means DG Bank as agent for the Liquidity Banks under
the Liquidity Agreement, or any successor to DG Bank in such capacity.
"Liquidity Agreement" means that certain Liquidity Agreement dated as
of May 26, 2000 among Autobahn Funding Company LLC, DG Bank and certain other
Liquidity Banks and the Liquidity Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Liquidity Bank" means any one of, and "Liquidity Banks" means all of,
the commercial lending institutions that are at any time parties to the
Liquidity Agreement as "Liquidity Providers."
"Liquidity Purchase" means a purchase of all or a portion of the Loans
by the Liquidity Banks from the Lender under the Liquidity Agreement.
"Lock-Box Agreement" means a letter agreement, in substantially the
form of Exhibit 5.01(g), among Borrower, the Originator whose Receivables are
the subject of such letter agreement, and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more lock-box
accounts for receiving or concentrating Collections of Pool Receivables.
"Material Adverse Effect" with respect to any event or circumstance, a
material adverse effect on:
(i) the business, assets, financial condition, operations or
prospects of Borrower or an Originator;
(ii) the ability of Borrower or an Originator to perform its
obligations under this Agreement or any other Transaction Document;
(iii) the validity, enforceability or collectibility of this
Agreement, any other Transaction Document, the Receivables or the
related Contracts; or
(iv) the status, existence, perfection, priority or
enforceability of Lender's security interest in the Pool Receivables.
"Maximum Advance Rate" means ninety percent (90.0%).
"Maximum Effective Advance Rate" means eighty-eight and one-half
percent (88.50%).
"Monthly Payment Rate" means as of any Cut-Off Date, for any
Settlement Period, a fraction (expressed as a percentage) (a) the numerator of
which is the total cash Collections with respect to all Pool Receivables and (b)
the denominator of which is the average aggregate Unpaid Principal Balance of
all Pool Receivables during such Settlement Period.
"Moody's" means Moody's Investors Service, Inc., or any successor
thereof.
"Net Pool Balance" means at any time the Unpaid Principal Balance of
the Eligible Receivables in the Receivables Pool at such time reduced by the
aggregate Excess Concentration Deduction at such time.
"Non-Use Fee" has the meaning set forth in Section 4.01(b).
"Non-Use Fee Rate" has the meaning set forth in the Fee Letter.
"Note" has the meaning set forth in Section 1.05.
"Obligations" means all present and future indebtedness and other
liabilities and obligations (howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Borrower to the Lender, the Agent, the Servicer, the Custodian, the Backup
Servicer and/or any other Person, arising under or in connection with this
Agreement or any other Transaction Document or the transactions contemplated
hereby or thereby and shall include, without limitation, all liability for
principal of and interest on the Loans, closing fees, unused line fees, audit
fees, expense reimbursements, indemnifications, and other amounts due or to
become due under the Transaction Documents, including, without limitation,
interest, fees and other obligations that accrue after the commencement of an
insolvency proceeding (in each case whether or not allowed as a claim in such
insolvency proceeding).
"Obligor" means any Person directly or indirectly obligated to make
payments on or with respect to any Receivable. Such term shall include, without
limitation, any Direct Obligor and all Insurance Obligors pursuant to a
Contract.
"Originator" means UPAC, UPAC of California or any other wholly-owned
direct or indirect Subsidiary of Parent that becomes a party to the Purchase and
Sale Agreement as an "Originator" thereunder, and "Originators" means all such
Persons collectively.
"Originator Eligible Unfunded Receivable" means a Receivable (i) which
would otherwise be an Originator Eligible Receivable except for the funding
requirement in clause (a) of the definition thereof, (ii) which after giving
effect to the funding thereof would comply with all the criteria set forth in
clause (a) of the definition of "Originator Eligible Receivable", (iii) which
has not remained unfunded for more than thirty (30) days after the execution and
the delivery of the Eligible Contract related thereto, and (iv) which when
combined with all other Receivables complying with the criteria set forth in
clauses (i) through (iii) above, (A) would not cause the aggregate outstanding
amount of such Receivables to exceed $1,000,000 and (B) would not cause the
Effective Advance Rate after giving effect to the minimum equity requirement set
forth in Section 10.01(x) of the Loan Agreement to exceed the Maximum Effective
Advance Rate.
"Oxford" means Oxford Premium Finance, Inc., an Illinois corporation.
"Parent" means Transfinancial Holdings, Inc., a Delaware corporation.
"Permitted Dividend" means any dividend that is to be paid by Borrower
to UPAC prior to the Liquidation Date out of payments or distributions made by
Servicer to Borrower under Section 3.01.
"Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Principal Receivable" means the portion of any Pool Receivable that
is related to the unpaid principal of the related loan.
"Program Fee" has the meaning set forth in Section 4.01(b).
"Program Fee Rate" has the meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section 14.08.
"Purchase and Sale Agreement" means that certain Amended and Restated
Purchase and Sale Agreement of even date herewith, among Borrower, the
Originators from time to time parties thereto and the Servicer, as the same may
be amended, restated, supplemented or otherwise modified from time to time.
"Purchase and Sale Termination Event" has the meaning set forth in the
Purchase and Sale Agreement.
"Purchase Termination Date" means that day on which a Liquidation
Event has occurred and is continuing, and
(a) the Agent declares a Purchase Termination Date in a notice
to Borrower in accordance with Section 10.02(a); or
(b) in accordance with Section 10.02(b), becomes the Purchase
Termination Date automatically.
"Qualifying Liquidity Bank" means a Liquidity Bank with a rating of
its short-term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by
Moody's.
"Receivable" means the indebtedness of any Obligor (other than a
Virginia Obligor) under a Contract whether constituting an account, chattel
paper, an instrument, investment property, a general intangible or a payment
intangible, and includes (i) the right to payment of such indebtedness and any
interest or finance or late charges or penalties and other obligations of such
Obligor with respect thereto, (ii) all other rights under such Contract,
including insurance policy cancellation rights, (iii) all right, title and
interest of Borrower and the applicable Originator in, to and under the
insurance contract underlying such Contract and any and all other direct or
indirect guaranties or security therefor, and (iv) all proceeds of the
foregoing.
"Receivables Pool" means at any time all then outstanding Receivables
owned by Borrower, other than the Receivables specifically excluded from the
Receivables Pool in a written certificate, executed and delivered by Lender and
Borrower on or before the date of the initial Loan hereunder.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulator" means any federal, state or local regulatory or
governmental body, agency or official.
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, change in
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to
such Affected Party of (A) any court, government authority
charged with the interpretation or administration of any law
referred to in clause (a)(i) or of (B) any fiscal, monetary or
other authority having jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Affected Party and
affecting the application to such Affected Party of any law,
regulation, interpretation, directive, requirement or request
referred to in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request or
accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above.
"Related Security" means, with respect to any Pool Receivable (i) all
of Borrower's right, title and interest in and to all Contracts or other
agreements that relate to such Pool Receivable, (ii) all of Borrower's interest
in the insurance policies, if any, relating to such Pool Receivable including,
without limitation, the right to terminate such policies and to receive unearned
premiums payable upon such termination and, to the extent permitted by
applicable law or regulations, the designation of Borrower as first priority
loss payee under such insurance policies, (iii) all other security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise, (iv) the assignment to Lender of all UCC
financing statements and notices to insurance companies covering any collateral
securing payment of such Pool Receivable, (v) all of the Borrower's rights and
remedies in, to and under the Purchase and Sale Agreement, and (vi) all
guaranties and other agreements or arrangements of whatever character from time
to time supporting or securing payment of such Pool Receivable whether pursuant
to the Contract related to such Pool Receivable or otherwise.
"Scheduled Termination Date" means May 25, 2005. The Scheduled
Termination Date may be extended for an additional period of one year by written
notice of request given by Borrower to the Agent at least 60 days prior to the
then current Scheduled Termination Date, and written notice of acceptance given
by the Agent and the Lender not later than 45 days thereafter.
"Secured Parties" means Lender, the Agent, the Liquidity Banks, the
Indemnified Parties and the Affected Parties.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Transfer Event" has the meaning set forth in Section
8.01(b).
"Servicer's Fee" accrued for any day means
(a) an amount equal to the product of (x) 1.00% per annum, times
(y) the amount of the outstanding principal balance of all the Loans
at the close of business on such day, times (z) 1/360; or
(b) on and after the date the Backup Servicer shall be the
Servicer, an amount equal to (x) 1.00% per annum, times (y) the Net
Pool Balance, times (z) 1/360.
"Settlement" means the payments and other actions provided for on the
Cut-Off Date for each Settlement Period.
"Settlement Date" means the 10th Business Day of each calendar month,
and each day after the occurrence of the Termination Date that the Agent shall
so designate as such.
"Settlement Period" means
(a) the period from the date of the initial Loan hereunder to
the close of business on the last day of the same calendar month; and
(b) thereafter, each period from the opening of business on the
first day of each calendar month to and including the close of
business day on the last day of such calendar month;
provided, however, that
(i) any Settlement Period which would otherwise end on a
day which is not a Business Day shall be extended to the next
succeeding Business Day; and
(ii) the last Settlement Period shall end on the Final
Payout Date.
"Settlement Statement" has the meaning set forth in Section 3.03(a).
"S&P" means Standard and Poor's Corporation, or any successor thereof.
"Subordinated Line" means that certain subordinated credit line
available from the Parent for each of the Originators, collectively, in the form
and as to dollar amount approved by the Agent.
"Subordinated Note" means any of the Subordinated Intercompany
Revolving Notes executed by the Borrower in favor of an Originator or Oxford
under and pursuant to the Purchase and Sale Agreement (as the same may be
amended, restated, substituted or otherwise modified from time to time), and
"Subordinated Notes" means all such notes collectively.
"Subsidiary" means a corporation of which Borrower, APR, UPAC, UPAC of
California, any other Originator or Parent and/or its other Subsidiaries own,
directly or indirectly, such number of outstanding shares as have more than 50%
of the ordinary voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Tax Sharing Agreement" means that certain Tax Sharing Agreement among
the Parent and its consolidated subsidiaries, a copy of which is attached as
Exhibit 5.01(r).
"Termination Date" means the earliest of
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of the Liquidity Banks'
commitments under the Liquidity Agreement;
(b) the Purchase Termination Date; and
(c) the Scheduled Termination Date.
"Transaction Documents" means this Agreement, the Note, the Purchase
and Sale Agreement, the Liquidity Agreement, the Custody Agreement, the Fee
Letter, the Backup Servicing Agreement, the Fee Letter, the Lock-Box Agreements,
that certain side letter among the Agent, the Borrower and the Originators
relating to exclusivity and the other documents to be executed and delivered in
connection herewith and therewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with the giving
of notice or lapse of time, or both, would become a Liquidation Event.
"UPAC" has the meaning set forth in the Preamble.
"UPAC of California" means UPAC of California, Inc., a California
corporation.
"Unpaid Balance" of any Receivable means at any time the Unpaid
Principal Balance thereof plus the unpaid amount thereof consisting of Finance
Charge Receivables.
"Unpaid Principal Balance" of any Receivable means at any time the
unpaid principal amount thereof.
"Virginia Obligor" means a Direct Obligor resident in the Commonwealth
of Virginia.
"Weekly Report" has the meaning set forth in Section 3.03(b);
provided, however, that for purposes of the Purchase and Sale Agreement, the
"Weekly Report" shall also be deemed to mean and include any Settlement
Statement delivered during any week in which it is due pursuant to Section
3.03(a).
"Weekly Report Date" means Tuesday of each calendar week, or, if such
day is not a Business Day, the immediately succeeding Business Day; provided,
however, that with respect to any week in which a Settlement Statement is
required to be delivered to the Agent pursuant to Section 3.03(a), the Weekly
Report Date for such week shall be the day of such week upon which such
Settlement Statement is so due.
"Yield Period" with respect to any Loan means:
(a) if Earned Discount is computed by reference to the CP Rate, a
period of 1 to and including 45 days;
(b) if Earned Discount in respect thereof is computed by reference to
the Adjusted Eurodollar Rate, a period of one, two or three months; and
(c) if Earned Discount in respect thereof is computed at the Base
Rate, a period of 1 to and including 29 days, in each case, as selected by
the Borrower (subject to the approval of the Agent) in accordance with
Section 1.04; provided, however, that from and after the Liquidation Date,
the Agent shall have the right to allocate outstanding Loans to Yield
Periods of such duration as shall be selected by it; and provided, further,
that:
(i) any Yield Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day;
provided, however, that if Earned Discount in respect of such Yield Period
is computed by reference to the Adjusted Eurodollar Rate, and such next
succeeding Business Day is in the next calendar month, then such Yield
Period shall end on the next preceding Business Day;
(ii) whenever any Yield Period as to which Earned Discount accrues at
the Adjusted Eurodollar Rate commences on the last Business Day in a month
or on a day for which there is no numerically corresponding day in the
month in which such Yield Period ends, the last day of such Yield Period
shall occur on the last Business Day of the last complete month through
which such Yield Period was scheduled to remain in effect;
(iii) if a CP Disruption Event shall have occurred and be continuing,
the Lender, or the Agent on the Lender's behalf, may, upon notice to the
Borrower, convert any Loan then funded by Commercial Paper Notes into a
Loan in respect of which Earned Discount accrues at the Base Rate for the
remainder of such Yield Period;
(iv) all Yield Periods which commence before the Liquidation Date and
would otherwise end on a date occurring after the Liquidation Date shall
end on the Liquidation Date;
(v) if the Lender or any Liquidity Bank shall notify the Agent that a
Eurodollar Disruption Event as described in clause (a) of the definition of
"Eurodollar Disruption Event" has occurred, the Agent shall in turn so
notify the Borrower, whereupon all Loans in respect of which Earned
Discount accrues at the Adjusted Eurodollar Rate for the then current Yield
Period shall immediately be converted into Loans in respect of which Earned
Discount accrues at the Base Rate for the remainder of such Yield Period;
and
(vi) if the Lender and the Borrower shall not have agreed as to the
reallocation and funding of any Loan in respect of which the Yield Period
is expiring by the close of business on the third Business Day preceding
the date of such expiration, then such Loan shall accrue Yield at either
the Adjusted Eurodollar Rate or the CP Rate, as selected by the Lender by
notice thereof to the Agent, for a Yield Period of 30 days.
The Lender shall, on the first day of each Yield Period, notify the Agent of the
Earned Discount Rate for the Loan allocated to each such Yield Period.
"Yield Rate" means the CP Rate, the Adjusted Eurodollar Rate or the
Base Rate, as applicable.
B. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York and
not specifically defined herein) are used herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
SCHEDULES AND EXHIBITS
to Receivables Purchase Agreement
SCHEDULES
SCHEDULE 6.01(e) Certain Regulatory Issues
SCHEDULE 6.01(j) Description of Litigation of Borrower
SCHEDULE 6.01(n) List of Offices of Borrower where
Records Are Kept
SCHEDULE 6.01(o) List of Lock-Box Banks
SCHEDULE 6.01(p)-1 Forms of Contracts
SCHEDULE 6.01(p)-2 Description of Credit and Collection
Policy
SCHEDULE 6.01(p)-3 Contract Term Criteria
SCHEDULE 6.02(h) Description of Material Adverse
Changes of UPAC
SCHEDULE 6.02(e) Certain Regulatory Issues
SCHEDULE 6.02(i) Description of Litigation of UPAC
SCHEDULE 6.02(k) List of Offices of UPAC
SCHEDULE 7.03(h) Schedule of Indebtedness of Borrower
SCHEDULE 7.06(i) Schedule of Indebtedness of UPAC
EXHIBITS
EXHIBIT 1.03 Form of Notice
EXHIBIT 1.05 Form of Note
EXHIBIT 3.03(a) Form of Settlement Statement
EXHIBIT 3.03(b) Form of Weekly Report
EXHIBIT 5.01(g) Form of Lock-Box Agreement
EXHIBIT 5.01(k)-1 Form of Opinion of Counsel for
Borrower as to Authority, Perfection,
Etc.
EXHIBIT 5.01(1)-1 Form of "True Sale" Opinion of Counsel
for Borrower
EXHIBIT 5.01(l)-2 Form of "Non-Substantive
Consolidation" Opinion of Counsel for
Borrower
EXHIBIT 5.01(r) Tax Sharing Agreement
EXHIBIT 7.02(j)-1 Notice to Obligors
EXHIBIT 7.02(j)-2 Notice to Insurance Carriers
EXHIBIT 7.02(j)-3 Notice to Insurance Agents
CH1 1141636v7 September 1, 2000 (10:05am)