Exhibit 99.3
SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
among
CONN FUNDING II, L.P.,
as Issuer,
CONN APPLIANCES, INC.,
as Seller,
THREE PILLARS FUNDING LLC,
as a Conduit Purchaser,
PARK AVENUE RECEIVABLES COMPANY, LLC,
as a Conduit Purchaser,
JPMORGAN CHASE BANK, N.A.,
as Funding Agent and as Committed Purchaser, and
SUNTRUST ROBINSON HUMPHREY, INC.
as the Administrator
dated as of August 14, 2008
Page
ARTICLE I. DEFINITIONS 1
SECTION 1.1 Certain Defined Terms 1
SECTION 1.2 Other Definitional Provisions 11
ARTICLE II. PURCHASE AND SALE 12
SECTION 2.1 Purchase and Sale of the Notes 12
SECTION 2.2 Initial Purchase Price 12
SECTION 2.3 Increases 12
SECTION 2.4 Extension of Purchase Expiration Dates 13
SECTION 2.5 Reduction of Maximum Principal Amount 14
SECTION 2.6 Calculation of Monthly Interest 15
SECTION 2.7 Benefits of Indenture 15
SECTION 2.8 Broken Funding 15
SECTION 2.9 Illegality 16
SECTION 2.10 Inability to Determine Eurodollar Rate (Reserve Adjusted) 16
SECTION 2.11 Fees 17
SECTION 2.12 Term Provisions 17
SECTION 2.13 Allocations of Principal 18
ARTICLE III. CLOSING 19
SECTION 3.1 Closing 19
SECTION 3.2 Transactions to be Effected at the Closing 19
ARTICLE IV. CONDITIONS PRECEDENT 19
SECTION 4.1 Conditions Precedent to Initial Purchase of the Notes 19
SECTION 4.2 Conditions Precedent to each Increase 21
SECTION 4.3 Conditions Precedent to the Restatement 22
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE SELLER 23
SECTION 5.1 Representations, Warranties and Covenants of the Seller and the Issuer 23
SECTION 5.2 Reaffirmation of Representations and Warranties by the Issuer 28
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VI. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE ADMINISTRATOR, THE FUNDING AGENT AND THE
CONDUIT PURCHASERS 28
SECTION 6.1 Securities Laws; Transfer Restrictions 28
ARTICLE VII. COVENANTS 29
SECTION 7.1 Monthly Noteholders' Statement; Notice of Adverse Effect 29
SECTION 7.2 Further Assurances 30
SECTION 7.3 Modifications to Transaction Documents 30
SECTION 7.4 Expenses 30
SECTION 7.5 Reorganizations and Transfers 30
SECTION 7.6 Financial Covenants 31
SECTION 7.7 ABL Covenants 31
SECTION 7.8 Most Favored Lender 31
SECTION 7.9 Restrictions on Amendments 32
ARTICLE VIII. INDEMNIFICATION 32
SECTION 8.1 Indemnification 32
SECTION 8.2 Increased Costs 32
SECTION 8.3 Indemnity for Taxes 34
SECTION 8.4 Other Costs, Expenses and Related Matters 36
ARTICLE IX. THE ADMINISTRATOR AND THE FUNDING AGENT 37
SECTION 9.1 Authorization and Action 37
SECTION 9.2 Administrator's and Funding Agent's Reliance, Etc 37
SECTION 9.3 Administrator, Funding Agent and their Respective Affiliates 38
SECTION 9.4 Purchase Decision 38
SECTION 9.5 Successor Administrator and Funding Agent 38
ARTICLE X. MISCELLANEOUS 39
SECTION 10.1 Amendments 39
SECTION 10.2 Notices 39
SECTION 10.3 No Waiver; Remedies 41
SECTION 10.4 Binding Effect; Assignability 41
SECTION 10.5 Confidentiality 42
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TABLE OF CONTENTS
(continued)
SECTION 10.6 GOVERNING LAW; JURISDICTION 42
SECTION 10.7 Wavier of Trial by Jury 43
SECTION 10.8 No Proceedings 43
SECTION 10.9 Execution in Counterparts 43
SECTION 10.10 No Recourse 43
SECTION 10.11 Survival 44
SECTION 10.12 Recourse 44
SECTION 10.13 No Fiduciary Duty 44
SECTION 10.14 Consent 44
SCHEDULES AND EXHIBITS
EXHIBIT A Form Notice of Increase
Schedule I List of Proceedings
Schedule II List of Trade Names
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This SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT,
dated as of August 14, 2008 (as amended, supplemented or otherwise modified from
time to time, this "Note Purchase Agreement") is among CONN FUNDING II, L.P., as
issuer (the "Issuer"), CONN APPLIANCES, INC., as seller (the "Seller"), THREE
PILLARS FUNDING LLC (f/k/a Three Pillars Funding Corporation) ("Three Pillars"),
as a conduit purchaser (a "Conduit Purchaser"), PARK AVENUE RECEIVABLES COMPANY,
LLC ("PARCO"), as a conduit purchaser (a "Conduit Purchaser", and together with
Three Pillars Funding LLC, the "Conduit Purchasers"), JPMORGAN CHASE BANK, N.A.
("JPMorgan"), as funding agent for PARCO (in such capacity, the "Funding Agent")
and as Committed Purchaser and SUNTRUST ROBINSON HUMPHREY, INC. (f/k/a SunTrust
Capital Markets, Inc.), as administrator (the "Administrator").
RECITALS
WHEREAS, the Issuer has issued and may continue to issue the
variable funding notes pursuant to a Base Indenture, dated as of September 1,
2002 (as amended, supplemented or otherwise modified from time to time, the
"Base Indenture"), between the Issuer and Wells Fargo Bank, National Association
(f/k/a Wells Fargo Bank Minnesota, National Association), as trustee (in such
capacity, together with its successors and assigns in such capacity, the
"Trustee"), as supplemented by the Amended and Restated Series Supplement
2002-A, dated as of September 10, 2007, between the Issuer and the Trustee (as
amended, supplemented or otherwise modified from time to time, the "Series
Supplement", and together with the Base Indenture, the "Indenture"); and
WHEREAS, the Issuer, the Seller (for itself and as successor
by merger to CAI, L.P.), the Conduit Purchasers, the Administrator and JPMorgan
are parties to that certain Amended and Restated Note Purchase Agreement, dated
as of September 10, 2007 (as amended prior to the date hereof, the "Original
Note Purchase Agreement") and such parties and the parties hereto desire to
amend and restate the Original Note Purchase Agreement.
NOW, THEREFORE, for full and fair consideration, the parties
hereto agree that the Original Note Purchase Agreement is hereby amended and
restated in its entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. Capitalized terms used herein without
definition shall have the meanings set forth in the Indenture. Additionally, the
following terms shall have the following meanings:
"ABL Agreement" means the Loan and Security Agreement, dated
as of August 14, 2008 among the Parent, Conn Appliances, Inc., Conn Credit
Corporation, Inc., Conn Credit I, LP, certain financial institutions as Lenders,
Bank of America, N.A., as administrative agent, joint bank runner, co-lead
arranger and collateral agent, JPMorgan Chase Bank, National Association, as
syndication agent, joint bank runner and co-lead arranger and Capital One N.A.,
as co-documentation agent.
"ABL Facility" has the meaning set forth in Section 7.7.
"Accounting Based Consolidation Event" means the
consolidation, for financial and/or regulatory accounting purposes, of all or
any portion of the assets and liabilities of a Conduit Purchaser with all or any
portion of the assets and liabilities of any other Affected Party. An Accounting
Based Consolidation Event shall be deemed to occur on the date any Affected
Party shall acknowledge in writing that any such consolidation of the assets and
liabilities of a Conduit Purchaser shall occur.
"Act" means the Securities Act of 1933, as amended.
"Administrator" has the meaning set forth in the Preamble.
"Affected Party" means each of the Conduit Purchasers, the
Committed Purchaser, any Liquidity Bank, any permitted assignee of any Conduit
Purchaser or any Liquidity Bank, any Support Provider and any holder of a
participation interest in the rights and obligations of any Liquidity Bank and
any Credit Bank under any Liquidity Agreement and/or any Credit Agreement, the
Administrator, the Funding Agent and any holding company of either Bank.
"Aggregate Purchaser Funded Amount" means, on any date of
determination an amount equal to (a) the Initial Purchase Price, plus (b) the
aggregate amount of all Increases made prior to such date of determination
(including Term Increases), minus (c) the aggregate amount of principal payments
(including, without limitation, any Decreases) in respect of the Notes made to
and received by or on behalf of the Conduit Purchasers and the Committed
Purchaser prior to such date. For the avoidance of doubt, amounts on deposit in
any Term Account shall not be included in the Aggregate Purchaser Funded Amount
until such amounts are advanced to the Issuer in accordance with Section 2.3.
"Alternate Reference Rate" means, on any date, a fluctuating
rate of interest per annum equal to the higher of:
(a) the rate of interest most recently announced by Bank at its principal
office in Atlanta, Georgia or New York, New York, as applicable, as its
prime rate (it being understood that at any one time there shall exist
only one such prime rate so announced), which rate is not necessarily
intended to be the lowest rate of interest determined by such Bank in
connection with extensions of credit; or
(b) the Federal Funds Rate (as defined below) most recently determined by
Bank plus 0.50% per annum.
"Applicable Margin" has the meaning set forth in the Fee
Letters, as applicable.
"Bank" means SunTrust Bank, a Georgia banking corporation or
JPMorgan, as applicable.
2
"Bank Rate" means, for any Interest Period, an interest rate
per annum equal to either (a) the sum of (i) 3.00% per annum, and (ii) the
Eurodollar Rate (Reserve Adjusted) for such Interest Period; provided, however,
that if (x) it shall become unlawful for any Liquidity Bank, any Credit Bank or
Term Institution to obtain funds in the London interbank eurodollar market in
order to make, fund or maintain any Funding Tranche hereunder, or if such funds
shall not be reasonably available to any Liquidity Bank, any Credit Bank or Term
Institution, or (y) there shall not be time prior to the commencement of an
applicable Interest Period to determine a Eurodollar Rate (Reserve Adjusted) in
accordance with its terms or the "Bank Rate" shall apply other than at the first
day of the Interest Period, then the "Bank Rate" shall be equal to the weighted
average of the Alternate Reference Rates in effect for each day during the
remainder of such Interest Period or (b) if requested by the Issuer, the
weighted average of the Alternate Reference Rates in effect during such Interest
Period, plus 3.00%.
"Block Event" means an event or circumstance that, after the
giving of notice or lapse of time or both, would give rise to an Event of
Default, Pay Out Event or Servicer Default.
"Breakage Amounts" has the meaning specified in Section 2.8.
"Closing" has the meaning specified in Section 3.1.
"Closing Date" has the meaning specified in Section 3.1.
"Commercial Paper Notes" means short-term promissory notes
issued by any Conduit Purchaser.
"Commercial Paper Rate" means, for any Interest Period for the
related Funding Tranche, a rate per annum equal to:
(a) in the case of a Conduit Purchaser using match funding,
the sum of (i) the rate or, if more than one rate, the weighted average of the
rates, determined by converting to an interest-bearing equivalent rate per annum
the discount rate (or rates) at which the applicable Commercial Paper Notes
outstanding during such Interest Period have been or may be sold by any
placement agent or commercial paper dealer selected by Administrator or the
Funding Agent, as applicable, plus (ii) the commissions and charges charged by
such placement agent or commercial paper dealer with respect to such Commercial
Paper Notes expressed as a percentage of the face amount thereof and converted
to an interest-bearing equivalent rate per annum (the "Match Funding Rate"); or
(b) in the case of a Conduit Purchaser using pool funding, the
sum of (i) the rate equivalent to the weighted average cost (as determined by
the agent under the applicable securitization facility and which shall include
incremental carrying costs incurred with respect to Commercial Paper Notes
maturing on dates other than those on which corresponding funds are received by
such Conduit Purchaser, other borrowings by such Conduit Purchaser (other than
under any Credit Agreement)), plus (ii) the commissions and charges charged by
such placement agent or commercial paper dealer with respect to such Commercial
Paper Notes expressed as a percentage of the face amount thereof and converted
to an interest-bearing equivalent rate per annum, plus (iii) any other costs
associated with the issuance of Commercial Paper Notes) of or related to the
issuance of Commercial Paper Notes that are allocated, in whole or in part, by
such Conduit Purchaser or the agent under the applicable securitization facility
to fund or maintain such portion of the aggregate principal amount of such
Conduit Purchaser's Note (and which may be also allocated in part to the funding
of other assets of such Conduit Purchaser); provided, however, that if the rate
(or rates) is a discount rate, then the rate (or if more than one rate, the
weighted average of the rates) shall be the rate resulting from converting such
discount rate (or rates) to an interest bearing equivalent rate per annum (the
"Pool Funding Rate").
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"Commitment" means, (i) with respect to Three Pillars, the sum
of its (a) Tranche A Commitment and (b) Tranche B Commitment and (ii) with
respect to the Committed Purchaser the sum of its (a) Tranche A Commitment and
(b) Tranche B Commitment.
"Committed Purchaser" means, JPMorgan Chase Bank, N.A. and
each of its successors and assigns and if the Issuer has requested that PARCO or
JPMorgan Chase Bank, N.A. make a Term Deposit in accordance with Section 2.12,
"Committed Purchaser" shall include JPMorgan Chase Bank, N.A. as a Term
Institution.
"Conduit Purchasers" means Three Pillars and PARCO.
"Consolidated Group" shall mean, collectively, Parent and its
Subsidiaries other than the Issuer (unless required to be consolidated in
accordance with GAAP).
"Consolidated Net Income" shall mean, for any period for the
Consolidated Group, the net income minus the net losses of such Persons, as
determined in accordance with GAAP, excluding unusual or extraordinary gains or
losses.
"Consolidated Net Worth" shall mean, as of any date, the
consolidated net worth of the Consolidated Group as reflected in such Persons'
financial statements most recently filed with the Securities and Exchange
Commission.
"Covered Taxes" has the meaning specified in Section 8.3.
"Credit Advance" means a drawing under a letter of credit
issued pursuant to a Credit Agreement for the account of any Conduit Purchaser,
a loan to any Conduit Purchaser under a Credit Agreement or any other advance or
disbursement of funds to any Conduit Purchaser or for such Conduit Purchaser's
account pursuant to a Credit Agreement or any such letter of credit, in each
case to the extent such drawing, loan, advance or disbursement has not been
repaid or reimbursed to the applicable Credit Bank in accordance with the
related Credit Agreement.
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"Credit Agreement" means and includes any program-wide
agreement entered into by any Credit Bank providing for the issuance of one or
more letters of credit for the account of any Conduit Purchaser, the issuance of
one or more surety bonds for which any Conduit Purchaser is obligated to
reimburse the applicable Credit Bank for any drawings thereunder, the sale by
any Conduit Purchaser to any Credit Bank of receivables or other financial
assets purchased by such Conduit Purchaser (or portions thereof) and/or the
making of loans and/or other extensions of credit to any Conduit Purchaser in
connection with its commercial paper program, together with any cash collateral
agreement, letter of credit, surety bond or other agreement or instrument
executed and delivered in connection therewith (but excluding the Liquidity
Agreement of such Conduit Purchaser, or similar agreement, or any voluntary
advance agreement).
"Credit Bank" means and includes each Bank and any other or
additional bank or other Person (other than any customer of any Conduit
Purchaser or any liquidity provider as such) now or hereafter extending credit
or a purchase commitment to or for the account of a Conduit Purchaser or issuing
a letter of credit, surety bond or other instrument, in each case to support any
obligations arising under or in connection with such Conduit Purchaser's
commercial paper program.
"Decrease" has the meaning specified in the Series Supplement.
"Default Rate" has the meaning specified in the definition of
Note Rate.
"Dollar" or "$" means lawful currency of the United States of
America.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to
any Funding Tranche, the rate per annum equal to the quotient of (i) the offered
rate for deposits in Dollars for a one-month period in an amount equal (as
nearly as possible) to the principal amount of the Funding Tranche which rate
appears on the pages 3750 or 3740, as applicable, of the Dow Jones Market
Service as of 11:00 A.M. (London, England) time on the Rate Setting Day;
provided, that if at least two rates appear on pages 3750 or 3740, as
applicable, of the Dow Jones Market Service on such Rate Setting Day, the rate
for such Interest Period shall be the arithmetic mean of such rates; provided
further, that if no such offered rates appear on such page, the rate used for
such Interest Period will be the arithmetic average (rounded upward, if
necessary, to the next higher 1/16th of 1%) of rates offered to Administrator by
not less than two major banks in London, England at approximately 10:00 A.M.
(Atlanta, Georgia time), two (2) Business Days prior to the first day of such
Interest Period for deposits in U.S. dollars in the London interbank market for
a one-month period in an amount comparable to the principal amount of the
Funding Tranche, divided by (ii) a number equal to 1.00 minus the Reserve
Percentage. The rate so determined in accordance herewith shall be rounded
upwards to the multiple of 1/100th of 1%
"Federal Bankruptcy Code" means the bankruptcy code of the
United States of America codified in Title 11 of the United States Code.
"Federal Funds Rate" means, for any day the greater of (i) the
average rate per annum as determined by the respective Bank at which overnight
Federal funds are offered to such Bank for such day by major banks in the
interbank market, and (ii) if such Bank is borrowing overnight funds from a
Federal Reserve Bank that day, the average rate per annum at which such
overnight borrowings are made on that day. Each determination of the Federal
Funds Rate by such Bank shall be conclusive and binding on the Issuer except in
the case of manifest error.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"Fee Letters" means each of the following letter agreements:
(i) that certain second amended and restated letter agreement, dated as of
September 10, 2007, between the Issuer and the Administrator setting forth
certain fees payable by the Issuer in connection with the purchase of Notes by
the Administrator for the benefit of Three Pillars, (ii) that certain letter
agreement, dated as of September 10, 2007, between the Issuer and the Funding
Agent setting forth certain fees payable by the Issuer in connection with the
purchase of Notes by the Funding Agent for the benefit of PARCO.
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"Fees" has the meaning set forth in Section 2.11.
"Final Purchase Expiration Date" means the later to occur of
(i) the Tranche A Purchase Expiration Date, (ii) Tranche B Purchase Expiration
Date and (iii) if the Issuer has requested a Term Institution make a Term
Deposit in accordance with Section 2.12, the Term Draw Expiration Date (as such
dates may be extended from time to time pursuant to Section 2.4).
"Fiscal Quarter" has the meaning specified in the ABL
Agreement as of the Restatement Date.
"Fixed Period" means, with respect to a Funding Tranche, a
period selected by (i) the Administrator with respect to Three Pillars and (ii)
the Funding Agent with respect to PARCO or the Committed Purchaser in each case
in its sole discretion; provided, that
(i) any Fixed Period with respect to any Funding Tranche not funded by the
issuance of Commercial Paper Notes which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day; provided, however, if interest in respect of such Fixed
Period is computed by reference to the Eurodollar Rate (Reserve
Adjusted), and such Fixed Period would otherwise end on a day which is
not a Business Day, and there is no subsequent Business Day in the same
calendar month as such day, such Fixed Period shall end on the next
preceding Business Day;
(ii) any Fixed Period with respect to any Funding Tranche not funded by the
issuance of Commercial Paper Notes will not be for a term of more than
40 days; and
(iii) any Fixed Period in respect of which interest is computed by reference
to the Commercial Paper Rate may be terminated at the election of, and
upon notice thereof to the Issuer by, the Administrator or the Funding
Agent, as applicable, any time, in which case the Funding Tranche
allocated to such terminated Fixed Period shall be allocated to a new
Fixed Period and shall accrue interest at the Alternate Reference Rate.
"Funding Agent" is defined in the Preamble.
"Funding Tranche" means one or more portions of the Aggregate
Purchaser Funded Amount used to fund or maintain the Notes that accrue interest
by reference to different interest rates.
"Governmental Actions" means any and all consents, approvals,
permits, orders, authorizations, waivers, exceptions, variances, exemptions or
licenses of, or registrations, declarations or filings with, any Governmental
Authority required under any Governmental Rules.
"Governmental Authority" means the United States of America,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and having jurisdiction over the applicable Person.
6
"Governmental Rules" means any and all laws, statutes, codes,
rules, regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.
"Increase" has the meaning specified in the Series Supplement.
"Increase Amount" means the amount requested by the Issuer to
be funded by the Conduit Purchasers and the Committed Purchaser, as may be
applicable (on a pro rata basis based on the Commitment including any commitment
amounts as a Term Institution) on an Increase Date.
"Increase Date" means the date on which each Increase occurs.
"Indemnified Party" has the meaning specified in Section 8.1.
"Initial Note Principal" means $28,080,192.
"Initial Purchase Price" has the meaning specified in Section
2.2.
"Intercreditor Agreement" means that Intercreditor Agreement
dated as of August 14, 2008, among Seller, Conn Credit Corporation, Inc., Conn
Credit I, L.P., Bank of America, N.A., and the Trustee.
"Issuer" is defined in the Preamble.
"Issuer Indemnified Amounts" has the meaning specified in
subsection 8.1(a).
"JPMorgan" is defined in the Preamble.
"Leverage Ratio" has the meaning specified in the ABL
Agreement as of the Restatement Date.
"Liquidity Agreement" means and includes (a) the Liquidity
Asset Purchase Agreement (regarding Conn Funding II, L.P.), dated as of
September 13, 2002, among Three Pillars, as borrower, SunTrust Bank, as
liquidity agent for the Liquidity Banks from time to time party thereto, and
SunTrust Robinson Humphrey, Inc. (f/k/a SunTrust Equitable Securities
Corporation), as administrator for Three Pillars, and the Liquidity Banks from
time to time party thereto, (b) the Asset Purchase Agreement (regarding Conn
Funding II, L.P.), dated as of September 10, 2007 among PARCO, JPMorgan, as
funding agent for the Liquidity Banks from time to time party thereto and the
Liquidity Banks from time to time party thereto, and (c) any other agreement
hereafter entered into by any Conduit Purchaser providing for the sale by such
Conduit Purchaser of an interest in the Notes (or portions thereof), or the
making of loans or other extensions of credit to such Conduit Purchaser secured
by security interests in the Notes (or portions thereof), to support all or part
of such Conduit Purchaser's payment obligations under its Commercial Paper Notes
or to provide an alternate means of funding such Conduit Purchaser's investments
in accounts receivable or other financial assets, in each case as amended,
supplemented or otherwise modified from time to time.
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"Liquidity Bank" means and includes the applicable Bank and
the various financial institutions as are, or may become, parties to a Liquidity
Agreement, as purchasers thereunder.
"Match Funding Rate" has the meaning specified in clause (a)
of the definition of "Commercial Paper Rate" herein.
"Minimum Fixed Charge Coverage Ratio" has the meaning
specified in the ABL Agreement as of the Restatement Date.
"Monthly Noteholders' Statement" has the meaning specified in
paragraph 2.3(b)(i).
"Note Rate" means, with respect to any Interest Period, the
weighted average of the rates applicable to all Funding Tranches outstanding
during all or part of such Interest Period (determined as of each day in such
Interest Period), each such rate being (a) to the extent any Conduit Purchaser
(other than in its capacity as a Term Institution) is funding such Funding
Tranche during such period through the issuance of its Commercial Paper Notes,
the Commercial Paper Rate plus the Applicable Margin, (b) to the extent any (i)
Conduit Purchaser (other than its capacity as a Term Institution) is funding
such Funding Tranche during such period pursuant to a Liquidity Agreement or, in
the case of Three Pillars, the Voluntary Advance Agreement or (ii) a Committed
Purchaser (other than in its capacity as a Term Institution) is funding such
Funding Tranche during such period, a rate per annum equal to the Bank Rate plus
the Applicable Margin, and (c) to the extent a Term Institution is funding such
Funding Tranche during such period, a rate per annum equal to the greater of (i)
the Bank Rate minus 3% plus the Applicable Margin and (ii) the Commercial Paper
Rate plus the Applicable Margin; provided that on any day after the occurrence
and continuance of any Servicer Default, Pay Out Event or any other Event of
Default, the rate applicable to each such Funding Tranche (the "Default Rate")
shall be 3% per annum above the applicable Alternate Reference Rate in effect on
such day plus the Applicable Margin; provided, however, that interest for any
Funding Tranche shall not be considered paid by any distribution to the extent
that all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
"Notes" means the Variable Funding Asset Backed Notes Series
2002-A in the maximum aggregate principal amount of $450,000,000 to be issued by
the Issuer pursuant to the Indenture.
"Notice of Increase" means a written notice of an Increase in
the form of Exhibit A hereto.
"Offering Memorandum 2002" means that certain offering
memorandum, dated as of September 10, 2002, prepared by the Issuer and the
Seller in connection with the issuance of the Series 2002-B Fixed Rate Notes.
8
"Original Note Purchase Agreement" is defined in the Recitals.
"PARCO" means Park Avenue Receivables Company, LLC and if the
Issuer has requested PARCO or JPMorgan to make a Term Deposit in accordance with
Section 2.12, "PARCO" shall include Park Avenue Receivables Company, LLC as a
Term Institution.
"Participant" has the meaning specified in subsection 1.4(b).
"Pool Funding Rate" has the meaning specified in clause (b) of
the definition of "Commercial Paper Rate" herein.
"Program Documents" means, with respect to each Conduit
Purchaser, the related Liquidity Agreement, any related Credit Agreement, solely
with respect to Three Pillars, the Voluntary Advance Agreement, the documents
under which Administrator or the Funding Agent, as applicable, performs its
obligations and the other documents to be executed and delivered in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time.
"Purchase Expiration Date" means any of (i) the Tranche A
Purchase Expiration Date, (ii) Tranche B Purchase Expiration Date and (iii) the
Term Draw Expiration Date, as the context requires.
"Rate Setting Day" means, for any Interest Period, two (2)
Business Days prior to the commencement of such Interest Period. In the event
such day is not a Business Day, then the Rate Setting Day shall be the
immediately preceding Business Day.
"Reduction" has the meaning specified in Section 2.5.
"Restatement" has the meaning specified in Section 3.1.
"Restatement Date" has the meaning specified in Section 3.1.
"Seller" is defined in the Preamble (it being understood that
any reference to the Seller with respect to the Closing Date shall be deemed a
reference to the Seller and its predecessors).
"Support Provider" means and includes any entity now or
hereafter extending credit or liquidity support or having a commitment to extend
credit or liquidity support to or for the account of, or to make loans to or
purchases from, any Conduit Purchaser or issuing a letter of credit, surety bond
or other instrument to support any obligations arising under or in connection
with the commercial paper program of such Conduit Purchaser.
"Term Account" means, for any Term Institution, the securities
account in the name of the Issuer maintained by such Term Institution during the
Term Period, if any, and under the sole control and dominion of such Term
Institution, to secure the Issuer's obligation to repay the Term Deposit made by
such Term Institution.
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"Term Deposit" shall mean, as of any date of determination in
respect of any Term Institution, the amount deposited by such Term Institution
into such Term Institution's Term Account pursuant to 2.12 hereof minus any Term
Increase made by such Term Institution plus any repayments or prepayments in
respect of the Aggregate Purchaser Funded Amount that are deposited into such
Term Account in accordance with Section 2.12 hereof.
"Term Deposit Rate" means the rate per annum equal to the Bank
Rate minus 3.00% per annum.
"Term Draw Expiration Date" means the earlier of (i) September
10, 2012, as such date may be extended in accordance with Section 2.4 or (ii)
the date of occurrence of an Event of Default, Payout Event or Servicer Default.
"Term Increase" has the meaning set forth in Section 2.3(a).
"Term Institution" has the meaning set forth in Section
2.12(a).
"Term Interest" has the meaning set forth in Section 2.12(e).
"Term Period" shall mean, with respect to any Term
Institution, the period commencing on the date, if any, on which such Term
Institution establishes its Term Account and makes the initial deposit therein
pursuant to Section 2.12 hereof and ending on the earlier of the Term Draw
Expiration Date or the date of the maturity of the Notes if accelerated
following our Event of Default, Payment Event or Servicer Default.
"Three Pillars" means Three Pillars Funding LLC and if the
Issuer has requested Three Pillars make a Term Deposit in accordance with
Section 2.12, "Three Pillars" shall include Three Pillars Funding LLC as a Term
Institution.
"Tranche A Commitment" means, with respect to Three Pillars
$66,666,666.67 and with respect to the Committed Purchaser $33,333,333.33, in
each case, as may be reduced from time to time in accordance with Section 2.5;
provided after the occurrence of the Tranche A Purchase Expiration Date with
respect to Three Pillars or the Committed Purchaser, as applicable, such
Person's Tranche A Commitment shall be zero.
"Tranche A Purchase Expiration Date" means the earlier of (i)
August 28, 2008 (as such date may be extended from time to time pursuant to
Section 2.4) and (ii) the date of occurrence of an Event of Default, Payout
Event or Servicer Default.
"Tranche B Commitment" means, with respect to Three Pillars
$133,333,333.33 and with respect to the Committed Purchaser $66,666,666.67 in
each case, as may be reduced from time to time in accordance with Section 2.5;
provided if the Issuer fails to request (i) Three Pillars, in accordance with
Section 2.12, to establish a Term Account and make a Term Deposit prior to the
third Business Day prior to the Tranche B Purchase Expiration Date, Three
Pillar's Tranche B Commitment shall be zero and (ii) the Committed Purchaser or
PARCO, in accordance with Section 2.12, to establish a Term Account and make a
Term Deposit prior to the third Business Day prior to the Tranche B Purchase
Expiration Date, the Committed Purchaser's Tranche B Commitment shall be zero;
provided further if the Issuer requests (i) Three Pillars, in accordance with
Section 2.12, to establish a Term Account and make a Term Deposit prior to the
third Business Day prior to the Tranche B Purchase Expiration Date, Three
Pillar's Tranche B Commitment shall be zero on the Term Draw Expiration Date and
(ii) the Committed Purchaser or PARCO, in accordance with Section 2.12, to
establish a Term Account and make a Term Deposit prior to the third Business Day
prior to the Tranche B Purchase Expiration Date, the Committed Purchaser's
Tranche B Commitment shall be zero on the Term Draw Expiration Date.
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"Tranche B Purchase Expiration Date" means the earlier of (i)
August 13, 2009 (as such date may be extended from time to time pursuant to
Section 2.4) and (ii) the date of occurrence of an Event of Default, Payout
Event or Servicer Default).
"Transaction Documents" means (i) the Base Indenture, (ii) the
Series Supplement, (iii) this Note Purchase Agreement, (iv) the Fee Letters, (v)
the Liquidity Agreements, (vi) the Servicing Agreement and (vii) the Notes, in
each case in effect on September 10, 2007 or as modified in accordance with the
terms of the Transaction Documents.
"Trust Assets" means all of the Issuer's right, title and
interest in and to all Receivables, Related Security, Contracts, Collections and
all proceeds relating to the foregoing and all of the other collateral which is
part of the Trust Estate or otherwise pledged to the Trustee for the benefit of
the Secured Parties pursuant to the Indenture.
"Voluntary Advance Agreement" means the Voluntary Advance
Agreement, dated as of March 11, 1999, among SunTrust Robinson Humphrey, Inc.
(f/k/a SunTrust Equitable Securities Corporation), the Administrator and
SunTrust Bank, as it may be amended, supplemented or otherwise modified from
time to time.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in this Note Purchase Agreement shall have the
meanings defined herein when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.1, and accounting terms partially defined in Section 1.1 to
the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms
herein are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained herein shall
control.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Note Purchase Agreement shall refer to this
Note Purchase Agreement as a whole and not to any particular provision
of this Note Purchase Agreement; and Section, subsection, Schedule and
Exhibit references contained in this Note Purchase Agreement are
references to Sections, subsections, the Schedules and Exhibits in or
to this Note Purchase Agreement unless otherwise specified.
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ARTICLE II.
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale of the Notes. On the terms and subject
to the conditions set forth in the Note Purchase Agreement dated as of the
Closing Date, and in reliance on the covenants, representations, warranties and
agreements therein set forth, the Issuer sold at the Closing to the
Administrator, on behalf of Three Pillars the Notes then outstanding in an
aggregate initial outstanding principal amount equal to the Initial Note
Principal for the Initial Purchase Price. On September 10, 2007, the
Administrator, on behalf of Three Pillars, assigned a portion of the Notes to
the Funding Agent, on behalf of PARCO, and the Committed Purchaser.
SECTION 2.2 Initial Purchase Price. The Notes were purchased at
Closing at a price (the "Initial Purchase Price") equal to 100% of the Initial
Note Principal.
SECTION 2.3 Increases.
(a) Subject to the terms and conditions of this Note Purchase Agreement and
the Series Supplement, from time to time prior to the Final Purchase
Expiration Date but not more frequently than twice per month (unless
the Administrator and the Funding Agent otherwise consent in their sole
discretion) upon receipt by the Administrator and the Funding Agent of
a Notice of Increase, the Administrator, on behalf of Three Pillars,
and the Funding Agent, on behalf of PARCO or the Committed Purchaser,
as the case may be, shall make Increases as provided in Section 2.3(c);
provided, however, that neither of Three Pillars nor the Committed
Purchaser shall be required to fund any Increase if, after giving
effect thereto, its Note Principal would exceed the Maximum Principal
Amount; and provided, further, that neither of Three Pillars nor the
Committed Purchaser shall be required to fund any Increase if, after
giving effect thereto, its Note Principal would exceed its Commitment.
Notwithstanding anything contained in the Transaction Documents, any
portion of an Increase funded after the Tranche B Purchase Expiration
Date allocated to a Term Institution's Tranche B Commitment shall be
funded by withdrawing such Term Institution's pro rata share of such
Increase from such Term Institution's Term Account (a "Term Increase").
(b) Each Increase hereunder shall be subject to the further
conditions precedent that:
(i) The Administrator and the Funding Agent will have
received copies of each of the monthly noteholders' statement, the
form of which is attached as Exhibit B to the Series Supplement (the
"Monthly Noteholders' Statement"), in each case, most recently
required to have been delivered under the Indenture;
(ii) Each of the representations and warranties of each
of the Seller, the Servicer and the Issuer made in the Transaction
Documents to which it is a party shall be true and correct in all
material respects as of the applicable Increase Date (except to the
extent they expressly relate to an earlier or later time);
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(iii) The Issuer, the Servicer and the Seller shall be
in compliance in all material respects with all of its respective
covenants contained in the Transaction Documents;
(iv) No Pay Out Event, Potential Pay Out Event, Default,
Event of Default, Servicer Default or Block Event shall have
occurred and be continuing;
(v) The Final Purchase Expiration Date shall not have
occurred; and
(vi) The Administrator and the Funding Agent shall have
received a completed Notice of Increase with respect to such
proposed Increase, not later than 12:00 p.m. (New York time) one (1)
Business Day prior to the proposed date of such Increase.
(c) Three Pillars shall make its related pro rata portion of the
proceeds of such requested Increase available to the Administrator at its office
in Atlanta, Georgia, and PARCO or the Committed Purchaser, as applicable may
make its related pro rata portion of the proceeds of such requested Increase
available to the Funding Agent at its office in New York, New York, in same day
funds on the Increase Date, and if PARCO does not make available its full pro
rata portion of such Increase Amount, the Committed Purchaser shall make any
portion constituting a shortfall so available to the Funding Agent. Upon receipt
by Administrator and the Funding Agent of such funds, the Administrator and the
Funding Agent will make such funds available to Issuer not later than 3:00 p.m.
New York City time on the Increase Date by wire transfer of immediately
available funds to such account as may from time to time be specified by the
Issuer in a notice to the Administrator and the Funding Agent.
(d) All conditions set forth in Section 3.1 of the Series
Supplement, to the extent applicable, shall have been satisfied at such time.
Each "Increase" with respect to all VFN Series shall be allocated to each
respective VFN Series as instructed by the Issuer; provided, that (i) the Issuer
shall not (unless necessary in order to comply with the requirements of clause
(ii) of this paragraph) disproportionately allocate Increases to the same VFN
Series for two or more consecutive Increases and (ii) shall at all times use its
reasonable best efforts to allocate Increases to the respective VFN Series so
that the aggregate of the "Aggregate Purchaser Funded Amounts" under (and as
defined in) each VFN Series is at all times ratably allocated among each such
VFN Series according to their respective "Maximum Principal Amount" (as defined
in each such VFN Series).
SECTION 2.4 Extension of Purchase Expiration Dates. The Issuer may
advise the Administrator and the Funding Agent, in writing of its desire to
extend any of the Purchase Expiration Dates; provided such request is made not
more than 90 days prior to, and not less than 60 days prior to, the then current
related Purchase Expiration Date or the Term Draw Expiration Date, as
applicable. The Administrator and the Funding Agent shall notify the Issuer in
writing, within 45 days after its receipt of such request by the Issuer, whether
the Conduit Purchasers and the Committed Purchaser are agreeable to such
extension (it being understood that each Conduit Purchaser may accept or decline
such a request in its sole discretion and on such terms as it may elect) and, to
the extent the Conduit Purchasers and the Committed Purchaser are agreeable, the
Issuer, the Administrator, the Funding Agent, the Committed Purchaser and the
Conduit Purchasers shall enter into such documents as the Conduit Purchasers and
the Committed Purchaser may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Conduit
Purchasers, the Administrator, the Funding Agent and the Committed Purchaser in
connection therewith (including reasonable attorneys' costs) shall be paid by
the Issuer; it being understood, that the failure of the Administrator and the
Funding Agent to so notify the Issuer as set forth above shall not be deemed to
be a consent to such request for extension by any Conduit Purchaser or the
Committed Purchaser. Notwithstanding anything contained herein, Three Pillars or
the Committed Purchaser may agree to extend any Purchase Expiration Date
independently of the other Person if such other Person declines to extend such
Purchase Expiration Date. In such a case, the applicable Purchase Expiration
Date shall occur only with respect to the Person declining to so extend.
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SECTION 2.5 Reduction of Maximum Principal Amount.
(a) On any Payment Date prior to the Rapid Pay Out Commencement
Date, upon the written request of the Issuer, the "Maximum Principal Amount" (as
defined in each VFN Series) may be permanently reduced (a "Reduction"), on a
ratable basis with respect to each VFN Series and with respect to the Notes, by
the Issuer; provided that the Issuer shall have given each applicable
"Administrator" and the Funding Agent hereunder irrevocable written notice
(effective upon receipt) of the amount of such Reduction prior to 10:00 a.m.,
New York time on a Business Day that is at least thirty (30) days prior to such
Reduction; provided, that any such Reduction shall be in an amount equal to
$25,000,000 in the aggregate for all VFN Series or integral multiples of
$10,000,000 in excess thereof; and provided, further, that no Reduction may
cause the aggregate of the "Maximum Principal Amounts" under all VFN Series to
be lower than $150,000,000. Each Reduction effected pursuant to this Section 2.5
shall automatically and permanently, without any further action on the part of
any party, reduce (i) the Commitment of each of (a) Three Pillars and (b) PARCO
and the Committed Purchaser on a pro rata basis, in the amount of such Reduction
(ii) the Tranche A Commitment and the Tranche B Commitment on a ratable basis
with respect to the Commitment of Three Pillars and the Commitment of the
Committed Purchaser; provided if requested by the Issuer and each of the
Administrator and the Funding Agent agrees, in writing, in their sole
discretion, the Tranche A Commitments and Tranche B Commitments of Three Pillars
and the Committed Purchaser may be reduced in amounts agreed to by the Issuer,
the Administrator and the Funding Agent (which may not be on a ratable basis);
(b) The Issuer shall pay to (i) the Administrator on behalf of Three
Pillars and (ii) the Funding Agent on behalf of PARCO or the Committed Purchaser
any accrued and unpaid fees and expenses with respect to the reduction amount on
the date of any such Reduction.
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SECTION 2.6 Calculation of Monthly Interest.
(a) On the Business Day prior to each Series Transfer Date,
the Administrator (with respect to Three Pillars) and the Funding Agent
(with respect to PARCO and the Committed Purchaser) shall calculate,
for the applicable Interest Period, the aggregate Monthly Interest for
each Funding Tranche (such Monthly Interest to be calculated using the
Note Rate, if necessary, for the remaining days in such Interest
Period). Each of the Administrator and the Funding Agent may, in its
sole discretion, determine the Commercial Paper Rate for its related
Conduit Purchaser with respect to each Series Transfer Date using the
Match Funding Rate or the Pool Funding Rate; provided, however, that to
the extent that the related Conduit Purchaser may choose between the
Match Funding Rate or the Pool Funding Rate, the Issuer may request the
Administrator or the Funding Agent, as applicable, to use either the
Match Funding Rate or the Pool Funding Rate in determining the
Commercial Paper Rate for its related Conduit Purchaser with respect to
such Series Transfer Date (it being understood and agreed that the
Administrator or the Funding Agent, as applicable, shall have no
obligation to follow any such request by the Issuer).
(b) The Issuer agrees to pay, and the Issuer agrees to
instruct the Servicer and the Trustee to pay, all amounts payable by it
with respect to the Notes, this Note Purchase Agreement and the Series
Supplement to the accounts designated by the Administrator and the
Funding Agent. All such amounts shall be paid no later than noon, New
York City time, on the day when due as determined in accordance with
this Note Purchase Agreement, the Indenture and the other Transaction
Documents, in lawful money of the United States in immediately
available funds. Amounts received after that time shall be deemed to
have been received on the next Business Day and shall bear interest at
the Default Rate, which interest shall be payable on demand.
SECTION 2.7 Benefits of Indenture. The Issuer hereby acknowledges
and confirms that each representation, warranty, covenant and agreement made
pursuant to the Indenture by the Issuer to the Trustee is (unless such
representation, warranty, covenant or agreement specifically states otherwise),
also made herein, all for the benefit and security of each Conduit Purchaser,
the Committed Purchaser, the Funding Agent and the Administrator.
SECTION 2.8 Broken Funding. In the event of (i) the payment of any
principal of any Funding Tranche (other than a Funding Tranche on which the
interest is computed by reference to the Alternate Reference Rate) other than on
the last day of the Fixed Period applicable thereto (including as a result of
the occurrence of the Rapid Pay Out Commencement Date or an optional prepayment
of a Funding Tranche), or (ii) any failure to borrow or prepay any Funding
Tranche (other than a Funding Tranche on which the interest is computed by
reference to the Alternate Reference Rate) on the date specified in any notice
delivered pursuant hereto, then, in any such event, the Issuer shall compensate
the Affected Party for the loss, cost and expense attributable to such event.
Such loss, cost or expense to any such Affected Party shall be deemed to include
an amount (the "Breakage Amount") determined by such Affected Party (or the
Administrator with respect to Three Pillars or the Funding Agent with respect to
PARCO or the Committed Purchaser, as applicable) to be the excess, if any, of
(i) the amount of interest which would have accrued on the portion of the
principal amount of such Funding Tranche prepaid or to be borrowed or prepaid
had such event not occurred, at the interest rate that would have been
applicable to such Funding Tranche, for the period from the date of such event
to the last day of the Fixed Period (or, in the case of a failure to borrow for
the period that would have been the related Fixed Period), over (ii) the amount
of interest which would be obtainable upon redeployment or reinvestment of an
amount of funds equal to such portion of such Funding Tranche for such period. A
certificate of any Affected Party incurring any loss, cost or expense as a
result of any of the events specified in this Section 2.8 and setting forth any
amount or amounts that the Affected Party is entitled to receive pursuant to
this Section 2.8 and the reason(s) therefor shall be delivered to the Issuer by
the Administrator or the Funding Agent and shall include reasonably detailed
calculations and shall be conclusive absent manifest error. The Issuer shall pay
to the Administrator or the Funding Agent, as applicable, on behalf of such
Affected Party the amount shown as due on any such certificate on the first
Payment Date which is not less than three Business Days after receipt thereof.
15
SECTION 2.9 Illegality. Notwithstanding anything in this Note
Purchase Agreement or any other Transaction Document to the contrary, 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 Affected Party to
acquire or maintain a Funding Tranche by reference to the Eurodollar Rate
(Reserve Adjusted) as contemplated by this Note Purchase Agreement or any
Program Document, (i) the Administrator or the Funding Agent, as applicable, on
behalf of such Affected Party shall, within forty-five (45) days after receiving
actual knowledge thereof, deliver a certificate to the Issuer (with a copy to
the Administrator or Funding Agent, as applicable) setting forth the basis for
such illegality, which certificate shall be conclusive absent manifest error,
and (ii) such Affected Party's portion of any Funding Tranche maintained by
reference to the Eurodollar Rate (Reserve Adjusted) then outstanding shall be
converted automatically to a Funding Tranche maintained by reference to the
Alternate Reference Rate.
SECTION 2.10 Inability to Determine Eurodollar Rate (Reserve
Adjusted). If, prior to the first day of any Interest Period relating to any
Funding Tranche maintained by reference to the Eurodollar Rate (Reserve
Adjusted):
(1) the Administrator or the Funding Agent shall have
determined (which determination in the absence of
manifest error shall be conclusive and binding upon the
Issuer) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate (Reserve
Adjusted) for such Interest Period; or
(2) the Administrator or the Funding Agent shall have
received notice from an Affected Party that the
Eurodollar Rate (Reserve Adjusted) determined or to be
determined for such Interest Period will not adequately
and fairly reflect the cost to such Affected Party (as
conclusively certified by such Person) of purchasing or
maintaining their affected portions of such Funding
Tranches during such Interest Period;
16
then, in either such event, the Administrator or the Funding
Agent shall give telecopy or telephonic notice thereof (confirmed in writing) to
the Issuer and the Administrator or Funding Agent, as applicable as soon as
practicable (but, in any event, within thirty (30) days after such determination
or notice, as applicable) thereafter. Until such notice has been withdrawn by
the Administrator or the Funding Agent, as applicable, no further Funding
Tranches by the related Conduit Purchaser or Committed Purchaser shall be funded
or maintained at the Eurodollar Rate (Reserve Adjusted). The Administrator and
the Funding Agent, as applicable, agrees to withdraw any such notice as soon as
reasonably practicable after such Person is notified of a change in
circumstances which makes such notice inapplicable.
SECTION 2.11 Fees. The Issuer shall pay to the Administrator or the
Funding Agent, as applicable, for the benefit of the applicable Affected Party
as and when due and in accordance with the provisions for payment set forth in
Article 5 of the Series Supplement, each of the applicable fees set forth in the
Fee Letters (the "Fees").
SECTION 2.12 Term Provisions.
(a) If the Issuer has requested an extension of the Tranche B
Purchase Expiration Date from each of Three Pillars and the Committed Purchaser
in accordance with Section 2.4 and if the Tranche B Purchase Expiration Date is
not extended in accordance with Section 2.4 by the Committed Purchaser or Three
Pillars (each such Person that does not agree to extend the Tranche B Purchase
Expiration Date is referred to herein as a "Term Institution") on terms
acceptable to the Issuer, in its sole discretion, such Term Institution shall,
by 11:00 a.m. (New York time) on the Tranche B Purchase Expiration Date
following its receipt of written request therefor from the Issuer by 10:00 a.m.
(New York time) three Business Days prior to the Tranche B Purchase Expiration
Date and subject to the satisfaction of the applicable conditions precedent set
forth in Section 4.2, (i) establish such Term Institution's Term Account and
(ii) make a Term Deposit by depositing, in same day funds to such Term
Institution's Term Account, an amount equal to such Term Institution's Tranche B
Commitment less such Term Institution's pro rata share of the Aggregate
Purchaser Funded Amount allocated to the Tranche B Commitment as of such date.
Each Term Institution shall invest the amounts on deposit in such Term
Institution's Term Account in Permitted Investments (it being agreed that the
earnings on any such Permitted Investments shall be applied to offset the Term
Interest payable to such Term Institutions). Any losses with respect to the
Permitted Investments shall be borne by the Issuer and shall be deemed to be an
"Increase" made by the applicable Term Institution. Notwithstanding anything
contained herein, if the Committed Purchaser does not (i) extend the Tranche B
Purchase Expiration Date or (ii) renew on terms acceptable to the Issuer and the
Issuer requests the Committed Purchaser make a Term Deposit pursuant to this
Section 2.12, PARCO may, in its sole discretion, make the Term Deposit in lieu
of the Committed Purchaser, provided, -------- further, that PARCO may at any
time request the Committed Purchaser to fund the related Term Account and any
outstanding Term Increases made by PARCO. Notwithstanding anything contained
herein, if both Three Pillars and the Committed Purchaser decline to extend the
Tranche B Purchase Expiration Date, and the Issuer requests a Term Deposit be
made pursuant to this Section 2.12, the Issuer shall request that both Three
Pillars and the Committed Purchaser make a Term Deposit in accordance with the
terms hereof.
17
(b) During the Term Period, all additional Increases to be made by
any Term Institution pursuant to Section 2.3 shall be made by such Term
Institution by withdrawing funds from such Term Institution's Term Account.
(c) All Term Deposits shall be due and payable in full by the Issuer
on the earlier of the Term Draw Expiration Date, the date of maturity of the
Notes if accelerated following an Event of Default in accordance with any
Transaction Document and the Rapid Pay Out Commencement Date and each Term
Institution that has outstanding Term Deposits may apply all amounts on deposit
in the related Term Account to repay such Term Deposits, together with all
accrued and unpaid interest thereon.
(d) The Issuer hereby agrees that it shall use the proceeds of the
Term Deposits solely to fund Term Increases from time to time. The Issuer hereby
grants to the applicable Term Institution, a security interest in the related
Term Account, all funds from time to time credited to such Term Account, all
financial assets (including, without limitation, Permitted Investments) from
time to time acquired with any such funds or otherwise credited to such Term
Account, all interest, dividends, cash, instruments and other investment
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such funds or such financial assets,
and all proceeds of, collateral for, and supporting obligations relating to any
and all of the foregoing. The grant of a security interest by the Issuer to each
such Term Institution pursuant to this Section secures the payment of the
Issuer's obligation to repay the Term Deposits, and to pay interest thereon,
pursuant to the terms of this Agreement.
(e) Interest shall accrue on the Term Deposit for each Interest
Period at the Term Deposit Rate ("Term Interest") and the Issuer shall pay Term
Interest on each Payment Date on the Term Deposit to the applicable Term
Institutions, in accordance with Section 2.6 of this Agreement and Section 5.2
of the Indenture.
(f) REPAYMENTS OF PRINCIPAL TO A TERM INSTITUTION WITH RESPECT TO
AMOUNTS ALLOCATED TO THE TRANCHE B COMMITMENT SHALL BE PAID TO THE APPLICABLE
TERM INSTITUTION'S TERM ACCOUNT AND APPLIED TO REDUCE THE AGGREGATE PURCHASER
FUNDED AMOUNT.
SECTION 2.13 Allocations of Principal. The Aggregate Purchaser Funded
Amount shall be allocated first against the Tranche B Commitment in an amount up
to the aggregate the Tranche B Commitment and second against the Tranche A
Commitment by the Administrator. Principal payments on the Notes shall be
allocated by the Administrator first, to the Tranche C Principal Amount, if any,
second, to reduce amounts allocated to the Tranche A Commitment until amounts
allocated to the Tranche A Commitment have been reduced to zero and third, to
reduce amounts allocated by the Administrator to the Tranche B Commitment.
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ARTICLE III.
CLOSING
SECTION 3.1 Closing. The closing (the "Closing") of the purchase and
sale of the Notes was held on September 13, 2002 (the date of the Closing being
referred to herein as the "Closing Date"). The closing of the transactions
contemplated by this Note Purchase Agreement (the "Restatement") will be held at
9:00 a.m., Chicago, Illinois time, on or about August 14, 2008, at the offices
of Mayer Brown LLP, 71 South Wacker Drive, Chicago, Illinois 60606 (such date
being referred to herein as the "Restatement Date").
SECTION 3.2 Transactions to be Effected at the Closing. At the
Closing (a) the Administrator delivered to the Issuer funds in an amount equal
to the sum of the Initial Purchase Price; and (b) the Issuer delivered one Note
to the Administrator in satisfaction of the Issuer's obligation to the
Administrator hereunder. On the Restatement Date the Issuer shall deliver the
then outstanding Notes to the Trustee for cancellation and shall deliver newly
issued Notes to the Administrator and the Funding Agent in the form attached to
the Series Supplement.
ARTICLE IV.
CONDITIONS PRECEDENT
SECTION 4.1 Conditions Precedent to Initial Purchase of the Notes.
In addition to the conditions set forth in Section 3.1 of the Series Supplement,
the purchase by the Administrator on behalf of the Conduit Purchaser of the
Notes was subject to the satisfaction at the time of the Closing of the
following conditions, each of which was satisfied or waived on or prior to the
Closing:
(a) The Administrator shall have received on the Closing
Date from each of the Seller and the Issuer, a certificate, dated
the Closing Date and signed by an executive officer of the Seller
and an executive officer of the Issuer, as the case may be, to the
effect that, and the Administrator shall be satisfied that, (i) the
representations and warranties of the Seller and the Issuer in this
Note Purchase Agreement, the Indenture and the other Transaction
Documents are true and correct on and as of the Closing Date as if
made on and as of such date, (ii) the Issuer and the Seller have
complied with all the agreements and satisfied all the conditions on
their part to be performed or satisfied in this Note Purchase
Agreement, the Indenture and the other Transaction Documents, as
applicable, at or prior to the Closing Date, and (iii) there has not
occurred any change or any development that is likely to result in a
change in the condition, financial or otherwise, or in the earnings,
business, operations or prospects of the Issuer or the Seller, and
their respective Affiliates, taken as a whole, from that set forth
in the Offering Memorandum 2002 that has had or could reasonably be
expected to have a Material Adverse Effect.
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(b) The Administrator shall have received a certificate,
dated the Closing Date, signed by an executive officer of Trustee to
the effect that each of the Trust Accounts have been established.
(c) The Administrator shall have received, on the
Closing Date, opinions delivered to the Administrator and the
Conduit Purchaser (and the other addressees reasonably requested by
the Initial Purchaser), in each case, dated the Closing Date,
covering such matters as the Administrator shall reasonably request.
(d) The Issuer, the Trustee, the Seller and the other
parties to the Transaction Documents shall have executed and
delivered the Transaction Documents to which they are parties in the
same form and substance as previously presented to and approved by
the Administrator.
(e) Prior to the Closing Date, the Issuer and the Seller
shall have furnished to the Administrator such further information,
certificates and documents as the Administrator may reasonably
request.
(f) Prior to the Closing Date, the Administrator shall
have received certified copies of resolutions of the Board of
Directors of the Issuer, the Servicer and the Seller (or, in each
case, of its general partner or sole member, if applicable)
authorizing or ratifying the execution, delivery and performance,
respectively, of the Transaction Documents to which it is a party,
together with a certified copy of its articles or certificate of
incorporation or certificate of limited partnership, as applicable,
and a copy of its limited partnership agreement or by-laws, as
applicable.
(g) Prior to the Closing Date, the Administrator shall
have received certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if
any) with respect to the Transaction Documents.
(h) Prior to the Closing Date, the Administrator shall
have received a certificate of the secretary or an assistant
secretary of each of the Issuer, the Servicer Letter of Credit Bank
and the Seller (or, in each case, of its general partner, if
applicable) certifying the names of its officer or officers
authorized to sign the Transaction Documents to which it is a party.
(i) Prior to the Closing Date, the Administrator shall
have received good standing certificates for the Issuer, the
Servicer and the Seller issued as of a recent date acceptable to
Administrator by (a) the Secretary of State of the jurisdiction of
such Person's incorporation or organization, and (b) the Secretary
of State of the jurisdiction where such Person's chief executive
office and principal place of business are located.
(j) Prior to the Closing Date, the Administrator shall
have received (i) acknowledgment copies of proper financing
statements (Form UCC-1), filed on or prior to the Closing Date,
naming Issuer as debtor and Trustee (for the benefit of the Secured
Parties) as the secured party as may be necessary or, in the opinion
of Administrator, desirable under the UCC to perfect Trustee's (for
the benefit of the Secured Parties) security interest in the Trust
Estate, (ii) acknowledgment copies of proper financing statements,
filed on or prior to the Closing Date, naming the Seller (and its
predecessors) as seller/debtor, the Issuer as purchaser/secured
party and the Trustee as assignee as may be necessary or, in the
opinion of Administrator, desirable under the UCC to perfect
Trustee's ownership interest in the Receivables and the proceeds
thereof, and (iii) executed copies of proper UCC-3 financing
statements necessary to release all liens and other Adverse Claims
of any Person in the Trust Estate, the Receivables or the Purchased
Receivables, as applicable, granted by the Issuer or the Seller or
its predecessors.
20
(k) Prior to the Closing Date, the Administrator shall
have received a written search report by a search service acceptable
to Administrator listing all effective financing statements that
name the Issuer or the Seller and its predecessors as a debtor or
assignor and that are filed in the jurisdictions in which filings
were made pursuant to subsection 4.1(j) above and in such other
jurisdictions that Administrator shall have reasonably requested,
together with copies of such financing statements (none of which
shall cover any of the Trust Estate), and tax and judgment lien
search reports from a Person satisfactory to Administrator showing
no evidence of such lien filed against the Issuer or the Seller and
its predecessors.
(l) Prior to the Closing Date, the Administrator shall
have received all outstanding Fees payable pursuant to the Fee
Letter, including all accrued attorneys' fees and expenses.
(m) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued
by any Governmental Authority that would, as of the Closing Date,
prevent the issuance or sale of the Notes; and no injunction or
order of any Federal, state or foreign court shall have been issued
that would, as of the Closing Date, prevent the issuance or sale of
the Notes.
(n) All Governmental Actions of all Governmental
Authorities required with respect to the transactions contemplated
by the Transaction Documents and the other documents related thereto
shall have been obtained or made.
(o) To the extent required by Three Pillars' commercial
paper program, a letter from each rating agency rating Three
Pillars' Commercial Paper Notes confirming its rating of such
Commercial Paper Notes or that such rating will not be withdrawn or
downgraded after giving effect to the Original Note Purchase
Agreement and the transactions contemplated thereby.
(p) No Pay Out Event, Potential Pay Out Event, Event of
Default, Servicer Default or Block Event has occurred and is
continuing.
(q) The representations and warranties of the Issuer,
the Servicer and the Seller set forth in the Original Note Purchase
Agreement and the other Transaction Documents are true and correct
as of the Closing Date.
SECTION 4.2 Conditions Precedent to each Increase. In addition to
the conditions set forth in Section 3.1 of the Series Supplement, the obligation
of the Conduit Purchasers and the Committed Purchaser to fund any Increase on
the related Increase Date is subject to the condition that there exist no Pay
Out Event, Potential Pay Out Event, Event of Default, Servicer Default or Block
Event which has occurred and is continuing.
21
SECTION 4.3 Conditions Precedent to the Restatement. In addition to
the conditions set forth in Section 3.1 of the Series Supplement, the purchase
by the Administrator and the Funding Agent on behalf of the respective Conduit
Purchasers of the Notes on the Restatement Date is subject to the satisfaction
at the time of the Restatement of the following conditions:
(a) The Administrator and the Funding Agent shall have
received on the Restatement Date from each of the Seller and the
Issuer, a certificate signed by an executive officer of such Person,
dated the Restatement Date, to the effect that (i) the
representations and warranties of the Seller and the Issuer in this
Note Purchase Agreement, the Indenture and the other Transaction
Documents are true and correct on and as of the Restatement Date as
if made on and as of such date, (ii) the Issuer and the Seller have
complied with all the agreements and satisfied all the conditions on
their part to be performed or satisfied in this Note Purchase
Agreement, the Indenture and the other Transaction Documents, as
applicable, at or prior to the Restatement Date, and (iii) there has
not occurred any change or any development that is likely to result
in a change in the condition, financial or otherwise, or in the
earnings, business, operations or prospects of the Issuer or the
Seller, and their respective Affiliates, taken as a whole, from that
set forth in the Seller's most recent form 10-K filed with the
Securities and Exchange Commission that has had or could reasonably
be expected to have a Material Adverse Effect and the Administrator
and the Funding Agent shall be satisfied that such conditions are
true.
(b) [Reserved].
(c) The Administrator and the Funding Agent shall have
received on the Restatement Date opinion letters and/or bring-down
letters of opinions delivered to the Administrator and Three Pillars
prior to the Restatement Date from counsel to the Issuer, the Seller
and the Trustee, in each case in form and substance satisfactory to
the Administrator and the Funding Agent.
(d) The Issuer, the Trustee, the Seller and the other
parties to the Transaction Documents shall have executed and
delivered to the Administrator and the Funding Agent this Note
Purchase Agreement and each other Transaction Document to be
executed as of the Restatement Date.
(e) Prior to the Restatement Date, the Issuer and the
Seller shall have furnished to the Administrator and the Funding
Agent such further information, certificates and documents as the
Administrator or the Funding Agent may reasonably request.
(f) Prior to the Restatement Date, the Administrator and
the Funding Agent shall have received certified copies of all
documents evidencing any necessary corporate action, consents and
governmental approvals (if any) with respect to the Transaction
Documents.
22
(g) Prior to the Restatement Date, the Administrator and
the Funding Agent shall have received good standing certificates for
the Issuer, the Servicer and the Seller issued as of a recent date
acceptable to Administrator and the Funding Agent by (a) the
Secretary of State of the jurisdiction of such Person's
incorporation or organization, and (b) the Secretary of State of the
jurisdiction where such Person's chief executive office and
principal place of business are located.
(h) [Reserved].
(i) Prior to the Restatement Date, each of the
Administrator and the Funding Agent shall have received all
outstanding Fees due and payable to it pursuant to its related Fee
Letter, including all accrued attorneys' fees and expenses.
(j) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued
by any Governmental Authority that would, as of the Restatement
Date, prevent the issuance or sale of the Notes; and no injunction
or order of any Federal, state or foreign court shall have been
issued that would, as of the Restatement Date, prevent the issuance
or sale of the Notes.
(k) No Pay Out Event, Potential Pay Out Event, Event of
Default, Servicer Default or Block Event has occurred and is
continuing.
(l) The representations and warranties of the Issuer,
the Servicer and the Seller set forth in this Note Purchase
Agreement and the other Transaction Documents are true and correct
as of the Restatement Date (except to the extent they relate to an
earlier date or later time, and then as of such earlier date or
later time).
(m) All fees due and payable to each Conduit Purchaser,
the Administrator, the Funding Agent and the Committed Purchaser on
or prior to the Restatement Date shall have been paid in full.
(n) To the extent required by any Conduit Purchaser's
commercial paper program, a letter from each rating agency rating
such Conduit Purchaser's Commercial Paper Notes confirming its
rating of such Commercial Paper Notes or that such rating will not
be withdrawn or downgraded after giving effect to this Note Purchase
Agreement and the transactions contemplated hereby.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE SELLER
SECTION 5.1 Representations, Warranties and Covenants of the Seller
and the Issuer. The Issuer severally represents and warrants and the Seller,
jointly and severally with the Issuer, represent and warrant to the Conduit
Purchasers, the Funding Agent, the Committed Purchaser and the Administrator,
that:
23
(a) Organization and Good Standing. Each of the Seller
and the Issuer has been duly organized and is validly existing and
in good standing under the laws of the state of organization, with
full power and authority to own its properties and conduct its
business as presently conducted. Each of the Issuer and the Seller
is duly qualified to do business and is in good standing as a
foreign entity (or is exempt from such requirements), and has
obtained all necessary licenses and approvals, in each jurisdiction
in which failure to so qualify or to obtain such licenses and
approvals would be reasonably likely to have a Material Adverse
Effect.
(b) Power and Authority; Due Authorization. Each of the
Seller and the Issuer has (a) all necessary power, authority and
legal right to (i) execute, deliver and perform its obligations
under this Note Purchase Agreement and each of the other Transaction
Documents to which it is a party and (b) duly authorized, by all
necessary action, the execution, delivery and performance of this
Note Purchase Agreement and the other Transaction Documents to which
it is a party, the transactions contemplated herein and the
borrowing, and the granting of security therefor, on the terms and
conditions provided in the Indenture.
(c) No Violation. The consummation of the transactions
contemplated by this Note Purchase Agreement and the other
Transaction Documents and the fulfillment of the terms hereof will
not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of
time or both) a default under, (A) the organizational documents of
the Issuer or the Seller or (B) any indenture, loan agreement,
pooling and servicing agreement, receivables purchase agreement,
mortgage, deed of trust, or other agreement or instrument to which
the Issuer or the Seller is a party or by which the Issuer or the
Seller or any of the Issuer's or the Seller's properties is bound,
(ii) result in or require the creation or imposition of any Adverse
Claim upon its properties pursuant to the terms of any such
indenture, loan agreement, pooling and servicing agreement,
receivables purchase agreement, mortgage, deed of trust, or other
agreement or instrument, other than pursuant to the terms of the
Transaction Documents, or (iii) violate any law or any order, rule,
or regulation applicable to the Issuer or the Seller or of any court
or of any federal, state or foreign regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction
over, the Issuer or the Seller or any of its respective properties.
(d) Validity and Binding Nature. This Note Purchase
Agreement is, and the other Transaction Documents to which the
Issuer or the Seller is a party when duly executed and delivered by
the Issuer or the Seller and the other parties thereto will be, the
legal, valid and binding obligation of the Issuer or the Seller, as
applicable, enforceable in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and by general principles of equity.
(e) Government Approvals. No authorization or approval
or other action by, and no notice to or filing with, any
governmental authority or regulatory body required for the due
execution, delivery or performance by the Issuer or the Seller of
any Transaction Document to which it is a party remains unobtained
or unfiled, except for the filing of the UCC financing statements
referred to in Section 15.4 of the Base Indenture.
24
(f) Bulk Sales. No transaction contemplated hereby or by
the other Transaction Documents requires compliance with any "bulk
sales" act or similar law.
(g) Margin Regulations. Neither the Seller nor the
Issuer is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock, and no proceeds from
the transactions contemplated hereby, directly or indirectly, will
be used for a purpose that violates, or would be inconsistent with,
Regulations T, U and X promulgated by the Federal Reserve Board from
time to time.
(h) Perfection. (i) On the Closing Date and the date of
each Increase, the Issuer shall be the owner of all of the
Receivables and Related Security and Collections and proceeds with
respect thereto, free and clear of all Adverse Claims. On or prior
to the Closing Date and the date of each Increase and each
recomputation of the Investor Interest, all financing statements and
other documents required to be recorded or filed in order to perfect
and protect the Trust Estate against all creditors (other than
Secured Parties) of, and purchasers (other than Secured Parties)
from, the Issuer and each Seller will have been (or will have been
within ten (10) days of the Closing Date) duly filed in each filing
office necessary for such purpose, and all filing fees and taxes, if
any, payable in connection with such filings shall have been (or
will have been within ten (10) days of the Closing Date) paid in
full;
(ii) the Indenture constitutes a valid grant
of a security interest to the Trustee for the benefit of
the Conduit Purchasers and the other Secured Parties in
all right, title and interest of the Issuer in the
Receivables, the Related Security and Collections and
proceeds with respect thereto and all other assets of
the Trust Estate, now existing or hereafter created or
acquired. Accordingly, to the extent the UCC applies
with respect to the perfection of such security
interest, upon the filing of any financing statements
described in Article 8 of the Indenture, and, solely
with respect to the Related --------- Security, to the
extent required for perfection under the relevant UCC,
the delivery of possession of all instruments, if any,
included in such Related Security to the Servicer), the
Trustee shall have a first priority perfected security
interest in such property and the proceeds thereof (to
the extent provided in Section 9-315), subject to
Permitted Encumbrances and, to the extent the UCC does
not apply to the perfection of such security interest,
all notices filings and other actions required by all
applicable law have been taken to perfect and protect
such security interest or lien against and prior to all
Adverse Claims with respect to the relevant Receivables,
Related Security and Collections and proceeds with
respect thereto and all other assets of the Trust
Estate. Except as otherwise specifically provided in the
Transaction Documents, neither the Issuer nor any Person
claiming through or under the Issuer has any claim to or
interest in the Collection Account; and
25
(iii) immediately prior to, and after giving
effect to, the initial purchase of the Notes and each
Increase hereunder, the Issuer will be Solvent.
(i) Offices. The principal place of business and chief
executive office of the Issuer is located at the address referred to
in Section 15.4 of the Base Indenture (or at such other locations,
notified to the Trustee in jurisdictions where all action required
thereby has been taken and completed).
(j) Tax Status. Each of the Issuer and the Seller has
filed all tax returns (Federal, State and local) required to be
filed by it and has paid or made adequate provision for the payment
of all taxes, assessments and other governmental charges then due
and payable (including for such purposes, the setting aside of
appropriate reserves for taxes, assessments and other governmental
charges being contested in good faith).
(k) Compliance with Applicable Laws; Licenses, etc.
(i) Each of the Issuer and the Seller is in
compliance with the requirements of all applicable laws,
rules, regulations, and orders of all governmental
authorities, a breach of any of which, individually or
in the aggregate, would be reasonably likely to have a
Material Adverse Effect.
(ii) Neither of the Issuer nor the Seller
has failed to obtain any licenses, permits, franchises
or other governmental authorizations necessary to the
ownership of its properties or to the conduct of its
business, which violation or failure to obtain would be
reasonably likely to have a Material Adverse Effect.
(l) No Proceedings. Except as described in Schedule I,
(i) there is no order, judgment, decree,
injunction, stipulation or consent order of or with any
court or other government authority to which the Issuer
or the Seller is subject, and there is no action, suit,
arbitration, regulatory proceeding or investigation
pending, or, to the knowledge of the Issuer or the
Seller, threatened, before or by any court, regulatory
body, administrative agency or other tribunal or
governmental instrumentality, against the Issuer that,
individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect; and
(ii) there is no action, suit, proceeding,
arbitration, regulatory or governmental investigation,
pending or, to the knowledge of the Issuer or the
Seller, threatened, before or by any court, regulatory
body, administrative agency, or other tribunal or
governmental instrumentality (A) asserting the
invalidity of this Note Purchase Agreement, the
Indenture, the Notes or any other Transaction Document,
(B) seeking to prevent the issuance of the Notes
pursuant to the Indenture or the consummation of any of
the other transactions contemplated by this Indenture or
any other Transaction Document or (C) seeking to
adversely affect the federal income tax attributes of
the Issuer.
26
(m) Investment Company Act, Etc. None of the Seller or
the Issuer is, or after applying the proceeds of this offering will
be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(n) Eligible Receivables. Each Receivable included in
the Trust Estate (other than any Receivable identified as not being
an Eligible Receivable and included as such in the calculation of
Minimum Issuer Interest) on the date of any Monthly Servicer Report
shall be an Eligible Receivable on such date. Each Receivable,
including Subsequently Purchased Receivables, purchased by the
Issuer on any Purchase Date shall be an Eligible Receivable as of
such Purchase Date.
(o) Receivables Schedule. The Receivable File is a true
and correct schedule of the Receivables included in the Trust
Estate.
(p) ERISA. (i) Each of the Seller, the Issuer and its
respective ERISA Affiliates is in compliance in all material
respects with ERISA unless any failure to so comply could not
reasonably be expected to have a Material Adverse Effect and (ii) no
Lien exists in favor of the Pension Benefit Guaranty Corporation on
any of the Receivables. No ERISA Event has occurred with respect to
Title IV Plans of the Issuer. No ERISA Event has occurred with
respect to Title IV plans of the Seller's or the Issuer's ERISA
Affiliates that have an aggregate Unfunded Pension Liability equal
to or greater than $1,000,000. No ERISA Event has occurred with
respect to a Multiemployer Plan (as defined in the Base Indenture)
of the Issuer or its ERISA Affiliates.
(q) Accuracy of Information. All information heretofore
furnished by, or on behalf of, the Seller or the Issuer to the
Trustee or any of the Noteholders in connection with any Transaction
Document, or any transaction contemplated thereby, is true and
accurate in every material respect (without omission of any
information necessary to prevent such information from being
materially misleading).
(r) No Material Adverse Change. Since the date of the
Seller's most recent form 10-K filed with the Securities and
Exchange Commission, there has been no material adverse change in
the collectibility of the Receivables or the Issuer's (i) financial
condition, business, operations or prospects or (ii) ability to
perform its obligations under any Transaction Document.
(s) Trade Names and Subsidiaries. Set forth on Schedule
II hereto is a complete list of trade names of the Seller for the
six year period preceding the Closing Date. The Issuer has no
Subsidiaries and does not own or hold, directly or indirectly, any
equity interest in any Person.
(t) Notes. The Notes have been duly and validly
authorized, and, when executed and authenticated in accordance with
the terms of the Indenture, and delivered to and paid for in
accordance with this Note Purchase Agreement, will be duly and
validly issued and outstanding and will be entitled to the benefits
of the Indenture.
27
(u) Sales by Seller. (a) Each sale of Receivables by the
Seller to the Issuer shall have been effected under, and in
accordance with the terms of, the Purchase Agreement, including the
payment by the Issuer to the Seller of an amount equal to the
purchase price therefor as described in the Purchase Agreement, and
each such sale shall have been made for "reasonably equivalent
value" (as such term is used under Section 548 of the Federal
Bankruptcy Code) and not for or on account of "antecedent debt" (as
such term is used under Section 547 of the Federal Bankruptcy Code)
owed by the Issuer to the Seller.
(v) Use of Proceeds. No proceeds of any Notes will be
used by the Issuer to acquire any security in any transaction which
is subject to Section 13 or 14 of the Securities Exchange Act of
1934, as amended.
(w) Reaffirmation of Representations and Warranties by
the Issuer. On the Closing Date and on each Business Day, the Issuer
shall be deemed to have certified that all representations and
warranties described in Section 7.1 of the Indenture are true and
correct on and as of such day as though made on and as of such day
(except to the extent they relate to an earlier date or later time,
and then as of such earlier date or later time).
SECTION 5.2 Reaffirmation of Representations and Warranties by the
Issuer. On the Closing Date, the Restatement Date, on each Business Day and on
each day that an Increase is made hereunder, the Issuer, by accepting the
proceeds thereof, shall be deemed to have certified that all representations and
warranties described in Section 5.1 hereof and Section 7.1 of the Indenture are
true and correct on and as of such day as though made on and as of such day
(except to the extent they relate to an earlier date or later time, and then as
of such earlier date or later time).
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE ADMINISTRATOR,
THE FUNDING AGENT AND THE CONDUIT PURCHASERS
SECTION 6.1 Securities Laws; Transfer Restrictions. Each of the
Administrator, the Funding Agent and each Conduit Purchaser represents and
warrants to the Issuer, for itself, as of the date hereof (or as of a subsequent
date on which a successor or assign of any Purchaser shall become a party
hereto), and agrees that:
(a) it has (i) reviewed the Indenture (including the
schedule and exhibits thereto) and all other documents which have
been provided by the Issuer to it with respect to the transactions
contemplated by the Indenture, (ii) participated in due diligence
sessions with the Servicer and (iii) had an opportunity to discuss
the Issuer's and the Seller's businesses, management and financial
affairs, and the terms and conditions of the proposed purchase with
the Issuer and the Servicer and their respective representatives;
28
(b) it is an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act and has sufficient knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of
investing in, and it is able and prepared to bear the economic risk
of investing in, the Notes;
(c) it is purchasing the Notes for its own account, or
for the account of one or more "accredited investors" within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act that meet the criteria described in subsection (b)
and for which it is acting with complete investment discretion, for
investment purposes only and not with a view to distribution;
(d) it understands that (i) the Notes have not been and
will not be registered or qualified under the Securities Act or any
applicable state securities laws or the securities laws of any other
jurisdiction and is being offered only in a transaction not
involving any public offering within the meaning of the Securities
Act, (ii) the Issuer is not required to so register or qualify the
Notes, and (iii) the Notes may be resold, pledged or otherwise
transferred only (A) to the Issuer, (B) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A under
the Securities Act, or (C) in a transaction otherwise exempt from
the registration requirements of the Securities Act, in each case in
accordance with the provisions of the Indenture and any applicable
securities laws of any state of the United States or any other
jurisdiction;
(e) it understands that upon original issuance thereof,
and until such time as the same may no longer be required under the
applicable requirements of the Securities Act, the certificate
evidencing the Notes (and all securities issued in exchange therefor
or substitution thereof) shall bear a legend substantially in the
form set forth in the form of Notes included as an exhibit to the
Series Supplement;
(f) it understands that the Registrar and Transfer Agent
for the Notes will not be required to accept for registration of
transfer the Notes acquired by it, except upon presentation of, if
applicable, the certificate and, if applicable, the opinion
described in the Series Supplement; and
(g) it will obtain from any transferee of the Notes (or
any interest therein) substantially the same representations,
warranties and agreements contained in this Section 6.1.
ARTICLE VII.
COVENANTS
SECTION 7.1 Monthly Noteholders' Statement; Notice of Adverse Effect.
(a) The Issuer will cause each Monthly Noteholders'
Statement pertaining to the Series Supplement to be delivered to
each Conduit Purchaser and the Committed Purchaser,
contemporaneously with the delivery thereof to the Trustee.
29
(b) As soon as possible, and in any event within one (1)
day after the occurrence thereof, the Issuer shall (or shall cause
the Servicer to) give each Conduit Purchaser and the Committed
Purchaser written notice of each Pay Out Event, Potential Pay Out
Event, Event of Default, Servicer Default or Block Event.
SECTION 7.2 Further Assurances. The Issuer agrees to take any and
all acts and to create any and all further instruments necessary or reasonably
requested by the Administrator and the Funding Agent to fully effect the
purposes of this Note Purchase Agreement.
SECTION 7.3 Modifications to Transaction Documents.
(a) Notwithstanding anything in the Indenture to the
contrary, no provision of this Note Purchase Agreement, the
Indenture, the Servicing Agreement or the Purchase Agreement may be
amended, waived or otherwise modified without (i) the prior written
consent of the Issuer and the Required Persons and (ii) if such
amendment is material, without satisfying the Rating Agency
Condition; provided that the consent of all of the Noteholders shall
be required for (i) any amendment, waiver, modification or
supplement of any such document described above relating to (i) the
definitions of "Eligible Receivables," "Purchase Expiration Date,"
"Final Purchase Expiration Date," "Tranche A Expiration Date,"
"Required Persons," "Required Reserve Amount," "Coverage Test" and
"Maximum Principal Amount" and any defined terms incorporated
therein, (ii) the reduction or postponement of the time for payment
of any fee or other amount payable to or on behalf of such
Noteholders or (iii) this Section 7.3.
(b) The Issuer shall (or shall cause the Servicer to)
give the Administrator, the Funding Agent, the Committed Purchaser
and the Conduit Purchasers written notice of any proposed amendment,
modification or waiver of any provision of the Transaction
Documents.
SECTION 7.4 Expenses. Whether or not the Closing takes place, except
as otherwise expressly provided herein or in the Fee Letter, all reasonable
costs and expenses incurred in connection with this Note Purchase Agreement and
the transactions contemplated hereby shall be paid by the Issuer.
SECTION 7.5 Reorganizations and Transfers. The Issuer shall not
enter into any transaction described in subsection 8.3(c) of the Indenture
unless the Trustee and the Required Persons shall have given their prior written
consent thereto.
30
SECTION 7.6 Financial Covenants.
(a) Parent shall, on a consolidated basis with its
Subsidiaries: (i) maintain a Fixed Charge Coverage Ratio at least
equal to 1.30:1.00 measured quarterly as at the last day of each
Fiscal Quarter on a trailing twelve month basis and (ii) maintain a
Leverage Ratio not greater than the ratio set forth below for each
Fiscal Quarter during the specified period, measured as of the last
day of each Fiscal Quarter:
- --------------------------------------------- -------------------------------
Period Ratio
- --------------------------------------------- -------------------------------
Restatement Date through January 31, 2009 3.50:1.00
- --------------------------------------------- -------------------------------
February 1, 2009 through December 31, 2009 3.75:1.00
- --------------------------------------------- -------------------------------
January 1, 2010 and thereafter 4.00:1.00
- --------------------------------------------- -------------------------------
(b) Notwithstanding anything set forth in Section
2.04(e) of the Servicing Agreement, the Seller will not permit, at
any time, Consolidated Net Worth to be less than the sum of (i)
$109,541,000 plus (ii) 75% of positive Consolidated Net Income
generated after January 31, 2005 plus (iii) 100% of any capital
stock or other ownership or profit interest or any securities
convertible into or exchangeable for capital stock or other
ownership or profit interest or any warrants, rights or options to
acquire the same, issued after January 31, 2005. Any gains
attributable to the effects of Statements of Financial Accounting
Standards Nos. 125/140 and/or 133, or their successors, and any
losses attributable thereto, shall be excluded in determining
Consolidated Net Worth for purposes of this Section.
For the avoidance of doubt, the parties hereto hereby agree that each covenant
set forth in this Section 7.6 shall be tested by the Seller quarterly.
SECTION 7.7 ABL Covenants. Prior to the execution of any loan
facility secured by the indebtedness of any obligor under a Pool Contract other
than the Receivables (each an "ABL Receivable") (an "ABL Facility"), the Issuer
and the Seller shall deliver or cause to be delivered to the Administrator and
the Funding Agent the following agreements in form and substance satisfactory to
the Administrator and the Funding Agent: (a) an intercreditor agreement among
the Trustee and the parties granted a security interest in the ABL Receivables
pursuant to such ABL Facility, and any necessary consents related thereto and
(b) an agreement detailing the procedures by which the Parent and its
Subsidiaries that originate Pool Contracts agree which customers of such Persons
approved for credit will be allocated among such originators for purposes of
providing such credit.
SECTION 7.8 Most Favored Lender. The Issuer and the Seller hereby
agree to promptly notify the Administrator and Funding Agent of any amendment or
modification to the transaction documents related to the ABL Facility. The
Issuer and the Seller hereby agree that if an ABL Facility is entered into on or
after the date hereof or if any amendments thereto are executed from time to
time that contains any credit enhancement levels, required reserve percentage,
covenant, event of default, servicer default, trigger event, remedy or any
similar items or definitional terms related thereto (other than pricing) that
are more favorable (in the determination of the Administrator and the Funding
Agent) than those contained in the Transaction Documents (the "More Favorable
Provisions"), then the Transaction Documents shall be deemed to be similarly
amended, mutatis mutandis, for the benefit of the Administrator, the Funding
Agent, the Committed Purchaser and each Conduit Purchaser to the extent
permitted under the Transaction Documents. The Issuer and the Seller hereby
agree to document any deemed amendment to the Transaction Documents in writing,
if requested to do so by the Administrator and Funding Agent and permitted by
the Transaction Documents.
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SECTION 7.9 Restrictions on Amendments. The Issuer and the Seller
hereby agree that it will not, and will not permit any of their Affiliates to,
enter into any agreement with any Person that restricts the Issuer's and the
Seller's ability to amend, modify and supplement the Transaction Documents other
than as restricted by the Transaction Documents.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1 Indemnification. The Seller and the Issuer, jointly and
severally, agree to indemnify and hold harmless the Administrator, the Funding
Agent, the Committed Purchaser, each Conduit Purchaser, each Liquidity Bank,
each Credit Bank, each Bank, each of such Banks' Affiliates and each of their
respective successors, transferees, participants and assigns and all officers,
directors, shareholders, controlling persons, employees and agents of any of the
foregoing (each of the foregoing Persons being individually called an
"Indemnified Party"), forthwith on demand, from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
called "Indemnified Amounts") awarded against or incurred by any of them arising
out of or relating to any Transaction Document or the transactions contemplated
thereby, any commingling of funds (whether or not permitted hereunder), or the
use of proceeds therefrom by the Issuer, including (without limitation) in
respect of the Initial Purchase Price or any Increases or in respect of any
Receivable; excluding, however, (a) Indemnified Amounts to the extent determined
by a court of competent jurisdiction to have resulted from gross negligence or
willful misconduct on the part of any Indemnified Party or its agent or
subcontractor (BUT EXPRESSLY EXCLUDING FROM THIS CLAUSE (a), AND EXPRESSLY
INCLUDING IN THE INDEMNITY SET FORTH IN THIS SECTION 8.1, INDEMNIFIED AMOUNTS
ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH
INDEMNIFIED PARTY, IT BEING THE INTENT OF THE PARTIES THAT, TO THE EXTENT
PROVIDED IN THIS SECTION 8.1, INDEMNIFIED PARTIES SHALL BE INDEMNIFIED FOR THEIR
OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE NOT CONSTITUTING GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT), and (b) any tax upon or measured by net income (except
those described in Section 8.1) on any Indemnified Party.
SECTION 8.2 Increased Costs.
(a) If after September 10, 2007, 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), other than laws,
interpretations, guidelines or directives relating to Taxes:
32
(i) 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, an Affected Party or
shall impose on any Affected Party or on the United States market
for certificates of deposit or the London interbank market any other
condition affecting this Note Purchase Agreement, the other
Transaction Documents, the ownership, maintenance or financing of
the Notes, the Receivables, any other assets of the Trust Estate or
payments of amounts due hereunder or its obligation to advance funds
hereunder or under the other Transaction Documents; or
(ii) imposes upon any Affected Party any other expense
deemed by such Affected Party to be material (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 Note Purchase Agreement, the other
Transaction Documents, the ownership, maintenance or financing of
the Notes, the Receivables, any other assets of the Trust Estate, or
payments of amounts due hereunder or its obligation to advance funds
hereunder or otherwise in respect of this Note Purchase Agreement or
the other Transaction Documents,
and the result of any of the foregoing is to increase the cost to or reduce the
return of such Affected Party with respect to this Note Purchase Agreement, the
other Transaction Documents, the ownership, maintenance or financing of the
Notes, the Receivables, any other assets of the Trust Estate, the obligations
hereunder, the funding of any Increases hereunder or under the other Transaction
Documents, by an amount reasonably deemed by such Affected Party to be material,
then, on the first Payment Date which is not less than three Business Days after
demand by such Affected Party through the Administrator or the Funding Agent, as
applicable, the Issuer shall pay to such Affected Party such additional amount
or amounts as will compensate such Affected Party for such increased cost or
reduction. In making demand hereunder, the applicable Affected Party shall
submit to the Issuer a certificate as to such increased costs incurred which
shall provide in detail the basis for such claim which certificate shall be
conclusive and binding for all purposes absent manifest error; provided,
however, that no such Affected Party shall be required to disclose any
confidential or tax planning information in any such certificate.
(b) If any Affected Party shall have determined that
after the Closing Date, the adoption of any applicable law or bank
regulatory guideline regarding capital adequacy, or any change
therein, or any change in the interpretation thereof by any Official
Body, or any directive regarding capital adequacy (in the case of
any bank regulatory guideline, whether or not having the force of
law) of any such Official Body, has or would have, due to an
increase in the amount of capital required to be maintained by such
Affected Party, the effect of reducing the rate of return on capital
of such Affected Party as a consequence of such Affected Party's
obligations hereunder or with respect hereto to a level below that
which such Affected Party 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 Affected Party to be material, then from time to time, on the
first Payment Date which is not less than ten (10) Business Days
after demand by such Affected Party through the Administrator or the
Funding Agent, as applicable, the Issuer shall pay to such Affected
Party such additional amount or amounts as will compensate such
Affected Party for such reduction. In making demand hereunder, the
applicable Affected Party shall submit to the Issuer a certificate
as to such increased costs incurred which shall provide in
reasonable detail the basis for such claim which certificate shall
be conclusive and binding for all purposes absent manifest error;
provided, however, that no such Affected Party shall be required to
disclose any confidential or tax planning information in any such
certificate.
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(c) If an Accounting Based Consolidation Event shall at
any time occur then, on the first Payment Date which is not less
than three Business Days after demand by such Affected Party through
the Administrator or the Funding Agent, as applicable, the Issuer
shall pay such amounts as such Affected Party reasonably determines
will compensate or reimburse the Affected Party for any resulting
(i) fee, expense or increased cost charged to, incurred or otherwise
suffered by such Affected Party, (ii) reduction in the rate of
return on such Affected Party's capital or reduction in the amount
of any sum received or receivable by such Affected Party or (iii)
opportunity cost, internal capital charge or other imputed cost
determined by such Affected Party to be allocable to Issuer or the
transactions contemplated in this Agreement in connection therewith.
Amounts under this Section 10.5 may be demanded at any time without
regard to the timing of issuance of any financial statement by
company or by any Affected Party. In making demand hereunder, the
applicable Affected Party shall submit to the Issuer a certificate
as to such increased costs incurred which shall provide in
reasonable detail the basis for such claim which certificate shall
be conclusive and binding for all purposes absent manifest error;
provided, however, that no such Affected Party shall be required to
disclose any confidential or tax planning information in any such
certificate.
SECTION 8.3 Indemnity for Taxes. All payments made by the Issuer to
the Administrator or the Funding Agent for the benefit of any related Conduit
Purchaser or the Committed Purchaser under this Note Purchase Agreement or any
other Transaction Document shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future stamp or
similar 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 that would not have been imposed if
the Affected Party had timely complied with the requirements of subsection
8.3(b) hereof, and (ii) taxes imposed on the net income of the Administrator,
the Funding Agent or any other Affected Party, in each case imposed by any
jurisdiction under the laws of which the Administrator, the Funding Agent or
such Affected Party is organized or any political subdivision or taxing
authority thereof or therein (all such nonexcluded 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 Administrator, the Funding Agent or any Affected Party hereunder, the
amounts so payable to the Administrator, the Funding Agent or such Affected
Party shall be increased to the extent necessary to yield to the Administrator,
the Funding Agent or such Affected Party (after payment of all Taxes) all
amounts payable hereunder at the rates or in the amounts specified in this Note
Purchase Agreement and the other Transaction Documents. The Issuer shall
indemnify the Administrator, the Funding Agent and any such Affected Party for
the full amount of any such Taxes on the first Payment Date which is not less
than ten (10) days after the date of written demand therefor by the
Administrator or the Funding Agent, as applicable.
34
(a) Each Affected Party that is a Non-United States
Person shall:
(i) deliver to the Issuer and the
Administrator or the Funding Agent, as applicable, two
duly completed copies of IRS Form W-8 BEN or Form W-8
ECI, or successor applicable form, as the case may be;
(ii) deliver to the Issuer and the
Administrator or the Funding Agent, as applicable, 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 Issuer; and
(iii) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Issuer, the Administrator
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, regardless of the identity of the
Affected Party, renders all such forms inapplicable or which, regardless of the
identity of the Affected Party, would prevent such Affected Party from duly
completing and delivering any such form with respect to it, and such Affected
Party so advises the Issuer and the Administrator or the Funding Agent, as
applicable. Each such Affected Party so organized shall certify in the case of
an IRS Form W-8 BEN or IRS Form W-8 ECI (or successor applicable form), that it
is entitled to receive payments under this Note Purchase Agreement and the other
Transaction Documents without deduction or withholding of any United States
federal income taxes. Each Affected Party which is a Non-United States Person
represents and warrants to the Issuer and the Administrator or the Funding
Agent, as applicable, that, as of the date of this Note Purchase Agreement (or
the date such Person otherwise becomes an Affected Party, as the case may be),
(i) it is entitled to receive all payments hereunder without deduction or
withholding for or on account of any United States federal Taxes and (ii) it is
permitted to take the actions described in the preceding sentence under the laws
and any applicable double taxation treaties of the jurisdiction of its head
office or any booking office used in connection with this Note Purchase
Agreement. Each Affected Party which is a Non-United States Person further
agrees that, to the extent any form claiming complete or partial exemption from
withholding and deduction of United States federal Taxes delivered under this
clause (b) is found to be incomplete or incorrect in any material respect, such
Affected Party shall (to the extent it is permitted to do so under the laws and
any double taxation treaties of the United States, the jurisdiction of its
organization and the jurisdictions in which its relevant booking offices are
located) execute and deliver to each of the Administrator or the Funding Agent,
as applicable, and the Issuer a complete and correct replacement form.
35
(b) Limitations. Each Affected Party agrees to use
reasonable efforts to mitigate the imposition of any Taxes referred
to in this Section 8.3, including changing the office of such
Affected Party from which any Funding Tranche (or portion thereof)
funded or maintained by such Affected Party or this Note Purchase
Agreement is booked; provided that such reasonable efforts would not
be disadvantageous to such Affected Party or result in the
imposition of any additional Taxes upon such Affected Party or cause
such Affected Party, in its good faith judgment, to violate one or
more of its policies in order to avoid such imposition of Taxes.
SECTION 8.4 Other Costs, Expenses and Related Matters.
(a) The Issuer agrees, upon receipt of a written
invoice, to pay or cause to be paid, and to save the Affected
Parties harmless against liability for the payment of, all
reasonable out-of-pocket expenses (including, without limitation,
reasonable attorneys', accountants' and other third parties' fees
and expenses, any filing fees and expenses incurred by officers or
employees of any of the Affected Parties) or intangible, documentary
or recording taxes incurred by or on behalf of the Affected Parties
(i) in connection with the negotiation, execution, delivery and
preparation of this Note Purchase Agreement, the other Transaction
Documents and any documents or instruments delivered pursuant hereto
and thereto and the transactions contemplated hereby or thereby
(including, without limitation, the perfection or protection of the
Affected Parties' interest in the Trust Estate) and (ii) (A)
relating to any amendments, waivers or consents under this Note
Purchase Agreement, any Program Documents and the other Transaction
Documents, (B) arising in connection with any of the Affected
Parties' enforcement or preservation of rights (including, without
limitation, the perfection and protection of the Affected Parties'
interest in the Trust Estate), or (C) arising in connection with any
audit, dispute, disagreement, litigation or preparation for
litigation involving this Note Purchase Agreement or any of the
other Transaction Documents.
(b) The Administrator or the Funding Agent will notify
the Issuer and the Servicer in writing of any event occurring after
September 10, 2007 which will entitle an Indemnified Party or
Affected Party to compensation pursuant to this Article VIII. Any
notice by the Administrator or the Funding Agent claiming
compensation under this Article VIII 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 Administrator or the Funding Agent, as applicable, or
any applicable Indemnified Party or Affected Party may use any
reasonable averaging and attributing methods.
(c) If the Issuer is required to pay any additional
amount to any Conduit Purchaser pursuant to Section 8.2 or 8.3, then
such Conduit Purchaser shall use reasonable efforts (which shall not
require such Conduit Purchaser to incur an unreimbursed loss or
unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden reasonably deemed
by it to be significant) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices,
branches or Affiliates, if such filing or assignment would reduce
amounts payable pursuant to Section 8.2 or 8.3, as the case may be,
in the future.
36
ARTICLE IX.
THE ADMINISTRATOR AND THE FUNDING AGENT
SECTION 9.1 Authorization and Action. Three Pillars hereby appoints
SunTrust Robinson Humphrey, Inc. as its Administrator for purposes of the
Transaction Documents and authorizes the Administrator to take such action as
agent on its behalf and to exercise such powers as are delegated to the
Administrator, by the terms hereof, together with such powers as are reasonably
incidental thereto. PARCO and the Committed Purchaser, hereby appoint JPMorgan
Chase Bank, N.A. as its Funding Agent for purposes of the Transaction Documents
and authorizes the Funding Agent to take such action as agent on their behalf
and to exercise such powers as are delegated to the Funding Agent, by the terms
hereof, together with such powers as are reasonably incidental thereto. Three
Pillars hereby authorizes the Administrator, in its sole discretion, to take any
actions and exercise any rights or remedies under this Note Purchase Agreement
and any permitted related agreements and documents. PARCO and the Committed
Purchaser hereby authorize the Funding Agent, in its sole discretion, to take
any actions and exercise any rights or remedies under this Note Purchase
Agreement and any permitted related agreements and documents. Except for actions
which the Administrator or the Funding Agent is expressly required to take
pursuant to this Note Purchase Agreement or the applicable Program Documents,
neither the Administrator nor the Funding Agent shall be required to take any
action which exposes the Administrator or the Funding Agent to personal
liability or which is contrary to applicable law unless the Administrator or the
Funding Agent, as applicable, shall receive further assurances to its
satisfaction from the related Conduit Purchaser, of the indemnification
obligations under Section 9.4 hereof against any and all liability and expense
which may be incurred in taking or continuing to take such action. The
Administrator agrees to give to Three Pillars prompt notice of each notice and
determination given to it by the Issuer, the Servicer or the Trustee, pursuant
to the terms of this Note Purchase Agreement or the Indenture. The Funding Agent
agrees to give to PARCO and the Committed Purchaser prompt notice of each notice
and determination given to it by the Issuer, the Servicer or the Trustee,
pursuant to the terms of this Note Purchase Agreement or the Indenture. Subject
to Section 9.5 hereof, the appointment and authority of each of the
Administrator and the Funding Agent hereunder shall terminate upon the later of
(i) the payment to (a) each Conduit Purchaser and the Committed Purchaser of all
amounts owing to such Person hereunder and (b) the Administrator and the Funding
Agent of all amounts due hereunder and (ii) the Series 2002-A Termination Date.
SECTION 9.2 Administrator's and Funding Agent's Reliance, Etc.
Neither the Administrator, the Funding Agent nor any of its respective
directors, officers, agents who are natural persons or employees shall be liable
for any action taken or omitted to be taken by it or them as Administrator or
Funding Agent under or in connection with this Note Purchase Agreement or any
related agreement or document, except for its or their own gross negligence or
willful misconduct. Without limiting the foregoing, the Administrator and the
Funding Agent: (i) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Conduit Purchasers, the Funding Agent or the Committed
Purchaser and shall not be responsible to the Conduit Purchasers, the Funding
Agent or the Committed Purchaser for any statements, warranties or
representations made by any other Person in connection with any Transaction
Document; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Transaction Document on the part of any Person or to inspect the property
(including the books and records) of any Person; (iv) shall not be responsible
to the Conduit Purchasers, the Funding Agent or the Committed Purchaser for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Transaction Document or any other instrument or document furnished
pursuant hereto or thereto; and (v) shall incur no liability under or in respect
of any Transaction Document by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing (which may be by
telex) believed by it in good faith to be genuine and signed or sent by the
proper party or parties.
37
SECTION 9.3 Administrator, Funding Agent and their Respective
Affiliates. Each of the Administrator, the Funding Agent and any of their
respective Affiliates may generally engage in any kind of business with the
Issuer, the Seller, any Bank, Servicer, any Obligor, any insurer, any of their
respective Affiliates and any Person who may do business with or own securities
of the Issuer, the Seller, any Bank, Servicer, any Obligor or any of their
respective Affiliates, all as if such entities were not the Administrator or the
Funding Agent, as applicable, and without any duty to account therefor to the
Conduit Purchasers, the Funding Agent and the Committed Purchaser, as
applicable.
SECTION 9.4 Purchase Decision. Each of the Conduit Purchasers and
the Committed Purchaser acknowledges that it has, independently and without
reliance upon the Administrator or the Funding Agent, and based on such
documents and information as it has deemed appropriate, made its own evaluation
and decision to enter into this Note Purchase Agreement and to purchase an
interest in the Notes. Each of the Conduit Purchasers and the Committed
Purchaser also acknowledges that it will, independently and without reliance
upon the Administrator or the Funding Agent or any of their respective
Affiliates, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or not
taking action under this Note Purchase Agreement or any related agreement,
instrument or other document.
SECTION 9.5 Successor Administrator and Funding Agent.
38
(a) The Administrator may resign at any time by giving
five days' written notice thereof to each of the parties hereto and
the Trustee. Upon any such resignation of the Administrator, Three
Pillars shall have the right to appoint a successor Administrator.
If no successor Administrator shall have been so appointed and shall
have accepted such appointment, within five days after the retiring
Administrator's giving of notice of resignation, then the retiring
Administrator may, on behalf of Three Pillars, appoint a successor
Administrator. Upon the acceptance of any appointment as
Administrator hereunder by a successor Administrator, such successor
Administrator shall thereupon succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring
Administrator, and the retiring Administrator shall be discharged
from its duties and obligations under this Note Purchase Agreement
and the other Transaction Documents (other than obligations arising
or to have been performed prior to such retirement). After any
retiring Administrator's resignation hereunder as Administrator, the
provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while ---------- it was
an Administrator under this Note Purchase Agreement and the other
Transaction Documents.
(b) The Funding Agent may resign at any time by giving
five days' written notice thereof to each of the parties hereto and
the Trustee. Upon any such resignation of the Funding Agent, PARCO
and the Committed Purchaser shall have the right to appoint a
successor Funding Agent. If no successor Funding Agent shall have
been so appointed and shall have accepted such appointment, within
five days after the retiring Funding Agent's giving of notice of
resignation, then the retiring Funding Agent may, on behalf of the
PARCO and the Committed Purchaser, appoint a successor Funding
Agent. Upon the acceptance of any appointment as Funding Agent
hereunder by a successor Funding Agent, such successor Funding Agent
shall thereupon succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Funding Agent, and the
retiring Funding Agent shall be discharged from its duties and
obligations under this Note Purchase Agreement and the other
Transaction Documents (other than obligations arising or to have
been performed prior to such retirement). After any retiring Funding
Agent's resignation hereunder as Funding Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Funding Agent under
this Note Purchase Agreement and the other Transaction Documents.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Amendments. No amendment or waiver of any provision of
this Note Purchase Agreement shall in any event be effective unless the same
shall be made in accordance with the requirements set forth in Section 7.3, and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 10.2 Notices. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if to the Conduit
Purchasers, shall be mailed, delivered or telegraphed and confirmed to such
Persons at the following addresses:
Three Pillars Funding LLC
c/o AMACAR Group, L.L.C.
6525 Morrison Boulevard,
Suite 318
Charlotte, NC 28211
Attention: Doris Hearn
Facsimile: (704) 365-1362
39
and
Park Avenue Receivables Company, LLC
10 South Dearborn Street
Mail Code: IL1-0597
Chicago, IL 60670
Attention: Kyle Kimme
Facsimile: (312) 732-3600
if to the Administrator, shall be mailed, delivered or telegraphed
and confirmed to the Administrator at the following address:
SunTrust Robinson Humphrey, Inc.
303 Peachtree Street
Atlanta, Georgia 30308
Attention: Kecia Howson
Facsimile: (404) 813-0000
if to the Funding Agent or the Committed Purchaser, shall be mailed,
delivered or telegraphed and confirmed to such Person at the following address:
JPMorgan Chase Bank, N.A.
10 South Dearborn Street
Mail Code: IL1-0597
Chicago, IL 60670
Attention: Kyle Kimme
Facsimile: (312) 732-3600
if to the Seller, shall be mailed, delivered or telegraphed and
confirmed to the Seller at the following address:
Conn Appliances, Inc.
3295 College Street
Beaumont, Texas 77701
Attention: David Atnip
Telephone: 409-832-1696 ext. 3270
Facsimile: 409-839-4609
40
if to the Issuer, shall be mailed, delivered or telegraphed and
confirmed to the Issuer at the following address:
Conn Funding II, L.P.
3295 College Street
Beaumont, Texas 77701
Attention: David Atnip
Telephone: 409-832-1696 ext. 3270
Facsimile: 409-839-4609
SECTION 10.3 No Waiver; Remedies. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 10.4 Binding Effect; Assignability.
(a) This Note Purchase Agreement shall be binding on the
parties hereto and their respective successors and assigns;
provided, however, that the Issuer may not assign any of its rights
or delegate any of its duties hereunder or under any of the other
Transaction Documents to which it is a party without the prior
written consent of the Administrator and the Funding Agent. No
provision of this Note Purchase Agreement or any other Transaction
Document shall in any manner restrict the ability of any Affected
Party to assign, participate, grant security interests in, or
otherwise transfer any portion of its interest in the Notes (and its
rights to receive any payments in respect thereof, including in
connection with any collateral securing payment with respect to such
Notes); provided, that any such transfer, participation or
assignment shall only be made in compliance with the transfer
restrictions set forth in the Indenture; provided, further, that
unless otherwise consented to by the Issuer, such transferee,
participant or assignee shall have executed and delivered to the
Issuer, the Trustee, the Funding Agent and the Administrator, a
transfer certificate, the form of which is attached as Exhibit C to
the Series Supplement, with such changes as shall be reasonably
acceptable to the Issuer. Without limiting the foregoing, any
Conduit Purchaser may, in one or a series of transactions, transfer
all or any portion of its interest in the Trust Estate and the
Notes, and its rights and obligations under the Transaction
Documents to any Bank, any Liquidity Bank (or any successor of any
thereof by merger, consolidation or otherwise), any Affiliate of any
Bank or any Liquidity Bank in connection with a draw under a
Liquidity Agreement or a Credit Advance (which may then assign all
or any portion thereof so assigned or any interest therein to such
party or parties as it may choose).
41
(b) Any Conduit Purchaser or any assignee permitted
pursuant to subsection (a) above may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to
one or more Persons (each, a "Participant") participating interests
in all or a portion of its rights and obligations under this Note
Purchase Agreements; provided, that any such transfer, participation
or assignment shall only be made in compliance with the transfer
restrictions set forth in the Indenture; provided, further, that the
Administrator shall have consented to any such participation by
Three Pillars, as a Conduit Purchaser and the Funding Agent shall
have consented to any such participation by PARCO or the Committed
Purchaser. Notwithstanding any such sale by such Conduit Purchaser
or assignee of participating interests to a Participant, such
Conduit Purchaser or assignee rights and obligations under this Note
Purchase Agreement shall remain unchanged, such Conduit Purchaser or
assignee shall remain solely responsible for the performance
thereof, and the other parties hereto shall continue to deal solely
and directly with such Conduit Purchaser or assignee in connection
with such Conduit Purchaser or assignee's rights and obligations
under this Note Purchase Agreement. Each Conduit Purchaser or
assignee shall be entitled to the benefits of Article IX hereof;
provided, however, that all amounts payable to any such Participant
shall be limited to the amounts which would have been payable to
such Conduit Purchaser or assignee selling such participating
interest had such interest not been sold.
(c) Notwithstanding any other provision of this
Agreement to the contrary, any Conduit Lender, Committed Lender or
the Administrator may at any time pledge or grant a security
interest in all or any portion of its rights (including, without
limitation, its pro rata share of the Aggregate Purchaser Funded
Amount and any rights to payment of principal or interest with
respect thereto) under this Agreement to secure obligations of such
Person to a Federal Reserve Bank, without notice to or consent of
the Issuer or the Administrator; provided that no such pledge or
grant of security interest shall release such Person from any such
Person of its obligations hereunder, or substitute any such pledgee
or grantee for such Person as a party hereto.
(d) This Note Purchase Agreement shall create and
constitute the continuing obligation of the parties hereto in
accordance with its terms, and shall remain in full force and effect
until such time as all amounts payable with respect to the Notes
shall have been paid in full.
SECTION 10.5 Confidentiality. Unless otherwise consented to by the
Administrator and the Funding Agent, each of the Issuer and the Seller hereby
agrees that it will not disclose the contents of any Transaction Document, or
any other confidential or proprietary information furnished by the
Administrator, the Funding Agent, the Committed Purchaser or any Conduit
Purchaser to any Person other than its Affiliates (which Affiliates shall have
executed an agreement satisfactory in form and in substance to the Administrator
and the Funding Agent to be bound by this Section 10.5) auditors and attorneys
or as required by applicable law.
SECTION 10.6 GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS
(OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
EACH OF THE PARTIES TO THIS NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE
NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW THE
JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
42
SECTION 10.7 Wavier of Trial by Jury. To the extent permitted by
applicable law, each of the parties hereto irrevocably waives all right of trial
by jury in any action, proceeding or counterclaim arising out of or in
connection with this Note Purchase Agreement or any matter arising hereunder.
SECTION 10.8 No Proceedings. The Issuer agrees that so long as any
indebtedness of any Conduit Purchaser shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any indebtedness
of such Conduit Purchaser shall have been outstanding, it shall not file, or
join in the filing of, a petition against such Conduit Purchaser under the
Federal Bankruptcy Code, or join in the commencement of any bankruptcy,
reorganization, arrangement, insolvency, liquidation or other similar proceeding
against such Conduit Purchaser.
SECTION 10.9 Execution in Counterparts. This Note Purchase 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.
SECTION 10.10 No Recourse. Notwithstanding anything to the contrary
contained herein, the obligations of the Conduit Purchasers under this Note
Purchase Agreement are solely the corporate obligations of such Conduit
Purchaser and, in the case of obligations of any Conduit Purchaser other than
its respective Commercial Paper Notes, shall be payable at such time as funds
are actually received by, or are available to, such Conduit Purchaser in excess
of funds necessary to pay in full all of its respective outstanding Commercial
Paper Notes and, to the extent funds are not available to pay such obligations,
the claims relating thereto shall not constitute a claim against such Conduit
Purchaser but shall continue to accrue. Each party hereto agrees that the
payment of any claim (as defined in Section 101 of the Bankruptcy Code) of any
such party shall be subordinated to the payment in full of all Commercial Paper
Notes.
No recourse under any obligation, covenant or agreement of any
Conduit Purchaser contained in this Note Purchase Agreement shall be had against
any incorporator, stockholder, officer, director, member, manager, employee or
agent of such Conduit Purchaser (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
Note Purchase Agreement is solely a corporate obligation of each Conduit
Purchaser, and that no personal liability whatever shall attach to or be
incurred by any incorporator, stockholder, officer, director, member, manager,
employee or agent of any Conduit Purchaser (solely by virtue of such capacity)
or any of them under or by reason of any of the obligations, covenants or
agreements of such Conduit Purchaser contained in this Note Purchase Agreement,
or implied therefrom, and that any and all personal liability for breaches by
such Conduit Purchaser 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, member, manager, employee or
agent is hereby expressly waived as a condition of and in consideration for the
execution of this Note Purchase Agreement; provided that the foregoing shall not
relieve any such Person from any liability it might otherwise have as a result
of fraudulent actions taken or fraudulent omissions made by them.
43
SECTION 10.11 Survival. All representations, warranties, covenants,
guaranties and indemnifications contained in this Note Purchase Agreement
(including, without limitation, in Sections 10.8 and 10.10), and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the sale, transfer or repayment of the Notes.
SECTION 10.12 Recourse. The obligations of the Issuer under this
Note Purchase Agreement and the Notes are full-recourse obligations of the
Issuer.
SECTION 10.13 No Fiduciary Duty. Each of the Issuer and the Seller
acknowledges that each of the Administrator and the Funding Agent is acting
solely in the capacity of arm's-length contractual counterparties to the Issuer
and the Seller with respect to the offering of Notes contemplated hereby
(including in connection with determining the terms of the offering) and not as
a financial advisor or a fiduciary to, or an agent of the Issuer, the Seller or
any other Person. Additionally, neither the Administrator nor the Funding Agent
is advising the Issuer, the Seller or any other Person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Issuer and
the Seller shall consult with their own advisors concerning such matters and
shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither the Administrator
nor the Funding Agent shall have any responsibility or liability to the Issuer
or the Seller with respect thereto. Any review by the Administrator or the
Funding Agent of the Issuer, the Seller, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the
benefit of the Administrator or the Funding Agent, as applicable, and shall not
be on behalf of the Issuer, the Seller or any other party.
SECTION 10.14 Consent. The Administrator and the Funding Agent
hereby consent to the execution and delivery of the Intercreditor Agreement as
of the date hereof.
[Remainder of page intentionally left blank --
signature pages follow.]
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IN WITNESS WHEREOF, the parties have caused this Note Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
CONN FUNDING II, L.P., as Issuer
By: Conn Funding II GP, L.L.C.,
its general partner
By: /s/ David R. Atnip
------------------
Name: David R. Atnip
Title: Treasurer
CONN APPLIANCES, INC., as Seller
By: /s/ David R. Atnip.
------------------
Name: David R. Atnip, Jr.
Title: Treasurer
THREE PILLARS FUNDING LLC,
as a Conduit Purchaser
By: /s/ Doris J. Hearn
-----------------
Name: Doris J. Hearn
Title: Vice President
PARK AVENUE RECEIVABLES COMPANY LLC,
as a Conduit Purchaser
By: JPMorgan Chase Bank, N.A.,
its attorney-in-fact
By: /s/ Trisha Lesch
---------------
Name: Trisha Lesch
Title: Vice President
S-1
JPMORGAN CHASE BANK, N.A., as
Funding Agent
By: /s/ Trisha Lesch
--------------
Name: Trisha Lesch
Title: Vice President
JPMORGAN CHASE BANK, N.A. as
Committed Purchaser
By: /s/ Trisha Lesch
---------------
Name: Trisha Lesch
Title: Vice President
SUNTRUST ROBINSON HUMPHREY, INC.,
as Administrator
By: /s/ Joseph R. Franke
------------------
Name: Joseph R. Franke
Title: Director
S-2