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FUNDING AGREEMENT
BY AND AMONG
CP FUNDING CORP.,
as Borrower,
PARK AVENUE RECEIVABLES CORPORATION,
THE CHASE MANHATTAN BANK,
as Funding Agent, APA Bank
and Syndication Agent
AND
THE SEVERAL FINANCIAL INSTITUTIONS
PARTY HERETO FROM TIME TO TIME,
as APA Banks
Dated as of October 8, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
FUNDINGS; THE VFN
SECTION 2.1 Loans to Borrower; Funding Procedures; the VFN. . . . . . . . . . 2
SECTION 2.2 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.5 Payments Generally. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.6 Broken Funding. . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.7 Conversion and Continuation of Outstanding
Advances Made by the APA Banks. . . . . . . . . . . . . . . . . . 15
SECTION 2.8 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.9 Inability to Determine Eurodollar Rate. . . . . . . . . . . . . . 17
SECTION 2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER
SECTION 3.1 Representations, Warranties and Covenants of the Borrower . . . . 19
ARTICLE IV
INDEMNIFICATION
SECTION 4.1 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.2 Indemnity for Reserves and Expenses . . . . . . . . . . . . . . . 24
SECTION 4.3 Indemnity for Taxes . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.4 Other Costs, Expenses and Related Matters . . . . . . . . . . . . 28
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ARTICLE V
LIQUIDITY COMMITMENT
SECTION 5.1 Liquidity Purchases . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.2 Several Purchase Commitments of the APA Banks . . . . . . . . . . 30
SECTION 5.3 Nonrecourse Nature of Transactions. . . . . . . . . . . . . . . . 31
SECTION 5.4 Payments; Indemnity . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.5 Reduction of Commitments. . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
REPRESENTATIONS AND WARRANTIESOF THE APA BANKS
SECTION 6.1 Representations and Warranties of the APA
Banks
to PARCO and the Funding Agent. . . . . . . . . . . . . . . . . . 33
SECTION 6.2 PARCO Disclaimer of Representations
and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
THE FUNDING AGENT
SECTION 7.1 Appointment.. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.4 Reliance by Funding Agent . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.5 Notice of Termination Event and Other Events;
Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6 Non-Reliance by APA Banks on Funding Agent
and Other APA Banks . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.8 Funding Agent in its Individual Capacity. . . . . . . . . . . . . 38
SECTION 7.9 Successor Funding Agent . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.10 Chase Conflict Waiver . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Waivers; Amendments, Etc. . . . . . . . . . . . . . . . . . . . . 40
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SECTION 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.3 Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.4 Severability; Counterparts; Waiver of Setoff. . . . . . . . . . . 42
SECTION 8.5 Successors and Assigns; Participations;
Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.6 No Petition.. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.7 Limited Recourse. . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.8 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 8.9 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
EXHIBITS
ANNEX I Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXHIBIT A Form of Variable Funding Note . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Transfer Supplement . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Opinion of Counsel. . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D Notice Addresses. . . . . . . . . . . . . . . . . . . . . . . . . D-1
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FUNDING AGREEMENT
FUNDING AGREEMENT (as amended, supplemented or otherwise modified
and in effect from time to time, this "AGREEMENT"), dated as of October 8,
1997, by and among PARK AVENUE RECEIVABLES CORPORATION, a Delaware
corporation, as lender (together with its successors and assigns, "PARCO"),
CP FUNDING CORP., a Nevada corporation, as borrower (together with its
successors and assigns, the "BORROWER"), THE CHASE MANHATTAN BANK, a New York
banking corporation ("CHASE"), as funding agent for PARCO and the several APA
Banks (in such capacity, the "FUNDING AGENT") and THE SEVERAL FINANCIAL
INSTITUTIONS PARTY HERETO FROM TIME TO TIME.
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions of this Agreement and
the other Basic Agreements, the Borrower desires to obtain, and PARCO desires
to lend, funds from time to time on an uncommitted basis;
WHEREAS, subject to the terms and conditions of this Agreement and
the other Basic Agreements, the Borrower desires to obtain, and the APA Banks
have agreed to lend, funds from time to time on a committed basis;
WHEREAS, in order to evidence its obligation to repay amounts
borrowed by it from PARCO and/or the APA Banks, as applicable, together with
interest thereon, the Borrower has agreed to execute and deliver the VFN to
the Funding Agent for the benefit of PARCO and the APA Banks;
WHEREAS, in order to obtain ratings for its Commercial Paper issued
to fund its interest in the VFN from time to time, PARCO desires that the APA
Banks to commit to purchase from PARCO, without recourse, representation or
warranty, all or a portion, as applicable, of PARCO's right, title and
interest in its loans made to the Borrower hereunder, subject to the terms
and conditions of this Agreement and the other Basic Agreements; and
WHEREAS, pursuant to the Security Agreement, the Borrower will pledge
to the Funding Agent for the benefit of the Secured Parties its interest in the
Collateral, including, but not limited to, the Borrower's security interest
in the Receivables and the Other Conveyed Property;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. All capitalized terms not otherwise
defined herein shall have the meanings specified in, or incorporated by
reference into, Annex A to that certain Sale and Servicing Agreement, dated
as of October 8, 1997 (as amended, supplemented or otherwise modified and in
effect from time to time, the "SALE AND SERVICING AGREEMENT"), by and among
AmeriCredit Financial Services, Inc., as Seller and Servicer thereunder, CP
Funding Corp., as Borrower, The Chase Manhattan Bank, as Funding Agent and
The Chase Manhattan Bank, as Back-Up Servicer, which Annex A is incorporated
herein by reference.
ARTICLE II
FUNDINGS; THE VFN
SECTION 2.1 LOANS TO BORROWER; FUNDING PROCEDURES; THE VFN. (a)
FUNDING GENERALLY. Upon the terms and subject to the conditions set forth
herein, prior to the Commitment Expiry Date, and PROVIDED that (i) in the
case of PARCO, no Potential PARCO Wind-Down Event or PARCO Wind-Down Event
shall have occurred and be continuing and (ii) in the case of the APA Banks,
no Termination Event or Potential Termination Event shall have occurred and
be continuing, PARCO may, in its sole discretion, and the APA Banks shall
(subject to the terms and conditions specified herein), make an advance (any
such advance, a "FUNDING," the first such advance, the "INITIAL FUNDING," and
each such additional funding, a "SUBSEQUENT FUNDING") to the Borrower from
time to time on or after the Effective Date.
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To request a Funding hereunder, the Borrower shall notify the
Funding Agent of such request by telephone (a) in the case of a Eurodollar
Funding, not later than 11:00 A.M. (New York time) three (3) Business Days
before the date of the proposed Funding, (b) in the case of an ABR Funding,
not later than 12:30 P.M. (New York Time) on the proposed date of such
Funding and (c) in the case of a CP Funding, not later than 11:00 A.M. (New
York time), one (1) Business Day before the date of the proposed Funding.
Each day on which a Funding is made hereunder shall be a Business Day. Each
such telephonic request for a Funding shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Funding Agent of a
written funding request (each, a "FUNDING REQUEST") in a form approved by the
Funding Agent and signed by the Borrower. Each such telephonic and written
Funding Request shall specify the following information in compliance with
Section 2.1(b):
(i) the requested Advance Amount (calculated in accordance with
the definition thereof, and which shall be at least $1,000,000 or
integral multiples of $1,000 in excess thereof);
(ii) the date of such Funding, which shall be a Business Day;
(iii) whether such Funding is to be an ABR Funding, a CP Funding or
a Eurodollar Funding;
(iv) in the case of a CP Funding or a Eurodollar Funding, the CP
Funding Period or Eurodollar Funding Period to be applicable thereto,
which shall be a period contemplated by the definition of the term "CP
Funding Period" and "Eurodollar Funding Period", respectively; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.1(e).
If no election as to the type of Funding is specified, then the requested
Funding shall be at the discretion of the Funding Agent (with the consent of
PARCO if the Funding Agent so selects a CP Funding). Promptly following
receipt of a Funding Request in accordance with this Section 2.1(a), the
Funding Agent shall promptly advise each Secured Party of the details thereof
and of the amount of such Secured Party's loan to be made as part of the
requested Funding (if any). No more than five (5) Subsequent Fundings shall
be permitted each calendar month, unless the Funding
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Agent, at the direction of the Required Banks, shall have agreed to more
frequent Fundings.
(b) CONDITIONS TO FUNDING. Neither PARCO nor the APA Banks shall
have any obligation to advance any funds to the Borrower in connection with
any Funding unless, on the date of such Funding, (i) after giving effect to
such Funding, the Total Investment PLUS the Interest Component of all
Commercial Paper issued by PARCO to fund the Total Investment would not
exceed the Facility Limit; (ii) each APA Bank's Pro Rata Share of such
Funding would not exceed the amount of its unused Commitment; (iii) the
Borrower has provided a Funding Request to the Funding Agent, which Funding
Request shall include the calculations necessary to satisfy the requirement
set forth in clauses (i) and (ii) above and shall also include a
certification by an authorized officer of the Borrower that, to the best of
such officer's knowledge, no event has occurred since the most recent Funding
(or the Effective Date, in the case of the Initial Funding) that would have a
material and adverse effect on the Receivables, the Seller, the Servicer or
the Borrower; (iv) the Borrower shall have deposited in the Reserve Account,
or shall have given irrevocable instructions to the Funding Agent to withhold
from the proceeds of such Funding and to deposit in the Reserve Account, an
amount equal to (x) in the case of the Initial Funding, the Reserve Account
Initial Deposit and (y) in the case of any Subsequent Funding, the Subsequent
Reserve Account Deposit; (v) the VFN is rated at least A2 by Moody's;
(vi) one or more binding and enforceable Hedge Contracts in an aggregate
notional amount equal to the Facility Limit are in full force and effect in
accordance with the terms of the Sale and Servicing Agreement; (vii) each
representation and warranty of the Borrower herein or in the Security
Agreement shall be true and correct with respect to the Borrower and each
Receivable as of the date of such Funding; (viii) a Potential PARCO Wind-Down
Event or a PARCO Wind-Down Event (each only in the case of a Funding to be
made by PARCO), or a Potential Termination Event or a Termination Event (in
the case of a Funding to be made by the APA Banks or PARCO), shall not have
occurred and be continuing; (ix) PARCO is able to obtain funds for the making
of such Funding (only in the case of a Funding to be made by PARCO); (x) the
Funding Agent shall have received, duly executed and delivered by Wells Fargo
Bank, a lien release in substantially the form specified in Section 1(b) of
the Intercreditor Agreement; and (ix) in connection with the Initial Funding,
the conditions precedent set forth in Section 2.1(g) hereof and Section 3.2
of the Sale and Servicing Agreement shall be satisfied.
Notwithstanding anything to the contrary set forth in this
Agreement, no APA Bank shall have any obligation to advance funds to the
Borrower on the
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Initial Funding Date or any Subsequent Funding Date if, on such day, any
Termination Event or Potential Termination Event shall have occurred and be
continuing. The Funding Agent shall promptly advise each APA Bank (by
telecopy or by telephone call promptly confirmed in writing by telecopy) of
the receipt and content of any Funding Request.
The APA Banks' several obligations to provide the Borrower with
funds pursuant to this Article II shall terminate on the Commitment Expiry
Date. Notwithstanding anything contained in this Section 2.1 or elsewhere in
this Agreement to the contrary, no APA Bank shall be obligated to provide the
Borrower with aggregate funds in connection with a Funding Request in an
amount that would exceed such APA Bank's unused Commitment then in effect,
and the failure of any APA Bank to make its Pro Rata Share of the Funding
available to the Borrower (subject to the terms and conditions set forth
herein) shall not relieve any other APA Bank of its obligations hereunder.
(c) ADVANCE PERCENTAGE; FUNDING REQUEST IRREVOCABLE. With respect
to any Funding Date, the advance percentage (the "ADVANCE PERCENTAGE") to
determine the Advance Amount shall be 88%, subject to downward adjustment on
such Funding Date as described below:
(1) if a "Trigger Event" (as defined in any public
asset-backed transaction beginning with, and including, the AmeriCredit
Automobile Receivables Trust 1996-D transaction) occurs which continues
unremedied for two (2) monthly reporting periods and is waived by the
party or parties entitled to exercise such waiver under the related
transaction documentation, then the Advance Percentage in effect at the
opening of business on such Funding Date shall be reduced by 2%;
PROVIDED that if the Trigger Event relates to a delinquency test failure
and occurs after the Pool Factor (as defined in the related transaction
documentation) is below 25%, the Advance Percentage shall not be so
reduced; PROVIDED FURTHER that if the Advance Percentage has been
reduced as a result of the application of this clause (1), the Advance
Percentage shall remain at such reduced percentage until such time as
the related Trigger Event has been cured for a period of three (3)
consecutive months;
(2) if a Trigger Event occurs and is not waived by the Person
or Persons entitled to exercise such waiver under the related
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transaction documentation, then the Advance Percentage in effect at the
opening of business on such Funding Date shall be reduced by 6% (without
duplication of any reduction pursuant to clause (1) above); and
(3) if there is an Excess Spread Deficiency (calculated as of
the close of business three (3) Business Days prior to such Funding
Date), then the Advance Percentage shall be reduced by the product of
(i) the amount of such Excess Spread Deficiency (stated as a percentage)
MULTIPLIED BY (ii) 1.7 (rounded to the nearest 1%); PROVIDED that if the
Advance Percentage has been reduced as a result of the application of
this clause (3), the Advance Percentage shall remain at such reduced
percentage until such time as the Excess Spread Deficiency has been
cured.
(d) FUNDING REQUEST IRREVOCABLE. The notice of the proposed Initial
Funding and any Subsequent Funding shall be irrevocable and binding on the
Borrower, and the Borrower shall indemnify PARCO and the APA Banks against any
loss or expense incurred by PARCO or the APA Banks as provided in Section 2.6
hereof.
(e) DISBURSEMENT OF FUNDS. No later than 4:30 P.M. (New York City
time) on the date on which a Funding is to be made, PARCO and/or the APA Banks,
as applicable, will make available to the Borrower, in immediately available
funds, the amount of the Funding to be made on such day by remitting the
required amount thereof to an account of the Borrower as designated in the
related Funding Request.
(f) THE VFN.
(i) The Borrower's obligation to pay the principal of, and
interest on, all amounts advanced by PARCO or the APA Banks pursuant
to any Funding shall be evidenced by a single note of the Borrower (as
amended, supplemented or otherwise modified and in effect from time to
time, the "VFN") which shall (1) be dated the Closing Date; (2) be in
the stated principal amount equal to the Facility Limit (as reflected
from time to time on the grid attached thereto); (3) bear interest as
provided therein; (4) be payable to the order of the Funding Agent for
the account of PARCO and the APA Banks and mature on the Distribution
Date occurring in the calendar month
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sixty-six (66) months following the Commitment Expiry Date (unless
otherwise accelerated pursuant to the terms of the Basic
Agreements); (5) be entitled to the benefits of this Agreement, the
Security Agreement and the other Basic Agreements; and (6) be
substantially in the form of Exhibit A to this Agreement, with
blanks appropriately completed in conformity herewith. The Funding
Agent shall, and is hereby authorized to, make a notation on the
schedule attached to the VFN of the date and the amount of each
Funding and the date and amount of the payment of principal
thereon, and prior to any transfer of the VFN, the Funding Agent,
on behalf of PARCO and the APA Banks, shall endorse the outstanding
principal amount of the VFN on the schedule attached thereto. The
entries made by the Funding Agent pursuant to the preceding
sentence shall be PRIMA FACIE evidence of the existence and amounts
of the obligations recorded therein; PROVIDED, HOWEVER, that
failure to make such notation shall not adversely affect the rights
of PARCO and the APA Banks with respect to the payment obligations
of the Borrower hereunder and under the VFN.
(ii) On any VFN Prepayment Date, the Borrower shall have
the option to prepay all or a portion of the VFN Balance (each, an
"OPTIONAL PREPAYMENT"), subject to the following terms and
conditions:
1. The Borrower shall have given the Funding Agent at least five
(5) Business Days' prior written notice of its intent to effect an
Optional Prepayment;
2. Unless such Optional Prepayment is to be effected on a
Distribution Date (in which case the relevant calculations with
respect to such Optional Prepayment shall be reflected on the
applicable Servicer's Determination Date Certificate), the Borrower
shall cause the Servicer to deliver to the Funding Agent, the Backup
Servicer and the Rating Agencies a Servicer's VFN Prepayment Date
Certificate substantially in the form of Exhibit B-1 to the Sale and
Servicing Agreement, together with evidence to the Funding Agent, the
Backup Servicer and the Rating Agencies (which evidence may consist
solely of the Servicer's VFN Prepayment Date Certificate) that the
Borrower shall have sufficient funds on the contemplated VFN
Prepayment Date to effect the Optional Prepayment in accordance with
this Agree-
7
ment. Any such Servicer's VFN Prepayment Date Certificate and
related evidence shall be delivered to the Funding Agent no later
than 1 P.M. (New York time), five (5) Business Days prior to the
contemplated VFN Prepayment Date. In effecting an Optional
Prepayment, the Borrower may (i) use the proceeds of sales of the
Receivables (which sales must be made in arm's-length transactions
to Persons other than AFS), and (ii) give effect to Principal
Collections on deposit in the Collection Account at such time to
the extent consistent with the requirements of paragraph 4 below
(as evidenced by the Servicer's VFN Prepayment Date Certificate).
3. In connection with any such Optional Prepayment that does
not constitute a prepayment in full of the outstanding VFN Balance,
then, following receipt by the Funding Agent of the amounts
referred to in paragraph 5 below, there shall be released from the
Lien of the Security Agreement (subject to the requirements of
paragraph 4 below): (i) a portion of the Receivables comprising the
Pool Balance selected by the Borrower in accordance with the FIFO
method; and (ii) such other Receivables not then constituting part
of the Pool Balance, excluding, however, any Receivable subject to
a Repurchase Obligation ("Other Designated Receivables") as the
Borrower has agreed to sell in an arm's length transaction
permitted hereby and as are designated by the Borrower and
specified in the Servicer's VFN Prepayment Date Certificate (such
Receivables and such Other Designated Receivables, together, in
each case, with the related Other Conveyed Property, being
collectively referred to as the "Prepayment Related Collateral").
4. After giving effect to the Optional Prepayment and the
release of Prepayment Related Collateral from the Lien of the
Security Agreement on any VFN Prepayment Date, (x) the remaining
VFN Balance MINUS Adjusted Principal Collections shall be less than
or equal to the amount resulting when the effective Advance
Percentage is multiplied by the remaining Pool Balance, (y) none of
the Pool Limitations shall be exceeded and (z) a Termination Event
or Potential Termination Event shall not have resulted;
For purposes of the foregoing, Adjusted Principal Collections means
the product of (i) the effective Advance Percentage, and (ii) the
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amount of Principal Collections on deposit in the Collection
Account as of the close of business on the day preceding the date
of the Servicer's VFN Prepayment Date Certificate.
5. On the related VFN Prepayment Date, the Funding Agent shall
have received, for the benefit of the Secured Parties, in
immediately available funds, an amount equal to the sum of (i) the
portion of the VFN Balance to be prepaid PLUS (ii) an amount equal
to all unpaid Carrying Costs (including Carrying Costs not yet
accrued) to the extent reasonably determined by the Funding Agent
to be attributable to that portion of the Total Investment to be
prepaid PLUS (iii) an aggregate amount equal to the sum of all
other amounts due and owing to the Funding Agent and the Secured
Parties under this Agreement and the other Basic Agreements, to the
extent accrued to such date and to accrue thereafter, as reasonably
determined by the Funding Agent to be attributable to that portion
of the Total Investment to be prepaid.
The Borrower hereby agrees to pay the reasonable legal
fees and expenses of the Funding Agent, PARCO and each APA Bank in
connection with any Optional Prepayment (including, but not limited
to, expenses incurred in connection with the release of the Lien of
the Funding Agent over the Receivables and related Other Conveyed
Property in connection with such Optional Prepayment).
(iii) Although the VFN shall be dated the Closing Date,
Carrying Costs in respect thereof shall be payable in the manner
specified therein and in the other Basic Agreements only for the
periods during which amounts are outstanding thereunder. In
addition, although the stated principal amount of the VFN shall be
equal to the Facility Limit, the VFN shall be enforceable with
respect to the Borrower's obligation to pay the principal thereof
only to the extent of the unpaid principal amount outstanding
thereunder at the time such enforcement shall be sought. Principal
on the VFN shall be payable by the Borrower in the manner and on
the dates specified in the VFN and in the other Basic Agreements.
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(g) CONDITIONS PRECEDENT. The obligations of PARCO and the APA Banks
under this Agreement on any Funding Date are subject to the accuracy of the
representations and warranties on the part of the Borrower made herein and in
the other Basic Agreements as of such Funding Date. This Agreement shall become
effective on the first day on which all of the following conditions precedent
have been satisfied (the "Effective Date"):
(i) The Funding Agent shall have received such opinions of
counsel to the Seller, the Servicer and the Borrower, in form and
substance acceptable to the Funding Agent, addressing such matters as
the Funding Agent, on behalf of the Secured Parties, shall request.
(ii) The Funding Agent shall have received a certificate of
the Borrower, dated the Closing Date, stating that (1) its
representations and warranties made herein and in the other Basic
Agreements are true and correct as of the Closing Date, and (2) the
Borrower has complied with all agreements and satisfied all conditions
to be satisfied on its part pursuant to this Agreement and the other
Basic Agreements on or prior to the Closing Date.
(iii) All conditions precedent to the authentication and
delivery of the VFN under this Agreement shall have been satisfied.
(iv) Each party to a Basic Agreement shall have performed
and complied with all agreements and conditions contained in such
Basic Agreement and all other documents delivered in connection
herewith or therewith which are required to be performed or complied
with by such party.
(v) This Agreement, the other Basic Agreements, the Fee
Letters, the Intercreditor Agreement and all agreements, certificates,
instruments and other documents required to be delivered in connection
herewith and therewith shall have been duly authorized, executed and
delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the
Funding Agent, PARCO and the APA Banks.
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(vi) The Funding Agent shall have received the following, in
each case in form and substance satisfactory to it:
(1) copy of the resolutions of the Board of Directors
of the Borrower, certified by the Secretary or an Assistant Secretary
as of the Closing Date, duly authorizing the execution, delivery and
performance by the Borrower of the documents executed by or on behalf
of the Borrower in connection with the transactions contemplated by
this Agreement and the other Basic Agreements to which it is a party;
and attesting to the names and true signatures of the person or
persons executing and delivering each such document;
(2) a copy of the resolutions of the Board of Directors
of the Seller and the Servicer, certified by the Secretary or an
Assistant Secretary of the Seller and the Servicer as of the Closing
Date, duly authorizing the execution, delivery and performance by the
Seller and the Servicer of each of the Basic Agreements to which each
of them is a party and any other documents executed by or on behalf of
the Seller and the Servicer in connection with the transactions
contemplated thereby; and an incumbency certificate of the Seller and
the Servicer as to the person or persons executing and delivering each
such document; and
(3) such other documents and evidence with respect to
the Borrower, the Seller, the Servicer, the Back-Up Servicer and the
Custodian as the Funding Agent may reasonably request in order to
establish the corporate existence and good standing of each thereof,
the proper taking of all appropriate corporate proceedings in
connection with the transactions contemplated by this Agreement and
the other Basic Agreements and the compliance with the conditions set
forth herein and therein.
(vii) No fact or condition shall exist under applicable law
or applicable regulations thereunder or interpretations thereof by any
regulatory authority which, in the Funding Agent's reasonable opinion,
would make it unlawful to issue the VFN or for the Borrower or any of
the other parties thereto to perform their respective obligations
under this Agreement and the other Basic Agreements.
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(viii) The Seller and the Borrower shall have filed any
financing statements or amendments thereto, wherever necessary or
advisable in the judgment of the Funding Agent, in order to perfect
the transfer and assignment of the Receivables to the Borrower and the
grant of the security interest therein to the Funding Agent and shall
have delivered file-stamped copies of such financing statements or
other evidence of the filing thereof to the Funding Agent.
(ix) All taxes and fees due in connection with the filing of
the financing statements referred to in clause (viii) of this Section
2.1(g) shall have been paid in full or duly provided for.
(x) No action or proceeding shall have been instituted nor
shall any governmental action be threatened before any court or
governmental agency nor shall any order, judgment or decree have been
issued or proposed to be issued by any court or governmental agency to
set aside, restrain, enjoin or prevent the performance of this
Agreement or any of the other Basic Agreements or the transactions
contemplated hereby or thereby.
(xi) The Funding Agent shall have received written
confirmation from each of the Rating Agencies that the then-current
ratings assigned by each of them to PARCO's Commercial Paper will not
be reduced or withdrawn as a result of the execution and delivery of
this Agreement by PARCO.
(xii) The Reserve Account shall have been established
pursuant to the Sale and Servicing Agreement.
(h) MATURITY OF COMMERCIAL PAPER. PARCO shall not issue any
Commercial Paper related to the VFN with a maturity in excess of forty-five (45)
days in connection with any financing or refinancing of an increase in the VFN.
SECTION 2.2 SHARING OF PAYMENTS, ETC. If PARCO or any APA Bank (for
purposes of this Section 2.2 only, being a "RECIPIENT") shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of any interest in the VFN owned by it in excess of its
ratable share of payments on account of any interest in the VFN obtained by
PARCO and/or the APA Banks entitled thereto, such Recipient shall forthwith
purchase from
12
PARCO and/or the APA Banks entitled to a share of such amount participations
in the percentage interests owned by such Persons as shall be necessary to
cause such Recipient to share the excess payment ratably with each such other
Person entitled thereto; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from such Recipient, such
purchase from each such other Person shall be rescinded and each such other
Person shall repay to the Recipient the purchase price paid by such Recipient
for such participation to the extent of such recovery, together with an
amount equal to such other Person's ratable share (according to the
proportion of (a) the amount of such other Person's required payment to (b)
the total amount so recovered from the Recipient) of any interest or other
amount paid or payable by the Recipient in respect of the total amount so
recovered.
SECTION 2.3 RIGHT OF SETOFF. Without in any way limiting the
provisions of Section 2.2, each of PARCO and the APA Banks is hereby authorized
(in addition to any other rights it may have) at any time after the occurrence
of a Termination Event or during the continuance of a Potential Termination
Event to setoff, appropriate and apply (without presentment, demand, protest or
other notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by PARCO or such APA Bank to, or for the account of,
the Borrower against the amount owing by the Borrower hereunder to such Person
(even if contingent or unmatured).
SECTION 2.4 INTEREST. (a) Any Funding (or portion thereof) funded by
PARCO shall have Discount calculated at the CP Rate.
(b) At the option of the Borrower, any Funding (or portion thereof)
made by the APA Banks to the Borrower pursuant to Section 2.1 hereof shall bear
interest at either (i) if available to the Borrower on the related Funding Date,
the Eurodollar Rate plus 1.25% or (ii) the Alternate Base Rate.
(c) If, on any Purchase Date specified in Article V below, no
Termination Event or Potential Termination Event has occurred and is continuing,
then the portion of the Banks' Aggregate Investment related to a Purchase by the
APA Banks on such Purchase Date shall, at the option of the Borrower, bear
interest at either (i) if available to the Borrower on the related Purchase
Date, the Eurodollar Rate plus 1.25% or (ii) the Alternate Base Rate.
(d) If, on any Purchase Date specified in Article V below, a
Termination Event or Potential Termination Event has occurred and is continuing,
13
then the portion of the Banks' Aggregate Investment related to a Purchase by the
APA Banks on such Purchase Date shall bear interest at the Alternate Base Rate
plus 2%.
(e) If any principal of, or interest on, any Funding or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to the
Alternate Base Rate PLUS 2%.
(f) Accrued Interest on each Funding shall be payable in arrears on
each Interest Payment Date for such Funding and upon the Commitment Expiry Date;
PROVIDED that (i) interest accrued pursuant to paragraph (e) of this Section 2.4
shall be payable on demand, (ii) in the event of any repayment of any Funding or
prepayment (other than with respect to a CP Funding) of any Funding, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
ABR Funding or Eurodollar Funding pursuant to Section 2.7, accrued interest on
such ABR Funding or Eurodollar Funding shall be payable on the Distribution Date
occurring immediately after of such conversion.
(g) All interest on Fundings hereunder (other than CP Fundings) shall
be computed on the basis of a year of 360 days, except that interest computed
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate or Eurodollar Rate
shall be determined by the Funding Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.5 PAYMENTS GENERALLY. All payments by the Borrower
hereunder shall be at the times, and in the manner, specified in Section 6.8 of
the Sale and Servicing Agreement. Notwithstanding any provision of this
Agreement or the other Basic Agreements to the contrary, all amounts due and
owing to the Funding Agent and the Secured Parties by the Borrower hereunder and
under the other Basic Agreements (if not due on an earlier date in accordance
with the terms hereof or the other Basic Agreements) will be due and payable on
the Distribution Date occurring in the month sixty-six (66) months following the
Commitment Expiry Date.
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SECTION 2.6 BROKEN FUNDING. In the event of (a) the payment of any
principal of any Eurodollar Funding other than on the last day of a Eurodollar
Funding Period applicable thereto (including as a result of a Termination Event,
Potential Termination Event or Optional Prepayment), (b) the conversion of any
Eurodollar Funding other than on the applicable Interest Payment Date or (c) any
failure to borrow, convert, continue or prepay any Eurodollar Funding on the
date specified in any notice delivered pursuant hereto, then, in any such event,
the Borrower shall compensate the APA Banks for the loss, cost and expense
attributable to such event . Such loss, cost or expense to any APA Bank shall
be deemed to include an amount determined by such APA Bank to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal
amount of such Eurodollar Funding had such event not occurred, at the Eurodollar
Rate that would have been applicable to such Eurodollar Funding, for the period
from the date of such event to the Interest Payment Date therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the related Eurodollar Funding Period), over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate
which such APA Bank would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks
in the interbank eurodollar market. A certificate of any APA Bank setting forth
any amount or amounts that such APA Bank is entitled to receive pursuant to this
Section 2.6 shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay each such APA Bank the amount shown as
due on any such certificate on the next succeeding Distribution Date after
receipt thereof.
SECTION 2.7 CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES MADE
BY THE APA BANKS. Prior to the occurrence of a Termination Event or a Potential
Termination Event, (a) each ABR Funding hereunder may, at the option of the
Borrower, be converted to a Eurodollar Funding and (b) each Eurodollar Funding
may, at the option of the Borrower, be continued as a Eurodollar Funding or
converted to an ABR Funding. If a Termination Event or Potential Termination
Event has occurred and is continuing, then, for so long as any such Termination
Event or Potential Termination Event is continuing, (i) no outstanding Funding
may be converted to, or continued as, a Eurodollar Funding and (ii) unless
repaid, each Eurodollar Funding shall be converted to an ABR Funding on the next
succeeding Interest Payment Date related thereto. For any such conversion or
continuation, the Borrower shall give the Funding Agent irrevocable notice
(each, a "CONVERSION/CONTINUATION NOTICE") of such request not later than
12:30 P.M. (New York time) (i) in the case of a conversion of an ABR Funding
into a Eurodollar
15
Funding, or a continuation of a Eurodollar Funding as a Eurodollar Funding,
three (3) Business Days before the date of such conversion or continuation,
as applicable, and (ii) following the occurrence and continuation of a
Termination Event or a Potential Termination Event, in the case of a
conversion of a Eurodollar Funding into an ABR Funding or a continuation of
an ABR Funding as an ABR Funding, on the Business Day of such conversion. If
a Conversion/Continuation Notice has not been timely delivered with respect
to any ABR Funding or Eurodollar Funding, such Funding shall be automatically
continued as, or converted to, an ABR Funding. Each Conversion/Continuation
Notice shall specify (a) the requested date (which shall be a Business Day)
of such conversion or continuation, (b) the aggregate amount and rate option
applicable to the Funding which is to be converted or continued and (c) the
amount and rate option(s) of Funding(s) into which such Funding is to be
converted or continued.
SECTION 2.8 ILLEGALITY. (a) Notwithstanding any other provision
herein, if, after the Closing Date, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation of any
existing or future Law or bank regulatory guideline by any Official Body
charged with the administration, interpretation or application thereof, or
the compliance with any directive of any Official Body (in the case of any
bank regulatory guideline, whether or not having the force of Law), shall
make it unlawful for any APA Bank to acquire or maintain a Eurodollar Funding
as contemplated by this Agreement, (i) such APA Bank shall promptly, after
becoming aware thereof, notify the Funding Agent and the Borrower thereof,
(ii) the commitment of such APA Bank hereunder to make a portion of a
Eurodollar Funding, continue any portion of a Eurodollar Funding as such and
convert an ABR Funding to a Eurodollar Funding shall forthwith be cancelled,
and such cancellation shall remain in effect so long as the circumstance
described above exists, and (iii) such APA Bank's portion of any Eurodollar
Funding then outstanding shall be converted automatically to an ABR Funding
on the last day of the related Eurodollar Funding Period, or within such
earlier period as required by law.
If any such conversion of a portion of a Eurodollar Funding occurs
on a day which is not the last day of the related Eurodollar Funding Period,
the Borrower shall pay to such APA Bank such amounts, if any, as may be
required to compensate such APA Bank pursuant to Section 2.6 hereof. If
circumstances subsequently change so that it is no longer unlawful for an
affected APA Bank to acquire or to maintain a portion of a Eurodollar Funding
as contemplated hereunder, such APA Bank will, as soon as reasonably
practicable after such APA Bank knows of such change in circumstances, notify
the Borrower, and the Funding Agent, and
16
upon receipt of such notice, the obligations of such APA Bank to acquire or
maintain its acquisition of portions of Eurodollar Fundings or to convert its
portion of an ABR Funding into portions of Eurodollar Fundings shall be
reinstated.
(b) Each APA Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.8(a) with respect to such APA Bank, it
will, if requested by the Borrower and to the extent permitted by law or by the
relevant Official Body, endeavor in good faith to change the office at which it
books its portions of Eurodollar Fundings hereunder if such change would make it
lawful for such APA Bank to continue to acquire or to maintain its acquisition
of portions of Eurodollar Fundings hereunder; PROVIDED, HOWEVER, that such
change may be made in such manner that such APA Bank, in its sole determination,
suffers no unreimbursed cost or expense or any other disadvantage whatsoever.
SECTION 2.9 INABILITY TO DETERMINE EURODOLLAR RATE. If, prior to the
first day of any Eurodollar Period:
(1) the Funding Agent shall have determined (which determination in
the absence of manifest error shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Eurodollar Funding Period; or
(2) the Funding Agent shall have received notice from the Required
Banks that the Eurodollar Rate determined or to be determined for such
Eurodollar Funding Period will not adequately and fairly reflect the cost
to such APA Banks (as conclusively certified by such APA Banks) of
purchasing or maintaining their affected portions of Eurodollar Fundings
during such Eurodollar Funding Period;
then, in either such event, the Funding Agent shall give telecopy or telephonic
notice thereof (confirmed in writing) to the Borrower and the APA Banks as soon
as practicable thereafter. Until such notice has been withdrawn by the Funding
Agent, no further Eurodollar Fundings shall be made. The Funding Agent agrees
to withdraw any such notice as soon as reasonably practicable after the Funding
Agent is notified of a change in circumstances which makes such notice
inapplicable.
SECTION 2.10 FEES. The Borrower hereby agrees to pay to the Funding
Agent, for the account of the Secured Parties (and, if applicable, itself), the
17
Utilization Fee, the Facility Fee and any other fees specified in the Fee
Letters. Such payments shall be made to the Funding Agent on the dates and in
the manner specified in the Fee Letters.
18
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER
SECTION 3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
BORROWER. The Borrower represents and warrants to and covenants with PARCO and
the APA Banks as of the Closing Date and the Initial Funding Date and, except as
otherwise provided herein, as of each Subsequent Funding Date that:
(a) CORPORATE EXISTENCE AND POWER. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is now conducted.
(b) CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The
execution, delivery and performance by the Borrower of this Agreement and the
other Basic Agreements to which it is a party are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official, and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the Certificate of Incorporation
or Bylaws of the Borrower or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Borrower or result in the creation
or imposition of any Lien on assets of the Borrower (other than the Lien of the
Security Agreement), or require the consent or approval of, or the filing of any
notice or other documentation with, any governmental authority or other Person.
(c) BINDING EFFECT. Each of this Agreement and the other Basic
Agreements to which it is a party constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors.
(d) ACCURACY OF INFORMATION. All information heretofore furnished
by the Borrower to PARCO, the APA Banks or the Funding Agent for purposes of,
or in connection with, this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to PARCO,
the APA Banks or
19
the Funding Agent will be, true and accurate in every material respect, on
the date such information is stated or certified.
(e) TAX STATUS. All tax returns (Federal, state and local)
required to be filed with respect to the Borrower have been filed (which
filings may be made by an Affiliate of the Borrower on a consolidated basis
covering the Borrower and other Persons), and there has been paid or adequate
provision made for the payment of all taxes, assessments and other
governmental charges in respect of the Borrower (or in the event consolidated
returns have been filed, with respect to the Persons subject to such returns).
(f) ACTION, SUITS. There are no actions, suits or proceedings
pending or threatened against or affecting the Borrower or any Affiliate of
the Borrower or their respective properties, in or before any court,
arbitrator or other body, which may have a material adverse effect on the
Borrower's ability to perform its obligations hereunder or under the other
Basic Agreements.
(g) USE OF PROCEEDS. The proceeds of any Funding will be used by
the Borrower to acquire the Receivables and related Other Conveyed Property
with respect thereto from the Seller pursuant to the Sale and Servicing
Agreement.
(h) PLACE OF BUSINESS. The chief place of business and chief
executive office of the Borrower are located at 1325 Airmotive Way, Suite
130, Reno, Nevada, and the offices where the Borrower keeps all of its books
and records are located at 1325 Airmotive Way, Reno, Nevada.
(i) MERGER AND CONSOLIDATION. The Borrower has not changed its
name, merged with or into or been consolidated with any other corporation or
been the subject of any proceeding under Title 11, United States Code
(Bankruptcy).
(j) SOLVENCY. The Borrower is not insolvent and will not be
rendered insolvent immediately following the consummation on the Closing
Date, the Initial Funding Date and any Subsequent Funding Date of the
transactions contemplated by this Agreement and the other Basic Agreements,
including (but not limited to) the pledge by the Borrower to the Funding
Agent of the Collateral in accordance with the Security Agreement.
(k) NO TERMINATION EVENT. After giving effect to the Funding, no
Potential Termination Event or Termination Event exists.
20
(l) COMPLIANCE. The Borrower has complied in all material respects
with all Requirements of Law in respect of the conduct of its business and
ownership of its property.
(m) NOT AN INVESTMENT COMPANY. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, or is exempt from all provisions of such Act.
(n) ERISA. The Borrower is in compliance in all material respects
with ERISA, and no lien in favor of the Pension Benefit Guaranty Corporation
on any of the Receivables or Other Conveyed Property shall exist.
(o) SUBSIDIARIES. The Borrower does not have any Subsidiaries.
(p) CAPITAL STOCK. The Borrower has neither sold nor pledged any
of its common stock to any entity other than the Seller.
(q) NO MATERIAL ADVERSE CHANGE. Since June 30, 1997, there has
been no material adverse change in the business, assets, operations,
prospects or conditions (financial or otherwise) of the Seller or the
Servicer, either individually or taken as a whole. Since September 25, 1997,
there has been no material adverse change in the business, assets,
operations, prospects or conditions (financial or otherwise) of the Borrower.
(r) FINANCIAL REPORTING. The Borrower will maintain for itself a
system of accounting established and administered in accordance with GAAP,
and will furnish to the Funding Agent for the benefit of the Secured Parties:
(i) QUARTERLY REPORTING. Within forty-five (45) days after
the close of each quarterly period of each of the Borrower's fiscal
years, for the Borrower, consolidated and consolidating unaudited
balance sheets as at the close of each such period and consolidated
and consolidating related statements of operations and cash flows for
the period from the beginning of such fiscal year to the end of such
quarter, all certified by an Authorized Officer of the Borrower.
(ii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate signed by an
Authorized Officer of the Borrower stating that (x) the attached
21
financial statements have been prepared in accordance with generally
accepted accounting principles and accurately reflect the financial
condition of the Borrower and (y) to the best of such Person's
knowledge, no Termination Event or Potential Termination Event exists,
or if any Termination Event or Potential Termination Event exists,
stating the nature and status thereof.
(s) CHARACTERISTICS OF RECEIVABLES. Each of the statements listed on
Schedule A to the Security Agreement is true and correct on the Initial Funding
Date and any Subsequent Funding Date with respect to each Receivable to be
purchased on such date.
Any document, instrument, certificate or notice delivered to PARCO,
the Funding Agent or the APA Banks by, or on behalf of, the Borrower or its
Affiliates hereunder or under the other Basic Agreements shall be deemed a
representation and warranty by the Borrower.
The representations and warranties set forth in this Section 3.1 shall
survive the pledge and assignment of the Collateral to the Funding Agent for the
benefit of the Secured Parties. Upon discovery by the Borrower, PARCO, the
Funding Agent or an APA Bank of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others.
22
ARTICLE IV
INDEMNIFICATION
SECTION 4.1 INDEMNITY. Without limiting any other rights which
PARCO or the APA Banks may have hereunder or under applicable law, the
Borrower agrees to indemnify PARCO, the APA Banks and the Funding Agent and
any of their permitted assigns and their respective agents, officers,
directors and employees (collectively, "INDEMNIFIED PARTIES") from and
against any and all damages, losses, claims, liabilities, costs and expenses,
including reasonable attorneys' fees (which such attorneys may be employees
of PARCO, the APA Banks and the Funding Agent) 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 as a result of this
Agreement and the other Basic Agreements, excluding, however, (i) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct
on the part of an Indemnified Party or (ii) recourse (except as otherwise
specifically provided in this Agreement and the other Basic Agreements) for
uncollectible Receivables and Other Conveyed Property. Such Indemnified
Amounts shall be paid in accordance with the terms of the other Basic
Agreements. Without limiting the generality of the foregoing, the Borrower
shall indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(a) reliance on any representation or warranty made by the Borrower
(or any officers of the Borrower) under or in connection with this Agreement
and the other Basic Agreements, any Funding Request or any other information
or report delivered by the Borrower pursuant hereto or thereto, which shall
have been false or incorrect in any material respect when made or deemed made;
(b) the failure by the Borrower to comply with any applicable law,
rule or regulation with respect to the Collateral, or the nonconformity of
the Collateral with any such applicable law, rule or regulation;
(c) the failure to vest and maintain vested in the Funding Agent a
first priority perfected security interest in the Collateral, free and clear
of any Lien (other than the Lien of the Security Agreement);
(d) the failure to file, or any delay in filing, financing statements,
continuation statements, or other similar instruments or documents under the UCC
of any applicable jurisdiction or other applicable laws with respect to all or
any part of
23
the Collateral, which failure has an adverse effect on the validity,
perfected status or priority of the security interest granted to the Funding
Agent under the Security Agreement;
(e) any valid dispute, claim, offset or defense (other than
discharge in bankruptcy of the related Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on such
Receivable not being legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of a Financed Vehicle or services related to such
Receivable or the furnishing or failure to furnish such Financed Vehicle or
services;
(f) any failure of the Borrower to perform its duties, covenants or
obligations in accordance with the provisions of Articles II and IV of the
Security Agreement; or
(g) any product liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with the related Financed Vehicle or related
merchandise or services which are the subject of any Receivable;
PROVIDED, HOWEVER, that if PARCO enters into agreements for the purchase of
interests in receivables from one or more Other Transferors, PARCO shall
allocate such Indemnified Amounts which are in connection with its activities
to the Borrower and each Other Transferor; and PROVIDED, FURTHER, that if
such Indemnified Amounts are attributable to the Borrower and not
attributable to any Other Transferor, the Borrower shall be solely liable for
such Indemnified Amounts or, if such Indemnified Amounts are attributable to
Other Transferors and not attributable to the Borrower, such Other
Transferors shall be solely liable for such Indemnified Amounts.
SECTION 4.2 INDEMNITY FOR RESERVES AND EXPENSES. (a) If after the
date hereof, the adoption of any Law or bank regulatory guideline or any
amendment or change in the interpretation of any existing or future Law or
bank regulatory guideline by any Official Body charged with the
administration, interpretation or application thereof, or the compliance with
any directive of any Official Body (in the case of any bank regulatory
guideline, whether or not having the force of Law):
24
(1) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System) against assets of, deposits with or for
the account of, or credit extended by, any Indemnified Party or shall
impose on any Indemnified Party or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting this Agreement, the other Basic Agreements, the
Collateral or payments of amounts due hereunder or thereunder or its
obligation to advance funds under any agreement or otherwise in
respect of this Agreement, the other Basic Agreements or the
Collateral; or
(2) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
other Basic Agreements, the Collateral or payments of amounts due
hereunder or thereunder or its obligation to advance funds under any
agreement or otherwise in respect of this Agreement, the other Basic
Agreements or the Collateral;
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Basic Agreements,
the Collateral and the obligations hereunder and thereunder, by an amount
reasonably deemed by such Indemnified Party to be material, then, on the next
succeeding Distribution Date after demand by the Funding Agent, the Borrower
shall pay to the Funding Agent, for the benefit of such Indemnified Party,
such additional amount or amounts as will compensate such Indemnified Party
for such increased cost; PROVIDED that no such amount shall be payable with
respect to any period commencing more than two hundred seventy (270) days
prior to the date the Funding Agent first notifies the Borrower of its
intention to demand compensation therefor under this Section 4.2(a); PROVIDED
FURTHER that if such change in Law, rule or regulation giving rise to such
increased costs or reductions is retroactive, then such 270-day period shall
be extended to include the period of retroactive effect thereof.
(b) If any Indemnified Party shall have determined that after the date
hereof, the adoption of any applicable Law or bank regulatory guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation thereof
25
by any Official Body, or any directive regarding capital adequacy (in the
case of any bank regulatory guideline, whether or not having the force of
law) of any such Official Body, has or would have the effect of reducing the
rate of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with respect
hereto to a level below that which such Indemnified Party (or its parent)
could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by
an amount reasonably deemed by such Indemnified Party to be material, then
from time to time, within ten (10) days after demand by the Funding Agent,
the Borrower shall pay to the Funding Agent, for the benefit of such
Indemnified Party, such additional amount or amounts as will compensate such
Indemnified Party (or its parent) for such reduction; PROVIDED that no such
amount shall be payable with respect to any period commencing two hundred
seventy (270) days prior to the date the Funding Agent first notifies the
Borrower of its intention to demand compensation under this Section 4.2(b);
PROVIDED FURTHER that if such change in Law, rule or regulation giving rise
to such increased costs or reductions is retroactive, then such 270-day
period shall be extended to include the period of retroactive effect thereof.
(c) The Funding Agent will promptly notify the Borrower of any
event of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Article IV. A
notice by the Funding Agent claiming compensation for the benefit of an
Indemnified Party under this Article IV and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, the Funding Agent may
use any reasonable averaging and attributing methods.
(d) Anything in this Section 4.2 to the contrary notwithstanding,
if PARCO enters into agreements for the acquisition of interests in
receivables from one or more Other Transferors, PARCO shall allocate the
liability for any amounts under this Section 4.2 ("SECTION 4.2 COSTS")
ratably to the Borrower and each Other Transferor; and PROVIDED, FURTHER,
that if such Section 4.2 Costs are attributable to the Borrower and not
attributable to any Other Transferor, the Borrower shall be solely liable for
such Section 4.2 Costs or if such Section 4.2 Costs are attributable to Other
Transferors and not attributable to the Borrower, such Other Transferors
shall be solely liable for such Section 4.2 Costs.
SECTION 4.3 INDEMNITY FOR TAXES. (a) All payments made by the
Borrower under this Agreement and any other Transaction Document shall be made
26
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Official Body, EXCLUDING (i) taxes
imposed on the net income of the Funding Agent or any other Indemnified
Party, however denominated, and (ii) franchise taxes imposed on any of them
in lieu of income taxes, in each case imposed: (1) by the United States or
any political subdivision or taxing authority thereof or therein; (2) by any
jurisdiction under the laws of which the Funding Agent or such Indemnified
Party or lending office is organized or in which its lending office is
located, managed or controlled or in which its principal office is located or
any political subdivision or taxing authority thereof or therein; or (3) by
reason of any connection between the jurisdiction imposing such tax and the
Funding Agent, such Indemnified Party or such lending office other than a
connection arising solely from this Agreement or any other Basic Agreement or
any transaction hereunder or thereunder (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, collectively or
individually, "TAXES"). If any such Taxes are required to be withheld from
any amounts payable to the Funding Agent or any Indemnified Party hereunder,
the amounts so payable to the Funding Agent or such Indemnified Party shall
be increased to the extent necessary to yield to the Funding Agent or such
Indemnified Party (after payment of all Taxes) all amounts payable hereunder
at the rates or in the amounts specified in this Agreement and the other
Basic Agreements. The Borrower shall indemnify the Funding Agent or any such
Indemnified Party for the full amount of any such Taxes on the Distribution
Date immediately succeeding the date of written demand therefor by the
Funding Agent or any Indemnified Party.
(b) Each Indemnified Party that is not incorporated under the laws
of the United States of America or a state thereof or the District of
Columbia shall:
(i) deliver to the Borrower and the Funding Agent (A) two duly
completed copies of IRS Form 1001 or Form 4224, or successor applicable
form, as the case may be, and (B) if applicable, an IRS Form W-8 or W-9, or
successor applicable form, as the case may be;
(ii) deliver to the Borrower and the Funding Agent two (2)
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
27
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the Borrower
or the Funding Agent;
unless, in any such case, an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Indemnified Party from duly
completing and delivering any such form with respect to it, and such
Indemnified Party so advises the Borrower and the Funding Agent. Each such
Indemnified Party so organized shall certify (i) in the case of an IRS Form
1001 or IRS Form 4224, that it is entitled to receive payments under the this
Agreement and the other Basic Agreements without deduction or withholding of
any United States federal income taxes and (ii) in the case of an IRS Form
W-8 or IRS Form W-9, that it is entitled to an exemption from United States
backup withholding tax. Each Person that is a Purchaser or Participant
hereunder, or which otherwise becomes a party to this Agreement as an APA
Bank, shall, prior to the effectiveness of such assignment, participation or
addition, as applicable, be required to provide all of the forms and
statements required pursuant to this Section 4.3.
SECTION 4.4 OTHER COSTS, EXPENSES AND RELATED MATTERS. (a) The
Borrower agrees, upon receipt of a written invoice, to pay or cause to be
paid, and to save PARCO and the Funding Agent harmless against liability for
the payment of, all reasonable out-of-pocket expenses (including, without
limitation, all reasonable attorneys', accountant's and other third parties'
fees and expenses, any filing fees and expenses incurred by officers or
employees of PARCO or the Funding Agent) incurred by or on behalf of PARCO,
any APA Bank or the Funding Agent (i) in connection with the negotiation,
execution, delivery and preparation of this Agreement and the other Basic
Agreements and any documents or instruments delivered pursuant hereto or
thereto and the transactions contemplated hereby and thereby (subject to the
terms of that certain engagement letter, dated as of June 24, 1997, between
the Seller and The Chase Manhattan Bank) and (ii) from time to time (a)
relating to any amendments, waivers or consents under this Agreement and the
other Basic Agreements, (b) arising in connection with PARCO's, the APA
Banks' or their respective agents' enforcement or preservation of rights
(including, without limitation, the perfection and protection of the Funding
Agent's first priority security interest in the Collateral), or (c) arising
in connection with any audit, dispute, disagreement, litigation or
preparation for litigation involving this Agreement.
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ARTICLE V
LIQUIDITY COMMITMENT
SECTION 5.1 LIQUIDITY PURCHASES. (a) SALES BY PARCO. From time
to time prior to the Commitment Expiry Date, PARCO, in its sole discretion,
may elect to deliver a Sale Notice to the Funding Agent or, following a PARCO
Wind-Down Event, shall be obligated to deliver a Sale Notice to the Funding
Agent. Each Sale Notice shall constitute an irrevocable offer by PARCO to
sell all or a portion of the PARCO Interest at the Purchase Price; PROVIDED
that, following a PARCO Wind-Down Event, the Assigned Percentage specified in
any such Sale Notice shall be 100%. Each Sale Notice shall be deemed to be a
representation and warranty by PARCO that no PARCO Insolvency Event shall
have occurred and be continuing. Each APA Bank hereby agrees to purchase
from PARCO such APA Bank's Pro Rata Share of the Assigned Percentage of PARCO
Interest for a purchase price equal to such APA Bank's Pro Rata Share of the
Purchase Price on the Purchase Date (which date, subject to Section 5.1(b)
below, may be the same as the date of the Sale Notice); PROVIDED that no such
purchase shall be made on a Purchase Date if a PARCO Insolvency Event shall
have occurred and be continuing. The Funding Agent shall promptly advise
each APA Bank (by telecopy or by telephone call promptly confirmed in writing
by telecopy) of the receipt and content of the Sale Notice and shall promptly
advise PARCO of each APA Bank's Pro Rata Share of the Purchase Price
thereunder. The Purchase Price shall be deposited in immediately available
funds into the account(s) specified by PARCO in the Sale Notice.
(b) TIMING OF SALE NOTICE AND PURCHASE DATE. If, at or prior to
12:30 P.M. (New York time) on any Business Day, PARCO delivers the Sale
Notice to the Funding Agent specifying that the Purchase Date shall be the
same date as the date of the Sale Notice, the Funding Agent shall, by no
later than 1:00 P.M. (New York time), notify each APA Bank of such Sale
Notice. Each APA Bank shall make a purchase of the PARCO Interest by
advancing immediately available funds on such date to PARCO's account at the
principal office of the Funding Agent no later than 2:00 P.M. (New York
time). Notwithstanding the fact that the Purchase Date may occur on a date
which is later than the date on which the Sale Notice is delivered to the
Funding Agent, the several obligations of each APA Bank to accept such
transfer and to make payment of the amounts required to be paid by it
pursuant to Section 5.2 shall arise immediately upon receipt by the Funding
Agent of the Sale Notice. Regardless of when the Sale Notice is received,
any APA Bank may designate any one or more of its domestic or foreign
branches, offices or affiliates through which it
29
will fund its Pro Rata Share of the Purchase Price for a Purchase, and the
term "APA Bank" shall include any such branch, office or affiliate for such
purpose.
SECTION 5.2 SEVERAL PURCHASE COMMITMENTS OF THE APA BANKS.
(a) FUNDING UPON RECEIPT OF A SALE NOTICE FROM PARCO. Subject to
Section 5.1, each APA Bank hereby absolutely and unconditionally severally
commits to PARCO and to the Funding Agent to provide the Funding Agent, on
the Purchase Date (if notice has been given in accordance with Section 5.1
(b)) at the principal office of the Funding Agent in The City of New York for
delivery to PARCO, with immediately available funds in an amount equal to
such APA Bank's Pro Rata Share of the Purchase Price, whereupon such APA Bank
shall become an assignee of PARCO under this Agreement and the other Basic
Agreements with an undivided interest in the Collateral equal to its Pro Rata
Share of the Assigned Percentage of the PARCO Interest. The APA Banks'
several obligations under this Section 5.2(a) to provide the Funding Agent
with funds pursuant to this Article V shall terminate on the Commitment
Expiry Date. Notwithstanding anything contained in this Section 5.2(a) or
elsewhere in this Agreement to the contrary, no APA Bank shall be obligated
to provide the Funding Agent with aggregate funds in connection with a
Purchase in an amount that would exceed such APA Bank's unused Commitment
then in effect, and the failure of any APA Bank to make its Pro Rata Share of
the Purchase Price available to the Funding Agent shall not relieve any other
APA Bank of its obligations hereunder.
(b) DEFAULTING APA BANKS. If, by 2:00 P.M. (New York time), one or
more APA Banks (each, a "DEFAULTING APA BANK", and each APA Bank other than
the Defaulting APA Bank being referred to as a "NON-DEFAULTING APA BANK")
fails to make its Pro Rata Share of the Purchase Price available to the
Funding Agent pursuant to Section 2.1(a) (the aggregate amount not so made
available to the Funding Agent being herein called the "PURCHASE PRICE
DEFICIT"), then the Funding Agent shall, by no later than 2:30 P.M. (New York
time), instruct each Non-Defaulting APA Bank to pay, by no later than 3:00
P.M. (New York time), in immediately available funds, to the account
designated by the Funding Agent, an amount equal to the lesser of (x) such
Non-Defaulting APA Bank's proportionate share (based upon the relative
Commitments of the Non-Defaulting APA Banks) of the Purchase Price Deficit
and (y) its unused Commitment. A Defaulting APA Bank shall forthwith, upon
demand, pay to the Funding Agent, for the ratable benefit of the
Non-Defaulting APA Banks, all amounts paid by each Non-Defaulting APA Bank on
behalf of such Defaulting APA Bank, together with interest thereon, for each
day
30
from the date a payment was made by a Non-Defaulting APA Bank until the date
such Non-Defaulting APA Bank has been paid such amounts in full, at a rate
per annum equal to the sum of the Federal Funds Effective Rate plus 2% (or
such higher rate as is applicable through interbank compensation rules). In
addition, without prejudice to any other rights that PARCO may have under
applicable law, each Defaulting APA Bank shall pay to PARCO forthwith upon
demand, the difference between the Defaulting APA Bank's unpaid Pro Rata
Share of the Purchase Price and the amount paid with respect thereto by the
Non-Defaulting APA Banks, together with interest thereon, for each day from
the date of the Funding Agent's request for such Defaulting APA Bank's Pro
Rata Share of the Purchase Price pursuant to Section 5.1(b) until the date
the requisite amount is paid to PARCO in full, at a rate per annum equal to
the sum of the Federal Funds Effective Rate plus 2% (or such higher rate as
is applicable through interbank compensation rules).
SECTION 5.3 NONRECOURSE NATURE OF TRANSACTIONS. Each of the
Funding Agent and the APA Banks hereby agrees that all Purchases under this
Article V shall be without recourse, representation or warranty of any kind
to PARCO or the Funding Agent.
SECTION 5.4 PAYMENTS; INDEMNITY. (a) PAYMENTS GENERALLY. On or
prior to the Closing Date, the Funding Agent shall establish a demand deposit
account with Chase for the benefit of PARCO and the APA Banks (the "FUNDING
ACCOUNT"), into which all payments received in respect of this Agreement and
the other Basic Agreements shall be deposited. The Funding Agent, on behalf
of PARCO and the APA Banks, shall have the sole right of withdrawal from the
Funding Account. For so long as any amounts remain due and owing to PARCO or
the APA Banks hereunder or under the other Basic Agreements, the Funding
Agent shall distribute all payments received by it in respect of the Basic
Agreements immediately after receipt thereof by (i) transferring PARCO's Pro
Rata Share of any such payments to PARCO and (ii) immediately after giving
effect to the payment in clause (a)(i), if any, transferring the remainder of
any such payments to the APA Banks ratably in accordance with their Pro Rata
Shares (calculated without regard to that portion of the Commitment of a
Defaulting APA Bank which such Defaulting APA Bank failed to fund pursuant to
this Agreement). Such transfers shall be made by the Funding Agent by
withdrawing funds on deposit in the Funding Account and by remitting such
funds to the accounts of PARCO and the several APA Banks specified by each of
them from time to time.
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(b) REQUESTS FOR INDEMNITY UNDER THE BASIC AGREEMENTS. The Funding
Agent shall, at the written request of any APA Bank, make demand of PARCO for
payment of any amounts held by PARCO from time to time claimed by such APA
Bank pursuant to this Agreement and the other Basic Agreements, and the
Funding Agent shall, upon its receipt of such amounts, distribute them to
each such APA Bank ratably in accordance with their respective Pro Rata
Shares (calculated, in the case of each Defaulting APA Bank, without regard
to that portion of its Commitment related to which such Defaulting APA Bank
failed to fund pursuant to this Agreement).
(c) PAYMENTS CONDITIONAL UPON RECEIPT FROM PARCO, THE BORROWER, THE
SELLER OR THE SERVICER. Anything in this Agreement to the contrary
notwithstanding, the Funding Agent (i) shall have no obligation to make any
payments to the APA Banks unless and until it has received such amounts from
PARCO, the Borrower, the Seller or the Servicer pursuant to this Agreement or
the other Basic Agreements and (ii) shall be entitled to assume that such
amounts have been paid by PARCO, the Borrower, the Seller or the Servicer
absent notice to the contrary.
SECTION 5.5 REDUCTION OF COMMITMENTS. The Aggregate Commitment
shall be automatically reduced, ratably among the APA Banks, by the amount of
any permanent reduction of the Facility Limit. The Funding Agent shall
notify the APA Banks and each Rating Agency of the occurrence of any such
reduction specified in the immediately preceding sentence promptly after the
Funding Agent (individually or in its capacity as Funding Agent) becomes
aware of the same. In addition to the foregoing, the Commitment of each APA
Bank and the Aggregate Commitment shall be reduced to zero on the Commitment
Expiry Date.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF THE APA BANKS
SECTION 6.1 REPRESENTATIONS AND WARRANTIES OF THE APA BANKS TO
PARCO AND THE FUNDING AGENT. Each of the APA Banks (a) confirms that it has
received copies of the Basic Agreements; (b) represents and warrants to the
Funding Agent and PARCO that it has, independently and without reliance upon
the Funding Agent, PARCO or any other APA Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial
and other conditions and creditworthiness of the Seller, the Servicer, the
Borrower, the Custodian, any Hedge Counterparty, the Back-Up Servicer and
the Obligors, and made its own decision to enter into this Agreement; (c)
represents that it will, independently and without reliance upon the Funding
Agent, PARCO or any other APA Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Basic Agreements, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, prospects, financial and other condition and
creditworthiness of the Seller, the Servicer, the Borrower, the Custodian,
any Hedge Counterparty, the Back-Up Servicer and the Obligors; (d) represents
and warrants that it is a corporation or a banking association duly organized
and validly existing under the laws of its jurisdiction of incorporation or
organization and has all corporate power to perform its obligations
hereunder; (e) represents and warrants that 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 it of this Agreement, which has not otherwise been obtained;
(f) represents and warrants that the execution, delivery and performance of
this Agreement are within its corporate powers, have been duly authorized by
all necessary corporate action, do not contravene or violate (i) its
certificate or articles of incorporation or association or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any adverse claim on its assets, which
contravention or violation in any of the foregoing cases could have a
material adverse effect on its financial condition or its ability to perform
its obligations hereunder; (g) represents
33
and warrants that this Agreement constitutes its legal, valid and binding
obligations enforceable against it in accordance with their terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to limiting creditors' rights
generally and by equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and (h)
represents and warrants that this Agreement has been duly authorized,
executed and delivered by it.
SECTION 6.2 PARCO DISCLAIMER OF REPRESENTATIONS AND WARRANTIES.
By executing and delivering any Sale Notice pursuant to Section 5.2(a), (a)
PARCO makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement and the other Basic Agreements or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement and the other Basic Agreements, or any other
instrument or document furnished pursuant hereto or thereto or in connection
herewith or therewith, and (b) PARCO makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Seller, the Servicer, the Borrower, the Custodian, any Hedge Counterparty,
the Back-Up Servicer or any Obligor or the performance or observance by such
Persons of any of their respective obligations under this Agreement, the
other Basic Agreements or any other instrument or document furnished pursuant
hereto or thereto or in connection herewith or therewith.
34
ARTICLE VII
THE FUNDING AGENT
SECTION 7.1 APPOINTMENT. Each Secured Party hereby irrevocably
designates and appoints Chase as Funding Agent hereunder, and authorizes the
Funding Agent to take such action on its behalf under the provisions of this
Agreement and the other Basic Agreements and to exercise such powers and
perform such duties as are expressly delegated to the Funding Agent by the
terms of this Agreement and the other Basic Agreements, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Funding Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Secured Party, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Funding Agent shall be read into this
Agreement or the other Basic Agreements or otherwise exist against the
Funding Agent. The provisions of this Article VII are solely for the benefit
of the Funding Agent and the Secured Parties, and neither the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty nor the Back-Up
Servicer shall have any rights as a third party beneficiary or otherwise
under any of the provisions hereof. In performing its functions and duties
hereunder, the Funding Agent shall act solely as the funding agent of the
Secured Parties and does not assume, nor shall be deemed to have assumed, any
obligation or relationship of trust or agency with or for the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty or the Back-Up
Servicer.
SECTION 7.2 DELEGATION OF DUTIES. The Funding Agent may execute
any of its duties under this Agreement and the other Basic Agreements by or
through its subsidiaries, affiliates, agents or attorneys-in-fact, and the
Funding Agent shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Funding Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
SECTION 7.3 EXCULPATORY PROVISIONS. Neither the Funding Agent nor
any of its directors, officers, agents or employees shall be (a) liable for
any action lawfully taken or omitted to be taken by it or them or any Person
described in Section 7.2 under or in connection with this Agreement, the
Receivables, the other Conveyed Property or the other Basic Agreements
(except for its, their or such Person's own gross negligence or willful
misconduct), or (b) responsible in any
35
manner to any of the Secured Parties, the Borrower, the Seller, the Servicer,
the Custodian, any Hedge Counterparty or the Back-Up Servicer for any
recitals, statements, representations or warranties contained in the Basic
Agreements or in any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, such
agreements or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Receivables, the Other Conveyed Property
or the Basic Agreements, or any other document furnished in connection
therewith or herewith, or for any failure of any Person (other than itself
and the Persons specified in Section 7.2) to perform its obligations under
any Basic Agreement or for the satisfaction of any condition specified in any
Basic Agreement. Except as expressly set forth in the Basic Agreements, the
Funding Agent shall not be under any obligation to any Secured Party to
ascertain or to inquire as to the observance or performance of any of the
agreements or covenants contained in, or conditions of, the Receivables, the
Other Conveyed Property or the Basic Agreements, or to inspect the
properties, books or records of the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty or the Back-Up Servicer.
SECTION 7.4 RELIANCE BY FUNDING AGENT. The Funding Agent shall,
in all cases, be entitled to rely, and shall be fully protected in relying,
upon any note, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without
limitation, counsel to each of the Secured Parties and the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty and the Back-Up
Servicer), independent accountants and other experts selected by the Funding
Agent. The Funding Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement, the other Basic Agreements,
the Receivables or the Other Conveyed Property or any other document
furnished in connection herewith or therewith unless it shall first receive
such advice or concurrence of the Required Banks or all of the APA Banks, as
the case may be, as it deems appropriate, or it shall first be indemnified to
its satisfaction by all of the APA Banks against any and all liability, cost
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Funding Agent shall, in all cases, be fully
protected in acting, or in refraining from acting, under this Agreement, the
other Basic Agreements, the Receivables or the Other Conveyed Property or any
other document furnished in connection herewith or therewith in accordance
with a request of the Required Banks or all of the APA Banks, as applica-
36
ble, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Secured Parties.
SECTION 7.5 NOTICE OF TERMINATION EVENT AND OTHER EVENTS; VOTING.
The Funding Agent shall not be deemed to have knowledge or notice of the
occurrence of any Termination Event, Potential Termination Event, PARCO
Wind-Down Event or Potential PARCO Wind-Down Event unless the Funding Agent
has received notice from the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty, the Back-Up Servicer or any Secured Party
referring to any Basic Agreement stating that such an event has occurred and
describing such event. If the Funding Agent receives such a notice, the
Funding Agent shall promptly give notice thereof to each Secured Party and
each Rating Agency. Subject to the provisions of Section 8.l(b), to the
extent the Funding Agent is entitled to consent to or withhold its consent of
any waiver or amendment of any Basic Agreement in accordance with the terms
thereof, the Funding Agent shall (a) give prompt notice to the Secured
Parties and Rating Agencies of any such waiver or amendment of which it is
aware, and (b) take such action with respect to such waiver, amendment,
Termination Event, Potential Termination Event, PARCO Wind-Down Event or
Potential PARCO Wind-Down Event as shall be directed by the Required Banks;
PROVIDED, HOWEVER, that unless and until the Funding Agent shall have
received such directions, the Funding Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Termination Event, Potential Termination Event, PARCO Wind-Down Event or
Potential PARCO Wind-Down Event as the Funding Agent shall deem advisable and
in the best interests of the APA Banks.
SECTION 7.6 NON-RELIANCE BY APA BANKS ON FUNDING AGENT AND OTHER
APA BANKS. Each APA Bank expressly acknowledges that neither the Funding
Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Funding Agent hereafter taken, including, without
limitation, any review of the affairs of PARCO, the Borrower, the Seller, the
Servicer, the Custodian, any Hedge Counterparty or the Back-Up Servicer,
shall be deemed to constitute any representation or warranty by the Funding
Agent. The Funding Agent shall not have any duty or responsibility to
provide any APA Bank with any credit or other information concerning the
business, operations, property, prospects, financial and other condition or
creditworthiness of PARCO, the Borrower, the Seller, the Servicer, the
Custodian, any Hedge Counterparty or the Back-Up Servicer which may come into
the possession of the Funding Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
37
SECTION 7.7 INDEMNIFICATION. The APA Banks agree to indemnify the
Funding Agent and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Borrower or any other Person
pursuant to a Basic Agreement, and without limiting the obligation of any
such Person to do so in accordance with the terms of the Basic Agreements),
ratably according to their Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for the Funding Agent or the affected Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Funding Agent or such affected Person shall be designated
a party thereto) that may at any time be imposed on, incurred by or asserted
against the Funding Agent or such affected Person as a result of, or arising
out of, or in any way related to or by reason of, any of the transactions
contemplated hereunder or under the Agreement or the execution, delivery or
performance of this Agreement, the Receivables, the Other Conveyed Property,
any other Basic Agreement or any other document furnished in connection
herewith or therewith (but excluding any such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful
misconduct of the Funding Agent or such affected Person).
SECTION 7.8 FUNDING AGENT IN ITS INDIVIDUAL CAPACITY. The Funding
Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with PARCO, the Borrower, the
Seller, the Servicer, the Custodian, any Hedge Counterparty or the Back-Up
Servicer or any Affiliate of such Persons as though the Funding Agent were
not the Funding Agent hereunder. With respect to the acquisition of its
Assigned Percentage of a Purchase Price pursuant to this Agreement, the
Funding Agent shall have the same rights and powers under this Agreement and
the other Basic Agreements as any APA Bank and may exercise the same as
though it were not the Funding Agent, and the terms "APA Bank" and "APA
Banks" shall include the Funding Agent in its individual capacity as an APA
Bank.
SECTION 7.9 SUCCESSOR FUNDING AGENT. Subject to the appointment
and acceptance of a successor Funding Agent as provided in this Section 7.9,
the Funding Agent may, upon five (5) days' notice to PARCO, the APA Banks and
the Rating Agencies, and the Funding Agent will, upon the direction of the
Required Banks (calculated without regard to the Pro Rata Share of Chase or
any Affiliate of Chase), resign as Funding Agent; PROVIDED, in either case,
that an APA Bank agrees
38
to become the successor Funding Agent hereunder in accordance with the next
sentence. If the Funding Agent shall resign as Funding Agent under this
Agreement, then the Required Banks during such period shall appoint, from
among the APA Banks, a successor agent, whereupon such successor agent shall
succeed to the rights, powers and duties of the Funding Agent, and the term
"Funding Agent" shall mean such successor agent, effective upon its
acceptance of such appointment, and the former Funding Agent's rights, powers
and duties as Funding Agent shall be terminated, without any other or further
act or deed on the part of such former Funding Agent or any of the parties to
this Agreement. After the retiring Funding Agent's resignation hereunder as
Funding Agent, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Funding
Agent under this Agreement.
SECTION 7.10 CHASE CONFLICT WAIVER. Chase acts as PARCO's
administrative agent, as issuing and paying agent for PARCO's Commercial
Paper, as provider of other backup facilities for PARCO, and may provide
other services or facilities from time to time (the "CHASE ROLES"). Without
limiting the generality of Section 7.8, each party hereto hereby acknowledges
and consents to any and all Chase Roles, waives any objections it may have to
any actual or potential conflict of interest caused by Chase's acting as the
Funding Agent or as an APA Bank hereunder and acting as or maintaining any of
the Chase Roles, and agrees that in connection with any Chase Role, Chase may
take, or refrain from taking, any action which it in its discretion deems
appropriate. The APA Banks are hereby notified that PARCO may delegate
responsibility for signing and/or sending Sale Notices to Chase as PARCO's
administrative agent.
39
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 WAIVERS; AMENDMENTS, ETC.
(a) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay by the
Funding Agent or any Secured Party in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Funding Agent and the Secured Parties hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 8.1(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Funding or
a Purchase hereunder shall not be construed as a waiver of any Termination
Event or Potential Termination Event, regardless of whether the Funding Agent
or any Secured Party may have had notice or knowledge of such Termination
Event or Potential Termination Event at the time.
(b) AMENDMENTS, ETC. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower, PARCO and the Required
Banks or by the Borrower, PARCO and the Funding Agent with the consent of the
Required Banks; PROVIDED that no such waiver, amendment or modification shall
become effective without prior written notice to the Rating Agencies;
PROVIDED FURTHER that no such agreement shall (i) increase the Commitment of
any APA Bank without the written consent of such APA Bank, (ii) reduce the
amount of any payments due and owing to PARCO or any APA Bank hereunder and
under the other Basic Agreements without the prior written consent of PARCO
and each APA Bank affected thereby, as applicable, (iii) postpone the
scheduled date of payment of the any amount payable hereunder or under the
other Basic Agreements, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of PARCO and each APA Bank affected thereby, (iv)
change Section 2.1 or Article V in a manner that would alter the PRO RATA
sharing of payments required thereby, without the written
40
consent of each APA Bank and, if there is a Net Investment, of PARCO, or (v)
change any of the provisions of this Section 8.1(b) or the definition of
"Required Banks" or any other provision hereof specifying the number or
percentage of APA Banks required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without
the prior written consent of each APA Bank; PROVIDED FURTHER that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Funding Agent hereunder without the prior written consent of the Funding
Agent.
(c) INTEGRATION. This Agreement and the other Basic Agreements
contain 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 agreement among the parties hereto with respect to the subject
matter hereof, superseding all prior oral or written understandings.
SECTION 8.2 NOTICES. Except as otherwise expressly provided
herein, all communications and notices provided for hereunder shall be in
writing and shall be (a) hand-delivered by messenger, (b) sent by reputable
overnight or second business day courier, or (c) sent by telecopy or similar
electronic transmission directed to the applicable address or telecopy
number, as the case may be, set forth on Exhibit D hereto (as amended from
time to time) or at such other address or telecopy number as any party may
hereafter specify in writing to the Funding Agent for the purpose of
receiving notices. Each such notice or other communication shall be
effective only upon receipt thereof.
SECTION 8.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL. (a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) For any action related to the judicial enforcement or
interpretation of this Agreement, each of the parties hereto expressly
submits to the nonexclusive jurisdiction of the state or federal courts
located in the County of New York in the State of New York. Each of the
parties hereto further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to such party at its address for notice under this Agreement, such service to
become effective five (5) days after such mailing. Each of the parties
hereto hereby stipulates that the venues referenced in this Section 8.3(b)
are convenient, and each
41
waives any objection that it may now or hereafter have relating to the venue
or convenience of such courts.
(c) The parties hereto hereby agree that no party shall request a
trial by jury in the event of litigation between them concerning this
Agreement or any claims or transactions in connection herewith, and any right
to trial by jury is expressly waived. Each of the parties hereto hereby
acknowledges that such waiver is made with full understanding and knowledge
of the nature of the rights and benefits waived hereby.
SECTION 8.4 SEVERABILITY; COUNTERPARTS; WAIVER OF SETOFF. This
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Each of the parties hereto (other than PARCO) hereby waives any right of
setoff it may have or to which it may be entitled under this Agreement or the
other Basic Agreements from time to time against PARCO or its assets.
SECTION 8.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the parties hereto and their respective successors and permitted assigns;
PROVIDED that the Borrower shall not assign any of its rights or obligations
hereunder to any Person without the prior written consent of the Secured
Parties. No APA Bank may participate, assign or sell any portion of its
rights hereunder except as required by operation of law, in connection with
the merger, consolidation or dissolution of any APA Bank or as otherwise
provided in this Section 8.5. No assignment hereunder shall become effective
without a Rating Confirmation.
(b) PARTICIPATIONS BY APA BANKS. Any APA Bank may, without the
consent of the Borrower, the Funding Agent or PARCO, sell participations to
one or more banks or other entities (each, a "PARTICIPANT") in all or a
portion of such APA Bank's rights and obligations hereunder and under the
other Basic Agreements (including all or a portion of its Commitment, Funding
Balance and amounts due and
42
owing to it); PROVIDED that (i) such APA Bank's obligations under this
Agreement shall remain unchanged, (ii) such APA Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, PARCO, the Funding Agent and the other
APA Banks shall continue to deal solely and directly with such APA Bank in
connection with such APA Bank's rights and obligations under this Agreement
and the other Basic Agreements. Any agreement or instrument pursuant to
which an APA Bank sells such a participation shall provide that such APA Bank
shall retain the sole right to enforce this Agreement and the other Basic
Agreements and to approve any amendment, modification or waiver of any
provision of this Agreement and the other Basic Agreements (as provided by
the terms hereof and thereof); PROVIDED that such agreement or instrument may
provide that such APA Bank will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso
of Section 8.1(b) that affects such Participant. The Borrower agrees that
each Participant shall be entitled to the benefits of Article IV to the same
extent as if it were an APA Bank and had acquired its interest by assignment
pursuant to Section 8.5(c); PROVIDED that no Participant shall be entitled to
receive any greater payment under Article IV than the applicable APA Bank
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent.
(c) ASSIGNMENTS BY APA BANKS.
(i) Any APA Bank may at any time and from time to time,
upon the prior written consent of PARCO and the Funding Agent,
(which consent shall not be unreasonably withheld) assign to one or
more accredited investors or other Persons (each, a "PURCHASER")
all or any part of its rights and obligations under this Agreement
and any other Basic Agreement pursuant to a supplement to this
Agreement, substantially in the form of Exhibit B hereto (each, a
"TRANSFER SUPPLEMENT"), executed by the Purchaser, such selling APA
Bank and, as applicable, the Funding Agent; and PROVIDED, HOWEVER,
that (A) each Purchaser shall purchase an identical percentage in
such selling APA Bank's Commitment, unused Commitment and Funding
Balance, (B) any such assignment cannot be for an amount less than
the lesser of (1) $10,000,000 and (2) such selling APA Bank's
Commitment or Funding Balance (calculated at the time of such
assignment), (C) each Purchaser must be a financial institution
rated at least A-1/P-1 (or the equivalent short-term rating)
43
by the Rating Agencies and incorporated in an OECD Country and (D)
each Purchaser shall deliver to the Funding Agent and PARCO an
opinion of such Purchaser's counsel in substantially the form of
Exhibit C hereto. Such assignment shall also be subject to the
other limitations set forth in this Agreement and the other Basic
Agreements, as the case may be.
(ii) Each of the APA Banks agrees that in the event that
it shall cease to have short-term debt ratings of at least A-1 by
S&P and at least P-1 by Moody's, or, if such APA Bank does not have
short-term debt which is rated by S&P's and Moody's, in the event
that the parent corporation of such APA Bank has rated short-term
debt, such parent corporation ceases to have short-term debt
ratings of at least A-1 by S&P and at least P-1 by Moody's (each,
an "AFFECTED APA BANK"), such Affected APA Bank shall be obligated,
at the request of PARCO and the Funding Agent, to assign all of its
rights and obligations hereunder to (x) one or more other APA Banks
selected by PARCO and the Funding Agent which are willing to accept
such assignment, or (y) another financial institution rated at
least A-1/P-1 (or the equivalent short-term rating) by the Rating
Agencies) nominated by the Funding Agent and agreed to by PARCO and
the Funding Agent, and willing to participate in this facility
through the Commitment Expiry Date in the place of such Affected
APA Bank; PROVIDED that (i) the Affected APA Bank receives payment
in full, pursuant to a Transfer Supplement and/or, as applicable,
an assignment, of an amount equal to the Affected APA Bank's
Funding Balance and any other amounts due and owing under this
Agreement and the other Basic Agreements in respect of such
Affected APA Bank's Funding Balance and (ii) such nominated
financial institution, if not an existing APA Bank, satisfies all
the requirements of this Agreement and provides the Funding Agent
with an opinion of counsel in substantially the form of Exhibit C
hereto.
(iii) Upon (A) execution of a Transfer Supplement, (B)
delivery of an executed copy thereof to PARCO and the Funding Agent
and delivery to the Funding Agent and PARCO of an opinion of such
Purchaser's counsel in substantially the form of Exhibit C hereto,
(C) payment, if applicable, by the Purchaser to such selling APA
Bank of an amount equal to the purchase price agreed between
44
such selling APA Bank and the Purchaser and (D) receipt by PARCO of
a Rating Confirmation, such selling APA Bank shall be released from
its obligations hereunder and under the other Basic Agreements to
the extent of such assignment and the Purchaser shall, for all
purposes, be an APA Bank party to this Agreement and, if and when
applicable, and assignee of PARCO's interest under this Agreement
and the other Basic Agreements and shall have all the rights and
obligations of an APA Bank under this Agreement to the same extent
as if it were an original party hereto or thereto, and no further
consent or action by PARCO, the APA Banks or the Funding Agent
shall be required. The amount of the assigned portion of the
selling APA Bank's Funding Balance allocable to the Purchaser shall
be equal to the Transferred Percentage (as defined in the Transfer
Supplement) of such selling APA Bank's Funding Balance which is
transferred thereunder regardless of the purchase price paid
therefor. Such Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to
reflect the addition of the Purchaser as an APA Bank and the
resulting adjustment of the selling APA Bank's Commitment arising
from the purchase by the Purchaser of all or a portion of the
selling APA Bank's rights, obligations, and interest hereunder and
under the other Basic Agreements.
(d) An APA Bank may, at any time, pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Basic
Agreements to a Federal Reserve Bank or similar central banking authority to
secure obligations of such APA Bank, and this Section 8.5 shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such pledge
or assignment of a security interest shall release an APA Bank from any of its
obligations hereunder or substitute any such pledgee or assignee for such APA
Bank as a party hereto.
SECTION 8.6 NO PETITION. Each of the parties hereto hereby covenant
and agree that, prior to the date which is one year and one day after the
payment in full of all outstanding Commercial Paper of PARCO or all outstanding
indebtedness of the Borrower (other than the Subordinated Note), as the case may
be, such party will not institute against, or join any other Person in
instituting against, PARCO or the Borrower, as applicable, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the
45
laws of any jurisdiction. The provisions of this Section 8.6 shall survive
termination of this Agreement.
SECTION 8.7 LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of PARCO under this Agreement are
solely the corporate obligations of PARCO and, in the case of obligations of
PARCO other than Commercial Paper, shall be payable at such time as funds are
received by or are available to PARCO in excess of funds necessary to pay in
full all outstanding Commercial Paper and, to the extent funds are not available
to pay such obligations, the claims relating thereto shall not constitute a
claim against PARCO but shall continue to accrue. Each party hereto agrees that
the payment of any claim (as defined in Section 101 of Title 11 of the
Bankruptcy Code) of any such party shall be subordinated to the payment in full
of all Commercial Paper.
No recourse under any obligation, covenant or agreement of PARCO
contained in this Agreement shall be had against any incorporator, stockholder,
officer, director, employee or agent of PARCO, the Funding Agent or any of their
Affiliates (solely by virtue of such capacity) by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that this Agreement is
solely a corporate obligation of PARCO, and that no personal liability whatever
shall attach to or be incurred by any incorporator, stockholder, officer,
director, employee or agent of PARCO, the Funding Agent or any of their
Affiliates (solely by virtue of such capacity) or any of them under or by reason
of any of the obligations, covenants or agreements of PARCO contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by PARCO of any of such obligations, covenants or agreements, either at
common law or at equity, or by statute, rule or regulation, of every such
incorporator, stockholder, officer, director, employee or agent is hereby
expressly waived as a condition of and in consideration for the execution of
this Agreement; PROVIDED that the foregoing shall not relieve any such Person
from any liability it might otherwise have as a result of its fraudulent actions
or omissions. The provisions of this Section 8.7 shall survive termination of
this Agreement.
SECTION 8.8 FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Funding Agent such
additional assignments, agreements, powers and instruments as are required by
the Funding Agent, on behalf of the Secured Parties, to carry into effect the
purposes of this Agreement or the other Basic Agreements or to better assure and
confer unto the Funding Agent its rights, powers and remedies hereunder or
thereunder.
46
SECTION 8.9 HEADINGS. Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
47
IN WITNESS WHEREOF, the parties hereto have caused this Funding
Agreement to be executed and delivered by their duly authorized officers or
signatories as of the date hereof.
CP FUNDING CORP., as Borrower
By:
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
Individually as an APA Bank and as
Funding Agent
By:
--------------------------------------
Name:
Title:
PARK AVENUE RECEIVABLES
CORPORATION
By:
--------------------------------------
Name:
Title:
48
ANNEX 1
COMMITMENTS
The Chase Manhattan Bank $ 50,000,000
The Bank of Tokyo-Mitsubishi,
Houston Agency $ 20,000,000
The Industrial Bank of
Japan, Limited, New York Branch $ 30,000,000
The Bank of Nova Scotia, Atlanta Agency $ 20,000,000
Credit Suisse First Boston,
New York Branch $ 50,000,000
ING (U.S.) Capital Corporation $ 75,000,000
------------
Aggregate Commitment $245,000,000
Date: October 8, 1997
54
EXHIBIT A
FORM OF
VARIABLE FUNDING NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OF TRANSFER OF THIS NOTE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
Reference is hereby made to (i) that certain Funding Agreement,
dated as of October 8, 1997 (as amended, supplemented or otherwise modified
and in effect from time to time, the "FUNDING AGREEMENT") by and among CP
Funding Corp., a Nevada corporation, as borrower (the "BORROWER"), Park
Avenue Receivables Corporation, a Delaware corporation ("PARCO"), The Chase
Manhattan Bank, a New York banking corporation, as funding agent (in such
capacity, the "FUNDING AGENT") and the several financial institutions party
thereto from time to time (the "APA BANKS" and, together with PARCO, the
"SECURED PARTIES") and (ii) that certain Security Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time, the "SECURITY AGREEMENT"), between the Borrower and the
Funding Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in, or incorporated by
reference into, the Funding Agreement and the Security Agreement.
FOR VALUE RECEIVED, the Borrower hereby promises to pay to the
order of the Funding Agent, for the account of and for the benefit of PARCO
and the APA Banks at the principal office of the Funding Agent at 450 West
33rd Street, 15th Floor, New York, New York 10001, Attention: Structured
Finance Services, a principal sum equal to TWO HUNDRED FORTY-FIVE MILLION
DOLLARS ($245,000,000.00), in lawful money of the United States of America
and in immediately available funds.
The date and amount of each Funding extended by PARCO and the APA
Banks, as the case may be, to the Borrower under the Funding Agreement, and each
payment of principal thereof, shall be recorded by the Funding Agent, for the
account of PARCO and the APA Banks, as appropriate, on its books and, prior to
A-1
any transfer of this Note (or, at the discretion of PARCO and the APA Banks,
at any other time), endorsed by the Funding Agent, on behalf of PARCO and the
APA Banks, on the schedule attached hereto or on any continuation thereof.
Although the stated principal amount of this Note is as stated above, this
Note shall be enforceable only with respect to the Borrower's obligation to
pay the principal hereof to the extent of the unpaid principal amount of the
Fundings outstanding under the Funding Agreement at the time such enforcement
shall be sought.
Carrying Costs in respect of the outstanding principal amount of
this Note shall accrue at the rate or rates from time to time in effect
pursuant to the Funding Agreement and payable to the Funding Agent for the
benefit of the Secured Parties of such Carrying Costs on the dates and in the
manner provided for in the Sale and Servicing Agreement and the Funding
Agreement; PROVIDED that, in all events, Carrying Costs constituting Accrued
Discount shall be payable by the Borrower on any day on which outstanding
Commercial Paper issued by PARCO to fund the Net Investment matures.
Carrying Costs due and payable hereunder shall be payable in accordance with
the priorities set forth in Section 6.8 of the Sale and Servicing Agreement.
Principal in an amount equal to the Targeted Monthly Principal
Payment, if any, will be due and payable on each Distribution Date in
accordance with the priorities set forth in Section 6.8 of the Sale and
Servicing Agreement. Unless otherwise due and payable on an earlier date in
accordance with the terms of the Basic Agreements, the entire outstanding
principal amount of this Note and accrued interest thereon will be due and
payable on the Distribution Date occurring in the calendar month sixty-six
(66) months following the Commitment Expiry Date.
Following the occurrence of a Termination Event, the Funding Agent
may, with the consent of the Required Banks, or shall, at the direction of
the Required Banks, declare all amounts due hereunder to be immediately due
and payable and exercise all remedies available to it pursuant to the Basic
Agreements and applicable law; PROVIDED that, upon the occurrence of an
Insolvency Event with respect to the Borrower, all such amounts immediately
shall become due and owing automatically without the need for presentment,
demand, protest or other notice of any kind, all of which are hereby waived
by the Borrower.
The Borrower's obligation to make payments hereunder shall be a
limited recourse obligation of the Borrower, payable solely from the
Collateral, and no recourse shall be had hereunder to the Borrower for
payment hereunder except to
A-2
the extent of the Collateral. This Note does not purport to summarize the
Funding Agreement, the Security Agreement or the other Basic Agreements, and
reference is hereby made to such agreements for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby.
The Borrower shall pay all costs of collection of any amount due
hereunder when incurred including, without limitation, reasonable attorney's
fees and expenses, and including all costs and expenses actually incurred in
connection with the pursuit by the Funding Agent, on behalf of and at the
direction of the Secured Parties, of any of their rights or remedies referred
to herein or in the Security Agreement or the Funding Agreement, or the
protection of, or realization upon, Collateral, and all such costs shall be
payable in accordance with the terms of the Security Agreement and the
Funding Agreement.
The Borrower hereby waives presentment, notice of dishonor, protest
and other notice or formality with respect to this Note.
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York.
A-3
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Variable Funding Note as of the date and year first above written.
CP FUNDING CORP.
By:
--------------------------
Name:
Title:
A-4
FUNDING AND REPAYMENT SCHEDULE
Amount of Amount of Principal Notation
Date of Funding Repayment Outstanding By
---- ---------- --------- ----------- ---------
A-5
EXHIBIT B
[FORM OF TRANSFER SUPPLEMENT]
THIS TRANSFER SUPPLEMENT is entered into as of the ____ day of _________,
19__, by and between ______________________ ("TRANSFEROR") and _______________
("TRANSFEREE").
PRELIMINARY STATEMENTS
A. This Transfer Supplement is being executed and delivered in
accordance with Section 8.5(c) of that certain Funding Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time, the "AGREEMENT"), by and among CP Funding Corp., a Nevada
corporation, Park Avenue Receivables Corporation, a Delaware corporation, the
several APA Banks party thereto from time to time, and The Chase Manhattan
Bank, a New York banking corporation, individually and as Funding Agent.
Capitalized terms used herein and not otherwise defined herein are used with
the meanings set forth in, or incorporated by reference into, the Agreement.
B. The Transferor is an APA Bank party to the Agreement, and the
Purchaser wishes to become an APA Bank thereunder.
C. The Transferor is selling and assigning to the Purchaser an
undivided _______% (the "TRANSFERRED PERCENTAGE") interest in all of
Transferor's rights and obligations under the Agreement and the other Basic
Agreements, including, without limitation, the Transferor's Commitment and
(if applicable) the Transferor's Funding Balance as set forth herein.
The parties hereto hereby agree as follows:
1. The transfer effected by this Transfer Supplement shall become
effective (the "TRANSFER EFFECTIVE DATE") two (2) Business Days (or such other
date selected by the Funding Agent in its sole discretion) following the date on
which a transfer effective notice substantially in the form of Schedule II to
this Transfer Supplement ("TRANSFER EFFECTIVE NOTICE") is delivered by the
Funding Agent to PARCO, the Transferor and the Transferee. From and after the
Transfer Effective Date, the Transferee shall be an APA Bank party to the
Agreement for all purposes
B-1
thereof as if the Transferee were an original party thereto and the
Transferee agrees to be bound by all of the terms and provisions contained
therein.
2. If there is no Net Investment or Banks' Aggregate Investment
on the Transfer Effective Date, Transferor shall be deemed to have hereby
transferred and assigned to the Transferee, without recourse, representation
or warranty (except as provided in paragraph 6 below), and the Transferee
shall be deemed to have hereby irrevocably taken, received and assumed from
the Transferor, the Transferred Percentage of the Transferor's Commitment and
all rights and obligations associated therewith under the terms of the
Agreement, including, without limitation, the Transferred Percentage of the
Transferor's future funding obligations under Section 5.2(a) of the Agreement.
3. If there is a Net Investment or Banks' Aggregate Investment,
at or before 12:00 noon, local time of the Transferor, on the Transfer
Effective Date, the Transferee shall pay to the Transferor, in immediately
available funds, an amount equal to the sum of (i) the Transferred Percentage
of an amount equal to the Transferor's Funding Balance (such amount, being
hereinafter referred to as the "TRANSFEREE'S FUNDING BALANCE"); (ii) all
accrued but unpaid (whether or not then due) interest attributable to the
Transferee's Funding Balance; and (iii) accrued but unpaid fees and other
costs and expenses payable in respect of the Transferee's Funding Balance for
the period commencing upon each date such unpaid amounts commence accruing,
to and including the Transfer Effective Date (the "TRANSFEREE'S ACQUISITION
COST"), whereupon, the Transferor shall be deemed to have transferred and
assigned to the Transferee, without recourse, representation or warranty
(except as provided in paragraph 6 below), and the Transferee shall be deemed
to have hereby irrevocably taken, received and assumed from the Transferor,
the Transferred Percentage of the Transferor's Commitment and Funding Balance
and all related rights and obligations under the Agreement and the other
Basic Agreements, including, without limitation, the Transferred Percentage
of the Transferor's future funding obligations under Section 5.2(a) of the
Agreement.
4. Concurrently with the execution and delivery hereof, the
Transferor will provide to the Transferee copies of all documents requested
by the Transferee which were delivered to such Transferor pursuant to the
Agreement.
5. Each of the parties to this Transfer Supplement agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as
B-2
such other party may reasonably request in order to effect the purposes of
this Transfer Supplement.
6. By executing and delivering this Transfer Supplement, the
Transferor and the Transferee confirm to and agree with each other, the
Funding Agent and the APA Banks as follows: (a) other than the representation
and warranty that it has not created any Lien (other than the Lien of the
Funding Agent for the benefit of the Secured Parties) upon any interest being
transferred hereunder, the Transferor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made by any other Person in or in connection with the
Agreement or the other Basic Agreements or the execution, legality, validity,
enforceability, genuineness, sufficiency or value thereof or any other
instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any Collateral; (b) the
Transferor makes no representation or warranty and assumes no responsibility
with respect to the financial condition of PARCO, the Seller, the Servicer,
the Borrower, the Custodian, any Hedge Counterparty, the Back-Up Servicer,
any Obligor, any surety or any guarantor or the performance or observance by
any of such Persons of any of their respective obligations under the
Agreement or the other Basic Agreements or any other instrument or document
furnished pursuant thereto or in connection therewith; (c) the Purchaser
confirms that it has received a copy of the Agreement and the other Basic
Agreements, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Transfer Supplement; (d) the Transferee will, independently and without
reliance upon the Funding Agent, PARCO or any other APA Bank, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Agreement or the other Basic Agreements; (e) the Transferee
appoints and authorizes the Funding Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement as are delegated to
the Funding Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (f) the Transferee was not formed for the
purpose of acquiring the interest being acquired hereunder; and (h) the
Transferee agrees that it will perform in accordance with their terms all of
the obligations which, by the terms of the Agreement and the other Basic
Agreements, are required to be performed by it as an APA Bank or as the
holder of PARCO's interest thereunder.
7. Each party hereto represents and warrants to and agrees with
the Funding Agent that it is aware of and will comply with the provisions of
the Agreement, including, without limitation, Sections 5.2, 8.5(c), 8.6 and
8.7 thereof.
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8. Schedule I hereto sets forth the revised Commitment of the
Transferor and the Commitment of the Transferee, as well as administrative
information with respect to the Transferee.
9. This Transfer Supplement shall be governed by, and construed
in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Supplement to be executed by their respective duly authorized officers as of
the date hereof.
[TRANSFEROR]
By:
------------------------------
Name:
Title:
[TRANSFEREE]
By:
------------------------------
Name:
Title:
B-5
SCHEDULE I TO TRANSFER SUPPLEMENT
LIST OF PURCHASING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: ___________________, 19__
TRANSFERRED PERCENTAGE: _____ %
Commitment Commitment Outstanding Pro Rata
Transferor [existing] [revised] Funding Balance Share
- ---------- ---------- ---------- --------------- --------
Commitment Outstanding Pro Rata
Transferee [initial] Funding Balance Share
- ---------- ---------- --------------- -----
ADDRESS FOR NOTICES:
- --------------------
____________________
____________________
____________________
Attention:
Telephone:
Telecopy:
B-6
SCHEDULE II TO TRANSFER SUPPLEMENT
TRANSFER EFFECTIVE NOTICE
TO:_________________, Transferor
_________________
_________________
TO:_________________, Transferee
_________________
_________________
The undersigned, as Funding Agent under the Funding Agreement, dated as of
October 8, 1997 (as amended, supplemented or otherwise modified and in effect
from time to time), by and among CP Funding Corp., a Nevada corporation, Park
Avenue Receivables Corporation, a Delaware corporation, the several APA Banks
party thereto from time to time, and The Chase Manhattan Bank, a New York
banking corporation, individually and as Funding Agent, hereby acknowledges
receipt of executed counterparts of a completed Transfer Supplement dated as of
______________, 19__ between ______________, as Transferor, and ______________,
as Transferee. Capitalized terms defined in such Transfer Supplement are used
herein as therein defined or incorporated by reference therein.
1. Pursuant to such Transfer Supplement, you are advised that the
Transfer Effective Date will be _____________, 19__.
2. PARCO and the Funding Agent each hereby consents to the Transfer
Supplement as required by Section 8.5(c) of the Agreement.
[3. Pursuant to such Transfer Supplement, the Transferee is required
to pay $_________ to the Transferor at or before 12:00 noon (local time of the
Transferor) on the Transfer Effective Date in immediately available funds.]
Very truly yours,
THE CHASE MANHATTAN BANK,
as Funding Agent
By:_____________________________________
Authorized Signatory
B-7
PARK AVENUE RECEIVABLES
CORPORATION
By:_____________________________________
Authorized Signatory
B-8
EXHIBIT C
FORM OF OPINION OF COUNSEL
Park Avenue Receivables Corporation Standard & Poor's Ratings Services
c/o Global Securitization Services, LLC 25 Broadway
25 West 43rd Street, Suite 704 New York, New York 10004
New York, New York 10036
The Chase Manhattan Bank, as Moody's Investors Service, Inc.
Administrative Agent, Depositary, 99 Church Street
Liquidity Agent, Liquidity Bank, New York, New York 10007
L/C Agent and L/C Bank
270 Park Avenue
New York, New York 10017
Re: Transfer Supplement dated as of _____________ with [Name of Bank]
Ladies and Gentlemen:
We have acted as counsel for [Name of Bank] (the "Bank") in connection
with (i) the Funding Agreement, dated as of October 8, 1997 (as amended,
supplemented or otherwise modified to the date hereof, the "AGREEMENT"; terms
defined therein and not otherwise defined in this letter shall have the
respective meanings ascribed therein), by and among CP Funding Corp., Park
Avenue Receivables Corporation, a Delaware corporation, the several APA Banks
party thereto from time to time, and The Chase Manhattan Bank, a New York
banking corporation, individually and as Funding Agent, and (ii) the Transfer
Supplement (the "Transfer Supplement") dated as of ______________, 199__ between
[Name of Transferor] as "Transferor" (as defined therein) and the Bank as
"Transferee" (as defined therein), consented to by PARCO and the Funding Agent.
1. The Bank is a _________________ organized, validly existing and
in good standing under the laws of _______________. The Bank has the corporate
power and authority to execute and deliver the Transfer Supplement and to
perform its obligations under the Funding Agreement.
C-1
2. No governmental approval, which has not been obtained or taken
and is not in full force and effect, is required to authorize, or is required in
connection with, the execution or delivery by the Bank of the Transfer
Supplement or the performance by the Bank of its obligations thereunder and
under the Funding Agreement.
3. Neither the execution and delivery of the Transfer Supplement by
the Bank, nor the consummation of the transactions contemplated thereby and by
the Funding Agreement, will contravene, or result in a violation of, any law
applicable to the Bank.
4. The Transfer Supplement has been duly authorized, executed and
delivered by the Bank, and the Funding Agreement, as amended by the Transfer
Supplement, constitutes the legal, valid and binding obligation of the Bank,
enforceable against the Bank in accordance with its terms, except such
enforceability may be limited by bankruptcy, insolvency, receivership,
conservatorship or other similar laws, regulations and administrative orders of
general application relating to or affecting the enforcement of creditors'
rights in general and the rights of creditors of banks as the same may be
applied in the event of the bankruptcy, insolvency, receivership,
conservatorship or other similar event in respect of the Bank or by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5. With the exception of obligations being given priority by statute
or regulation, the obligations of the Bank under the Funding Agreement, as
amended by the Transfer Supplement, will rank PARI PASSU with all obligations of
the Bank which are not contractually subordinated to payment of such
obligations.
Very truly yours,
[NOTE THAT ADDITIONAL OPINIONS MAY BE REQUIRED
FROM FOREIGN APA BANKS]
C-2
EXHIBIT D
NOTICE ADDRESSES
IF TO THE BORROWER:
CP Funding Corp.
1325 Airmotive Way, Suite 130
Reno, Nevada 8950
Attention: President
Telephone: (702) 322-2221
Telecopy: (702) 322-8808
IF TO PARCO:
Park Avenue Receivables Corporation
c/o Global Securitization Services, LLC
25 West 43rd Street, Suite 704
New York, New York 10036
Attention: President
Telephone: (212) 302-5151
Telecopy: (212) 302-8767
IF TO THE FUNDING AGENT OR THE APA BANKS:
The Chase Manhattan Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Structured Finance Services
Telephone: (212) 946-7861
Telecopy: (212) 946-7776
D-1