EXHIBIT 10.18
APPENDIX A
DEFINITIONS
A. Defined Terms. As used in the Transaction Documents, unless otherwise
-------------
defined therein:
"Additional Amounts" means all amounts payable to the Holders pursuant
to Sections 3.1 and 6.5 of the Certificate Purchase Agreement; provided
that "Additional Amounts" shall not include principal or interest on the
Series 1997-1 Certificates.
"Adverse Claim" means any claim of ownership interest or any mortgage,
deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other) or other security interest (other
than, with respect to any Purchased Asset, (i) any mortgage, deed of trust,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other) or other security agreement in favor of any Person who
prior to the date of the Purchase of such Purchased Asset has subordinated
its interest in such Purchased Asset to the interest of Transferor therein
pursuant to a written subordination agreement in form and substance
satisfactory to the Required Person or (ii) in the event such Purchased
Asset is a Receivable owing from a Governmental Authority, the right of
such Governmental Authority to offset against such Receivable, but only
prior to the time such Governmental Authority actually offsets against such
Receivable or notifies Seller or Servicer of its intent to do so).
"Affiliate" means, with respect to a Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person. As used in this definition of "Affiliate", the term "control"
means the power, directly or indirectly, to direct or cause the direction
of the management and policies of a Person, whether through the ownership
of such Person's voting securities, by contract or otherwise, and the terms
"affiliated," "controlling" and "controlled" have the meanings correlative
to the term "control."
"Allocable Funds" means the funds which are deposited into the Master
Collection Account.
"Amortization Commencement Date" means the expiration of the Revolving
Period.
"Amortization Period" means the period (i) beginning on the earlier of
(1) June 27, 1999, (2) the date the Trust has cumulatively acquired
$56,820,000 in Eligible Receivables, or (3) the date Class A
Certificateholders have in aggregate funded a cumulative Invested Amount of
$50,000,000.
"Applicant" is defined in Section 6.7 of the Pooling Agreement.
-1-
"Authorized Newspaper" means a newspaper of general circulation in the
Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Authorized Officer" means, with respect to Transferor, Servicer or
Seller, the Chief Executive Officer, the President, the Treasurer, the
Chief Financial Officer, any Vice President and any Assistant Treasurer,
and with respect to the Trustee, any Responsible Officer.
"Available Final Distribution Amount" means with respect to any
Series, the amount that would be available in the Master Collection Account
on the Final Scheduled Payment Date for the Series for distribution to the
Certificateholders of such Series.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978 (11
U.S.C. (S)(S)101 et seq.).
"Bankruptcy Event" means, for any Person, any of the following events:
(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, custodian, liquidator, assignee, sequestrator or the
like for such Person or any substantial part of its assets, or any similar
action with respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of
debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of 60 days, 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 the like, for
such Person or 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.
"Bankruptcy Opinion" means (i) with respect to any Series, the Opinion
of Counsel regarding true sale and substantive consolidation issues
rendered in connection with the original issuance of such Series, and (ii)
with respect to any other action, an Opinion of Counsel substantially in
the form of the opinion referred to in clause (i) above.
"Base Amount" is defined in Section 2.1 of the Certificate Purchase
Agreement.
"Business Day" means any day other than a Saturday, Sunday or public
holiday under the laws of the State of New York or State of Maryland or
other day on which banking institutions are authorized or obligated to
close in the Borough of Manhattan in the City of New York in the State of
New York or in the City of Chevy Chase in the State of Maryland.
-2-
"Buyer" is defined in the preamble to the Purchase Agreement.
"Calculation Period" means a calendar month.
"Carrying Cost Account" is defined in Section 4.2 of the Pooling
Agreement.
"Carrying Costs" means, for any period, (a) the aggregate Servicing
Fee for the period in the applicable amount provided for in Section 3.4 of
the Pooling Agreement including reasonable and customary Servicing
Advances, (b) interest or yield payable with respect to the Class A
Certificates for that period, (c) the operating expenses described in
Section 4.2(ii) of the Pooling Agreement for the period and (d) other fees,
costs and expenses incurred by Transferor and Trustee for the period and
paid to Persons other than Related Persons in connection with their duties
under the Transaction Documents (in the case of Trustee, to the extent not
included in the Servicing Fee).
"Certificate" means any Investor Certificate or the Transferor
Certificate.
"Certificate Purchase Agreement" means the Certificate Purchase
Agreement (Series 1997-1, Class A) dated as of the Closing Date between
Transferor and CS First Boston Mortgage Capital, LLC, as Purchaser.
"Certificate Register" means the register maintained pursuant to
Section 6.3 of the Pooling Agreement.
"Certificateholder" means the Person in whose name a Certificate is
registered in the Certificate Register.
"Class" or "Class of Certificates" means the Class A Certificates or
the Transferor Certificate, as the context requires.
"Class A Certificate" is defined in Section 6.1 of the Pooling
Agreement. Each Class A Certificate shall be substantially in the form of
Exhibit B to the Pooling Agreement.
"Class A Certificate Spread" means with respect to the Class A
Certificates, 3.75% per annum; provided that at any time that an Unmatured
Early Amortization Event or an Early Amortization Event has occurred and is
continuing, "Class A Certificate Spread" means with respect to the Class A
Certificates, 5.75% per annum.
"Class A Invested Amount" means, at any time, the sum of the purchase
prices paid for Class A Purchases made at or prior to that time, reduced
(but not below zero) by the aggregate amount of all distributions that have
been made to the Holders of the Class A Certificates on account of
principal.
"Class A Purchases" means purchases made in respect of Class A
Certificates pursuant to the Class A Certificate Purchase Agreement.
-3-
"Class A Stated Amount" means as to any Class A Certificate, the
initial maximum principal amount that may be required to be funded by the
Holder of such Certificate on a cumulative basis. The aggregate Class A
Stated Amounts of all Class A Certificates is $50,000,000.
"Class Percentage" means, with respect to each Holder, the percentage
equivalent (carried out to twelve decimal places) of a fraction, the
numerator of which is the Stated Amount of such Holder's Certificates of a
particular class and the denominator of which is the sum of the Stated
Amounts of all of the Certificates of such Class.
"Closing Date" means June 27, 1997.
"Collected Funds" as of any Business Day shall mean all available
funds on deposit in the Master Collection Account (other than funds that
are required to be returned to Related Persons or their designees) not
previously allocated to another Transaction Account.
"Collections" means all funds that are received by Seller, Transferor,
Servicer or Trustee from or on behalf of any Obligor in payment of any
amounts owed in respect of any Purchased Asset, or otherwise applied to
repay or discharge any Purchased Asset, or otherwise constituting proceeds
of Purchased Assets.
"Corporate Trust Office" means the principal office of Trustee in
Minneapolis, Minnesota at which at any particular time its corporate trust
business shall be principally administered.
"Credit and Collections Policy" means Seller's Statement of Policy and
Procedures and Underwriting Guidelines as attached as Exhibit G to the
---------
Pooling Agreement, as such Exhibit may be amended from time to time with
the written approval of the Required Persons.
"CSFB" means Credit Suisse First Boston Mortgage Capital, LLC, a
Delaware limited liability company, and its permitted successors and
assigns.
"Current Carrying Costs" means, on any Business Day during any
Distribution Period, and with respect to each Class of Certificates, the
sum of (i) the amount of accrued and unpaid interest on the Certificates
through such Business Day, (ii) the amount of additional interest that will
be accrued and unpaid on the Certificates through the last day of such
Distribution Period at the interest rates applicable to the Invested Amount
as of such Business Day, (iii) the Servicing Fee payable to the Servicer,
and (iv) the amount of the Trustee Fee that will be payable on the next
Distribution Date.
"Cut-Off Date" means the last day of any Calculation Period.
"Delinquency Test" means Delinquent Receivables owned by the Trust
account for less than five percent (5%) of the total Receivables held in
the Trust.
"Delinquent Receivable" means any Receivable
-4-
(i) payment for which is more than 59 days overdue (exclusive of
any grace periods and applying any payments made by or on behalf of an
Obligor to the most recent payments due),
(ii) for which the Seller or Servicer determines in good faith
that the Obligor will not continue remitting payments, or
(iii) that is otherwise in material default.
"Disposition" is defined in Section 9.3 of the Pooling Agreement.
"Distribution Date" means the twentieth (20th) day of each calendar
month (or, if not a Business day, the next Business Day).
"Distribution Period" means the period from and including one
Distribution Date, to, but not including, the next Distribution Date,
commencing with the Closing Date.
"Dollars" means dollars in lawful money of the United States of
America.
"Domestic Person" means any Person that has a place of business
located in the United States of America or Puerto Rico or otherwise is
subject to the jurisdiction of one or more civil courts of the United
States of America (other than solely by reason of contractual submission to
such jurisdiction).
"Early Amortization Calculation Date" means the day before an Early
Amortization Period begins.
"Early Amortization Event" mean, any event identified as an Early
Amortization Event in Section 9.1 of the Pooling Agreement.
"Early Amortization Period" means the period beginning on the date (if
any) specified in Section 9.2 of the Pooling Agreement and ending on the
day on which the Invested Amount has been reduced to zero.
"Eligible ABL Receivable" means any receivable arising under an
Obligor Loan Agreement which at the time of determination:
(a) satisfies the General Eligible Receivable Test;
(b) the Related Security for which is a first priority perfected
security interest and fully secures the Receivable;
(c) that satisfies all applicable requirements of the Credit and
Collections Policy;
(d) the original principal balance of which does not exceed 500% of
underwritten cash flow; and
-5-
(e) for which all Related Security Documents have been delivered to
the Trustee or its agent endorsed to the Trustee or in blank.
"Eligible Deposit Account" means (a) a segregated trust account
maintained at a bank with a long-term senior unsecured debt rating of at
least "A" or its equivalent from any Rating Agency or (b) a deposit account
maintained with a bank that has an unsecured long-term senior unsecured
debt rating of at least "A" or its equivalent, or a short-term rating of at
least "A-1" or its equivalent, from any Rating Agency.
"Eligible Investments" means any of the following (other than any such
investments issued by the Seller or any Affiliate thereof):
(a) negotiable instruments or securities represented by instruments in
registered or book-entry form which evidence:
(i) obligations which have the benefit of the full faith and
credit of the United States of America, including depository
receipts issued by a bank as custodian with respect to any
such instrument or security held by the custodian for the
benefit of the holder of such depository receipt,
(ii) demand deposits or time deposits in, or bankers' acceptances
issued by, any depositary institution or trust company
incorporated under the laws of the United States of America or
any state thereof and subject to supervision and examination
by Federal or state banking or depositary institution
authorities, provided that at the time of such investment or
contractual commitment to investment therein, the certificates
of deposit or short-term deposits, if any, or long-term
unsecured debt obligations (other than any such obligation
whose rating is based on collateral or on the credit of a
Person other than such institution or trust company), of such
depositary institution or trust company are rated A-1+, or its
equivalent, by any Rating Agency and, in the case of the
certificates of deposit or short-term deposits, or are rated
AAA by Rating Agency, in the case of long-term unsecured debt
obligations.
(iii) certificates of deposit which, at the time of such investment
or contractual commitment to invest therein, are rated A-1+,
or its equivalent, by any Rating Agency.
(iv) freely redeemable shares in open-end money market mutual funds
(including such mutual funds that are offered by the Person
who is acting as the Trustee or by any agent of such Person)
which (1) maintain a constant net-asset value, (2) at the time
of such investment have been rated not less than "AAAm", or
its equivalent, by any Rating Agency, (3) have offering
materials
-6-
which explicitly state that such fund will not invest in
derivative instruments or enter into derivative contracts and
(4) invest solely in obligations, deposits, bankers'
acceptances, certificates of deposit, repurchase agreements
and commercial paper of the types described in clauses (a)(i)
--------------
through (a)(iii) above and (b) through (e) below, without
--------
regard to the limitation set forth in such clauses as to the
maturity of such obligations, deposits, bankers' acceptances,
certificates of deposit, repurchase agreements or commercial
paper;
(b) demand deposits in the name of Trustee in any depositary
institution or trust company referred to in clause (a)(ii) above;
--------------
(c) commercial paper (having original or remaining maturities of no
more than 270 days) which, at the time of Trustee's investment or
contractual commitment to invest therein, is rated A-1+, or its equivalent,
by any Rating Agency;
(d) Eurodollar time deposits that are obligations of institutions
whose time deposits are rated AAA, or its equivalent, by any Rating Agency;
(e) repurchase agreements involving any Eligible Investment described
in any of clauses (a)(i), (a)(iii) or (d) above, so long as the other party
to such repurchase agreement is rated AAA, or its equivalent, by any Rating
Agency; and
(f) the following:
(i) negotiable instruments or securities represented by
instruments in registered or book-entry form which evidence:
(1) demand deposits or time deposits in, or bankers'
acceptances issued by, and depositary institution or
trust company incorporated under the laws of the United
States of America or any state thereof and subject to
supervision and examination by Federal or state banking
or depositary institution authorities, provided that at
the time of the Trustee's investment or contractual
commitment to invest therein, the certificates or deposit
or short-term deposits, if any (other than any such
obligation whose rating is based on collateral or on the
credit of a Person other than such institution or trust
company), of such depositary institution or trust company
are rated A-1, or its equivalent, by any Rating Agency,
in the case of certificates of deposit or short-term
deposits, or are rated A, or its equivalent, by any
Rating Agency, in the case of long-term unsecured debt
obligations.
-7-
(2) certificates of deposit which, at the time of the
Trustee's investment or commitment to invest therein, are
rated A-1, or its equivalent, by any Rating Agency, or
(3) freely redeemable shares in open-end money market mutual
funds (including such mutual funds that are offered by the
Person who is acting as the Trustee or by any agent of
such Person) which (A) maintain a constant net-asset
value, (B) at the time of such investment have been rated
not less than "Am", or its equivalent, by any Rating
Agency, (C) have offering materials which explicitly state
that such fund will not invest in derivative instruments
or enter into derivative contracts and (D) invest solely
in obligations, deposits, bankers' acceptances,
certificates of deposit, repurchase agreements and
commercial paper of the types described in this clause
(f), without regard to the limitation set forth in such
clauses as to the maturity of such obligations, deposits,
bankers' acceptances, certificates of deposit, repurchase
agreements or commercial paper;
(ii) demand deposits in the name of the Trustee in any depositary
institution or trust company referred to in clause (f)(i)(1)
----------------
above; and
(iii) commercial paper (having original or remaining maturities of
no more than 270 days) which, at the time of Trustee's
investment or contractual commitment to invest therein, is
rated A-1, or its equivalent, by any Rating Agency;
provided that (x) funds on deposit in the Overcollateralization
Account may not be invested in any Eligible Investment described in
clauses (f)(i) through (f)(iii) above, (y) each investment described
-------------------------------
in clauses (f)(i) through (f)(iii) above must have a maturity of 30 or
-------------------------------
fewer days after the time of the investment therein by the Trustee,
and (z) the aggregate amount invested in all investments which are
described in any of clauses (f)(i) through (f)(iii) above at any time
-------------------------------
may not exceed 20% of the total funds on deposit in all Transaction
Accounts at such time;
provided, that any such Eligible Investment specified in clauses (a)
through (f) shall (x) have a predetermined fixed dollar amount of principal
due at maturity that cannot vary or change; (y) if such Eligible Investment
is rated by any Rating Agency, not have an "r" highlighter or its
equivalent affixed to such rating; and (z) if the interest rate on such
Eligible Investment is not fixed, such interest rate shall be tied to a
single interest rate index plus a single fixed spread, if any, and shall
move proportionately with such index.
-8-
"Eligible Obligor" means at any time, an Obligor that meets the Credit
and Collections Policy requirements and that also satisfies the following
criteria (unless such Obligor is expressly approved as an Eligible Obligor
by the Required Persons);
(a) it is not (except as otherwise specified for any Series in the
related Supplement) a Governmental Authority; and
(b) it is not a direct or indirect Subsidiary or an Affiliate of
Seller or any other entity with respect to which Seller or any of its
Subsidiaries or Affiliates own, directly or indirectly, more than 10% of
the entity's equity interest.
"Eligible Receivable" means any Eligible STL Receivable, Eligible SDWW
Receivable or Eligible ABL Receivable.
"Eligible SDWW Receivable" means any receivable arising under an
Obligor Loan Agreement which at the time of determination:
(a) satisfies the General Eligible Receivable Test;
(b) the Related Security for which is comprised of first or second
priority security interests in receivables or, if approved by Required
Person, which approval shall not be unreasonably withheld, a security
interest of lesser priority, plus warrants as to the ownership interests in
the applicable Obligor which secure the Receivables;
(c) that satisfies in all material respects all applicable
requirements of the Credit and Collections Policy;
(d) the original principal which (collectively with any other
Indebtedness prior to or pari passu with such Receivables) does not exceed
500% of the underwritten cash flow; and
(e) for which all Related Security Documents have been delivered to
the Trustee or its agent endorsed to the Trustee or in blank.
"Eligible STL Receivable" means any receivable arising under an
Obligor Loan Agreement which at the time of determination:
(a) satisfies the General Eligible Receivable Test;
(b) the Related Security for which is a first priority perfected
security interest and fully secures the Receivable;
(c) for which all Related Security Documents have been delivered to
the Trustee or its agent in recordable form endorsed to the Trustee or in
blank;
-9-
(d) the principal balance of which does not exceed 95% of the
appraised value of such real estate at the time of determination and, when
added to all other Eligible STL Receivables, does not cause the weighted
maximum weighted loan to value ratio of all such Eligible STL Receivables
to exceed 85%; and
(e) the representations and warranties contained in Exhibit A to the
Purchase and Sale Agreement are true and correct with respect to each such
Receivable.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Exchange Act" means the Securities Exchange Act of 1934.
"Federal Funds Rate" means (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 the day (or, if
the day is not a Business Day, the immediately preceding Business Day) by
the Federal Reserve Bank of New York; provided that if the rate is not so
published for any Business Day, the rate for purposes of this clause will
be the average of the quotations for the day on such transactions received
by the Agent from three Federal funds brokers of recognized standing
selected by it, plus (b) 100 basis points.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Final Distribution Date" is defined in Section 12.2 of the Pooling
Agreement.
"Final Scheduled Payment Date" means the Distribution Date occurring
in June, 2000.
"Fully Funded Date" means the first date falling in the Amortization
Period or an Early Amortization Period on which there are funds on deposit
in the Carrying Cost Account and the Principal Funding Account that, in the
aggregate, equal or exceed the sum of (i) any Servicing Fee payable to
anyone other than a Related Person on the first Distribution Date falling
after that date, and (ii) the Investor Repayment Amount.
"GAAP" means United States of America generally accepted accounting
principles, consistently applied.
"General Eligible Receivable Test" shall mean, with respect to any
Receivable, that such Receivable satisfies each of the following at the
time of determination:
(a) is the obligation of an Eligible Obligor, is fully funded (or will
be fully funded on the same day it is sold to Transferor), is denominated
and payable in U.S. dollars in the United States, and with respect to which
the Unpaid Balance and all other terms reported for such Receivable by
Seller are true and correct;
-10-
(b) bears interest at a floating rate equal to no less than, through
its remaining term, the sum of the Prime Rate plus 2.00% per annum, which
yield calculation shall include fees payable by the Obligor pursuant to the
related Obligor Loan Agreement;
(c) the related Obligor for which has not been and is not subject to a
Bankruptcy Event;
(d) has a remaining term of no longer than five (5) years;
(e) with respect to which both the representation and warranty of
Transferor in Section 2.4(a)(i) of the Pooling Agreement and the
representations and warranties of Seller in Section 5.1(k) and (u) of the
Purchase Agreement are true and correct in all material respects;
(f) the origination of which (including the sale, if any, by the
originator to Seller, the sale by Seller to Transferor and the transfer by
Transferor to the Trust) does not contravene or conflict with any law, rule
or regulation or any contractual or other restriction, limitation or
encumbrance that applies to (i) Seller, (ii) Transferor, or (iii) the
Trust, and the sale, assignment or transfer of which, and the granting of a
security interest in which, does not require the consent of or permit or
license from, any Person, other than any such consent, permit or license
that has been obtained and continues in full force and effect;
(g) that is not subject to any asserted reduction, cancellation, or
refund or any dispute, offset, counterclaim, lien or defense whatsoever
(including any Permitted Adverse Claim or other potential reduction on
account of any offsetting account payable of Transferor or Seller to the
Obligor or funds of any Obligor held by (x) Transferor or (y) Seller);
(h) that was created in accordance with, and conforms in all material
respects with, all applicable laws, rules, regulations, orders, judgments,
decrees and determinations of all courts and other Governmental Authorities
(whether Federal, state, local or foreign) and including usury laws;
(i) for which the related Obligor Loan Agreement and all other
documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Receivable have been duly and properly executed by the
parties thereto, and each is the legal, valid and binding obligation of the
maker thereof (subject to any non-recourse provisions contained in any of
the foregoing agreements and any applicable state anti-deficiency
legislation), enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws relating to or affecting the rights
of creditors generally and by general principles of equity regardless of
whether such enforcement is considered in a proceeding in equity or at law;
(j) that has not been compromised, adjusted, satisfied, subordinated,
rescinded or modified (including by extension of time or payment or the
granting of any discounts, allowances or credits), by Seller, any Affiliate
thereof or any predecessor in interest with
-11-
respect to such Receivable except to the extent disclosed and such
Receivable, as so modified, would otherwise constitute an Eligible
Receivable;
(k) no payment for which is more than 59 days overdue (exclusive of
any grace periods and applying any payments made by or on behalf of an
Obligor to the most recent payments due) and that is otherwise not in
material default; and
(l) when added to all other Eligible Receivables in the Trust, does
not cause the weighted average yield on Eligible Receivables to be less
than a per annum rate of the Prime Rate plus 3.00%, which yield calculation
shall include fees payable by the Obligor pursuant to the Related Obligor
Loan Agreement.
(m) if the applicable Receivable is not a real estate loan such
Receivable, if transferred to the Trust would not result in the percentage
of the aggregate of all Receivables transferred to the Trust from and after
the Closing Date that were not real estate loans (whether or not
outstanding as of the applicable date of determination) to be greater than
fifty percent (50%).
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof and any entity in the United States
of America or any applicable foreign jurisdiction that exercises executive,
legislative, regulatory or administrative functions of or pertaining to
government.
"Guarantor" means Healthcare Financial Partners, Inc., a Delaware
corporation, and its successors and assigns.
"Guaranty" means any agreement or arrangement by which any Person
directly or indirectly guarantees, endorses, agrees to purchase or
otherwise becomes contingently liable upon any liability of any other
Person (other than by endorsements of instruments in the course of
collection) or guarantees the payment of distributions upon the shares of
any other Person.
"HCFP Indemnified Losses" is defined in Section 9.1 of the Purchase
Agreement.
"HCFP Indemnified Party" is defined in Section 9.1 of the Purchase
Agreement.
"Highest Bid" means the highest cash purchase offer for a Series
received by Servicer pursuant to Section 12.1 of the Pooling Agreement.
"Holder" means the Person in whose name a Certificate is registered in
the Certificate Register at the time of determination.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent certified public accountant as to any
financial statement of Seller, any qualification or exception to such
opinion or certification that is of a "going concern" or similar nature.
-12-
"Indebtedness" of any Person means all of that Person's obligations
for borrowed money, obligations evidenced by bonds, debentures, notes or
other similar instruments, obligations as lessee under leases that are
required by GAAP to be recorded as capitalized leases and obligations to
pay the deferred purchase price of property services.
"Indemnified Losses" is defined in Section 7.3 of the Pooling
Agreement.
"Indemnified Party" is defined in Section 7.3 of the Pooling
Agreement.
"Initial Cut-Off Date" means the Business Day immediately preceding
the Initial Purchase Date.
"Initial Purchase Date" means the date on which the initial Purchase
shall be made which shall be a Subsequent Closing Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Invested Amount" means, at any time, the sum of the Class A Invested
Amount.
"Investor Certificateholder" means the Person in whose name an
Investor Certificate is registered in the Certificate Register at the time
of determination.
"Investor Certificates" means the Class A Certificates.
"Investor Repayment Amount" means, on any Business Day falling in the
Amortization Period or an Early Amortization Period, the sum of (a) the
outstanding principal amount of the Series 1997-1 Certificates, plus (b)
all accrued and unpaid interest and any Additional Amounts known to be
payable on the Series 1997-1 Certificates on the first Distribution Date
falling after that date, plus (c) an amount determined by Trustee as
reasonably expected to constitute Additional Amounts but are not known to
be payable on the Series 1997-1 Certificates on the first Distribution Date
falling after that date.
"Issuance" is defined in Section 6.10(b) of the Pooling Agreement.
"Issuance Date" is defined in Section 6.10(b) of the Pooling
Agreement.
"Issuance Exchange" is defined in Section 6.10(a) of the Pooling
Agreement.
"Issuance Notice" is defined in Section 6.10(b) of the Pooling
Agreement.
"LIBOR" means the per annum interest rate determined by the Required
Person equal to the rate offered for one month deposits in US dollars in
the London interbank maker which appears on Telerate Page 3750 or such
other page as may replace Page 3750 on that service or such other service
or services as may be nominated by the British Bankers Association for the
purposes of displaying such rate (collectively, "Telerate page 3750") as of
9:00 A.M. New York City time on the day which is two Business Days prior to
the Closing Date and each
-13-
Subsequent Closing Date; provided, that in the event that more than one
--------
such rate is provided, the arithmetic mean of such rates shall apply, and
in the event that no such rate is published, then LIBOR shall be determined
from such comparable financial reporting company as the Required Person in
its discretion shall determine.
"Master Collection Account" is defined in Section 4.2 of the Pooling
Agreement.
"Material Adverse Effect" means, (a) with respect to any Person, as
specified in the applicable Transactional Document, and any event or
circumstance at any time, a material adverse effect on the ability of that
Person to perform its obligations under the relevant Transaction Document
or (b) with respect to any Person, event or circumstance, at any time, a
material adverse effect on the validity, enforceability or collectibility
of any Receivables, Related Assets, or amounts due Seller, Transferor or
the Trust under any Obligor Loan Agreements; provided, that for the purpose
of determining whether any Adverse Claim or other event or circumstance
results (or has a likelihood of resulting) in a Material Adverse Effect,
the effect of such event or circumstance shall be considered in the
aggregate with the effect of all other Adverse Claims (including Permitted
Adverse Claims) or other events and circumstances occurring or existing at
the time of such determination.
"Monthly Report" is defined in Section 3.5(d) of the Pooling
Agreement.
"Net Invested Amount" means, on any Business Day, the Invested Amount,
reduced by the aggregate balance on deposit in the Purchase Account and the
Principal Funding Account.
"New Issuance" is defined in Section 6.10(a) of the Pooling Agreement.
"Non-Recourse Claim" is defined in Section 11.3 of the Pooling
Agreement.
"Obligations" means (a) all obligations of Seller, Transferor and the
Servicer to Trustee, the Trust, any other Indemnified Party, the Investor
Certificateholders and their respective successors, permitted transferees
and assigns, arising under or in connection with the Transaction Documents,
and (b) all obligations of Seller to Buyer, any other HCFP Indemnified
Party and their respective successors, transferees and assigns, arising
under or in connection with the Transaction Documents, in each case
howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due.
"Obligor" means a Person obligated to make payments on a Receivable.
"Obligor Loan Agreement" an agreement between Seller and an Eligible
Obligor substantially in the form attached hereto as Exhibit 1, with such
changes thereto as may be (i) satisfactory to the Required Persons, as
approved by them in writing or (ii) deemed immaterial by the Required
Persons in their reasonable discretion after prior notice of such change
has been provided at least 14 days prior to execution of such change. The
change will
-14-
be deemed immaterial if the Required Persons do not object in writing
within ten days of receipt of such notice.
"Officer's Certificate" means, unless otherwise specified in the
Pooling Agreement, a certificate signed by an Authorized Officer of
Transferor, Servicer, or Seller, as the case may be, or, in the case of a
Successor Servicer, a certificate signed by the President, and Vice
President, Assistant Treasurer or the financial controller (or an officer
holding an office with equivalent or more senior responsibilities) of such
Successor Servicer, that, in the case of any of the foregoing, is delivered
to Trustee.
"Opinion of Counsel" means a written opinion of counsel, who shall be
reasonably acceptable to Trustee and the Required Persons.
"Origination and Servicing Party" means any of Seller, Servicer, each
Sub-Servicer and Transferor.
"Overcollateralization Account" is defined in Section 4.2 of the
Pooling Agreement.
"Parent Guarantee" means the Guarantee dated as of June 27, 1997 from
the Guarantor in favor of the Trustee.
"Paying Agent" means any paying agent appointed pursuant to Section
6.6 of the Pooling Agreement and shall initially be Trustee.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Adverse Claims" means (a) ownership or security interests
arising under the Transaction Documents, and (b) liens of taxes,
assessments or charges of any Governmental Authority (other than Tax or
ERISA Liens) and liens of landlords, carriers, warehousemen, mechanics and
materialmen imposed by law in the ordinary course of business, in each case
(i) for amounts not yet due or (ii) which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP,
provided that the aggregate amount secured by all liens referred to in this
clause (ii) does not exceed $50,000.
"Permitted Sale" is defined in Section 10.16 of the Purchase
Agreement.
"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.
"Pooling Agreement" means the Pooling and Servicing Agreement, dated
as of the Closing Date, among Transferor, as transferor, the initial
Servicer, as Servicer, and Trustee, as it may be amended, supplemented or
otherwise modified from time to time.
-15-
"Prime Rate" means, on any day, a fluctuating rate of interest per
annum equal to the highest of:
(i) the rate of interest announced, from time to time, by Trustee
as its prime commercial rate for United States dollar loans made in the
United States for any day, or, if Trustee shall cease to announce such
rate, the rate of interest announced, from time to time, by the commercial
bank then having the largest capital and surplus of any such commercial
bank in New York, New York as its prime commercial rate for United States
dollar loans made in the United States for any day, and
(ii) the Federal Funds Rate.
Any change in the interest rate resulting from a change in the prime
commercial rate announced by Trustee or other bank as provided above shall
become effective without prior notice to Transferor or Servicer as of 12:01
a.m., New York City time, on the Business Day on which each change in the
prime commercial rate is announced by Trustee or other bank as provided
above. The prime commercial rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged by Trustee
or other bank as provided above to any customer. Trustee or other bank as
provided above may make commercial loans or other loans at rates of
interest at, above or below the prime commercial rate.
"Principal Funding Account" is defined in Section 4.2 of the Pooling
Agreement.
"Principal Payment Date" means (i) with respect to any Series 1997-1
Certificate during the Revolving Period, any date on which the Invested
Amount is to be reduced pursuant to Section 3.1 of the Certificate Purchase
Agreements, (ii) with respect to any Series 1997-1 Certificate during an
Amortization Period or Early Amortization Period, each Distribution Date
falling in such Amortization Period or Early Amortization Period.
"Private Holder" shall mean each holder of a right to receive interest
or principal with respect to a Certificate, other than Certificates with
respect to which an Opinion of Counsel is rendered that such Certificates
will be treated as debt for Federal income tax purposes, and any holder of
a right to receive any amount in respect to the Transferor Certificate. A
Person holding more than one interest in the Trust each of which separately
would cause such Person to be a Private Holder shall be treated as a single
Private Holder; a Private Holder that would be a partnership, an S
corporation or a grantor trust under the Internal Revenue Code shall be
treated as one or more Private Holders in accordance with the provisions of
Treasury Regulation Section 1.7704-1 or any successor provision of law.
"Program" means the transactions contemplated in the Transaction
Documents.
"Publication Date" is defined in Section 9.3(a) of the Pooling
Agreement.
"Public Notice" means all assignments, financing statements (and
continuation statements or financing change statements with respect to such
financing statements where applicable), recordings, filings, notices and
registrations and any other instrument similar in
-16-
effect, and all amendments or assignments of any of the foregoing, relating
to assignment or perfection of a security interest or lien meeting the
requirements of applicable state, provincial, territorial or other local
law.
"Purchase" means each purchase of Receivables and Related Assets by
Transferor from Seller under the Purchase Agreement.
"Purchase Account" is defined in Section 4.2 of the Pooling Agreement.
"Purchase Agreement" means the Purchase and Sale Agreement, dated as
of the Closing Date, between Seller and Transferor.
"Purchase Price" is defined in Section 2.2 of the Purchase Agreement.
"Purchase Report" is defined in Section 2.1 of the Purchase Agreement.
"Purchase Termination Date" is defined in Section 1.1 of the Purchase
Agreement.
"Purchased Assets" is defined in Section 1.1 of the Purchase
Agreement.
"Purchased Receivables" is defined in Section 1.1 of the Purchase
Agreement.
"Rating Agency" means either of Standard & Poor's Ratings Services,
Moody's Investor Services, Inc., Duff & Phelps Credit Rating Company, or
Fitch Investors Service, Inc.
"Receivable" means any claim for the repayment of funds advanced to an
Obligor, fees and interest earned thereon and other amounts payable with
respect thereto, pursuant to an Obligor Loan Agreement.
"Receivables Pool" means at any time all Receivables then held by the
Trust.
"Record Date" means the fifteenth (15th) day of each month (or, if not
a Business Day, the next Business Day).
"Records" means all purchase orders, invoices and other agreements,
documents, books, records and other media for the storage of information
(including tapes, disks, punch cards, computer programs and databases and
related property) maintained by Transferor, Seller or Servicer with respect
to the Transferred Assets and/or the related Obligors. Seller shall be
permitted to retain sufficient copies of the Records to monitor its
obligations under the Purchase Agreement.
"Related Assets" is defined in Section 1.1 of the Purchase Agreement.
"Related Person" means the Seller and each of its Affiliates (other
than Transferor).
-17-
"Related Purchased Assets" is defined in Section 1.1 of the Purchase
Agreement.
"Related Security" means, with respect to any Receivable, (a) all of
the applicable liens, security interests and possessory interests from time
to time purporting to secure payment of such Receivable, whether pursuant
to the Obligor Loan Agreement related to the Receivable or otherwise, (b)
all property of any kind acquired through the enforcement of such liens,
security interests or possessory rights, or in lien thereof, and (c) all
letters of credit, guarantees, insurance policies and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable, whether pursuant to the contract with the
Obligor related to the Receivable or otherwise.
"Related Security Documents" means all such assignments, mortgages,
financing statements and other documentation required or appropriate to
convey to the Trustee the Related Security.
"Related Transferred Assets" is defined in Section 2.1(a) of the
Pooling Agreement.
"Report Date" means the Business Day that is three Business Days prior
to a Distribution Date.
"Repurchase Amount" is defined in Section 12.4 of the Pooling
Agreement.
"Repurchase Distribution Date" is defined in Section 12.4 of the
Pooling Agreement.
"Repurchase Price" means the purported Unpaid Balance of a Receivable
at such time as it was sold to Buyer under the Purchase Agreement, plus all
interest accrued on such Unpaid Balance (paid and unpaid) from the time the
Receivable was conveyed to the Trust, plus all Servicing Fees and other
expenses incurred by the Trust in owning and enforcing such Receivable,
less all payments actually received by the Trust with respect to such
Receivable.
"Required Person" means the Holder of Class A Certificates having the
largest Class Percentage.
"Required Series Holders" means with respect to any action to be taken
by Investor Certificateholders, Investor Certificateholders that evidence
at least 66-2/3% of the principal amount of those Certificates.
"Reserve Account" is defined in Section 4.2 of the Pooling Agreement.
"Responsible Officer" means, when used with respect to Trustee, (a)
any officer within the Corporate Trust Office (or any successor group of
Trustee), including any vice president, assistant vice president or any
officer or assistant trust officer of Trustee customarily performing
functions similar to those performed by the persons who hold the office of
vice president, assistant vice president, or assistant secretary and (b)
any other officer within the Corporate Trust Office with direct
responsibility for the administration of the
-18-
Pooling Agreement or to whom any corporate trust matter is referred at
Trustee's Corporate Trust Office because of such officer's knowledge of and
familiarity with the particular subject.
"Revolving Period" means the period beginning on the Closing Date and
ending on the day before the first day of the Amortization Period or an
Early Amortization Period.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means HCFP Funding II, Inc., a Delaware corporation and any
successor permitted thereto under the Purchase Agreement or any entity that
acquires its rights and obligations under the Transaction Documents.
"Seller Account" is defined in Section 3.1(b) of the Purchase
Agreement.
"Seller Assignment Certificate" means an assignment by a Seller,
substantially in the form of Exhibit A to the Purchase Agreement,
evidencing Transferor's acquisition of the Purchased Assets generated by
the Seller, as it may be amended, supplemented or otherwise modified from
time to time.
"Seller Change Event" is defined in Section 3.5(e) of the Pooling
Agreement.
"Seller Receivables Review" is defined in Section 6.1(c) of the
Purchase Agreement.
"Seller Transaction Documents" means the Purchase Agreement and the
Seller Assignment Certificates.
"Series" means any series of Investor Certificates issued pursuant to
Section 6.10 of the Pooling Agreement.
"Series Interest" is defined in Section 4.1 of the Pooling Agreement.
"Series 1997-1 Certificates" means any of the Class A Certificates.
"Series Percentage" means, with respect to each Purchaser, the
percentage equivalent (carried out to twelve decimal places) of a fraction,
the numerator of which is the Stated Amount of such Purchaser's Certificate
and the denominator of which is the sum of the Stated Amounts for all of
the Series 1997-1 Certificates.
"Service Transfer" is defined in Section 10.2(b) of the Pooling
Agreement.
"Servicer" means at any time the Person then authorized pursuant to
Article III of the Pooling Agreement to service, administer and collect
Receivables and Related Transferred Assets.
"Servicer Default" is defined in Section 10.1 of the Pooling
Agreement.
-19-
"Servicer Report" is defined in Section 4.8 of the Pooling Agreement.
"Servicing Advances" means out-of-pocket expenses paid by Servicer in
the course of executing its duties under the Pooling Agreement.
"Servicing Fee" is defined in Section 3.4(a) of the Pooling Agreement.
"Solvent" shall mean, as to any Person as of the applicable date of
determination, that such Person has capital sufficient to carry on its
business and transactions and all business and transactions to which it is
about to engage, is able to pay its debts as they mature, and owns property
having a value, both at fair valuation and at the then fair saleable value,
greater than the amount required to pay its then existing debt (including
contingencies).
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Stated Amount" means as to any Certificate, the initial maximum
principal amount that may be required to be funded by the Holder of such
Certificate.
"Subject Instruments" means any Certificates with respect to which the
Transferor shall not have received an Opinion of Counsel to the effect that
such Certificates will be treated as debt for Federal income tax purposes.
"Subordination Test" means that both (i) the Invested Amount is no
more than 88% of the Unpaid Balance of the Receivables, and (ii) the Unpaid
Balance of the Receivables exceeds the Invested Amount by at least
$3,000,000.
"Sub-Servicer" is defined in Section 3.1 of the Pooling Agreement.
"Subsequent Closing Date" shall mean the second and fourth Wednesday
of each month, or if such day is not a Business Day, the next succeeding
Business Day.
"Subsidiary" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned
by such Person.
"Successor Servicer" is defined in Section 10.2(a) of the Pooling
Agreement.
"Supplement" means each supplement to the Pooling Agreement executed
by Transferor, Servicer and Trustee to specify the terms of a Series of
Certificates, as the same may be amended, supplemented or otherwise
modified from time to time.
"Tax or ERISA Lien" means a lien arising under Section 6321 of the
Internal Revenue Code or Section 302(f) or 4068 of ERISA.
-20-
"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for Federal and state income and franchise tax
purposes, (a) such action will not adversely affect the existing
characterization of the Investor Certificates of any outstanding Series or
class as debt or (if applicable) as interests in a partnership (that is not
a publicly traded partnership), (b) following such action the Trust will
not be treated as an association (or publicly traded partnership) taxable
as a corporation, (c) such action will not be treated as a taxable event to
any Investor Certificateholder or Certificate Owner and (d) in the case of
the original issuance of any Series or class of Investor Certificates, the
Investor Certificates of the new Series or class will properly be
characterized as debt.
"Termination Notice" is defined in Section 10.1 of the Pooling
Agreement.
"Transaction Accounts" is defined in Section 4.2 of the Pooling
Agreement.
"Transaction Documents" means each Seller Transaction Document, the
Pooling Agreement, the Certificate Purchase Agreements, the Guarantee and
the related Certificates as any of the same from time to time may be
amended, supplemented, amended and restated or otherwise modified in
accordance with the terms thereof.
"Transfer Agent and Registrar" means any transfer agent and registrar
appointed pursuant to Section 6.3 of the Pooling Agreement and shall
initially be Trustee.
"Transferor" means Wisconsin Circle II Funding Corporation, a Delaware
corporation.
"Transferor Certificate" means a certificate substantially in the form
of Exhibit E to the Pooling Agreement, as described in Section 4.1 of the
Pooling Agreement.
"Transferor Indemnified Losses" has the meaning provided in Section
7.3 of the Pooling Agreement for "Indemnified Losses."
"Transferor Indemnified Party" has the meaning provided in Section 7.3
of the Pooling Agreement for "Indemnified Party."
"Transferor Interest" is defined in Section 4.1 of the Pooling
Agreement.
"Transferred Assets" is defined in Section 2.1 of the Pooling
Agreement.
"Trigger Event" is defined in Section 9.3(a) of the Pooling Agreement.
"Trust" means the trust created by the Pooling Agreement, which shall
be known as the STL 1997-1 Trust.
"Trustee" means First Bank National Association, a national bank in
its capacity as agent for the Certificateholders, or its successor-in-
interest, or any successor trustee appointed as provided in the Pooling
Agreement.
-21-
"Trust Interests" means the fractional undivided beneficial interests
in the assets of the Trust.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Underwriting Guidelines" means the Underwriting Guidelines contained
in the Credit and Collections Policy and attached as part of Exhibit E to
------- -
the Purchase Agreement, as the same may be amended from time to time with
the written approval of the Required Persons.
"Unmatured Early Amortization Event" means any event or condition
that, with the giving of notice or lapse of time, or both, would become an
Early Amortization Event.
"Unpaid Balance" of any Receivable means at any time the unpaid amount
thereof (excluding interest accrued for the period after the due date of
such Receivable, related service charges and other reimbursable amounts) as
shown in the books of Servicer at such time.
"Verification Notice" is defined in Section 3.2 of the Pooling
Agreement.
B. Other Terms. All accounting terms not specifically defined herein
-----------
shall be construed in accordance with GAAP. To the extent that the definitions
of accounting terms in any Transaction Document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in such Transaction
Document shall control.
C. Reference. The words "hereof", "herein" and "hereunder" and words of
---------
similar import when used in any Transaction Document shall refer to such
Transaction Document as a whole and not to any particular provision of such
Transaction Document; and reference to "Section", "subsection", "Schedule" and
------- ---------- --------
"Exhibit" in any Transaction Document are references to Sections, subsections,
- --------
Schedules and Exhibits in or to such Transaction Document unless otherwise
specified in such Transaction Document.
D. Number and Gender. Each defined term used in the Transaction
-----------------
Documents has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in the Transaction Documents has a comparable
meaning whether used in a masculine, feminine or gender-neutral form.
E. Including. Whenever the term "including" (whether or not that term is
---------
followed by the phrase "but not limited to" or "without limitation" or words of
similar effect) is used in the Transaction Documents in connection with a
listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.
F. Reference to Statutes and Regulations. References to a statute shall
-------------------------------------
refer to such statute and any successor statute, and to all regulations
promulgated under or implementing the
-22-
statute or successor, as in effect at the relevant time. References to a
regulation shall refer to such regulation and any successor regulation, as in
effect from time to time.
G. Regulatory Bodies. References to a governmental or quasi-governmental
-----------------
agency, authority or instrumentality shall also refer to a regulatory body that
succeeds to the functions of such agency, authority or instrumentality.
H. Time Periods. In computing periods from a specified date to a later
------------
specified date, when precise times of day are not stated, the words "from" and
"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to but excluding."
I. Time of Day. Unless otherwise specified, indications of time of day
-----------
mean New York, New York time.
J. Interpretation of Standards. The parties acknowledge that this
---------------------------
Agreement and the other Transaction Documents contain many determinations,
standards and measurements which must be made or applied by the Transferor and
the Servicer in the process of performing their obligations under this Agreement
and the other Transaction Documents, including the determination of whether
Receivables constitute Eligible Receivables, when or whether dilutions, write-
offs or Early Amortization Events have occurred, and many other matters. The
Transferor and Servicer shall make or apply such determinations, standards and
measurements in good faith and using reasonable judgment, and the Transferor and
Servicer shall bear the burden of proof in any dispute with the Trustee or any
Required Persons regarding any such determinations, standards or measurements.
K. "Or". The word "or" is not exclusive. Thus, "A or B" means "A or B
----
or both."
L. Agreements. References to any agreement, arrangement or other
----------
document shall refer to such agreement, arrangement or other document as the
same may be amended, supplemented, amended and restated, endorsed or otherwise
modified from time to time, together with any other agreement, arrangement or
other document entered into or executed in substitution therefor or renewal
thereof in accordance with the Transaction Documents.
-23-
EXHIBIT 1
to Definitions
FORM OF OBLIGOR LOAN AGREEMENT
------------------------------
[TO COME FROM S&S]
1-1