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LOAN AND SERVICING AGREEMENT
dated as of April 30, 2009
among
HARLEY-DAVIDSON WAREHOUSE FUNDING CORP.,
as Borrower
HARLEY-DAVIDSON CREDIT CORP.,
as Servicer
THE COMMERCIAL PAPER CONDUITS FROM TIME TO TIME
PARTY HERETO AS CONDUIT LENDERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS COMMITTED LENDERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY
HERETO AS ADMINISTRATIVE AGENTS,
JPMORGAN CHASE BANK, N.A.
and
CITICORP NORTH AMERICA, INC.,
as Syndication Agents
and
JPMORGAN CHASE BANK, N.A.,
as Program Agent
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J.P. MORGAN SECURITIES INC.
and
CITICORP NORTH AMERICA, INC.,
as Co-Lead Arrangers
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iii
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..........................................................1
SECTION
1.01. Certain Defined
Terms..................................1
SECTION
1.02. Other Terms and
Constructions.........................31
SECTION
1.03. Computation of Time
Periods...........................31
ARTICLE II AMOUNTS AND TERMS OF THE
LOANS.....................................31
SECTION
2.01. The Loan
Facility.....................................31
SECTION
2.02. Making the
Advance....................................32
SECTION
2.03. Reduction in the Aggregate
Commitment.................35
SECTION
2.04.
Tranches..............................................35
SECTION
2.05. Interest and Fees;
Hedging............................36
SECTION
2.06. Maturity
Date.........................................37
SECTION
2.07. Evidence of
Debt......................................37
SECTION
2.08. Settlement
Procedures.................................38
SECTION
2.09. Removal of Defaulted
Contracts........................41
SECTION
2.10. Payments and Computations,
Etc........................42
SECTION
2.11. Interest
Protection...................................42
SECTION
2.12. Accounting Based Consolidation
Event..................43
SECTION
2.13. Increased
Capital.....................................43
SECTION
2.14. Funding
Losses........................................44
SECTION
2.15. Taxes 44
SECTION
2.16. Security
Interest.....................................45
SECTION
2.17. Take-Out
Securitizations..............................48
SECTION
2.18. Defaulting
Lenders....................................48
SECTION
2.19. Mitigation of Obligations; Replacement of
Lender
Groups.........................................49
ARTICLE III CONDITIONS
PRECEDENT..............................................50
SECTION
3.01. Conditions Precedent to Effectiveness of the
Agreement
and the Initial
Advance...............................50
SECTION
3.02. Conditions Precedent to each Advance Subsequent to
the
Initial Advance.......................................50
SECTION
3.03. Conditions Precedent to Each
Advance..................51
ARTICLE IV REPRESENTATIONS AND
WARRANTIES.....................................52
SECTION
4.01. Representations and Warranties of the
Borrower........52
SECTION
4.02. Representations and Warranties of the
Servicer........57
SECTION
4.03. Financial Institution Representations and
Warranties..61
ARTICLE V GENERAL
COVENANTS...................................................61
SECTION
5.01. Affirmative Covenants of the
Borrower.................61
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SECTION
5.02. Negative Covenants of the
Borrower....................67
SECTION
5.03. Affirmative Covenants of the
Servicer.................69
SECTION
5.04. Negative Covenants of the
Servicer....................73
ARTICLE VI ADMINISTRATION OF
CONTRACTS........................................74
SECTION
6.01. Designation of the
Servicer...........................74
SECTION
6.02. Duties of the
Servicer................................75
SECTION
6.03. Servicer
Advances.....................................77
SECTION
6.04. Responsibilities of the
Borrower......................77
SECTION
6.05. Further Action Evidencing Program Agent's
Interest....77
SECTION
6.06.
Collections...........................................78
SECTION
6.07.
Reports...............................................78
SECTION
6.08. Servicer
Fees.........................................78
ARTICLE VII EVENTS OF
TERMINATION.............................................79
SECTION
7.01. Events of
Termination.................................79
SECTION
7.02.
Remedies..............................................80
SECTION
7.03. Additional Remedies of the
Lenders....................82
ARTICLE VIII
INDEMNIFICATION..................................................82
SECTION
8.01. Indemnities by the
Borrower...........................82
SECTION
8.02. Indemnities by the
Servicer...........................85
SECTION
8.03. Other Costs and
Expenses..............................86
ARTICLE IX THE
AGENTS.........................................................86
SECTION
9.01. Authorization and
Action..............................86
SECTION
9.02. Agents' Reliance,
Etc.................................87
SECTION
9.03. Agents and
Affiliates.................................87
SECTION
9.04. Lender's Loan
Decision................................88
SECTION
9.05. Delegation of
Duties..................................88
SECTION
9.06.
Indemnification.......................................88
SECTION
9.07. Successor
Agents......................................88
ARTICLE X
MISCELLANEOUS.......................................................89
SECTION
10.01. Amendments,
Etc......................................89
SECTION
10.02. Notices,
Etc.........................................91
SECTION
10.03.
Assignability........................................91
SECTION
10.04. Additional Lender
Groups.............................93
SECTION
10.05. Consent to
Jurisdiction..............................93
SECTION
10.06. WAIVER OF JURY
TRIAL.................................94
SECTION
10.07. Right of
Setoff......................................94
SECTION
10.08. Ratable
Payments.....................................94
SECTION
10.09. Limitation of
Liability..............................94
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SECTION
10.10.
Taxes................................................95
SECTION
10.11. No
Proceedings.......................................96
SECTION
10.12.
Confidentiality......................................96
SECTION
10.13. No Waiver;
Remedies..................................97
SECTION
10.14. GOVERNING
LAW........................................97
SECTION
10.15. Execution in
Counterparts............................97
SECTION
10.16. Integration; Binding Effect; Survival of
Termination.97
SECTION
10.17.
Headings.............................................98
SECTION
10.18. Existing Credit
Agreement............................98
SECTION
10.19. Third Party
Beneficiaries............................98
EXHIBITS AND SCHEDULES
[Certain exhibits omitted as not material or separately filed]
EXHIBIT
A
Form of Borrowing Notice
EXHIBIT
B-1
Form of Rated Note
EXHIBIT
B-2
Form of Unrated Note
EXHIBIT
C
Form of Monthly Report
EXHIBIT
D
List of Offices of Borrower where Records are Kept
EXHIBIT
E
List of Closing Documents
EXHIBIT
F
Form of Assignment and Acceptance
EXHIBIT
G
Form of Joinder Agreement
EXHIBIT
H
Form of Custodial Agreement
EXHIBIT
I
HDI Credit Agreements
SCHEDULE
I
Lender Groups
SCHEDULE
II
Notice Addresses
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LOAN AND SERVICING AGREEMENT
This LOAN AND SERVICING AGREEMENT dated as of April 30, 2009
is among HARLEY-DAVIDSON WAREHOUSE FUNDING CORP., a Nevada
corporation (the
"Borrower"), HARLEY-DAVIDSON CREDIT CORP., a Nevada corporation
("HDCC" and as
initial servicer, together with its successors and permitted
assigns, the
"Servicer"), CERTAIN FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY
HERETO AS
CONDUIT LENDERS, CERTAIN FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO
AS COMMITTED LENDERS, CERTAIN FINANCIAL INSTITUTIONS FROM TIME TO
TIME PARTY
HERETO AS ADMINISTRATIVE AGENTS, JPMORGAN CHASE BANK, N.A.
("JPMorgan") as the
Program Agent and JPMORGAN and CITICORP NORTH AMERICA, INC.
("CNAI") as the
Syndication Agents. Capitalized terms used herein shall have the
meanings
specified in Section 1.01.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower from time to time shall purchase
Contracts from HDCC pursuant to the Receivables Sale Agreement;
WHEREAS, to fund its purchases under the Receivables Sale
Agreement, the Borrower has requested Loans, on a revolving basis,
from the
Lenders on the terms and conditions of this Agreement and shall
pledge to the
Lenders the assets and interests in property acquired by it under
the
Receivables Sale Agreement as collateral security therefor;
WHEREAS, the Conduit Lenders may, in their sole discretion,
make the Loans so requested, and if a Conduit Lender in any Lender
Group elects
not to make any such Loan, the Committed Lenders in such Lender
Group have
agreed that they shall make such Loan, in each case subject to the
terms and
conditions of this Agreement;
NOW THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein contained and other good and
valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged,
each party agrees as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following
meanings:
"Adjusted LIBO Rate" means, for any Tranche Period, an
interest rate per annum obtained by dividing (i) the LIBO Rate for
such Tranche
Period by (ii) a percentage equal to 100% minus the LIBO Rate
Reserve Percentage
for such Tranche Period.
"Adjusted Pool Balance" means, as of any date, an amount equal
to (i) the Outstanding Eligible Balance as of such date minus (ii)
the Yield
Supplement Overcollateralization Amount.
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"Administrative Agent" means, as to any Conduit Lender or
Committed Lender, the Person listed on Schedule I as the
"Administrative Agent"
for such Lender, or in any Assignment and Acceptance or Joinder
Agreement as an
"Administrative Agent", together with its respective successors and
permitted
assigns.
"Advance" means a borrowing made hereunder on any Borrowing
Date in accordance with Article II and consisting of the aggregate
amount of the
several Loans made by the Lenders to the Borrower on such Borrowing
Date.
"Adverse Claim" means any lien (statutory or other), mortgage,
security interest, pledge, hypothecation, assignment for security,
encumbrance
or other pledge and security agreement of any kind or nature
whatsoever, whether
then in effect or capable of arising upon the occurrence of any
specified events
or conditions, and including any UCC financing statement filed or
other
perfection measure taken in respect of any asset or interest in
property.
"Affected Party" means any Lender, the Program Agent, any
Administrative Agent, any Liquidity Provider, any insurance
company, bank or
other funding entity providing liquidity, credit enhancement or
back-up purchase
support or facilities to any Conduit Lender, any agent,
administrator or manager
of a Conduit Lender, and, with respect to each of the foregoing,
the parent
company that directly or indirectly controls such Person.
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or
is under
common control with such specified Person. A Person shall be deemed
to control
another Person if the controlling Person owns, directly or
indirectly, 5% or
more of any class of voting securities (or other voting interests)
of the
controlled Person or possesses, directly or indirectly, the power
to direct or
cause the direction of the management or policies of the controlled
Person,
whether through ownership of stock or otherwise. None of the
Program Agent, any
Administrative Agent or any Lender shall be deemed to be an
Affiliate of the
Borrower or HDCC.
"Aggregate Commitment" means, at any time, the aggregate
amount of the Commitments at such time, as adjusted as necessary to
give effect
to any Joinder Agreement, and as such amount may be reduced
pursuant to Section
2.03 hereof; provided, however, that at all times on and after the
Termination
Date, the Aggregate Commitment shall mean the Aggregate Principal
Balance. As of
the Effective Date, the Aggregate Commitment is $1,200,000,000.
"Aggregate Principal Balance" means, at any time, the
aggregate outstanding principal balance of the Loans hereunder at
such time.
"Agreement" means this Loan and Servicing Agreement, as
amended, restated, supplemented or otherwise modified from time to
time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time in the United
States,
applied in a manner consistent with that used by HDI in its
preparation of its
audited financial statements for the year ended December 31, 2008
(except for
changes to such application as are concurred on by HDI's
independent public
accountants); provided that, if HDI notifies the Global
Administrative Agent
(under and as defined in the HDI Credit Agreement) that HDI wishes
to amend the
terms set
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forth in clauses (h), (i), (j) and (k) of the definition of
"Servicer
Termination Event" herein (as they are used in the HDI Credit
Agreement) to
eliminate the effect of any change in Agreement Accounting
Principles on the
operation of such Servicer Termination Events (or if the Global
Administrative
Agent notifies HDI that the Required Lenders (under and as defined
in the HDI
Credit Agreement) wish to amend such clauses for such purpose),
then HDI's
compliance with such clauses shall be determined on the basis of
Agreement
Accounting Principles in effect immediately before the relevant
change in
Agreement Accounting Principles became effective, until either such
notice is
withdrawn or such clauses are amended in a manner satisfactory to
HDI and the
Required Lenders (under and as defined in the HDI Credit
Agreement).
"Alternative Rate" means, for any Tranche during any Tranche
Period, an interest rate per annum equal to the sum of the
Applicable Margin
plus the Adjusted LIBO Rate for such Tranche Period; provided,
however, that in
case of:
(a) any Tranche Period with respect to which the Adjusted
LIBO Rate is not available pursuant to Section 2.04,
(b) any Tranche Period of less than one month in respect
of which the Syndication Agents have not agreed to allow Interest
to accrue at
the Adjusted LIBO Rate,
(c) any Tranche Period as to which an Administrative
Agent does not receive a request, by no later than 1:00 P.M. (New
York City
time) on the second Business Day preceding the first day of such
Tranche Period,
that the related Tranche be funded at the Adjusted LIBO Rate,
or
(d) any Tranche Period for a Tranche, the Principal Balance of
which is less than $500,000,
the Alternative Rate for such Tranche Period for the affected
Lender(s) shall be
an interest rate per annum equal to the Base Rate plus the
Applicable Margin in
effect from time to time during such Tranche Period.
"Applicable Margin" has the meaning set forth in the Fee
Letter.
"Asset Purchase Agreement" means any asset purchase agreement,
liquidity loan agreement or other agreement pursuant to which a
Conduit Lender
may from time to time assign part or all of the Loans made by such
Conduit
Lender to a Liquidity Provider, or incur indebtedness to a
Liquidity Provider
and pledge part or all of the Loans made by such Conduit Lender as
collateral
security to such Liquidity Provider, as such agreement may be
amended, restated,
supplemented or otherwise modified from time to time.
"Assignment and Acceptance" means an agreement substantially
in the form set forth as Exhibit E hereto.
"Audit" has the meaning set forth in Section 5.01(d).
"Authorized Officer" means, with respect to any Person, its
president, vice president, secretary corporate controller,
treasurer, assistant
treasurer or chief financial officer.
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"Bankruptcy Code" means Title 11 of the United States Code, 11
U.S.C. Section 101 et seq., as amended from time to time, or any
successor
thereto.
"Base Rate" means a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall at any time,
in respect
of any Lender Group, be determined by the Administrative Agent of
such Lender
Group to be equal to the highest of: (i) the Prime Rate, (ii) the
Federal Funds
Rate plus 0.50%, and (iii) the Adjusted LIBO Rate for a Tranche
Period of one
month plus 1.00%.
"Base Rate Tranche" means a Tranche for which Interest is
computed by reference to the Base Rate.
"Borrower" means Harley-Davidson Warehouse Funding Corp., a
Nevada corporation, in its capacity as the borrower hereunder,
together with its
successors and permitted assigns.
"Borrower Obligations" means all present and future
indebtedness and other liabilities and obligations (howsoever
created or
evidenced, whether direct or indirect, absolute or contingent, or
due or to
become due) of the Borrower to the Secured Parties arising under
this Agreement
or any other Facility Document or the transactions contemplated
hereby or
thereby, and shall include, without limitation, the repayment of
the Aggregate
Principal Balance and the payment of Interest, principal, Fees and
all other
amounts due or to become due from the Borrower to the Secured
Parties under the
Facility Documents (whether in respect of fees, expenses,
indemnifications,
breakage costs, increased costs or otherwise), including, without
limitation,
interest, fees and other obligations that accrue after the
commencement of any
bankruptcy, insolvency or similar proceeding with respect to any
Transaction
Party (in each case whether or not allowed as a claim in such
proceeding).
"Borrowing Base" means, as of any Borrowing Date or Take-Out
Date, an amount equal to the (i) Adjusted Pool Balance at such time
minus (ii)
the Required O/C Amount.
"Borrowing Date" means any date on or after the Effective Date
on which Loans are advanced hereunder.
"Borrowing Notice" means a written request for Loans to be
made hereunder substantially in the form of Exhibit A hereto and
duly executed
by the Borrower.
"Business Day" means any day other than a Saturday, Sunday or
public holiday or the equivalent for banks in New York City, New
York and
Chicago, Illinois and, if the term "Business Day" is used in
connection with the
LIBO Rate, any day on which dealings are carried on in the London
interbank
market.
"Change of Control" means (i) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership
(within the
meaning of Rule 13d-3 of the Securities and Exchange Commission
under the
Securities and Exchange Act of 1934) directly or indirectly of
voting stock (or
other securities convertible into voting stock) of HDI representing
30% or more
(by number of votes) of the outstanding shares of voting stock of
HDI, (ii) HDI
ceases to own, directly or indirectly, at least 51% (by number of
votes) of the
outstanding shares
4
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of voting stock of HDFS, free and clear of any Adverse Claim (such
term to
exclude the filing of any non-consensual UCC financing statements),
(iii) HDFS
ceases to own, directly or indirectly, 100% of the outstanding
capital stock of
HDCC, free and clear and of any Adverse Claim (such term to exclude
the filing
of any non-consensual UCC financing statements), or (iv) HDCC
ceases to own,
directly or indirectly, 100% of the outstanding capital stock of
the Borrower,
free and clear of any Adverse Claim (such term to exclude the
filing of any
non-consensual UCC financing statements). Notwithstanding the
foregoing, a
security interest granted on any of the stock of HDFS or HDCC to
secure any of
the obligations existing under the HDI Credit Agreement from time
to time shall
not constitute a Change of Control.
"CNAI" has the meaning set forth in the preamble to this
Agreement.
"Collateral" has the meaning set forth in Section 2.16.
"Collection Account" means an account at The Bank of New York
Mellon Trust Company, National Association maintained in the name
of the
Borrower, subject to the security interest of the Program Agent for
the benefit
of the Secured Parties, for the purpose of receiving Collections,
or any other
account which may be designated by the Borrower and approved by the
Program
Agent with respect to which all the actions required under Sections
5.01(j) and
5.03(g) shall have been taken.
"Collection Policy" means the billing, collection,
enforcement, write-off, modification and servicing policies,
procedures and
practices of the Servicer for conditional sales contracts and
promissory notes
and security agreements of the same general type as the Contracts,
as set forth
in a written summary delivered to each Syndication Agent on or
prior to the date
hereof, as modified from time to time in accordance with the terms
of Sections
5.02(c) and 5.04(b).
"Collections" means, with respect to any Contract, any and all
cash collections and other cash proceeds of such Contract,
including, without
limitation, all cash proceeds and insurance proceeds of Related
Security with
respect to such Contract, and all Recoveries with respect to each
charged-off
Contract (net of amounts, if any, retained by any third party
collection agent
or by the Servicer in accordance with Section 6.02(g)). For the
avoidance of
doubt, so long as HDCC is the Servicer, Collections constituting
Late Payment
Penalty Fees or extension fees with respect to any Contract may, in
accordance
with the Servicer's customary business practices, be retained by
the Servicer as
part of its compensation hereunder.
"Commitment" of any Committed Lender means the Dollar amount
set forth on Schedule I hereto or, in the case of a Committed
Lender that
becomes a party to this Agreement pursuant to an Assignment and
Acceptance or
Joinder Agreement, as applicable, the amount set forth therein as
such Committed
Lender's "Commitment", in each case as such amount may be reduced
or increased
from time to time in accordance with this Agreement.
"Committed Lender" means, as to any Lender Group, each of the
financial institutions listed on Schedule I as a "Committed Lender"
for such
Lender Group, or in any Assignment and Acceptance or Joinder
Agreement as a
"Committed Lender" for the applicable Lender Group, together with
its respective
successors and permitted assigns.
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"Computer File" means the computer files maintained by the
Servicer which provide information relating to the Contracts, and
includes the
master file and the history file as well as servicing information
with respect
to the Contracts.
"Concentration Criterion" has the meaning set forth in the
Receivables Sale Agreement.
"Concentration Limits" has the meaning set forth in the
Receivables Sale Agreement.
"Conduit Lenders" means, collectively, the Persons identified
as "Conduit Lenders" on Schedule I, or in any Assignment and
Acceptance or
Joinder Agreement as a "Conduit Lender," and their respective
successors and
permitted assigns.
"Conduit Lending Limit" means, for any Conduit Lender, the
maximum principal amount of the Loans which may be advanced by such
Conduit
Lender as set forth on Schedule I (or on the signature page to the
Assignment
and Acceptance or Schedule A to the Joinder Agreement, as
applicable, pursuant
to which such Conduit Lender became a party hereto), subject to an
assignment
pursuant to Section 10.03, as such amount may be modified from time
to time in
accordance with this Agreement.
"Consolidated" refers to the consolidation of accounts in
accordance with Agreement Accounting Principles.
"Consolidated EBITDA" means, for any period, net income (or
net loss) of HDI and its Consolidated Subsidiaries in accordance
with Agreement
Accounting Principles plus the sum of (a) Consolidated Interest
Expense, (b)
taxes on or measured by income (including franchise taxes imposed
in lieu of
income taxes), (c) depreciation expense, (d) amortization expense,
(e)
non-recurring cash restructuring expenses not to exceed an
aggregate amount of
$50,000,000 in any period of four consecutive fiscal quarters and
(f) other
non-cash or extraordinary charges minus (g) any cash payments made
during such
period in respect of any non-cash charges previously added back to
Consolidated
EBITDA in accordance with the foregoing clause (f) and paid
subsequent to the
fiscal quarter in which such non-cash charge was incurred, in each
case
determined in accordance with Agreement Accounting Principles for
such period.
For the purposes of calculating Consolidated EBITDA for any period,
if during
such period HDI or any Subsidiary shall have made an acquisition or
a
disposition, Consolidated EBITDA for such period shall be
calculated after
giving pro forma effect thereto as if such acquisition or
disposition occurred
on the first day of such period.
"Consolidated Equity" means and refers to, as of the end of
any period of determination, the sum, without duplication, of (i)
Consolidated
Tangible Net Worth of HDFS, (ii) preferred stock and (iii)
Subordinated
Indebtedness.
"Consolidated Finco Debt" means, at any time, all Indebtedness
(as defined in the HDI Credit Agreement) of HDFS and its
Consolidated
Subsidiaries as reflected in the most recent Consolidated balance
sheet of HDFS
in accordance with Agreement Accounting Principles; provided, there
shall be
excluded from such amounts (i) Subordinated Indebtedness and (ii)
Subordinated
Intercompany Indebtedness.
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"Consolidated Interest Expense" means, with respect to HDI and
its Consolidated Subsidiaries for any fiscal period, interest
expense (whether
cash or non-cash) determined in accordance with Agreement
Accounting Principles
for the relevant period ended on such date and including interest
expense for
the relevant period that has been capitalized on the balance
sheet.
"Consolidated Opco Debt" means, at any time, all Indebtedness
(as defined in the HDI Credit Agreement) of HDI and its
Consolidated
Subsidiaries as reflected in the most recent Consolidated balance
sheet of HDI
(but excluding HDFS and its Subsidiaries) in accordance with
Agreement
Accounting Principles; provided, there shall be excluded from such
amounts
intercompany Indebtedness (as defined in the HDI Credit
Agreement).
"Consolidated Tangible Net Worth" of HDFS means its
consolidated shareholder's equity net of intangible assets, as
shall be
determined in accordance with Agreement Accounting Principles.
"Contract" has the meaning set forth in the Receivables Sale
Agreement.
"Contract Assets" has the meaning set forth in
the Receivables
Sale Agreement.
"Contract File" means, as to each Contract, (a) the fully
executed original of such Contract with the fully executed original
assignment
from the related dealer, if any, to the applicable Originator
including the
executed conditional sales contract or promissory note and security
agreement or
other evidence of the obligation of the Obligor, (b) the original
title
certificate to the Motorcycle and, where applicable, the
certificate of lien
recordation, or if such title certificate has not yet been issued,
an
application for such title certificate, or other appropriate
evidence of a
security interest in the covered Motorcycle; (c) the assignments of
the
Contracts, (d) the original copy of any agreement(s) modifying the
Contract,
including, without limitation, any extension agreements, (e) a copy
of the
related Obligor's credit application, and (f) documents evidencing
the existence
of physical damage insurance covering such Motorcycle.
"Contract Rate" has the meaning set forth in the Receivables
Sale Agreement.
"Contract Schedule" has the meaning set forth in the
Receivables Sale Agreement.
"Control Agreement" means that certain Account Control
Agreement dated as of April 30, 2009 among the Borrower, the
Servicer, The Bank
of New York Mellon Trust Company, National Association, as
securities
intermediary, and the Program Agent, as amended, restated,
supplemented or
otherwise modified from time to time.
"CP Costs" means, for each day, the sum of (i) discount or
yield accrued on Pooled Commercial Paper of any Conduit Lender
administered by
JPMorgan on such day, plus (ii) any and all accrued commissions in
respect of
placement agents and commercial paper dealers, and issuing and
paying agent fees
incurred, in respect of Pooled Commercial Paper of such Conduit
Lender for such
day, plus (iii) other costs associated with funding small or
odd-lot amounts
with respect to all receivable purchase facilities which are funded
by Pooled
Commercial Paper of such Conduit Lender for such day, minus (iv)
any accrual of
income net of
7
<PAGE>
expenses received on such day from investment of collections
received under all
receivable purchase or financing facilities funded substantially
with Pooled
Commercial Paper of such Conduit Lender, minus (v) any payment
received on such
day net of expenses in respect of Liquidation Fees related to the
prepayment of
any purchaser interest of such Conduit Lender pursuant to the terms
of any
receivable purchase or financing facilities funded substantially
with Pooled
Commercial Paper.
"CP Rate" means:
(a)
with respect to any Conduit Lender for
which CNAI is the Administrative Agent, for any Tranche Period
for any Tranche, to the extent such Conduit Lender funds such
Tranche by issuing Promissory Notes, the per annum rate equal
to the weighted average of the per annum rates paid or payable
by such Conduit Lender from time to time as interest on or
otherwise (by means of interest rate hedges or otherwise) in
respect of those Promissory Notes issued by such Conduit
Lender that are allocated, in whole or in part, by CNAI (on
behalf of such Conduit Lender) to fund or maintain such
Tranche during such Tranche Period, and reported to the
Borrower and the Servicer, which rates shall reflect and give
effect to the commissions of placement agents and dealers in
respect of such Promissory Notes, to the extent such
commissions are allocated, in whole or in part, to such
Promissory Notes by CNAI (on behalf of such Conduit Lender);
provided, however, that if any component of such rate is a
discount rate, CNAI shall for such component use the rate
resulting from converting such discount rate to an interest
bearing equivalent rate per annum;
(b)
with respect to any Conduit Lender for
which JPMorgan is the Administrative Agent, for any Tranche
Period for any Tranche, to the extent such Conduit Lender
funds such Tranche by issuing Promissory Notes, a per annum
rate equal to a fraction, expressed as a percentage, the
numerator of which shall be equal to the sum of the CP Costs,
determined on a pro rata basis, based upon the percentage
share that the dollar amount of such Tranche represents in
relation to all assets or investments associated with any
assets held by such Conduit Lender and funded substantially
with Pooled Commercial Paper, for each day during such Tranche
Period (or portion thereof), and the denominator of which is
the weighted daily average Principal Balance of such Tranche
during such Tranche Period;
(c) with respect to any Conduit Lender for
which Deutsche Bank AG, New York Branch is the Administrative
Agent, for any Tranche Period for any Tranche, to the extent
such
Conduit Lender funds such Tranche by issuing Promissory
Notes, a per annum rate equal to the weighted average of the
rates on all of those Promissory Notes allocated by Deutsche
Bank AG, New York Branch (on behalf of such Conduit Lender) to
the funding or maintenance of such Tranche during such Tranche
Period, and reported to the Borrower and the Servicer,
(converted, if any such rates are discount rates, to annual
yield-equivalent rates on the basis of a 365-day year (or
360-day year, if such Promissory Notes are denominated in U.S.
Dollars)), as weighted by the portion of the Aggregate
Principal Balance funded by such Conduit Lender at each such
rate; provided that the "CP Rate" calculated with respect to
such Conduit Lender will be inclusive of any dealer fees,
commissions or similar fees;
8
<PAGE>
(d) with respect to any Conduit Lender for
which The Royal Bank of Scotland plc is the Administrative
Agent, for any Tranche Period for any Tranche, to the extent
such Conduit Lender funds such Tranche by issuing Promissory
Notes, a per annum rate (expressed as a percentage and an
interest yield equivalent and calculated on the basis of a
360-day year) equal to the weighted average of the per annum
rates paid or payable by such Conduit Lender from time to time
as interest on or otherwise in respect of those Promissory
Notes issued by such Conduit Lender that are allocated, in
whole or in part, by The Royal Bank of Scotland plc (on behalf
of such Conduit Lender) to fund or maintain such Tranche
during
such Tranche Period, and reported to the Borrower and
the Servicer, which rates shall reflect and give effect to (i)
certain documentation and transaction costs associated with
the issuance of such Promissory Notes, including dealer and
placement agent commissions, and (ii) other borrowings by such
Conduit Lender, including borrowings to fund small or odd
dollar amounts that are not easily accommodated in the
commercial paper market, to the extent such amounts are
allocated, in whole or in part, by The Royal Bank of Scotland
plc to fund the Conduit Lender's purchase or maintenance of
such Tranche during such Tranche Period; and
(e) with respect to any other Conduit
Lender, the comparable rate identified as being the "CP Rate"
in respect of such Lender pursuant to an Assignment and
Acceptance or Joinder Agreement, as applicable, by which such
Conduit Lender became a party to this Agreement.
"Credit Policy" has the meaning set forth in the Receivables
Sale Agreement.
"Custodial Agreement" means an agreement among the Custodian,
the Borrower, the Servicer and the Program Agent substantially in
the form of
Exhibit H attached hereto, with such modifications as may be
acceptable to the
Syndication Agents from time to time.
"Custodian" means Iron Mountain Information Management, Inc.
and any other Person from time to time designated by the Servicer
and the
Borrower with the consent of the Syndication Agents to maintain
custody of the
original Records.
"Cutoff Date" has the meaning set forth in the Receivables
Sale Agreement.
"Deal Rating Agency" means Moody's.
"Debt Rating" means, with respect to any Person at any time
the issuer rating assigned by S&P for such Person or the
corporate credit rating
assigned by Moody's to such Person, in each case without giving
effect to any
third party credit enhancement.
"Default Applicable Margin" has the meaning set forth in the
Fee Letter.
"Default Rate" means (i) in the case of any Tranche in respect
of which Interest is computed by reference to the CP Rate, a
fluctuating
interest rate per annum equal to the higher of (a) the CP Rate plus
the Default
Applicable Margin and (b) the Base Rate plus the Default Applicable
Margin, (ii)
in the case of any Tranche in respect of which Interest is computed
by reference
to the Alternative Rate, a fluctuating interest rate per annum
equal to the Base
Rate plus the Default Applicable Margin, and (iii) in the case of
any other
amount due hereunder, a fluctuating interest rate per annum equal
to the Base
Rate plus the Default Applicable Margin.
9
<PAGE>
"Defaulted
Contract" has the meaning set forth in the
Receivables Sale Agreement.
"Defaulting Lender" means any Committed Lender that, as
determined by the Program Agent, has (a) failed to fund any portion
of its Loans
within three (3) Business Days of the date required to be funded by
it
hereunder, (b) notified the Borrower or the Program Agent in
writing that it
does not intend to comply with any of its funding obligations under
this
Agreement or has made a public statement to the effect that it does
not intend
to comply with its funding obligations under this Agreement, (c)
failed, within
three (3) Business Days after request by the Program Agent, to
confirm that it
will comply with the terms of this Agreement relating to its
obligations to fund
prospective Loans, (d) otherwise failed to pay over to the Program
Agent, the
Administrative Agent in its Lender Group or any other Lender in its
Lender Group
any other amount required to be paid by it hereunder within three
(3) Business
Days of the date when due, unless the subject of a good faith
dispute, or (e)
(i) become the subject of a bankruptcy or insolvency proceeding, or
has had a
receiver, conservator, trustee or custodian appointed for it, or
(ii) has a
parent company that has become the subject of a bankruptcy or
insolvency
proceeding, or a receiver, conservator, trustee or custodian has
been appointed
for such parent company.
"Delinquent Contract" means, at any time, a Contract (i) as to
which any portion of the payments on the Outstanding Balance remain
unpaid for
thirty (30) or more days after the date the same shall have been
due and (ii)
that is not a Defaulted Contract.
"Delinquency Ratio" means, for any month, the ratio of (i) the
Outstanding Eligible Balance of Contracts that are Delinquent
Contracts as of
the last day of such month, to (ii) the Outstanding Eligible
Balance as of the
beginning of such month.
"Dollars" and "$" each mean the lawful currency of the United
States of America.
"During the continuance" and words of similar import mean,
when used in connection with an Event of Termination or Servicer
Termination
Event, the period commencing with the occurrence of such Event of
Termination or
Servicer Termination Event, after giving effect to any applicable
grace period,
and ending (if at all) on the effective date of a waiver in respect
of such
Event of Termination or Servicer Termination Event issued in
accordance with the
terms of Section 10.01, it being understood that an Event of
Termination or
Servicer Termination Event shall continue to exist unless and until
waived in
accordance with the terms of Section 10.01, notwithstanding the
cure of the
underlying event or condition that shall have given rise to such
Event of
Termination or Servicer Termination Event at any time after the
lapse of the
applicable grace period.
"Dynamic Enhancement Percentage" has the meaning set forth in
the Fee Letter.
"Early Amortization Event" means the occurrence and
continuation of any one of the following events:
10
<PAGE>
(i) For any month, the average of the Managed Pool
Loss-to-Liquidation Ratio at the end of such month and the two
preceding months
exceeds (a) 11.00% (in the case of any such three-month period, the
last month
of which is any month from April through September) and (b) 13.00%
(in the case
of any such three-month period, the last month of which is any
month from
October through March); or
(ii) The Rated Notes (if any) shall at any time fail to be
rated "AAA/Aaa" (or its equivalent) by any Rating Agency then
providing ratings
in respect of the Rated Notes; or
(iii) As at the end of any calendar
month:
(a) the average of the Delinquency Ratios for the three months
then most recently ended in respect of which the Delinquency Ratio
shall have
been greater than zero shall exceed 6.00%; or
(b)
the average of the Loss-to-Liquidation Ratios as at the
end of such month and the two preceding months shall exceed the
applicable
percentage set forth in the Fee Letter.
The calculation of the Delinquency Ratio and the
Loss-to-Liquidation Ratio shall commence on July 31, 2009.
"Early Amortization Period" means a period commencing on the
occurrence of an Early Amortization Event and ending on the
earliest to occur of
(i) the cure of such Early Amortization Event (whether by additions
to the
Collateral or following a period of amortization), (ii) the
reduction to zero of
the Aggregate Principal Balance of the Loans or (iii) such Early
Amortization
Event being waived.
"Effective Date" means the later of (i) April 30, 2009 and
(ii) the date the conditions precedent set forth in Section 3.01
shall have been
satisfied or waived by the Syndication Agents.
"Eligible Contract" has the meaning set forth in the
Receivables Sale Agreement.
"Eligible Hedge Agreement" means a Hedge Agreement in the form
of an interest rate cap agreement that complies with the
requirements set forth
in Section 2.05(e).
"Eligible Hedge Counterparty" means a Hedge Counterparty that
satisfies, as applicable, (i) the Moody's Second Trigger Ratings
Threshold, or
(ii) a rating equivalent to the foregoing of the rating agency that
is then
providing a publicly announced credit rating of such Hedge
Counterparty, if
Moody's is not then rating such Hedge Counterparty.
"Eligible Post-Sale Contract" has the meaning set forth in the
Receivables Sale Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended or any successor statute.
11
<PAGE>
"ERISA Affiliate" means (a) a corporation which is a member of
a controlled group of corporations with HDCC within the meaning of
Section
414(b) of the IRC, (b) a trade or business (whether or not
incorporated) which
is under common control with HDCC within the meaning of Section
414(c) of the
IRC or Section 4001(b)(1) of ERISA, (c) a member of an affiliated
service group
with HDCC within the meaning of Section 414(m) of the IRC, or (d)
an entity
treated as under common control with HDCC by reason of Section
414(o) of the
IRC.
"ERISA Plan" means any employee benefit plan (a) maintained by
HDCC or any ERISA Affiliate, or to which any of them contributes or
is obligated
to contribute, for its employees and (b) covered by Title IV of
ERISA or to
which Section 412 of the IRC applies.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal
Reserve System, as
in effect from time to time.
"Event of Termination" has the meaning set forth in Section
7.01.
"Excluded Taxes" has the meaning set forth in Section 2.15.
"Existing Credit Agreement" means that certain Loan and
Security Agreement, dated as of December 12, 2008, among the
Borrower, the
Servicer, the lenders and administrative agents party thereto and
the program
agent, as amended, restated, supplemented or otherwise modified
from time to
time prior to the date hereof.
"Facility Documents" means, collectively, this Agreement, the
Receivables Sale Agreement, the Control Agreement, the Custodial
Agreement, each
Hedge Agreement, the Lockbox Agreement, the Reserve Account
Agreement, the Fee
Letter and all other agreements, documents and instruments
delivered pursuant
thereto or in connection therewith.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal (for each day during such period) to
the weighted
average of the rates on overnight federal funds transactions with
members of the
Federal Reserve System arranged by federal funds brokers, as
published for such
day (or, if such day is not a Business Day, for the immediately
preceding
Business Day) by the Federal Reserve Bank of New York; or if such
rate is not so
published for any day which is a Business Day, the average of the
quotations for
such day on such transactions received by the Program Agent from
three federal
funds brokers of recognized standing selected by it.
"Fee Letter" means the Fee Letter dated as of the date hereof
among the Administrative Agents and the Borrower, as the same may
be amended,
restated, supplemented or otherwise modified from time to time.
"Fees" means, collectively, all Usage Fees, Unused Fees,
Make-Whole Fees and Other Fees.
"Final Collection Date" means the date on or following the
Termination Date on which the Aggregate Principal Balance has been
reduced to
zero and all other Borrower Obligations (other than contingent
obligations that
are not then manifest) have been paid in full.
12
<PAGE>
"Finance Receivables" means dealer wholesale receivables,
retail installment contracts, promissory notes, retail leases,
charge accounts
or other receivables, chattel paper or other similar financial
assets
originated, acquired or serviced in the ordinary course of business
of HDI or
any of its Subsidiaries and shall include all related collateral
and assets and
any retained assets in respect of any of the foregoing.
"Finco Leverage Ratio" means the ratio of (a) Consolidated
Finco Debt to (b) Consolidated Equity.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"Governmental Authority" means any national, state or local
government (whether domestic or foreign), any political subdivision
thereof or
any other governmental, quasi-governmental, judicial, regulatory,
public or
statutory instrumentality, authority, body, agency, bureau or
entity (including,
the Comptroller of the Currency, the Federal Reserve Board, any
central bank or
any comparable authority), or any arbitrator with authority to bind
a party to
this Agreement at law.
"HDCC" has the meaning set forth in the preamble to this
Agreement.
"HDFS" means Harley-Davidson Financial Services, Inc., a
Delaware corporation.
"HDI" means Harley-Davidson, Inc., a Wisconsin corporation.
"HDI Credit Agreement" means, collectively, the 3-Year Credit
Agreement dated as of July 16, 2008 and the 364-Day Credit
Agreement dated as of
April 30, 2009, each by, among others, HDI, Harley-Davidson Funding
Corp., HDFS,
Harley-Davidson Financial Services International, Inc., HDCC, the
institutions
from time to time party thereto as lenders, JPMorgan, as the
global
administrative agent, and various other agents from time to time
party thereto,
attached hereto as Exhibit I, as the same may from time to time be
amended,
restated, supplemented or otherwise modified, and any other credit
facility that
shall refinance or otherwise be established in substitution for all
or any part
of either of the foregoing; provided that, with respect to any
reference made
herein to the HDI Credit Agreement for purposes of incorporation by
reference
herein of any term defined therein or any other provision, (i) such
incorporated
definition or other provision shall be in the form set forth on
Exhibit I
hereto, without giving effect to any amendment, restatement,
supplement or other
modification of the HDI Credit Agreement that may occur after the
date hereof,
and (ii) if there shall be any inconsistency between the terms and
provisions of
the 3-Year Credit Agreement and the 364-Day Credit Agreement, the
terms and
provisions of the 364-Day Credit Agreement shall prevail for
purposes of this
Agreement.
"Hedge Agreement" means documentation to which the Borrower is
party relating to a hedge transaction that provides protection to
the Borrower
against fluctuations in interest rates, whether such protection is
in the form
of an interest rate swap, interest rate cap or similar derivative
transaction.
13
<PAGE>
"Hedge Counterparty" means the counterparty to the Borrower
under the applicable Hedge Agreement, together with its successors
and permitted
assigns.
"Hedging Rate" means, in the case of any Hedge Agreement at
any time, the greater at such time of the cap rate and the swap
fixed rate, if
any, set forth in such Hedge Agreement.
"Incipient Event of Termination" means any event which, with
the giving of notice or lapse of time or both, would constitute an
Event of
Termination.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred
purchase price of
property or services (other than accounts payable arising in the
ordinary course
of such Person's business payable on terms customary in the trade),
(iii)
obligations, whether or not assumed, secured by Adverse Claims or
payable out of
the proceeds or production from property now or hereafter owned or
acquired by
such Person, (iv) obligations which are evidenced by notes,
bankers'
acceptances, or other instruments, (v) obligations to purchase
accounts,
securities or other property arising out of or in connection with
the sale of
the same or substantially similar accounts, securities or property,
(vi)
capitalized lease obligations, (vii) other obligations for borrowed
money or
other financial accommodation which, in accordance with GAAP, would
be shown as
a liability on the consolidated balance sheet of such Person,
(viii) net
liabilities under interest rate swap, exchange or cap agreements,
obligations or
other liabilities with respect to accounts or notes, (ix) sale and
leaseback
transactions which create a liability on the consolidated balance
sheet of such
Person, (x) obligations in connection with other transactions
(excluding
operating leases under GAAP) which are the functional equivalent,
or take the
place, of borrowing but which do not constitute a liability on the
consolidated
balance sheet of such Person, (xi) obligations in respect of
Permitted Finance
Receivables Securitizations, and (xii) any guaranty or any other
agreement
providing support for any of the foregoing.
"Indemnified Party" has the meaning set forth in Section 8.01.
"Independent Director" has the meaning set forth in the
Borrower's Articles of Incorporation as in effect on the date
hereof.
"Insolvency Event" means for any Person (i) such Person or any
of its material Subsidiaries shall generally not pay its debts as
such debts
become due or shall admit in writing its inability to pay its debts
generally or
shall make a general assignment for the benefit of creditors; or
(ii) any
proceeding shall be instituted by such Person or any of its
material
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or
seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection,
relief or composition of it or its debts under any law relating to
bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
entry of an
order for relief or the appointment of a receiver, trustee or other
similar
official for it or any substantial part of its property; or (iii)
any proceeding
shall be instituted against such Person or any of its material
Subsidiaries
seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or
composition
of it or its debts under any law relating to bankruptcy, insolvency
or
reorganization or relief of debtors, or seeking the entry of an
order for relief
or the appointment of a receiver, trustee or other similar official
for it or
any substantial part of its property, which proceeding continues
undismissed or
unstayed for a period of 60 consecutive days or (iv) such Person or
any of its
material Subsidiaries shall take any corporate action to authorize
any of the
actions set forth in clauses (i), (ii) or (iii) above.
14
<PAGE>
"Interest" means, for any Tranche and any Tranche Period, the
sum for each day during such Tranche Period of the following:
IR x PB/CB where:
where:
IR
= the Interest Rate for such Tranche for such
day.
PB
= the Principal Balance of such Tranche on such
day.
CB
= (i) in the case of a Base Rate Tranche, 365 or
366 and (ii)
in the case of any other Tranche, 360.
"Interest Coverage Ratio" means the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Interest Expense.
"Interest Rate" means, with respect to any Tranche for any day
(a) to the extent such Tranche is funded on such day by a Conduit
Lender through
the issuance of Promissory Notes, the CP Rate and (ii) otherwise,
the
Alternative Rate; provided, that at all times following the
Termination Date
and/or the occurrence and during the continuation of an Event of
Termination,
the Interest Rate for each Tranche on each day shall be an interest
rate per
annum equal to the Default Rate.
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"IRS" means the Internal Revenue Service of the United States
of America.
"Joinder Agreement" means a joinder agreement substantially
similar to Exhibit G attached hereto.
"JPMorgan" has the meaning set forth in the preamble to this
Agreement.
"Late Payment Penalty Fees" means any late payment fees paid
by Obligors on Contracts and retained by the Servicer in accordance
with its
customary business practices as part of its compensation hereunder
after all
sums received from or on behalf of such Obligors have been
allocated first to
regularly scheduled payments of interest and past due interest on
the related
Contracts.
"Lender" means any Conduit Lender or Committed Lender, as
applicable, and "Lenders" means, collectively, the Conduit Lenders
and the
Committed Lenders.
15
<PAGE>
"Lender Group" means any
Administrative Agent and its related
Conduit Lenders and Committed Lenders.
"Lender Group Limit" means, for any Lender Group, the amount
set forth on Schedule I (or in an Assignment and Assumption or a
Joinder
Agreement pursuant to which such Lender Group became party hereto),
as such
amount may be modified in accordance with Section 2.03, subject to
an assignment
pursuant to Section 10.03.
"LIBO Rate" means, for any LIBOR Tranche and the related
Tranche Period, the rate determined by the related Administrative
Agent by
reference to the British Bankers' Association Interest Settlement
Rate for
deposits in Dollars, with a maturity comparable to such Tranche
Period,
appearing on Reuters Screen LIBOR01 (or any such screen as may
replace such
screen on such service or any successor to or substitute for such
service,
providing rate quotations comparable to those currently provided by
such
service, as determined by the related Administrative Agent from
time to time for
purposes of providing quotations of interest rates applicable to
deposits in
Dollars in the London interbank market) at approximately 11:00
a.m., London
time, on the second Business Day before the first day of such
Tranche Period. In
the event that such rate is not available at such time for any
reason, then the
"LIBO Rate" for the applicable LIBOR Tranche and related Tranche
Period shall be
the rate at which deposits in Dollars in a principal amount which
approximates
the portion of the Loan allocated to such Tranche (but not less
than $1,000,000)
and for a maturity comparable to such Tranche Period are offered by
the related
Reference Bank in immediately available funds in the London
interbank market at
approximately 11:00 a.m., London time, on the second Business Day
before (and
for value on) the first day of such Tranche Period.
"LIBO Rate Reserve Percentage" means, for any LIBOR Tranche
and the related Tranche Period, the reserve percentage applicable
two Business
Days before the first day of such Tranche Period under regulations
issued from
time to time by the Board of Governors of the Federal Reserve
System (or any
successor) (or, if more than one such percentage shall be
applicable, the daily
average of such percentages for those days in such Tranche Period
during which
any such percentage shall be so applicable) for determining the
maximum reserve
requirement (including, without limitation, any emergency,
supplemental or other
marginal reserve requirement) with respect to liabilities or assets
consisting
of or including Eurocurrency Liabilities (or with respect to any
other category
of liabilities that includes deposits by reference to which the
interest rate on
Eurocurrency Liabilities is determined) having a term equal to such
Tranche
Period.
"LIBOR Tranche" means a Tranche for which Interest is computed
by reference to the Adjusted LIBO Rate.
"Liquidation Fee" means for any Tranche held by a Lender the
Principal Balance of which is reduced on any date other than the
last day of the
related Tranche Period, (i) the amount, if any, by which the
additional Interest
which would have accrued during such Tranche Period on the
reductions of the
Principal Balance of such Tranche had a reduction of the Principal
Balance not
occurred, exceeds (ii) the income, if any, received by such Lender
from the
investment of the proceeds of such reductions of Principal Balance
during such
Tranche Period. A certificate as to the amount of any Liquidation
Fee (including
the computation of such amount in reasonable detail) shall be
submitted by the
affected Lender to the Borrower and shall be conclusive and binding
for all
purposes, absent manifest error.
16
<PAGE>
"Liquidity Provider" means any of the financial institutions
from time to time party to any Asset Purchase Agreement or any
liquidity loan
agreement or similar arrangement with a Conduit Lender.
"Loan" means, in respect of any Lender Group and any Advance,
the portion of such Advance funded by such Lender Group and
advanced to the
Borrower from time to time pursuant to Article II.
"Lock-Box" means the post office box maintained pursuant to
the Lockbox Agreement for the purpose of receiving payments on
Contracts or
other Collections.
"Lockbox Account" means the lockbox account maintained by the
Lockbox Bank and subject to the Lockbox Agreement.
"Lockbox Agreement" means that certain Fifth Amended and
Restated Agreement Regarding Lockbox Administration, dated as of
November 1,
2000, among HDCC, the trust depositors party thereto and the
Lockbox Bank and
acknowledged by the trustees thereunder, as the same may be from
time to time
amended or supplemented with the consent of the Syndication
Agents.
"Lockbox Bank" means Bank of America, N.A. and its successors
and assigns.
"Loss-to-Liquidation Ratio" means, for any Monthly Period, an
amount equal to (i) the Outstanding Balance of the Contracts that
became
Defaulted Contracts during such Monthly Period minus the amount of
Recoveries
received by the Servicer during such Monthly Period, divided by
(ii) the sum of
(a) the Outstanding Balance of the Contracts that became Defaulted
Contracts
during such Monthly Period and (ii) the aggregate amount of
principal
Collections (excluding any Recoveries) received by the Servicer
during such
Monthly Period; provided that for any Monthly Period for which the
foregoing
calculation would result in a percentage less than 1.50%, the
Loss-to-Liquidation Ratio for such Monthly Period shall be deemed
to be 1.50%.
"Make-Whole Fee" means a fee in respect of any reduction in
the Aggregate Commitment equal to the Unused Fee that would have
accrued at
2.00% per annum on the Unused Commitment if such portion of the
Aggregate
Commitment had remained in effect and unused during the period
beginning on the
applicable Reduction Date and ending on the Maturity Date then in
effect.
"Managed Pool Loss-to-Liquidation Ratio" means, for any month
with respect to HDFS's U.S. retail Motorcycle managed portfolio, a
ratio equal
to (a) the sum of (i) the aggregate principal balance of such
finance
receivables that were charged-off during such month in accordance
with HDFS's
internal accounting procedures minus (ii) any post-charge-off
recoveries made on
such charged-off finance receivables, divided by (b) the sum of (i)
the
aggregate principal balance of such finance receivables that were
charged-off
during such month in accordance with HDFS's internal accounting
procedures minus
(ii) any post-charge-off recoveries made on such charged-off
finance receivables
plus (iii) the aggregate amount of principal collections, fees and
expenses
received on all such finance receivables during such month.
17
<PAGE>
"Material Adverse Effect" means a material adverse effect on
(i) a significant portion (as determined by any Syndication Agent
in its
reasonable discretion) of either the Contracts or any of the other
Collateral
(including, without limitation, the enforceability or
collectibility of the
Contracts), (ii) the financial condition or operations of the
Borrower, the
Servicer or HDCC, in each case, individually, or with its
respective Affiliates,
taken as a whole, (iii) the ability of the Borrower, the Servicer
or HDCC to
perform its obligations under this Agreement or any other Facility
Document,
(iv) the legality, validity or enforceability of this Agreement or
any other
Facility Document, (v) any Secured Party's interest in the
Contracts generally
or in any significant portion of the Contracts, the Related
Security or the
Collections with respect thereto, or (vi) the timely payment of the
principal
and interest on the Loans or other amounts payable in connection
therewith.
"Maturity Date" means April 29, 2010, as such date may be
extended from time to time pursuant to Section 2.02(c).
"Minimum Excess Spread Percentage" means 4.00% per annum.
"Minimum Reserve Amount" means, as of any date of
determination, an amount equal to the product of (a) 1.00% times
(b) the
Adjusted Pool Balance.
"Monthly
Period" means a calendar month and, with respect to
any Settlement Date or Monthly Reporting Date, the immediately
preceding
calendar month, except that the final Monthly Period shall end on
the Final
Collection Date.
"Monthly Report" means a report, in
substantially the form of
Exhibit C (with such changes as the Borrower and the Syndication
Agents may
agree to from time to time), furnished by the Servicer to the
Administrative
Agents for the Lenders pursuant to Section 6.07.
"Monthly Reporting Date" means the third Business Day
preceding each Settlement Date, other than a Provisional Settlement
Date (or, if
such day is not a Business Day, the immediately preceding Business
Day).
"Moody's" means Moody's Investors Service, Inc.,
and its
successors.
"Moody's Second Trigger Ratings Threshold" means, with respect
to a Hedge Counterparty, (i) if such entity has both a long-term
unsecured and
unsubordinated Debt Rating or counterparty rating from Moody's and
a short-term
unsecured and unsubordinated Debt Rating from Moody's, a long-term
unsecured and
unsubordinated Debt Rating or counterparty rating from Moody's of
"A3" or above
and a short-term unsecured and unsubordinated Debt Rating from
Moody's of
"Prime-2" or above, or (ii) if such entity has only a long-term
unsecured and
unsubordinated Debt Rating or counterparty rating from Moody's, a
long-term
unsecured and unsubordinated Debt Rating or counterparty rating
from Moody's of
"A3" or above.
18
<PAGE>
"Motorcycle" means a new or used motorcycle manufactured by
Harley-Davidson Motor Company, a wholly-owned subsidiary of HDI,
the sale and
financing of which shall have given rise to a Contract.
"New Contracts" has the meaning set forth in Section 2.02(a).
"Note" has the meaning set forth in Section 2.07.
"Notice of Sale" has the meaning set forth in the Receivables
Sale Agreement.
"Obligor" means any Person obligated to make payments pursuant
to a Contract.
"O/C Floor Amount" means, the greater of (i) $50,000,000 and
(ii) an amount equal to 5.00% of the Aggregate Commitment as of the
Effective
Date, as such amount may be increased upon any subsequent increase
in the
Aggregate Commitment.
"Official Body" means any Governmental Authority or any
accounting board or authority (whether or not part of a government)
which is
responsible for the establishment or interpretation of national or
international
accounting principles, in each case whether foreign or
domestic.
"Opco Leverage Ratio" means the ratio of (a) Consolidated Opco
Debt to (b) Consolidated EBITDA.
"Originator" means, in the case of any Contract, Eaglemark
Savings Bank or HDCC as the Person that shall have originated such
Contract.
"Other Fees" means amounts owed by the Borrower hereunder
pursuant to Sections 2.11, 2.12, 2.13, 2.14, 2.15, 8.01, 8.03 and
10.10.
"Outstanding Balance" means, with respect to a Contract at any
time, the then outstanding principal balance thereof.
"Outstanding Eligible Balance" means, at any time, the sum at
such time of (i) in the case of any Contracts then being included
for the first
time (which, in the case of the initial Advance hereunder, shall
mean all
Contracts then constituting Collateral), the Outstanding Balance of
all such
Contracts that are Eligible Contracts as of their respective Cutoff
Dates, and
(ii) in the case of any other Contracts, the Outstanding Balance of
all such
Contracts that are Eligible Post-Sale Contracts; provided that with
respect to
(i) any Contract identified in the initial Contract Schedule
delivered under the
original Receivables Sale Agreement that is not an Eligible
Contract as of the
date of the initial Advance hereunder, or (ii) any Contract that,
on or after
the date hereof, becomes part of the Collateral as an Eligible
Contract but
subsequently ceases to be an Eligible Post-Sale Contract, and as a
result in
either such case such Contract is not or ceases to be included in
the
Outstanding Eligible Balance, such Contract may be included in the
Outstanding
Eligible Balance on any later date only if such Contract
constitutes an Eligible
Contract as of such later date (and thereafter may be included in
the
Outstanding Eligible Balance so long as it remains an Eligible
Post-Sale
Contract). In the case of Contracts the Obligor of which resides in
Texas, in
the event the Concentration Limit for such Contracts exceeds zero,
it shall be a
further condition to the initial inclusion of any such Contracts in
the
Outstanding Eligible Balance that the inclusion of all such
Contracts in the
Outstanding Eligible Balance would not cause the Overconcentration
Amount in
respect of such Concentration Limit to exceed zero.
19
<PAGE>
"Overconcentration Amount" means, as of any Borrowing Date or
Take-Out Date, the aggregate amount for all Concentration Criteria,
calculated
as of such date for each Concentration Criterion as being the sum
of (i) the
amount, if positive, equal to (A) the Outstanding Eligible Balance
in respect of
all Contracts having such Concentration Criterion minus (B) an
amount equal to
(1) the Outstanding Eligible Balance in respect of all Contracts
multiplied by
(2) the Concentration Limit associated with such Concentration
Criterion and
(ii) the aggregate Outstanding Balance in respect of all Contracts
then included
in the Outstanding Eligible Balance that would need to be removed
from the
Borrowing Base to cause the Concentration Limits set forth in
Sections
4.01(o)(ii) and (iii) of the Receivables Sale Agreement to be
observed; provided
that in calculating the Overconcentration Amount at any time, the
Outstanding
Balance of a Contract shall not be counted more than once.
"Participant" has the meaning set forth in Section 10.03(g).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Permitted Finance Receivables Securitization" means any
financial asset financing (whether a program or otherwise)
providing for the
sale, conveyance, pledge or other transfer of Finance Receivables
by HDI or any
of its Subsidiaries to a trust or to one or more limited purpose
finance
companies, special purpose entities or financial institutions or
other third
party investors or financiers, either directly or through one or
more
Subsidiaries.
"Permitted Liens" means any liens (a) for taxes, assessments
and governmental charges or levies that in each case are either (i)
not overdue
or (ii) being contested in good faith and by proper proceedings and
as to which
appropriate reserves are being maintained and (b) of a collecting
bank in the
ordinary course of processing items for collection.
"Permitted Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under
the laws of
the United States of America or any State (or any domestic branch
of a foreign
bank) and subject to supervision and examination by Federal or
State banking or
depository institution authorities; provided, however, that at the
time of the
investment or contractual commitment to invest therein, the
commercial paper or
other short-term senior unsecured debt obligations (other than such
obligations
the rating of which is based on the credit of a Person other than
such
depository institution or trust company) thereof shall have a
credit rating from
the Rating Agencies in the highest investment category granted
thereby;
20
<PAGE>
(c) commercial paper, master notes, promissory notes, demand
notes or other short-term debt obligations having, at the time of
the investment
or contractual commitment to invest therein, a rating from the
Rating Agencies
in the highest investment category granted thereby;
(d) investments in money market funds having a rating from the
Rating Agencies in the highest investment category granted thereby
(including
funds for which the Program Agent or any Administrative Agent or
any of their
respective Affiliates is investment manager or advisor);
(e) notes or bankers' acceptances issued by any depository
institution or trust company referred to in clause (b);
(f) repurchase and reverse repurchase agreements
collateralized by securities issued or guaranteed by the United
States
government or any agency, instrumentality or establishment of the
United States
government, in either case entered into with a depository
institution or trust
company (acting as principal) described in clause (b), or entered
into with an
entity (acting as principal) which has, or whose parent has, a
credit rating
from the Rating Agencies in the highest credit category granted
thereby; and
(g) any other investment approved by the Syndication Agents.
Solely for purposes of amounts from time to time held in the
Reserve Account,
"Permitted Investments" shall include, in addition to the
foregoing, any
investments permitted under the Reserve Account Agreement.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, limited
liability company,
trust, unincorporated association, joint venture, Governmental
Authority or
other entity.
"Pooled Commercial Paper" means Promissory Notes of a Conduit
Lender subject to any particular pooling arrangement by such
Conduit Lender, but
excluding Promissory Notes issued by such Conduit Lender for a
tenor and in an
amount specifically requested by any Person in connection with any
agreement
effected by such Conduit Lender.
"Prime Rate" means, with respect to any Lender Group, the rate
of interest announced publicly by the related Reference Bank from
time to time
as its prime or base rate (such rate not necessarily being the
lowest or best
rate charged by such Reference Bank).
"Principal Balance" means with respect to any Tranche, the
original principal amount of a Loan made hereunder that has been
allocated to
such Tranche pursuant to Section 2.04, as such amount may be
divided or combined
in accordance therewith, in each case as reduced from time to time
by
Collections and other amounts received by the applicable Lender
holding such
Tranche from distributions made pursuant to Sections 2.08(b) and
2.08(c), as
applicable, or otherwise that have been applied to reduce the
Principal Balance
of such Tranche; provided, that if such Principal Balance shall
have been
reduced by any distribution and thereafter all or a portion of such
distribution
is rescinded or must otherwise be returned for any reason, such
Principal
Balance shall be increased by the amount of such rescinded or
returned
distribution, as though it had not been received by such
Lender.
21
<PAGE>
"Priority Finance Charges" means, in respect of any period,
the sum of (i) all accrued at any time and remaining unpaid
Interest, Usage
Fees, Unused Fees and Make-Whole Fees, and (ii) all unreimbursed
costs and
expenses of the type described in Section 8.03 incurred by the
Program Agent at
any time in connection with the enforcement of any Facility
Document or the
collection of any amounts due thereunder, to the extent such sum
does not exceed
an amount equal to the amount of Interest that would have accrued
on the
Aggregate Principal Balance of the Loans during such period at a
rate equal to
the Adjusted LIBO Rate plus the Applicable Margin.
"Program Agent" means JPMorgan, in its capacity as agent for
the Lenders, together with its successors and permitted
assigns.
"Prohibited Transaction" means any transaction set forth in
Section 406 of ERISA or Section 4975 of the IRC which is not exempt
under
Section 408 of ERISA or Section 4975(d) of the IRC (or any
exemption issued
thereunder).
"Promissory Notes" means with respect to a Conduit Lender, (i)
the short-term promissory notes or extendable money market notes
issued by such
Conduit Lender which are allocated by such Conduit Lender directly
or indirectly
as its funding for its purchasing or maintaining its portion of the
Advances
hereunder and (ii) participations sold by a Conduit Lender pursuant
to Section
10.03(g); provided, that the term "Promissory Notes" shall not
include the
interests sold or indebtedness incurred by a Conduit Lender
pursuant to the
provisions of any of its program-level liquidity facilities or
Asset Purchase
Agreements.
"Pro Rata Share" means, at any time, as the context may
require:
(i) for any Committed Lender, (a) the ratio (expressed as a
percentage) of the Commitment of such Committed Lender at such time
divided by
the sum of the Commitments of all Committed Lenders at such time
and (b) after
the Commitments of all of the Committed Lenders have been
terminated, the ratio
(expressed as a percentage) of the outstanding principal amount of
the Loans
funded by such Committed Lender at such time divided by the
outstanding
principal amount of the Loans funded by all of the Committed
Lenders at such
time; and
(ii) for any Lender Group, (a) the ratio (expressed as a
percentage) of the aggregate of the Commitments of the Committed
Lenders in such
Lender Group at such time divided by the Aggregate Commitment at
such time and
(b) after the Commitments of all of the Committed Lenders in such
Lender Group
have been terminated, the ratio (expressed as a percentage) of the
outstanding
principal amount of the Loans funded by the Committed Lenders in
such Lender
Group at such time divided by the outstanding principal amount of
the Loans
funded by all of the Committed Lenders in all of the Lender Groups
at such time.
"Provisional Settlement Date" means any Business Day declared
by the Program Agent (at the direction of any Administrative Agent,
which, in
the discretion of any Administrative Agent, may be as frequently as
each
Business Day) to be a Settlement Date on one (1) Business Day's
written notice
(which may specify an ongoing Provisional Settlement Date
arrangement) to the
Borrower and the Servicer at any time on or after the Termination
Date, or at
any time during the continuance of an Event of Termination.
22
<PAGE>
"Rated Note" has the meaning set forth in Section 2.07.
"Rate Type" means the Adjusted LIBO Rate, the Base Rate or the
CP Rate.
"Rating Agencies" means each of S&P and
Moody's or their
respective successors.
"Receivables Sale Agreement" means that certain Amended and
Restated Receivables Sale Agreement dated as of the date hereof
between HDCC and
the Borrower, as amended, restated, supplemented or otherwise
modified from time
to time.
"Records" means all Contracts and related Contract Files, and
all other agreements, documents, instruments, books, records and
other
information (including, without limitation, computer programs,
tapes, discs,
punch cards, data processing software and related property and
rights) with
respect to the Contracts, the related Obligors and the Related
Security.
"Recoveries" means any payments that the Servicer receives
from or on behalf of the related Obligor in respect of a Contract
that has
become a Defaulted Contract, including any net proceeds from the
liquidation of
the related Motorcycle.
"Reduction Date" means any Business Day on which the Borrower
reduces the Aggregate Commitment pursuant to Section 2.03.
"Reference Bank" means, with respect to any Lender Group at
any time, the Committed Lender in such Lender Group designated by
the applicable
Administrative Agent to be the "Reference Bank" for such Lender
Group.
"Related Entity" means HDI, any Originator and each of their
respective Affiliates and successors.
"Related Security" means, with respect to any Contract:
(a)
all of the Borrower's interest in the Motorcycle and
related goods (including returned or repossessed goods), if any,
the sale or
financing of which gave rise to such Contract, and all insurance
contracts with
respect thereto,
(b) all
other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of
such
Contract, whether pursuant to such Contract or otherwise, together
with all
financing statements and security agreements describing any
collateral securing
such Contract,
(c) all guaranties, insurance, "supporting obligations"
(within the meaning of Section 9-102(a) of the UCC of all
applicable
jurisdictions) and other agreements or arrangements of whatever
character from
time to time supporting or securing payment of such Contract,
23
<PAGE>
(d) all service contracts and other contracts and agreements
associated with such Contract,
(e)
all Records related to such Contract,
(f) all of the Borrower's right, title and interest in, to and
under the Receivables Sale Agreement with respect to such
Contract,
(g) all of the Borrower's right, title and interest in and to
the Collection Account and the contractual arrangements existing
from time to
time between the Custodian and the Borrower (or any person on
behalf of the
Borrower), and any and all agreements related thereto, and
(h) all proceeds of any of the
foregoing.
"Repurchase Price" has the meaning set forth in the
Receivables Sale Agreement.
"Required Lenders" means, at any time, Committed Lenders
holding, in the aggregate, sixty-six and two-thirds percent
(66-2/3%) or more of
the Aggregate Commitment in effect at such time; provided, however,
that, in the
event that the Commitments have been terminated pursuant to the
terms hereof,
"Required Lenders" means the Lenders whose Pro Rata Shares of the
Aggregate
Principal Balance are equal to or greater than sixty-six and
two-thirds percent
(66-2/3%). On each date of determination, the Commitment and the
Aggregate
Principal Balance in respect of any Defaulting Lender shall be
excluded.
"Required O/C Amount" means, as of any date, an amount equal
to the greater of (i) the product of (a) the Required O/C
Percentage times (b)
the Adjusted Pool Balance, and (ii) the O/C Floor Amount.
"Required O/C Percentage" means, as of any date, a percentage
equal to the greater of (i) the Dynamic Enhancement Percentage as
of such date
and (ii) the percentage, if any, specified by any Rating Agency as
being the
minimum overcollateralization percentage necessary to maintain the
rating of
"AAA/Aaa" (or its equivalent) on the Rated Notes, if any.
"Required Rate" means, at any time, a rate equal to the sum at
such time of (i) the Hedging Rate, (ii) the Applicable Margin,
(iii) the
Servicer Fee and (iv) the Minimum Excess Spread Percentage.
"Reserve Account" means an account at the Program Agent
maintained in the name of the Borrower, subject to the security
interest of the
Program Agent for the benefit of the Secured Parties, with respect
to which the
action required under Sections 5.01(m) and 5.03(j) shall have been
taken.
"Reserve Account Agreement" means that certain Securities
Account, Depositary Account and Account Control Agreement dated as
of April 30,
2009 among the Borrower, the Servicer, JPMorgan, as securities
intermediary, and
the Program Agent, as amended, restated, supplemented or otherwise
modified from
time to time.
24
<PAGE>
"Reserve Account Shortfall" means the circumstance where the
Minimum Reserve Amount in effect at any time exceeds the amount
then on deposit
in the Reserve Account.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any
class of
capital stock of the Borrower now or hereafter outstanding, except
a dividend
payable solely in shares of that class of stock or in any junior
class of stock
of the Borrower, (ii) any redemption, retirement, sinking fund or
similar
payment, purchase or other acquisition for value, direct or
indirect, of any
shares of any class of capital stock of the Borrower now or
hereafter
outstanding, (iii) any payment made to redeem, purchase, repurchase
or retire,
or to obtain the surrender of, any outstanding warrants, options or
other rights
to acquire shares of any class of capital stock of the Borrower now
or hereafter
outstanding, and (iv) any payment of management fees by the
Borrower (except for
Servicer Fees, the allocable share of overhead expenses, and
reasonable
management fees to HDCC or its Affiliates in reimbursement of
actual management
services performed).
"Revolving Period" means the period commencing on the
Effective Date and ending on the Termination Date.
"S&P" means Standard & Poor's Ratings Services, a division
of
The McGraw-Hill Companies, Inc., and its successors.
"Secured Parties" means, collectively, each Hedge
Counterparty, the Lenders, each Administrative Agent, the Program
Agent, the
Liquidity Providers and each other Indemnified Party.
"Servicer" means HDCC, solely in its capacity as Servicer
hereunder, or such other Person(s) then authorized pursuant to
Section 6.01 to
service, administer, bill and collect payments under the Contracts
and enforce
the Contracts.
"Servicer Advance" has the meaning set forth in Section 6.03.
"Servicer Fee" has the meaning set forth in Section 6.08;
provided, that if the Servicer is not HDCC or an Affiliate of HDCC,
the Servicer
Fee shall be an amount equal to the then-prevailing market rate for
servicing
similar Contracts.
"Servicer Termination Event" means the occurrence and
continuation of any one of the following events:
(a) the Servicer shall fail to remit Collections to the
Collection Account in accordance with Section 2.08(a) or shall fail
to remit
Collections that are then available to the Servicer in the amount
and order
provided in Section 2.08(b), and such failure shall continue for
three (3)
consecutive Business Days; or
(b) the Servicer shall fail to deliver the Monthly Report when
due and such failure continues unremedied by the applicable
Settlement Date; or
25
<PAGE>
(c) the Servicer shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or any
other Facility
Document, and any such failure shall remain unremedied for thirty
(30)
consecutive days; or
(d) an Insolvency Event has occurred with respect to the
Servicer, HDI or HDFS; or
(e) any representation, warranty, certification or statement
made by the Servicer under or in connection with this Agreement,
any other
Facility Document or in any other document delivered pursuant
hereto or thereto
shall be determined to have been false in any material respect on
the date as of
which made or deemed made; or
(f)
(i) the Servicer, HDI or HDFS or any of their material
Subsidiaries shall fail to pay any principal of or premium or
interest on any
Indebtedness that is outstanding in a principal or net amount of at
least
$60,000,000 in the aggregate (but excluding Indebtedness
outstanding hereunder)
when the same becomes due and payable (whether by scheduled
maturity, required
prepayment, acceleration, demand or otherwise) and such failure
shall continue
after the applicable grace period, if any, specified in the
agreement or
instrument relating to such Indebtedness, or (ii) any event shall
occur or
condition shall exist under any agreement or instrument relating to
any such
Indebtedness or any Permitted Finance Receivables Securitization
and shall
continue after the applicable grace period, if any, specified in
such agreement
or instrument, if such event or condition is to accelerate, or to
permit the
acceleration of, the maturity of such Indebtedness or to permit an
early
amortization or early liquidation, in the case of a Permitted
Finance
Receivables Securitization; or any such Indebtedness shall be
declared to be due
and payable, or required to be prepaid or redeemed (other than by a
regularly
scheduled required prepayment or redemption), purchased or
defeased, or an offer
to prepay, redeem, purchase or defease such Indebtedness shall be
required to be
made, in each case prior to the stated maturity thereof; provided
that in the
case of any intercompany indebtedness, the occurrence of a default
thereunder
shall not constitute a Servicer Termination Event unless either (x)
in the case
of a payment default, demand shall have been made and the obligor
thereon shall
have failed to cure the same in a reasonable period of time, or (y)
such
intercompany indebtedness shall have been accelerated; or
(g) one of more final judgments for the payment of money in an
amount in excess of $60,000,000 in the aggregate shall be entered
against the
Servicer, HDI or HDFS or any of their material Subsidiaries with
respect to
which (i) enforcement proceedings shall have been commenced by any
creditor upon
such judgments or orders or (ii) there shall be any period of ten
(10)
consecutive days during which a stay of enforcement of such
judgments or orders,
by reason of a pending appeal or otherwise, shall not be in effect;
provided,
however, that any such judgment or order shall not be a Servicer
Termination
Event or included in the calculation of the aggregate amount of
judgments or
orders under this clause (g) if and for so long as (A) the amount
of such
judgment or order is covered by a valid and binding policy of
insurance between
the defendant and the insurer covering payment thereof and (B) such
insurer,
which shall be rated at least "A" by A.M. Best Company, has been
notified of,
and has not disputed the claim made for payment of, the amount of
such judgment
or order; or
26
<PAGE>
(h) HDFS shall, as of the end of any fiscal month, fail to
have a minimum Consolidated Tangible Net Worth of $500,000,000;
or
(i) The Finco Leverage Ratio, as of the end of any fiscal
month, shall exceed 10.00 to 1.00; or
(j) The Opco Leverage Ratio, as of the end of any fiscal
quarter ending prior to the Guaranty Ratings Threshold Date, shall
exceed 2.75
to 1.00; provided that this clause (j) shall cease to be a Servicer
Termination
Event on and after the Guaranty Ratings Threshold Date, and any
Servicer
Termination Event existing as of the expiration of the Guaranty
Ratings
Threshold Date solely by virtue of this clause (j) shall
automatically cease to
exist (each capitalized term not otherwise defined herein being
used in this
clause (j) as defined in the HDI Credit Agreement); or
(k)
The Interest Coverage Ratio of HDI, as of the end of any
fiscal quarter for the period of four consecutive fiscal quarters
then ended,
shall be less than 2.50 to 1.00; or
(l) any "Default" under and as defined in the HDI Credit
Agreement shall occur, without giving effect to any amendment or
waiver
thereunder.
"Settlement Date" means (i) May 12, 2009, in the case of the
first Settlement Date and, thereafter, the 12th day of each
calendar month, or
if such day is not a Business Day, the next following day that is a
Business
Day, or (ii) any Provisional Settlement Date.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the
amount of such
Person's liabilities (including disputed, contingent and
unliquidated
liabilities) as such value is established and liabilities evaluated
for purposes
of Section 101(31) of the Bankruptcy Code; (b) the present fair
saleable value
of the property of such Person in an orderly liquidation of such
Person is not
less than the amount that will be required to pay the probable
liability of such
Person on its debts as they become absolute and matured; (c) such
Person is able
to realize upon its property and pay its debts and other
liabilities (including
disputed, contingent and unliquidated liabilities) as they mature
in the normal
course of business; (d) such Person does not intend to, and does
not believe
that it will, incur debts or liabilities beyond such Person's
ability to pay as
such debts and liabilities mature; and (e) such Person is not
engaged in
business or a transaction, and is not about to engage in a business
or a
transaction, for which such Person's property would constitute
unreasonably
small capital.
"Subordinated Finance Charges" means, in respect of any
period, the sum of (i) all accrued at any time and remaining unpaid
Interest,
Usage Fees, Unused Fees and Make-Whole Fees, and (ii) all
unreimbursed costs and
expenses of the type described in Section 8.03 incurred by the
Program Agent at
any time in connection with the enforcement of any Facility
Document or the
collection of any amounts due thereunder, to the extent such sum
exceeds the
Priority Finance Charges in respect of such period.
"Subordinated Indebtedness" means Indebtedness of HDI or its
Subsidiaries, whether direct or indirect, to non-affiliated Persons
which is
subordinated to the Obligations on a basis acceptable to the Agent
(each
capitalized term being used in this definition as defined in the
HDI Credit
Agreement as in effect on the date hereof).
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"Subordinated Intercompany Indebtedness" means Indebtedness
arising from intercompany loans; provided that if the obligor of
such
Indebtedness is one of more of the Companies (whether as a primary
obligor or a
secondary obligor), such Indebtedness shall be subordinated to the
Obligations
pursuant to the subordination terms set forth in the HDI Credit
Agreement (each
capitalized term being used in this definition as defined in the
HDI Credit
Agreement as in effect on the date hereof).
"Subordinated Swap Termination Payment" means any termination
payment due under any Hedge Agreement resulting from the occurrence
of an "Early
Termination Date" under and as defined in such Hedge Agreement,
where the Hedge
Counterparty is the "Defaulting Party" or sole "Affected Party"
(each as defined
in such Hedge Agreement) other than any termination payment
resulting from a
"Tax Event" or "Illegality" (each as defined in such Hedge
Agreement).
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of
which shall at
the time be owned or controlled, directly or indirectly, by such
Person or by
one or more of its Subsidiaries or by such Person and one or more
of its
Subsidiaries, or (ii) any partnership, limited liability company,
association,
joint venture or similar business organization more than 50% of the
ownership
interests having ordinary voting power of which shall at the time
be so owned or
controlled. Unless otherwise expressly provided, all references
herein to a
"Subsidiary" shall mean a direct or indirect Subsidiary of HDI.
"Syndication Agent" means either JPMorgan or CNAI.
"Take-Out Date" means any date on which a Take-Out
Securitization occurs.
"Take-Out Securitization" means a financing transaction
undertaken by the Borrower or an Affiliate of the Borrower
involving the direct
or indirect sale or other conveyance of Contracts with an aggregate
Outstanding
Balance of at least $200,000,000 that comprise Collateral hereunder
and the
Related Security and the Collections related thereto, to a Person
that shall
privately or publicly issue securities, notes or certificates
backed by such
Contracts, Related Security and the Collections related
thereto.
"Target Principal Amount" means:
(a) as of any Settlement Date occurring during the Revolving
Period, except as provided in clause (b)(i), an amount equal to (i)
the
Aggregate Principal Balance of the Loans then outstanding minus
(ii) the sum of
(A) the Adjusted Pool Balance at such time, minus (B) the Required
O/C Amount
(as calculated on the basis of the Dynamic Enhancement Percentage
as of the last
day of the Monthly Period then most recently ended), and
(b) as of any Settlement Date (i) during an Early Amortization
Period or (ii) following the end of the Revolving Period, an amount
equal to the
Aggregate Principal Balance of the Loans then outstanding.
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"Termination Date" means the earlier to occur of (i) the
Maturity Date and (ii) the declaration or automatic occurrence of
the
Termination Date pursuant to Section 7.02.
"Total Distribution Amount" means:
(a) with respect to any Settlement Date other than a
Provisional Settlement Date, the sum of, without duplication, (i)
all
Collections deposited in the Collection Account or otherwise
received by the
Servicer or the Borrower during the immediately preceding Monthly
Period, (ii)
the aggregate of the Repurchase Prices (if any) received since the
last
Settlement Date, (iii) any amounts paid or deposited into the
Collection Account
since the last Settlement Date pursuant to Section 2.09 or 2.17,
(iv) any net
monthly payments and termination payments received from any Hedge
Counterparty
on such Settlement Date (except to the extent any such termination
payment is
used by the Borrower to enter into a replacement Eligible Hedge
Agreement), (v)
any Servicer Advance made on such Settlement Date, (vi) any
investment earnings
received and not previously remitted to the Collection Account and
the Reserve
Account, as applicable, and (vii) any distributions of amounts on
deposit in the
Reserve Account in accordance with Section 2.08(d); and
(b) with respect to any Provisional Settlement Date, (i) all
Collections then held in the Collection Account or otherwise
received and then
being held by the Servicer or the Borrower, (ii) the aggregate of
the Repurchase
Prices (if any) received and not previously distributed under
Sections 2.08(b)
or 2.08(c), (iii) any amounts paid or deposited into the Collection
Account
since the last Settlement Date pursuant to Section 2.09 or 2.17,
(iv) any
payments received from any Hedge Counterparty and not previously
distributed
under Sections 2.08(b) or 2.08(c) (except to the extent any such
termination
payment is used by the Borrower to enter into a replacement
Eligible Hedge
Agreement), (v) any Servicer Advance made on such Settlement Date,
(vi) any
investment earnings received and not previously remitted to the
Collection
Account and the Reserve Account, as applicable, and (vii) any
distributions of
amounts on deposit in the Reserve Account in accordance with
Section 2.08(d).
"Tranche" has the meaning
specified in Section 2.04(a).
"Tranche Period" means, with respect to any Tranche:
(a) in the case of any Tranche in respect of which Interest is
computed by reference to the CP Rate, (i) initially, the period
commencing on
(and including) the Effective Date and ending on (and including)
the last day of
the calendar month in which the Effective Date occurs, and (ii)
thereafter, each
successive calendar month commencing on (but excluding) the last
day of the
immediately preceding calendar month for such Tranche and ending on
(and
including) the last day of such calendar month; and
(b) in the case of any Base Rate Tranche, (i) a period from
one to and including 31 days, or such other period as may be
mutually agreeable
to the Syndication Agents and the Borrower; and
(c) in the case of any LIBOR Tranche, a period of one month,
or such other period as may be mutually agreeable to the
Syndication Agents and
the Borrower, as the Borrower shall select in a written notice to
the Program
Agent and the Lenders not later than 1:00 P.M. (New York City time)
on the
second Business Day immediately before the first day of such
Tranche Period,
each such Tranche Period for such Tranche to commence on the last
day of the
immediately preceding Tranche Period for such Tranche (or, if
applicable, the
Effective Date), except that if the Program Agent and the Lenders
shall not have
received such notice before 1:00 P.M. on such second preceding
Business Day,
such Tranche Period shall be one day; provided, however, that:
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(i) any Tranche Period (other than of one
day) which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business
Day (provided, however, that in the case of a LIBOR Tranche,
if such Tranche 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 Tranche Period shall
end on the immediately preceding Business Day);
(ii)
in the case of any Tranche Period of
one day, (A) if commencing on the Effective Date, such Tranche
Period shall be the Effective Date; (B) any subsequently
occurring Tranche Period which is one day shall, if the
immediately preceding Tranche Period is more than one day, be
the last day of such immediately preceding Tranche Period and,
if the immediately preceding Tranche Period is one day, be the
day next following such immediately preceding Tranche Period;
and (C) if such Tranche Period occurs on a day immediately
preceding a day which is not a Business Day, such Tranche
Period shall be extended to the next succeeding Business Day;
and
(iii) in the case of any Tranche Period for
any Tranche which commences before the Termination Date and
would otherwise end on a date occurring after the Termination
Date, such Tranche Period shall end on the Termination Date.
"Transaction Parties" means, collectively, the Borrower,
HDCC, and the Servicer.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction.
"Unrated Note" has the meaning set forth in Section 2.07.
"Unused Commitment" has the meaning set forth in Section 2.03.
"Unused Fee" has the meaning set forth in the Fee Letter.
"Usage Fee" has the meaning set forth in the Fee Letter.
"Yield Supplemented Contract" means a Contract for which the
Contract Rate is less than the Required Rate.
"Yield Supplement Overcollateralization Amount" means, during
the Revolving Period, as calculated on each Borrowing Date (in
respect of the
Contracts then becoming part of the Collateral), each Settlement
Date (in
respect of all Contracts then comprising Collateral) and each
Take-Out Date (in
respect of all Contracts remaining as Collateral after giving
effect to the
applicable Take-Out), an aggregate amount for all applicable
Contracts,
calculated in respect of each such Contract as being an amount
equal to, if
positive, (A) the Outstanding Balance of each Yield Supplemented
Contract minus
(B) the present value of such Yield Supplemented Contract
discounted at the
Required Rate. The Required Rate for each Contract shall be
determined on the
basis of the Hedging Rate set forth in the Borrowing Notice for the
Borrowing
Date such Contract first became part of the Collateral.
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SECTION 1.02. Other Terms and Constructions. Under this
Agreement, all accounting terms not specifically defined herein
shall be
construed in accordance with GAAP as in effect in the United
States, and all
accounting determinations made and all financial statements
prepared hereunder
shall be made and prepared in accordance with GAAP (except for
those accounting
determinations made with respect to the financial covenants set
forth in clauses
(h), (i), (j) and (k) of the definition of "Servicer Termination
Event", which
shall be made in accordance with Agreement Accounting Principles).
All terms
used in Article 9 of the UCC in the State of New York, and not
specifically
defined herein, are used herein as defined in such Article 9. The
words
"herein," "hereof," and "hereunder" and other words of similar
import refer to
this Agreement as a whole, including the exhibits and schedules
hereto, as the
same may from time to time be amended or supplemented and not to
any particular
section, subsection, or clause contained in this Agreement, and all
references
to Sections, Exhibits and Schedules shall mean, unless the context
clearly
indicates otherwise, the Sections hereof and the Exhibits and
Schedules attached
hereto, the terms of which Exhibits and Schedules are hereby
incorporated into
this Agreement. The captions and section numbers appearing in this
Agreement are
inserted only as a matter of convenience and do not define, limit,
construe or
describe the scope or intent of the provisions of this Agreement.
Each of the
definitions set forth in Section 1.01 hereof shall be equally
applicable to both
the singular and plural forms of the defined terms. Unless
specifically stated
otherwise, all references herein to any agreements, documents or
instruments
shall be references to the same as amended, restated, supplemented
or otherwise
modified from time to time.
SECTION 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time
from a
specified date to a later specified date, the word "from" means
"from and
including" and the words "to" and "until" each means "to but
excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Loan Facility.
(a) Generally. On the terms and subject to the conditions
hereof, each Conduit Lender may in its sole discretion make, and
each Committed
Lender severally and not jointly agrees to make (if the Conduit
Lender in its
related Group elects not to make), Loans to the Borrower from time
to time on
any day during the Revolving Period, but no more than once a week,
in an amount
in respect of any Lender Group not to exceed at any time its Lender
Group's Pro
Rata Share of the Aggregate Commitment. No Lender shall be required
to extend
its portion of any Advance hereunder, and no Advance shall be
extended, if:
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(i) such Lender's portion of any requested
Advance would exceed its Pro Rata Share of such Advance or
such Lender's Lending Group's portion of such Advance would
exceed its Pro Rata share of the Aggregate Commitment;
(ii) if such Lender is a Conduit Lender, the
extension of the related Loan would result in the aggregate
principal amount of the Loans extended by such Conduit Lender
exceeding
its Conduit Lending Limit, or if such Lender is a
Committed Lender, the extension of the related Loan would
result in the aggregate principal amount of the Loans extended
by such Committed Lender exceeding its Commitment;
(iii) the Termination Date has occurred; or
(iv) any condition to making such Advance
set forth in Article III shall not have been satisfied.
Subject to the terms, conditions, provisions and limitations set
forth herein,
the Borrower may borrow, repay or prepay and reborrow Loans during
the Revolving
Period. The Loans shall be secured by the Collateral pursuant to
Section 2.16.
Collections received in respect of the Collateral shall be applied
in accordance
with the provisions of Section 2.08.
(b) Conduit Lender Participation. On or prior to each
Borrowing Date, each Conduit Lender shall advise its related
Administrative
Agent as to whether and the extent to which it shall participate in
the making
of the Loan to be made by its Lender Group on such Borrowing Date.
The related
Administrative Agent shall promptly notify the Borrower, the
Program Agent and
the Committed Lenders in its Lender Group of such Conduit Lender's
election. At
no time will a Conduit Lender be obligated to make all or any
portion of any
Loan to be made by its Lender Group hereunder.
(c) Committed Lender's Commitment.
(i) If a Conduit Lender elects not to make all or any portion
of the Loan to be
made by its Lender Group, the same shall be made by
the Committed
Lenders in its Lender Group on a pro rata basis in
accordance with
their respective Commitments.
(ii) The obligation of any Committed Lender to make its
ratable portion of
any Advance hereunder is several from the obligation
of any other
Committed Lender (whether or not in the same Lender
Group). The
failure of any Committed Lender to make its ratable portion
of any Advance
hereunder shall not release the obligation of any other
Committed Lender
(whether or not in the same Lender Group) to make its
ratable portion of
any Advance hereunder, but no Committed Lender shall
be responsible for
the failure of any other Committed Lender to make
its ratable
portion of any Advance hereunder.
SECTION 2.02. Making the Advance.
(a) Each Advance made under this Article II shall consist of
the Loans made by each Lender Group ratably in proportion to such
Lender Group's
respective Pro Rata Share and shall be made pursuant to a Borrowing
Notice
issued by the Borrower to the Administrative Agents and the
Hedge
Counterparties. To be effective, a Borrowing Notice must be
received by each
Administrative Agent not less than two (2) Business Days prior to
the requested
Borrowing Date; provided that the initial Borrowing Notice issued
by the
Borrower hereunder may be issued to the Administrative Agents on
the Effective
Date. Each Administrative Agent shall forward each Borrowing Notice
to the
Lenders in its Lender Group. Each Borrowing Notice shall, except as
set forth
below, be irrevocable and shall specify:
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(i) the new Contracts being pledged in
connection with such Advance (the "New Contracts"),
(ii)
the requested aggregate principal
amount of such Advance and the amount of the Loan,
(iii) the Borrowing Date,
(iv) the Cutoff Date in respect of the New
Contracts,
(v) the initial Tranche Period and Rate Type
requested by the Borrower, and
(vi) the Hedging Rate existing under the
Hedge
Agreements for the Loans to be made by each Lender Group
on such Borrowing Date, which Hedging Rate shall be used in
the calculation of the Yield Supplement Overcollateralization
Amount in respect of the New Contracts.
On each Borrowing Date, upon satisfaction of the applicable
conditions precedent
set forth in Article III, and so long as such Advance does not
otherwise violate
the terms and conditions hereof, each Conduit Lender or each
Committed Lender,
as applicable, shall remit to the account specified by the
Administrative Agent
in its Lender Group by wire transfer in same day funds at such time
as shall
enable such Administrative Agent to remit such funds to the
Borrower by 12:00
p.m. (New York City time) on the Borrowing Date, an amount equal to
(1) in the
case of a Conduit Lender, its Lender Group's Pro Rata Share of the
Advance, and
(2) in the case of a Committed Lender, its individual Pro Rata
Share thereof.
Upon receipt of such funds, each Administrative Agent shall by
12:00 pm (New
York City time) on such Borrowing Date initiate a wire transfer of
same day
funds in such amount to account #35099879 maintained on behalf of
the Borrower
at The Northern Trust Company (the "NTC Account"); provided that,
with respect
to the funds remitted to the Administrative Agent of the JPMorgan
Lender Group
in respect of such Advance, such Administrative Agent shall (x)
deposit or cause
to be deposited in the Reserve Account a portion of such funds, to
the extent
available, up to the amount necessary to cause the funds then held
in the
Reserve Account to equal the Minimum Reserve Amount after giving
effect to such
Advance, and (y) initiate a wire transfer of the balance of such
funds, if any,
to the NTC Account. Upon the making of such wire transfers and
deposits, each
Lender Group shall be deemed to have extended its Loan to the
Borrower as part
of such Advance.
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<PAGE>
Notwithstanding the foregoing, the initial Advance hereunder
shall be disbursed in the following manner: (i) in the case of each
of the
Lender Groups of which JPMorgan and CNAI is Administrative Agent,
such
Administrative Agent shall apply the proceeds of its Lender Group's
Pro Rata
Share of the initial Advance to the "Borrower Obligations" then
owing such
Lender Group under the Existing Credit Agreement, (ii) in the case
of each other
Lender Group, the Administrative Agent of such Lender Group shall
remit the
proceeds of such Lender Group's Pro Rata Share of the initial
Advance to the
Program Agent, and (iii) the Program Agent shall distribute funds
received by it
from the Administrative Agents of such other Lender Groups to (A)
JPMorgan and
CNAI, for application to the "Borrower Obligations" then
outstanding under the
Existing Credit Agreement, (B) the Program Agent, for deposit to
the Reserve
Account in an amount equal to the Minimum Reserve Amount, and (C)
the Borrower,
to the extent of any balance remaining. Upon the making of such
disbursements in
accordance with the foregoing, each Lender Group shall be deemed to
have
extended its Pro Rata Share of the initial Advance to the
Borrower.
(b) Borrowing Notice Irrevocable. Each Borrowing Notice shall
be irrevocable and binding on the Borrower. The Borrower shall
reimburse each
Lender for any loss, cost or expense incurred by such Lender as a
result of any
failure to fulfill on or prior to the Borrowing Date specified in
such Borrowing
Notice the applicable conditions set forth in Article III or any
other term or
condition described in this Agreement, including any loss, cost or
expense
incurred by reason of the liquidation or redeployment of funds
acquired by such
Lender to fund its Loan when the Loan, as a result of such failure,
is not made
on such date.
(c) Extension of the Maturity Date. The Borrower may request,
no more frequently than once each year, by delivering written
notice to the
Administrative Agents and the Program Agent, that the Lenders
extend the
Maturity Date for an additional 364 days, with such extension to
become
effective as of and from the date all of the Lenders consenting
thereto shall in
their sole discretion consent to such extension. The Administrative
Agents will
forward such requests to the Lenders in their respective Lender
Groups. Any such
request shall be subject to the following conditions: (w) at no
time shall any
Commitment have a term of more than 364 days and, if any such
request would
result in a term of more than 364 days, such request shall be
deemed to have
been made for such number of days so that, after giving effect to
such extension
on the date requested, such term will not exceed 364 days, (x) none
of the
Lenders will have any obligation to extend any Commitment, (y) if
fewer than all
of the Lenders agree to extend the Maturity Date at such time, then
any such
extension of the Maturity Date will be effective only if (1) those
Lenders who
initially agreed to extend the Maturity Date for an additional 364
days
subsequently reaffirm their agreement to extend, acknowledging that
it would
then be without the participation of the non-extending Lenders, and
(2) the
Borrower shall have made payment in full of the principal balance
of the Loans
together with all other Borrower Obligations accrued hereunder and
owing to each
of the non-extending Lenders and their related Lender Groups on the
Maturity
Date in effect prior to such extension, and (z) any request for
such extension
shall be made not more than sixty (60) days prior to the then
effective Maturity
Date. Each Administrative Agent shall respond to such request in
writing, on
behalf of the Lenders in its Lender Group (with a copy to the
Program Agent),
within thirty (30) days after receipt of such request; provided
that if such
request was received less than thirty (30) days prior to the then
effective
Maturity Date, each Administrative Agent shall be given at least
ten (10) days
to respond thereto (meaning that no such request may be delivered
fewer than ten
(10) days before the Maturity Date). Any Administrative Agent's
failure for any
reason to respond to such a request within the applicable time
period shall be
deemed a rejection of the requested extension by the Lenders in its
Lender
Group. In the case of any Lender that shall not have agreed to (or
been deemed
to have rejected) an extension request, the Principal Balance of
all Loans made
by such Lender, together with all Borrower Obligations accrued
hereunder and
owing to such Lender shall be due and payable in full to such
Lender on the
Maturity Date that shall have been in effect at the time the
request by the
Borrower for an extension was made.
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SECTION 2.03. Reduction in the Aggregate
Commitment. The Borrower may, on
any Settlement Date prior to the Maturity Date on not less than ten
(10) days'
prior irrevocable written notice to the Administrative Agents, (i)
prepay in
whole all of the outstanding Borrower Obligations, together with
any additional
amount as may be necessary to pay all amounts, including any
termination
payments, due to the Hedge Counterparties on such Settlement Date
as a result of
such prepayment, or (ii) permanently reduce in part (ratably among
the Committed
Lenders) that portion of the Aggregate Commitment that exceeds the
Aggregate
Principal Balance (the "Unused Commitment"); provided, that upon
each such
reduction, the Borrower shall pay on the applicable Reduction Date
a Make-Whole
Fee to the Administrative Agents ratably based on the Pro Rata
Share of each
Lender Group's Lender Group Limit at such time; provided further,
that if on any
Reduction Date a Lender is a Defaulting Lender, such Lender shall
not be
entitled to a Make-Whole Fee in connection with the reduction being
given effect
on such Reduction Date. Any such reduction in the Aggregate
Commitment shall be
applied ratably to the Lenders and shall result in reductions of
each of the
Commitments, the Conduit Lending Limits and the Lender Group Limits
based on
their respective Pro Rata Shares of the applicable reduction.
Notwithstanding
the foregoing, the Borrower may elect to reduce the Unused
Commitment of any
Defaulting Lender prior to reducing the Aggregate Commitment
ratably among the
non-defaulting Committed Lenders.
SECTION 2.04. Tranches.
(a) Generally. Each Loan shall be allocated to one or more
Tranche Periods. Any portion of a Loan having one Tranche Period
and one Rate
Type and held by one Lender is referred to herein as a "Tranche".
From time to
time the Borrower shall select Tranche Periods and Rate Types with
respect to
Tranches funded by the Committed Lenders, subject to the provisions
of this
Agreement and provided that no Event of Termination has occurred.
At all times
after the occurrence of and during the continuation of an Event of
Termination,
each Committed Lender shall select the Tranche Periods and Rate
Types with
respect to the Tranches it funds hereunder. Either the Borrower or,
following an
Event of Termination, the applicable Lender, may, upon notice to
the other party
received at least three (3) Business Days prior to the last day of
any Tranche
Period in the case of the Borrower giving notice, or up to the last
day of such
Tranche Period in the case of the Lender giving notice, either (i)
divide any
Tranche originating on such last day or having a Tranche Period
ending on such
last day into two or more Tranches having an aggregate Principal
Balance equal
to the Principal Balance of such undivided Tranche, or (ii) combine
any two or
more Tranches originating on such last day or having Tranche
Periods ending on
such last day into a single Tranche having a Principal Balance
equal to the
aggregate of the Principal Balance of such Tranches; provided,
however, that no
Tranche with respect to which Interest is determined by reference
to the CP Rate
may be combined with a Tranche with respect to which Interest is
determined by
reference to the Alternative Rate, and a Tranche held by one Lender
may not be
combined with any Tranche held by any other Lender.
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(b) Illegality. Notwithstanding any other provision of this
Agreement, if the adoption of or any change in any Law or in the
interpretation
or application thereof by any relevant Governmental Authority shall
make it
unlawful for any Lender, in its reasonable determination, to fund
or maintain
LIBOR Tranches as contemplated by this Agreement or to obtain in
the interbank
Eurodollar market the funds with which to make or maintain any such
LIBOR
Tranche, such Lender shall promptly notify the Program Agent, its
Administrative
Agent and the Borrower thereof whereupon, until such Lender
notifies the
Borrower and the Program Agent that the circumstances giving rise
to such
suspension no longer exist (which notice such Lender shall promptly
give), (i)
the obligation of such Lender to fund or maintain LIBOR Tranches
shall forthwith
be suspended and (ii) such Lender's then outstanding LIBOR
Tranches, if any,
shall be converted on the last day of the Tranche Period for such
Tranches or
within such earlier period as required by Law into Base Rate
Tranches. Before
giving any notice to the Program Agent, its Administrative Agent
and the
Borrower pursuant to this clause (b), such Lender shall designate a
different
office as its lending office if such designation would avoid the
need for giving
such notice and would not, in the judgment of such Lender, be
otherwise
disadvantageous to such Lender.
(c) LIBO Rate Inadequate; Inability to Determine
LIBO Rate. If
prior to the commencement of any Tranche Period for a LIBOR
Tranche, either (i)
the related Lender reasonably determines that the rate at which
deposits of
Dollars are being offered to such Lender in the London interbank
market does not
accurately reflect the cost to such Lender of funding or
maintaining LIBOR
Tranches for such Tranche Period or (ii) the related Lender is
unable, after
reasonable attempts, to obtain Dollars in the London interbank
market to fund or
maintain such Tranche for such Tranche Period, then such Lender
shall give
notice thereof to the Borrower, its Administrative Agent and the
Program Agent
by telephone or telecopy as promptly as practicable thereafter and,
until such
Lender notifies the Borrower, its Administrative Agent and the
Program Agent
that the circumstances giving rise to such suspension no longer
exist (which
notice such Lender shall promptly give), (A) the obligations of
such Lender to
fund or maintain LIBOR Tranches shall be suspended, and (B) each
outstanding
LIBOR Tranche funded by such Lender shall be converted into a Base
Rate Tranche
on the last day of the Tranche Period applicable thereto.
SECTION 2.05. Interest and Fees; Hedging. (a) The Borrower
shall pay Interest on the Principal Balance of each Tranche, which
interest
shall accrue for each day that such Principal Balance shall be
outstanding.
(b) On each Settlement Date, the Borrower shall pay to each
Lender (or its related Administrative Agent) all accrued and unpaid
Interest
with respect to all Tranches funded by such Lender during the
related Monthly
Period (or, in the case of a Provisional Settlement Date, all
accrued and unpaid
Interest to such Settlement Date); provided that, in the case of
any LIBOR
Tranche, the Borrower shall, if so requested by the applicable
Lender, pay to
such Lender all accrued and unpaid Interest thereon on the last day
of the
related Tranche Period.
(c) On each Settlement Date, the Borrower shall pay to each
Administrative Agent an amount equal to the sum of the Usage Fee
and the Unused
Fee, if any, accrued in respect of each day during the related
Monthly Period
(or, in the case of a Provisional Settlement Date, all accrued and
unpaid Usage
Fees and Unused Fees to such Settlement Date) for the benefit of
each Lender in
such Administrative Agent's Lender Group, which fees shall accrue
on each day
during the period from the Effective Date to the date the Loans
shall be repaid
in full as specified herein. Notwithstanding the foregoing, the
Usage Fee shall
not accrue on any day that the Default Rate shall then be in effect
as the
Interest Rate.
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(d) On or before the fifth Business Day prior to each
Settlement Date (or, in the case of a Provisional Settlement Date,
such notice
as may be reasonably practicable under the circumstances), each
Administrative
Agent, on behalf of the Lenders in its Lender Group, shall furnish
the Borrower
with an invoice setting forth (i) the amount of the accrued and
unpaid Interest
and the calculation thereof for all Tranches funded by the Lenders
in its Lender
Group during the related Monthly Period (or other applicable
period), and (ii)
the amount of the accrued and unpaid Usage Fee payable to the
Lenders in such
Administrative Agent's Lender Group during such period.
(e) From and after the initial Borrowing Date, at all times
that any Loan shall be outstanding, the Borrower shall cause
Eligible Hedging
Agreements to be in place and to be maintained with Eligible
Hedge
Counterparties in respect of the Aggregate Principal Balance then
outstanding.
The Borrower shall confer with each Administrative Agent as to the
Hedge
Agreements that shall correspond to the Loans made such
Administrative Agent's
Lender Group. Each Hedge Agreement proposed to be effective on the
initial
Borrowing Date in respect of the Loans being made on such date
shall, if in form
and substance reasonably satisfactory to the Syndication Agents,
constitute an
Eligible Hedge Agreement. Each new Hedge Agreement, and each
amended, restated,
supplemented or otherwise modified Hedge Agreement, that is
proposed to be
effective at any time after the initial Borrowing Date shall
constitute an
Eligible Hedge Agreement if it is either (i) in form and substance
substantially
similar to the corresponding Hedge Agreement that shall have been
in effect on
the initial Borrowing Date or (ii) otherwise in form and substance
reasonably
satisfactory to the Syndication Agents, with approval by the
Syndication Agents
not to be unreasonably withheld, conditioned or delayed. The
Borrower shall
cause the Hedge Agreements in respect of all Loans made on the same
Borrowing
Date to be uniform in terms of cap rate, amortization schedule, and
such other
terms as otherwise necessary to cause each such Hedge Agreement to
be in
substantially the same form such that no one Hedge Agreement
contains material
provisions which are more favorable than the provisions included in
the other
Hedge Agreements.
SECTION 2.06. Maturity Date. The Aggregate Principal Balance
of the Loans together with other Borrower Obligations accrued
hereunder shall be
due and payable in full, together with all Interest thereon accrued
to such
date, on the Maturity Date unless (i) earlier repaid pursuant to
the provisions
of this Agreement (including, without limitation, Section 2.08), or
(ii) the
Borrower Obligations are required to be repaid on any earlier date
in accordance
Section 7.02.
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SECTION 2.07. Evidence of Debt. The Loans may be evidenced by
two series of promissory notes (each, a "Note") executed and
delivered by the
Borrower to each Lender in the principal amount of the Loan or
portion thereof
made by such Lender. If such a series is requested by any of the
Lender Groups,
one series of Notes will be explicitly rated by at least one Rating
Agency as
having a long-term debt rating equivalent to AAA/Aaa and each such
Note shall be
substantially in the form of Exhibit B-1 hereto (a "Rated Note").
The other
series of Notes will not require an explicit rating from the Rating
Agencies and
each such Note shall be substantially in the form of Exhibit B-2
hereto (an
"Unrated Note"). In all respects other than the classification of
the Notes as
rated or unrated, the Notes will be entitled to identical rights
and priority.
The Notes will be ranked pari passu and the Lenders holding such
Notes will
share equally in the Collateral and will be entitled to the same
rights and
remedies under this Agreement and the other Facility Documents.
Each Lender
Group may elect, in its sole discretion, to have either a Rated
Note or an
Unrated Note issued by the Borrower to its Lender Group. In the
case of any
Lender that does not request a Note, such Lender shall maintain an
account or
accounts evidencing the indebtedness of the Borrower to such Lender
resulting
from the Loan or portion thereof made by such Lender, including the
outstanding
principal balance of such Loan and the amount of Interest payable
and paid to
such Lender from time to time hereunder. The entries made in such
accounts of
the Lenders shall be prima facie evidence of the existence and
amounts of the
obligations recorded therein; provided, however, that the failure
of any Lender
to maintain such accounts or any error therein shall not in any
manner affect
the obligation of the Borrower to repay any Loan in accordance with
the terms of
this Agreement.
SECTION 2.08. Settlement Procedures.
(a) Deposits to Collection Account. The Servicer shall
instruct the Lockbox Bank to remit all Collections identified with
the Contracts
from the Lockbox Account directly to the Collection Account within
two (2)
Business Days of identification. In the event that the Borrower
and/or the
Servicer receives any Collections or other proceeds of the
Collateral, each
shall remit the same directly to the Collection Account within two
(2) Business
Days of receipt. On each Settlement Date, each of the Borrower and
the Servicer
shall deposit or shall cause to be deposited to the Collection
Account all
amounts described in "Total Distribution Amount" together with any
other
Collections received by either of them that have not previously
been deposited
to the Collection Account. The Servicer shall not make any
withdrawals from the
Collection Account or the Reserve Account, as applicable, at any
time except for
the purpose of distributing such Collections and other amounts in
accordance
with Sections 2.08(b) and 2.08(c), as applicable; provided, that
the Servicer
may, from time to time, withdraw amounts from the Collection
Account as
contemplated in Section 6.06, and the Servicer may cause amounts in
the
Collection Account and the Reserve Account, as applicable, to be
invested in
Permitted Investments maturing not later than the Settlement Date
next following
such investment.
(b) Application of Collections - Revolving Period. On each
Settlement Date, the Servicer shall apply the Total Distribution
Amount for such
Settlement Date in the following order of priority:
(i) first, to the Servicer for the repayment
of any outstanding Servicer Advance made in
respect of any
Contract;
(ii) second, to the Servicer the accrued and
unpaid Servicer Fee, including any unpaid Servicer Fees with
respect
to any prior Monthly Periods;
(iii) third, to be distributed pari passu to
the Administrative Agents, the Program Agent and the Hedge
Counterparties, as applicable: (A) to each Administrative
Agent for the Lenders in its respective Lender Group, on a pro
rata basis, and if applicable to the Program Agent, an amount
equal to the aggregate accrued and unpaid Priority Finance
Charges, and (B) to the Hedge Counterparties, on a pro rata
basis, all net monthly payments, if any, due to the Hedge
Counterparties on such Settlement Date (other than such
payments due upon the termination of any Hedge
Agreement);
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(iv) fourth, to be distributed pari passu to
the Administrative Agents and the Hedge Counterparties, as
applicable: (A) to the Administrative Agents for the Lenders
in their respective Lender Groups, an amount equal to each
Lender Group's Pro Rata Share of the Target Principal Amount,
and
(B) to the Hedge Counterparties, on a pro rata basis, any
payments due upon the termination of any Hedge Agreement to
which they are party (other than Subordinated Swap Termination
Payments);
(v) fifth, to be distributed to the
Administrative Agents for the Lenders in their respective
Lender Group, on a pro rata basis, an amount equal to the
aggregate accrued and unpaid Subordinated Finance Charges (to
the extent the same constitute Interest or Fees), if any;
(vi) sixth, to be deposited to the Reserve
Account, the amount of any Reserve Account Shortfall;
(vii) seventh, to be distributed to the
Program Agent, an amount equal to the aggregate accrued and
unpaid Subordinated Finance Charges due and payable to the
Program Agent (to the extent constituting reimbursement for
enforcement costs and expenses);
(viii) eighth, to be distributed to any
applicable Hedge Counterparties, on a pro rata basis, any
Subordinated Swap Termination Payments then due and payable;
(ix) ninth, if any Borrower Obligations
(including "Unpaid Amounts" (as defined in the Hedge
Agreements)) (other than the amounts paid pursuant to clauses
(i) through (vii) above) are then due and payable by the
Borrower to any Secured Party, to each such Secured Party
(ratably in accordance with the amounts owing to each) the
Borrower Obligations so due and payable;
(x) tenth, to be distributed pari passu, all
unpaid amounts then payable to The Bank of New York Mellon
Trust Company, National Association under the Control
Agreement and to the Program Agent under the Reserve Account
Agreement; and
(xi) eleventh, any remaining funds to the
Borrower.
In addition to the
foregoing, the Servicer shall, to the extent of
funds then available in the Collection Account, on the last day of
any Tranche
Period for a LIBOR Tranche, disburse to the applicable
Administrative Agent for
the Committed Lender that shall have funded or maintained such
LIBOR Tranche, an
amount equal to the Interest on such LIBOR Tranche.
(c) Application of Collections - Post-Revolving Period. Upon
the occurrence of and during the continuation of an Event of
Termination and at
all times following the end of the Revolving Period, the Servicer
shall apply
the Total Distribution Amount on each Settlement Date in the
following order of
priority:
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(i) first, to the Servicer for the repayment
of any outstanding Servicer Advance made in respect of any
Contract;
(ii) second, to the Servicer, if the
Servicer is not HDCC or an Affiliate of HDCC, the accrued and
unpaid Servicer Fee, including any unpaid Servicer Fees with
respect to any prior Monthly Periods;
(iii)
third, to be distributed pari passu to
the Administrative Agents, the Program Agent and the Hedge
Counterparties, as applicable: (A) to each Administrative
Agent for the benefit of the Lenders in its respective Lender
Group, on a pro rata basis, and if applicable to the Program
Agent, an amount equal to the aggregate accrued and unpaid
Priority Finance Charges, and (B) to the Hedge Counterparties,
on a pro rata basis, all net monthly payments, if any, due to
the Hedge Counterparties on such Settlement Date (other than
such payments due upon the termination of any Hedge
Agreement);
(iv) fourth, to be distributed pari passu to
the Administrative Agents and the Hedge Counterparties, as
applicable: (A) to the Administrative Agents for the Lenders
in their respective Lender Groups, an amount equal to each
Lender Group's Pro Rata Share of the Target Principal Amount,
and (B) to the Hedge Counterparties, on a pro rata basis, any
payments
due upon the termination of any Hedge Agreement to
which they are party (other than Subordinated Swap Termination
Payments);
(v) fifth, to be distributed to the
Administrative Agents for the Lenders in their respective
Lender Group, on a pro rata basis, and if applicable to the
Program Agent, an amount equal to the aggregate accrued and
unpaid Subordinated Finance Charges, if any;
(vi) sixth, to be distributed to any
applicable Hedge Counterparties, on a pro rata basis, any
Subordinated Swap Termination Payments then due and payable;
(vii) seventh, if any Borrower Obligations
(including "Unpaid Amounts" (as defined in the Hedge
Agreements)) (other than the amounts paid pursuant to clauses
(i) through (vi)
above) are then due and payable by the
Borrower to any Secured Party, to each such Secured Party
(ratably in accordance with the amounts owing to each) the
Borrower Obligations so due and payable;
(viii) eighth, to be distributed pari passu,
all unpaid amounts then payable to The Bank of New York Mellon
Trust Company, National Association under the Control
Agreement and to the Program Agent under the Reserve Account
Agreement;
(ix) ninth, if the Servicer is HDCC or an
Affiliate thereof, to the Servicer the amounts specified in
clause (ii) above; and
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(x) tenth, on the Final Collection Date, any
remaining funds to the Borrower.
Any payment to be made to the Lenders hereunder shall be made
to the applicable Administrative Agent on behalf of its related
Lenders as
described in clauses (b) and (c) above and such payment shall
conclusively
satisfy the Borrower's or the Servicer's payment duties
hereunder.
(d) Reserve Account.
(i) On each Settlement Date, if the Total
Distribution Amount is estimated to be less than the aggregate
amount required to be paid pursuant to Section 2.08(b)(i)
through (iii), then the Servicer shall withdraw from the
Reserve Account and remit to the Collection Account on the
Business Day preceding the Settlement Date the amount of such
deficiency and shall apply such amount in accordance with
Section 2.08(b).
(ii) Upon the occurrence and during the
continuation of an Event of Termination and at all times
following the end of the Revolving Period, if at any time the
Total Distribution Amount is less than the aggregate amount
required to be paid pursuant to Section 2.08(c)(i) through
(vi), the Servicer shall withdraw from the Reserve Account the
amount of such deficiency and shall apply such amount in
accordance with Section 2.08(c).
(iii) On each Settlement Date during the
Revolving Period, if (A) the Total Distribution Amount is
sufficient in amount to pay all amounts then due under Section
2.08(b)(i) through (x), and (B) no Event of Termination or
Incipient Event of Termination shall have occurred and then be
continuing, the Servicer may distribute to the Borrower the
excess of the aggregate amount then held in the Reserve
Account over the Minimum Reserve Amount.
(iv) Upon the Aggregate Principal Balance
being reduced to zero and all other Borrower Obligations being
indefeasibly paid in full, after giving effect to any
withdrawals on such date pursuant to clauses (i) and (ii)
above, all amounts then remaining in the Reserve Account shall
be released to the Borrower.
(e) The Borrower hereby represents and warrants that each
remittance of Collections to the Program Agent or the
Administrative Agents, as
applicable, hereunder will have been (i) in payment of a debt
incurred by the
Borrower in the ordinary course of its business or financial
affairs and (ii)
made in the ordinary course of business or financial affairs of the
Borrower.
SECTION 2.09. Removal of Defaulted Contracts. In the event the
Borrower shall be capable of selling, assigning or otherwise
transferring a
Contract that has become a Defaulted Contract for an amount not
less than the
Repurchase Price (or such other price as shall be acceptable to the
Syndication
Agents in their sole discretion), the Borrower may, with the
consent of the
Syndication Agents, remove from the Collateral such Defaulted
Contract and the
related Contract Assets by depositing to the Collection Account on
the
Settlement Date immediately following the Monthly Period in which
such Contract
became a Defaulted Contract an amount equal to the Repurchase Price
(or such
other price) from the proceeds of such sale, assignment or other
transfer.
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SECTION 2.10. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Borrower or the
Servicer hereunder shall be paid or deposited in accordance with
the terms
hereof no later than 1:00 p.m. (New York City time) on the day when
due in
lawful money of the United States of America in immediately
available funds to
an account the Program Agent or the relevant Administrative Agents
may designate
prior to such payment from time to time in writing. The Borrower
and the
Servicer shall, to the extent permitted by law, pay to the Affected
Party
interest on all amounts not paid or deposited or debited by such
Person when due
hereunder at the Default Rate, payable on demand. All computations
of interest
and all computations of Interest and Fees hereunder shall be made
on the basis
of a year of 360 days for the actual number of days (including the
first but
excluding the last day) elapsed; provided that all computations of
Interest on
Base Rate Tranches shall be made on the basis of a year of 365 or
366 days for
the actual number of days (including the first but excluding the
last day)
elapsed. In no event shall any provision of this Agreement require
the payment
or permit the collection of Interest in excess of the maximum
permitted by
applicable law. In the event that any payment hereunder (whether
constituting a
repayment of Loans or a payment of Interest or any other amount) is
rescinded or
must otherwise be returned for any reason, the amount of such
payment shall be
restored and such payment shall be considered not to have been
made.
SECTION 2.11. Interest Protection.
(a) If due to either: (i) the introduction of or any change
(including, without limitation, any change by way of imposition or
increase of
reserve requirements) in or in the interpretation by any
Governmental Authority
of any law or regulation (other than laws or regulations relating
to taxes)
after the date hereof, (ii) the compliance by any Affected Party
with any
directive or request from any central bank or other Governmental
Authority
(whether or not having the force of law) imposed after the date
hereof, or (iii)
any change in any accounting guideline by an accounting board or
authority
(whether or not part of a government or instrumentality thereof)
which is
responsible for the establishment of or interpretation of national
or
international accounting principles (in each case whether foreign
or domestic);
(1) there shall be an increase in the cost to such Affected Party
of funding or
maintaining any Tranche which accrues Interest at the Adjusted LIBO
Rate or the
CP Rate hereunder or of extending a commitment in respect thereof,
or (2) such
Affected Party shall be required to make a payment calculated by
reference to
any Tranche which accrues Interest at the Adjusted LIBO Rate or the
CP Rate
funded by it or Interest received by it, then the Borrower shall,
on the next
Settlement Date which is at least five (5) Business Days after
receipt of the
certificate described in Section 2.11(b), pay such Administrative
Agent for the
account of such Affected Party (as a third party beneficiary, in
the case of any
Affected Party other than one of the Lenders), that portion of such
increased
costs incurred, amounts not received or required payment made or to
be made,
which such Administrative Agent reasonably determines is
attributable to funding
and maintaining, or extending a commitment to fund, any Tranche
which accrues
Interest at the Adjusted LIBO Rate or the CP Rate hereunder or
pursuant to any
Asset Purchase Agreement or similar liquidity facility.
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(b) Each Administrative Agent will promptly notify the
Borrower and the Program Agent of any event of which it has
knowledge, occurring
after the date hereof, which will entitle any Affected Party in its
Lender Group
to compensation pursuant to Section 2.11(a). Each Affected Party
will designate
a different lending office if such designation will avoid the need
for, or
reduce the amount of, such compensation and will not, in the
judgment of such
Affected Party, be otherwise disadvantageous to it. In determining
the amount of
such compensation, such Affected Party may use any reasonable
averaging and
attribution methods. The applicable Affected Party (or such party's
related
Administrative Agent) shall submit to the Borrower a certificate
describing in
reasonable detail such increased costs incurred, amounts not
received or
receivable or required payment made or to be made (including the
calculation
thereof), which certificate shall be conclusive in the absence of
manifest
error.
SECTION 2.12. Accounting Based Consolidation Event. (a) If an
Accounting Based Consolidation Event shall at any time occur, the
Borrower
shall, on the next Settlement Date which is at least five (5)
Business Days
after receipt of the certificate described below, pay the
applicable
Administrative Agent, for the benefit of the relevant Affected
Party, such
amounts as such Affected Party reasonably determines will
compensate or
reimburse such Affected Party for any resulting (i) fee, expense or
increased
cost, including without limitation, charged to, incurred or
otherwise suffered
by such Affected Party, or (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, in each case determined by such Affected Party
to be
allocable to the Borrower or the transactions contemplated in this
Agreement in
connection therewith. Amounts under this Section 2.12 may be
demanded at any
time without regard to the timing of issuance of any financial
statement by any
Conduit Lender or by any Affected Party; provided that a Conduit
Lender on
behalf of such Affected Party shall provide to the Borrower a
calculation in
reasonable detail of the amounts payable to each Affected Party
pursuant to this
Section 2.12 and such calculation shall be binding in the absence
of manifest
error; provided, further, in respect of any Monthly Period, the
amount due to an
Affected Party under this Section 2.12 when combined with the
Interest payable
to such Affected Party for such Monthly Period shall be equal to
the amount of
Interest that would have accrued if the Tranche held by such
Affected Party were
a Base Rate Tranche during such Monthly Period.
(b)
For purposes of this Section 2.12, "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 any
Conduit Lender that are subject to this Agreement or any other
Facility Document
with all or any portion of the assets and liabilities of an
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 Lender shall occur.
SECTION 2.13. Increased Capital.
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(a) If, after the date hereof, (i) the introduction of or any
change in or in the interpretation by any Official Body of any law
or
regulation, (ii) compliance by any Affected Party with any new or
changed
directive or request from any central bank or other Official Body
(whether or
not having the force of law), or (iii) any change in any accounting
guideline by
an accounting board or authority (whether or not part of a
government or
instrumentality thereof) which is responsible
