Document:

Exhibit 10.1

 

REVOLVING CREDIT AGREEMENT

 

Dated as of August 27, 2013

 

among

 

WCI COMMUNITIES, INC.

 

as Borrower

 

THE BANKS PARTY HERETO

 

CITIBANK, N.A.

 

as Administrative Agent,

 

CITIGROUP GLOBAL MARKETS INC.

 

and

 

J.P. MORGAN SECURITIES LLC,

 

as Joint Lead Arrangers and Joint Book Managers

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I. DEFINITIONS AND   ACCOUNTING TERMS
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Defined Terms
    	
1
    
	
1.2
    	
Accounting Terms
    	
28
    
	
1.3
    	
Rounding
    	
29
    
	
1.4
    	
Other Interpretive Provisions
    	
29
    
	
1.5
    	
Exhibits and Schedules
    	
30
    
	
1.6
    	
References to “the Borrower and its Subsidiaries”
    	
30
    
	
1.7
    	
Time of Day
    	
30
    
	
1.8
    	
Letter of Credit Amounts
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE II. LOANS AND LETTERS OF   CREDIT
    	
30
    
	
 
    	
 
    	
 
    
	
2.1
    	
Loans-General
    	
30
    
	
2.2
    	
Base Rate Loans
    	
31
    
	
2.3
    	
Eurodollar Rate Loans
    	
31
    
	
2.4
    	
Maturity Extension
    	
32
    
	
2.5
    	
Letters of Credit
    	
32
    
	
2.6
    	
Reduction of Commitment
    	
39
    
	
2.7
    	
Optional Increase to Commitment
    	
39
    
	
2.8
    	
Borrowing Base
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE III. PAYMENTS AND FEES
    	
42
    
	
 
    	
 
    	
 
    
	
3.1
    	
Principal and Interest
    	
42
    
	
3.2
    	
Commitment Fee
    	
43
    
	
3.3
    	
Other Fees
    	
43
    
	
3.4
    	
[Intentionally Omitted]
    	
43
    
	
3.5
    	
[Intentionally Omitted]
    	
43
    
	
3.6
    	
Eurodollar Fees and Costs
    	
43
    
	
3.7
    	
Late Payments/Default Interest
    	
46
    
	
3.8
    	
Computation of Interest and Fees
    	
46
    
	
3.9
    	
Holidays
    	
46
    
	
3.10
    	
Payment Free of Taxes
    	
46
    
	
3.11
    	
Funding Sources
    	
49
    
	
3.12
    	
Failure to Charge or Making of Payment Not Subsequent   Waiver
    	
49
    
	
3.13
    	
Time and Place of Payments; Evidence of Payments;   Application of Payments
    	
49
    
	
3.14
    	
Administrative Agent’s Right to Assume Payments Will be   Made
    	
49
    
	
3.15
    	
Survivability
    	
50
    
	
3.16
    	
Bank Calculation Certificate
    	
50
    
	
3.17
    	
Designation of a Different Lending Office
    	
50
    
	
 
    	
 
    	
 
    
	
ARTICLE IV. REPRESENTATIONS AND   WARRANTIES
    	
51
    
	
 
    	
 
    	
 
    
	
4.1
    	
Existence and Qualification; Power; Compliance with Law
    	
51
    
	
4.2
    	
Authority; Compliance with Other Instruments and Government   Regulations
    	
51
    
	
4.3
    	
No Governmental Approvals Required
    	
52
    

 

i

 

	
4.4
    	
Subsidiaries
    	
52
    
	
4.5
    	
Financial Statements
    	
53
    
	
4.6
    	
No Material Adverse Change
    	
53
    
	
4.7
    	
Title to Assets
    	
53
    
	
4.8
    	
Intangible Assets
    	
53
    
	
4.9
    	
Anti-Terrorism Laws
    	
53
    
	
4.10
    	
Governmental Regulation
    	
54
    
	
4.11
    	
Litigation
    	
54
    
	
4.12
    	
Binding Obligations
    	
54
    
	
4.13
    	
No Default
    	
54
    
	
4.14
    	
[Intentionally Omitted]
    	
55
    
	
4.15
    	
Tax Liability
    	
55
    
	
4.16
    	
[Intentionally Omitted]
    	
55
    
	
4.17
    	
Environmental Matters
    	
55
    
	
4.18
    	
Disclosure
    	
55
    
	
4.19
    	
[Intentionally Omitted]
    	
55
    
	
4.20
    	
ERISA Compliance
    	
55
    
	
4.21
    	
Solvency
    	
56
    
	
4.22
    	
[Intentionally Omitted]
    	
56
    
	
4.23
    	
Tax Shelter Regulations
    	
56
    
	
 
    	
 
    	
 
    
	
ARTICLE V. AFFIRMATIVE COVENANTS   (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)
    	
56
    
	
 
    	
 
    	
 
    
	
5.1
    	
Payment of Taxes and Other Potential Liens
    	
56
    
	
5.2
    	
Preservation of Existence
    	
56
    
	
5.3
    	
Maintenance of Properties
    	
57
    
	
5.4
    	
Maintenance of Insurance
    	
57
    
	
5.5
    	
Compliance with Laws
    	
57
    
	
5.6
    	
Inspection Rights
    	
57
    
	
5.7
    	
Keeping of Records and Books of Account
    	
57
    
	
5.8
    	
Use of Proceeds
    	
58
    
	
5.9
    	
Subsidiary Guaranty
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE VI. NEGATIVE COVENANTS
    	
58
    
	
 
    	
 
    	
 
    
	
6.1
    	
Payment or Prepayment of Subordinated Obligations and   Certain Other Obligations
    	
58
    
	
6.2
    	
Indebtedness of Mortgage Subsidiaries
    	
58
    
	
6.3
    	
Merger and Sale of Assets
    	
59
    
	
6.4
    	
Investments and Acquisitions
    	
59
    
	
6.5
    	
Burdensome Agreements
    	
60
    
	
6.6
    	
Change in Business
    	
61
    
	
6.7
    	
Liens and Negative Pledges
    	
61
    
	
6.8
    	
Transactions with Affiliates
    	
64
    
	
6.9
    	
Consolidated Tangible Net Worth
    	
64
    
	
6.10
    	
Consolidated Leverage Ratio
    	
64
    
	
6.11
    	
Consolidated Interest Coverage Ratio or Minimum Liquidity
    	
64
    
	
6.12
    	
Distributions
    	
65
    
	
6.13
    	
Amendments
    	
66
    
	
6.14
    	
Investment in Subsidiaries and Joint Ventures
    	
66
    

 

ii

 

	
6.15
    	
Regulation U
    	
66
    
	
6.16
    	
Fiscal Year
    	
66
    
	
6.17
    	
Designation of Subsidiaries
    	
66
    
	
 
    	
 
    	
 
    
	
ARTICLE VII. INFORMATION AND   REPORTING REQUIREMENTS
    	
67
    
	
 
    	
 
    	
 
    
	
7.1
    	
Financial and Business Information of the Borrower and Its   Subsidiaries
    	
67
    
	
7.2
    	
Compliance Certificate
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII. CONDITIONS
    	
70
    
	
 
    	
 
    	
 
    
	
8.1
    	
Initial Advances, Etc.
    	
70
    
	
8.2
    	
Any Advance
    	
72
    
	
8.3
    	
Any Letter of Credit
    	
72
    
	
 
    	
 
    	
 
    
	
ARTICLE IX. EVENTS OF DEFAULT AND   REMEDIES UPON EVENTS OF DEFAULT
    	
73
    
	
 
    	
 
    	
 
    
	
9.1
    	
Events of Default
    	
73
    
	
9.2
    	
Remedies Upon Event of Default
    	
74
    
	
 
    	
 
    	
 
    
	
ARTICLE X. THE ADMINISTRATIVE   AGENT
    	
76
    
	
 
    	
 
    	
 
    
	
10.1
    	
Appointment and Authorization
    	
76
    
	
10.2
    	
Delegation of Duties
    	
77
    
	
10.3
    	
Liability of Administrative Agent
    	
77
    
	
10.4
    	
Reliance by Administrative Agent
    	
77
    
	
10.5
    	
Notice of Default
    	
78
    
	
10.6
    	
Credit Decision; Disclosure of Information by   Administrative Agent
    	
78
    
	
10.7
    	
Indemnification of Administrative Agent
    	
78
    
	
10.8
    	
Administrative Agent in its Individual Capacity
    	
79
    
	
10.9
    	
Successor Administrative Agent
    	
79
    
	
10.10
    	
Administrative Agent May File Proofs of Claim
    	
80
    
	
10.11
    	
Guaranty Matters
    	
80
    
	
10.12
    	
Other Agents; Arrangers and Managers
    	
81
    
	
10.13
    	
Defaulting Banks
    	
81
    
	
10.14
    	
No Obligations of the Borrower
    	
83
    
	
 
    	
 
    	
 
    
	
ARTICLE XI. MISCELLANEOUS
    	
83
    
	
 
    	
 
    
	
11.1
    	
Cumulative Remedies; No Waiver
    	
83
    
	
11.2
    	
Amendments; Consents
    	
83
    
	
11.3
    	
Costs, Expenses and Taxes
    	
85
    
	
11.4
    	
Nature of Banks’ Obligations
    	
85
    
	
11.5
    	
Survival of Representations and Warranties
    	
85
    
	
11.6
    	
Notices and Other Communications; Facsimile Copies
    	
86
    
	
11.7
    	
Execution in Counterparts; Facsimile Delivery
    	
88
    
	
11.8
    	
Successors and Assigns
    	
88
    
	
11.9
    	
Sharing of Setoffs
    	
91
    
	
11.10
    	
Indemnification by the Borrower
    	
91
    
	
11.11
    	
Nonliability of Banks
    	
92
    
	
11.12
    	
Confidentiality
    	
93
    

 

iii

 

	
11.13
    	
No Third Parties Benefited
    	
94
    
	
11.14
    	
Other Dealings
    	
94
    
	
11.15
    	
Right of Setoff — Deposit Accounts
    	
94
    
	
11.16
    	
Further Assurances
    	
94
    
	
11.17
    	
Integration
    	
94
    
	
11.18
    	
Governing Law
    	
95
    
	
11.19
    	
Severability of Provisions
    	
95
    
	
11.20
    	
Headings
    	
95
    
	
11.21
    	
Conflict in Loan Documents
    	
96
    
	
11.22
    	
Waiver of Right to Trial by Jury
    	
96
    
	
11.23
    	
Purported Oral Amendments
    	
96
    
	
11.24
    	
Payments Set Aside
    	
96
    
	
11.25
    	
[Intentionally Omitted]
    	
97
    
	
11.26
    	
USA PATRIOT Act Notice
    	
97
    
	
11.27
    	
Replacement of Banks
    	
97
    
	
11.28
    	
No Fiduciary Relationship
    	
98
    

 

iv

 

	
Exhibits
    
	
 
    	
 
    	
 
    
	
A
    	
 
    	
Assignment   and Assumption
    
	
 
    	
 
    	
 
    
	
B
    	
 
    	
Borrowing   Base Certificate
    
	
 
    	
 
    	
 
    
	
C
    	
 
    	
Compliance Certificate
    
	
 
    	
 
    	
 
    
	
D
    	
 
    	
Loan Notice
    
	
 
    	
 
    	
 
    
	
E
    	
 
    	
Note
    
	
 
    	
 
    	
 
    
	
F-1
    	
 
    	
Opinion   of Counsel (Latham & Watkins LLP)
    
	
 
    	
 
    	
 
    
	
F-2
    	
 
    	
Opinion   of General Counsel of the Borrower
    
	
 
    	
 
    	
 
    
	
G
    	
 
    	
Subsidiary   Guaranty
    
	
 
    	
 
    	
 
    
	
H-1
    	
 
    	
U.S.   Tax Compliance Certificate (For Foreign Banks That Are Not Partnerships)
    
	
 
    	
 
    	
 
    
	
H-2
    	
 
    	
U.S.   Tax Compliance Certificate (For Foreign Participants That Are Not   Partnerships)
    
	
 
    	
 
    	
 
    
	
H-3
    	
 
    	
U.S.   Tax Compliance Certificate (For Foreign Participants That Are Partnerships)
    
	
 
    	
 
    	
 
    
	
H-4
    	
 
    	
U.S.   Tax Compliance Certificate (For Foreign Banks That Are Partnerships)
    
	
 
    	
 
    	
 
    
	
I
    	
 
    	
Form   of Solvency Certificate
    
	
 
    	
 
    	
 
    
	
Schedules
    
	
 
    	
 
    	
 
    
	
1.1
    	
 
    	
Pro   Rata Shares
    
	
 
    	
 
    	
 
    
	
4.4
    	
 
    	
Subsidiaries
    
	
 
    	
 
    	
 
    
	
6.4
    	
 
    	
Investments
    
	
 
    	
 
    	
 
    
	
6.7
    	
 
    	
Existing   Liens
    
	
 
    	
 
    	
 
    
	
11.6
    	
 
    	
Notices
    

 

v

 

REVOLVING CREDIT AGREEMENT

 

Dated as of August 27, 2013

 

This Revolving Credit Agreement (as it may from time to time be supplemented, modified, amended, renewed, extended or supplanted, this “Agreement”), dated as of August 27, 2013, is entered into by and among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), each financial institution set forth on the signature pages of this Agreement or which from time to time becomes party hereto (collectively, the “Banks” and individually, a “Bank”), Citibank, N.A., as Administrative Agent, and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Book Managers.

 

RECITALS

 

WHEREAS, the Borrower wishes to establish a revolving credit facility for general corporate purposes of the Borrower and its Subsidiaries, subject to the terms hereof.

 

WHEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I.
 DEFINITIONS AND ACCOUNTING TERMS

 

1.1                               Defined Terms.

 

As used in this Agreement, the following terms shall have the meanings set forth below:

 

“2017 Notes” means the $125,000,000 aggregate principal amount of senior secured term notes due 2017 of the Borrower issued on June 8, 2012.

 

“Acquisition” means any transaction, or any series of related transactions, consummated after the Closing Date, by which the Borrower or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any corporation, partnership or limited liability company, or other business entity or division thereof, whether through purchase of assets, merger or otherwise, (b) acquires control of securities of a corporation representing 50% or more of the ordinary voting power for the election of directors or (c) acquires control of a 50% or more ownership interest in any corporation, partnership, limited liability company, or other business entity.  For the avoidance of doubt, the acquisition by the Borrower and its Subsidiaries of personal property, real property and interests in real property in the ordinary course of their respective businesses shall not be considered an Acquisition.

 

“Administrative Agent” means Citi in its capacity as administrative agent under this Agreement and the other Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account set forth on Schedule 11.6, or such other address or account as the Administrative Agent may, from time to time, notify the Borrower and the Banks.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent to the Banks.

 

 

“Advance” means an advance of a Loan made or to be made to the Borrower by a Bank pursuant to Article II.

 

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person.  As used in this definition, “control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person which owns directly or indirectly 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 10% or more of the partnership or other ownership interests of any other Person will be deemed to control such corporation or other Person.

 

“Agent Parties” has the meaning set forth in Section 11.6(c).

 

“Agent-Related Persons” means the Administrative Agent, together with its Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

 

“Agreement” has the meaning set forth in the first paragraph hereof.

 

“Anti-Terrorism Laws” means Law related to terrorism financing or money laundering including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56), The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) and Executive Order 13224 (effective September 24, 2001).

 

“Approved Fund” means any Fund that is administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity that administers or manages a Bank.

 

“Arrangers” means CGMI and JPM, in their capacities as joint lead arrangers and joint book managers.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another, or an Approved Fund thereof.

 

“Assignment and Assumption” means an assignment and assumption substantially in the form of Exhibit A.

 

“Attorney Costs” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.

 

“Attributable Indebtedness” when used with respect to any sale and leaseback transaction, means, as at the time of determination, the present value (discounted at a rate equivalent to the Borrower’s then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of any Capital Leases included in any such sale and leaseback transaction.

 

“Authorizations” has the meaning set forth for that term in Section 4.1.

 

2

 

“Bank” means each financial institution whose name is set forth in the signature pages of this Agreement and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Bank of America Letter of Credit Facility” means that certain Letter of Credit Agreement dated as of January 19, 2009 by and between WCI Communities, LLC and Bank of America, as amended by the First Amendment to Letter of Credit Agreement, dated as of November 21, 2011, by and between WCI Communities, LLC and Bank of America, as amended by the Second Amendment to Letter of Credit Agreement, dated as of July 1, 2012, by and between WCI Communities, LLC and Bank of America, as amended by the Third Amendment to Letter of Credit Agreement, dated as of November 30, 2012, by and between WCI Communities, LLC and Bank of America, and as may be further amended, amended and restated, modified or supplemented from time to time.

 

“Bank Insolvency Event” means that (i) a Bank or its Parent Company is insolvent or (ii) an event of the kind referred to in Section 9.1(j) occurs with respect to a Bank or its Parent Company (as if the references in such provisions to the Borrower or Subsidiaries referred to such Bank or Parent Company).

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the one month Eurodollar Rate plus 1.00% and (c) the rate of interest in effect for such day as publicly announced from time to time by Citi as its “prime rate.”  The “prime rate” is a rate set by Citi based upon various factors including Citi’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Citi shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Advance” means an Advance made by a Bank to fund its Pro Rata Share of a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Base Rate Spread” means 1.75%.

 

“Borrower” means WCI Communities, Inc., a Delaware corporation, and its successors and permitted assigns.

 

“Borrower Materials” has the meaning set forth in Section 7.1.

 

“Borrowing Base” has the meaning set forth in Section 2.8(b).

 

“Borrowing Base Availability” means the lesser of (a) the difference of (1) the Commitment minus (2) the Total Outstandings and (b) the difference of (1) the Borrowing Base minus (2) the Borrowing Base Indebtedness (including the Total Outstandings).  Borrowing Base Availability will be calculated (i) in connection with the delivery of any Compliance Certificate pursuant to Section 7.2, as of the end of the Fiscal Quarter or Fiscal Year to which such Compliance Certificate relates, and (ii) in connection with the incurrence of any Loan, the issuance of any Letter of Credit (including a designation of a Letter of Credit under Section 2.5(l)) or the incurrence of any other Borrowing Base Indebtedness, in each case, as of the end of the most recent Fiscal Quarter for which financial statements have been delivered (or were required to have been delivered) pursuant to Section 7.1 (on a pro forma basis with

 

3

 

such Loan, Letter of Credit or other Borrowing Base Indebtedness deemed to be incurred as of the end of such Fiscal Quarter at the time of such computation).

 

“Borrowing Base Certificate” means a written calculation of the Borrowing Base, substantially in the form of Exhibit B signed, on behalf of the Borrower by a Senior Officer of the Borrower.

 

“Borrowing Base Indebtedness” means as of any date of determination, the aggregate principal amount of indebtedness for borrowed money (including, without limitation, the Senior Notes), and the aggregate face amount of obligations under Financial Letters of Credit that are not Cash Collateralized or Letter of Credit Collateralized, of the Borrower and Subsidiaries; provided that Borrowing Base Indebtedness shall not include (i) Non-Recourse Indebtedness, (ii) the outstanding principal amount of any Subordinated Obligations or (iii) all Letters of Credit issued under the Stonegate Agreement.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state of New York, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

 

“Capital Lease” means, with respect to any Person, a lease of any Property by that Person as lessee that is, or should be recorded as a “capital lease” on a balance sheet of that Person prepared in accordance with Generally Accepted Accounting Principles in effect as of the date of this Agreement.

 

“Cash” means all monetary items (including currency, coin and bank demand deposits) that are treated as cash under Generally Accepted Accounting Principles consistently applied.

 

“Cash Collateralize” has the meaning set forth in Section 2.5(g).

 

“Cash Equivalents” means, with respect to any Person, that Person’s Investments in:

 

(a)                                 marketable obligations with a maturity of one year or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof;

 

(b)                                 demand and time deposits and certificates of deposit or acceptances with a maturity of one year or less (i) of any of the Banks or their respective Affiliates, (ii) of any other financial institution that (A) is organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development or is the principal banking Subsidiary of a bank holding company organized under the Laws of the United States, any state thereof, the District of Columbia or any member nation of the Organization for Economic Cooperation and Development and is a member of the Federal Reserve System, (B) has combined capital and surplus of at least $100,000,000, and (C) is assigned at least an A-1 rating by Thompson Financial BankWatch or (iii) that are fully insured by the Federal Deposit Insurance Corporation, including, for the avoidance of doubt, investments placed through the CDARS and ICS deposit placement program;

 

(c)                                  commercial paper maturing no more than 365 days from the date of acquisition thereof issued by a corporation that is not the Borrower or an Affiliate of the Borrower, and is organized under the laws of any State of the United States of America or the District of Columbia and rated, at the time of acquisition, at least A-1 by S&P or at least P-1 by Moody’s or at least F1 by Fitch;

 

4

 

(d)                                 repurchase obligations with a term of not more than ten days for underlying securities of the types described in clause (a) above entered into with any commercial bank meeting the specifications of clause (b) above; and

 

(e)                                  investments in money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (a) through (d) above.

 

“CDARS” means the Certificate of Deposit Account Registry Service.

 

“CDD” means a community development district and/or community development authority or similar governmental or quasi-governmental entity created under state or local statutes to encourage planned community development and to allow for the construction and maintenance of long-term infrastructure through alternative financing sources, including the tax-exempt and/or the taxable bond markets.

 

“CDD Obligations” means Indebtedness and other obligations of the Borrower and its Restricted Subsidiaries incurred with respect to CDDs and which are reflected as a liability on the balance sheet of the Borrower as required by GAAP.

 

“CFC Subsidiary” means any Subsidiary of the Borrower that is: (a) a “controlled foreign corporation” within the meaning of Section 957 of the Code, (b) a “domestic corporation” or “domestic partnership” within the meaning of Section 7701(a)(30) of the Code that has no material assets other than equity interests in one or more Subsidiaries that are controlled foreign corporations within the meaning of Section 957 of the Code and that conduct no business other than holding such equity interests, and (c) disregarded as an entity separate from its owner under Treasury Regulations Section 301.7701-3 that has no material assets other than equity interests in one or more Subsidiaries described in parts (a) and (b) of this definition.

 

“CGMI” means Citigroup Global Markets Inc. and its successors.

 

“Change in Control” means, and shall be deemed to have occurred at such time as any of the following events shall occur:

 

(a)                                 any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Sponsors, is or becomes the “beneficial owner” (as defined in Rules 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Borrower (for the purposes of this clause (a), such other person shall be deemed to beneficially own any Voting Stock of a Person held by any other Person (the “parent entity”), if such other person is the beneficial owner (as defined above in this clause (a)), directly or indirectly, of more than 50% of the voting power of the Voting Stock of such parent entity); or

 

(b)                                 the stockholders of the Borrower adopt a Plan of Liquidation or dissolution of the Borrower; provided that a liquidation or dissolution of the Borrower which is part of a transaction that does not constitute a Change in Control pursuant to the proviso contained in clause (c) below shall not constitute a Change in Control;

 

(c)                                  the merger or consolidation of the Borrower with or into another Person or the merger of another Person with or into the Borrower, or the sale of all or substantially all the assets of the Borrower and its Restricted Subsidiaries (determined on a consolidated basis) to another Person, except in each case to a Sponsor or to a Restricted Subsidiary of the Borrower; provided that a transaction following which (A) in the case of a merger or consolidation transaction, one or more holders of securities

 

5

 

that represented a majority of the Voting Stock of the Borrower immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction or (B) in the case of a sale of assets transaction, each transferee is or becomes an obligor in respect of the Obligations and a Subsidiary of the transferor of such assets, in each case, shall not constitute a Change in Control; or

 

(d)                                 a “Change in Control” (or analogous term) as defined in the Senior Notes Indenture or in any other agreements governing any Indebtedness under which at least $25,000,000 is outstanding.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:

 

(a)                                 the adoption or taking effect of any Law;

 

(b)                                 any change in any Law or in the administration, interpretation or application thereof by any Governmental Agency; or

 

(c)                                  the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Agency.

 

Notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change in Status” means, with respect to any Guarantor Subsidiary, (a) such Guarantor Subsidiary ceases to be a Subsidiary of the Borrower as a result of a transaction permitted under this Agreement or (b) the designation by the Borrower that such Guarantor Subsidiary is not required to be a Guarantor Subsidiary under the definition thereof.

 

“Citi” means Citibank, N.A. and its successors.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended and as in effect from time to time.

 

“Commission” means the Securities and Exchange Commission and any successor commission.

 

“Commitment” means, subject to Sections 2.6 and 2.7, $75,000,000.  The Pro Rata Shares of the Banks, on the Closing Date, with respect to the Commitment are set forth in Schedule 1.1.

 

“Compensation Period” has the meaning set forth for that term in Section 3.14.

 

“Compliance Certificate” means a compliance certificate in the form of Exhibit C signed, on behalf of the Borrower, by a Senior Officer of the Borrower.

 

6

 

“Connection Income Taxes” means Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

 

“Connection Taxes” means with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, (a) plus, without duplication, (i) any extraordinary loss reflected in such Consolidated Net Income (including the amount of net loss resulting from the payment of any premiums, fees or similar amounts that are required to be paid under the terms of the instruments governing any Indebtedness upon the repayment, prepayment or other extinguishment of such Indebtedness, in accordance with the terms of such Indebtedness), and (ii) Consolidated Interest Expense for such period, and (iii) the aggregate amount of federal, state and foreign income taxes payable by the Borrower and its Restricted Subsidiaries for such period, and (iv) depreciation, impairment charges for inventory, goodwill and similar items, amortization of goodwill and other intangible assets, non-cash compensation expense and all other non-cash expenses of the Borrower and its Restricted Subsidiaries for such period, and (v) litigation costs and expenses for non-ordinary course litigation (and in the case of the foregoing items (ii), (iii), (iv), and (v) only to the extent deducted in the determination of Consolidated Net Income for such period), (b) minus, without duplication, (i) consolidated interest income of the Borrower and its Restricted Subsidiaries for such period, and (ii) any extraordinary gain reflected in such Consolidated Net Income, in each of the foregoing cases as determined in accordance with Generally Accepted Accounting Principles consistently applied.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the 12 month period ending on such date to (b) Consolidated Interest Incurred for the 12 month period ending on such date.

 

“Consolidated Interest Expense” means, for any period, the consolidated interest expense (including capitalized interest and other charges amortized to cost of sales and including all other non-cash interest expense, but excluding interest of a Loan Party to another Loan Party); provided, however, that any non-cash interest expenses or income attributable to movement in the mark-to-market valuation of Swap Contracts or other derivative instruments pursuant to GAAP shall be excluded from the calculation of Consolidated Interest Expense) of Loan Parties and their Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Interest Incurred” means, for any period, the aggregate amount (without duplication and determined in each case in accordance with GAAP) of interest (excluding interest of a Loan Party to another Loan Party) incurred, whether such interest was expensed or capitalized, paid, accrued, or scheduled to be paid or accrued during such period by any of the Loan Parties and their Subsidiaries during such period, including (a) the interest portion of all deferred payment obligations and (b) all commissions, discounts, and other fees and charges (excluding premiums) owed with respect to bankers’ acceptances and letter of credit financings (including, without limitation, letter of credit fees) and Swap Contracts, in each case to the extent attributable to such period; provided, however, that the Consolidated Interest Incurred of the Restricted Subsidiaries shall only be included in the amount of the Loan Parties’ pro-rata share of interest; and provided further, that any non-cash interest expenses or income attributable to movement in the mark-to-market valuation of Swap Contracts or other derivative instruments pursuant to GAAP shall be excluded from the calculation of Consolidated Interest Incurred)

 

7

 

of Loan Parties and their Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.  For purposes of this definition, interest on Capital Leases shall be deemed to accrue at an interest rate reasonably determined by the Borrower to be the rate of interest implicit in such Capital Leases in accordance with GAAP.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness net of Unrestricted Cash on that date in excess of $10,000,000 plus, to the extent the Borrower cannot meet the requirements of Section 6.11(b), the amount necessary to enable the Borrower to meet the requirements of Section 6.11(a) to (b) the sum of (i) Consolidated Total Indebtedness net of Unrestricted Cash on that date in excess of $10,000,000 plus, to the extent the Borrower cannot meet the requirements of Section 6.11(b), the amount necessary to enable the Borrower to meet the requirements of Section 6.11(a) and (ii) Consolidated Tangible Net Worth on that date determined in accordance with Generally Accepted Accounting Principles consistently applied.

 

“Consolidated Net Income” means, for any period, the net income of the Borrower and its Restricted Subsidiaries on a consolidated basis determined in accordance with Generally Accepted Accounting Principles consistently applied.

 

“Consolidated Net Tangible Assets” means, as of any date, the total amount of assets of the Borrower and its Restricted Subsidiaries on a consolidated basis at the end of the Fiscal Quarter immediately preceding such date for which financial statements under Section 7.1 have been delivered (or have been required to have been delivered), as determined in accordance with GAAP, less (1) Intangible Assets and (2) any assets securing Non-Recourse Indebtedness up to the aggregate principal amount of such Non-Recourse Indebtedness.

 

“Consolidated Net Worth”  means, with respect to any Person as of any date, the consolidated stockholders’ equity of such Person and its Restricted Subsidiaries, determined on a consolidated basis at the end of the Fiscal Quarter immediately preceding such date for which financial statements under Section 7.1 have been delivered (or have been required to have been delivered), as determined in accordance with GAAP, less (without duplication) (1) any amounts thereof attributable to Disqualified Equity Interests of such Person or its Restricted Subsidiaries or any amount attributable to Unrestricted Subsidiaries and (2) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within twelve months after the acquisition of such business) subsequent to the Closing Date in the book value of any asset owned by such Person or a Restricted Subsidiary of such Person.

 

“Consolidated Tangible Net Worth” means, with respect to any Person as of any date, the Consolidated Net Worth of such Person and its Restricted Subsidiaries determined on a consolidated basis at the end of the Fiscal Quarter immediately preceding such date for which financial statements under Section 7.1 have been delivered (or have been required to have been delivered), less (without duplication) all Intangible Assets of such Person and its Restricted Subsidiaries determined on a consolidated basis at the end of the Fiscal Quarter immediately preceding such date for which financial statements under Section 7.1 have been delivered (or have been required to have been delivered).

 

“Consolidated Total Indebtedness” means, as of any date of determination, all Indebtedness and any drawn Performance Letters of Credit not reimbursed when due and not Cash Collateralized or Letter of Credit Collateralized, of the Borrower and its Restricted Subsidiaries on a consolidated basis on that date (without duplication for any guaranty by the Borrower of a Restricted Subsidiary’s Indebtedness or any guaranty by a Restricted Subsidiary of either the Borrower’s or another Restricted Subsidiary’s Indebtedness or otherwise).

 

8

 

“Contingent Guaranty Obligation” means, with respect to any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses (other than for collection or deposit in the ordinary course of business), contingently agrees to purchase or provide funds for the payment of, or otherwise is contingently liable upon, the Indebtedness of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person to enable such Person to pay Indebtedness, or otherwise assures any creditor with respect to Indebtedness of such other Person against loss with respect to payment of such Indebtedness, including, without limitation, any such agreement, undertaking or arrangement in the form of a comfort letter, operating agreement, take-or-pay contract or “put” agreement; provided that a “bad boy”, “bad acts” or completion guarantee or similar arrangement shall not constitute a Contingent Guaranty Obligation except to the extent of the principal amount then due and payable thereunder.  The amount of any Contingent Guaranty Obligation of a Person shall be deemed to be (1) in the event the terms of such Contingent Guaranty Obligation provide that such Person shall be liable for a fixed portion of the principal amount of the related primary Indebtedness and such Indebtedness has a stated or determinable principal amount, an amount equal to such fixed portion and (2) in the event the principal amount of the related primary Indebtedness is not stated or determinable or the terms of such Contingent Guaranty Obligation do not provide that such Person shall be liable for a fixed portion of such principal, an amount equal to the maximum reasonably anticipated liability which is likely to be paid by such Person in respect of such principal as determined by such Person in good faith; provided, however, that if any Person is liable severally but not jointly and severally with one or more other obligors under any Contingent Guaranty Obligation, the amount of such Contingent Guaranty Obligation shall be the product of (x) the amount determined as set forth above and (y) the maximum percentage of the aggregate liability in respect of principal under such Contingent Guaranty Obligation with respect to which such Person is severally liable.

 

“Contractual Obligation” means, as to any Person, any provision of any outstanding Securities issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound, other than, in the case of the Borrower and its Restricted Subsidiaries, any of the Loan Documents.

 

“Core Businesses” means (i) any businesses engaged in by the Borrower and its Subsidiaries on the Closing Date, (ii) any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses described in clause (i) of this definition, (iii) any business in the homebuilding, real estate development or community planning industries and (iv) commercial real estate development, brokerage and the sale or rental of homes and other real estate activities, including the provision of mortgage financing, title insurance or homeowners’ insurance.

 

“Credit Suisse” means Credit Suisse AG, Cayman Islands Branch and its successors.

 

“Debt Rating” means, as of any date of determination, the rating as determined by a Rating Agency of the Borrower’s non-credit-enhanced, senior unsecured long-term debt.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, insolvency, reorganization, or similar debtor relief Laws from time to time in effect affecting the rights of creditors generally.

 

“Default” means any event that, with the giving of any notice or passage of time, or both, would be an Event of Default.

 

“Default Rate” has the meaning set forth for that term in Section 3.7.

 

9

 

“Defaulting Bank” means, at any time, a Bank that (i) has failed for two Business Days or more to comply with its obligations under this Agreement to make a Loan or make a payment to an Issuing Bank in respect of an L/C Advance or pay any other amount required to be paid by it under the Loan Documents (each a “funding obligation”), (ii) has notified in writing the Borrower, the Administrative Agent or any Issuing Bank, or has stated publicly, that it does not intend or expect to comply with any such funding obligation, (iii) has defaulted on its funding obligations under any other loan agreement or credit agreement or other similar agreement, (iv) for three or more Business Days after written request of the Administrative Agent or the Borrower, fails to provide a written certification that it will comply with its prospective funding obligations hereunder (provided that such Bank will cease to be a Defaulting Bank pursuant to this clause (iv) upon the Administrative Agent’s and the Borrower’s receipt of such written confirmation), or (v) as to which a Bank Insolvency Event has occurred and is continuing with respect to such Bank; provided that neither the reallocation of funding obligations provided for in Section 10.13 as a result of a Bank being a Defaulting Bank nor the performance by Non-Defaulting Banks of such reallocated funding obligations shall by themselves cause the relevant Defaulting Bank to become a Non-Defaulting Bank; provided further that in each case, a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any Equity Interest in that Bank or any direct or indirect parent company thereof by a Governmental Agency so long as such ownership interest does not result or provide such Bank with immunity from the jurisdiction of course within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Agency) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank.  Any determination by the Administrative Agent that a Bank is a Defaulting Bank under any of clauses (i) through (v) above will be conclusive and binding absent manifest error, and such Bank will be deemed to be a Defaulting Bank upon notification of such determination by the Administrative Agent to the Borrower, the Issuing Banks, and the Banks.

 

“Deferred Tax Valuation Allowance” means the valuation allowance applied to deferred tax assets resulting from the application of Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes, or otherwise required in accordance with Generally Accepted Account Principles consistently applied.

 

“Designated Deposit Account” means a demand deposit account from time to time designated by the Borrower by written notification to the Administrative Agent.

 

“Designation” has the meaning set forth for that term in Section 6.17.

 

“Designation Amount” has the meaning set forth for that term in Section 6.17.

 

“Developed Lots” means subdivision lots located in the United States that are wholly owned by the Borrower or its Restricted Subsidiaries (unencumbered by a Lien or Liens, other than Liens permitted under Section 6.7; provided that the principal amount of Indebtedness for borrowed money secured by such Liens is included in Borrowing Base Indebtedness for the purpose of calculating the Borrowing Base Availability), and that are subject to a recorded plat or subdivision map or similar zoning and development restrictions, in substantial compliance with all applicable Laws and available for the construction thereon of foundations for Units.

 

“Disposition” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale or issuance of Equity Interests (other than directors’ qualifying shares or other shares required by applicable Law) in a Restricted Subsidiary) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

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“Disqualified Equity Interests” of any Person means any class of Equity Interests of such Person that, by their terms, or by the terms of any related agreement or of any security into which they are convertible, puttable or exchangeable, are, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, whether or not at the option of the holder thereof, or mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final Maturity Date; provided, however, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that are not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided further, however, that any Equity Interests that would constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the Borrower to redeem such Equity Interests upon the occurrence of a change in control or asset sale occurring prior to the Maturity Date shall not constitute Disqualified Equity Interests if the change in control or asset sale provisions applicable to such Equity Interests specifically provide that the Borrower will not redeem any such Equity Interests pursuant to such provisions prior to the Maturity Date.

 

“Distribution” means, with respect to any shares of capital stock or any warrant or right to acquire shares of capital stock or any other equity security issued by a Person, (a) the retirement, redemption, purchase, or other acquisition for value (other than for capital stock or other equity securities of the same type of such Person) by such Person of any such security, (b) the declaration or payment by such Person of any dividend in Cash or in Property (other than in capital stock or other equity securities of the same type of such Person) on or with respect to any such security, and (c) any Investment by such Person in any holder of 5% or more of the capital stock (or other equity securities) of such Person, if a purpose of such Investment is to avoid the characterization of the transaction between such Person and such holder as a Distribution under clause (a) or (b) above.  In addition, to the extent any loan or advance by the Borrower to one of its Restricted Subsidiaries is deemed to be an “Investment” for purposes of this Agreement, then any principal payment made by such Restricted Subsidiary in respect of such loan or advance shall be considered a Distribution for purposes of Section 6.12.

 

“Dollars” means the national currency of the United States of America.

 

“Domestic Lending Office” means, with respect to each Bank, its office, branch or affiliate identified on the signature pages hereof as its Domestic Lending Office or such other office, branch or affiliate as such Bank may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Borrower that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of the Borrower or any Guarantor Subsidiary.

 

“Eligible Assignee” means:  (a) a Bank; (b) an Affiliate of a Bank; (c) an Approved Fund; and (d) a financial institution that has, or is a wholly-owned subsidiary of a parent company that has, (i) an unsecured long-term debt rating of not less than BBB+ from S&P or Baa1 from Moody’s (or BBB+ from S&P and Baa1 from Moody’s if both agencies issue ratings of its unsecured long-term debt) and (ii) if its unsecured short-term debt is rated, an unsecured short-term debt rating of not less than A2 from S&P or P2 from Moody’s (or A2 from S&P and P2 from Moody’s if both agencies issue ratings of its unsecured

 

11

 

short-term debt); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include (x) the Borrower or any of the Borrower’s Affiliates or Subsidiaries, or (y) any Defaulting Bank or Potential Defaulting Bank or any of their respective subsidiaries, or any Person who, upon becoming a Bank hereunder, would constitute any of the foregoing Persons described in this clause (y).

 

“Embargoed Person” means any party that (i) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by OFAC or (ii) resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions programs.

 

“Engagement Letter” means the Engagement Letter, dated as of August 27, 2013, by and among Citi, CGMI and JPM.

 

“Equity Interests” of any Person means (1) any and all shares or other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person.

 

“ERISA” means, at any date, the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder, all as the same shall be in effect at such date.

 

“ERISA Affiliate” means any Person (or any trade or business, whether or not incorporated) that is under common control with the Borrower within the meaning of Section 414 of the Code.

 

“ERISA Event” means:  (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal (within the meanings of Sections 4203 and 4205 of ERISA) by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in “reorganization” (within the meaning of Section 4241 of ERISA), “insolvency” (within the meaning of Section 4245 of ERISA), or “endangered” or “critical status” (within the meaning of Section 305 of ERISA); (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; (g) a determination that any Pension Plan is, or is expected to be in “at-risk” status (as defined in Section 303(i)(4)(A) of ERISA or Section 430(i)(4)(A) of the Code); (h) the failure by the Borrower or any ERISA Affiliate to meet the funding requirements of Sections 412 and 430 of the Code or Sections 302 and 303 of ERISA with respect to any Pension Plan, whether or not waived, or the failure to make by its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (i) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Pension Plan; or (j) the imposition of a Lien upon the assets of the Borrower or any ERISA Affiliate pursuant to the Code or ERISA with respect to any Pension Plan.

 

“Escrow Receivables” means, as of any date of determination, the amounts due to the Borrower or any Restricted Subsidiary and held at an escrow or title company (including an escrow or title company

 

12

 

that is a Restricted Subsidiary of the Borrower) following the sale and conveyance of title of a Model Home or Unit to a buyer to the extent that such amounts are free and clear of all Liens other than Liens permitted under Section 6.7(u) and under clause (t)(i) of the definition of Permitted Encumbrances.

 

“Eurodollar Advance” means an Advance made by a Bank to fund its Pro Rata Share of a Eurodollar Rate Loan.

 

“Eurodollar Base Rate” has the meaning set forth in the definition of Eurodollar Rate.

 

“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

	
Eurodollar Rate =
    	
 
    	
Eurodollar   Base Rate
    
	
 
    	
1.00   — Eurodollar Reserve Percentage
    	
 
    
				

 

Where, “Eurodollar Base Rate” means, for such Interest Period, the rate per annum equal to the British Bankers Association (or successor thereto if the British Bankers Association is no longer making such rates available) LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, 2 Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Base Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Citi and with a term equivalent to such Interest Period would be offered by Citi’s London Branch to major banks in the London interbank Eurodollar market at their request at approximately 11:00 a.m., London time, 2 Business Days prior to the commencement of such Interest Period.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the Eurodollar Rate.

 

“Eurodollar Rate Spread” means 2.75%.

 

“Eurodollar Reserve Percentage” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to 5 decimal places) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”).  The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning provided in Section 9.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient made by or on account of any obligation of the Borrower hereunder,

 

13

 

(a)                                 Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Bank, its applicable Lending Office located in the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that are Connection Taxes;

 

(b)                                 in the case of a Bank (i) United States federal withholding (including backup withholding) Taxes imposed on amounts payable to or for the account of such Bank with respect to an applied interest in a Loan or Commitment pursuant to a Law in effect at the time such Bank acquires such interest in the Loan or Commitment (other than with respect to an assignee pursuant to a request by the Borrower under Section 11.27), or designates a new Lending Office, except in either case, to the extent that such Bank (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower under Section 3.10 with respect to such Taxes, or (ii) is attributable to such Bank’s failure or inability to comply with Section 3.10(e); and

 

(c)                                  any United States federal withholding Taxes imposed under FATCA.

 

“Exposure” means for any Bank, as of any date of determination, the product obtained by multiplying that Bank’s then effective Pro Rata Share by the then effective Commitment.

 

“Extension Notice” has the meaning provided in Section 2.4.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b) of the Code and any applicable governmental agreements with respect thereto and laws enacting such governmental agreements.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Citi on such day on such transactions as determined by the Administrative Agent.

 

“Financial Letter of Credit” means any letter of credit issued by an issuer for the account of the Borrower or a Restricted Subsidiary that represents an irrevocable obligation on the part of the issuer to make payment on account of any indebtedness with respect to which the Borrower or a Restricted Subsidiary is liable in the event that the Borrower or Restricted Subsidiary fails to fulfill its financial obligations to the beneficiary.

 

“Fiscal Quarter” means each of the fiscal quarters of the Borrower ending on each March 31, June 30, September 30 and December 31.

 

“Fiscal Year” means each of the fiscal years of the Borrower ending on each December 31.

 

“Fitch” means Fitch IBCA, Duff & Phelps, a division of Fitch, Inc. and any successor thereto.

 

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“Foreign Bank” means any Bank that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of that Person which is not a Domestic Subsidiary and which is a controlled foreign corporation as defined in Section 957 of the Code.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP Value” means, with respect to any property or asset, the book value for such property or asset determined in accordance with Generally Accepted Accounting Principles consistently applied.

 

“Generally Accepted Accounting Principles” (or “GAAP”) means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States as in effect on the Closing Date.  The term “consistently applied,” as used in connection therewith, means that the accounting principles applied to financial statements of a Person as of any date or for any period are consistent in all material respects (subject to Section 1.2) to those applied to financial statements of that Person as of recent prior dates and for recent prior periods.

 

“Governmental Agency” or “Governmental Agencies” means (a) any federal, state, county or municipal government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, (c) any court or administrative tribunal, or (d) any arbitration tribunal or other non-governmental authority to whose jurisdiction a Person has consented, in each case whether of the United States of America or any other nation.

 

“Guarantor Subsidiary” means each wholly owned Restricted Subsidiary of the Borrower, but excluding each Unrestricted Subsidiary, Immaterial Subsidiary, Mortgage Subsidiary, Foreign Subsidiary and CFC Subsidiary; provided that the assets of all Immaterial Subsidiaries that are not required to be Guarantor Subsidiaries shall not in the aggregate exceed 7.5% of the Consolidated Net Tangible Assets of the Borrower and its Restricted Subsidiaries, in each case measured as of the end of the previous Fiscal Year.

 

“Hazardous Materials” means substances defined as “hazardous substances” pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq., or as “hazardous”, “toxic” or “pollutant” substances or as “solid waste” pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., or as “friable asbestos-containing material” pursuant to the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq. or any other applicable Hazardous Materials Law, in each case as such Laws are amended from time to time.

 

“Hazardous Materials Laws” means all Laws governing the use, generation, manufacture, production, storage, release, threatened release, discharge, treatment, transportation or disposal or presence of Hazardous Materials applicable to any real Property of the Borrower or its Subsidiaries.

 

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“ICS” means Insured Cash Sweep.

 

“IFRS” has the meaning set forth in Section 1.2.

 

“Immaterial Subsidiary” means, at any date of determination, each Restricted Subsidiary of the Borrower, whose total assets as of the last day of the then most recently ended Fiscal Quarter for which internal financial statements are available were less than $20,000,000 determined in accordance with Generally Accepted Accounting Principles.

 

“Increasing Bank” has the meaning set forth in Section 2.7(a).

 

“Indebtedness” means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money, (b) that portion of the obligations of such Person under Capital Leases that should properly be recorded as a liability on a balance sheet of that Person prepared in accordance with Generally Accepted Accounting Principles as in effect on the date of this Agreement, (c) any obligation of such Person that is evidenced by a promissory note, bond, indenture or other instrument representing an extension of credit to such Person, whether or not for borrowed money, (d) any obligation of such Person for the deferred purchase price of Property or services (other than trade or other accounts payable incurred in the ordinary course of business (but specifically excluding from such exception the deferred purchase price of any owned real property); provided, however, that Indebtedness shall not include obligations with respect to options to purchase real property that have not been exercised), (e) any obligation of the types referred to in clauses (a) through (d) above, whether or not assumed, that is secured by a Lien on assets of such Person, whether or not that Person has assumed such obligation or whether or not such obligation is non-recourse to the credit of such Person, but only to the extent of the fair market value of the assets so subject to the Lien if such obligation is nonrecourse, (f) obligations of such Person arising under banker or other acceptance facilities or under facilities for the discount of accounts receivable of such Person, (g) any obligation of such Person under Financial Letters of Credit issued for the account of such Person to the extent not Cash Collateralized, (h) net obligations of such Person under any Swap Contract, (i) Contingent Guaranty Obligations, (j) obligations of such Person to purchase securities or other property arising out of or in connection with the sale of the same or substantially similar securities or property, (k) liabilities and obligations under any receivables sales transactions, (l) Attributable Indebtedness and (m) the liquidation value of preferred stock of a Restricted Subsidiary of such Person issued and outstanding and held by any Person other than such Person (or one of its wholly-owned Restricted Subsidiaries); provided, however, that in no event shall Indebtedness include CDD Obligations.  Notwithstanding the foregoing, none of the items described in the foregoing clauses (a) through (k) between or among the Borrower and/or any of its Restricted Subsidiaries shall constitute Indebtedness for purposes of Sections 6.9, 6.10 and 6.11 or the definitions used therein.

 

“Indemnified Liabilities” has the meaning set forth in Section 11.10.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitees” has the meaning set forth in Section 11.10.

 

“Information” has the meaning set forth in Section 11.12.

 

“Intangible Assets” means, with respect to any Person, all unamortized debt discount and expense, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses, write-ups of assets over their carrying value

 

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(other than write-ups which occurred prior to the Closing Date and other than, in connection with the acquisition of an asset, the write-up of the value of such asset to its fair market value in accordance with GAAP on the date of acquisition) and all other items which would be treated as intangibles on the consolidated balance sheet of such Person prepared in accordance with GAAP.

 

“Interest Period” means, as to each Eurodollar Rate Loan, a period of 1, 2, 3 or 6 months, as designated by the Borrower; provided that (a) the first day of each Interest Period must be a Business Day, (b) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day, unless such Business Day falls in the next calendar month, in which case the Interest Period shall end on the next preceding Business Day, and (c) no Interest Period may extend beyond the Maturity Date.

 

“Investment” means, with respect to any Person, any investment by that Person, whether by means of purchase or other acquisition of capital stock or other Securities of any other Person or by means of loan, advance, capital contribution, or other debt or equity participation or interest in any other Person, including any partnership or joint venture interest in any other Person; provided that an Investment of a Person shall not include any trade or account receivable arising in the ordinary course of the business of such Person, whether or not evidenced by a note or other writing.  The amount of any Investment shall be the amount actually invested, less any return of capital, without adjustment for subsequent increases or decreases in the market value of such Investment.  In addition, the Designation of any Subsidiary as an Unrestricted Subsidiary shall be deemed to be an Investment in an amount equal to the Designation Amount as determined in accordance with Section 6.17.   For the avoidance of doubt, the acquisition by the Borrower and its Subsidiaries of personal property, real property and interests in real property in the ordinary course of their respective businesses shall not be considered an Investment.

 

“IRS” means the United States Internal Revenue Service.

 

“ISP98” has the meaning set forth in Section 2.5(h).

 

“Issuing Bank” means any Bank in its capacity as an issuer of Letters of Credit hereunder up to its Issuing Bank’s L/C Limit.  As of the Closing Date, the Issuing Banks are Citi, JPMorgan Chase Bank, N.A., Credit Suisse and Bank of America.

 

“Issuing Bank’s L/C Limit” means, with respect to any Bank which is also an Issuing Bank at any time, an amount equal to the product of such Bank’s Pro Rata Share multiplied by the L/C Limit, or such higher or lower amount as shall be agreed by such Bank at the request of the Borrower.  Such Bank or the Borrower shall notify the Administrative Agent or any such change in the Issuing Bank’s L/C Limit of such Bank.

 

“Joint Venture” means any Person, other than a Subsidiary, (a) in which the Borrower or any Restricted Subsidiary of the Borrower holds an equity Investment which entitles the Borrower or such Restricted Subsidiary to more than 10% of (i) the ordinary voting power for the election of the board of directors or other governing body of such Person or (ii) the partnership, membership or other ownership interest in such Person, and (b) which has at least one holder of its equity interests that is not any Subsidiary of the Borrower.

 

“JPM” means J.P. Morgan Securities LLC and its successors.

 

“L/C Advance” means, with respect to each Bank, such Bank’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

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“L/C Borrowing” means an extension of credit resulting from a drawing under a Letter of Credit which has not been reimbursed on the date required or refinanced as a Loan.

 

“L/C Limit” means $50,000,000.

 

“Land Held for Future Development” means, as of any date of determination, Land Parcels (unencumbered by a Lien or Liens, other than Liens permitted under Section 6.7; provided that the principal amount of Indebtedness for borrowed money secured by such Liens is included in Borrowing Base Indebtedness for the purpose of calculating the Borrowing Base Availability) where development activity has been suspended or has not yet begun, but is expected by the Borrower in good faith to occur in the future.

 

“Land Parcels” means parcels of land located in the United States wholly owned by the Borrower or any Restricted Subsidiary that are unencumbered by any Lien or Liens (other than Permitted Encumbrances).

 

“Laws” means, collectively, all foreign, federal, state and local statutes, treaties, codes, ordinances, rules, regulations and controlling precedents of any Governmental Agency.

 

“Lending Office” means, as to any Bank, the office or offices of such Bank described as such in such Bank’s Administrative Questionnaire, or such other office or offices as a Bank may from time to time notify the Borrower and the Administrative Agent.

 

“Letter of Credit” means any of the standby letters of credit issued by an Issuing Bank under the Commitment pursuant to Section 2.5, either as originally issued or as the same may be supplemented, modified, amended, renewed, extended or supplanted.  A Letter of Credit shall be a Financial Letter of Credit or a Performance Letter of Credit.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form, from time to time, that is in use by an Issuing Bank.

 

“Letter of Credit Collateralize” has the meaning set forth in Section 2.5(g).

 

“Letter of Credit Fee” means 2.25%.

 

“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn face amount of outstanding Letters of Credit plus the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, lien or charge of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any Property, including any agreement to grant any of the foregoing (other than an agreement which gives to a Person the right to become equally and ratably secured with any other Person to whom a Lien is granted on any item of Property) any conditional sale or other title retention agreement, any lease in the nature of a security interest, or the filing of or agreement to give any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the Uniform Commercial Code or comparable Law of any jurisdiction with respect to any Property.  Notwithstanding the foregoing, in no event shall an operating lease or any filing with respect thereto be deemed to constitute a Lien.

 

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“Liquidity” means at any time, without duplication, the sum of (a) all Unrestricted Cash held by the Borrower and its Restricted Subsidiaries plus (b) the Borrowing Base Availability plus (c) the aggregate amounts available to be utilized by the Borrower under the Stonegate Agreement.

 

“Loans” means the aggregate of the Advances made at any one time by the Banks pursuant to Article II.

 

“Loan Documents” means, collectively, this Agreement, the Engagement Letter, the Notes, the Letters of Credit, Letter of Credit Applications, the Subsidiary Guaranty, any Loan Notice, any Request for Letter of Credit, any Compliance Certificate, any Borrowing Base Certificate and any other instruments, documents or agreements of any type or nature hereafter executed and delivered by the Borrower or any of its Restricted Subsidiaries or Affiliates to the Administrative Agent or any other Bank pursuant to this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted.

 

“Loan Notice” means a notice of (a) a request for a Loan, (b) a conversion of Loans from one Type to the other or (c) a continuation of Eurodollar Rate Loans and, if in writing, shall be substantially in the form of Exhibit D.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor Subsidiary.

 

“Lots Under Development” means, as of any date of determination, Land Parcels (unencumbered by a Lien or Liens, other than Liens permitted under Section 6.7; provided that the principal amount of Indebtedness for borrowed money secured by such Liens is included in Borrowing Base Indebtedness for the purpose of calculating the Borrowing Base Availability) that are being developed into Developed Lots.  For the avoidance of doubt, in no event shall Lots Under Development include any Land Held for Future Development.

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U of the Board of Governors of the United States Federal Reserve System, or any successor thereto.

 

“Material Adverse Effect” means any one or more events, developments or circumstances which, individually or when aggregated with any other circumstances or events, has had or would reasonably be expected to have a material adverse effect on (i) the business, performance property, condition (financial or otherwise) or results of operations of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its payment or other material obligations under the Loan Documents or (iii) the validity or enforceability against the Borrower or any other Loan Party of any material obligations of the Borrower or any other Loan Party under the Loan Documents or the rights or remedies of the Administrative Agent and the Banks thereunder.

 

“Material Amount of Assets” means, as of any date of determination, more than 5.0% of the consolidated total assets of the Borrower and its Restricted Subsidiaries as of such date.

 

“Maturity Date” means August 27, 2017.

 

“Maturity Extension” has the meaning provided in Section 2.4.

 

“Model Homes” means housing Units (unencumbered by a Lien or Liens, other than Liens permitted under Section 6.7; provided that the principal amount of Indebtedness for borrowed money secured by such Liens is included in Borrowing Base Indebtedness for the purpose of calculating the

 

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Borrowing Base Availability) which have been completed, furnished and landscaped and are used in the marketing efforts with respect to a residential home community.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage Subsidiary” means any Subsidiary of the Borrower engaged primarily in the mortgage origination and lending business.

 

“Multiemployer Plan” means any “employee benefit plan” (as defined in Section 3(3) of ERISA) of a type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions.

 

“New Bank” has the meaning set forth in Section 2.7(a).

 

“Non-Complying Bank” has the meaning set forth in Section 11.27.

 

“Non-Consenting Bank” has the meaning set forth in Section 11.27.

 

“Non-Defaulting Bank” means, at any time, a Bank that is not a Defaulting Bank or a Potential Defaulting Bank.

 

“Non-Recourse Indebtedness” with respect to any Person means Indebtedness of such Person for which (1) the sole legal recourse for collection of principal and interest on such Indebtedness is against the specific property identified in the instruments evidencing or securing such Indebtedness and such property was acquired, in whole or in part, directly or indirectly (including through the purchase of Equity Interests of the Person owning such property), with the proceeds of such Indebtedness or such Indebtedness was incurred within 365 days after the direct or indirect acquisition of such property, including through the purchase of Equity Interests of the Person owning such property, and (2) no other assets of such Person may be realized upon in collection of principal or interest on such Indebtedness.  Indebtedness that is otherwise Non-Recourse Indebtedness will not lose its character as Non-Recourse Indebtedness because there is recourse to the Borrower, any Guarantor Subsidiary or any other Person for (a) environmental warranties, covenants or indemnities, (b) indemnities for and liabilities arising from fraud, misrepresentation, misapplication or non-payment of rents, profits, deposits, insurance and condemnation proceeds and other sums actually received by the obligor from secured assets to be paid to the lender, waste and mechanics’ liens, breach of separateness covenants, and other customary exceptions or (c) similar customary “bad-boy” guarantees.

 

“Note” means each promissory note made by the Borrower to a Bank evidencing the Advances under that Bank’s Pro Rata Share of the Commitment, substantially in the form of Exhibit E, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted.

 

“Obligations” means all present and future obligations of every kind or nature of the Borrower or any Loan Party at any time and from time to time owed to the Administrative Agent or the Banks or any one or more of them under any one or more of the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated, or contingent or noncontingent, including obligations of performance as well as obligations of payment, and including interest that accrues to the extent permitted by applicable Law after the commencement of any proceeding under any Debtor Relief Law by or against the Borrower.

 

“OFAC” means the U.S. Treasury Department’s Office of Foreign Assets Control.

 

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“Officer’s Certificate” means, when used with reference to any Person, a certificate signed by a Senior Officer of such Person.

 

“Opinions of Counsel” means the favorable written legal opinions of (a) Latham & Watkins LLP, special counsel to the Borrower and (b) Vivien Hastings, General Counsel to the Loan Parties (with respect to matters of Florida law), substantially in the form of Exhibits F-1 and F-2, respectively.

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except, in each case, any such Taxes that are Connection Taxes imposed with respect to an assignment, other than an assignment made pursuant to Section 11.27, or sale of a participation.

 

“Outstanding Amount” means:

 

(a)                                 with respect to Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Loans, as the case may be, occurring on such date; and

 

(b)                                 with respect to any Letter of Credit Usage on any date, the amount of such Letter of Credit Usage on such date, after giving effect to the issuance, extension, expiry, renewal or increase of any Letter of Credits occurring on such date and any other changes in the aggregate amount of the Letter of Credit Usage as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

“PAPA” means an arrangement, other than with an Affiliate of the Borrower, which may be unsecured or secured by a Lien granted in conjunction with purchase contracts for the purchase of real estate and which provides for future payments due to the sellers of such real estate at the time of the sale of such real estate (or parts thereof) and which payments may be contingent on the sale price of such real estate (or parts thereof), which arrangement may include (1) adjustments to the land purchase price, (2) profit participations, (3) community marketing fees and community enhancement fees and (4) reimbursable costs paid by the land developer.

 

“PATRIOT Act” has the meaning set forth in Section 11.26.

 

“Parent Company” means, with respect to a Bank, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Bank, or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Bank.

 

“Participant” has the meaning set forth in Section 11.8(d).

 

“Participant Register” has the meaning set forth in Section 11.8(d).

 

“Party” means any Person other than the Banks or the Administrative Agent which now or hereafter is a party to any of the Loan Documents.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto established under ERISA.

 

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“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, which is subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code, and which is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute.

 

“Performance Letter of Credit” means any letter of credit issued by an issuer for the account of the Borrower or a Restricted Subsidiary that is not a Financial Letter of Credit.

 

“Permitted Encumbrances” means:

 

(a)                                 inchoate Liens incident to construction or maintenance of real property; or Liens incident to construction or maintenance of real property now or hereafter filed of record for which adequate reserves have been set aside if required by, and in accordance with, Generally Accepted Accounting Principles and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no material property is subject to a material risk of loss or forfeiture;

 

(b)                                 Liens for Taxes and assessments on real property which are not yet delinquent; or Liens for Taxes and assessments on real property for which adequate reserves have been set aside if required by, and in accordance with, Generally Accepted Accounting Principles and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no material property is subject to a material risk of loss or forfeiture;

 

(c)                                  minor defects and irregularities in title to any real property which in the aggregate do not materially impair the fair market value or use of the real property for the purposes for which it is or may reasonably be expected to be held;

 

(d)                                 easements, plats, declarations of condominium and restrictions of record customary in any of the Core Businesses or the Tower Business;

 

(e)                                  easements, rights-of-way, exceptions, restrictions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, utilities, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting real property, facilities, or equipment which in the aggregate do not materially impair the fair market value or use of such property for the purposes for which it is or may reasonably be expected to be held;

 

(f)                                   easements, rights-of-way, exceptions, restrictions, reservations, or other agreements affecting real property which in the aggregate do not materially impair the fair market value or use of such property for the purposes for which it is or may reasonably be expected to be held;

 

(g)                                  rights reserved to or vested in any Governmental Agency to control or regulate the use of any real property (and Liens created by the exercise of any such rights);

 

(h)                                 any obligations or duties affecting any real property to any Governmental Agency with respect to any right, power, franchise, grant, license, or permit;

 

(i)                                     present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of real property;

 

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(j)                                    contractual or statutory Liens of landlords and Liens of suppliers (including sellers of goods) and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business;

 

(k)                                 statutory Liens, including Liens of carriers, warehousemen, mechanics and materialmen, other than those described in clauses (a) or (b) above and any Lien imposed pursuant to the Code or ERISA with respect to any Pension Plan, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto if required by, and in accordance with, GAAP;

 

(l)                                     covenants, conditions, and restrictions affecting the use of real property which in the aggregate do not materially impair the fair market value or use of the real property for the purposes for which it is or may reasonably be expected to be held;

 

(m)                             rights of tenants under leases and rental agreements covering real property entered into in the ordinary course of business of the Person owning such real property;

 

(n)                                 Liens incurred or deposits made in the ordinary course of business (as determined in good faith by the Borrower) in connection with workers’ compensation, unemployment or other insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds, development obligations, progress payments, utility services, developer’s or other obligations to make on-site or off-site improvements and other similar obligations (exclusive of obligations for the payment of borrowed money);

 

(o)                                 Liens consisting of deposits of property to secure statutory obligations of the Borrower or a Restricted Subsidiary of the Borrower in the ordinary course of its business;

 

(p)                                 Liens consisting of additions, accessions, improvements and replacements and customary deposits in connection with Model Homes and proceeds and products therefrom;

 

(q)                                 Liens for homeowner, condominium, property owner, amenity providers, clubs and similar associations and club fees and assessments and other payments;

 

(r)                                    leases or subleases, licenses or sublicenses, (or any Liens related thereto) granted to others that do not materially interfere with the ordinary course of business (as determined in good faith by the Borrower) of the Borrower or any Restricted Subsidiary;

 

(s)                                   any right, title and interest of the landlord under any lease pursuant to which the Borrower or a Restricted Subsidiary has a leasehold interest in any property or assets and any Liens that by operation of law have been placed by such landlord on property over which the Borrower or a Restricted Subsidiary has any real property interest;

 

(t)                                    pledges, deposits and other Liens existing under, or required to be made in connection with, (i) earnest money obligations, escrows or similar purpose undertakings or indemnifications in connection with any purchase and sale agreement, (ii) development agreements or other contracts entered into with governmental authorities (or an entity sponsored by a governmental authority), in connection with the entitlement of real property, (iii) CDD Obligations arising in ordinary course of business or (iv) agreements for the funding of infrastructure, including in respect of the issuance of community facility district bonds, metro district bonds, Mello-Roos bonds and subdivision

 

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improvement bonds, and similar bonding requirements arising in the ordinary course of business of a homebuilder (as determined in good faith by the Borrower); and

 

(u)                                 Liens consisting of deposits of property to secure (or in lieu of) surety, appeal or customs bonds in proceedings to which the Borrower or a Restricted Subsidiary of the Borrower is a party in the ordinary course of its business.

 

“Person” means an individual, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, estate, unincorporated organization, union, tribe, business association or Governmental Agency, or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) (a) established, maintained or contributed to by the Borrower or any of its Subsidiaries or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate, or (b) with respect to which the Borrower or any of its Subsidiaries may have any liability (whether actual or contingent).

 

“Plan of Liquidation” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise):  (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to creditors and holders of equity interests of such Person.

 

“Platform” has the meaning set forth in Section 7.1.

 

“Potential Defaulting Bank” means, at any time, any Bank (i) with respect to which an event of the kind referred to in the definition of “Bank Insolvency Event” has occurred and is continuing in respect of any financial institution affiliate of such Bank, (ii) that has notified, or whose Parent Company or a financial institution affiliate thereof has notified, the Administrative Agent, the Borrower or any Issuing Bank in writing, or has stated publicly, that it does not intend to comply with its funding obligations under any other loan agreement or credit agreement or other similar agreement, or (iii) that has, or whose Parent Company has, a non-investment grade rating from Moody’s or S&P or another nationally recognized rating agency.  Any determination by the Administrative Agent that a Bank is a Potential Defaulting Bank under any of clauses (i) through (iii) above will be conclusive and binding absent manifest error, and such Bank will be deemed a Potential Defaulting Bank upon notification of such determination by the Administrative Agent to the Borrower, the Issuing Banks and the Banks.

 

“Pro Rata Share” of a Bank, as it pertains to the Commitment, means the applicable percentage set forth opposite the name of that Bank on Schedule 1.1 to this Agreement, as such Schedule 1.1 may change from time to time in accordance with the terms of this Agreement or in accordance with any effective Assignment and Assumption.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

“Public Lender” has the meaning set forth in Section 7.1.

 

“Qualified Equity Interests” means Equity Interests of the Borrower other than Disqualified Equity Interests.

 

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“Qualified Issuer” means a commercial bank, savings bank, savings and loan association or similar financial institution which, (a) has total assets of $5,000,000,000 or more, (b) is “well capitalized” within the meaning of such term under the Federal Depository Institutions Control Act, (c) is engaged in the business of lending money and extending credit under credit facilities substantially similar to those extended under this Agreement and (d) is operationally and procedurally able to meet the obligations of a Bank hereunder to the same degree as a commercial bank.

 

“Quarterly Payment Date” means September 30, 2013, and each December 31, March 31, June 30 and September 30 thereafter through and including the Maturity Date.

 

“Rating Agencies” means S&P and Moody’s.

 

“Recipient” means (a) the Administrative Agent, (b) any Bank and (c) any Issuing Bank, as applicable.

 

“Redesignation” has the meaning set forth for that term in Section 6.17.

 

“Register” has the meaning set forth in Section 11.8(c).

 

“Regulation D” means Regulation D, as at any time amended, of the Board of Governors of the Federal Reserve System or any other regulation in substance substituted therefor.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period is waived pursuant to applicable Laws as in effect on the date hereof.

 

“Request for Letter of Credit” means a written request for the issuance of a Letter of Credit signed by a Responsible Official of the Borrower, in a form reasonably designated from time to time by the Administrative Agent.

 

“Required Banks” means, as of any date of determination, Banks having an aggregate Pro Rata Share of more than 50% of the Commitment or, if the commitment of each Bank to make Advances and the obligation of the Issuing Banks to issue Letters of Credit have been terminated or suspended, Banks holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each Bank’s risk participation and funded participation in Letter of Credit Usage being deemed “held” by such Bank for purposes of this definition); provided that, the Pro Rata Share of the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Bank shall be excluded for purposes of making a determination of Required Banks.

 

“Requirement of Law” means, as to any Person, any Law or any judgment, award, decree, writ or determination of, or any consent or similar agreement with, a Governmental Agency, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

“Responsible Official” means (a) when used with reference to a Person other than an individual, any corporate officer of such Person, general partner of such Person, corporate officer of a corporate general partner of such Person, or corporate officer of a corporate general partner of a partnership that is a general partner of such Person, or any other responsible official thereof duly acting on behalf thereof, and

 

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(b) when used with reference to a Person who is an individual, such Person.  Any document or certificate hereunder that is signed or executed by a Responsible Official of a Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of that Person.

 

“Restricted Subsidiaries” means, as of any date, the Subsidiaries of the Borrower and any other Loan Party which are not Unrestricted Subsidiaries.

 

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Securities” means any capital stock, share, voting trust certificate, bonds, debentures, notes or other evidences of indebtedness, limited partnership interests, or any warrant, option or other right to purchase or acquire any of the foregoing.

 

“Senior Notes” means the notes issued under the Senior Notes Indenture.

 

“Senior Notes Indenture” means that certain Indenture, by and between the Borrower, the guarantors party thereto and Wilmington Trust, National Association, as trustee, dated as of August 7, 2013, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

“Senior Officer” means the (a) chief executive officer, (b) chief operating officer, (c) chief financial officer, (d) chief accounting officer, (e) vice president of finance or (f) treasurer, in each case whatever the title nomenclature may be, of the Person designated.

 

“Significant Subsidiary” means (a) any Restricted Subsidiary that would be a “significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Closing Date and (b) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in Section 9.1(h)(x) or (j) has occurred and is continuing, would constitute a Significant Subsidiary under clause (a) of this definition.

 

“Sold Homes Under Construction” means Developed Lots having fully or partially constructed Units thereon (including, at a minimum, the commencement of a foundation for any such Unit) that are subject to bona fide contracts for the sale of such Units to a third party.

 

“Solvent” means, with respect to any Person on any date of determination, that on such date (i) the sum of the debt (including contingent liabilities) of such Person and its Restricted Subsidiaries, taken as a whole, does not exceed the present fair saleable value (on a going concern basis) of the assets of the Person and its Restricted Subsidiaries, taken as a whole; (ii) the capital of such Person and its Restricted Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of such Person and its Restricted Subsidiaries, taken as a whole, contemplated as of the date hereof; and (iii) such Person and its Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts including current obligations beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under FASB Account Standards Codification (ASC) Topic 450, “Contingencies”).

 

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“Sponsors” means Monarch Alternative Capital LP, Stonehill Institutional Partners, L.P. and their respective managed funds and Affiliates (but excluding any of their respective portfolio companies).

 

“Stonegate Agreement” means the $10,000,000 revolving credit facility by and between the Borrower, WCI Communities, LLC, and Stonegate Bank dated as of February 28, 2013.

 

“Subordinated Obligations” means, collectively, all obligations of the Borrower or any of its Restricted Subsidiaries that (a) do not provide for any scheduled redemption on or before 180 days after the Maturity Date and (b) are expressly subordinated in right of payment to the Obligations.

 

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, or other business entity whether now existing or hereafter organized or acquired:  (a) in the case of a corporation or limited liability company, of which securities having a majority of the ordinary voting power for the election of the board of directors (other than securities having such power only by reason of the happening of a contingency) are at the time owned by such Person or one or more Subsidiaries of such Person; or (b) in the case of a partnership or other business entity, in which such Person or a Subsidiary of such Person is a general partner.

 

“Subsidiary Guaranty” means the guaranty of the Indebtedness of the Borrower under this Agreement executed by each Guarantor Subsidiary of the Borrower substantially in the form of Exhibit G, either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Agency, including any interest, additions to tax or penalties applicable thereto.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all Letter of Credit Usage.

 

“Tower Business” means the business of constructing multi-family residential condominium projects reasonably anticipated to have six floors or more above a parking level. Each such project shall be referred to herein as a “Tower”.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

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“Unit” means a residential housing unit available for sale, or subject to a contract for the sale of such Unit, located in the United States.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.5(c)(i).

 

“Unrestricted Cash” means, as of any date of determination, the Cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries to the extent that such Cash and Cash Equivalents are free and clear of all Liens other than as permitted by Sections 6.7(a), (d) and (u).

 

“Unrestricted Subsidiary” means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the board of directors of the Borrower in accordance with Section 6.17 and (2) any Subsidiary of an Unrestricted Subsidiary.

 

“Unsold Homes Under Construction” means Developed Lots where on-site construction of Units has commenced as evidenced by the commencement of foundations for such Units, other than Sold Homes Under Construction.

 

“Voting Stock” means, with respect to any Person, the capital stock of such Person having general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

1.2                               Accounting Terms.

 

All accounting terms not specifically defined in this Agreement shall be construed in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, Generally Accepted Accounting Principles consistently applied, except as otherwise specifically prescribed herein.  In the event that Generally Accepted Accounting Principles change during the term of this Agreement such that the financial covenants contained in Sections 6.9, 6.10, 6.11 or 6.14 would then be calculated in a different manner or with different components or would render the same not meaningful criteria for evaluating the Borrower’s financial condition, (a) the Borrower and the Banks agree to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating the Borrower’s financial condition to substantially the same criteria as were effective prior to such change in Generally Accepted Accounting Principles and (b) until so amended, (i) such financial covenants shall continue to be computed in accordance with Generally Accepted Accounting Principles prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Banks financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such financial covenants made before and after giving effect to such change in Generally Accepted Accounting Principles.  At any time after the Closing Date, the Borrower may elect to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS, as in effect as of the date of such election; provided that any such election, once made, shall be irrevocable; provided, further, any calculation or determination in this Agreement that requires the application of GAAP for periods that include Fiscal Quarters ended prior to the Borrower’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP.  The Borrower shall give notice of any such election made in accordance with this definition to the Administrative Agent and the Banks.  Notwithstanding the foregoing, in no event shall the Borrower apply IFRS with respect to the Borrowing Base calculations (including any component definitions thereof) made pursuant to Section 2.8 without the written consent of the Administrative Agent (which may be given or withheld in its sole discretion).

 

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1.3                               Rounding.

 

Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement.

 

1.4                               Other Interpretive Provisions.

 

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)                                 The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)                                 Any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document).

 

(c)                                  The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(d)                                 Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

(e)                                  Any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

 

(f)                                   The term “including” is by way of example and not limitation.

 

(g)                                  The term “or” is not exclusive.

 

(h)                                 The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(i)                                     In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(j)                                    Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

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1.5                               Exhibits and Schedules.

 

All Exhibits and Schedules to this Agreement, either as originally existing or as the same may from time to time be supplemented, modified, or amended, are incorporated herein by reference.  A matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

 

1.6                               References to “the Borrower and its Subsidiaries”.

 

Any reference herein to “the Borrower and its Subsidiaries” or the like shall refer solely to the Borrower during such times, if any, as the Borrower shall have no Subsidiaries.

 

1.7                               Time of Day.

 

Unless otherwise specified, all references herein to times of day shall be references to Eastern standard time.

 

1.8                               Letter of Credit Amounts.

 

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time (after taking into account amounts drawn prior to such time that are not subject to reinstatement); provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II.
 LOANS AND LETTERS OF CREDIT

 

2.1                               Loans-General.

 

(a)                                 Subject to the terms and conditions set forth in this Agreement (including Section 8.2), at any time and from time to time from the Closing Date through the Business Day immediately preceding the Maturity Date, each Bank shall, pro rata according to that Bank’s Pro Rata Share of the Commitment then in effect, make Advances to the Borrower under the Commitment in such amounts as the Borrower may request; provided that, after giving effect to such Advance, the Total Outstandings shall not exceed the aggregate Commitments and Borrowing Base Indebtedness shall not exceed the Borrowing Base.  Subject to the limitations set forth herein, the Borrower may borrow, repay and reborrow under this Section 2.1(a) without premium or penalty.

 

(b)                                 [Intentionally Omitted].

 

(c)                                  Subject to the next sentence and to Section 2.5(c), each Loan shall be made pursuant to the Borrower’s irrevocable Loan Notice to the Administrative Agent, which shall specify the requested (i) date of such Loan, (ii) Type of Loan, (iii) amount of such Loan and (iv) in the case of a Eurodollar Rate Loan, Interest Period for such Loan.  Any Loan Notice delivered under this Agreement may be delivered by mail, email, telecopier, telephone, or as otherwise acceptable to the Administrative Agent; provided that, each telephonic Loan Notice given by the Borrower pursuant to this Section 2.1(c) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Official of the Borrower.

 

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(d)                                 Promptly following receipt of a Loan Notice, the Administrative Agent shall notify each Bank by telephone, telecopier or telex of the date and Type of the Loan, the applicable Interest Period in the case of a Eurodollar Rate Loan, and that Bank’s Pro Rata Share of the Loan.  Not later than 1:00 p.m. New York time, on the date specified for any Loan, each Bank shall make its Pro Rata Share of the Loan in immediately available funds available to the Administrative Agent at the Administrative Agent’s Office.  Upon fulfillment of the applicable conditions set forth in Article VIII, all Advances shall be credited in immediately available funds to the Designated Deposit Account.

 

(e)                                  The principal amount of each Loan shall be an integral multiple of $1,000,000 and shall be in an amount not less than (i) $1,000,000 if such Loan is a Base Rate Loan and (ii) $5,000,000 if such Loan is a Eurodollar Rate Loan.

 

(f)                                   A Loan Notice shall be irrevocable upon the Administrative Agent’s first notification thereof.  The obligation of each Bank to make any Advance is several, and not joint or joint and several, and is not conditioned upon the performance by any other Bank of its obligation to make Advances.  The failure by any Bank to perform its obligation to make any Advance will not increase the obligation of any other Bank to make Advances.

 

(g)                                  The Borrower may redesignate a Base Rate Loan as a Eurodollar Rate Loan, or a Eurodollar Rate Loan as a Base Rate Loan or a Eurodollar Rate Loan with a new Interest Period, by delivering a Loan Notice to the Administrative Agent, within the time periods and pursuant to the conditions set forth in Section 2.1(c), 2.2 or 2.3, as applicable, and elsewhere in this Agreement.  If no Loan Notice has been made prior to the last day of the Interest Period for an outstanding Eurodollar Rate Loan within the requisite notice periods set forth in Section 2.3, then the Borrower shall be deemed to have requested that such Eurodollar Rate Loan be redesignated as a Base Rate Loan.

 

(h)                                 The Advances made by each Bank under this Section 2.1 shall be evidenced by that Bank’s Note to the extent requested by such Bank.

 

2.2                               Base Rate Loans.

 

Each request by the Borrower for a Base Rate Loan shall be made pursuant to a Loan Notice received by the Administrative Agent, at the Administrative Agent’s Office, not later than 12:00 p.m. New York time, on the Business Day on which the requested Base Rate Loan is to be made.  The Administrative Agent shall notify each Bank of a request for a Base Rate Loan as soon as practicable after receipt of the same.  All Loans shall constitute Base Rate Loans unless properly designated as Eurodollar Rate Loans pursuant to Section 2.3.

 

2.3                               Eurodollar Rate Loans.

 

(a)                                 Each request by the Borrower for a Eurodollar Rate Loan shall be made pursuant to a Loan Notice received by the Administrative Agent, at the Administrative Agent’s Office, not later than 12:00 p.m. New York time, at least 3 Business Days before the first day of the applicable Interest Period, provided that, such advance notice period may be reduced by the Administrative Agent in its discretion with respect to any Eurodollar Rate Loan made on the Closing Date.  The Administrative Agent shall notify each Bank of a request for a Eurodollar Rate Loan as soon as practicable after receipt of the same.

 

(b)                                 At or about 1:00 p.m., New York time, 2 Business Days before the first day of the applicable Interest Period, the Administrative Agent shall determine the applicable Eurodollar Rate

 

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(which determination shall be conclusive in the absence of manifest error) and promptly shall give notice of the same to the Borrower and the Banks by telephone, telecopier or, in the case of Banks, telex.

 

(c)                                  No more than 10 Eurodollar Rate Loans may be outstanding at any particular time.

 

2.4                               Maturity Extension.

 

At any time after the Closing Date, the Borrower and any Bank may agree, by notice to the Administrative Agent (each such notice, an “Extension Notice”), to extend the maturity date (any such extension, a “Maturity Extension”) of such Bank’s Commitments and/or Loans to the extended maturity date specified in such Extension Notice; provided that, (a) only one additional tranche of Commitments and/or Loans shall be permitted under this Section 2.4, (b) only the consent of the Borrower and respective extending Banks will be required in order to effect such Maturity Extension and (c) each Bank shall be offered the opportunity to participate in such Maturity Extension on the same terms and conditions as each other Bank.  This Section 2.4 shall supersede any provisions in Section 11.2 or any provisions relating to the pro rata sharing of payments set forth in this Agreement to the contrary.

 

2.5                               Letters of Credit.

 

(a)                                 Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions of this Agreement (including Section 8.3), each Issuing Bank agrees, in reliance upon the agreements of the other Banks set forth in this Section 2.5, (1) from time to time during the period from the Closing Date through the day 5 days prior to the Maturity Date, to issue Letters of Credit for the account of the Borrower in an aggregate amount not exceeding such Issuing Bank’s L/C Limit, and such Issuing Bank shall issue for the account of the Borrower one or more Letters of Credit and amend Letters of Credit previously issued by it in accordance with Section 2.5(b), and (2) to honor drafts under the Letters of Credit; provided that, no Issuing Bank shall be obligated to issue any Letter of Credit if, after giving effect to such issuance, (x) the Total Outstandings exceeds the Commitments, (y) Borrowing Base Indebtedness exceeds the Borrowing Base or (z) the Letter of Credit Usage would exceed the L/C Limit or any limit established by Law after the Closing Date on such Issuing Bank’s ability to issue the requested Letter of Credit at any time. Notwithstanding the foregoing, an Issuing Bank shall not issue any Letter of Credit if, (A) on or prior to the Business Day immediately preceding the issuance thereof any Bank has notified the Issuing Bank or the Administrative Agent in writing that the conditions set forth in Section 8.3 have not been satisfied with respect to the issuance of such Letter of Credit or (B) the expiry date of such requested Letter of Credit would occur after the earlier of (x) 5 days prior to the Maturity Date, unless such Letter of Credit is Cash Collateralized in a manner acceptable to the applicable Issuing Bank in its sole discretion and such Issuing Bank agrees that any participations in such Letter of Credit by the Banks pursuant to this Section 2.5 shall terminate on the Maturity Date and (y) one year from the date of such issuance, unless agreed by the applicable Issuing Bank; provided that, nothing in this clause (y) shall prevent any Letter of Credit with a one-year tenor from providing for the renewal thereof for additional one-year periods, subject to the foregoing clause (B).  Subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired, terminated or that have been drawn upon and reimbursed.  All Existing Letters of Credit shall be deemed to be issued hereunder and shall constitute Letters of Credit subject to the terms hereof.

 

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(ii)                                  No Issuing Bank shall be obligated to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any Governmental Agency or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any Law applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Agency with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Issuing Bank in good faith deems material to it;

 

(B)                               the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to the customers of such Issuing Bank generally; or

 

(C)                               a default of any Bank’s obligations to fund under Section 2.5(c) exists or any Bank is at such time a Defaulting Bank hereunder, unless such Issuing Bank has entered into satisfactory arrangements with the Borrower or such Bank to eliminate the Issuing Bank’s risk with respect to such Bank.

 

Each Bank from time to time party hereto agrees to act as an Issuing Bank hereunder.

 

(b)                                 Procedures for Issuance and Amendment of Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the applicable Issuing Bank (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Official of the Borrower.  Such Letter of Credit Application must be received by the applicable Issuing Bank and the Administrative Agent not later than 1:00 p.m., New York time, at least 3 Business Days (or such later date and time as the applicable Issuing Bank may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to such Issuing Bank:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as such Issuing Bank may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Issuing Bank (w) the Letter of Credit to be amended; (x) the proposed date of amendment thereof (which shall be a Business Day); (y) the nature of the proposed amendment; and (z) such other matters as such Issuing Bank may require.

 

(ii)                                  Promptly after receipt of any Letter of Credit Application, the applicable Issuing Bank will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower

 

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and, if not, such Issuing Bank will provide the Administrative Agent with a copy thereof.  Upon receipt by the applicable Issuing Bank of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with such Issuing Bank’s usual and customary business practices.  Immediately upon the issuance of each Letter of Credit, each Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the applicable Issuing Bank a risk participation in such Letter of Credit in an amount equal to the product of such Bank’s Pro Rata Share times the amount of such Letter of Credit.

 

(iii)                               Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable Issuing Bank will also (x) deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment and (y) notify the Borrower and the Administrative Agent of any return, surrender or cancellation of any Letter of Credit.

 

(c)                                  Drawings and Reimbursements; Funding of Participations.

 

(i)                                     Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable Issuing Bank shall promptly notify the Borrower and the Administrative Agent thereof and of the date such Issuing Bank proposes to pay such drawing.  The Borrower shall reimburse such Issuing Bank through the Administrative Agent in an amount equal to the amount of any payment by such Issuing Bank under a Letter of Credit, which reimbursement shall be made, (x) if such Issuing Bank notifies the Borrower and the Administrative Agent of such payment before 2:00 p.m. New York time on the Business Day immediately preceding the date of such payment (the date of such payment being, the “Honor Date”), then on the Honor Date, or (y) if such Issuing Bank notifies the Borrower and the Administrative Agent after 2:00 p.m. New York time on the Business Day immediately preceding the Honor Date or any Business Day thereafter, then on the Business Day immediately following such notice (with any notice received on or after 2:00 p.m. New York time on any day deemed to be received before 2:00 p.m. New York time on the next Business Day).  If the Borrower fails to so reimburse such Issuing Bank by such date, the Administrative Agent shall promptly notify each Bank of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Bank’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed to have requested a Base Rate Loan in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.1(e) for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Borrowing Base Availability and the conditions set forth in Section 8.2 (other than the delivery of a Loan Notice).  Any notice given by an Issuing Bank or the Administrative Agent pursuant to this Section 2.5(c)(i) may be given by telephone if immediately confirmed in writing; provided that, the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii)                                  Each Bank (including the Bank acting as Issuing Bank) shall upon any notice pursuant to Section 2.5(c)(i) make funds available to the Administrative Agent for the account of the applicable Issuing Bank at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent (provided that, the Administrative Agent gives notice on or prior to 11:00 a.m. on such Business Day), whereupon, subject to the provisions of Section 2.5(c)(iii), each Bank that so makes funds available shall be deemed to have

 

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made an Advance to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the applicable Issuing Bank.

 

(iii)                               With respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate Loan because the conditions set forth in Section 8.2 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the applicable Issuing Bank an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Bank’s payment to the Administrative Agent for the account of the applicable Issuing Bank pursuant to Section 2.5(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Bank in satisfaction of its participation obligation under this Section 2.5.

 

(iv)                              Until each Bank funds its Advance or L/C Advance pursuant to this Section 2.5(c) to reimburse the applicable Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Bank’s Pro Rata Share of such amount shall be solely for the account of the applicable Issuing Bank.

 

(v)                                 Each Bank’s obligation to make Advances or L/C Advances to reimburse the Issuing Bank for amounts drawn under Letters of Credit, as contemplated by this Section 2.5(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against the applicable Issuing Bank, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Bank’s obligation to make Advances pursuant to this Section 2.5(c) is subject to the conditions set forth in Section 8.2 (other than delivery by the Borrower of a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the applicable Issuing Bank for the amount of any payment made by such Issuing Bank under any Letter of Credit, together with interest as provided herein.

 

(vi)                              If any Bank fails to make available to the Administrative Agent for the account of the applicable Issuing Bank any amount required to be paid by such Bank pursuant to the foregoing provisions of this Section 2.5(c) by the time specified in Section 2.5(c)(ii), such Issuing Bank shall be entitled to recover from such Bank (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such Issuing Bank at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the applicable Issuing Bank submitted to any Bank (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after an Issuing Bank has made a payment under any Letter of Credit and has received from any Bank such Bank’s L/C Advance in respect of such payment in accordance with Section 2.5(c), if the Administrative Agent receives for the account of such Issuing Bank any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of cash collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Bank its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the

 

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period of time during which such Bank’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the Administrative Agent for the account of an Issuing Bank pursuant to Section 2.5(c)(i) is required to be returned under any of the circumstances described in Section 11.24 (including pursuant to any settlement entered into by such Issuing Bank in its discretion), each Bank shall pay to the Administrative Agent for the account of such Issuing Bank its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Bank, at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

(e)                                  Obligations Absolute.  The obligation of the Borrower to reimburse the applicable Issuing Bank for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)                                  the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)                               any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by the applicable Issuing Bank under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the applicable Issuing Bank under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower;

 

provided that, the foregoing in clauses (i) through (v) shall not excuse any Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are waived by the Borrower to the extent permitted by applicable Law) suffered by the Borrower that are caused by such Issuing Bank’s (or its Related Parties’) gross negligence, bad faith or willful misconduct as determined in a final and non-appealable judgment by a court of competent jurisdiction when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The Borrower shall promptly examine a copy of each

 

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Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the applicable Issuing Bank.

 

(f)                                   Role of Issuing Bank.  Each Bank and the Borrower agree that, in paying any drawing under a Letter of Credit, the applicable Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the Issuing Banks, any Agent-Related Person nor any of the respective correspondents, participants or assignees of any Issuing Bank shall be liable to any Bank for (i) any action taken or omitted in connection herewith at the request or with the approval of the Banks or the Required Banks, as applicable; (ii) any action taken or omitted in the absence of gross negligence, bad faith or willful misconduct as determined in a final, non-appealable judgment of a court of competent jurisdiction; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of any Issuing Bank, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of any Issuing Bank, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.5(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against an Issuing Bank (and any other applicable “issuer” within the meaning of ISP98), and an Issuing Bank (or such issuer) may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by such Issuing Bank’s (or such issuer’s) willful misconduct or gross negligence, in each case as determined in a final, non-appealable judgment of a court of competent jurisdiction.  In furtherance and not in limitation of the foregoing, an Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)                                  Cash or Letter of Credit Collateral.  Upon the request of the Administrative Agent, (i) if an Issuing Bank has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) if, as of the date 5 days prior to the Maturity Date or acceleration pursuant to Section 9.2(a)(ii), any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn or (iii) if any amount remains available to be drawn under any Letter of Credit by reason of the operation of Section 3.14 of ISP 98, the Borrower shall immediately Cash Collateralize or Letter of Credit Collateralize the then outstanding amount of the Letter of Credit Usage, excluding any portion of such amount that is already Cash Collateralized by operation of another provision of this Agreement (in an amount equal to 101% of such outstanding amount determined as of the date of such L/C Borrowing or the Maturity Date, as the case may be).  For purposes hereof, “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Banks and the Banks, as collateral for the then outstanding amount of the Letter of Credit Usage, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the applicable Issuing Banks (which documents are hereby consented to by the Banks).  Derivatives of such term have corresponding meanings.  The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuing Banks and the Banks, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash collateral shall be

 

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maintained in a blocked, non-interest bearing deposit account at Citi.  For purposes hereof, “Letter of Credit Collateralize” means to deliver to the Administrative Agent, for the benefit of the Issuing Banks and the Banks, as collateral for the then outstanding amount of the Letter of Credit Usage, one or more irrevocable standby letters of credit (other than a Letter of Credit) in the aggregate amount equal to 101% of the then outstanding amount of the Letter of Credit Usage (less the amount, if any, of the then outstanding amount of the Letter of Credit Usage being Cash Collateralized) issued by one or more financial institutions that each is a Qualified Issuer in form and substance satisfactory to the Administrative Agent and the applicable Issuing Banks (which documents are hereby consented to by the Banks).  Derivatives of such term have corresponding meanings.  The Borrower hereby agrees that the Administrative Agent may immediately apply cash collateral or draw upon any irrevocable standby letters of credit delivered pursuant to this Section 2.5(g) in order to reimburse the Issuing Banks for any drawings under any Letters of Credit.

 

(h)                                 Applicability of ISP98.  The rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) (“ISP98”) shall apply to each Letter of Credit, except as provided in Section 2.5(l) below.

 

(i)                                     Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

 

(j)                                    Letter of Credit Fees.

 

(i)                                     The Borrower shall pay to the Administrative Agent for the account of the Banks a letter of credit fee payable to the Banks in accordance with their Pro Rata Shares with respect to each Letter of Credit issued or renewed equal to the Letter of Credit Fee times the daily maximum amount available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit); provided that, (x) if any portion of a Defaulting Bank’s Pro Rata Share of any Letter of Credit is Cash Collateralized by the Borrower or reallocated to the other Banks pursuant to Section 10.13(b)(iii), then the Borrower shall not be required to pay a Letter of Credit fee to such Defaulting Bank with respect to such portion of such Defaulting Bank’s Pro Rata Share so long as it is Cash Collateralized or Letter of Credit Collateralized by the Borrower or reallocated to the other Banks, but such Letter of Credit fee shall instead be payable to such other Banks in accordance with their Pro Rata Share of such reallocated amount, and (y) if any portion of a Defaulting Bank’s Pro Rata Share is not Cash Collateralized or Letter of Credit Collateralized or reallocated pursuant to Section 10.13(b)(iii), then the Letter of Credit fee with respect to such Defaulting Bank’s Pro Rata Share shall be payable to the applicable Issuing Bank until such Pro Rata Share is Cash Collateralized or Letter of Credit Collateralized or reallocated or such Bank ceases to be a Defaulting Bank.  Such letter of credit fee shall accrue and be computed on a quarterly basis in arrears, and shall be due and payable on each Quarterly Payment Date, commencing with the first such date to occur after the issuance of such Letter of Credit and on the Maturity Date.

 

(ii)                                  The Borrower shall pay directly to the applicable Issuing Bank for its own account a fronting fee with respect to each Letter of Credit issued or renewed by such Issuing Bank equal to 0.125% per annum of the daily maximum amount which is available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit).  Such fronting fee shall accrue and be computed on a quarterly basis in arrears, and shall be due and payable on each Quarterly Payment Date, commencing with the first such date to occur after the issuance of such Letter of Credit and on the earlier of (x) the expiry date of such Letter of Credit or (y) the Maturity Date.

 

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(iii)                               The Borrower shall pay directly to the applicable Issuing Bank for its own account the customary issuance, presentation, amendment, and other processing fees, and other standard costs and charges, of such Issuing Bank relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and charges are due and payable within ten (10) Business Days of demand and are nonrefundable.

 

(k)                                 Reporting.  Each Issuing Bank shall, no later than the 3rd Business Day following the last day of each month, provide to the Administrative Agent a report in form and substance reasonably satisfactory to the Administrative Agent, showing the date of issuance or amendment of each Letter of Credit, the account party, the original face amount (if any), the expiration date, and the reference number of any Letter of Credit issued or amended during such month.  Upon request of any Bank, the Administrative Agent shall forward copies of such reports to such Bank.

 

(l)                                     Designation of Additional Letters of Credit.

 

(i)                                     Subject to the limitations set forth in this Section, the Borrower may, on one occasion on or after the Closing Date, by written notice to the Administrative Agent designate letters of credit under the Bank of America Letter of Credit Facility as Letters of Credit hereunder and such designated letters of credit shall be deemed Letters of Credit and Bank of America shall be an Issuing Bank for all purposes under this Agreement.

 

(ii)                                  Designation of Letters of Credit under clause (i) above shall be subject to the following conditions at the time of any such designation:

 

(A)                               Bank of America shall be a Bank hereunder;

 

(B)                               after giving effect to such designation the Total Outstandings shall not exceed the Borrowing Base Availability; and

 

(C)                               each of the conditions set forth in Section 8.3 shall be satisfied.

 

2.6                               Reduction of Commitment.

 

The Borrower shall have the right, at any time and from time to time, without penalty or charge, upon at least three (3) Business Days prior written notice voluntarily to reduce or terminate permanently and irrevocably, in aggregate principal amounts in an integral multiple of $1,000,000 but not less than $5,000,000 (unless all of the unused Commitment is being terminated), all or a portion of the unused Commitment.  The Borrower shall pay to the Administrative Agent (for the account of each Bank, pro rata according to that Bank’s Pro Rata Share) on the date of such termination all unpaid commitment fees which have accrued to such date in respect of the terminated portion of the Commitment.

 

2.7                               Optional Increase to Commitment.

 

(a)                                 Subject to the limitations set forth in this Section, the Administrative Agent may, at any time and from time to time at the request of the Borrower, increase the Commitment by (i) admitting additional Banks hereunder (each a “New Bank”), or (ii) increasing the Exposure of any Bank (each an “Increasing Bank”), subject to the following conditions:

 

(i)                                     each New Bank is an Eligible Assignee;

 

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(ii)                                  the Borrower executes (A) a new Note payable to the order of a New Bank, or (B) a replacement Note payable to the order of an Increasing Bank if such Increasing Bank previously received a Note;

 

(iii)                               each New Bank executes and delivers to the Administrative Agent an instrument of joinder to this Agreement which is in form and substance acceptable to the Administrative Agent;

 

(iv)                              after giving effect to the admission of any New Bank or the increase in the Exposure of any Increasing Bank, the Commitment does not exceed $125,000,000 less the aggregate amount of reductions, if any, of the Commitment made pursuant to Sections 2.6;

 

(v)                                 each increase in the Commitment shall be in the amount of $5,000,000 or a greater integral multiple of $500,000;

 

(vi)                              no admission of any New Bank shall increase the Exposure of any existing Bank without the written consent of such Bank;

 

(vii)                           no Bank shall be an Increasing Bank without the written consent of such Bank;

 

(viii)                        the Borrower shall offer such increased Commitments to each existing Bank (pursuant to their respective Pro Rata Share) prior to offering any such increased Commitment to any New Bank; provided that, any existing Bank that does not affirmatively accept such offer in writing within 10 Business Days of the date of delivery of written notice thereof shall be presumed to have declined such offer;

 

(ix)                              no Default or Event of Default exists or would result from such increased Commitments (provided that, for the purposes of this condition, compliance with Sections 6.10 and 6.11 shall be determined in accordance with clause (x) below);

 

(x)                                 the Borrower satisfies Sections 6.10 and 6.11(b) on a pro forma basis after giving effect to such increased Commitments (which shall be deemed fully drawn for purposes of complying with Section 6.10);

 

(xi)                              [Intentionally Omitted];

 

(xii)                           [Intentionally Omitted];

 

(xiii)                        the Administrative Agent shall have received from the Borrower such documents as it may reasonably request in connection with such increase, including:

 

(A)                               a certificate signed by a Senior Officer of the Borrower (x) certifying and attaching the resolutions adopted by the Borrower approving or consenting to such increase and (y) certifying that (1) the representations and warranties contained in Article IV and the other Loan Documents are true and correct on and as of the date of the increase, except to the extent that such representations and warranties specifically refer to an earlier date, and (2) no Default or Event of Default exists as of the date of the increase or will result from the increase; and

 

40

 

(B)                               a written consent to the increase and reaffirmation of its obligations under the Loan Documents executed by each Guarantor Subsidiary; and

 

(xiv)                       Any such increase shall be effective, if at all, as of the date determined by the Borrower subject to the reasonable approval of the Administrative Agent.  The Administrative Agent shall promptly notify the Banks of the effective date of such increase.

 

(b)                                 Except as set forth in Section 2.7(a), no consent of the Banks shall be required for an increase in the amount of the Commitment pursuant to this Section 2.7.

 

(c)                                  After the admission of any New Bank or the increase in the Exposure of any Increasing Bank, the Administrative Agent shall promptly provide to each Bank and to the Borrower a new Schedule 1.1 to this Agreement.

 

(d)                                 Concurrently with the effectiveness of any increase to the Commitment under this Section, (i) the participation interest of each Bank in each outstanding Letter of Credit shall be adjusted, and (ii) each New Bank and each Increasing Bank shall make additional Advances available to the Administrative Agent (the proceeds of which shall be paid to the other Banks for assignment of Loans or used in part to refinance expiring Eurodollar Rate Loans) in the amount required to result in the aggregate outstanding Advances of each Bank being equal to its Pro Rata Share of the Commitment, as so increased.

 

(e)                                  The Borrower confirms its obligation pursuant to Section 3.6(f) to repay any breakage fees resulting from the prepayment of any Eurodollar Rate Loans resulting from the Borrower’s request to increase the Commitment under this Section 2.7.

 

(f)                                   This Section shall supersede any provisions in Section 11.2 or 11.8 to the contrary.

 

2.8                               Borrowing Base.

 

(a)                                 Reporting of Borrowing Base.  Concurrently with (i) the delivery of the financial statements described in Section 7.1(a) and (b) and (ii) the request for the incurrence of a Loan, issuance of any Letter of Credit or the incurrence of any other Borrowing Base Indebtedness, the Borrower shall provide the Administrative Agent with a Borrowing Base Certificate in a form satisfactory to the Administrative Agent showing the Borrower’s calculations of the components of the Borrowing Base as of the end of the last Fiscal Quarter for which financial statements were required to be delivered under Section 7.1(a) or 7.1(b) (or, to the extent more recent, the last fiscal month for which internal financial statements are available), as applicable, and such data supporting such calculations per Exhibit B or in another form as the Administrative Agent may reasonably require.  Any change in the Borrowing Base shall be effective upon receipt of a Borrowing Base Certificate.

 

(b)                                 Amount of Borrowing Base.  As used in this Agreement, the term “Borrowing Base” means a Dollar amount equal to the sum of the following, as of any date of determination, and without duplication, and with respect to the Borrower and the Restricted Subsidiaries:

 

(i)                                     Escrow Receivables.  100% of the aggregate GAAP Value of Escrow Receivables; plus

 

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(ii)                                  Sold Homes Under Construction.  90% of the aggregate GAAP Value of Sold Homes Under Construction; plus

 

(iii)                               Model Homes.  85% of the aggregate GAAP Value of Model Homes; plus

 

(iv)                              Unsold Homes Under Construction. 80% of the aggregate GAAP Value of Unsold Homes Under Construction; plus

 

(v)                                 Developed Lots and Lots Under Development.  65% of the aggregate GAAP Value of Developed Lots and Lots Under Development.

 

(vi)                              Land Held For Future Development.  50% of the aggregate GAAP Value of Land Held for Future Development; plus

 

(vii)                           Unrestricted Cash.  100% of Unrestricted Cash minus Total Outstandings (excluding undrawn Letters of Credit);

 

provided, however, that the aggregate of the amounts set forth in clause (vi) shall be less than 45% of the Borrowing Base; provided further, that (a) the value of any unentitled land or land under option; (b) the value of the vertical construction of any Tower; (c) the value of the land on which a Tower is constructed, but only after the construction of such Tower has commenced; and (d) the value of the assets securing the loans under the Stonegate Agreement, in each case, shall not be included in the Borrowing Base.

 

ARTICLE III.
 PAYMENTS AND FEES

 

3.1                               Principal and Interest.

 

(a)                                 Interest shall be payable on the outstanding daily unpaid principal amount of each Advance from the date of such Advance until payment in full and shall accrue and be payable at the rates set forth herein, to the extent permitted by applicable Laws, before and after default, before and after maturity, before and after any judgment, and before and after the commencement of any proceeding under any Debtor Relief Law, with interest on overdue interest to bear interest at the Default Rate.

 

(b)                                 Interest accrued on each Base Rate Loan shall be due and payable in arrears on each Quarterly Payment Date.  Except as otherwise provided in Section 3.7, the unpaid principal amount of any Base Rate Loan shall bear interest at a fluctuating rate per annum equal to the sum of the Base Rate plus the Base Rate Spread.

 

(c)                                  Interest accrued on each Eurodollar Rate Loan shall be due and payable in arrears on the last day of the Interest Period applicable to such Eurodollar Rate Loan; provided, in the case of each Interest Period of longer than three months, accrued interest shall also be due and payable each date that is three months, or an integral multiple thereof, after the commencement of such Interest Period.  Except as otherwise provided in Section 3.7, the unpaid principal amount of any Eurodollar Rate Loan shall bear interest at a rate per annum equal to the sum of the Eurodollar Rate for that Eurodollar Rate Loan plus the Eurodollar Rate Spread.

 

(d)                                 If not sooner paid, the Loans shall be payable as follows:

 

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(i)                                     the Loans shall be payable within one Business Day in Cash to the extent that the Total Outstandings exceeds at any time the Commitments as then in effect or Borrowing Base Indebtedness exceeds at any time the Borrowing Base as then in effect, but only to the extent of such excess, and excluding any portion of such excess represented by outstanding Letters of Credit which are Cash Collateralized or Letter of Credit Collateralized pursuant to Section 2.5(g); and

 

(ii)                                  the Loans shall in any event be immediately payable in Cash on the Maturity Date.

 

(e)                                  Loans may, at any time and from time to time, voluntarily be prepaid at the election of the Borrower in whole or in part without premium or penalty; provided that:  (i) any partial prepayment shall be in integral multiples of $1,000,000, (ii) any partial prepayment shall be in an amount not less than $1,000,000 on a Base Rate Loan, and not less than $5,000,000 on a Eurodollar Rate Loan, (iii) the Administrative Agent must have received written notice of any prepayment at least 3 Business Days before the date of prepayment in the case of a Eurodollar Rate Loan and by 1:00 p.m., New York time, on the date of prepayment in the case of a Base Rate Loan, (iv) each prepayment of principal, except for partial prepayments on Base Rate Loans, shall be accompanied by prepayment of interest accrued to the date of payment on the amount of principal paid and (v) in the case of any prepayment of any Eurodollar Rate Loan, the Borrower shall promptly upon demand reimburse each Bank for any loss or cost directly or indirectly resulting from the prepayment, determined as set forth in Section 3.6.

 

3.2                               Commitment Fee.

 

From the Closing Date until the Maturity Date, the Borrower shall pay to the Administrative Agent, for the account of each Bank, pro rata according to that Bank’s Pro Rata Share of the Commitment, a commitment fee equal 0.50% times the average daily amount by which the Commitment exceeds the aggregate outstanding principal of the Loans plus the Letter of Credit Usage; provided that, no commitment fee shall accrue with respect to any Defaulting Bank’s Pro Rata Share of the Commitment to the extent not reallocated pursuant to Section 10.13.  This commitment fee shall accrue daily and be payable in arrears with respect to each calendar quarter on the Quarterly Payment Date falling at the end of such calendar quarter.  The Administrative Agent shall calculate the commitment fee and shall notify the Borrower in writing of such amounts prior to each Quarterly Payment Date.

 

3.3                               Other Fees.

 

The Borrower shall pay to Citi and the Arrangers such other fees in such amounts and at such times as heretofore set forth in the Engagement Letter and any other applicable letter agreements to which the Borrower is a party.

 

3.4                               [Intentionally Omitted].

 

3.5                               [Intentionally Omitted].

 

3.6                               Eurodollar Fees and Costs.

 

(a)                                 Increased Costs Generally.  If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for

 

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the account of, or credit extended or participated in by, any Bank (except any reserve requirement reflected in the Eurodollar Rate) or an Issuing Bank;

 

(ii)                                  subject any Recipient to any Tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Recipient in respect thereof (except for Indemnified Taxes, Taxes described in clauses (b) and (c) of the definition of Excluded Taxes, and Connection Income Taxes); or

 

(iii)                               impose on any Bank or an Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Eurodollar Rate Loans made by such Bank or any Letter of Credit or participation therein;

 

and the result of any of the foregoing would be to increase the cost to such Bank of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Bank or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Bank or such Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Bank or such Issuing Bank, the Borrower will pay to such Bank or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Bank or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)                                 Capital or Liquidity Requirements.  If any Bank or an Issuing Bank determines that any Change in Law affecting such Bank or such Issuing Bank or any Lending Office of such Bank or such Bank’s or such Issuing Bank’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Bank’s or such Issuing Bank’s capital or on the capital of such Bank’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Bank or the Loans made by, or participations in Letters of Credit held by, such Bank, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Bank or such Issuing Bank or such Bank’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Bank’s or such Issuing Bank’s policies and the policies of such Bank’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Bank or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Bank or such Issuing Bank or such Bank’s or such Issuing Bank’s holding company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A certificate of a Bank or an Issuing Bank setting forth the amount or amounts necessary to compensate such Bank or such Issuing Bank or its holding company, as the case may be, as specified in Section 3.6(a) or Section 3.6(b) and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Bank or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the part of any Bank or an Issuing Bank to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Bank’s or such Issuing Bank’s right to demand such compensation, provided that, the Borrower shall not be required to compensate a Bank or an Issuing Bank pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than 6 months prior to the date that such Bank or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Bank’s or such Issuing Bank’s intention to

 

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claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 6-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

(e)                                  If, with respect to any proposed Eurodollar Rate Loan:

 

(i)                                     the Administrative Agent reasonably determines that, by reason of circumstances affecting the London interbank Eurodollar market generally that are beyond the reasonable control of the Banks, deposits in dollars (in the applicable amounts) are not being offered to each of the Banks in the London interbank Eurodollar market for the applicable Interest Period; or

 

(ii)                                  the Required Banks advise the Administrative Agent that the Eurodollar Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Banks of making the applicable Eurodollar Advances; then the Administrative Agent forthwith shall give notice thereof to the Borrower and the Banks, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Banks to make any future Eurodollar Advances shall be suspended.  If at the time of such notice there is then pending a Loan Notice that specifies a Eurodollar Rate Loan, such Loan Notice shall be deemed to specify a Base Rate Loan.

 

(f)                                   Compensation for Losses.  Upon demand of any Bank (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Bank for and hold such Bank harmless from any loss, cost or expense incurred by it as a result of:

 

(i)                                     any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(ii)                                  any failure by the Borrower (for a reason other than the failure of any Bank to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

 

(iii)                               any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.27;

 

including any loss, cost or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained.  The Borrower shall also pay any customary administrative fees charged by such Bank in connection with the foregoing.  For purposes of calculating amounts payable by the Borrower to the Banks under this Section 3.6, each Bank shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank Eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

 

(g)                                  If any Bank requests compensation under this Section 3.6, then such Bank shall, if requested by the Borrower, use commercially reasonable efforts to designate another Lending Office for any Loan or Letter of Credit affected by such event.

 

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3.7                               Late Payments/Default Interest.

 

If any installment of principal, interest or fee or any other amount payable to the Banks under any Loan Document is not paid when due, it shall thereafter bear interest at a fluctuating interest rate per annum at all times (whether before or after judgment ) equal to the sum of the Base Rate plus the Base Rate Spread plus 2% (the “Default Rate”), provided however that, subject to the following sentence, principal, interest or other amounts due with respect to Eurodollar Rate Loans shall bear interest at a fluctuating rate per annum at all times equal to the sum of the Eurodollar Rate plus the Eurodollar Rate Spread plus 2%; in each case, to the extent permitted by applicable Law, until paid in full (whether before or after judgment).  Upon and during the continuance of any Event of Default under Section 9.1(j), the Obligations shall automatically bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate, to the extent permitted by applicable Law, until no Event of Default exists (whether before or after judgment).

 

3.8                               Computation of Interest and Fees.

 

All computations of interest for Base Rate Loans when the Base Rate is determined by Citi’s “prime rate” shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of interest and fees hereunder shall be calculated on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day and excluding the last day), which results in greater interest than if a year of 365 days were used.  Any Loan that is repaid on the same day on which it is made shall bear interest for one day.

 

3.9                               Holidays.

 

If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

3.10                        Payment Free of Taxes.

 

(a)                                 Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Taxes, except as required by applicable Law.  If the Borrower shall be required (as determined in the good faith discretion of the applicable withholding agent) by applicable Law to deduct and withhold any Tax from any such payment, then

 

(i)                                     if such Tax is an Indemnified Tax, then the sum payable shall be increased as necessary so that after making all required deductions of Indemnified Taxes (including deductions and withholdings applicable to additional sums payable under this Section) the Recipient receives an amount equal to the sum it would have received had no such deductions been made,

 

(ii)                                  the Borrower or Administrative Agent, as applicable, shall make such deductions, and

 

(iii)                               the Borrower or Administrative Agent, as applicable, shall timely pay the full amount deducted to the relevant Governmental Agency in accordance with applicable Law.

 

(b)                                 Payment of Other Taxes by the Borrower.  The Borrower shall timely pay any Other Taxes to the relevant Governmental Agency in accordance with applicable Law, or at the option of 

 

46

 

the Administrative Agent timely reimburse it for its payment in accordance with applicable Law of any Other Taxes.

 

(c)                                  Indemnification by the Borrower.  Without duplication of Section 3.10(a), the Borrower shall indemnify each Recipient within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Agency.  A certificate as to the amount of such payment or liability, together with reasonable supporting documentation, if any, delivered to the Borrower by a Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Bank, shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments.  As soon as practicable after any payment of Taxes by the Borrower to a Governmental Agency, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Agency evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                  Status of Banks.  Any Bank that is entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), prior to the date on which such Bank becomes a Bank under this Agreement, and at the time or times prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Bank, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Bank is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.10(e)(1)(i)-(iv), Section 3.10(e)(2) and Section 3.10(e)(3) below) shall not be required if in the Bank’s reasonable judgment such completion, execution or submission would subject such Bank to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Bank.  Without limiting the generality of the foregoing,

 

(1)                                 any Foreign Bank shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

(i)                                     duly executed originals of IRS Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

 

(ii)                                  duly executed originals of IRS Form W-8ECI,

 

(iii)                               in the case of a Foreign Bank claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate (a “U.S. Tax Compliance Certificate”) substantially in the form of Exhibit H-1 to the effect that such Foreign Bank is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent 

 

47

 

shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly executed originals of IRS Form W-8BEN,

 

(iv)                              duly executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that, if the Foreign Bank is a partnership and one or more direct or indirect partners of such Foreign Bank are claiming the portfolio interest exemption, such Foreign Bank may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner, and

 

(v)                                 any other form or certificate prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made;

 

(2)                                 if a payment made to a Bank under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if such Bank were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Bank has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

(3)                                 each Bank that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Bank becomes a Bank under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent) duly completed originals of IRS Form W-9 (or any successor form) certifying that such Bank is exempt from U.S. federal backup withholding tax.

 

Each Bank agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall promptly update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(f)                                   Treatment of Certain Refunds.  If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made by the Borrower under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of such Recipient, and without interest (other than any interest paid by the relevant Governmental Agency with respect to such refund), provided that, the Borrower, upon the request of the Recipient, agrees to repay the amount paid over to the Borrower pursuant to this Section 3.10(f) (plus any penalties, interest or other charges imposed by the relevant Governmental Agency) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Agency.  Notwithstanding anything to the contrary in this Section 3.10(f), in no event will the Recipient be required to pay any amount to the Borrower pursuant to this Section 3.10(f) the payment of which would 

 

48

 

place the Recipient in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This Section 3.10(f) shall not be construed to require the Recipient to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

 

3.11                        Funding Sources.

 

Except as otherwise provided in Section 3.6(g), nothing in this Agreement shall be deemed to obligate any Bank to obtain the funds for its share of any Loan in any particular place or manner or to constitute a representation by any Bank that it has obtained or will obtain the funds for its share of any Loan in any particular place or manner.

 

3.12                        Failure to Charge or Making of Payment Not Subsequent Waiver.

 

Any decision by any Bank not to require payment of any fee or costs, or to reduce the amount of the payment required for any fee or costs, or to calculate any fee or any cost in any particular manner, shall not limit or be deemed a waiver of any Bank’s right to require full payment of any fee or costs, or to calculate any fee or any costs in any other manner.  Any decision by the Borrower to pay any fee or costs shall not limit or be deemed a waiver of any right of the Borrower to protest or dispute the payment amount of such fee or costs.

 

3.13                        Time and Place of Payments; Evidence of Payments; Application of Payments.

 

All payments to be made by the Borrower shall be made without conditions or deduction for any counterclaim, defense, recoupment or setoff.  The amount of each payment hereunder, under the Notes or under any Loan Document shall be made to the Administrative Agent at the Administrative Agent’s Office, for the account of each of the Banks or the Administrative Agent, as the case may be, in lawful money of the United States of America without deduction, offset or counterclaim and in immediately available funds on the day of payment (which must be a Business Day).  All payments of principal received after 1:00 p.m., New York time, on any Business Day, shall be deemed received on the next succeeding Business Day for purposes of calculating interest thereon.  The amount of all payments received by the Administrative Agent for the account of a Bank shall be promptly paid by the Administrative Agent to that Bank in immediately available funds.  Each Bank shall keep a record of Advances made by it and payments of principal with respect to each Note, and such record shall be presumptive evidence of the principal amount owing under such Note; provided that, failure to keep such record shall in no way affect the Obligations of the Borrower.  Prior to the Maturity Date or an acceleration of the maturity of the Loans, payments under the Loan Documents shall be applied first to amounts owing under the Loan Documents other than the principal amount of and accrued interest on the Loans and the Borrower’s obligations with respect to Letter of Credit Usage, second to accrued interest on the Loans, third, to the principal amount of the Loans and fourth to the Borrower’s Obligations with respect to Letter of Credit Usage then due and owing.  Following the Maturity Date or an acceleration of the maturity of the Loans, payments and recoveries under the Loan Documents shall be applied in a manner designated in Section 9.2(e).  All payments with respect to principal and interest shall be applied ratably in accordance with the Pro Rata Shares.

 

3.14                        Administrative Agent’s Right to Assume Payments Will be Made.

 

Unless the Borrower or any Bank has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Bank, as the case may be, will not make such payment, the Administrative Agent may assume that the 

 

49

 

Borrower or such Bank, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

 

(a)                                 if the Borrower failed to make such payment, each Bank shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Bank in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Bank to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and

 

(b)                                 if any Bank failed to make such payment, such Bank shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate from time to time in effect.  If such Bank pays such amount to the Administrative Agent, then such amount shall constitute such Bank’s Advance included in the applicable Loan.  If such Bank does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Advance.  Nothing herein shall be deemed to relieve any Bank from its obligation to fulfill its Pro Rata Share of the Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Bank as a result of any default by such Bank hereunder.

 

A notice of the Administrative Agent to any Bank or the Borrower with respect to any amount owing under this Section 3.14 shall be conclusive, absent manifest error.

 

3.15                        Survivability.

 

All of the Borrower’s obligations under Sections 3.6 and 3.10 hereof shall survive termination of the Commitments and repayment of all other Obligations hereunder.

 

3.16                        Bank Calculation Certificate.

 

Any request for compensation pursuant to Section 3.6 shall be accompanied by a statement of an officer of the Bank requesting such compensation and describing the methodology used by such Bank in calculating the amount of such compensation, which methodology may consist of any reasonable averaging and attribution.

 

3.17                        Designation of a Different Lending Office.

 

If any Bank requests compensation under Sections 3.6(a) through 3.6(e), or the Borrower is required to pay any additional amount to any Bank or any Governmental Agency for the account of any Bank pursuant to Section 3.10, then such Bank shall use reasonable efforts to designate a different Lending Office for funding or booking its Advances hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Bank, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 3.6(a) through 3.6(e) or Section 3.10, as the case may be, in the future, and (ii) in each case, would not subject such Bank to any unreimbursed cost or expense and would not otherwise be disadvantageous to such 

 

50

 

Bank.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Bank in connection with any such designation or assignment.

 

ARTICLE IV.
 REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Banks that:

 

4.1                               Existence and Qualification; Power; Compliance with Law.

 

The Borrower is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware, and its certificate of incorporation does not provide for the termination of its existence.  The Borrower is duly qualified or registered to transact business as a foreign corporation in the State of Florida, and in each other jurisdiction in which the conduct of its business or the ownership of its properties makes such qualification or registration necessary, except where the failure so to qualify or register would not constitute a Material Adverse Effect.  The Borrower has all requisite corporate power and authority to conduct its business, to own and lease its Properties and to execute, deliver and perform all of its obligations under the Loan Documents.  All outstanding shares of capital stock of the Borrower are duly authorized, validly issued, fully paid, non-assessable, and were issued in compliance with all applicable state and federal securities Laws, except where the failure to so comply would not constitute a Material Adverse Effect.  The Borrower is in compliance with all Laws and other legal requirements applicable to its business the violation of which would have a Material Adverse Effect, and has obtained all authorizations, consents, approvals, orders, licenses and permits (collectively, “Authorizations”) from, and has accomplished all filings, registrations and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business, except where the failure so to obtain Authorizations, or to comply with, file, register, qualify or obtain exemptions would not constitute a Material Adverse Effect.

 

4.2                               Authority; Compliance with Other Instruments and Government Regulations.

 

The execution, delivery, and performance by the Borrower, and by each Guarantor Subsidiary of the Borrower, of the Loan Documents to which it is a Party, have been duly authorized by all necessary corporate or partnership action, and do not:

 

(a)                                 require any consent or approval not heretofore obtained of any stockholder, partner, security holder, or creditor of such Party;

 

(b)                                 violate or conflict with any provision of such Party’s charter, certificate or articles of incorporation, bylaws, certificate or articles of organization, operating agreement, partnership agreement or other organizational or governing documents of such Party;

 

(c)                                  result in or require the creation or imposition of any Lien (except to the extent that any Lien is created under this Agreement or is permitted under this Agreement pursuant to Section 6.7);

 

(d)                                 constitute a “transfer of an interest” or an “obligation incurred” that is avoidable by a trustee under Section 548 of the Bankruptcy Code of 1978, as amended, or constitute a “fraudulent transfer” or “fraudulent obligation” within the meaning of the Uniform Fraudulent Transfer Act as enacted in any jurisdiction or any analogous Law;

 

(e)                                  violate any Requirement of Law applicable to such Party; or

 

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(f)                                   result in a breach of or constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement to which such Party or any of its Property is bound or affected with respect to any obligation or obligations aggregating $25,000,000 or more;

 

and neither the Borrower nor any Guarantor Subsidiary of the Borrower is in violation of, or default under, any Requirement of Law, or any indenture, loan or credit agreement described in Section 4.2(f) in any respect that would constitute a Material Adverse Effect.

 

4.3                               No Governmental Approvals Required.

 

Except such as have heretofore been obtained, no Authorization from, or filing, registration, or qualification with, or exemption from any of the foregoing from, any Governmental Agency is or will be required to authorize or permit the execution, delivery and performance by the Borrower or any Guarantor Subsidiary of the Borrower of the Loan Documents to which it is a Party, except where the failure to obtain such Authorization, registration or exemption would not constitute a Material Adverse Effect.

 

4.4                               Subsidiaries.

 

(a)                                 Schedule 4.4 correctly sets forth the names, the form of legal entity, the jurisdictions of organization of all Subsidiaries of the Borrower as of the Closing Date and the identification by the Borrower of each Restricted Subsidiary, Significant Subsidiary, Guarantor Subsidiary, Foreign Subsidiary, Unrestricted Subsidiary, Immaterial Subsidiary and Mortgage Subsidiary of the Borrower, in each case as of the Closing Date.  As of the Closing Date, unless otherwise indicated in Schedule 4.4, all of the outstanding shares of capital stock, or all of the units of equity interest, as the case may be, of each Subsidiary indicated thereon are owned of record and beneficially by the Borrower or one of such Subsidiaries, and all such shares or equity interests so owned were issued in compliance with all state and federal securities Laws and are duly authorized, validly issued, fully paid and non-assessable (other than with respect to required capital contributions to any joint venture in accordance with customary terms and provisions of the related joint venture agreement), except where the failure to so comply would not constitute a Material Adverse Effect, and are free and clear of all Liens, except for Liens permitted under this Agreement.

 

(b)                                 Each Guarantor Subsidiary is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, is duly qualified to do business as a foreign organization and is in good standing as such in each jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification necessary (except where the failure to be so duly qualified and in good standing does not constitute a Material Adverse Effect) and has all requisite power and authority to conduct its business, to own and lease its Properties and to execute, deliver and perform the Loan Documents to which it is a Party.

 

(c)                                  Each Guarantor Subsidiary is in substantial compliance with all Laws and other requirements applicable to its business and has obtained all Authorizations from, and each such Significant Subsidiary has accomplished all filings, registrations, and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business, except where the failure so to obtain Authorizations, or to comply with, file, register, qualify or obtain exemptions does not constitute a Material Adverse Effect.

 

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4.5                               Financial Statements.

 

The Borrower has furnished to each Bank the audited consolidated financial statements of the Borrower and its Restricted Subsidiaries as of December 31, 2012 and for the Fiscal Year then ended.  Such audited financial statements are in accordance with the books and records of the Borrower and its Restricted Subsidiaries, were prepared in accordance with Generally Accepted Accounting Principles consistently applied and fairly present in accordance with Generally Accepted Accounting Principles consistently applied the consolidated financial condition and results of operations of the Borrower and its Restricted Subsidiaries as of the date and for the period covered thereby.

 

4.6                               No Material Adverse Change.

 

Since the date of the financial statement most recently delivered (or required to be delivered) under Section 4.5 or Section 7.1, there has been no material adverse change in the financial condition of the Borrower or its Subsidiaries, taken as a whole.

 

4.7                               Title to Assets.

 

(a)                                 Except with respect to the assets described in Section 4.7(b), the Borrower and its Restricted Subsidiaries have good and valid title to all of the assets reflected in the financial statements described in Section 4.5 as owned by them (other than assets disposed of in the ordinary course of business), free and clear of all Liens other than Liens permitted pursuant to Section 6.7.

 

(b)                                 The Borrower and its Restricted Subsidiaries have good record and marketable title in fee simple to all Developed Lots, Lots Under Development, Land Held for Development, and Model Homes and Units being constructed on Developed Lots included in the Borrowing Base (as set forth in the Borrowing Base Certificate delivered by the Borrower to the Administrative Agent pursuant to Section 8.1(a)(viii) or Section 2.8(a)(ii), as the case may be), free and clear of all Liens (other than Liens permitted pursuant to Section 6.7).

 

4.8                               Intangible Assets.

 

The Borrower and its Guarantor Subsidiaries own, or possess the right to use, all trademarks, trade names, copyrights, patents, patent rights, licenses and other intangible assets that are necessary in the conduct of their businesses as operated, and no such intangible asset, to the actual knowledge of the Borrower, conflicts with the valid trademark, trade name, copyright, patent, patent right or intangible asset of any other Person to the extent that such conflict would constitute a Material Adverse Effect.

 

4.9                               Anti-Terrorism Laws.

 

(a)                                 No Loan Party, none of their Subsidiaries and, to the actual knowledge of the Senior Officers of each Loan Party, none of the respective officers, directors, brokers or agents of such Loan Party or such Subsidiary (i) has violated or is in violation of Anti-Terrorism Laws or (ii) has engaged or engages in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in the “Forty Recommendations” and “Nine Special Recommendations” published by the Organisation for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering.

 

(b)                                 No Loan Party, none of their Subsidiaries and, to the actual knowledge of the Senior Officers of each Loan Party, none of the respective officers, directors, brokers or agents of such 

 

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Loan Party or such Subsidiary that is acting or benefiting in any capacity in connection with the Loans is an Embargoed Person.

 

(c)                                  Except as otherwise authorized by OFAC, no Loan Party, none of their Subsidiaries and, to the actual knowledge of the Senior Officers of each Loan Party, none of the respective officers, directors, brokers or agents of such Loan Party or such Subsidiary acting or benefiting in any capacity in connection with the Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Embargoed Person, (ii) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-Terrorism Law or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

4.10                        Governmental Regulation.

 

(a)                                 Neither the Borrower nor any Guarantor is engaged principally or as one of its important activities in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Borrowings or drawings under any Letter of Credit will be used for any purpose that violates Regulation U of the Board of Governors of the United States Federal Reserve System.

 

(b)                                 Neither the Borrower nor any of the Guarantor Subsidiaries is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

4.11                        Litigation.

 

There are no actions, suits, or proceedings pending or, to the actual knowledge of the Borrower, threatened against or affecting the Borrower or any of its Restricted Subsidiaries or any Property of any of them before any Governmental Agency which would constitute a Material Adverse Effect.  To the actual knowledge of the Borrower, there are no investigations by any Governmental Agency pending or threatened against or affecting the Borrower or any of its Restricted Subsidiaries or any Property of any of them which would constitute a Material Adverse Effect.

 

4.12                        Binding Obligations.

 

Each of the Loan Documents to which the Borrower or any Guarantor Subsidiary of the Borrower is a Party has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of the Borrower or the Guarantor Subsidiary, as the case may be, enforceable against the Borrower or the Guarantor Subsidiary, as the case may be, in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws or by equitable principles relating to the granting of specific performance or other equitable remedies as a matter of judicial discretion.

 

4.13                        No Default.

 

No event has occurred and is continuing that is a Default or an Event of Default.

 

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4.14                        [Intentionally Omitted].

 

4.15                        Tax Liability.

 

The Borrower and its Restricted Subsidiaries have timely filed all federal income Tax returns and all other material Tax returns which are required to be filed or have requested a valid extension thereof, and have paid, or made provision for the payment of, all Taxes which have become due pursuant to said returns or pursuant to any assessment received by the Borrower or any Restricted Subsidiary, except such Taxes, if any, (a) as are being contested in good faith by appropriate proceedings (and with respect to which the Borrower or its Restricted Subsidiary has established adequate reserves for the payment of the same to the extent required by, and in accordance with, Generally Accepted Accounting Principles), or (b) the failure of which to pay will not constitute a Material Adverse Effect.

 

4.16                        [Intentionally Omitted].

 

4.17                        Environmental Matters.

 

To the actual knowledge of the Borrower, the Borrower and its Restricted Subsidiaries are in substantial compliance with all applicable Laws relating to environmental protection where the failure to comply would constitute a Material Adverse Effect.  To the actual knowledge of the Borrower, neither the Borrower nor any of its Restricted Subsidiaries has received any notice from any Governmental Agency respecting the alleged violation by the Borrower or any Restricted Subsidiary of such Laws which would constitute a Material Adverse Effect and which has not been or is not being corrected.

 

4.18                        Disclosure.

 

The information provided by the Borrower to the Banks in connection with this Agreement or any Loan, taken as a whole, has not contained any untrue statement of a material fact and has not omitted a material fact necessary to make the statements contained therein, taken as a whole, not misleading under the totality of the circumstances existing at the date such information was provided and in the context in which it was provided.

 

4.19                        [Intentionally Omitted].

 

4.20                        ERISA Compliance.

 

(a)                                 Except as would not reasonably be expected to have a Material Adverse Effect, each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the actual knowledge of the Borrower, except as would not reasonably be expected to have a Material Adverse Effect, nothing has occurred which would prevent, or cause the loss of, such qualification.  As of the date of this Agreement, neither the Borrower nor any ERISA Affiliate sponsors, or has sponsored within the past 6 years, a Pension Plan, or is a participant, or has participated within the past 6 years, in a Multiemployer Plan.

 

(b)                                 There are no pending or, to the actual knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Agency, with respect to any Plan that would reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or would reasonably be expected to result in a Material Adverse Effect.  No ERISA Event that has resulted or

 

55

 

would reasonably be expected to result in a Material Adverse Effect has occurred or is reasonably expected to occur.

 

4.21                        Solvency.

 

On a consolidated basis, after giving effect to the making of any Loans and the issuance of any Letter of Credit hereunder, the Borrower and its Subsidiaries are Solvent.

 

4.22                        [Intentionally Omitted].

 

4.23                        Tax Shelter Regulations.

 

The Borrower does not intend to treat the Loans or Letters of Credit as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4).  In the event the Borrower determines to take any action inconsistent with such intention, it will promptly notify the Administrative Agent thereof.  Accordingly, if the Borrower so notifies the Administrative Agent, the Borrower acknowledges that one or more of the Banks may treat its Loans or Letters of Credit as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and such Bank or Banks, as applicable, will maintain the lists and other records required by such Treasury Regulation.

 

ARTICLE V.
 AFFIRMATIVE COVENANTS
 (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)

 

As long as any Loan remains unpaid, or any other Obligation remains unpaid, or any portion of the Commitment or any Letter of Credit remains outstanding, the Borrower shall, and shall cause each of its Restricted Subsidiaries to, unless the Administrative Agent (with the approval of the Required Banks) otherwise consents in writing:

 

5.1                               Payment of Taxes and Other Potential Liens.

 

Pay and discharge promptly, all Taxes, assessments, and governmental charges or levies imposed upon the Borrower or any of its Restricted Subsidiaries, upon their respective Property or any part thereof, upon their respective income or profits or any part thereof, except any Tax, assessment, charge, or levy (i) that is not yet past due, or is being contested in good faith by appropriate proceedings, as long as the Borrower or its Restricted Subsidiary has established and maintains adequate reserves for the payment of the same to the extent required by, and in accordance with, Generally Accepted Accounting Principles or (ii) the failure of which to pay would not constitute a Material Adverse Effect.

 

5.2                               Preservation of Existence.

 

Preserve and maintain their respective existence, licenses, rights, franchises, and privileges in the jurisdiction of their formation and all authorizations, consents, approvals, orders, licenses, permits, or exemptions from, or registrations with, any Governmental Agency that are necessary for the transaction of their respective business, and qualify and remain qualified to transact business in each jurisdiction in which such qualification is necessary in view of their respective business or the ownership or leasing of their respective Properties; provided that, (a) the failure to preserve and maintain any particular right, franchise, privilege, authorization, consent, approval, order, license, permit, exemption, or registration, or to qualify or remain qualified in any jurisdiction, that does not constitute a Material Adverse Effect will not constitute a violation of this covenant, and (b) nothing in this Section 5.2 shall prevent any consolidation or merger or disposition of assets permitted by Section 6.3 or shall prevent the termination

 

56

 

of the business or existence (corporate or otherwise) of any Subsidiary of the Borrower which in the reasonable judgment of the management of the Borrower is no longer necessary or desirable including the liquidation of WCI Towers Northeast USA, Inc., First Fidelity Title, Inc., and WCI Communities Rivington, LLC.

 

5.3                               Maintenance of Properties.

 

Maintain, preserve and protect all of their respective real Properties in good order and condition, subject to wear and tear in the ordinary course of business and damage caused by the natural elements, and not permit any waste of their respective real Properties, except that the failure to so maintain, preserve or protect any particular real Property, or the permitting of waste on any particular real Property, where such failure or waste with respect to all real Properties of the Borrower and its Restricted Subsidiaries, in the aggregate, would not constitute a Material Adverse Effect.

 

5.4                               Maintenance of Insurance.

 

Maintain insurance with responsible insurance companies in such amounts and against such risks as in the Borrower’s reasonable business judgment is adequate in light of the Borrower’s and its Restricted Subsidiaries’ size, business, assets and location of operations.

 

5.5                               Compliance with Laws.

 

Comply with all Requirements of Laws (including ERISA, Hazardous Materials Laws, Anti-Terrorism Laws and Regulation U and X issued by the Board of Governors of the Federal Reserve System) noncompliance with which would constitute a Material Adverse Effect, except that the Borrower and its Restricted Subsidiaries need not comply with a Requirement of Law then being contested by any of them in good faith by appropriate procedures, so long as such contest (or a bond or surety posted in connection therewith) operates as a stay of enforcement of any material penalty that would otherwise apply as a result of such failure to comply.

 

5.6                               Inspection Rights.

 

Permit representatives and independent contractors of the Administrative Agent and each Bank to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors and officers, all at the reasonable expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided that, none of the foregoing unreasonably interferes with the normal business operations of the Borrower or any of such Restricted Subsidiaries and that the Banks shall engage in any such inspections on a cooperative basis.

 

5.7                               Keeping of Records and Books of Account.

 

Keep adequate records and books of account fairly reflecting all financial transactions in conformity with Generally Accepted Accounting Principles applied on a consistent basis (except for changes concurred with by the Borrower’s independent certified public accountants) and all applicable requirements of any Governmental Agency having jurisdiction over the Borrower or any of its Restricted Subsidiaries.

 

57

 

5.8                               Use of Proceeds.

 

Use the proceeds of all Loans solely for working capital, land acquisitions, Acquisitions permitted hereunder, the acquisition of any assets used in the Core Businesses (but excluding any assets used solely in connection with the Tower Business) and other general corporate purposes of the Borrower and its Restricted Subsidiaries.

 

5.9                               Subsidiary Guaranty.

 

Cause each of its Guarantor Subsidiaries hereafter formed, acquired or qualifying as a Guarantor Subsidiary, to (a) execute and deliver to the Administrative Agent promptly following such formation, acquisition or qualification a joinder of the Subsidiary Guaranty in the form attached as an exhibit thereto, and (b) deliver to the Administrative Agent documents of the types referred to in clause (v) of Section 8.1(a) and, if requested by the Administrative Agent, favorable opinions of counsel to such Guarantor Subsidiary (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent.  For the avoidance of doubt, any Subsidiary of the Borrower that guarantees the obligations under the Senior Notes and the Senior Note Indenture shall also be a Guarantor Subsidiary hereunder and shall comply with the provisions of this Section 5.9.

 

ARTICLE VI.
 NEGATIVE COVENANTS

 

As long as any Loan remains unpaid, or any other Obligation remains unpaid, or any portion of the Commitment or any Letter of Credit remains outstanding, the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, unless the Administrative Agent (with the approval of the Required Banks) otherwise consents in writing:

 

6.1                               Payment or Prepayment of Subordinated Obligations and Certain Other Obligations.

 

(a)                                 Make any payment with respect to any Subordinated Obligation in violation of the provisions in the instruments governing such Subordinated Obligation; or

 

(b)                                 (i) Make an optional or unscheduled payment or prepayment of any principal (including an optional or unscheduled sinking fund payment), interest or any other amount with respect to any Subordinated Obligation, or (ii) make a purchase or redemption of any Subordinated Obligation; provided, however, that the restrictions set forth in this clause (b) shall not apply if all of the following conditions are met:

 

(i)                                     the Borrower is in compliance with the covenants set forth in Sections 6.9, 6.10 and 6.11 hereof on a pro forma basis after giving effect to such payment, prepayment, purchase or redemption of Subordinated Obligations; and

 

(ii)                                  no Default or Event of Default then exists or would result therefrom.

 

6.2                               Indebtedness of Mortgage Subsidiaries.

 

Notwithstanding anything herein to the contrary, Mortgage Subsidiaries shall not incur any Indebtedness for borrowed money other than Non-Recourse Indebtedness.

 

58

 

6.3                               Merger and Sale of Assets.

 

Merge or consolidate with or into any Person, sell a Material Amount of Assets or liquidate or dissolve the Borrower or any Restricted Subsidiary, except, subject to Section 6.6:

 

(a)                                 a merger of the Borrower into a wholly-owned Restricted Subsidiary of the Borrower that has nominal assets and liabilities, the primary purpose of which is to effect the reincorporation of the Borrower in another state of the United States;

 

(b)                                 merger, consolidation or liquidation of a Subsidiary of the Borrower into the Borrower (with the Borrower as the surviving corporation) or into any other Restricted Subsidiary of the Borrower, provided that, (i) the reduction in the proportionate share of the Borrower and its Restricted Subsidiaries in the total assets of such resulting Subsidiary (after intercompany eliminations) does not constitute a Material Amount of Assets and (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(c)                                  mergers, consolidations, liquidations, or sales of all or substantially all of the assets of a Restricted Subsidiary; provided that, (i) any such transaction does not involve a transfer by the Borrower or its Restricted Subsidiaries of a Material Amount of Assets and (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(d)                                 a merger or consolidation of the Borrower with another Person if (i) no Change in Control results therefrom, (ii) the Borrower does not transfer a Material Amount of Assets measured before the effectiveness of the merger or consolidation to one or more Persons in giving effect to such merger or consolidation, (iii) the Borrower is the surviving Person and (iv) immediately after giving effect to such merger, no Default or Event of Default shall have occurred and be continuing;

 

(e)                                  the sale of inventory (which shall include personal property, real property and interests in real property) in the ordinary course of business;

 

(f)                                   any sale of assets among the Loan Parties and their Restricted Subsidiaries which is in the ordinary course of business or is otherwise in compliance with all other provisions of this Agreement; or

 

(g)                                  the liquidation of WCI Towers Northeast USA, Inc., First Fidelity Title, Inc. and WCI Communities Rivington, LLC.

 

6.4                               Investments and Acquisitions.

 

Make any Acquisition, or enter into an agreement to make any Acquisition, or make or suffer to exist any Investment, other than:

 

(a)                                 Investments in Cash or Cash Equivalents;

 

(b)                                 Loans and advances to directors, employees and officers of the Borrower and its Restricted Subsidiaries for bona fide business purposes not in excess of $2,000,000 (without giving effect to the forgiveness of any such loan) at any one time outstanding;

 

(c)                                  Investments of the Borrower in any of its wholly-owned Restricted Subsidiaries and Investments of any Subsidiary of the Borrower in the Borrower or any of the Borrower’s wholly-owned Restricted Subsidiaries;

 

59

 

(d)                                 Acquisitions of or Investments in Persons engaged primarily in the same businesses as the Borrower and its Restricted Subsidiaries (including Core Businesses and the Tower Business), or in a business reasonably related to such businesses, including electronic commerce and similar activities related to real estate;

 

(e)                                  Acquisitions of or Investments in the Borrower’s own capital stock permitted by Section 6.12;

 

(f)                                   Acquisitions of or Investments in Persons engaged primarily in businesses other than those permitted by Section 6.4(d), provided that, the aggregate cost of all such Acquisitions and Investments made in any fiscal year does not exceed $10,000,000;

 

(g)                                  Investments in Restricted Subsidiaries in existence on the Closing Date or other Investments in existence on the Closing Date and disclosed on Schedule 6.4;

 

(h)                                 Investments received in connection with the settlement of a bona fide dispute with another Person;

 

(i)                                     Investments in Unrestricted Subsidiaries, subject to the limitations set forth in Section 6.17 and in an amount not to exceed $15,000,000 in the aggregate; provided that such limitations shall not apply to Investments in Unrestricted Subsidiaries as of the Closing Date listed on Schedule 6.4; and

 

(j)                                    advances, Loans, rebates and extensions of credit (including the creation of receivables) to suppliers, customers and vendors, and performance and completion guarantees, in each case in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof, provided that, the aggregate amount of any such Investments at any one time does not exceed $25,000,000;

 

but in all events, subject to the restrictions of Section 6.14.

 

For purposes of compliance with this Section, in the event that any Acquisition or Investment meets the criteria set forth in more than one of clauses (a) through (j) of this Section, the Borrower, in its sole discretion, may classify or reclassify such Acquisition or Investment in any manner that complies with this Section and such Acquisition or Investment shall be treated as having been permitted pursuant to only one of the clauses of this Section.

 

6.5                               Burdensome Agreements.

 

Enter into any Contractual Obligation that limits the ability (i) of any Restricted Subsidiary to make Distributions to the Borrower or any Subsidiary Guarantor or to otherwise transfer property to the Borrower or any Subsidiary Guarantor or (ii) of any Restricted Subsidiary to guarantee the Indebtedness of the Borrower; provided however that the foregoing restrictions shall not apply to (x) restrictions imposed by Law or this Agreement, (y) customary restrictions and conditions contained in agreements relating to a sale of a Subsidiary or all or substantially all of its assets pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder and (z) customary provisions in leases, partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer or encumbrance of leasehold interests or ownership interests in such partnership, limited liability company, joint venture or similar Person.

 

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6.6                               Change in Business.

 

Engage in any business other than the businesses as now conducted by the Borrower or its Subsidiaries (including the Core Businesses), and any business reasonably related to such businesses, other than businesses in which the Borrower and its Subsidiaries have invested to the extent permitted pursuant to Section 6.4(f); provided, however, that the Borrower and its Subsidiaries shall be permitted to engage in the Tower Business.

 

6.7                               Liens and Negative Pledges.

 

Create, incur, assume, or suffer to exist, any Lien of any nature upon or with respect to any of their respective Properties, whether now owned or hereafter acquired, or enter or suffer to exist any Contractual Obligation wherein the Borrower or any of its Restricted Subsidiaries agrees not to grant any Lien on any of their Properties, except:

 

(a)                                 Liens and Contractual Obligations existing on the date hereof and described in Schedule 6.7, provided that, the obligations secured by such Liens and Contractual Obligations are not increased and that no such Lien or Contractual Obligation extends to any Property of the Borrower or any Restricted Subsidiary other than the Property subject to such Lien or Contractual Obligation on the Closing Date;

 

(b)                                 Liens on Property of any Foreign Subsidiary securing Indebtedness of that Foreign Subsidiary, or Contractual Obligations of any Foreign Subsidiary restricting the grant of any Lien on the Property of such Foreign Subsidiary;

 

(c)                                  Liens on Property securing Indebtedness of the Borrower or any of its Restricted Subsidiaries, or Contractual Obligations restricting the grant of any Lien on Property where such Property secures Indebtedness incurred for the purposes of acquiring and/or developing such Property, provided that, such Indebtedness is included in “Borrowing Base Indebtedness” for the purpose of calculating the Borrowing Base Availability;

 

(d)                                 Liens or Contractual Obligations that may exist from time to time under the Loan Documents;

 

(e)                                  Liens or Contractual Obligations consisting of a Capital Lease covering personal Property entered into in the ordinary course of business;

 

(f)                                   Liens and Contractual Obligations that are Permitted Encumbrances;

 

(g)                                  attachment, judgment and other similar Liens arising in connection with court proceedings; provided that, in the case of such Liens securing claims that exceed $25,000,000 in the aggregate over the amount of any insurance proceeds reasonably expected to be received, the execution or enforcement of such Liens are effectively stayed and the claims secured thereby are being contested in good faith by appropriate proceedings timely commenced and diligently prosecuted;

 

(h)                                 Liens on any asset of any Person, or Contractual Obligations of such Person restricting the grant of any Lien on such asset of such Person, in each case existing at the time such Person becomes a Subsidiary and not created in contemplation of such event;

 

(i)                                     Liens on any asset of any Person, or Contractual Obligations of such Person restricting the grant of any Lien on such asset of such Person, in each case existing at the time such

 

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Person is acquired by or merged or consolidated with or into the Borrower or any of its Restricted Subsidiaries and not created in contemplation of such event;

 

(j)                                    Liens on any asset, or Contractual Obligations restricting the grant of any Lien on such asset, in each case existing prior to the acquisition thereof by the Borrower or any of its Restricted Subsidiaries and not created in contemplation of such acquisition;

 

(k)                                 Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section, provided that, such Indebtedness is not increased and is not secured by additional assets;

 

(l)                                     Liens or Contractual Obligations arising in the ordinary course of business which do not secure any obligation in an amount exceeding $15,000,000 in the aggregate, and do not in the aggregate materially detract from the value of the assets covered by such Liens or materially impair the use thereof in the operation of the Borrower’s business;

 

(m)                             any Contractual Obligations restricting the grant of any Lien; provided that, as of any date of determination, such Contractual Obligations do not (x) prohibit first priority, perfected Liens on Properties of the Borrower and the Guarantor Subsidiaries in favor of the Administrative Agent and the Banks to secure the Obligations then outstanding and determinable (other than unasserted or contingent indemnification or reimbursement Obligations) as of such date, or (y) require that holders of any indebtedness receive Liens ranking senior or pari passu to Liens granted on collateral in favor of the Administrative Agent and the Banks to secure the Obligations then outstanding and determinable (other than unasserted or contingent indemnification or reimbursement Obligations) as of such date;

 

(n)                                 assessment district or similar Liens in connection with municipal financings;

 

(o)                                 a Contractual Obligation wherein the Borrower or any of its Restricted Subsidiaries agrees to grant any Lien on any of their Properties, if such Contractual Obligation provides for the grant of a Lien on a pari passu basis in favor of the Administrative Agent for the benefit of the Banks with respect to the Obligations and in favor of the holders of such other Indebtedness (other than Subordinated Obligations), if any, as the Borrower designates (and the Borrower shall, as soon as reasonably possible, provide to the Banks a copy of any such Contractual Obligation);

 

(p)                                 Liens on Property of a Joint Venture permitted under Section 6.4 and 6.14;

 

(q)                                 Liens securing Non-Recourse Indebtedness of the Borrower and any Restricted Subsidiary; provided that, such Liens apply only to (a) the property whose acquisition (direct or indirect, including through the purchase of Equity Interests of the Person owning such property) was financed, in whole or in part, out of the net proceeds of such Non-Recourse Indebtedness within 180 days after the incurrence of such Non-Recourse Indebtedness and (b) assets directly related thereto or derived therefrom, such as proceeds (including insurance proceeds), products, rents, and profits thereof, fixtures thereon and improvements and accessions thereto;

 

(r)                                    Liens securing obligations of the Borrower or any Restricted Subsidiary to any third party in connection with PAPAs, any option, repurchase right or right of first refusal to purchase real property granted to the master developer or the seller of real property that arises as a result of the non-use or non-development of such real property by the Borrower or any Restricted Subsidiary and joint development agreements with third parties to perform and/or pay for or reimburse the costs of construction and/or development related to or benefiting property (and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and

 

62

 

products therefrom) of the Borrower or any Restricted Subsidiary and property belonging to such third parties, in each case entered into in the ordinary course of business; provided that, such Liens do not at any time encumber any property, other than the property (and additions, accessions, improvements and replacements and customary deposits in connection therewith and proceeds and products therefrom) financed by such Indebtedness and the proceeds and products thereof;

 

(s)                                   Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; provided however, that such bankers’ acceptances do not constitute Indebtedness;

 

(t)                                    Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents, goods covered thereby and other assets relating to such letters of credit and products and proceeds thereof;

 

(u)                                 (i) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Borrower or any Restricted Subsidiary, in each case granted in the ordinary course of business (as determined in good faith by the Borrower) in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness; (ii) Liens arising under Article 2 or Article 4 of the UCC and banker’s Liens and rights of set-off, revocation, refund or chargeback or other similar Liens in connection with account control agreements in favor of banks or other financial institutions; and (iii) Liens arising under Article 2 or Article 4 of the UCC and banker’s Liens and rights of set-off, revocation, refund or chargeback or other similar Liens in connection with account control agreements in favor of banks or other financial institutions;

 

(v)                                 Liens arising from filing Uniform Commercial Code financing statements regarding leases;

 

(w)                               Liens consisting of restrictions and easements in connection with an acquisition permitted under Section 6.4(d) or (f); provided that, such Liens were not incurred in contemplation or anticipation of such acquisition;

 

(x)                                 Liens on cash pledged to secure deductibles, retentions and other obligations to insurance providers in the ordinary course of business (as determined in good faith by the Borrower);

 

(y)                                 Liens on cash collateral including deposits supporting performance bonds and financial bonds;

 

(z)                                  Liens incurred in the ordinary course of business (as determined in good faith by the Borrower) as security for the obligations of the Borrower and its Restricted Subsidiaries with respect to indemnification in respect of title insurance providers or surety bond providers; and

 

(aa)                          Liens on the equity interests of an Unrestricted Subsidiary to secure Indebtedness of such Unrestricted Subsidiary.

 

For purposes of compliance with this Section:  (x) in the event that any Lien or Contractual Obligation meets the criteria set forth in more than one of clauses (a) through (aa) of this Section, the Borrower, in its sole discretion, may classify or reclassify such Lien or Contractual Obligation in any manner that

 

63

 

complies with this Section and such Lien or Contractual Obligation shall be treated as having been permitted pursuant to only one of the clauses of this Section; and (y) any Indebtedness secured by a Lien may be divided and classified among more than one of the clauses of this Section.

 

6.8                               Transactions with Affiliates.

 

Enter into any transaction of any kind with any Affiliate of the Borrower other than (a) a transaction that results in Subordinated Obligations, (b) a transaction between or among the Borrower and/or its Restricted Subsidiaries, (c) a transaction that has been authorized by the board of directors or a committee established by the board of directors of the Borrower with the favorable vote of a majority of the directors who have no financial or other interest in the transaction or by the vote of a majority of the outstanding shares of capital stock of the Borrower, (d) a transaction entered into on an arm’s length basis on terms and under conditions not less favorable to the Borrower or any of its Restricted Subsidiaries than could be obtained from a Person that is not an Affiliate of the Borrower, (e) salary, bonus, equity compensation and other compensation arrangements and indemnification arrangements with directors or officers consistent with past practice or current market practice, or (f) transactions permitted by clauses (b), (c) and (g) of Section 6.4.

 

6.9                               Consolidated Tangible Net Worth.

 

Permit Consolidated Tangible Net Worth to be, at the end of any Fiscal Quarter, less than an amount equal to the sum of (a) $125,681,000 plus (b) an amount equal to 50% of aggregate of the cumulative Consolidated Net Income for each Fiscal Quarter ending after June 30, 2013 and ending as of the last day of such Fiscal Quarter (provided that, there shall be no reduction hereunder in the event of a consolidated net loss in any such Fiscal Quarter) plus (c) an amount equal to 25% of any Consolidated Net Income realized as a result of a reversal of the Deferred Tax Valuation Allowance after June 30, 2013 plus (d) an amount equal to 50% of the cumulative net proceeds received by the Borrower from the issuance of its capital stock after June 30, 2013.

 

6.10                        Consolidated Leverage Ratio.

 

Permit the Consolidated Leverage Ratio to be, at the end of any Fiscal Quarter, greater than 0.60 to 1.00.

 

6.11                        Consolidated Interest Coverage Ratio or Minimum Liquidity.

 

Permit both of the following to occur with respect to any Fiscal Quarter:

 

(a)                                 Liquidity to be less than the sum of Consolidated Interest Incurred for the 12 month period ending on such date; and

 

(b)                                 the Consolidated Interest Coverage Ratio to be, at the end of any Fiscal Quarter, less than:

 

	
For   each Fiscal Quarter ending after the Closing Date through and including the   Fiscal Quarter ending September 30, 2014
    	
 
    	
1.00
    

 

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For   the Fourth Fiscal Quarter of 2014 through and including the Fiscal Quarter   ending September 30, 2015
    	
 
    	
1.25
    
	
 
    	
 
    	
 
    
	
For   the Fiscal Quarter ending December 31, 2015 and each Fiscal Quarter   thereafter
    	
 
    	
1.50
    

 

For the avoidance of doubt, the Borrower must be in breach of both of the covenants in the foregoing clauses (a) and (b) in order to be in breach of this Section 6.11.

 

6.12                        Distributions.

 

(a)                                 Make any Distribution unless (i) the Borrower is in compliance with the covenants set forth in Sections 6.9, 6.10 and 6.11 hereof on a pro forma basis after giving effect thereto and (ii) no Default or Event of Default then exists or would result therefrom.

 

(b)                                 Notwithstanding Section 6.12(a) above, this Section 6.12 does not prohibit:

 

(i)                                     retirements, redemptions, purchases, or other acquisitions for value of capital stock, warrants or rights to acquire shares of capital stock or other equity securities (x) from or with employees, officers or directors or former employees, officer or directors (or their estates or beneficiaries under their estates) of the Borrower and its Restricted Subsidiaries in connection with the Borrower’s equity incentive plans or other benefit plans or upon death, disability, retirement, severance or termination or pursuant to any agreement under which the capital stock or other securities were issued or any employment agreement, (y) in connection with cashless exercises of options, warrants or other rights to acquire capital stock or other equity securities, or (z) in lieu of fractional shares; provided that, the total cash consideration paid by or on behalf of the Borrower and its Restricted Subsidiaries for all such repurchases and exchanges from or with employees (excluding repurchases and exchanges solely to satisfy Tax withholding obligations) does not exceed in the aggregate $5,000,000 in any Fiscal Year;

 

(ii)                                  the purchase of call options or call spreads by the Borrower or its Restricted Subsidiaries in connection with any convertible securities offering of Subordinated Obligations by the Borrower, together with the repurchase of shares of capital stock or settlement for cash (in whole or in part) as may be required by the terms of such options or spreads;

 

(iii)                               a Distribution made (x) to the Borrower or to a Guarantor Subsidiary by any of their respective Subsidiaries or (y) to a wholly-owned Restricted Subsidiary of the Borrower by any Subsidiary that is not a Loan Party;

 

(iv)                              the payment of any Distribution within 60 days after the date of declaration thereof so long as such Distribution was permitted by the provisions of this Agreement at the time of its declaration; or

 

(v)                                 the making of cash payments in connection with any conversion of convertible securities of the Borrower.

 

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6.13                        Amendments.

 

Amend, waive or terminate any provision in any instrument or agreement governing Subordinated Obligations unless such amendment, waiver or termination would not be materially adverse to the interests of the Banks under this Agreement.

 

6.14                        Investment in Subsidiaries and Joint Ventures.

 

Permit, as of the last day of any Fiscal Quarter, the Borrower’s equity interest, computed in accordance with Generally Accepted Accounting Principles consistently applied, in (1) all Restricted Subsidiaries of the Borrower (other than those that are consolidated on the Borrower’s financial statements), (2) all Joint Ventures (other than those that are consolidated on the Borrower’s financial statements) and (3) without duplication of amounts described in clauses (1) and (2), other entities in which the Borrower owns an equity interest that are not consolidated on the Borrower’s financial statements (other than Unrestricted Subsidiaries and de minimis investments in readily marketable securities of publicly traded companies), to exceed 20% of Consolidated Tangible Net Worth in the aggregate as of the last day of such Fiscal Quarter.

 

6.15                        Regulation U.

 

Permit any Loan hereunder to be used to purchase or carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

 

6.16                        Fiscal Year.

 

Change its fiscal year-end to a date other than December 31.

 

6.17                        Designation of Subsidiaries.

 

The board of directors of the Borrower may designate any Subsidiary of the Borrower as an “Unrestricted Subsidiary” hereunder (a “Designation”) only if: (1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; (2) the Borrower would be permitted to make, at the time of such Designation, an Investment pursuant to Section 6.4 in an amount (the “Designation Amount”) equal to the fair market value of the Borrower’s proportionate ownership interest in such Subsidiary on such date; (3) neither the Borrower nor any of its other Subsidiaries (other than Unrestricted Subsidiaries) (x) provides any direct or indirect credit support for any Indebtedness of such Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness) or (y) is directly or indirectly liable for any Indebtedness of such Subsidiary other than, in each case, such Investments as are permitted pursuant to Section 6.4; (4) such Subsidiary is a Person with respect to which neither the Borrower nor any Restricted Subsidiary has any direct or indirect obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and (5) such Subsidiary has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Issuer or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by the Borrower or any Restricted Subsidiary of the Equity Interest of such Unrestricted Subsidiary, which guarantee is not recourse to the Borrower or any Restricted Subsidiary, and except in the case of clauses (4) and (5) of this Section 6.17, to the extent: (i) that the Borrower or such Restricted Subsidiary could otherwise provide such a Subsidiary Guaranty or incur such Indebtedness under this Agreement; and (ii) the satisfaction of such obligation, the provision of such Subsidiary Guaranty and the incurrence of such Indebtedness otherwise would be permitted under this Agreement.

 

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If, at any time after the Designation, any Unrestricted Subsidiary fails to meet the requirements set forth in the preceding paragraph it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of the date and, if the Indebtedness is not permitted to be incurred under this Agreement or the Lien is not permitted under Section 6.7, the Borrower shall be in Default hereunder.

 

Upon designation of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this Section 6.17, such Restricted Subsidiary shall, by execution and delivery of an Officer’s Certificate in form satisfactory to the Administrative Agent, be released from any Subsidiary Guaranty previously made by such Restricted Subsidiary.

 

The Borrower may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”) only if (1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation and (2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Agreement.

 

All Designations and Redesignations must be evidenced by resolutions of the board of directors of the Borrower and an Officer’s Certificate delivered to the Administrative Agent certifying compliance with the foregoing provisions.  Such resolutions and Officer’s Certificate shall be delivered to the Administrative Agent within 45 days after the end of the Fiscal Quarter of the Borrower in which such Designation or Redesignation is made (or, in the case of a Designation or Redesignation made during the last Fiscal Quarter of the Borrower’s Fiscal Year, within 90 days after the end of such Fiscal Year).

 

ARTICLE VII.
 INFORMATION AND REPORTING REQUIREMENTS

 

7.1                               Financial and Business Information of the Borrower and Its Subsidiaries.

 

As long as any Loan remains unpaid or any other Obligation remains unpaid, or any portion of the Commitment or any Letter of Credit remains outstanding, the Borrower shall, unless the Administrative Agent (with the approval of the Required Banks) otherwise consents in writing, deliver to the Administrative Agent and each of the Banks (except as otherwise provided below) at its own expense:

 

(a)                                 As soon as reasonably possible, and in any event within the earlier of (x) 50 days after the close of each Fiscal Quarter of the Borrower (other than the fourth Fiscal Quarter) and (y) five days after such related filing (if any) with the Securities Exchange Commission is due, (i) the consolidated and consolidating balance sheet of the Borrower and its Restricted Subsidiaries as of the end of such Fiscal Quarter, setting forth in comparative form the corresponding figures for the corresponding Fiscal Quarter of the preceding Fiscal Year, if available, and (ii) the consolidated and consolidating statements of profit and loss and the consolidated statements of cash flows of the Borrower and its Restricted Subsidiaries for such Fiscal Quarter and for the portion of the Fiscal Year ended with such Fiscal Quarter, setting forth in comparative form the corresponding periods of the preceding Fiscal Year.  Such consolidated and consolidating balance sheets and statements shall be prepared in reasonable detail in accordance with Generally Accepted Accounting Principles consistently applied (other than those which require footnote disclosure of certain matters), and shall be certified by the principal financial officer of the Borrower, subject to normal year-end accruals and audit adjustments;

 

(b)                                 As soon as reasonably possible, and in any event within the earlier of (x) 120 days after the close of each Fiscal Year of the Borrower and (y) five days after such related filing (if any)

 

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with the Securities Exchange Commission is due, (i) the consolidated and consolidating (in accordance with past practices of the Borrower) balance sheets of the Borrower and its Restricted Subsidiaries as of the end of such Fiscal Year, setting forth in comparative form the corresponding figures at the end of the preceding Fiscal Year and (ii) the consolidated and consolidating (in accordance with past practices of the Borrower) statements of profit and loss and the consolidated statements of cash flows of the Borrower and its Restricted Subsidiaries for such Fiscal Year, setting forth in comparative form the corresponding figures for the previous Fiscal Year.  Such consolidated and consolidating balance sheet and statements shall be prepared in reasonable detail in accordance with Generally Accepted Accounting Principles consistently applied.  Such consolidated balance sheet and statements shall be accompanied by a report and opinion of Ernst & Young LLP or other independent certified public accountants of recognized national standing selected by the Borrower, which report and opinion shall state that the examination of such consolidated financial statements by such accountants was made in accordance with generally accepted auditing standards and that such consolidated financial statements fairly present the financial condition, results of operations and of cash flows of the Borrower and its Restricted Subsidiaries subject to no exceptions as to scope of audit and subject to no other exceptions or qualifications (other than changes in accounting principles in which the auditors concur and other than as a result of current debt maturity) unless such other exceptions or qualifications are approved by the Required Banks in their reasonable discretion.  Such consolidating balance sheet and statements shall be certified by a Senior Officer of the Borrower;

 

(c)                                  Promptly after the receipt thereof by the Borrower, copies of any audit or management reports submitted to it by independent accountants in connection with any audit or interim audit submitted to the board of directors of the Borrower or any of its Restricted Subsidiaries;

 

(d)                                 Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to its stockholders, and copies of all annual, regular and periodic reports that the Borrower may file or be required to file with the Commission; provided that, any of the foregoing reports, statements or communications filed with or furnished to the Commission by the Borrower (and which are available online) shall be deemed to have been delivered by the Borrower under this Section 7.1;

 

(e)                                  Promptly upon a Senior Officer of the Borrower becoming aware of the occurrence of any (i) ERISA Event that would reasonably be expected to result in a Material Adverse Effect or (ii) “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) in connection with any Pension Plan or any trust created thereunder that would reasonably be expected to result in a Material Adverse Effect, in each case, a written notice specifying the nature thereof, what action the Borrower and any of its Restricted Subsidiaries, or to the extent known, any ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken or threatened to be taken by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto;

 

(f)                                   Promptly upon a Senior Officer of the Borrower becoming aware of the existence of a Default or an Event of Default, a written notice specifying the nature and period of existence thereof and what action the Borrower is taking or proposes to take with respect thereto;

 

(g)                                  Promptly upon a Senior Officer of the Borrower becoming aware that the holder of any evidence of Indebtedness (in a principal amount in excess of $25,000,000) of the Borrower or any of its Restricted Subsidiaries has given notice or taken any other action with respect to a default or event of default, a written notice specifying the notice given or action taken by such holder and the nature of such default or event of default and what action the Borrower or such Restricted Subsidiary is taking or proposes to take with respect thereto;

 

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(h)                                 Promptly upon a Senior Officer of the Borrower becoming aware of the existence of any pending or threatened litigation or any investigation by any Governmental Agency that could reasonably be expected to constitute a Material Adverse Effect (provided that, no failure of a Senior Officer to provide notice of any such event shall be the sole basis for any Default or Event of Default hereunder);

 

(i)                                     Prior written notice to the Administrative Agent of any transaction of which any Senior Officer of the Borrower has actual knowledge pursuant to which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Sponsors, becomes the “beneficial owner” (as defined in Rules 13d-3 under the Exchange Act), directly or indirectly, of 25% or more of the total voting power of the Voting Stock of the Borrower;

 

(j)                                    As soon as reasonably possible, and in any event prior to the date that is 45 days after the commencement of each Fiscal Year, deliver to the Administrative Agent the business plan of the Borrower and its Restricted Subsidiaries for that Fiscal Year, together with projections covering the next succeeding Fiscal Year;

 

(k)                                 Promptly following obtaining knowledge thereof by a Senior Officer of the Borrower, written notice to the Administrative Agent of any announcement by the Rating Agencies of any change or possible change in a Debt Rating;

 

(l)                                     Promptly upon a Senior Officer of the Borrower becoming aware that the Borrower or an ERISA Affiliate has become a sponsor of, or participant in, any Pension Plan or Multiemployer Plan, notice of such sponsorship or participation; and

 

(m)                             Such other data and information as from time to time may be reasonably requested by any of the Banks.

 

Documents required to be delivered pursuant to Sections 7.1 and 7.2 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower (or any direct or indirect parent of the Borrower) posts such documents, or provides a link thereto on the website on the Internet at the website address listed on Schedule 11.6; or (ii) on which such documents are posted on the Borrower’s behalf and at the Borrower’s expense on IntraLinks or another relevant website, if any, to which each Bank and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that, the Borrower shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the notices required by Sections 7.1(e), (f), (g) and (h) and the Compliance Certificate required by Section 7.2 to the Administrative Agent (which may be electronic copies delivered via electronic mail).

 

The Borrower hereby acknowledges that (i) the Administrative Agent, the Arrangers or both will make available to the Banks and the Issuing Bank(s) materials or information provided by or on behalf of the Borrower hereunder (collectively, the “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (ii) certain of the Banks may be “public-side” Banks (i.e., Banks that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a “Public Lender”).  The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities:

 

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(i)                                     all the Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof;

 

(ii)                                  by marking the Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Bank(s) and the Banks to treat such the Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such the Borrower Materials constitute Information, they shall be treated as set forth in Section 11.12);

 

(iii)                               all the Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and

 

(iv)                              the Administrative Agent and the Arrangers shall be entitled to treat any the Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any the Borrower Materials “PUBLIC.”

 

7.2                               Compliance Certificate.

 

Concurrently with the delivery of the financial statements described in Section 7.1(a) and (b), the Borrower shall deliver to the Administrative Agent and the Banks, at the Borrower’s sole expense, a Compliance Certificate dated as of the last day of the Fiscal Quarter or Fiscal Year, as the case may be.

 

ARTICLE VIII.
 CONDITIONS

 

8.1                               Initial Advances, Etc.

 

The obligation of each Bank to make the initial Advance to be made by it and of the Issuing Bank(s) to issue the initial Letter of Credit are subject to the following conditions precedent, each of which shall be satisfied prior to the making of the initial Advances (unless all of the Banks, in their sole and absolute discretion, shall agree otherwise):

 

(a)                                 The Administrative Agent shall have received all of the following, each dated as of the Closing Date (unless otherwise specified or unless the Administrative Agent otherwise agrees) and all in form and substance satisfactory to the Administrative Agent and each of the Banks:

 

(i)                                     executed counterparts of this Agreement, sufficient in number for distribution to the Banks and the Borrower;

 

(ii)                                  a Note executed by the Borrower in favor of each Bank requesting a Note, each in a principal amount equal to that Bank’s Pro Rata Share of the Commitment, promptly following the Closing Date;

 

(iii)                               the Subsidiary Guaranty executed by each Subsidiary which is a Guarantor Subsidiary as of the Closing Date;

 

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(iv)                              a customary solvency certificate in substantially the form of Exhibit I;

 

(v)                                 with respect to the Borrower and each Subsidiary which is a Guarantor Subsidiary as of the Closing Date, such documentation as the Administrative Agent may reasonably require to establish the due organization, valid existence and good standing of the Borrower and each such Subsidiary, its qualification to engage in business in each jurisdiction in which it is required to be so qualified, its authority to execute, deliver and perform any Loan Documents to which it is a Party, and the identity, authority and capacity of each Responsible Official thereof authorized to act on its behalf, including certified copies of articles of incorporation and amendments thereto, bylaws and amendments thereto, certificates of good standing or qualification to engage in business, tax clearance certificates, certificates of corporate resolutions, incumbency certificates, and the like;

 

(vi)                              the Opinions of Counsel;

 

(vii)                           an Officer’s Certificate of the Borrower affirming, to the actual knowledge of the certifying Senior Officer, that the conditions set forth in Sections 8.1(c) and 8.1(d) have been satisfied;

 

(viii)                        a Borrowing Base Certificate calculated as of the last day of the Fiscal Quarter ending on June 30, 2013;

 

(ix)                              the financial statements described in Section 4.5;

 

(x)                                 a Compliance Certificate calculated as of the last day of the Fiscal Quarter ending on June 30, 2013; and

 

(xi)                              such other assurances, certificates, documents, consents or opinions relevant hereto as the Administrative Agent may reasonably require.

 

(b)                                 All fees then payable under the letter agreements referred to in Section 3.3 shall have been paid and all other amounts and expenses owed hereunder shall have been paid.

 

(c)                                  The representations and warranties of the Borrower contained in Article IV shall be true and correct in all material respects on and as of the Closing Date.

 

(d)                                 The Borrower and its Restricted Subsidiaries shall be in compliance with all the terms and provisions of the Loan Documents, and no Default or Event of Default shall have occurred and be continuing.

 

(e)                                  The Administrative Agent shall have received satisfactory evidence that the 2017 Notes have been, or concurrently with the Closing Date will be, terminated and all Liens securing obligations under the 2017 Notes have been, or concurrently with the Closing Date are being, released;

 

(f)                                   The Administrative Agent shall have received a copy of the Senior Notes Indenture.

 

(g)                                  The Administrative Agent shall have received all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the PATRIOT Act, that has been requested prior to the Closing Date.

 

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8.2                               Any Advance.

 

The obligations of the Banks to make any Advance are subject to the following conditions precedent:

 

(a)                                 the Administrative Agent shall have received a Loan Notice;

 

(b)                                 the representations and warranties contained in Article IV (other than the representations and warranties contained in Sections 4.4(a) and 4.18) shall be true and correct in all material respects on and as of the date of the Loan as though made on and as of that date (except that the financial statements referred to in Section 4.5(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.1(b) and the financial statements referred to in Section 4.5(b) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.1(a)); it being understood and agreed that any representation or warranty that is qualified as to materiality or “Material Adverse Effect” shall be true and correct in all respects;

 

(c)                                  [Intentionally Omitted];

 

(d)                                 at and after giving effect to such Advance, no Default or Event of Default shall have occurred and be continuing; and

 

(e)                                  after giving effect to such Loan or Letter of Credit, the Total Outstandings shall be less than the Borrowing Base Availability as set forth on the Borrowing Base Certificate provided pursuant to Section 2.8.

 

Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in this Section have been satisfied on and as of the date of the Loan requested thereby.

 

8.3                               Any Letter of Credit.

 

The obligations of an Issuing Bank to issue, renew or increase any Letter of Credit (including any issuance, renewal or increase in any Letter of Credit on the Closing Date) are subject to the following conditions precedent:

 

(a)                                 the Administrative Agent and the Issuing Bank shall have received a Request for Letter of Credit;

 

(b)                                 the representations and warranties contained in Article IV (other than the representations and warranties contained in Sections 4.4(a) and 4.18) shall be true and correct in all material respects on and as of the date of the issuance of the Letter of Credit as though made on and as of that date (except that the financial statements referred to in Section 4.5(a) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.1(b) and the financial statements referred to in Section 4.5(b) shall be deemed to refer to the most recent statements furnished pursuant to Section 7.1(a)); it being understood and agreed that any representation or warranty that is qualified as to materiality or “Material Adverse Effect” shall be true and correct in all respects;

 

(c)                                  [Intentionally Omitted];

 

(d)                                 at and after giving effect to the issuance, renewal or increase of such Letter of Credit, no Default or Event of Default shall have occurred and be continuing; and

 

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(e)                                  after giving effect to such Loan or Letter of Credit, the Total Outstandings shall be less than the Borrowing Base Availability as set forth on the Borrowing Base Certificate provided pursuant to Section 2.8.

 

Each Request for Letter of Credit submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in this Section have been satisfied on and as of the date of the issuance of the Letter of Credit requested thereby.

 

ARTICLE IX.
 EVENTS OF DEFAULT AND REMEDIES UPON EVENTS OF DEFAULT

 

9.1                               Events of Default.

 

There will be a default hereunder if any one or more of the following events (“Events of Default”) occurs and is continuing, whatever the reason therefor:

 

(a)                                 failure to pay any installment of principal on any Loan on the date, or any payment in respect of a Letter of Credit pursuant to Section 2.5, when due; or

 

(b)                                 failure to pay any installment of interest on any of the Loans, or to pay any fee or other amounts due the Administrative Agent or any Bank hereunder, within five (5) Business Days after the date when due; or

 

(c)                                  any failure to comply with Sections 2.8(a), 5.2 (with respect to the Borrower), 5.8, 5.9, any Section of Article VI or 7.1(f); or

 

(d)                                 [Intentionally Omitted]; or

 

(e)                                  the Borrower or any other Party fails to perform or observe any other term, covenant, or agreement contained in any Loan Document on its part to be performed or observed within 30 calendar days after notice by the Administrative Agent of such Default; or

 

(f)                                   any representation or warranty in any Loan Document or in any certificate, agreement, instrument, or other document made or deemed made or delivered, on or after the Closing Date, pursuant to or in connection with any Loan Document proves to have been incorrect when made in any respect material to the ability of the Borrower to duly and punctually perform all of the Obligations; or

 

(g)                                  the Borrower, any of its Significant Subsidiaries which is also a Restricted Subsidiary, or any Guarantor Subsidiary (i) fails to pay the principal, or any principal installment, of any present or future Indebtedness (other than Non-Recourse Indebtedness), or any guaranty of present or future Indebtedness (other than Non-Recourse Indebtedness) on its part to be paid, when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by reason of required prepayment or otherwise in excess of $25,000,000 in the aggregate or (ii) fails to perform or observe any other material term, covenant, or agreement on its part to be performed or observed, or suffers to exist any condition, in connection with any present or future Indebtedness (other than Non-Recourse Indebtedness), or any guaranty of present or future Indebtedness (other than Non-Recourse Indebtedness), in excess of $25,000,000 in the aggregate, if as a result of such failure or such condition any holder or holders thereof (or an agent or trustee on its or their behalf) has the right to declare it due before the date on which it otherwise would become due or has the right to cause a demand such that such Indebtedness be repurchased, prepaid, defeased or redeemed; or

 

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(h)                                 (x) any written guarantee of the indebtedness and liabilities of the Borrower to the Administrative Agent and the Banks or any one or more of them arising under the Loan Documents is asserted to be invalid or unenforceable by any Loan Party (other than following the release of any such guarantee contemplated by Section 10.11 or following the termination of such guarantee in accordance with its terms), or (y) any Loan Document, at any time after its execution and delivery and for any reason other than the agreement of all the Banks, satisfaction in full of all the Obligations or in accordance with its terms, ceases to be in full force and effect or is declared by a court of competent jurisdiction to be null and void, invalid, or unenforceable in any respect; or

 

(i)                                     a final judgment (or judgments) against the Borrower or any of its Significant Subsidiaries is entered for the payment of money in excess of $25,000,000 in the aggregate over the amount of any insurance proceeds reasonably expected to be received and remains unsatisfied, unpaid, undischarged or unbonded without procurement of a stay of execution within 30 calendar days after the issuance of any writ of execution or similar legal process or the date of entry of judgment, whichever is earlier, or in any event at least 5 calendar days prior to the sale of any assets pursuant to such legal process; or

 

(j)                                    the Borrower or any Significant Subsidiary of the Borrower institutes or consents to any proceeding under a Debtor Relief Law relating to it or to all or any part of its Property, or fails generally, or admits in writing its inability, to pay its debts as they mature, or makes a general assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for it or for all or any part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer is appointed without the application or consent of that Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its Property is instituted without the consent of that Person, and continues undismissed or unstayed for 60 calendar days; or

 

(k)                                 the occurrence of one or more ERISA Events if the aggregate liability of the Borrower and its ERISA Affiliates under ERISA as a result thereof would reasonably be expected to result in a Material Adverse Effect; or

 

(l)                                     any determination is made by a court of competent jurisdiction that payment of principal or interest or both is due to the holder of any Subordinated Obligations which would not be permitted by Section 6.1 or that any Subordinated Obligation is not subordinated in accordance with its terms to the Obligations; or

 

(m)                             a Change in Control shall have occurred.

 

9.2                               Remedies Upon Event of Default.

 

Without limiting any other rights or remedies of the Administrative Agent or the Banks provided for elsewhere in this Agreement or the Loan Documents, or by applicable Law or in equity, or otherwise:

 

(a)                                 Upon the occurrence of any Event of Default, and so long as any such Event of Default shall be continuing (other than an Event of Default described in Section 9.1(j) with respect to the Borrower or a Guarantor Subsidiary):

 

(i)                                     the Required Banks may request the Administrative Agent to, and the Administrative Agent thereupon shall, by notice to the Borrower, declare that all commitments to make Advances or issue Letters of Credit, and all other obligations of the Administrative Agent,

 

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any Issuing Bank or the Banks with respect to Advances and Letters of Credit shall be suspended; and

 

(ii)                                  the Required Banks may request the Administrative Agent to, and the Administrative Agent thereupon shall, by notice to the Borrower:

 

(A)                               declare the unpaid principal of all Obligations due to the Banks hereunder and under the Notes, an amount equal to the Letter of Credit Usage, all interest accrued and unpaid thereon, and all other amounts payable to the Banks under the Loan Documents to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without protest, presentment, notice of dishonor, demand, or further notice of any kind, all of which are expressly waived by the Borrower;

 

(B)                               require that the Borrower Cash Collateralize or Letter of Credit Collateralize all outstanding Letters of Credit at 101% of the face amount thereof (excluding any portion of such amount that is already Cash Collateralized by operation of another provision of this Agreement); and

 

(C)                               apply cash collateral or make drawings under irrevocable standby letters of credit delivered pursuant to Section 2.5(g).

 

(b)                                 Upon the occurrence of any Event of Default described in Section 9.1(j) with respect to the Borrower or a Guarantor Subsidiary:

 

(i)                                     all commitments to make Advances or issue Letters of Credit, and all other obligations of the Administrative Agent, any Issuing Bank or the Banks with respect to Advances and Letters of Credit under the Loan Documents shall terminate without notice to or demand upon the Borrower, which are expressly waived by the Borrower; and

 

(ii)                                  (A) the unpaid principal of all Obligations due to the Banks hereunder and under the Notes, an amount equal to the Letter of Credit Usage and all interest accrued and unpaid on such Obligations, and all other amounts payable under the Loan Documents shall be forthwith due and payable, without protest, presentment, notice of dishonor, demand, or further notice of any kind, all of which are expressly waived by the Borrower; and (B) the Administrative Agent may apply cash collateral or make drawings under irrevocable standby letters of credit delivered pursuant to Section 2.5(g).

 

(c)                                  So long as any Letter of Credit shall remain outstanding, any amounts received by the Administrative Agent in respect of the Letter of Credit Usage pursuant to Section 9.2(a)(ii) or 9.2(b)(ii) may be held as cash collateral for the obligation of the Borrower to reimburse the Issuing Banks in event of any drawing under any Letter of Credit (and the Borrower hereby grants to the Administrative Agent for the benefit of the Issuing Banks and the Banks a security interest in such cash collateral).  In the event any Letter of Credit in respect of which the Borrower has deposited cash collateral with the Administrative Agent is canceled or expires, the cash collateral shall be applied first to the reimbursement of the Issuing Banks (or all of the Banks, as the case may be) for any drawings thereunder, second to the payment of any outstanding Obligations of the Borrower hereunder or under any other Loan Document, and third to the Person entitled to such amount.

 

(d)                                 Upon the occurrence of an Event of Default, the Banks and the Administrative Agent, or any of them, may proceed to protect, exercise, and enforce their rights and remedies under the

 

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Loan Documents against the Borrower or any other Party and such other rights and remedies as are provided by Law or equity, without notice to or demand upon the Borrower (which are expressly waived by the Borrower) except to the extent required by applicable Laws.  The order and manner in which the rights and remedies of the Banks under the Loan Documents and otherwise are exercised shall be determined by the Required Banks.

 

(e)                                  All payments received by the Administrative Agent and the Banks, or any of them, after the acceleration of the maturity of the Loans or after the Maturity Date shall be applied first to the costs and expenses (including Attorney Costs) of the Administrative Agent, acting as Administrative Agent, and of the Banks and thereafter paid pro rata to the Banks in the same proportion that the aggregate of the unpaid principal amount owing on the Obligations of the Borrower to each Bank, plus accrued and unpaid interest thereon, bears to the aggregate of the unpaid principal amount owing on all the Obligations, plus accrued and unpaid interest thereon.  Regardless of how each Bank may treat the payments for the purpose of its own accounting, for the purpose of computing the Borrower’s Obligations, the payments shall be applied first, to the costs and expenses of the Administrative Agent, acting as Administrative Agent, payable to the Administrative Agent in its capacity as such hereunder, second, to the payment of accrued and unpaid fees hereunder and interest on all Obligations to the Banks, to and including the date of such application (ratably according to the accrued and unpaid interest on the Loans), third, to the ratable payment of the unpaid principal of all Obligations to the Banks, fourth, to the payment of all other amounts then owing to the Administrative Agent or the Banks under the Loan Documents, and fifth, the balance, if any, to the Borrower or as otherwise required by law.  Subject to Section 9.2(a)(i), no application of the payments will cure any Event of Default or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents or prevent the exercise, or continued exercise, of rights or remedies of the Banks hereunder or under applicable Law unless all amounts then due (whether by acceleration or otherwise) have been paid in full.

 

ARTICLE X.
 THE ADMINISTRATIVE AGENT

 

10.1                        Appointment and Authorization.

 

(a)                                 Each Bank hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Bank or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(b)                                 An Issuing Bank shall act on behalf of the Banks with respect to any Letters of Credit issued by it and the documents associated therewith, and such Issuing Bank shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article X with respect to any acts taken or omissions suffered by such Issuing Bank in connection with Letters of Credit issued by it or

 

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proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in this Article X and in the definition of “Agent-Related Person” included such Issuing Bank with respect to such acts or omissions, and (ii) as additionally provided herein with respect to such Issuing Bank.

 

10.2                        Delegation of Duties.

 

The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

 

10.3                        Liability of Administrative Agent.

 

No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein, as determined in a final, non-appealable judgment of a court of competent jurisdiction, and with respect to the Borrower, except as set forth in Sections 2.5(e) and 2.5(f) and for any failure to comply with Section 11.12), or (b) be responsible in any manner to any Bank or participant for any recital, statement, representation or warranty made by any Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Party or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Bank or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Party or any Affiliate thereof.  No Agent-Related Person shall be under any obligation to take any action that, in its opinion or the opinion of its counsel, may expose any Agent-Related Person to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt, any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Bank in violation of any Debtor Relief Law.

 

10.4                        Reliance by Administrative Agent.

 

(a)                                 The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Party), independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Banks (or such greater number of Banks as may be expressly

 

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required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Banks.

 

(b)                                 For purposes of determining compliance with the conditions specified in Section 8.1, each Bank that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Bank unless the Administrative Agent shall have received notice from such Bank prior to the proposed Closing Date specifying its objection thereto.

 

10.5                        Notice of Default.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Banks, unless the Administrative Agent shall have received written notice from a Bank or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.”  The Administrative Agent will promptly notify the Banks of its receipt of any such notice.  The Administrative Agent shall take such action with respect to such Default or Event of Default as may be directed by the Required Banks in accordance with Article IX; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Banks.

 

10.6                        Credit Decision; Disclosure of Information by Administrative Agent.

 

Each Bank acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Bank as to any matter, including whether Agent-Related Persons have disclosed material information in their possession.  Each Bank represents to the Administrative Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder.  Each Bank also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and the other Parties.  Except for notices, reports and other documents expressly required to be furnished to the Banks by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person.

 

10.7                        Indemnification of Administrative Agent.

 

Whether or not the transactions contemplated hereby are consummated, the Banks shall, ratably in accordance with their respective Pro Rata Shares, indemnify upon demand each Agent-Related Person

 

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(to the extent not reimbursed by or on behalf of any Party and without limiting the obligation of any Party to do so), and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Bank shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person’s own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Banks (or greater number, if so required) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.  Without limitation of the foregoing, each Bank shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower.  The undertaking in this Section shall survive termination of the Commitments, the payment of all other Obligations and the resignation of the Administrative Agent.

 

10.8                        Administrative Agent in its Individual Capacity.

 

The Administrative Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Loan Parties and their respective Affiliates as though the Administrative Agent were not the Administrative Agent or an Issuing Bank hereunder and without notice to or consent of the Banks.  The Banks acknowledge that, pursuant to such activities, the Administrative Agent or its Affiliates may receive information regarding any Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them.  With respect to its Loans, the Administrative Agent shall have the same rights and powers under this Agreement as any other Bank and may exercise such rights and powers as though it were not the Administrative Agent or an Issuing Bank, and the terms “Bank” and “Banks” include the Administrative Agent in its individual capacity.

 

10.9                        Successor Administrative Agent.

 

The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Banks.  If the Administrative Agent resigns under this Agreement, the Required Banks shall appoint from among the Banks a successor administrative agent for the Banks, which successor administrative agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default under Section 9.1(a) or 9.1(j) (which consent of the Borrower shall not be unreasonably withheld or delayed).  If no successor administrative agent is appointed 15 days prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Banks and the Borrower, a successor administrative agent from among the Banks.  Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor administrative agent and the retiring Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article X and Sections 11.3 and 11.10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.  If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring

 

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Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Banks shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Banks appoint a successor agent as provided for above.

 

10.10                 Administrative Agent May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Party, the Administrative Agent (irrespective of whether the principal of any Loan or other Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Banks and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Banks and the Administrative Agent and their respective agents and counsel and all other amounts due the Banks and the Administrative Agent under Sections 2.5, 3.2 and 11.3) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Banks, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.2, 3.3 and 11.3.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Bank or to authorize the Administrative Agent to vote in respect of the claim of any Bank in any such proceeding.

 

10.11                 Guaranty Matters.

 

Each Bank acknowledges and irrevocably consents to the release and discharge of any Guarantor Subsidiary from its obligations under the Subsidiary Guaranty by the Administrative Agent, without any further consent or authorization by the Banks, as a result of a Change in Status of a Guarantor Subsidiary.  The Borrower may notify the Administrative Agent of any Change in Status of a Guarantor Subsidiary by delivering an Officer’s Certificate, which shall include a reasonably detailed description of such Change in Status and a certification that no Default or Event of Default exists or would result from the release of such Guarantor Subsidiary from its obligations under the Subsidiary Guaranty.  Such Officer’s Certificate shall be delivered no later than simultaneously with the delivery of a Compliance Certificate pursuant to Section 7.2 with respect to the fiscal quarter during which such Change in Status occurs.  Upon delivery of such Officer’s Certificate to the Administrative Agent, such Guarantor Subsidiary will be released and discharged from its obligations under the Subsidiary Guaranty, automatically, without any further action by the Administrative Agent or any Bank, and the Subsidiary that is subject to such Change in Status shall

 

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no longer be a Guarantor Subsidiary.  Upon request by the Administrative Agent at any time, the Required Banks will confirm in writing the Administrative Agent’s authority to take any steps to effect the release of any Guarantor Subsidiary from its obligations under the Subsidiary Guaranty pursuant to this Section 10.11.

 

10.12                 Other Agents; Arrangers and Managers.

 

None of the Banks or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “senior managing agent,” “managing agent,” “co-agent,” “joint book manager”, “sole book manager,” “lead manager,” “joint lead arranger”, “sole lead arranger,” “arranger” or “co-arranger” shall have any right, power, obligation, liability, responsibility or duty under this Agreement or any of the other Loan Documents other than, in the case of such Banks, those applicable to all Banks as such.  Without limiting the foregoing, none of the Banks or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Bank.  Each Bank acknowledges that it has not relied, and will not rely, on any of the Banks or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

 

10.13                 Defaulting Banks.

 

(a)                                 If for any reason any Bank becomes a Defaulting Bank, then in addition to the rights and remedies that may be available to the Administrative Agent and the Banks at law or in equity, the Defaulting Bank’s right to participate in the Loan and the Agreement will be suspended during the pendency of the Defaulting Bank’s uncured default, and (without limiting the foregoing) the Administrative Agent may (or at the direction of the Required Banks, shall) withhold from the Defaulting Bank any interest payments, fees, principal payments or other sums otherwise payable to such Defaulting Bank under the Loan Documents until such default of such Defaulting Bank has been cured.  Each Non-Defaulting Bank will have the right, but not the obligation, in its sole discretion, to acquire at par a proportionate share (based on the ratio of its Pro Rata Share of the Commitment to the aggregate amount of the Pro Rata Shares of the Commitments of all of the Non-Defaulting Banks that elect to acquire a share of the Defaulting Bank’s Pro Rata Share of the Commitment) of the Defaulting Bank’s Pro Rata Share of the Commitment, including its proportionate share in the outstanding principal balance of the Loans.  The Defaulting Bank will pay and protect, defend and indemnify the Administrative Agent and each of the other Banks and Issuing Banks against, and hold the Administrative Agent, and each of the other Banks and Issuing Banks harmless from, all claims, actions, proceedings, liabilities, damages, losses, and expenses (including Attorney Costs, and interest at the Base Rate plus 2.0% per annum for the funds advanced by the Administrative Agent or any Banks on account of the Defaulting Bank) they may sustain or incur by reason of or in consequence of the Defaulting Bank’s failure or refusal to perform its obligations under the Loan Documents.  The Administrative Agent may set off against payments due to the Defaulting Bank for the claims of the Administrative Agent and the other Banks against the Defaulting Bank.  The exercise of these remedies will not reduce, diminish or liquidate the Defaulting Bank’s Pro Rata Share of the Commitment (except to the extent that part or all of such Pro Rata Share of the Commitment is acquired by the other Banks as specified above) or its obligations to share losses and reimbursement for costs, liabilities and expenses under this Agreement.  This indemnification will survive the payment and satisfaction of all of the Borrower’s obligations and liabilities to the Banks and the Issuing Banks.  The foregoing provisions of this Section 10.13 are solely for the benefit of the Administrative Agent and the Banks, and may not be enforced or relied upon by the Borrower.

 

(b)                                 Notwithstanding anything to the contrary contained in this Agreement, if any Bank becomes a Defaulting Bank, then, until such time as that Bank is no longer a Defaulting Bank, to the extent permitted by applicable Law:

 

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(i)                                     fees shall cease to accrue on the Commitment of such Defaulting Bank pursuant to Sections 3.2 and 3.3;

 

(ii)                                  the Defaulting Bank’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 11.2;

 

(iii)                               any L/C Advance of such Defaulting Bank not funded by such Defaulting Bank will, upon notice by the Administrative Agent, and subject in any event to the limitation in the first proviso below, automatically be reallocated (effective on the day such Bank becomes a Defaulting Bank) among the Non-Defaulting Banks pro rata in accordance with their respective Commitments; provided that, (a) the sum of the Exposure of each Non-Defaulting Bank may not in any event exceed the Non-Defaulting Bank’s Pro Rata Share of the Commitment as in effect at the time of such reallocation, (b) such reallocation will not constitute a waiver or release of any claim the Borrower, the Administrative Agent, any Issuing Bank or any other Bank may have against such Defaulting Bank including any claim of a Non-Defaulting Bank as a result of such Non-Defaulting Bank’s increased exposure following such reallocation, and (c) neither such reallocation nor any payment by a Non-Defaulting Bank as a result thereof will cause such Defaulting Bank to be a Non-Defaulting Bank;

 

(iv)                              to the extent that any portion (the “unreallocated portion”) of the Defaulting Bank’s L/C Advance cannot be so reallocated, whether by reason of clause (a) of the proviso in clause (iii) above or otherwise, the Borrower will, without prejudice to any right or remedy available to it hereunder or under Law and not later than 1 Business Day after demand by the Administrative Agent, (a) Cash Collateralize the obligations of the Borrower to each applicable Issuing Bank in respect of the unallocated portion of such L/C Advance, as the case may be, in an amount at least equal to 101% of the aggregate amount of the unreallocated portion of such L/C Advance (excluding any portion of such amount that is already Cash Collateralized by operation of another provision of this Agreement), or (b) make other arrangements satisfactory to the Administrative Agent and the Issuing Bank in their sole discretion to protect them against the risk of non-payment by such Defaulting Bank; and

 

(v)                                 any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Bank under this Agreement (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Bank to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Bank to the Issuing Bank hereunder; third, if so determined by the Administrative Agent or requested by the Issuing Bank, to be held as Cash Collateral for future funding obligations of that Defaulting Bank of any participation in any Letter of Credit; fourth, as the Borrower may request (so long as no Default or Event of Default has occurred and is continuing), to the funding of any Loan in respect of which that Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as reasonably determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Bank to fund Loans under this Agreement; sixth, to the payment of any amounts owing to the Banks or the Issuing Bank as a result of any judgment of a court of competent jurisdiction obtained by any Bank or the Issuing Bank against that Defaulting Bank as a result of that Defaulting Bank’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default has occurred and is continuing, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Bank as a

 

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result of that Defaulting Bank’s breach of its obligations under this Agreement; and eighth, to that Defaulting Bank or as otherwise directed by a court of competent jurisdiction; provided that, if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting Bank has not fully funded its appropriate share and (y) such Loans or L/C Borrowings were made at a time when the conditions set forth in Section 8.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Borrowings owed to, all Non-Defaulting Banks on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Borrowings owed to, that Defaulting Bank.  Any payments, prepayments or other amounts paid or payable to a Defaulting Bank that are applied (or held) to pay amounts owed by a Defaulting Bank or to post Cash Collateral pursuant to this Section 10.13(b)(v) shall be deemed paid to and redirected by that Defaulting Bank, and each Bank irrevocably consents hereto.

 

10.14                 No Obligations of the Borrower.

 

Nothing contained in this Article X shall be deemed to impose upon the Borrower any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Banks under any provision of this Agreement, and the Borrower shall have no liability to the Administrative Agent or any of the Banks in respect of any failure by the Administrative Agent or any Bank to perform any of its obligations to the Administrative Agent or the Banks under this Agreement.  Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by the Borrower to the Administrative Agent for the account of the Banks, the Borrower’s obligations to the Banks in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.

 

ARTICLE XI.
 MISCELLANEOUS

 

11.1                        Cumulative Remedies; No Waiver.

 

The rights, powers, and remedies of the Administrative Agent or any Bank provided herein or in any Note or other Loan Document are cumulative and not exclusive of any right, power, or remedy provided by law or equity.  No failure or delay on the part of the Administrative Agent or any Bank in exercising any right, power, or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power, or remedy preclude any other or further exercise of any other right, power, or remedy.  The terms and conditions of Sections 8.1, 8.2, and 8.3 hereof are inserted for the sole benefit of the Banks and the Administrative Agent may (with the approval of the Required Banks) waive them in whole or in part with or without terms or conditions in respect of any Loan, without prejudicing the Banks’ rights to assert them in whole or in part in respect of any other Loans.

 

11.2                        Amendments; Consents.

 

No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Party therefrom, may in any event be effective unless in writing signed by the Required Banks and the Borrower, and then only in the specific instance and for the specific purpose given; and without the approval in writing of all of the affected Banks, no amendment, waiver or consent may be effective:

 

(a)                                 to amend or modify the principal of, or the amount of principal or principal prepayments payable on any Obligation, to increase the Exposure of any Bank without the consent of that

 

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Bank, to decrease the rate of any interest or fee payable to any Bank without the consent of that Bank, or to reduce or waive any interest or other amount payable to any Bank without the consent of that Bank;

 

(b)                                 to postpone any date fixed for any payment of principal of, prepayment of principal of, or any installment of interest on, any Obligation owing to a Bank or any installment of any fee owing to a Bank, or to extend the term of the Commitment without the consent of that Bank;

 

(c)                                  to amend or modify the provisions of the definition in Section 1.1 of “Required Banks” or this Section 11.2, or any provision providing for the ratable or pro rata treatment of the Banks without the consent of each Bank;

 

(d)                                 release any Guarantor Subsidiary from liability under the Subsidiary Guaranty (except as provided below); or

 

(e)                                  to amend or modify any provision of this Agreement or the Loan Documents that expressly requires the consent or approval of all the Banks without the consent of each Bank.

 

Any amendment, waiver or consent pursuant to this Section 11.2 shall apply equally to, and shall be binding upon, all the Banks and the Administrative Agent.  Any amendment, waiver or consent pursuant to this Section 11.2 that permits the sale or other transfer of the capital stock of (or all or substantially all of the assets of) a Guarantor Subsidiary shall automatically release the Guarantor Subsidiary effective concurrently with such sale or other transfer.

 

In addition, no amendment, modification, termination or waiver of any provision (i) of Section 2.5 shall be effective without the written concurrence of Administrative Agent and, with respect to the purchase of participations in Letters of Credit, without the written concurrence of applicable Issuing Banks that have issued an outstanding Letter of Credit or has not been reimbursed for a payment under a Letter of Credit, (ii) of Article X or of any other provision of this Agreement which, by its terms, expressly requires the approval or concurrence of Administrative Agent shall be effective without the written concurrence of Administrative Agent.

 

Notwithstanding anything to the contrary contained in this Section 11.2, if the Administrative Agent and the Borrower shall have jointly identified an obvious error, defect, ambiguity or inconsistency or any error or omission of a technical, administrative or immaterial nature in any provision of any Loan Document, then the Administrative Agent and the Borrower shall be permitted to amend such provision in order to correct the same, and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Banks within five Business Days following their receipt of notice thereof.

 

Anything herein to the contrary notwithstanding, during such period as a Bank is a Defaulting Bank, to the fullest extent permitted by applicable Law, such Bank will not be entitled to vote in respect of amendments and waivers hereunder and the Commitment and the outstanding Loans or other extensions of credit of such Bank hereunder will not be taken into account in determining whether the Required Banks or all of the Banks, as required, have approved any such amendment or waiver (and the definition of “Required Banks” will automatically be deemed modified accordingly for the duration of such period); provided that, any such amendment or waiver that would increase the Exposure or extend the term of the Commitment of such Defaulting Bank, postpone the date fixed for the payment of principal or interest owing to such Defaulting Bank hereunder, reduce the principal amount of any Obligation owing to such Defaulting Bank, reduce the amount of or the rate or amount of interest on any amount owing to such Defaulting Bank or of any fee payable to such Defaulting Bank hereunder, or alter the terms of this proviso, will require the consent of such Defaulting Bank.

 

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11.3                        Costs, Expenses and Taxes.

 

The Borrower shall pay within 30 days after demand (which demand shall be accompanied by an invoice in reasonable detail) the reasonable actual out-of-pocket costs and expenses of the Administrative Agent in connection with the negotiation, preparation, execution, delivery, arrangement, syndication and closing of (a) the Loan Documents and (b) any amendment, waiver or modification of the Loan Documents.  The Borrower shall pay within 30 days after demand the reasonable actual out-of-pocket costs and expenses of the Administrative Agent and each of the Banks and Issuing Banks in connection with the enforcement of any Loan Documents following the occurrence of a Default or an Event of Default, including in connection with any refinancing, restructuring, reorganization (including a bankruptcy reorganization, if such payment is approved by the bankruptcy court or any similar proceeding).  The costs and expenses referred to in the first sentence above (for which the Borrower shall be liable solely with respect to costs and expenses of the Administrative Agent and Arrangers) and the second sentence above (which shall apply to costs and expenses of the Administrative Agent, the Banks and the Issuing Banks) shall include filing fees, recording fees, title insurance fees, appraisal fees, search fees, and other out-of-pocket expenses and Attorney Costs of the Administrative Agent, Arrangers or any of the Banks or Issuing Banks, as the case may be, or independent public accountants and other outside experts retained by the Administrative Agent (provided that, the Borrower shall not be liable under this Section 11.3 for (i) fees and expenses of more than one firm of independent public accountants, or more than one expert with respect to a specific subject matter, at any one time, or (ii) the fees and expenses of more than one firm of outside legal counsel (and one local counsel in each relevant jurisdiction and specialty counsel, if applicable) retained to represent the Administrative Agent, the Banks and the Issuing Banks, but if any of such parties does not consent to such joint representation, the Borrower shall be liable for the fees and expenses of not more than one firm of outside legal counsel (and one local counsel in each relevant jurisdiction and specialty counsel, if applicable) retained to represent the Administrative Agent and also for not more than one additional firm of outside legal counsel retained to otherwise represent one or more of the Banks and Issuing Banks).  Nothing herein shall obligate the Borrower to pay any costs and expenses in connection with an assignment of or participation in a Bank’s Pro Rata Share of a Commitment.  Any amount payable to the Administrative Agent, any Arranger, any Bank, any Issuing Bank or any Participant under this Section 11.3 shall bear interest from the date which is 30 days after the Borrower’s receipt of demand (together with reasonable supporting documentation) for payment at the rate then in effect for Base Rate Loans.

 

11.4                        Nature of Banks’ Obligations.

 

Nothing contained in this Agreement or any other Loan Document and no action taken by the Administrative Agent or the Banks or any of them pursuant hereto or thereto may, or may be deemed to, make the Banks a partnership, an association, a joint venture, or other entity, either among themselves or with the Borrower.  The obligations of the Banks hereunder to make Advances and to fund participations in Letters of Credit are several and not joint or joint and several.  The failure of any Bank to make any Advance or to fund any such participation on any date required hereunder shall not relieve any other Bank of its corresponding obligation to do so on such date, and no Bank shall be responsible for the failure of any other Bank to so make its Advance or purchase its participation.

 

11.5                        Survival of Representations and Warranties.

 

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Bank, regardless of any investigation made by the Administrative Agent or any Bank or on their behalf and notwithstanding that the Administrative Agent

 

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or any Bank may have had notice or knowledge of any Default at the time of the making of any Advance or the issuance of any Letter of Credit, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

11.6                        Notices and Other Communications; Facsimile Copies.

 

(a)                                 Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 11.6(b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)                                     if to the Borrower, the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.6; and

 

(ii)                                  if to any other Bank, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

 

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (x) actual receipt by the relevant party hereto and (y) (A) if sent by hand or overnight courier service, when signed for by or on behalf of the relevant party hereto, (B) if mailed by certified or registered mail, 4 Business Days after deposit in the mails, postage prepaid or (C) if sent by telecopier, when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices delivered through electronic communications to the extent provided in Section 11.6(b) below, shall be effective as provided in Section 11.6(b).

 

(b)                                 Electronic Communications.  Notices and other communications to the Banks and the Issuing Bank(s) hereunder may be delivered or furnished by electronic communication (including e mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that, the foregoing shall not apply to notices to any Bank or the Issuing Bank(s) pursuant to Article II if such Bank or such Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that, approval of such procedures may be limited to particular notices or communications.  Unless the Administrative Agent otherwise prescribes,

 

(i)                                     notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and

 

(ii)                                  notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as

 

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described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)                                  The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Bank, any Issuing Bank or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of the Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Bank, any Issuing Bank or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

(d)                                 Change of Address, Etc.  Each of the Borrower, the Administrative Agent and the Issuing Bank(s) may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Bank may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the Issuing Bank(s).  In addition, each Bank agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record:

 

(i)                                     an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and

 

(ii)                                  accurate wire instructions for such Bank.

 

(e)                                  Reliance by Administrative Agent, Issuing Bank(s) and Banks.  The Administrative Agent, the Issuing Bank(s) and the Banks shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Borrower even if

 

(i)                                     such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or

 

(ii)                                  the terms thereof, as understood by the recipient, varied from any confirmation thereof.

 

The Borrower shall indemnify each Agent-Related Person, each Issuing Bank and each Bank from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

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11.7                        Execution in Counterparts; Facsimile Delivery.

 

This Agreement and any other Loan Document to which the Borrower is a Party may be executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan Document, as the case may be, taken together will be deemed to be but one and the same instrument.  Such counterparts may be sent by telecopy, with the original counterparts to follow by mail or courier.  The execution of this Agreement or any other Loan Document by any party hereto or thereto will not become effective until executed counterparts hereof or thereof (or other evidence of execution satisfactory to the Administrative Agent and the Borrower) have been delivered to the Administrative Agent and the Borrower.  The parties hereto agree and acknowledge that delivery of any signature by facsimile shall constitute execution by such signatory.

 

11.8                        Successors and Assigns.

 

(a)                                 The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Bank and no Bank may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 11.8(b), (ii) by way of participation in accordance with the provisions of Section 11.8(d), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.8(f) or (iv) in accordance with Section 11.27 (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.8(d) and, to the extent expressly contemplated hereby, the Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Any Bank may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this Section 11.8(b), participations in Letters of Credit) at the time owing to it); provided that, (i) except in the case of an assignment of the entire remaining amount of the assigning Bank’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Bank or an Affiliate or Approved Fund of a Bank, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Bank subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 and shall be an integral multiple of $1,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met; (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Bank’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned; (iii) any assignment to an Eligible Assignee other than a Bank or an Affiliate or Approved Fund of a Bank shall be subject to the prior written consent of the Administrative Agent, not to be unreasonably withheld or delayed; (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (treating multiple, simultaneous assignments by or to two or

 

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more Approved Funds as a single assignment) (except that no such processing and recordation fee shall be payable (w) in connection with any assignment to or from Citi or any of its Affiliates or Approved Funds, or (x) in the case of an assignee which is already a Bank or is an Affiliate or Approved Fund of a Bank, or (y) for any assignment which the Administrative Agent, in its sole discretion elects to waive such processing and recordation fee), and the Eligible Assignee, if it shall not be a Bank, shall deliver to the Administrative Agent an Administrative Questionnaire; and (z) any assignment to an Eligible Assignee other than a Bank or an Affiliate or Approved Fund of a Bank shall be subject to the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed), but such consent of the Borrower shall not be required if a Default or an Event of Default has then occurred and is continuing; provided that, the Borrower shall be deemed to have consented to any such Eligible Assignee unless it shall have objected thereto within five (5) Business Days following written request for such consent.  Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.8(c), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Bank under this Agreement, and the assigning Bank thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Bank’s rights and obligations under this Agreement, such Bank shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.6, 3.10, 11.3, 11.6(e) and 11.10 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, the Borrower shall execute and deliver a Note to the assignee Bank.  Any assignment or transfer by a Bank of rights or obligations under this Agreement that does not comply with this Section 11.8(b) shall be treated for purposes of this Agreement as a sale by such Bank of a participation in such rights and obligations in accordance with Section 11.8(d).  Any costs and expenses incurred in connection with an assignment hereunder (including the processing and recordation fee pursuant to Section 11.8(b)(iv)) shall be paid by the Eligible Assignee (except as otherwise provided in Section 11.27).

 

(c)                                  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Banks, and the Commitments of, and principal amounts of the Loans and other Obligations owing to, each Bank pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Banks shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Bank, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Any Bank may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Bank’s rights or obligations under this Agreement (including all or a portion of its Commitment or the Loans (including such Bank’s participations in Letters of Credit) owing to it); provided that, (i) such Bank’s obligations under this Agreement otherwise shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Bank sells such a participation shall provide that such Bank shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided further, that such agreement or instrument may provide that such Bank will not,

 

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without the consent of the Participant, agree to any amendment, waiver or other modification described in Sections 11.2(a), 11.2(b) or 11.2(d) that directly affects such Participant; provided further, that any Bank selling a participation shall endeavor promptly to give the Borrower notice following any such sale, but the failure to give such notice will not give rise to any liability on the part of such Bank or otherwise affect the validity of any such sale.  Subject to clause (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of, and subject to the limitations of, Sections 3.6 and 3.10 to the same extent as if it were a Bank and had acquired its interest by assignment pursuant to Section 11.8(b).  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.15 as though it were a Bank, provided that, such Participant agrees to be subject to Section 11.9 as though it were a Bank.  Each Bank that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that, no Bank shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)                                  A Participant shall not be entitled to receive any greater payment under Sections 3.6 and 3.10 than the applicable Bank would have been entitled to receive with respect to the participation sold to such Participant.

 

(f)                                   Any Bank may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that, no such pledge or assignment shall release such Bank from any of its obligations hereunder or substitute any such pledgee or assignee for such Bank as a party hereto.

 

(g)                                  In connection with any assignment of rights and obligations of any Defaulting Bank hereunder, no such assignment will be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Bank, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Bank to the Administrative Agent, any Issuing Bank and each other Bank hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with such Defaulting Bank’s Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Bank hereunder becomes effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest will be deemed to be a Defaulting Bank for all purposes of this Agreement until such compliance occurs.

 

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(h)                                 If any Issuing Bank resigns as an Issuing Bank it shall retain all the rights and obligation of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Bank and all Obligations with respect thereto (including the right to require the Banks to make Base Rate Loans or fund risk participation in Unreimbursed Amounts pursuant to Section 2.5).

 

11.9                        Sharing of Setoffs.

 

Each Bank severally agrees that if it, through the exercise of the right of setoff, banker’s lien, or counterclaim against the Borrower or otherwise, receives payment of the Obligations due it hereunder and under the Notes that is ratably more than that to which it is entitled hereunder pursuant to Section 3.13 or 9.2(e), then:  (a) the Bank exercising the right of setoff, banker’s lien, or counterclaim or otherwise receiving such payment shall purchase, and shall be deemed to have simultaneously purchased, from the other Bank a participation in the Obligations held by the other Bank and shall pay to the other Bank a purchase price in an amount so that the share of the Obligations held by each Bank after the exercise of the right of setoff, banker’s lien, or counterclaim or receipt of payment shall be in the same proportion that existed prior to the exercise of the right of setoff, banker’s lien, or counterclaim or receipt of payment, and (b) such other adjustments and purchases of participations shall be made from time to time as shall be equitable to ensure that all of the Banks share any payment obtained in respect of the Obligations ratably in accordance with the provisions of Section 3.13 and 9.2(e), provided that, if all or any portion of a disproportionate payment obtained as a result of the exercise of the right of setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from the purchasing Bank by the Borrower or any Person claiming through or succeeding to the rights of the Borrower, the purchase of a participation shall be rescinded and the purchase price thereof shall be restored to the extent of the recovery, but without interest.  Each Bank that purchases a participation in the Obligations pursuant to this Section shall from and after the purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Bank were the original owner of the Obligations purchased.  The Borrower expressly consents to the foregoing arrangements and agrees that, to the extent permitted by Law, any Bank holding a participation in an Obligation so purchased may exercise any and all rights of setoff, banker’s lien or counterclaim with respect to the participation as fully as if the Bank were the original owner of the Obligation purchased.  Notwithstanding anything in this Section 11.9 to the contrary, in the event that any Defaulting Bank exercises any right of setoff, (i) all amounts so set off will be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 10.13(b)(iii) and, pending such payment, will be segregated by such Defaulting Bank from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, the Banks and any other Person entitled to such amounts pursuant to Section 10.13(b)(iii) and (y) the Defaulting Bank will provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Bank as to which it exercised such right of setoff.

 

11.10                 Indemnification by the Borrower.

 

The Borrower shall indemnify and hold harmless each Agent-Related Person, the Arrangers, each Bank, each Issuing Bank and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages (including punitive and exemplary damages), penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs; provided that, such Attorney Costs shall not include the fees and expenses of more than one firm of outside legal counsel (and one local counsel in each relevant jurisdiction and specialty counsel, if applicable, and solely in the case of a conflict of interest, one additional counsel in each applicable material jurisdiction to the affected

 

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Indemnitees) retained to represent the Administrative Agent, the Banks and the Issuing Banks, but if any of such parties does not consent to such joint representation, the Borrower shall be liable for the fees and expenses of not more than one firm of outside legal counsel (and one local counsel in each relevant jurisdiction and specialty counsel, if applicable, and solely in the case of a conflict of interest, one additional counsel in each applicable material jurisdiction to the affected Indemnitees) retained to represent the Administrative Agent and also for not more than one additional firm of outside legal counsel retained to otherwise represent one or more of the Banks and Issuing Banks)) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (c) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto or (d) the use, generation, manufacture, production, storage, release, threatened release, discharge, treatment, transportation, disposal or presence of any Hazardous Materials if such Hazardous Materials are on, under, about or relate to the Borrower’s Property or operations, so long as such liability, obligation, loss, damage (including punitive and exemplary damages), penalty, claim, demand, action, judgment, suit, cost, expense or disbursement arises out of or relates to a Commitment, the use of proceeds of any Loans, any transaction contemplated pursuant to this Agreement, or any relationship or alleged relationship of any Indemnitee to Borrower related to this Agreement (all the foregoing, collectively, the “Indemnified Liabilities”); provided that, such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or material breach of the Loan Documents by such Indemnitee.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date).  All amounts due under this Section 11.10 shall be payable within 10 Business Days after demand therefor.  The agreements in this Section 11.10 shall survive the resignation of the Administrative Agent, the replacement of any Bank, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Obligations.  Notwithstanding the foregoing, indemnification for Indemnified Taxes and Other Taxes shall be governed by, and be subject to the qualifications and requirements set forth in, Section 3.10.  Furthermore, this Section 11.10 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

11.11                 Nonliability of Banks.

 

The relationship between the Borrower and the Banks is, and shall at all times remain, solely that of borrower and lenders, and the Banks and the Administrative Agent neither undertake nor assume any responsibility or duty to the Borrower to review, inspect, supervise, pass judgment upon, or inform the Borrower of any matter in connection with any phase of the Borrower’s business, operations, or condition, financial or otherwise.  The Borrower shall rely entirely upon its own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment, or information supplied to the Borrower by any Bank, the Administrative Agent or any Arranger in connection with any such matter

 

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is for the protection of the Banks, the Administrative Agent and the Arrangers, and neither the Borrower nor any third party is entitled to rely thereon.

 

11.12                 Confidentiality.

 

Each of the Administrative Agent, each Bank and each Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed

 

(a)                                 to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives only for the purposes of administration or enforcement of this Agreement (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential),

 

(b)                                 to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners),

 

(c)                                  to the extent required by applicable Laws or regulations or by any subpoena or similar legal process,

 

(d)                                 to any other party hereto,

 

(e)                                  in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder,

 

(f)                                   subject to an agreement containing a standard of confidentiality substantially the same as that in this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations,

 

(g)                                  with the consent of the Borrower or

 

(h)                                 to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Bank, any Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section 11.12, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Arranger, any Bank or an Issuing Bank on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Each of the Administrative Agent, each Bank and each Issuing Bank acknowledges that (x) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (y)

 

93

 

it has developed compliance procedures regarding the use of material non-public information and (z) it will handle such material non-public information in accordance with applicable Law, including Federal and state securities Laws.  Notwithstanding the foregoing, the provisions set forth in this Section 11.12 shall expire and shall be of no further effect after the first anniversary of the earlier of (a) the Maturity Date and (b) the date on which no Loan remains unpaid, or any other Obligation remains unpaid, or any portion of the Commitment or any Letter of Credit remains outstanding.

 

11.13                 No Third Parties Benefited.

 

This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of the Borrower, the Administrative Agent and the Banks in connection with the Commitment, and is made for the sole benefit of the Borrower, the Administrative Agent and the Banks, and the Administrative Agent’s and the Banks’ successors and assigns.  Except as provided in Sections 11.8 and 11.10, no other Person shall have any rights of any nature hereunder or by reason hereof.

 

11.14                 Other Dealings.

 

Any Bank may, without liability to account to the other Banks, accept deposits from, lend money or provide credit facilities to and generally engage in any kind of banking or other business with the Borrower and its Subsidiaries.

 

11.15                 Right of Setoff — Deposit Accounts.

 

Upon the occurrence of an Event of Default and the acceleration of maturity of the principal indebtedness pursuant to Section 9.2, the Borrower hereby specifically authorizes each Bank in which the Borrower maintains a deposit account (whether a general or special deposit account, other than trust accounts) or a certificate of deposit to setoff any Obligations owed to the Banks against such deposit account or certificate of deposit without prior notice to the Borrower (which notice is hereby waived) whether or not such deposit account or certificate of deposit has then matured.  Nothing in this Section shall limit or restrict the exercise by a Bank of any right to setoff or banker’s lien under applicable Law, subject to the approval of the Required Banks.

 

11.16                 Further Assurances.

 

The Borrower shall, at its expense and without expense to the Banks or the Administrative Agent, do, execute, and deliver such further acts and documents as any Bank or the Administrative Agent from time to time reasonably requires for the assuring and confirming unto the Banks or the Administrative Agent the rights hereby created or intended now or hereafter so to be, or for carrying out the intention or facilitating the performance of the terms of any Loan Document; provided that, this Section 11.16 is not intended to create any affirmative obligation on the part of the Borrower to provide additional collateral security, additional guarantors or other credit enhancement with respect to the Obligations.

 

11.17                 Integration.

 

This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and supersedes all prior agreements, written or oral (including the mandate letter and the summary of terms relating to this Agreement), on the subject matter hereof except as provided in Section 3.3 hereof or otherwise expressly provided herein to the contrary.  The Loan Documents were drafted with the joint participation of the Borrower and the Banks and shall be construed neither against nor in favor of either, but rather in accordance with the fair meaning thereof.

 

94

 

11.18                 Governing Law.

 

(a)                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

(b)                                 SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(c)                                  WAIVER OF VENUE.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

11.19                 Severability of Provisions.

 

Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.

 

11.20                 Headings.

 

Article and section headings in this Agreement and the other Loan Documents are included for convenience of reference only and are not part of this Agreement or the other Loan Documents for any other purpose.

 

95

 

11.21                 Conflict in Loan Documents.

 

To the extent there is any actual irreconcilable conflict between the provisions of this Agreement and any other Loan Document, the provisions of this Agreement shall prevail.

 

11.22                 Waiver of Right to Trial by Jury.

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.23                 Purported Oral Amendments.

 

THE BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.  THE BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF ANY AGENT OR ANY BANK THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THE AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

11.24                 Payments Set Aside.

 

To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Bank, or the Administrative Agent or any Bank exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Bank severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

96

 

11.25                 [Intentionally Omitted].

 

11.26                 USA PATRIOT Act Notice.

 

Each Bank that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Bank) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Bank or the Administrative Agent, as applicable, to identify the Borrower in accordance with the PATRIOT Act.  The Borrower hereby agrees to provide any such information that is reasonably requested by any Bank or the Administrative Agent.

 

11.27                 Replacement of Banks.

 

If (a) any Bank requests compensation under Sections 3.6(a) through 3.6(e), (b) the Borrower is required to pay any additional amount pursuant to Section 3.10, (c) any Bank is a Defaulting Bank, (d) any Bank is a Non-Consenting Bank or (e) any other circumstance exists hereunder that gives the Borrower the right to replace a Bank as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Bank and the Administrative Agent, require such Bank to assign and delegate, without recourse (subject to the last sentence of this Section 11.27, in accordance with and subject to the restrictions contained in, and consents required by, Section 11.8), and such Bank shall assign within three (3) Business Days after the date of such notice, all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee reasonably acceptable to the Administrative Agent that shall assume such obligations, provided that:

 

(a)                                 the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.8(b);

 

(b)                                 such Bank shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.6(f) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and including all amounts due to such Bank under Sections 3.10, 11.3, 11.6(e) and 11.10, but subject to the provisions of clause (c) below);

 

(c)                                  in the case of any such assignment resulting from a claim for compensation under Sections 3.6(a) through 3.6(e) or payments required to be made pursuant to Section 3.10, such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)                                 prior to such assignment, such Bank shall have taken no action under Section 3.17 so as to eliminate the continued need for payment of the amounts owing pursuant to Sections 3.6 and 3.10;

 

(e)                                  such assignment does not conflict with applicable Laws; and

 

(f)                                   no Event of Default shall have occurred and be continuing at the time of such assignment.

 

In the event that a Bank (a “Non-Complying Bank”) does not comply with the requirements of the immediately preceding sentence within three (3) Business Days after receipt of notice to such effect

 

97

 

from the Borrower, each Bank hereby authorizes and directs the Administrative Agent to execute and deliver such documentation as may be required to give effect to an assignment in accordance with Section 11.8 on behalf of such Non-Complying Bank and any such documentation so executed by the Administrative Agent shall be effective for purposes of documenting an assignment pursuant to Section 11.8.

 

In the event that (i) the Borrower or the Administrative Agent has requested that the Banks consent to a departure or waiver of any provisions of the Loan Documents or agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of each affected Bank in accordance with the terms of Section 11.2 and (iii) the Required Banks have agreed to such consent, waiver or amendment, then any Bank who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Bank.”

 

A Bank shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Bank or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

11.28                 No Fiduciary Relationship.

 

The Borrower hereby acknowledges that none of the Administrative Agent, the Banks or their Affiliates has any fiduciary relationship with or duty to the Borrower or any of its Affiliates arising out of or in connection with the Loan Documents, and the relationship between the Administrative Agent, the Banks or any of their Affiliates, on the one hand, and the Borrower or its Affiliates, on the other hand, in connection with the Loan Documents is solely that of debtor and creditor.

 

[Remainder of Page Intentionally Left Blank]

 

98

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
 
    	
WCI   COMMUNITIES, INC.,
    
	
 
    	
 
    	
a   Delaware Corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Russell Devendorf
    
	
 
    	
 
    	
Name:
    	
Russell   Devendorf
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President and Chief Financial Officer
    

 

[Signature Page — Revolving Loan Agreement]

 

 

	
 
    	
 
    	
CITIBANK,   N.A.,

as   Administrative Agent, a Bank and an Issuing Bank
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Marni McManus
    
	
 
    	
 
    	
Name:
    	
Marni   McManus
    
	
 
    	
 
    	
Title:
    	
Managing   Director and Vice President
    

 

[Signature Page — Revolving Loan Agreement]

 

 

	
 
    	
 
    	
JPMORGAN   CHASE BANK, N.A.,

as   a Bank and an Issuing Bank
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mohammad Hasan
    
	
 
    	
 
    	
Name:
    	
Mohammad   Hasan
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

[Signature Page — Revolving Loan Agreement]

 

 

	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   a Bank and an Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ann E. Kenzie
    
	
 
    	
Name:   Ann E. Kenzie
    
	
 
    	
Title:   Vice President
    

 

[Signature Page – Revolving Loan Agreement]

 

 

	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH,
    
	
 
    	
as   a Bank and an Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   William O’Daly
    
	
 
    	
Name:   William O’Daly
    
	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Philipp Horat
    
	
 
    	
Name:   Philipp Horat
    
	
 
    	
Title:   Authorized Signatory
    

 

[Signature Page – Revolving Loan Agreement]

 

 

SCHEDULE 1.1

 

PRO RATA SHARES

 

	
Bank
    	
 
    	
Pro Rata Share
    	
 
    	
Pro Rata Share
   of Commitment
    	
 
    
	
Citibank, N.A.
    	
 
    	
40.000000000
    	
%
    	
$
    	
30,000,000.00
    	
 
    
	
JPMorgan Chase Bank, N.A.
    	
 
    	
30.000000000
    	
%
    	
$
    	
22,500,000.00
    	
 
    
	
Bank of America, N.A.
    	
 
    	
15.000000000
    	
%
    	
$
    	
11,250,000.00
    	
 
    
	
Credit Suisse AG, Cayman Islands Branch
    	
 
    	
15.000000000
    	
%
    	
$
    	
11,250,000.00
    	
 
    
	
TOTAL
    	
 
    	
100.000000000
    	
%
    	
$
    	
75,000,000.00
    	
 
    

 

 

SCHEDULE 4.4

 

SUBSIDIARIES

 

	
Restricted Subsidiaries:
    	
WCI   Communities, LLC
    	
Delaware
    
	
 
    	
WCI Communities Management, LLC
    	
Delaware
    
	
 
    	
WCI Towers Northeast USA, Inc.
    	
Delaware
    
	
 
    	
Watermark Realty Referral, Inc.
    	
Florida
    
	
 
    	
Watermark Realty, Inc.
    	
Delaware
    
	
 
    	
WCI Realty, Inc.
    	
Florida
    
	
 
    	
Pelican Landing Golf Resort Ventures, Inc.
    	
Delaware
    
	
 
    	
Spectrum Eastport, LLC
    	
Delaware
    
	
 
    	
WCI Communities, Rivington, LLC
    	
Delaware
    
	
 
    	
Pelican Landing Golf Resort Ventures
    	
 
    
	
 
    	
Limited Partnership
    	
Delaware
    
	
 
    	
Pelican Landing Timeshare Ventures
    	
 
    
	
 
    	
Limited Partnership
    	
Delaware
    
	
 
    	
Eastport Home & Land Company, LLC
    	
Delaware
    
	
 
    	
First Fidelity Title, Inc.
    	
Delaware
    
	
 
    	
 
    	
 
    
	
Significant Subsidiaries:
    	
WCI   Communities, LLC
    	
 
    
	
 
    	
WCI Communities Management, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
Guarantor Subsidiaries:
    	
WCI   Communities, LLC
    	
 
    
	
 
    	
WCI Communities Management, LLC
    	
 
    
	
 
    	
WCI Towers Northeast USA, Inc.
    	
 
    
	
 
    	
Watermark Realty Referral, Inc.
    	
 
    
	
 
    	
Watermark Realty, Inc.
    	
 
    
	
 
    	
WCI Realty, Inc.
    	
 
    
	
 
    	
Pelican Landing Golf Resort Ventures, Inc.
    	
 
    
	
 
    	
Spectrum Eastport, LLC
    	
 
    
	
 
    	
WCI Communities, Rivington, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
Foreign Subsidiaries:
    	
None
    	
 
    
	
 
    	
 
    	
 
    
	
Unrestricted Subsidiaries:
    	
None
    	
 
    
	
 
    	
 
    	
 
    
	
Immaterial Subsidiaries:
    	
WCI   Towers Northeast USA, Inc.
    	
 
    
	
 
    	
First Fidelity Title, Inc.
    	
 
    
	
 
    	
Watermark Realty Referral, Inc.
    	
 
    
	
 
    	
Watermark Realty, Inc.
    	
 
    
	
 
    	
WCI Realty, Inc.
    	
 
    
	
 
    	
Pelican Landing Golf Resort Ventures, Inc.
    	
 
    
	
 
    	
Spectrum Eastport, LLC
    	
 
    
	
 
    	
WCI Communities, Rivington, LLC
    	
 
    
	
 
    	
Pelican Landing Golf Resort Ventures Limited   Partnership
    	
 
    
	
 
    	
Pelican Landing Timeshare Ventures Limited   Partnership
    	
 
    
	
 
    	
Eastport Home & Land Company, LLC
    	
 
    
	
 
    	
 
    	
 
    
	
Mortgage Subsidiary:
    	
None
    	
 
    

 

 

SCHEDULE 6.4

 

INVESTMENTS

 

Section 6.4(g) - Investments in Restricted Subsidiaries

 

	
WCI   Communities, LLC
    
	
 
    
	
WCI   Communities Management, LLC
    
	
 
    
	
WCI   Towers Northeast USA, Inc.
    
	
 
    
	
Watermark   Realty Referral, Inc.
    
	
 
    
	
Watermark   Realty, Inc.
    
	
 
    
	
WCI   Realty, Inc.
    
	
 
    
	
Pelican   Landing Golf Resort Ventures, Inc.
    
	
 
    
	
Spectrum   Eastport, LLC
    
	
 
    
	
WCI   Communities, Rivington, LLC
    
	
 
    
	
Pelican   Landing Golf Resort Ventures Limited Partnership
    
	
 
    
	
Pelican   Landing Timeshare Ventures Limited Partnership
    
	
 
    
	
Eastport   Home & Land Company, LLC
    
	
 
    
	
First   Fidelity Title, Inc.
    

 

Section 6.4(g) - Other Investments

 

	
Sarasota   National Community Development District Bonds
    	
 
    	
$
    	
24,000,000.00
    	
 
    

 

Section 6.4(i) - Investments in Unrestricted Subsidiaries

 

None.

 

 

SCHEDULE 6.7

 

EXISTING LIENS

 

1.              Contingent liens arising under CDD bonds

 

The obligation to pay principal and interest on the bonds issued by the CDD is allocated to each benefited parcel within the CDD. The CDD imposes liens against the property to secure the unpaid obligation. CDD liens have the priority accorded them by Florida law and such liens may be foreclosed by the CDD in the manner provided by law.  The bonds, including interest and redemption premiums, if any, are typically payable and secured solely from the assessments levied on the property benefited.

 

CDD Outstanding Bond Balance by Issuance as of July 31, 2013

 

	
 
    	
 
    	
A BOND
    	
 
    	
B BOND
    	
 
    	
LIABILITY & OTHER
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
A Bond
   Par
    	
 
    	
A Bond
   Assumed
    	
 
    	
A Bond
   Principal
   Paid
    	
 
    	
A Bond
   Liability
    	
 
    	
B Bond
   Par
    	
 
    	
B Bond
   Redeemed
    	
 
    	
B Bond
   Outstanding
    	
 
    	
B Bond
   Cash
    	
 
    	
Ppd / Accr
   Interest *
    	
 
    	
Total
   Liability
    	
 
    	
Total
   Less Interest
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Bayside
    	
 
    	
(7,660,000
    	
)
    	
6,022,693
    	
 
    	
1,299,656
    	
 
    	
(337,651
    	
)
    	
(7,745,000
    	
)
    	
7,745,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6,189
    	
 
    	
(331,462
    	
)
    	
(337,651
    	
)
    
	
Heron Bay
    	
 
    	
(3,175,000
    	
)
    	
2,896,643
    	
 
    	
—
    	
 
    	
(278,357
    	
)
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
6,173
    	
 
    	
(272,184
    	
)
    	
(278,357
    	
)
    
	
Heron Bay North
    	
 
    	
(6,930,000
    	
)
    	
3,556,889
    	
 
    	
772,495
    	
 
    	
(2,600,616
    	
)
    	
(2,165,000
    	
)
    	
790,000
    	
 
    	
(1,375,000
    	
)
    	
268,326
    	
 
    	
19,529
    	
 
    	
(3,687,761
    	
)
    	
(3,707,290
    	
)
    
	
Pelican Preserve
    	
 
    	
(3,200,000
    	
)
    	
2,784,602
    	
 
    	
73,924
    	
 
    	
(341,473
    	
)
    	
(34,950,000
    	
)
    	
34,950,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
552
    	
 
    	
(340,921
    	
)
    	
(341,473
    	
)
    
	
Sarasota National
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
Tiburon
    	
 
    	
(7,610,000
    	
)
    	
5,302,580
    	
 
    	
—
    	
 
    	
(2,307,420
    	
)
    	
(17,150,000
    	
)
    	
17,150,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
28,294
    	
 
    	
(2,279,126
    	
)
    	
(2,307,420
    	
)
    
	
Venetian
    	
 
    	
(12,910,000
    	
)
    	
9,124,209
    	
 
    	
—
    	
 
    	
(3,785,791
    	
)
    	
(14,785,000
    	
)
    	
14,785,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
57,380
    	
 
    	
(3,728,411
    	
)
    	
(3,785,791
    	
)
    
	
Total
    	
 
    	
(41,485,000
    	
)
    	
29,687,616
    	
 
    	
2,146,075
    	
 
    	
(9,651,309
    	
)
    	
(76,795,000
    	
)
    	
75,420,000
    	
 
    	
(1,375,000
    	
)
    	
268,326
    	
 
    	
118,117
    	
 
    	
(10,639,866
    	
)
    	
(10,757,983
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
A
    	
 
    	
 
    	
 
    	
 
    	
 
    	
B
    	
 
    	
C
    	
 
    	
D
    	
 
    	
A+B+C+D
    	
 
    	
A+B+C
    	
 
    

 

In April 2013, we acquired property (Sarasota National), which was secured by an existing CDD obligation and the related $24.0 million of CDD bonds issued and outstanding. Therefore, we are both an owner of property subject to a CDD obligation as well as the holder of the related CDD bonds.  In accordance with ASC Subtopic 405-20, Extinguishments of Liabilities, (“ASC 405-20”), we accounted for the existing CDD obligation as a debt extinguishment to the extent of our obligation to repay the related CDD bond obligations.  As a result, $23.6 million of $24.0 million existing CDD obligation, which relates to the property owned by us, is not recorded as a CDD obligation on our balance sheet.

 

2.              Any liens securing obligations under the following credit facilities:

 

1)             Stonegate Agreement

2)             Bank of America Letter of Credit Facility

 

 

3.              Existing UCC Financing Statements

 

WCI Communities, Inc., WCI Communities, LLC., & Pelican Landing Golf Resort Ventures Limited Partnership

 

	
 
    	
 
    	
Name
    	
 
    	
Jurisdiction
    	
 
    	
Current Secured
   Party of Record
    	
 
    	
File #s
    	
 
    	
File Date
    	
 
    	
File Type
    	
 
    	
Collateral
   Secured
    	
 
    	
Expiration
   Date
    
	
1.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Textron Financial Corporation
    	
 
    	
30674724
    	
 
    	
02-27-03
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-27-08
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
80644490
    	
 
    	
02-22-08
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
02-22-13
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
30634460
    	
 
    	
02-18-13
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
02-18-18
    
	
2.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
FNF Capital, Inc.
    	
 
    	
40349300
    	
 
    	
02-09-04
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-09-09
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
84061030
    	
 
    	
12-08-08
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
12-08-13
    
	
3.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
FNF Capital, Inc.
    	
 
    	
41588849
    	
 
    	
05-20-04
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
05-20-09
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
84052112
    	
 
    	
12-08-08
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
05-20-14
    
	
4.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Wells Fargo Equipment Finance, Inc.
    	
 
    	
41976739
    	
 
    	
07-14-04
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
07-14-09
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
90284916
    	
 
    	
01-28-09
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
07-14-14
    
	
5.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Textron Financial Corporation
    	
 
    	
53073138
    	
 
    	
09-29-05
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
09-29-10
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0225843
    	
 
    	
6-29-10
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
06-29-15
    
	
6.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
FNF Capital, LLC
    	
 
    	
53317899
    	
 
    	
10-19-05
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
10-19-10
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
03197567
    	
 
    	
09-07-10
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
09-07-15
    
	
7.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Textron Financial Corporation
    	
 
    	
53464527
    	
 
    	
11-08-05
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
11-08-10
    

 

 

	
 
    	
 
    	
Name
    	
 
    	
Jurisdiction
    	
 
    	
Current Secured
   Party of Record
    	
 
    	
File #s
    	
 
    	
File Date
    	
 
    	
File Type
    	
 
    	
Collateral
   Secured
    	
 
    	
Expiration
   Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
02466740
    	
 
    	
07-15-10
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
07-15-15
    
	
8.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
FNF Capital, LLC
    	
 
    	
61082502
    	
 
    	
03-23-06
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
03-23-11
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
10977440
    	
 
    	
03-16-11
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
03-16-16
    
	
9.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
FNF Capital, LLC
    	
 
    	
70755560
    	
 
    	
02-28-07
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-28-12
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20464794
    	
 
    	
02-06-12
    	
 
    	
Continuation
    	
 
    	
Equipment Lease
    	
 
    	
02-06-17
    
	
10.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Modular Space Corporation
    	
 
    	
20083405337
    	
 
    	
10-08-08
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
10-08-13
    
	
11.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Wells Fargo Financial Leasing Inc.
    	
 
    	
20101846009
    	
 
    	
05-26-10
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
05-26-15
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20132533793
    	
 
    	
07-01-13
    	
 
    	
Amendment
    	
 
    	
Restatement of Collateral
    	
 
    	
05-26-15
    
	
*12.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
FL-Secretary of State
    	
 
    	
Robb & Stucky, Ltd., LLLP
    	
 
    	
200808914314
    	
 
    	
08-08-08
    	
 
    	
Original
    	
 
    	
Equipment
    	
 
    	
08-08-13 (may have been continued)
    
	
*13.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
FL-Secretary of State
    	
 
    	
Robb & Stucky, Ltd., LLLP
    	
 
    	
200808914292
    	
 
    	
08-08-08
    	
 
    	
Original
    	
 
    	
Equipment
    	
 
    	
08-08-13 (may have been continued)
    
	
*14.
    	
 
    	
WCI   Communities, Inc.
    	
 
    	
FL-Secretary of State
    	
 
    	
Siemens Financial Services, Inc.
    	
 
    	
200809312040
    	
 
    	
10-07-08
    	
 
    	
Original
    	
 
    	
Equipment
    	
 
    	
10-07-13
    
	
15.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE- Secretary of State
    	
 
    	
Macrolease Corporation
    	
 
    	
20113345686
    	
 
    	
08-29-11
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
08-29-16
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20113890475
    	
 
    	
10-10-11
    	
 
    	
Amendment
    	
 
    	
Equipment Lease
    	
 
    	
08-29-16
    
	
16.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE — Secretary of State
    	
 
    	
Macrolease Corporation
    	
 
    	
20120516973
    	
 
    	
02-09-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-09-17
    

 

 

	
 
    	
 
    	
Name
    	
 
    	
Jurisdiction
    	
 
    	
Current Secured
   Party of Record
    	
 
    	
File #s
    	
 
    	
File Date
    	
 
    	
File Type
    	
 
    	
Collateral
   Secured
    	
 
    	
Expiration
   Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20121675380
    	
 
    	
05-01-12
    	
 
    	
Amendment
    	
 
    	
Equipment Lease
    	
 
    	
02-09-17
    
	
17.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE- Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20121738154
    	
 
    	
05-04-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
05-04-17
    
	
18.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20121905902
    	
 
    	
05-17-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
05-17-17
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
20122462333
    	
 
    	
06-26-12
    	
 
    	
Amendment
    	
 
    	
Equipment Lease
    	
 
    	
06-26-17
    
	
19.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20122018846
    	
 
    	
05-24-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
05-24-17
    
	
20.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20122672089
    	
 
    	
07-11-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
07-11-17
    
	
21.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20122672774
    	
 
    	
07-11-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
07-11-17
    
	
22.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20123747062
    	
 
    	
09-28-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
09-28-17
    
	
23.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE-Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20130518267
    	
 
    	
02-17-13
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-07-18
    
	
24.
    	
 
    	
WCI   Communities, LLC
    	
 
    	
DE- Secretary of State
    	
 
    	
Deere Credit, Inc.
    	
 
    	
20131717371
    	
 
    	
05-06-13
    	
 
    	
Original
    	
 
    	
Equipment and Inventory, attachments, accounts and proceeds
    	
 
    	
05-06-18
    
	
25.
    	
 
    	
Watermark   Realty, Inc.
    	
 
    	
DE — Secretary of State
    	
 
    	
Hewlett-Packard Financial Services Company
    	
 
    	
20120744898
    	
 
    	
2/27/12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
02-27-17
    
	
26.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP
    	
 
    	
DE — Secretary of State
    	
 
    	
Textron Financial Corporation
    	
 
    	
20103445248
    	
 
    	
10/4/10
    	
 
    	
Original
    	
 
    	
Financed equipment
    	
 
    	
10-04-15
    
	
27.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP and
    	
 
    	
DE — Secretary of State
    	
 
    	
PNCEF, LLC
    	
 
    	
20104421214
    	
 
    	
12/14/10
    	
 
    	
Original
    	
 
    	
Leased equipment
    	
 
    	
12-14-15
    

 

 

	
 
    	
 
    	
Name
    	
 
    	
Jurisdiction
    	
 
    	
Current Secured
   Party of Record
    	
 
    	
File #s
    	
 
    	
File Date
    	
 
    	
File Type
    	
 
    	
Collateral
   Secured
    	
 
    	
Expiration
   Date
    
	
 
    	
 
    	
Raptor   Bay Golf
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
28.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP
    	
 
    	
DE — Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20120780199
    	
 
    	
2/29/12
    	
 
    	
Original
    	
 
    	
Leased and financed equipment
    	
 
    	
02-28-17
    
	
29.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP
    	
 
    	
DE — Secretary of State
    	
 
    	
General Electric Capital Corporation
    	
 
    	
20121006891
    	
 
    	
3/15/12
    	
 
    	
Original
    	
 
    	
Leased equipment
    	
 
    	
03-15-17
    
	
30.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP
    	
 
    	
DE- Secretary of State
    	
 
    	
TCF Equipment Finance, Inc.
    	
 
    	
20123838242
    	
 
    	
10-04-12
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
10-04-17
    
	
31.
    	
 
    	
Pelican   Landing Golf Resort Ventures LP and Pelican Landing Golf Resort   Ventures, Inc.
    	
 
    	
DE- Secretary of State
    	
 
    	
Wells Fargo Financial Leasing, Inc.
    	
 
    	
20132283167
    	
 
    	
06-14-13
    	
 
    	
Original
    	
 
    	
Equipment Lease
    	
 
    	
06-14-18
    

 

 

SCHEDULE 11.6

 

ADDRESSES FOR NOTICES TO BORROWER PARTIES

 

WCI Communities, Inc.

 

	
Address:
    	
24301   Walden Center Drive
    
	
 
    	
Bonita   Springs, FL 34134
    
	
 
    	
 
    
	
Attention:
    	
Russell   Devendorf, Senior Vice President and Chief Financial Officer
    
	
 
    	
Telephone:
    	
(239)   498-8220
    
	
 
    	
Fax:
    	
(239)   498-8338
    
	
 
    	
Email:
    	
russelldevendorf@wcicommunities.com
    
	
 
    	
 
    
	
 
    	
Sheila   Leith, Vice President and Treasurer
    
	
 
    	
Telephone:
    	
(239)   498-8529
    
	
 
    	
Fax:
    	
(239)   498-8504
    
	
 
    	
Email:
    	
sheilaleith@wcicommunities.com
    
	
 
    	
 
    
	
 
    	
Vivien   Hastings, Senior Vice President and General Counsel
    
	
 
    	
Telephone:
    	
(239)   498-8213
    
	
 
    	
Fax:
    	
(239)   498-8277
    
	
 
    	
Email:
    	
vivienhastings@wcicommunities.com
    

 

 

ADDRESSES FOR NOTICES TO CITIBANK, N.A.

 

Citibank, N.A., as Administrative Agent

 

For payments and requests for Credit Extensions:

 

	
Investor Relations
    
	
1615 Brett Road, Building III
    
	
New Castle, DE 19720
    
	
Attention:
    	
Investor   Relations
    
	
Telephone:
    	
302-894-6010
    
	
Facsimile:
    	
212-994-0961
    
	
Email:
    	
global.loans.support@citi.com
    

 

Payment Instructions

 

	
Citibank,   N.A.
    	
 
    
	
ABA   #
    	
021000089
    
	
Account   No.:
    	
36852248
    
	
Account   Name:
    	
Medium   Term Finance
    
	
Attn.:
    	
Global   Loans
    
	
Ref:
    	
WCI   Communities, Inc.
    

 

Other Notices as Administrative Agent:

 

	
Investor Relations
    
	
1615 Brett Road, Building III
    
	
New Castle, DE 19720
    
	
Attention:
    	
Investor   Relations
    
	
Telephone:
    	
302-894-6010
    
	
Facsimile:
    	
212-994-0961
    
	
Email:
    	
global.loans.support@citi.com
    

 

With a copy to:

 

Proskauer Rose LLP

Eleven Time Square

New York, NY 10036-8299

Attention:  Andrew Bettwy, Esq.

Fax: 212-969-2900

 

Citibank, N.A., as Lender

 

	
Investor Relations
    
	
1615 Brett Road, Building III
    
	
New Castle, DE 19720
    
	
Attention:
    	
Investor   Relations
    

 

 

	
Telephone:
    	
302-894-6010
    
	
Facsimile:
    	
212-994-0961
    
	
Email:
    	
global.loans.support@citi.com
    

 

With a copy to:

 

Proskauer Rose LLP

Eleven Time Square

New York, NY 10036-8299

Attention:  Andrew Bettwy, Esq.

Fax: 212-969-2900

 

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified in item 1 below (the “Assignor”) and the Assignee identified in item 2 below (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement identified below (the “Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex I attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations as a Bank under the Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including, without limitation, Letters of Credit included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Bank) against any Person, whether known or unknown, arising under or in connection with the Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

(d)                                 Assignor:

 

(e)                                  Assignee:                                                                              [and is an Affiliate or Approved Fund of [identify Bank](1)]

 

(f)                                   Borrower:  WCI Communities, Inc., a Delaware corporation

 

(g)                                  Administrative Agent:  Citibank, N.A., as the administrative agent under the Agreement

 

(h)                                 Agreement:  Revolving Credit Agreement, dated as of August 27, 2013, among WCI Communities, Inc., as Borrower, the Banks from time to time party thereto, and Citibank, N.A., as Administrative Agent, as amended, restated, extended, supplemented or otherwise modified from time to time.

 

(1)                                 Select as applicable.

 

 

(i)                                     Assigned Interest:

 

	
Aggregate Amount of
   Commitment
   for all Banks*
    	
 
    	
Amount of Commitment
   Assigned*
    	
 
    	
Pro Rata Share Assigned
   of Aggregate
   Commitment(2)
    	
 
    	
CUSIP
   Numbers
    	
 
    
	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    
	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
 
    	
%
    	
 
    	
 
    

 

[7.                                  Trade Date:                               ,         ](3)

 

Effective Date:                                  ,

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNOR]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
 
    
	
 
    	
[NAME   OF ASSIGNEE]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

*                                         Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

(2)                                 Set forth, to at least 9 decimals, as a percentage of the Commitment of all Banks thereunder.

(3)                                 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

 

5

 

	
[Consented   to and](4) Accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CITIBANK,   N.A.,
    	
 
    	
 
    
	
as   Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[Consented   to:](5)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WCI   COMMUNITIES, INC.,
    	
 
    	
 
    
	
as   Borrower
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

(4)                                 To be added only if the consent of the Administrative Agent is required by the terms of the Agreement.

(5)                                 To be added only if the consent of the Borrower is required by the terms of the Agreement.

 

6

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR
 ASSIGNMENT AND ASSUMPTION

 

(i)                                     Representations and Warranties.

 

(A)          Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

(B)          Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Bank under the Agreement, (ii) it meets all requirements of an Eligible Assignee under the Agreement (subject to receipt of such consents as may be required under the Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Agreement as a Bank thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Bank thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Bank and based on such other documents and information as it has deemed appropriate, made it own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, and (vii) attached hereto is any documentation required to be delivered by it pursuant to the terms of the Agreement, including Section 3.10(e) thereof, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Bank.

 

(ii)           Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date to the Assignee.

 

(iii)          General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment

 

7

 

and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

8

 

EXHIBIT B

 

Borrowing Base Certificate Date:               

 

BORROWING BASE CERTIFICATE

 

The undersigned Senior Officer, being the duly elected                                        of WCI Communities, Inc., a Delaware corporation (the “Borrower”), hereby certifies that the following is a true and correct calculation of the Borrowing Base as of                   ,          (the “Statement Date”).  Capitalized terms used but not defined herein shall have the meanings set forth in the Revolving Credit Agreement dated as of August 27, 2013, as amended, restated, extended, supplemented or otherwise modified from time to time (the “Agreement”), by and among the Borrower, the Banks from time to time party thereto (the “Banks”), and Citibank, N.A., as Administrative Agent.

 

11.29                 Borrowing Base Calculation.

 

(a)           Borrowing Base.  The following Escrow Receivables, Sold Homes Under Construction, Model Homes, Unsold Homes Under Construction, Lots under Development, Developed Lots, Land Held for Future Development and Unrestricted Cash of the Borrower or any Subsidiary qualify for inclusion in the Borrowing Base (all figures are as of Statement Date or the date of incurrence of any Loan, Letter of Credit or any other Borrowing Base Indebtedness, as applicable):

 

	
(i)
    	
100% of the aggregate GAAP Value of Escrow   Receivables
    	
 
    	
$
    	
 
    	
 
    
	
(ii)
    	
90% of the aggregate GAAP Value of Sold Homes   Under Construction
    	
 
    	
$
    	
 
    	
 
    
	
(iii)
    	
85% of the aggregate GAAP Value of Model Homes
    	
 
    	
$
    	
 
    	
 
    
	
(iv)
    	
80% of the aggregate GAAP Value of Unsold Homes   Under Construction
    	
 
    	
$
    	
 
    	
 
    
	
(v)
    	
65% of the aggregate GAAP Value of Developed Lots   and Lots Under Development
    	
 
    	
$
    	
 
    	
 
    
	
(vi)
    	
50% of the aggregate GAAP Value of Land Held for   Future Development(1)
    	
 
    	
$
    	
 
    	
 
    
	
(vii)
    	
100% of Unrestricted Cash minus Total   Outstandings
    	
 
    	
$
    	
 
    	
 
    
	
(viii)
    	
Total Borrowing Base (Lines I.A.1+2+3+4+5+6+7)
    	
 
    	
$
    	
 
    	
 
    

 

(b)                                 Borrowing Base Indebtedness.  The following figures are as of the Statement Date:

 

	
(i)
    	
The aggregate principal amount of indebtedness for   borrowed money (including, without limitation, the Senior Notes)
    	
 
    	
$
    	
 
    	
 
    
	
(ii)
    	
Letter of Credit Usage with respect to Financial   Letters of Credit that are not Cash Collateralized or Letter of Credit   Collateralized (computed as if all Financial Letters of Credit
    	
 
    	
$
    	
 
    	
 
    

 

(1)                                 Line I.A.6 shall not exceed 45% of the amount in Line I.A.8.  The value of (i) any unentitled land or land under option, (ii) the vertical construction of any Tower, (iii) the land on which a Tower is constructed, but only after the construction of such Tower has commenced and (iv) the assets securing the loans under the Stonegate Agreement, in each case, shall not be included in the Borrowing Base.

 

1

 

	
 
    	
were Letters of Credit   issued under the Agreement)
    	
 
    	
 
    	
 
    	
 
    
	
(iii)
    	
other Borrowing Base   Indebtedness(2)
    	
 
    	
$
    	
 
    	
 
    
	
(iv)
    	
Total Borrowing Base   Indebtedness (Lines I.B.1+2+3)
    	
 
    	
$
    	
 
    	
 
    

 

(c)           Borrowing Base Surplus/(Deficit) at the Statement Date.

 

	
(Line I.A.8 minus Line I.B.4)
    	
 
    	
$
    	
 
    	
 
    

 

(d)           Commitment less Total Outstandings.

 

	
1.
    	
Commitment
    	
 
    	
$
    	
 
    	
 
    
	
2.
    	
Total Outstandings
    	
 
    	
$
    	
 
    	
 
    
	
3.
    	
(Line I.D.1 minus Line I.D.2)
    	
 
    	
$
    	
 
    	
 
    

 

(e)           Borrowing Base Availability. The Borrowing Base Availability shall be the lesser of Line I.C.1 and Line I.D.3.

 

	
1.
    	
Borrowing Base   Availability at the Statement Date
    	
 
    	
$
    	
 
    	
 
    

 

IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base Certificate as of                       , 20[    ].

 

	
 
    	
WCI   COMMUNITIES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Printed Name and Title]
    

 

(2)                                 Line I.B.3 shall not include (i) any Non-Recourse Indebtedness, (ii) the outstanding principal amount of any Subordinated Obligations or (iii) all Letters of Credit issued under the Stonegate Agreement.

 

2

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                    ,           

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Revolving Credit Agreement, dated as of August 27, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and Citibank, N.A., as Administrative Agent.  Capitalized terms used but not defined herein have the meanings given to them in the Agreement.

 

The undersigned Senior Officer hereby certifies as of the date hereof that he/she is the                                                                    of the Borrower, and that, as such, he/she is authorized to execute and deliver this Compliance Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

(a)           Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 7.1(b) of the Agreement for the Fiscal Year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

(b)           Attached hereto as Schedule 1 are the unaudited financial statements required by Section 7.1(a) of the Agreement for the Fiscal Quarter of the Borrower ended as of the above date.  Such financial statements fairly present the financial condition, results of operations and cash flows of the Borrower and its Restricted Subsidiaries in accordance with Generally Accepted Accounting Principles as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

 

(c)           Attached hereto as Schedule 2 is a backlog report which is true and correct in all material respects and which summarizes the Borrower’s backlog as of the Fiscal Quarter of the Borrower ended as of the above date.

 

[select one.]

 

(d)           [To the best knowledge of the undersigned as of the date hereof, there is no Default or Event of Default.]

 

[or]

 

[The following is a list of each Default or Event of Default as of the date hereof and the nature and status of each such Default or Event of Default:]

 

(e)                                  To the actual knowledge of the undersigned,

 

[select one:]

 

1

 

[no event or circumstance constituting a Material Adverse Effect (other than a Material Adverse Effect which is not particular to the Borrower and which is generally known) has occurred since the date of the most recent Compliance Certificate delivered under Section 7.2 of the Agreement.]

 

[or]

 

[the following is a list of each Material Adverse Effect (describing in reasonable detail the nature and status thereof) which has occurred since the date of the most recent Compliance Certificate delivered under Section 7.2 of the Agreement.]

 

(f)            The financial covenant analyses and information set forth on Schedule 3 attached hereto are true and accurate on and as of the date of this Compliance Certificate.

 

(g)           The computation of the Borrowing Base Availability set forth on Schedule 4 attached hereto is true and accurate on and as of the date of this Compliance Certificate.

 

[Use the following paragraph 7 if there has been any change to the listing of Subsidiaries]

 

(h)           [Attached hereto as Schedule 5 is a report of each change, as of the last day of such Fiscal Quarter, in the listing of Subsidiaries set forth in Schedule 4.4 (as the same may have been revised by previous Compliance Certificates), including changes in Guarantor Subsidiaries].

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of                         ,           .

 

 

	
 
    	
WCI   COMMUNITIES, INC., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

2

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 1
  to the Compliance Certificate

 

Financial Statements

 

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 2
  to the Compliance Certificate

 

Backlog Report

 

WCI COMMUNITIES, INC. TO INSERT REPORT

 

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 3
  to the Compliance Certificate

 

Financial Covenant Analyses and Information

 

WCI COMMUNITIES, INC. TO PREPARE SPREADSHEET WITH LINE ITEM CALCULATIONS OF THE FOLLOWING

 

11.30                 Section 6.9 — Consolidated Tangible Net Worth.

 

11.31                 Section 6.10 — Consolidated Leverage Ratio.

 

11.32                 Section 6.11 — Consolidated Interest Coverage Ratio or Minimum Liquidity.

 

11.33                 Section 6.14— Investment in Subsidiaries and Joint Ventures.

 

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 4
  to the Compliance Certificate

 

Borrowing Base Availability

 

WCI COMMUNITIES, INC. TO PREPARE SPREADSHEET WITH LINE ITEM CALCULATIONS OF THE FOLLOWING

 

11.1                        Borrowing Base Availability

 

 

For the Quarter/Year ended                                (“Statement Date”)

 

SCHEDULE 5
  to the Compliance Certificate

 

List of Subsidiaries

 

 

EXHIBIT D

 

FORM OF LOAN NOTICE

 

Date:                    ,        

 

To:          Citibank, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Revolving Credit Agreement, dated as of August 27, 2013 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and Citibank, N.A., as Administrative Agent.  Capitalized terms used but not defined herein have the meanings given to them in the Agreement.

 

The undersigned hereby requests (select one):

 

	
o
    	
An   Advance
    	
o
    	
A   conversion or continuation of Loans
    

 

On                                                          (a Business Day).

 

In the amount of $                                      .

 

Comprised of

[Type of Loan requested]

 

For Eurodollar Rate Loans:  with an Interest Period of           .

 

The Advances requested herein comply with the proviso to the first sentence of Section 2.1(a) of the Agreement.

 

In connection with the requested Advance, the undersigned certifies that the conditions precedent to the making of such Advance, as set forth in Section 8.2 of the Agreement, have been satisfied.

 

 

	
 
    	
WCI COMMUNITIES, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

1

 

EXHIBIT E

 

NOTE

 

	
$
    	
,       
    
	
 
    	
New York, New York
    

 

FOR VALUE RECEIVED, the undersigned promises to pay to the order of                                                (the “Bank”) the principal amount of                                                DOLLARS ($                  ), or such lesser aggregate amount of Advances as may be made pursuant to the Bank’s Pro Rata Share of the Commitment under the Loan Agreement hereinafter described, payable as hereinafter set forth.  The undersigned promises to pay interest on the principal amount of each Advance made hereunder and remaining unpaid from time to time from the date of each Advance until the date of payment in full, payable as hereinafter set forth.

 

Reference is made to the Revolving Credit Agreement dated as of August 27, 2013, among the undersigned, as Borrower, the Banks from time to time party thereto, and Citibank, N.A., as Administrative Agent (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Loan Agreement”).  Terms defined in the Loan Agreement and not otherwise defined herein are used herein with the meanings defined for those terms in the Loan Agreement.  This is one of the Notes referred to in the Loan Agreement, and any holder hereof is entitled to all of the rights, remedies, benefits and privileges provided for in the Loan Agreement as originally executed or as it may from time to time be supplemented, modified, amended, renewed, extended or supplanted.  The Loan Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events upon the terms and conditions therein specified.

 

The principal indebtedness evidenced by this Note shall be payable as provided in the Loan Agreement and in any event on the Maturity Date.

 

Interest shall be payable on the outstanding daily unpaid principal amount of each Advance hereunder from the date thereof until payment in full and shall accrue and be payable at the rates and on the dates set forth in the Loan Agreement to the fullest extent permitted by applicable Law, before and after default, before and after maturity, before and after any judgment, and before and after the commencement of any proceeding under any Debtor Relief Law, with interest on overdue interest to bear interest at the rate set forth in Section 3.7 of the Loan Agreement.

 

The amount of each payment hereunder shall be made to the Administrative Agent at the Administrative Agent’s Office, for the account of the Bank, in lawful money of the United States of America, without deduction, offset or counterclaim and in immediately available funds on the day of payment (which must be a Business Day).  All payments of principal received after 1:00 p.m., New York time, on any Business Day, shall be deemed received on the next succeeding Business Day for purposes of calculating interest thereon.  The Bank shall use its best efforts to keep a record of the Advances made by it (which record may be in electronic or other intangible form) and payments of principal with respect to this Note, and such record shall be presumptive evidence of the principal amount owing under this Note; provided that failure to keep such record shall in no way affect the Obligations of the Borrower.

 

The undersigned hereby waives protest, presentment, notice of dishonor, demand and any other notice of any kind, to the fullest extent permitted by applicable Laws.

 

1

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.  THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  This Note shall be subject to the provisions of Sections 11.18 and 11.22 of the Loan Agreement as if such sections were set forth herein, mutatis mutandis, and the provisions of such sections are incorporated by reference herein.

 

 

	
 
    	
WCI   COMMUNITIES, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

2

 

ADVANCES AND PAYMENTS OF PRINCIPAL
 (Base Rate Loans)

 

	
Date
    	
 
    	
Amount of Loan or of
   Redesignation From
   Another Type of Loan
    	
 
    	
Amount of Principal Paid or
   Redesignated Into Another
   Type of Loan
    	
 
    	
Unpaid Principal
   Balance
    	
 
    	
Notation
   Made by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

3

 

ADVANCES AND PAYMENTS OF PRINCIPAL
 (Eurodollar Rate Loans)

 

	
Date
    	
 
    	
Amount of Loan or of
   Redesignation From
   Another Type of Loan
    	
 
    	
Amount of Principal Paid or
   Redesignated Into Another
   Type of Loan
    	
 
    	
Unpaid Principal
   Balance
    	
 
    	
Notation
   Made by
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

4

 

EXHIBIT F-1

 

OPINION OF COUNSEL

 

LATHAM & WATKINS LLP

 

[Attached.]

 

1

 

EXHIBIT F-2

 

OPINION OF COUNSEL

 

GENERAL COUNSEL TO THE LOAN PARTIES

 

[Attached.]

 

1

 

EXHIBIT G

 

SUBSIDIARY GUARANTY

 

THIS SUBSIDIARY GUARANTY (“Guaranty”) dated as of August 27, 2013, is made by each of the undersigned guarantors and, effective as of the date set forth in the applicable Instrument of Joinder, each other Person who has become a guarantor pursuant to Section 19 hereof (each a “Guarantor” and, collectively, the “Guarantors”) in favor of Citibank, N.A., as the Administrative Agent (“Administrative Agent”), under the Loan Agreement referred to below, and the Banks that are party to the Loan Agreement from time to time (each a “Bank” and collectively the “Banks”) (the Administrative Agent and the Banks are referred to herein collectively as the “Lender Parties” and each individually as a “Lender Party”), with reference to the following facts:

 

RECITALS

 

A.            Pursuant to that certain Revolving Credit Agreement dated as of August 27, 2013, among WCI Communities, Inc., a Delaware corporation (the “Borrower”), the Banks and the Administrative Agent (as amended, extended, renewed, supplemented, or otherwise modified from time to time, the “Loan Agreement”), the Banks are making certain credit facilities available to Borrower.  Terms defined in the Loan Agreement and not otherwise defined in this Guaranty shall have the meanings given to those terms in the Loan Agreement and such definitions are incorporated by reference herein in full.

 

B.            As a condition to the availability of such credit facilities, certain Guarantors are required to enter into this Guaranty and to guarantee the Guaranteed Obligations (as hereinafter defined), subject to the limitations set forth herein.

 

C.            Each Guarantor expects to realize direct and indirect benefits from the availability of the aforementioned credit facilities to Borrower, as the result of financial or business support which may be provided to such Guarantor by Borrower.

 

AGREEMENT

 

NOW, THEREFORE, in order to induce the Banks to extend the aforementioned credit facilities, and for other good and valuable consideration, the receipt and adequacy of which hereby are acknowledged, each Guarantor hereby represents, warrants, covenants, agrees and guarantees, on a joint and several basis, as follows:

 

1.             Guaranty.  Each Guarantor hereby absolutely and unconditionally guarantees, as a guarantee of payment and not merely as a guarantee of collection, prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of any and all existing and future indebtedness and liabilities of every kind, nature and character, direct or indirect, absolute or contingent, liquidated or unliquidated, voluntary or involuntary, of the Borrower to Lender Parties arising at any time under the Loan Agreement and the Loan Documents (collectively, the “Guaranteed Obligations”).  The Lender Parties’ books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Guarantors and conclusive for the purpose of establishing the amount of the Guaranteed Obligations, absent manifest error.  This Guaranty shall not be affected by the validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed Obligations, or any question as to the authenticity of such instrument or agreement, or by the existence, validity, enforceability, perfection, or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to the obligations of any Guarantor under this Guaranty, other 

 

1

 

than payment in full by the Borrower or any other Person.  The obligations of each Guarantor hereunder shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any applicable state law.

 

2.             No Setoff or Deductions; Taxes.  Each Guarantor represents and warrants that it (or, if it is a disregarded entity for U.S. federal income tax purposes, its regarded owner) is a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.  All payments by each Guarantor hereunder shall be paid in full, without setoff or counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and all present and future taxes, except as required by applicable law.  If any Guarantor must make a payment under this Guaranty, such Guarantor represents and warrants that it will make the payment from one of its U.S. resident offices to the Lender Parties so that no withholding tax is imposed on the payment to the extent permitted by applicable law.  If notwithstanding the foregoing, a Guarantor makes a payment under this Guaranty to which withholding tax or other tax applies, the Guarantor’s payment shall be increased, or the Lender Parties shall be indemnified, as applicable, as and to the extent provided in Section 3.10 of the Loan Agreement.

 

3.             No Termination.  This Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until (a) all of the Guaranteed Obligations are paid in full and any commitments of the Banks or facilities provided by the Banks with respect to the Guaranteed Obligations are terminated, at which time this Guaranty and the obligations of the Guarantors hereunder shall terminate (except as expressly provided in Sections 8 and 12 hereof), or (b) with respect to any Guarantor, such Guarantor is released pursuant to Section 10.11 of the Loan Agreement.  At the Administrative Agent’s option, all payments under this Guaranty shall be made to an office of the Administrative Agent located in the United States and in U.S. Dollars.

 

4.             Waiver of Notices.  Each Guarantor waives notice of the acceptance of this Guaranty and of the extension or continuation of the Guaranteed Obligations or any part thereof.  Each Guarantor further waives presentment, protest, notice, dishonor or default, demand for payment and any other notices to which such Guarantor might otherwise be entitled.

 

5.             Subrogation.  The Guarantors shall exercise no right of subrogation, contribution or similar rights against the Borrower or any other Guarantor with respect to any payments on the Guaranteed Obligations made to the Lender Parties under this Guaranty until all of the Guaranteed Obligations are paid in full and any commitments of the Banks or facilities provided by the Banks with respect to the Guaranteed Obligations are terminated.  If any amounts are paid to a Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Lender Parties and shall forthwith be paid to the Lender Parties to reduce the amount of the Guaranteed Obligations, whether matured or unmatured.

 

6.             Waiver of Suretyship Defenses.  Each Guarantor agrees that the Lender Parties may, at any time and from time to time, and without notice to such Guarantor, make any agreement with the Borrower or with any other Person liable on any of the Guaranteed Obligations or providing collateral as security for the Guaranteed Obligations, for the extension, renewal, payment, compromise, discharge or release of the Guaranteed Obligations or any collateral (in whole or in part), or for any modification or amendment of the terms thereof or of any instrument or agreement evidencing the Guaranteed Obligations or the provision of collateral, all without in any way impairing, releasing, discharging or otherwise affecting the obligations of such Guarantor under this Guaranty.  Each Guarantor waives any defense arising by reason of any disability or other defense of the Borrower or any other Guarantor, or the cessation from any cause whatsoever of the liability of the Borrower (other than payment in full of the 

 

2

 

Guaranteed Obligations), or any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower and waives the benefit of any statute of limitations affecting the liability of such Guarantor hereunder.  Each Guarantor waives any right to enforce any remedy which any Lender Party now has or may hereafter have against the Borrower and waives any benefit of and any right to participate in any security now or hereafter held by any Lender Party until all of the Guaranteed Obligations are paid in full and any commitments of the Banks and facilities provided by the Banks with respect to the Guaranteed Obligations are terminated.  Further, each Guarantor consents to the Lender Parties’ taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Guarantors under this Guaranty or which, but for this provision, might operate as a discharge of any Guarantor.

 

7.             Exhaustion of Other Remedies Not Required.  The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Guaranteed Obligations.  Each Guarantor waives diligence by the Lender Parties and action on delinquency in respect of the Guaranteed Obligations or any part thereof, including, without limitation any provisions of law requiring the Lender Parties to exhaust any right or remedy or to take any action against the Borrower, any other guarantor or any other person, entity or property before enforcing this Guaranty against such Guarantor.

 

8.             Reinstatement.  Notwithstanding anything in this Guaranty to the contrary, this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any portion of the Guaranteed Obligations is revoked, terminated, rescinded or reduced or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or any other Person or otherwise, as if such payment had not been made and whether or not the Lender Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.

 

9.             Subordination.  While an Event of Default has occurred and is continuing, each Guarantor hereby subordinates the payment of all obligations and indebtedness of the Borrower owing to such Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of the Borrower to the Guarantor as subrogee of the Lender Parties or resulting from such Guarantor’s performance under this Guaranty, until such time as all Guaranteed Obligations have been paid in full.  If the Lender Parties so request, any such obligation or indebtedness of the Borrower to the Guarantor shall be enforced and performance received by the Guarantors as trustee for the Lender Parties and the proceeds thereof shall be paid over to the Lender Parties on account of the Guaranteed Obligations, but otherwise without reducing or affecting in any manner the liability of the Guarantors under this Guaranty.

 

10.          Information.  While an Event of Default has occurred and is continuing, each Guarantor shall furnish promptly to the Lender Parties any and all financial or other information regarding such Guarantor or its property as the Lender Parties may reasonably request in writing.

 

11.          Stay of Acceleration.  In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed, upon the insolvency, bankruptcy or reorganization of the Borrower or any other Person, or otherwise, all such amounts shall nonetheless be payable by the Guarantors immediately upon demand by the Lender Parties.

 

12.          Expenses.  The Guarantors shall pay, within 30 days after demand, all the reasonable actual out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses and costs disbursements of any law firm or other external counsel) of the Lender Parties in connection with the enforcement of this Guaranty following the occurrence of a Default or an Event of Default, including in connection with any refinancing, restructuring, reorganization (including a bankruptcy reorganization, if 

 

3

 

such payment is approved by the bankruptcy court or any similar proceeding), subject to the limitations set forth in Section 11.3 of the Loan Agreement (which limitations shall be applied as if such expenses were payable by the Borrower thereunder).  The obligations of the Guarantors (excluding Guarantors that have been released pursuant to Section 10.11 of the Loan Agreement) under the preceding sentence shall survive termination of this Guaranty.

 

13.          Amendments.  No provision of this Guaranty may be waived, amended, supplemented or modified, except by a written instrument executed by the Administrative Agent, the Required Banks under Section 11.2 of the Loan Agreement and the Guarantors.

 

14.          No Waiver; Enforceability.  No failure by the Lender Parties to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy or power hereunder preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any provision of this Guaranty shall not affect the enforceability or validity of any other provision herein.  Subject to the terms hereof and of the Loan Agreement, any right, remedy, power or privilege of the Lender Parties hereunder may be exercised by the Administrative Agent or the Required Banks.

 

15.          Assignment; Governing Laws; Jurisdiction.  This Guaranty shall (a) bind each Guarantor and its successors and assigns, provided that no Guarantor may assign its rights or obligations under this Guaranty without the prior written consent of the Lender Parties (and any attempted assignment without such consent shall be void), (b) inure to the benefit of the Lender Parties and their respective successors and assigns and the Lender Parties may, subject to the terms of the Loan Agreement but without notice to the Guarantors and without affecting the Guarantors’ obligations hereunder, assign or sell participations in the Guaranteed Obligations and this Guaranty, in whole or in part, and (c) be governed by the internal laws of the State of New York.  Each Guarantor hereby irrevocably (i) submits to the exclusive jurisdiction of any State court sitting in New York County and the United States District Court of the Southern District of New York in any action or proceeding arising out of or relating to this Guaranty, and (ii) waives to the fullest extent permitted by law any defense asserting an inconvenient forum in connection therewith.  Service of process by the Lender Parties in connection with such action or proceeding shall be binding on a Guarantor if sent to such Guarantor by registered or certified mail at the address for notices to be delivered to the Borrower pursuant to Section 11.6 of the Loan Agreement.  Each Guarantor agrees that the Lender Parties may, subject to Section 11.12 of the Loan Agreement, disclose to any prospective purchaser and any purchaser of all or part of the Guaranteed Obligations any and all information in the Lender Parties’ possession concerning the Guarantors.

 

16.          Condition of the Borrower.  Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower such information concerning the financial condition, business and operations of the Borrower as such Guarantor requires, and that the Lender Parties have no duty, and such Guarantor is not relying on the Lender Parties at any time, to disclose to such Guarantor any information relating to the business, operations or financial condition of the Borrower.

 

17.          Setoff.  After demand upon the Guarantors for payment under this Guaranty, each Guarantor hereby specifically authorizes each Bank (subject to the approval of the Required Banks) in which such Guarantor maintains a deposit account (whether a general or special deposit account, other than trust accounts) or a certificate of deposit to setoff any Guaranteed Obligations owed to the Banks against such deposit account or certificate of deposit without prior notice to any Guarantor (which notice is hereby waived) whether or not such deposit account or certificate of deposit has then matured.  Nothing 

 

4

 

in this shall limit or restrict the exercise by a Bank of any right to setoff or banker’s lien under applicable Law, subject to the approval of the Required Banks.

 

18.          Other Guarantees.  Unless otherwise agreed by the Lender Parties and the Guarantors in writing, this Guaranty is not intended to supersede or otherwise affect any other guaranty now or hereafter given by the Guarantors for the benefit of the Lender Parties or any term or provision thereof.

 

19.          Additional Guarantors.  Any other Person may become a Guarantor hereunder and become bound by the terms and conditions of this Guaranty, in each case effective as of the date set forth in the applicable Instrument of Joinder, by executing and delivering to the Administrative Agent an Instrument of Joinder substantially in the form attached hereto as Exhibit “A” (an “Instrument of Joinder”).

 

20.          Representations and Warranties.  Each Guarantor represents and warrants that (i) it is duly organized and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate, limited liability company or limited partnership, as applicable, power to make and perform this Guaranty, and all necessary corporate, limited liability company or limited partnership, as applicable, authority to execute, deliver and perform all of its obligations under this Guaranty; (ii) this Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws or by equitable principles relating to the granting of specific performance and other equitable remedies as a matter of judicial discretion; (iii) the making and performance of this Guaranty does not and will not violate the provisions of any applicable material law, regulation or order, does not and will not require any consent under, any material agreement, instrument, or document to which it is a party or by which it or any of its property may be bound or affected and does not and will not (when aggregated with any defaults and breaches of the Borrower and other Guarantors) result in the breach of or constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture or loan or credit agreement to which such Party or any of its Property is bound or affected with respect to any obligation or obligations aggregating $25,000,000 or more; (iv) all material consents, approvals, licenses and authorizations of, and filings and registrations with, any governmental authority required under applicable law and regulations for the making and performance of this Guaranty have been obtained or made and are in full force and effect; and (v) by virtue of its relationship with the Borrower, the execution, delivery and performance of this Guaranty is for the direct benefit of such Guarantor and it has received adequate consideration for this Guaranty.

 

21.          WAIVER OF JURY TRIAL; FINAL AGREEMENT.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY.  THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Pages Follow]

 

5

 

Executed as of the date first written above.

 

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[ADD   GUARANTORS],
    
	
 
    	
a   [                  ]   corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:  
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADMINISTRATIVE   AGENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CITIBANK,   N.A.,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:  
    
	
 
    	
Title:
    

 

[Signature Page — Subsidiary Guaranty]

 

 

EXHIBIT A

 

INSTRUMENT OF JOINDER

 

THIS INSTRUMENT OF JOINDER (“Joinder”) is executed as of                     , by                                                                                                                                               , a                        (“Joining Party”), and delivered to the Administrative Agent pursuant to the terms of that certain Subsidiary Guaranty dated as of August 27, 2013 (the “Guaranty”). Terms used but not defined in this Joinder shall have the meanings defined for or ascribed to those terms in the Guaranty.

 

RECITALS

 

A.            The Guaranty was made by the Guarantors in favor of the Banks that are parties to that certain Revolving Credit Agreement, dated as of August 27, 2013 (as amended, extended, renewed, supplemented, or otherwise modified from time to time, the “Loan Agreement”), by and among WCI Communities, Inc., a Delaware corporation, as Borrower, the Banks party thereto from time to time, and Citibank, N.A., as Administrative Agent.

 

B.            Joining Party is becoming a Guarantor pursuant to Section 5.9 of the Loan Agreement.

 

C.            Joining Party expects to realize direct and indirect benefits from the availability to Borrower of credit facilities pursuant to the Loan Agreement, as the result of financial or business support which may be provided to such Joining Party by Borrower.

 

NOW THEREFORE, Joining Party agrees as follows:

 

AGREEMENT

 

1.             By this Joinder, Joining Party becomes a “Guarantor” under and pursuant to Section 19 of the Guaranty. Joining Party agrees that, upon its execution hereof, it will become a Guarantor under the Guaranty with respect to all Indebtedness of Borrower heretofore or hereafter incurred under the Loan Agreement, and will be bound by all terms, conditions, and duties applicable to a Guarantor under the Guaranty.

 

2.             The effective date of this Joinder is                       .

 

 

	
 
    	
“Joining Party”
    
	
 
    	
 
    
	
 
    	
a
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Printed Name and Title
    

 

 

EXHIBIT H-1

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Banks That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August 27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as the Administrative Agent (as therein defined) (as the same may be modified, amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:  
    	
 
    
	
 
    	
Title:  
    	
 
    

Date:                      , 2013

 

 

EXHIBIT H-2

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August 27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as the Administrative Agent (as therein defined) (as the same may be modified, amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:  
    	
 
    
	
 
    	
Title:  
    	
 
    

 

Date:                      , 2013

 

 

EXHIBIT H-3

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August 27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as the Administrative Agent (as therein defined) (as the same may be modified, amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:  
    	
 
    
	
 
    	
Title:  
    	
 
    

 

Date:                      , 2013

 

 

EXHIBIT H-4

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Banks That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to that certain Revolving Credit Agreement dated as of August 27, 2013 by and among WCI COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the Banks from time to time party thereto, and CITIBANK, N.A., as the Administrative Agent (as therein defined) (as the same may be modified, amended or restated from time to time, the “Credit Agreement”).

 

Pursuant to the provisions of Section 4.06(g) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Internal Revenue Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:  
    	
 
    
	
 
    	
Title:  
    	
 
    

Date:                      , 2013

 

 

EXHIBIT I

 

FORM OF SOLVENCY CERTIFICATE

 

August 27, 2013

 

This Solvency Certificate is being executed and delivered pursuant to Section 8.1(a)(iv) of the Revolving Credit Agreement, dated as of the date hereof (the “Credit Agreement”; terms defined therein being used herein as defined therein) among WCI Communities, Inc., a Delaware corporation, as Borrower (the “Borrower”), the other Guarantors party thereto from time to time, Citibank, N.A., as Administrative Agent, and each Bank from time to time party thereto.

 

I, Russell Devendorf, the Chief Financial Officer of the Borrower, solely in such capacity and not in an individual capacity, hereby certify that I am the Chief Financial Officer of the Borrower and that I am familiar with the businesses and assets of the Borrower and its Subsidiaries (taken as a whole), I have made such other investigations and inquiries as I have deemed appropriate and I am duly authorized to execute this certificate (this “Solvency Certificate”) on behalf of the Borrower pursuant to the Credit Agreement.

 

I further certify, solely in my capacity as Chief Financial Officer of the Borrower, and not in my individual capacity, as of the date hereof and after giving effect to the incurrence of the indebtedness and obligations being incurred in connection with the Credit Agreement on the date hereof, if any, that, (i) the sum of the debt (including contingent liabilities) of the Borrower and its Restricted Subsidiaries, taken as a whole, does not exceed the present fair saleable value (on a going concern basis) of the assets of the Borrower and its Restricted Subsidiaries, taken as a whole; (ii) the capital of the Borrower and its Restricted Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Borrower and its Restricted Subsidiaries, taken as a whole, contemplated as of the date hereof; and (iii) the Borrower and its Restricted Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts including current obligations beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under FASB Accounting Standards Codification (ASC) Topic 450, “Contingencies”).

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first written above.

 

	
 
    	
WCI   COMMUNITIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   Russell Devendorf
    
	
 
    	
 
    	
Title:   Chief Financial OfficerExhibit 4.1

 

 

CNH EQUIPMENT TRUST 2013-C

 

INDENTURE

 

between

 

CNH EQUIPMENT TRUST 2013-C

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Indenture Trustee.

 

Dated as of August 1, 2013

 

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I Definitions and Incorporation by Reference
    	
2
    
	
 
    	
 
    
	
SECTION 1.1.
    	
Definitions
    	
2
    
	
SECTION 1.2.
    	
Incorporation   by Reference of Trust Indenture Act
    	
2
    
	
SECTION 1.3.
    	
Other   Definitional Provisions
    	
3
    
	
 
    	
 
    
	
ARTICLE II The Notes
    	
3
    
	
 
    	
 
    
	
SECTION 2.1.
    	
Form
    	
3
    
	
SECTION 2.2.
    	
Execution,   Authentication and Delivery
    	
4
    
	
SECTION 2.3.
    	
Temporary   Notes
    	
4
    
	
SECTION 2.4.
    	
Registration;   Registration of Transfer and Exchange
    	
5
    
	
SECTION 2.5.
    	
Mutilated,   Destroyed, Lost or Stolen Notes
    	
6
    
	
SECTION 2.6.
    	
Persons   Deemed Owner
    	
7
    
	
SECTION 2.7.
    	
Payment   of Principal and Interest; Defaulted Interest
    	
7
    
	
SECTION 2.8.
    	
Cancellation
    	
8
    
	
SECTION 2.9.
    	
Release   of Collateral
    	
8
    
	
SECTION 2.10.
    	
Book-Entry   Notes
    	
8
    
	
SECTION 2.11.
    	
Notices   to Clearing Agency
    	
9
    
	
SECTION 2.12.
    	
Definitive   Notes
    	
9
    
	
SECTION 2.13.
    	
Tax   Treatment
    	
10
    
	
 
    	
 
    
	
ARTICLE III Covenants
    	
10
    
	
 
    	
 
    
	
SECTION 3.1.
    	
Payment   of Principal and Interest
    	
10
    
	
SECTION 3.2.
    	
Maintenance   of Office or Agency
    	
10
    
	
SECTION 3.3.
    	
Money   for Payments To Be Held in Trust
    	
10
    
	
SECTION 3.4.
    	
Existence
    	
12
    
	
SECTION 3.5.
    	
Protection   of the Trust Estate
    	
12
    
	
SECTION 3.6.
    	
Opinions   as to the Trust Estate
    	
12
    
	
SECTION 3.7.
    	
Performance   of Obligations; Servicing of Receivables
    	
13
    
	
SECTION 3.8.
    	
Negative   Covenants
    	
14
    
	
SECTION 3.9.
    	
Annual   Statement as to Compliance
    	
15
    
	
SECTION 3.10.
    	
Issuing   Entity May Consolidate, etc., Only on Certain Terms
    	
15
    
	
SECTION 3.11.
    	
Successor   or Transferee
    	
17
    
	
SECTION 3.12.
    	
No   Other Business
    	
17
    
	
SECTION 3.13.
    	
No   Borrowing
    	
17
    
	
SECTION 3.14.
    	
Servicer’s   Obligations
    	
17
    
	
SECTION 3.15.
    	
Guarantees,   Loans, Advances and Other Liabilities
    	
17
    
	
SECTION 3.16.
    	
Capital   Expenditures
    	
17
    
	
SECTION 3.17.
    	
Removal   of Administrator
    	
17
    
	
SECTION 3.18.
    	
Restricted   Payments
    	
18
    
	
SECTION 3.19.
    	
Notice   of Events of Default
    	
18
    

 

i

 

	
SECTION 3.20.
    	
Further   Instruments and Acts
    	
18
    
	
SECTION 3.21.
    	
Perfection   Representation
    	
18
    
	
 
    	
 
    
	
ARTICLE IV Satisfaction and Discharge
    	
18
    
	
 
    	
 
    
	
SECTION 4.1.
    	
Satisfaction   and Discharge of Indenture
    	
18
    
	
SECTION 4.2.
    	
Application   of Trust Money
    	
19
    
	
SECTION 4.3.
    	
Repayment   of Monies Held by Paying Agent
    	
19
    
	
 
    	
 
    
	
ARTICLE V Remedies
    	
20
    
	
 
    	
 
    
	
SECTION 5.1.
    	
Events   of Default
    	
20
    
	
SECTION 5.2.
    	
Acceleration   of Maturity; Rescission and Annulment
    	
21
    
	
SECTION 5.3.
    	
Collection   of Indebtedness and Suits for Enforcement by Indenture Trustee
    	
22
    
	
SECTION 5.4.
    	
Remedies;   Priorities
    	
24
    
	
SECTION 5.5.
    	
Optional   Preservation of the Receivables
    	
25
    
	
SECTION 5.6.
    	
Limitation   of Suits
    	
25
    
	
SECTION 5.7.
    	
Unconditional   Rights of Noteholders To Receive Principal and Interest
    	
26
    
	
SECTION 5.8.
    	
Restoration   of Rights and Remedies
    	
26
    
	
SECTION 5.9.
    	
Rights   and Remedies Cumulative
    	
26
    
	
SECTION 5.10.
    	
Delay   or Omission Not a Waiver
    	
27
    
	
SECTION 5.11.
    	
Control   by Noteholders
    	
27
    
	
SECTION 5.12.
    	
Waiver   of Past Defaults
    	
27
    
	
SECTION 5.13.
    	
Undertaking   for Costs
    	
28
    
	
SECTION 5.14.
    	
Waiver   of Stay or Extension Laws
    	
28
    
	
SECTION 5.15.
    	
Action   on Notes
    	
28
    
	
SECTION 5.16.
    	
Performance   and Enforcement of Certain Obligations
    	
28
    
	
 
    	
 
    
	
ARTICLE VI The Indenture Trustee
    	
29
    
	
 
    	
 
    
	
SECTION 6.1.
    	
Duties   of the Indenture Trustee
    	
29
    
	
SECTION 6.2.
    	
Rights   of Indenture Trustee
    	
31
    
	
SECTION 6.3.
    	
Individual   Rights of the Indenture Trustee
    	
32
    
	
SECTION 6.4.
    	
Indenture   Trustee’s Disclaimer
    	
32
    
	
SECTION 6.5.
    	
Notice   of Defaults
    	
32
    
	
SECTION 6.6.
    	
Reports   by Indenture Trustee to the Holders
    	
32
    
	
SECTION 6.7.
    	
Compensation   and Indemnity
    	
32
    
	
SECTION 6.8.
    	
Replacement   of the Indenture Trustee
    	
33
    
	
SECTION 6.9.
    	
Successor   Indenture Trustee by Merger
    	
34
    
	
SECTION 6.10.
    	
Appointment   of Co-Trustee or Separate Trustee
    	
34
    
	
SECTION 6.11.
    	
Eligibility;   Disqualification
    	
35
    
	
SECTION 6.12.
    	
Preferential   Collection of Claims Against the Issuing Entity
    	
36
    
	
SECTION 6.13.
    	
Information   to Be Provided by the Indenture Trustee
    	
37
    
	
SECTION 6.14.
    	
Representations   and Warranties
    	
37
    
	
 
    	
 
    
	
ARTICLE VII Noteholders’ Lists and Reports
    	
38
    

 

ii

 

	
SECTION 7.1.
    	
Issuing   Entity To Furnish Indenture Trustee Names and Addresses of Noteholders
    	
38
    
	
SECTION 7.2.
    	
Preservation   of Information; Communications to Noteholders
    	
38
    
	
SECTION 7.3.
    	
Reports   by Issuing Entity
    	
38
    
	
SECTION 7.4.
    	
Required   Filings
    	
39
    
	
 
    	
 
    
	
ARTICLE VIII Accounts, Disbursements and Releases
    	
39
    
	
 
    	
 
    
	
SECTION 8.1.
    	
Collection   of Money
    	
39
    
	
SECTION 8.2.
    	
Trust   Accounts
    	
39
    
	
SECTION 8.3.
    	
General   Provisions Regarding Accounts
    	
41
    
	
SECTION 8.4.
    	
Release   of Trust Estate
    	
42
    
	
SECTION 8.5.
    	
Opinion   of Counsel
    	
43
    
	
 
    	
 
    
	
ARTICLE IX Supplemental Indentures
    	
43
    
	
 
    	
 
    
	
SECTION 9.1.
    	
Supplemental   Indentures Without Consent of Noteholders
    	
43
    
	
SECTION 9.2.
    	
Supplemental   Indentures With Consent of Noteholders
    	
44
    
	
SECTION 9.3.
    	
Execution   of Supplemental Indentures
    	
46
    
	
SECTION 9.4.
    	
Effect   of Supplemental Indenture
    	
46
    
	
SECTION 9.5.
    	
Conformity   with Trust Indenture Act
    	
46
    
	
SECTION 9.6.
    	
Reference   in Notes to Supplemental Indentures
    	
46
    
	
SECTION 9.7.
    	
Amendment   without Consent
    	
46
    
	
SECTION 9.8
    	
[Reserved]
    	
46
    
	
 
    	
 
    
	
ARTICLE X Redemption of Notes
    	
47
    
	
 
    	
 
    
	
SECTION 10.1.
    	
Redemption
    	
47
    
	
SECTION 10.2.
    	
Form of   Redemption Notice
    	
47
    
	
SECTION 10.3.
    	
Notes   Payable on Redemption Date
    	
47
    
	
 
    	
 
    
	
ARTICLE XI Miscellaneous
    	
48
    
	
 
    	
 
    
	
SECTION 11.1.
    	
Compliance   Certificates and Opinions, etc.
    	
48
    
	
SECTION 11.2.
    	
Form of   Documents Delivered to Indenture Trustee
    	
49
    
	
SECTION 11.3.
    	
Acts   of Noteholders
    	
50
    
	
SECTION 11.4.
    	
Notices, etc.,   to the Indenture Trustee, Issuing Entity and Rating Agencies
    	
51
    
	
SECTION 11.5.
    	
Notices   to Noteholders; Waiver
    	
51
    
	
SECTION 11.6.
    	
Alternate   Payment and Notice Provisions
    	
52
    
	
SECTION 11.7.
    	
Conflict   with Trust Indenture Act
    	
52
    
	
SECTION 11.8.
    	
Effect   of Headings and Table of Contents
    	
52
    
	
SECTION 11.9.
    	
Successors   and Assigns
    	
52
    
	
SECTION 11.10.
    	
Severability
    	
52
    
	
SECTION 11.11.
    	
Benefits   of Indenture
    	
53
    
	
SECTION 11.12.
    	
Legal   Holidays
    	
53
    
	
SECTION 11.13.
    	
Governing   Law
    	
53
    
	
SECTION 11.14.
    	
Counterparts
    	
53
    
	
SECTION 11.15.
    	
Recording   of Indenture
    	
53
    

 

iii

 

	
SECTION 11.16.
    	
Trust   Obligation
    	
53
    
	
SECTION 11.17.
    	
No   Petition
    	
54
    
	
SECTION 11.18.
    	
Inspection
    	
54
    
	
SECTION 11.19.
    	
Subordination
    	
54
    
	
SECTION 11.20.
    	
Information   Requests
    	
55
    
	
SECTION 11.21.
    	
Communications   with Rating Agencies
    	
55
    

 

iv

 

APPENDIX

 

	
APPENDIX A
    	
 
    	
Definitions
    
	
 
    
	
EXHIBITS
    
	
 
    
	
EXHIBIT A-1
    	
 
    	
Form of A-1 Notes
    
	
 
    	
 
    	
 
    
	
EXHIBIT A-2
    	
 
    	
Form of A-2 Notes
    
	
 
    	
 
    	
 
    
	
EXHIBIT A-3
    	
 
    	
Form of A-3 Notes
    
	
 
    	
 
    	
 
    
	
EXHIBIT A-4
    	
 
    	
Form of A-4 Notes
    
	
 
    	
 
    	
 
    
	
EXHIBIT A-5
    	
 
    	
Form of   Class B Notes
    
	
 
    	
 
    	
 
    
	
EXHIBIT B
    	
 
    	
Form of   Section 3.9 Officer’s Certificate
    
	
 
    
	
SCHEDULES
    

 

SCHEDULE P                  Perfection Representations & Warranties

 

v

 

INDENTURE dated as of August 1, 2013 between CNH EQUIPMENT TRUST 2013-C, a Delaware statutory trust (the “Issuing Entity”), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation (“DB Trust”), as trustee and not in its individual capacity (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuing Entity’s 0.25% Class A-1 Asset Backed Notes (each an “A-1 Note”), 0.63% Class A-2 Asset Backed Notes (each an “A-2 Note”), 1.02% Class A-3 Asset Backed Notes (each an “A-3 Note”), 1.67% Class A-4 Asset Backed Notes (each an “A-4 Note”) and the 2.06% Class B Asset Backed Notes (each a “Class B Note”; and together with the A-1 Notes, the A-2 Notes, the A-3 Notes, and the A-4 Notes, the “Notes”).

 

GRANTING CLAUSE

 

The Issuing Entity hereby Grants to DB Trust at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of the Issuing Entity’s right, title and interest in, to and under the following, whether now existing or hereafter arising or acquired (collectively, the “Collateral”):

 

(a)               the Receivables, including all documents constituting chattel paper included therewith, and all obligations of the Obligors thereunder, including all monies paid thereunder on or after the Cutoff Date;

 

(b)               the security interests in the Financed Equipment granted by Obligors pursuant to the Receivables and any other interest of the Issuing Entity in the Financed Equipment;

 

(c)                any proceeds with respect to the Receivables from claims on insurance policies covering Financed Equipment or Obligors (to the extent not used to purchase Substitute Equipment);

 

(d)               any proceeds from recourse to Dealers with respect to the Receivables;

 

(e)                any Financed Equipment that shall have secured a Receivable and that shall have been acquired by or on behalf of the Trust;

 

(f)                 all funds on deposit from time to time in the Trust Accounts, including the Spread Account Deposit, and all investments and proceeds thereof (including all income thereon);

 

(g)                the Sale and Servicing Agreement (including all rights of the Seller under the Purchase Agreement assigned to the Issuing Entity pursuant to the Sale and Servicing Agreement);

 

(h)               [Reserved]; and

 

(i)                   all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind

 

 

and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds (to the extent not used to purchase Substitute Equipment), condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of any and all of the foregoing.

 

The foregoing Grant is made in trust to secure (x) first, the payment of principal of and interest on, and any other amounts owing in respect of, the Class A Notes, equally and ratably without prejudice, priority or distinction, and (y) second, the payment of principal of and interest on, and any other amounts owing in respect of, the Class B Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with this Indenture.

 

DB Trust, as Indenture Trustee on behalf of the Noteholders, (1) acknowledges such Grant, and (2) accepts the trusts under this Indenture in accordance with this Indenture and agrees to perform its duties required in this Indenture and the other Basic Documents to which it is a party in accordance with their terms.

 

ARTICLE I
 Definitions and Incorporation by Reference

 

SECTION 1.1.                                     Definitions.  Capitalized terms used but not otherwise defined herein are defined in Appendix A hereto.

 

SECTION 1.2.                                     Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following terms, where used in the TIA, shall have the following meanings for the purposes hereof:

 

“Commission” means the Securities and Exchange Commission.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

 

“obligor” on the indenture securities means the Issuing Entity and any other obligor on the indenture securities.

 

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.

 

2

 

SECTION 1.3.                                     Other Definitional Provisions.  (a)   All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(b)         As used in this Agreement and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date hereof.  To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.

 

(c)          The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including, without limitation,”.

 

(d)         The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(e)          References to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation.

 

(f)           References to any agreement refer to that agreement as from time to time amended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms.

 

(g)          References to any Person include that Person’s successors and assigns.

 

ARTICLE II
 The Notes

 

SECTION 2.1.                                     Form.  The A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B Notes, together with the Indenture Trustee’s certificate of authentication, shall be in substantially the forms set forth in Exhibits A-1, A-2, A-3, A-4 and A-5 respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

3

 

The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

 

Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibits A-1, A-2, A-3, A-4, and A-5 are part of the terms of this Indenture.

 

SECTION 2.2.                                     Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuing Entity by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signature of individuals who were at the time of signature Authorized Officers of the Issuing Entity shall bind the Issuing Entity, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

 

The Indenture Trustee shall upon Issuing Entity Order authenticate and deliver A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B Notes for original issue in an aggregate principal amount of $165,000,000, $250,000,000, $223,000,000, $100,500,000 and $17,000,000, respectively.  The Outstanding Amount of A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B Notes at any time may not exceed such respective amounts except as provided in Section 2.5.

 

Each Note shall be dated the date of its authentication.  The Notes shall be issuable as registered Notes in the minimum denomination of $1,000 and in greater whole-dollar denominations in excess thereof.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate of authentication shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

SECTION 2.3.                                     Temporary Notes.  Pending the preparation of Definitive Notes, the Issuing Entity may execute, and upon receipt of an Issuing Entity Order, the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with this Indenture as the Authorized Officers executing such Notes may determine, as evidenced by their execution of such Notes.

 

If temporary Notes are issued, the Issuing Entity will cause Definitive Notes to be prepared without unreasonable delay.  After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuing Entity to be maintained as provided in Section 3.2, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Notes, the Issuing Entity shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of authorized denominations.  Until so exchanged,

 

4

 

the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as if they were Definitive Notes.

 

SECTION 2.4.                                     Registration; Registration of Transfer and Exchange.  The Issuing Entity shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuing Entity shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Trustee shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuing Entity shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of the Note Registrar.

 

If a Person other than the Indenture Trustee is appointed by the Issuing Entity as the Note Registrar, the Issuing Entity will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times, to obtain copies thereof and to rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.

 

Upon surrender for registration of transfer of any Note at the office or agency of the Issuing Entity to be maintained as provided in Section 3.2, if the requirements of Section 8-401(a) of the UCC are met, the Issuing Entity shall execute, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes in any authorized denominations of a like aggregate principal amount.

 

At the option of the Holder, Notes may be exchanged for other new Notes of the same Class in any authorized denominations of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are met, the Issuing Entity shall execute, the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive.

 

By its acquisition of a Note or any interest therein, each purchaser or transferee shall be deemed to represent and warrant that either (a) it is not an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), an entity deemed to hold “plan assets” of any of the foregoing or a “governmental plan” as defined in Section 3(32) of ERISA that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the acquisition and holding of the Note or any interest therein will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuing Entity, evidencing the same debt and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

 

5

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuing Entity may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Sections 2.3 or 9.6 not involving any transfer.

 

SECTION 2.5.                                     Mutilated, Destroyed, Lost or Stolen Notes.If: (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by the Indenture Trustee and the Issuing Entity to hold the Indenture Trustee and the Issuing Entity, respectively, harmless, then, in the absence of notice to the Issuing Entity, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuing Entity shall execute, and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become, or within seven days shall be, due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuing Entity may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note (or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence), a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuing Entity and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered (or payment made) or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuing Entity or the Indenture Trustee in connection therewith.

 

Upon the issuance of any replacement Note under this Section, the Issuing Entity may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith.

 

Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuing Entity, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time

 

6

 

enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

SECTION 2.6.                                     Persons Deemed Owner.  Prior to due presentment for registration of transfer of any Note, the Issuing Entity, the Indenture Trustee and any agent of the Issuing Entity or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Issuing Entity, the Indenture Trustee nor any agent of the Issuing Entity or the Indenture Trustee shall be affected by notice to the contrary.

 

SECTION 2.7.                                     Payment of Principal and Interest; Defaulted Interest.  (a)  The A-1 Notes, A-2 Notes, A-3 Notes, A-4 Notes and Class B Notes shall accrue interest at the A-1 Note Rate, the A-2 Note Rate, the A-3 Note Rate, the A-4 Note Rate and the Class B Note Rate, respectively, and such interest shall be payable on each Payment Date, subject to Section 3.1.  Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by the Issuing Entity on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by check mailed first-class, postage prepaid, to such Person’s address as it appears on the Note Register on such Record Date.  However, unless Definitive Notes have been issued, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee.  Notwithstanding the above, the final installment of principal payable with respect to such Note (and except for the Redemption Price for any Note called for redemption pursuant to Section 10.1(a)) shall be payable as provided in clause (b)(ii).  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.3.

 

(b)         ((i)The principal of each Note shall be payable in installments on each Payment Date as provided in this Indenture, and except as provided below each such installment shall be due and payable only to the extent that there are funds available to make the payment in accordance with the Basic Documents.  Notwithstanding the foregoing:  (A) the entire Outstanding Amount of each Class of Notes shall be due and payable on the related Class Final Scheduled Maturity Date, and (B) the entire Outstanding Amount of all Classes of Notes shall be due and payable, on any date on which an Event of Default shall have occurred and be continuing if the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes have declared the Notes to be immediately due and payable in the manner provided in Section 5.2, and such Notes shall be paid in accordance with, and in the priority and sequence set forth in, Section 8.2(e).  All principal payments on the A-1 Notes shall be made pro rata to the Noteholders of the A-1 Notes.  All principal payments on the A-2 Notes shall be made pro rata to the Noteholders of the A-2 Notes. All principal payments on the A-3 Notes shall be made pro rata to the Noteholders of the A-3 Notes.  All principal

 

7

 

payments on the A-4 Notes shall be made pro rata to the Noteholders of the A-4 Notes.  All principal payments on the Class B Notes shall be made pro rata to the Noteholders of the Class B Notes.

 

(ii)                                  The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuing Entity expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed no later than five Business Days prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

 

(c)                                  If the Issuing Entity defaults in a payment of interest on the Notes, the Issuing Entity shall pay, in any lawful manner, defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable interest rate from the Payment Date for which such payment is in default.  The Issuing Entity may pay such defaulted interest to the Persons who are Noteholders on a subsequent special record date, which date shall be at least five Business Days prior to the special payment date.  The Issuing Entity shall fix or cause to be fixed any such special record date and special payment date, and, at least 15 days before any such special record date, shall mail to each Noteholder a notice that states the special record date, the special payment date and the amount of defaulted interest to be paid.

 

SECTION 2.8.                                     Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee.  The Issuing Entity may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuing Entity may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section except as expressly permitted by this Indenture.  All canceled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuing Entity shall direct by an Issuing Entity Order that they be returned to it; provided, that such Issuing Entity Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

 

SECTION 2.9.                                     Release of Collateral.  Subject to Sections 8.4 and 11.1 and the Basic Documents, the Indenture Trustee shall release property from the Lien of this Indenture only upon receipt of an Issuing Entity Request accompanied by an Officer’s Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA §§314(c) and 314(d)(l), or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

 

SECTION 2.10.                              Book-Entry Notes.  The Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company (“DTC”) (the initial Clearing Agency), or its custodian, by, or on

 

8

 

behalf of, the Issuing Entity. Such Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner of such Note will receive a Definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12. Unless and until definitive, fully registered Notes (the “Definitive Notes”) representing Notes have been issued to Note Owners:

 

(i)                                     this Section shall be in full force and effect;

 

(ii)                                  the Note Registrar and the Indenture Trustee may deal with the Clearing Agency for all purposes (including the payment of principal of and interest on the applicable Notes) as the authorized representative of the Note Owners;

 

(iii)                               to the extent that this Section conflicts with any other provisions of this Indenture, this Section shall control;

 

(iv)                              the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants pursuant to the Note Depository Agreement.  Unless and until Definitive Notes are issued, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the applicable Notes to such Clearing Agency Participants; and

 

(v)                                 whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Amount of the Notes (or a Class of Notes), the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes (or Class of Notes) and has delivered such instructions to the Indenture Trustee.

 

SECTION 2.11.                              Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes for the Notes have been issued to Note Owners, the Indenture Trustee shall give all such notices and communications to the Clearing Agency.

 

SECTION 2.12.                              Definitive Notes.  Notes initially or subsequently cleared through a clearing agency may be issued in definitive, fully registered certificated form to Noteholders if requested by the DTC participants to whom the Notes are credited and in accordance with DTC’s rules and procedures.  Upon any surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuing Entity shall execute, and the Indenture Trustee shall authenticate, the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuing Entity, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders.  In addition, Notes issued as

 

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Definitive Notes from time to time may be subsequently issued as Book-Entry Notes and cleared through a Clearing Agency at the request of applicable Holders of the Definitive Notes.

 

SECTION 2.13.                              Tax Treatment.  It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, until the Certificates are held by other than the Seller, the Trust be disregarded as an entity separate from the Seller and the Notes be treated as debt of the Seller.  At such time that the Certificates are held by more than one Person, it is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for such tax purposes, the Trust be treated as a partnership and the Notes be treated as debt of the Trust.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as provided in this Section 2.13.

 

ARTICLE III
 Covenants

 

SECTION 3.1.                                     Payment of Principal and Interest.  The Issuing Entity will duly and punctually pay the principal and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, subject to Sections 8.2(c) and (e), the Issuing Entity will cause to be distributed to Holders of the Notes all amounts on deposit in the Note Distribution Account on a Payment Date deposited therein for the benefit of the Notes pursuant to the Sale and Servicing Agreement.  Amounts properly withheld under the Code or any applicable State law by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuing Entity to such Noteholder for all purposes of this Indenture.

 

SECTION 3.2.                                     Maintenance of Office or Agency.  The Issuing Entity will maintain an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuing Entity in respect of the Notes and this Indenture may be served.  The Issuing Entity hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes.  The Issuing Entity will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuing Entity shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuing Entity hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

SECTION 3.3.                                     Money for Payments To Be Held in Trust.  As provided in Sections 8.2(a) and (b), all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account and the Note Distribution Account pursuant to Section 8.2(c) or Section 8.2(e), as applicable, shall be made on behalf of the Issuing Entity by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account and the Note Distribution Account for payments of Notes shall be paid over to the Issuing Entity except as provided in this Section.

 

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One Business Day prior to each Payment Date and Redemption Date, the Issuing Entity shall deposit or cause to be deposited in the Note Distribution Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act.

 

Any Paying Agent shall be appointed by Issuing Entity Order with written notice thereof to the Indenture Trustee.  Any Paying Agent appointed by the Issuing Entity shall be a Person who would be eligible to be Indenture Trustee hereunder as provided in Section 6.11.

 

The Issuing Entity will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

 

(i)                                     hold in trust all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(ii)                                  give the Indenture Trustee notice of any default by the Issuing Entity (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;

 

(iii)                               at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

 

(iv)                              immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent; and

 

(v)                                 comply with all requirements of the Code and any applicable State law with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

 

The Issuing Entity may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuing Entity Order, direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuing Entity on Issuing Entity

 

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Order; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuing Entity for payment thereof (but only to the extent of the amounts so paid to the Issuing Entity), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuing Entity cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuing Entity.  The Indenture Trustee shall also adopt and employ, at the expense of the Issuing Entity, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

SECTION 3.4.                                     Existence.  The Issuing Entity will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the jurisdiction of its organization and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate.

 

SECTION 3.5.                                     Protection of the Trust Estate.  The Issuing Entity will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

 

(i)                                     maintain or preserve the Lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

 

(ii)                                  perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

 

(iii)                               enforce any of the Collateral; or

 

(iv)                              preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all Persons.

 

The Issuing Entity hereby designates the Indenture Trustee as its agent and attorney-in-fact to execute any financing statement, continuation statement, instrument of further assurance or other instrument required to be executed to accomplish the foregoing.

 

SECTION 3.6.                                     Opinions as to the Trust Estate. (a) On the Closing Date, the Issuing Entity shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken or will be taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto and any other requisite documents, and with respect to the execution and filing of any financing statements

 

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and continuation statements, as are necessary to perfect and make effective the Lien and security interest created by this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such Lien and security interest effective.

 

(b)         On or before April 30 in each calendar year commencing in the calendar year 2014 the Issuing Entity shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as is necessary to maintain the Lien and security interest of this Indenture and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such Lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents, and the execution and filing of any financing statements, amendments to financing statements and continuation statements, that will, in the opinion of such counsel, be required to maintain the Lien and security interest of this Indenture until April 30 in the following calendar year.

 

SECTION 3.7.                                     Performance of Obligations; Servicing of Receivables.  (a)  The Issuing Entity will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or such other instrument or agreement.

 

(b)         The Issuing Entity may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuing Entity shall be deemed to be action taken by the Issuing Entity.  Initially, the Issuing Entity has contracted with the Servicer and the Administrator to assist the Issuing Entity in performing its duties under this Indenture.

 

(c)          The Issuing Entity will punctually perform and observe all of its obligations and agreements contained in this Indenture, the other Basic Documents and in the instruments and agreements included in the Trust Estate, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.  Except as otherwise expressly provided therein, the Issuing Entity shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of the Indenture Trustee or the Holders of at least a majority of the Outstanding Amount of the Notes.

 

(d)         If the Issuing Entity shall have knowledge of the occurrence of a Servicer Default, the Issuing Entity shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuing Entity is taking with respect to such default.  If a Servicer Default shall arise from the failure of the Servicer to

 

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perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the Issuing Entity shall take all reasonable steps available to it to remedy such failure.

 

(e)          As promptly as possible after the giving of notice of termination to the Servicer of the Servicer’s rights and powers pursuant to Section 8.1 of the Sale and Servicing Agreement, the Issuing Entity shall appoint a successor servicer acceptable to the Indenture Trustee (the “Successor Servicer”), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Indenture Trustee.  In the event that a Successor Servicer has not been appointed and accepted its appointment at the time when the previous Servicer ceases to act as Servicer, the Indenture Trustee without further action shall automatically be appointed as the Successor Servicer.  Notwithstanding the above, the Indenture Trustee shall, if it is unable to so act, (i) notify the Issuing Entity of its resignation as Successor Servicer and (ii) appoint or petition a court of competent jurisdiction to appoint any established institution, having a net worth of not less than $50,000,000 and whose regular business shall include the servicing of equipment receivables as the successor to the Servicer under the Sale and Servicing Agreement.  In accordance with Section 8.2 of the Sale and Servicing Agreement, the Issuing Entity shall enter into an agreement with such Successor Servicer for the servicing of the Receivables (such agreement to be in form and substance satisfactory to the Indenture Trustee).  If the Indenture Trustee shall succeed to the previous Servicer’s duties as servicer of the Receivables as provided herein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, the provisions of Article VI shall be inapplicable to the Indenture Trustee in its duties as the Successor Servicer and the servicing of the Receivables.  In case the Indenture Trustee shall become the Successor Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to act through or appoint as Servicer any one of its Affiliates; provided, that it shall be fully liable for the actions and omissions of such Affiliate in its capacity as Successor Servicer.  Notwithstanding anything else herein to the contrary, in no event shall the Indenture Trustee be liable for any servicing fee or for any differential in the amount of the Servicing Fee paid hereunder and the amount necessary to induce any successor Servicer to act as Successor Servicer under this Indenture and the transactions set forth or provided for herein, or be liable for or be required to make any servicer advances.

 

(f)           Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Issuing Entity shall promptly notify the Indenture Trustee.  As soon as a Successor Servicer is appointed, the Issuing Entity shall notify the Indenture Trustee of such appointment, specifying in such notice the name and address of such Successor Servicer.

 

SECTION 3.8.                                     Negative Covenants.  So long as any Notes are Outstanding, the Issuing Entity shall not:

 

(i)                                     except as expressly permitted by this Indenture, the Purchase Agreement or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuing Entity, including those included in the Trust Estate, unless directed to do so by the Indenture Trustee;

 

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(ii)                                  claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code or applicable State law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate; or

 

(iii)                               (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any Lien (other than the Lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit the Lien of this Indenture not to constitute a valid first priority (other than with respect to any tax lien, mechanics’ lien or other lien not considered a Lien) security interest in the Trust Estate.

 

SECTION 3.9.                                     Annual Statement as to Compliance.  The Issuing Entity will deliver to the Indenture Trustee, within 120 days after the end of each fiscal year of the Issuing Entity, an Officer’s Certificate, substantially in the form of Exhibit B, stating that:

 

(i)                                     a review of the activities of the Issuing Entity during such year and of performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

(ii)                                  to the best of such Authorized Officer’s knowledge, based on such review, the Issuing Entity has complied with all conditions and covenants under this Indenture throughout such year or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

 

SECTION 3.10.                              Issuing Entity May Consolidate, etc., Only on Certain Terms.  (a)  The Issuing Entity shall not consolidate or merge with or into any other Person, unless:

 

(i)                                     the Person (if other than the Issuing Entity) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuing Entity to be performed or observed, all as provided herein;

 

(ii)                                  immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(iii)                               the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

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(iv)                              the Issuing Entity shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Issuing Entity, any Noteholder or any Certificateholder;

 

(v)                                 any action that is necessary to maintain the Lien and security interest created by this Indenture shall have been taken; and

 

(vi)                              the Issuing Entity shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

 

(b)         Except as permitted by the Basic Documents, the Issuing Entity shall not convey or transfer any of its properties or assets, substantially as an entirety, including those included in the Trust Estate, to any Person, unless:

 

(i)                                     the Person that acquires by conveyance or transfer the properties and assets of the Issuing Entity the conveyance or transfer of which is hereby restricted shall:  (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture and the other Basic Documents on the part of the Issuing Entity to be performed or observed, all as provided herein, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold harmless the Issuing Entity against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;

 

(ii)                                  immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(iii)                               the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

(iv)                              the Issuing Entity shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Issuing Entity, any Noteholder or any Certificateholder;

 

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(v)                                 any action that is necessary to maintain the Lien and security interest created by this Indenture shall have been taken; and

 

(vi)                              the Issuing Entity shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).

 

SECTION 3.11.                              Successor or Transferee.  (a)  Upon any consolidation or merger of the Issuing Entity in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuing Entity) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuing Entity under this Indenture with the same effect as if such Person had been named as the Issuing Entity herein.

 

(b)         Upon a conveyance or transfer of all the assets and properties of the Issuing Entity pursuant to Section 3.10(b), the Issuing Entity will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuing Entity with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that the Issuing Entity is to be so released.

 

SECTION 3.12.                              No Other Business.  The Issuing Entity shall not engage in any business other than as permitted in Section 2.3 of the Trust Agreement.

 

SECTION 3.13.                              No Borrowing.  The Issuing Entity shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes.

 

SECTION 3.14.                              Servicer’s Obligations.  The Issuing Entity shall cause the Servicer to comply with Sections 4.8, 4.9, 4.10, 4.11 and 5.11 of the Sale and Servicing Agreement.

 

SECTION 3.15.                              Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by the Sale and Servicing Agreement or this Indenture, the Issuing Entity shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

 

SECTION 3.16.                              Capital Expenditures.  The Issuing Entity shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).

 

SECTION 3.17.                              Removal of Administrator.  So long as any Notes are Outstanding, the Issuing Entity shall not remove the Administrator without cause unless the Rating Agency Condition shall have been satisfied in connection with such removal.

 

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SECTION 3.18.                              Restricted Payments.  The Issuing Entity shall not, directly or indirectly:  (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Trustee or any owner of a beneficial interest in the Issuing Entity or otherwise with respect to any ownership or equity interest or security in or of the Issuing Entity or to the Servicer or the Administrator, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuing Entity may make, or cause to be made, distributions to the Servicer, the Trustee, the Certificateholders and the Administrator as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement.  The Issuing Entity will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the other Basic Documents.

 

SECTION 3.19.                              Notice of Events of Default.  The Issuing Entity shall give the Indenture Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder, each default on the part of the Servicer or the Seller of its obligations under the Sale and Servicing Agreement and each default on the part of CNHCA of its obligations under the Purchase Agreement.

 

SECTION 3.20.                              Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuing Entity will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 3.21.                              Perfection Representation.  The Issuing Entity further makes all the representations, warranties and covenants set forth in Schedule P.

 

ARTICLE IV
 Satisfaction and Discharge

 

SECTION 4.1.                                     Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to: (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) [Reserved]; (v) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (vi) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee under Section 4.2) and (vii) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuing Entity, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when:

 

(A)                               either:

 

(1)                                 all Notes theretofore authenticated and delivered (other than: (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5 and (ii) Notes for whose payment money has

 

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theretofore been deposited in trust or segregated and held in trust by the Issuing Entity and thereafter repaid to the Issuing Entity or discharged from such trust, as provided in Section 3.3) have been delivered to the Indenture Trustee for cancellation; or

 

(2)                                 all Notes not theretofore delivered to the Indenture Trustee for cancellation:

 

(i)                                     have become due and payable,

 

(ii)                                  will become due and payable on the respective Class Final Scheduled Maturity Date within one year, or

 

(iii)                               are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuing Entity, and the Issuing Entity, in the case of clause (2)(i), (ii) or (iii), has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the respective Class Final Scheduled Maturity Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.1(a)), as the case may be;

 

(B)                               the Issuing Entity has paid or caused to be paid all other sums payable hereunder by the Issuing Entity; and

 

(C)                               the Issuing Entity has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.1(a) and, subject to Section 11.2, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

SECTION 4.2.                                     Application of Trust Money.  All monies deposited with the Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such monies have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such monies need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or as required by law.

 

SECTION 4.3.                                     Repayment of Monies Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all monies then

 

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held by any Paying Agent other than the Indenture Trustee under this Indenture with respect to such Notes shall, upon demand of the Issuing Entity, be paid to the Indenture Trustee to be held and applied according to Section 3.3, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

 

ARTICLE V
 Remedies

 

SECTION 5.1.                                     Events of Default.  “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(i)                                     default in the payment of any interest on any Class A Note, or if no Class A Notes are Outstanding, any Class B Note, when the same becomes due and payable, and such default shall continue for a period of five days;

 

(ii)                                  default in the payment of the principal of any Note when the same becomes due and payable;

 

(iii)                               default in the observance or performance of any covenant or agreement of the Issuing Entity made in this Indenture (other than a covenant or agreement a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Issuing Entity made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuing Entity by the Indenture Trustee or to the Issuing Entity and the Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder;

 

(iv)                              the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuing Entity or any substantial part of the Trust Estate in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuing Entity or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuing Entity’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

 

(v)                                 the commencement by the Issuing Entity of a voluntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter

 

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in effect, or the consent by the Issuing Entity to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuing Entity to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuing Entity or for any substantial part of the Trust Estate, or the making by the Issuing Entity of any general assignment for the benefit of creditors, or the failure by the Issuing Entity generally to pay its debts as such debts become due, or the taking of action by the Issuing Entity in furtherance of any of the foregoing.

 

The Issuing Entity shall deliver to the Indenture Trustee, within five days after the Issuing Entity or the Administrator obtains actual knowledge thereof, written notice in the form of an Officer’s Certificate of any event that, with the giving of notice or the lapse of time or both, would become an Event of Default under clause (iii), its status and what action the Issuing Entity is taking or proposes to take with respect thereto.

 

SECTION 5.2.                                     Acceleration of Maturity; Rescission and Annulment.  If an Event of Default should occur and be continuing, then and in every such case the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount may declare all the Notes to be immediately due and payable, by a notice in writing to the Issuing Entity (and to the Indenture Trustee if given by Noteholders), and upon any such declaration the Outstanding Amount, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

 

At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders of Notes representing not less than a majority of the Outstanding Amount, by written notice to the Issuing Entity and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i)                                     the Issuing Entity has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

(A)                               all payments of principal of and interest on all Notes and all other amounts, in each case, that would then be due hereunder if the Event of Default giving rise to such acceleration had not occurred; and

 

(B)                               all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and

 

(ii)                                  all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

 

No such rescission shall affect any subsequent default or impair any right consequent to such default.

 

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SECTION 5.3.                                     Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.  (a)  The Issuing Entity covenants that if an Event of Default described in Section 5.1(i) or (ii) occurs, the Issuing Entity will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of Notes, the whole amount then due and payable on such Notes for principal and interest, with interest upon the overdue principal at the applicable interest rate, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest, at the applicable interest rate, and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.

 

(b)         In case the Issuing Entity shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuing Entity or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuing Entity or other obligor upon such Notes, wherever situated, the monies adjudged or decreed to be payable.

 

(c)          In case an Event of Default occurs and is continuing, the Indenture Trustee may, as more particularly provided in Section 5.4, in its discretion, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

(d)         In case there shall be pending, relative to the Issuing Entity or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or other similar law, or in case a receiver, assignee, trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuing Entity or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuing Entity or other obligor upon the Notes, or to the creditors or property of the Issuing Entity or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

 

(i)                                     to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by

 

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the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Noteholders allowed in such Proceedings;

 

(ii)                                  unless prohibited by applicable law or regulations, to vote on behalf of the Holders of the Notes in any election of a trustee, a standby trustee or any Person performing similar functions in any such Proceedings;

 

(iii)                               to collect and receive any monies or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and

 

(iv)                              to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes allowed in any judicial Proceedings relative to the Issuing Entity, its creditors and its property;

 

and any trustee, receiver, liquidator, assignee, custodian, sequestrator or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.

 

(e)          Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

(f)           All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name and as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.

 

(g)          In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

 

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SECTION 5.4.                                     Remedies; Priorities.  (a)  If the Notes have been declared to be due and payable under Section 5.2 following an Event of Default, the Indenture Trustee may do one or more of the following (subject to Section 5.5):

 

(i)                                     institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuing Entity and any other obligor upon such Notes monies adjudged due;

 

(ii)                                  institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

 

(iii)                               exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes;

 

(iv)                              sell the Trust Estate, or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; and

 

(v)                                 make demand upon the Servicer, by written notice, that the Servicer deliver to the Indenture Trustee all Receivable Files;

 

provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default, other than an Event of Default described in Section 5.1(i) or (ii), unless:  (A) all the Noteholders consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest or (C) the Indenture Trustee determines that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of Holders of 66 2/3% of the Outstanding Amount of the Notes. In determining such sufficiency or insufficiency with respect to clauses (B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.  The Indenture Trustee shall incur no liability as a result of the sale of the Trust Estate or any part thereof at any sale pursuant to this Section 5.4 conducted in a commercially reasonable manner.  Each of the Issuing Entity and Holders hereby waives any claims against the Indenture Trustee arising by reason of the fact that the price at which the Trust Estate may have been sold at such sale was less than the price that might have been obtained, even if the Indenture Trustee accepts the first offer received and does not offer the Trust Estate to more than one offeree, so long as such sale is conducted in a commercially reasonable manner.

 

(b)         If the Indenture Trustee collects any money or property pursuant to this Article V, it shall pay out such money or property in the following order:

 

FIRST:  [Reserved];

 

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SECOND:  to pay the Servicer its accrued and unpaid Servicing Fee;

 

THIRD:  to the Indenture Trustee for amounts due under Section 6.7 and to the Trustee for amounts due under Section 8.1 of the Trust Agreement;

 

FOURTH:  to the Administrator its accrued and unpaid Administration Fees;

 

FIFTH:  to the Note Distribution Account for distribution pursuant to Section 8.2(e) to the extent of all amounts payable under such Section, other than any amounts that would be deposited into the Certificate Distribution Account under such Section;

 

SIXTH:  to the Servicer, to cover any accrued and unpaid reimbursable expenses;

 

SEVENTH:  to the Trustee for amounts due to the Trustee under Article VIII of the Trust Agreement to the extent not paid under clause THIRD above; and

 

EIGHTH:  to the Issuing Entity for distribution to the Certificateholders.

 

The Indenture Trustee may fix a special record date and special payment date for any payment to Noteholders pursuant to this Section.  At least 15 days before such special record date, the Issuing Entity shall mail to each Noteholder and the Indenture Trustee a notice that states the special record date, the special payment date and the amount to be paid.

 

SECTION 5.5.                                     Optional Preservation of the Receivables.  If the Notes have been declared to be due and payable under Section 5.2 following an Event of Default, and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate.  In determining whether to maintain possession of the Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

 

SECTION 5.6.                                     Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(i)                                     such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

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(ii)                                  the Holder(s) of not less than 25% of the Outstanding Amount of the Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

(iii)                               such Holder(s) have offered to the Indenture Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;

 

(iv)                              the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceeding; and

 

(v)                                 no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of a majority of the Outstanding Amount of the Notes;

 

it being understood and intended that no one or more Holder(s) of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder(s) of Notes or to obtain or to seek to obtain priority or preference over any other Holder(s) or to enforce any right under this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Noteholders, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

SECTION 5.7.                                     Unconditional Rights of Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

SECTION 5.8.                                     Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuing Entity, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

 

SECTION 5.9.                                     Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or

 

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remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 5.10.                              Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee or any Holder of Notes to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

 

SECTION 5.11.                              Control by Noteholders.  The Holders of not less than a majority of the Outstanding Amount of the Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided, that:

 

(i)                                     such direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)                                  subject to the express terms of Section 5.4, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by all the Noteholders;

 

(iii)                               if the conditions set forth in Section 5.5 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and

 

(iv)                              the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction;

 

provided further, however, that, subject to Section 6.1, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholder(s) not consenting to such action.

 

SECTION 5.12.                              Waiver of Past Defaults.  Prior to the time a judgment or decree for payment of money due has been obtained as described in Section 5.3, the Holders of Notes of not less than a majority of the Outstanding Amount of the Notes may waive any past Default or Event of Default and its consequences except a Default:  (a) in payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuing Entity, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to

 

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have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

SECTION 5.13.                              Undertaking for Costs.  All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney’s fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to:  (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder(s) holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

SECTION 5.14.                              Waiver of Stay or Extension Laws.  The Issuing Entity covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuing Entity (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

SECTION 5.15.                              Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuing Entity or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuing Entity. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.4(b).

 

SECTION 5.16.                              Performance and Enforcement of Certain Obligations.  (a)  Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuing Entity shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Seller and the Servicer, as applicable, of each of their obligations to the Issuing Entity under or in connection with the Sale and Servicing Agreement or to the Seller under or in connection with the Purchase Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuing Entity under or in connection with the Sale and Servicing Agreement (or the Seller under or in connection with the Purchase Agreement) to the extent and in the manner directed by the Indenture Trustee, including the transmission of

 

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notices of default on the part of the Seller or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Servicer of each of their obligations under the Sale and Servicing Agreement or the Purchase Agreement.

 

(b)         If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than 66 2/3% of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuing Entity against the Seller or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer of each of their obligations to the Issuing Entity thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuing Entity to take such action shall be suspended.

 

(c)          If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than 66 2/3% of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Seller against CNHCA under or in connection with the Purchase Agreement, including the right or power to take any action to compel or secure performance or observance by CNHCA, of each of its obligations to the Seller thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Purchase Agreement, and any right of the Seller to take such action shall be suspended.

 

ARTICLE VI
 The Indenture Trustee

 

SECTION 6.1.                                     Duties of the Indenture Trustee.  (a)  If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)         Except during the continuance of an Event of Default actually known to a Responsible Officer:

 

(i)                                     the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall examine the certificates

 

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and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)          The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)                                     this clause (c) does not limit the effect of clause (b) of this Section;

 

(ii)                                  the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is conclusively determined by a court of competent jurisdiction that the Indenture Trustee was negligent in ascertaining the pertinent facts;

 

(iii)                               the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the Indenture;

 

(iv)                              the Indenture Trustee shall not be charged with knowledge of an Event of Default or Servicer Default unless a Responsible Officer obtains actual knowledge of such event or the Indenture Trustee receives written notice of such event from the Seller, Servicer or Note Owners owning Notes aggregating not less than 10% of the Outstanding Amount of the Notes; and

 

(v)                                 the Indenture Trustee shall have no duty to monitor the performance of the Issuing Entity, the Trustee, the Seller or the Servicer, nor shall it have any liability in connection with malfeasance or nonfeasance by the Issuing Entity, the Trustee, the Seller or the Servicer.  The Indenture Trustee shall have no liability in connection with compliance of the Issuing Entity, the Trustee, the Seller or the Servicer with statutory or regulatory requirements related to the Receivables.  The Indenture Trustee shall not make or be deemed to have made any representations or warranties with respect to the Receivables or the validity or sufficiency of any assignment of the Receivables to the Trust Estate or the Indenture Trustee.

 

(d)         Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to clauses (a), (b), (c) and (g).

 

(e)          The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuing Entity.

 

(f)           Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law, this Indenture or the Sale and Servicing Agreement.

 

(g)           No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity satisfactory to it against any loss, liability or expense is not reasonably assured to it.

 

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(h)         Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to this Section and the TIA.

 

SECTION 6.2.                                     Rights of Indenture Trustee.  (a)  The Indenture Trustee may conclusively rely and shall be fully protected in acting on any document reasonably believed by it to be genuine and to have been signed or presented by the proper Person.  The Indenture Trustee need not investigate any fact or matter stated in any such document.

 

(b)         Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

 

(c)          The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, a custodian or a nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it.

 

(d)         The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 

(e)          The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(f)           The Indenture Trustee shall not be required to make any initial or periodic examination of any files or records related to the Receivables for the purpose of establishing the presence or absence of defects, the compliance by the Issuing Entity with its representations and warranties or for any other purpose.

 

(g)          In the event that the Indenture Trustee is also acting as Paying Agent or Note Registrar hereunder, the rights and protections afforded to the Indenture Trustee pursuant to this Article VI shall also be afforded to the Indenture Trustee in its capacity as such Paying Agent or Note Registrar.

 

(h)         In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering (“Applicable Law”), the Indenture Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee.  Accordingly, each of the parties to the Indenture agrees to provide to the Indenture Trustee, upon its request from time to time such identifying information and documentation as may be available for such party and is

 

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reasonably acceptable for such party to provide in order to enable the Indenture Trustee to comply with Applicable Law.

 

SECTION 6.3.                                     Individual Rights of the Indenture Trustee.  The Indenture Trustee shall not, in its individual capacity, but may in a fiduciary capacity, become the owner of Notes or otherwise extend credit to the Issuing Entity.  The Indenture Trustee may otherwise deal with the Issuing Entity or its Affiliates with the same rights it would have if it were not the Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.

 

SECTION 6.4.                                     Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for, and makes no representation as to the validity or adequacy of, this Indenture or the Notes; shall not be accountable for the Issuing Entity’s use of the proceeds from the Notes; and shall not be responsible for any statement of the Issuing Entity in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication.

 

SECTION 6.5.                                     Notice of Defaults.  If a Default occurs and is continuing and is known to a Responsible Officer, the Indenture Trustee shall mail to each Noteholder notice of the Default within 90 days after it occurs.  Except in the case of a Default in payment of principal of or interest on any Note, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.

 

SECTION 6.6.                                     Reports by Indenture Trustee to the Holders.  The Indenture Trustee shall deliver to each Noteholder such information as may be required to enable such Holder to prepare its federal, State and other income tax returns.  Within 60 days after each December 31, starting with December 31, 2013, the Indenture Trustee shall mail to each Noteholder a brief report as of such December 31 that complies with TIA § 313(a) (if required by said section).

 

SECTION 6.7.                                     Compensation and Indemnity.  The Issuing Entity shall, or shall cause the Servicer to, pay to the Indenture Trustee from time to time reasonable compensation for its services as agreed to between the Issuing Entity and the Indenture Trustee in writing.  The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuing Entity shall, or shall cause the Servicer to, reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuing Entity shall or shall cause the Servicer to indemnify the Indenture Trustee and its officers, directors, employees and agents against any and all loss, liability or expense (including attorneys’ fees and expenses) incurred by them in connection with the administration of this trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuing Entity and the Servicer promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuing Entity and the Servicer shall not relieve the Issuing Entity or the Servicer of its respective

 

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obligations hereunder.  The Issuing Entity shall, or shall cause the Servicer to, defend the claim and the Indenture Trustee may have separate counsel and the Issuing Entity shall, or shall cause the Servicer to, pay the reasonable fees and expenses of such counsel.  Notwithstanding anything to the contrary contained herein, neither the Issuing Entity nor the Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuing Entity’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture or the earlier resignation or removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.1(iv) or (v), the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or similar law.

 

SECTION 6.8.                                     Replacement of the Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.8.  The Indenture Trustee may resign at any time by so notifying the Issuing Entity in writing.  The Holders of not less than a majority of the Outstanding Amount of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee in writing and may appoint a successor Indenture Trustee.  The Issuing Entity shall remove the Indenture Trustee if:

 

(i)                                     the Indenture Trustee fails to comply with Section 6.11;

 

(ii)                                  the Indenture Trustee is adjudged a bankrupt or insolvent;

 

(iii)                               a receiver or other public officer takes charge of the Indenture Trustee or its property; or

 

(iv)                              the Indenture Trustee otherwise becomes incapable of acting.

 

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuing Entity shall promptly appoint a successor Indenture Trustee.

 

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuing Entity.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The successor Indenture Trustee shall mail a notice of its succession to the Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuing Entity or the

 

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Holders of not less than a majority of the Outstanding Amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

 

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuing Entity’s and the Administrator’s obligations under Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.  The retiring Indenture Trustee shall have no liability for any act or omission by any successor Indenture Trustee other than itself, serving again as Indenture Trustee.

 

SECTION 6.9.                                     Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee.  The Indenture Trustee shall provide prompt written notice of any such transaction following the consummation thereof to the Issuing Entity and, subject to Section 11.21, to the Rating Agencies; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11.

 

In case at the time such successor(s) by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor Indenture Trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor Indenture Trustee hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates of authentication shall have the full force and effect to the same extent given to the certificate of authentication of the Indenture Trustee anywhere in the Notes or in this Indenture.

 

SECTION 6.10.                              Appointment of Co-Trustee or Separate Trustee.  (a)  Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Person(s) to act as co-trustee(s), or separate trustee(s), of all or any part of the Trust Estate, and to vest in such Person(s), in such capacity and for the benefit of the Noteholders, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.8.

 

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(b)         Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)                                     all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act(s) are to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act(s), in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)                                  no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

 

(iii)                               the Indenture Trustee may at any time accept the resignation of or remove, in its sole discretion, any separate trustee or co-trustee.

 

(c)          Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

 

(d)         Any separate trustee or co-trustee may at any time constitute the Indenture Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

(e)          The Indenture Trustee shall have no obligation to determine whether a co-trustee or separate trustee is legally required in any jurisdiction in which any part of the Trust Estate may be located.

 

SECTION 6.11.                              Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a) and, upon Issuing Entity Order, Section 26(a)(1) of the Investment Company Act of 1940, as amended.  The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published

 

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annual report of condition and it shall have a long term senior, unsecured debt rating of “Baa3” or better by Moody’s (or, if not rated by Moody’s, a comparable rating by another statistical rating agency).  The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture(s) under which other securities of the Issuing Entity are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

If a default occurs under this Indenture, and the Indenture Trustee is deemed to have a conflicting interest as a result of acting as trustee for both (1) the Class A Notes and (2) the Class B Notes, a successor Indenture Trustee shall be appointed for one or more of such Classes, so that there will be separate Indenture Trustees for the Class A Notes and the Class B Notes, respectively.  No such event shall alter the voting rights of the Class A Noteholders or the Class B Noteholders under this Indenture or any other Basic Document.  However, so long as any amounts remain unpaid with respect to the Class A Notes, only the Indenture Trustee for the Class A Noteholders will have the right to exercise remedies under this Indenture (but subject to the express provisions of Section 5.4 and to the right of the Class B Noteholders to receive their respective shares of any proceeds of enforcement, subject to the subordination of the Class B Notes to the Class A Notes as described herein).  Upon repayment of the Class A Notes in full, but so long as any amounts remain unpaid with respect to the Class B Notes, only the Indenture Trustee for the Class B Noteholders will have the right to exercise remedies under this Indenture (but subject to the express provisions of Section 5.4).

 

In the case of the appointment hereunder of a successor Indenture Trustee with respect to any Class of Notes, the Issuing Entity, the retiring Indenture Trustee and the successor Indenture Trustee with respect to such Class of Notes shall execute and deliver an indenture supplemental hereto wherein each successor Indenture Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, the successor Indenture Trustee all the rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of the Class to which the appointment of such successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not retiring with respect to all Classes of Notes, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes of each Class as to which the retiring Indenture Trustee is not retiring shall continue to be vested in the retiring Indenture Trustee, and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Indenture Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Indenture Trustees co-trustees of the same trust and that each such Indenture Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Indenture Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Indenture Trustee shall become effective to the extent provided therein.

 

SECTION 6.12.                              Preferential Collection of Claims Against the Issuing Entity.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed

 

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in TIA § 311(b).  An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

SECTION 6.13.                              Information to Be Provided by the Indenture Trustee.  At any time when the Issuing Entity’s reporting obligations under Section 15(d) of the Exchange Act are not suspended, the Indenture Trustee shall notify the Servicer promptly after the Indenture Trustee becomes aware of (a) the initiation of any legal proceedings against the Indenture Trustee, or of which any property of the Indenture Trustee is subject, that are material to the Noteholders, (b) any developments in any such proceedings that are material to the Noteholders and (c) any such material proceedings that are contemplated by any governmental authority against the Indenture Trustee.

 

SECTION 6.14.                              Representations and Warranties.  The Indenture Trustee hereby represents that:

 

(a)         the Indenture Trustee is duly organized and validly existing as a banking corporation in good standing under the laws of the State of New York with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted;

 

(b)         the Indenture Trustee has the power and authority to execute and deliver this Indenture and to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized by the Indenture Trustee by all necessary corporate action;

 

(c)          the consummation of the transactions contemplated by this Indenture and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under the articles of association or bylaws of the Indenture Trustee or any material agreement or other instrument to which the Indenture Trustee is a party or by which it is bound;

 

(d)         to best of the Indenture Trustee’s knowledge, there are no proceedings or investigations pending or threatened before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties:  (i) asserting the invalidity of this Indenture, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Indenture or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture; and

 

(e)          as of the date of the Underwriting Agreement, the Preliminary Prospectus Date, the Prospectus Date and the Closing Date, there are no legal proceedings pending against the Indenture Trustee, or of which any property of the Indenture Trustee is subject, that are material to the Noteholders, and no such legal proceedings are known to the Indenture Trustee to be contemplated by any governmental authority against the Indenture Trustee that are material to the Noteholders.

 

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ARTICLE VII
 Noteholders’ Lists and Reports

 

SECTION 7.1.                                     Issuing Entity To Furnish Indenture Trustee Names and Addresses of Noteholders.The Issuing Entity will furnish or cause to be furnished to the Indenture Trustee:  (a) not more than five days after the earlier of:  (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuing Entity of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

 

SECTION 7.2.                                     Preservation of Information; Communications to Noteholders.  (a)  The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.1 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.

 

(b)         Three or more Noteholders, or one or more Holder(s) of Notes evidencing at least 25% of the Outstanding Amount of the Notes, may communicate pursuant to TIA § 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

 

(c)          The Issuing Entity, the Indenture Trustee and the Note Registrar shall have the protection of TIA § 312(c).

 

SECTION 7.3.                                     Reports by Issuing Entity.  (a)   The Issuing Entity shall:

 

(i)                                     file with the Indenture Trustee, within 15 days after the Issuing Entity is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuing Entity may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

 

(ii)                                  file with the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Issuing Entity with the conditions and covenants of this Indenture (with a copy of any such filings being delivered promptly to the Indenture Trustee); and

 

(iii)                               supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA § 313(c)) such summaries of any information, documents and reports required to be filed by the Issuing Entity pursuant to clauses (i) and (ii) as may be required by the rules and regulations prescribed from time to time by the Commission.

 

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(b)         Unless the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity shall end on December 31 of each year.

 

SECTION 7.4.                                     Required Filings.  In no event shall the Indenture Trustee or any agent of the Indenture Trustee be obligated or responsible for preparing, executing, filing or delivering in respect of the Trust Estate or on behalf of another person, either (A) any report or filing required or permitted by the SEC to be prepared, executed, filed or delivered by or in respect of the Trust Estate or another person, or (B) any certification in respect of any such report or filing; in either case, other than as required expressly herein or in the other Basic Documents.

 

ARTICLE VIII
 Accounts, Disbursements and Releases

 

SECTION 8.1.                                     Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Collateral and the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

 

SECTION 8.2.                                     Trust Accounts.  (a)   On or prior to the Closing Date, the Issuing Entity shall cause the Servicer to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders and the Certificateholders, the Trust Accounts as provided in Section 5.1 of the Sale and Servicing Agreement.

 

(b)         On or before each Payment Date, the Total Distribution Amount with respect to the preceding Collection Period will be deposited in the Collection Account as provided in Section 5.3 of the Sale and Servicing Agreement.  On or before each Payment Date, the First Principal Payment Amount and Noteholders’ Distributable Amount with respect to the preceding Collection Period will be transferred to the Note Distribution Account as provided in Sections 5.5 and 5.6 of the Sale and Servicing Agreement, and the Turbo Principal Payment Amount as of such Payment Date will be transferred to the Note Distribution Account as provided in Section 5.6(b)(x) of the Sale and Servicing Agreement.

 

(c)          On each Payment Date and Redemption Date prior to an Event of Default and acceleration of the Notes, the Indenture Trustee shall deposit or distribute all amounts on deposit in the Note Distribution Account to the Noteholders in the following amounts and in the following order of priority:

 

(i)                                     [Reserved];

 

(ii)                                  to the Class A Noteholders, the Class Interest Amount for each Class of Class A Notes; provided, that if there are not sufficient funds in the Note Distribution

 

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Account to pay the entire amount of accrued and unpaid interest then due on such Notes, the amount in the Note Distribution Account shall be applied to the payment of such interest on such Notes pro rata on the basis of the total such interest due on such Notes;

 

(iii)                               to the Class A Noteholders, an amount equal to the First Principal Payment Amount in the following order of priority:

 

(A)                               to the A-1 Noteholders, until the Outstanding principal balance of the A-1 Notes is reduced to zero;

 

(B)                               to the A-2 Noteholders, until the Outstanding principal balance of the A-2 Notes is reduced to zero;

 

(C)                               to the A-3 Noteholders, until the Outstanding principal balance of the A-3 Notes is reduced to zero;

 

(D)                               to the A-4 Noteholders, until the Outstanding principal balance of the A-4 Notes is reduced to zero;

 

(iv)                              to the Class B Noteholders, the Class Interest Amount for the Class B Notes;

 

(v)                                 to the Class A Noteholders, for payment of principal, in the following order of priority:

 

(A)                               to the A-1 Noteholders, until the Outstanding principal balance of the A-1 Notes is reduced to zero;

 

(B)                               to the A-2 Noteholders, until the Outstanding principal balance of the A-2 Notes is reduced to zero;

 

(C)                               to the A-3 Noteholders, until the Outstanding principal balance of the A-3 Notes is reduced to zero;

 

(D)                               to the A-4 Noteholders, until the Outstanding principal balance of the A-4 Notes is reduced to zero;

 

(vi)                              to the Class B Noteholders, for payment of principal, until the Outstanding principal balance of the Class B Notes is reduced to zero;

 

(vii)                           [Reserved]; and

 

(viii)                        thereafter, any excess shall be deposited in the Certificate Distribution Account.

 

(d)         On the A-1 Note Final Scheduled Maturity Date, the Indenture Trustee shall distribute to the Class A-1 Noteholders, from the amount available in the Note Distribution Account, an amount equal to the sum of (i) the aggregate accrued and unpaid interest on the A-1

 

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Notes as of the A-1 Note Final Scheduled Maturity Date, and (ii) the amount necessary to reduce the outstanding principal amount of the A-1 Notes to zero.

 

(e)          On each Payment Date and Redemption Date, after an Event of Default and acceleration of the Notes (and, if any Notes remain outstanding after the Final Scheduled Maturity Date), the Indenture Trustee shall distribute all amounts on deposit in the Note Distribution Account to the Noteholders in the following amounts and in the following order of priority:

 

(i)                                     [Reserved];

 

(ii)                                  to the Class A Noteholders, the Class Interest Amount for each Class of Class A Notes; provided, that if there are not sufficient funds in the Note Distribution Account to pay the entire amount of accrued and unpaid interest then due on such Notes, the amount in the Note Distribution Account shall be applied to the payment of such interest on such Notes pro rata on the basis of the total such interest due on such Notes;

 

(iii)                               first, to the A-1 Noteholders until the outstanding principal balance of the A-1 Notes is reduced to zero; second to the A-2 Noteholders, the A-3 Noteholders and the A-4 Noteholders, for payment of principal, ratably, according to the amounts due and payable on the A-2 Notes, A-3 Notes and A-4 Notes for principal, without preference or priority of any kind, until the outstanding principal balance of the A-2 Notes, A-3 Notes and A-4 Notes has been reduced to zero;

 

(iv)                              to the Class B Noteholders, the Class Interest Amount for the Class B Notes;

 

(v)                                 to the Class B Noteholders, for payment of principal, until the outstanding principal balance of the Class B Notes is reduced to zero;

 

(vi)                              [Reserved]; and

 

(vii)                           thereafter, any excess shall be deposited in the Certificate Distribution Account.

 

(f)           [Reserved].

 

(g)          [Reserved].

 

SECTION 8.3.                                     General Provisions Regarding Accounts.  (a)  So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuing Entity Order, subject to the provisions of Section 5.1(b) of the Sale and Servicing Agreement.  All income or other gain from investments of monies deposited in the Trust Accounts shall be deposited by the Indenture Trustee in the Collection Account, and any loss or expenses resulting from such investments shall be charged to such account.  The Issuing Entity will not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Trust Accounts unless the security interest granted and perfected

 

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in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Indenture Trustee to make any such investment or sale, if requested by the Indenture Trustee, the Issuing Entity shall deliver to the Indenture Trustee an Opinion of Counsel to such effect.

 

(b)         Subject to Section 6.1(c), the Indenture Trustee shall not in any way be held liable for the selection of Eligible Investments or by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein, except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms; provided, however, that the limitation to the Indenture Trustee’s liability does not extend to any actions constituting willful misconduct, negligence or bad faith.

 

(c)          If (i) the Issuing Entity shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00 a.m. (New York City time) (or such other time as may be agreed by the Issuing Entity and the Indenture Trustee) on any Business Day; or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.2, or, if such Notes shall have been declared due and payable following an Event of Default, but amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.4(b) as if there had not been such a declaration; then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in the Eligible Investments identified in clause (d) of the definition of Eligible Investments.

 

(d)         [Reserved].

 

SECTION 8.4.                                     Release of Trust Estate.  (a)  Subject to the payment of its fees and expenses pursuant to Section 6.7, the Indenture Trustee may, and when required by this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

 

(b)         The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7 have been paid, release any remaining portion of the Trust Estate that secured the Notes from the Lien of this Indenture and release to the Issuing Entity or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the Lien of this Indenture pursuant to this paragraph only upon receipt of an Issuing Entity Request accompanied by an Officer’s Certificate, an Opinion of Counsel, and (if required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1 or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

 

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SECTION 8.5.                                     Opinion of Counsel.  The Indenture Trustee shall receive at least seven days’ notice when requested by the Issuing Entity to take any action pursuant to Section 8.4(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

ARTICLE IX
 Supplemental Indentures

 

SECTION 9.1.                                     Supplemental Indentures Without Consent of Noteholders.

 

(a)         Without the consent of the Holders of Notes but with prior written notice to the Rating Agencies (which notice shall be given pursuant to Section 11.21), the Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i)                                     to correct or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture, or to subject to the Lien of this Indenture additional property;

 

(ii)                                  to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuing Entity, and the assumption by any such successor of the covenants of the Issuing Entity herein and in the Notes;

 

(iii)                               to add to the covenants of the Issuing Entity, for the benefit of the Holders of Notes, or to surrender any right or power herein conferred upon the Issuing Entity;

 

(iv)                              to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

 

(v)                                 to replace the Spread Account with another form of credit enhancement; provided, the Rating Agency Condition is satisfied;

 

(vi)                              to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not materially adversely affect the interests of the Holders of Notes;

 

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(vii)                           to evidence and provide for the acceptance of the appointment hereunder by a successor or additional trustee with respect to the Notes or any class thereof and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI;

 

(viii)                        to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA; or

 

(ix)                              to amend the “Specified Spread Account Balance” definition in a manner that results in an increase in the amounts required to be on deposit in the Spread Account pursuant to such definition.

 

The Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

 

(b)         The Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity Order, may, without the consent of any of the Holders of Notes but with prior written notice to the Rating Agencies (which notice shall be given pursuant to Section 11.21), enter into an indenture or indentures supplemental hereto to cure any ambiguity, to correct or supplement any provisions in this Indenture or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Officer’s Certificate of the Seller, adversely affect in any material respect the interests of any Noteholder.  A supplemental indenture shall be deemed not to adversely affect in any material respect the interests of any Class of Notes if the Rating Agency Condition has been satisfied with respect to such supplemental indenture for such Class of Notes.

 

(c)          [Reserved].

 

SECTION 9.2.                                     Supplemental Indentures With Consent of Noteholders.  The Issuing Entity and the Indenture Trustee, when authorized by an Issuing Entity Order, may, with prior written notice to the Rating Agencies (which notice shall be given pursuant to Section 11.21) and with the consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes, by Act of such Holders delivered to the Issuing Entity and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

 

(i)                                     delay the Class Final Scheduled Maturity Date of any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect

 

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thereto or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

(ii)                                  reduce the percentage of the Outstanding Amount, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(iii)                               modify or alter the provisions of the proviso to the definition of “Outstanding”;

 

(iv)                              reduce the percentage of the Outstanding Amount required to direct the Indenture Trustee to direct the Issuing Entity to sell or liquidate the Trust Estate pursuant to Section 5.4;

 

(v)                                 modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(vi)                              modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation); or

 

(vii)                           permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive any Holder of Notes of the security provided by the Lien of this Indenture.

 

It shall not be necessary for any Act of the Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of Noteholders provided for in this Indenture or in any other Basic Document) and of evidencing the authorization of the execution thereof by Noteholders shall be subject to such reasonable requirements as the Indenture Trustee may provide.

 

Promptly after the execution by the Issuing Entity and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

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SECTION 9.3.                                     Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and, subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

SECTION 9.4.                                     Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuing Entity and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION 9.5.                                     Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

 

SECTION 9.6.                                     Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuing Entity or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuing Entity, to any such supplemental indenture may be prepared and executed by the Issuing Entity and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

SECTION 9.7.                                     Amendment without Consent.  Notwithstanding anything herein to the contrary (other than as provided in Section 9.1(c) and Section 9.2), any term or provision of this Agreement may be amended by the Issuing Entity and the Indenture Trustee without the consent of the Noteholders or any other Person to add, modify or eliminate any provisions as may be necessary or advisable in order to comply with or obtain more favorable treatment for the Issuing Entity, the Seller or any of their Affiliates under or with respect to any law or regulation or any accounting rule or principle (whether now or in the future in effect); it being a condition to any such amendment that the Rating Agency Condition shall have been satisfied.

 

SECTION 9.8.                                     [Reserved].

 

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ARTICLE X
 Redemption of Notes

 

SECTION 10.1.                              Redemption.  (a)  The Notes are subject to redemption in whole, but not in part, at the direction of CNHCA pursuant to Section 9.1(a) of the Sale and Servicing Agreement, on any Payment Date on which CNHCA exercises its option to purchase the Trust Estate pursuant to said Section 9.1(a), for a purchase price equal to the Redemption Price.  The Servicer or the Issuing Entity shall furnish the Rating Agencies notice of such redemption.  If such Notes are to be redeemed pursuant to this Section 10.1, CNHCA or the Issuing Entity shall furnish notice of such election to the Indenture Trustee not later than 25 days prior to the Redemption Date and the Issuing Entity shall deposit with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed.

 

(b)         Reserved.

 

SECTION 10.2.                              Form of Redemption Notice.  Notice of redemption under Section 10.1 shall be given by the Indenture Trustee by first-class mail, postage prepaid, mailed not less than five Business Days prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder’s address appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)                                     the Redemption Date;

 

(ii)                                  the Redemption Price;

 

(iii)                               the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuing Entity to be maintained as provided in Section 3.2); and

 

(iv)                              the CUSIP numbers of the affected Notes.

 

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuing Entity.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.

 

SECTION 10.3.                              Notes Payable on Redemption Date.  The Notes to be redeemed shall, following notice of redemption pursuant to this Article, become due and payable on the Redemption Date at the Redemption Price and (unless the Issuing Entity shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

 

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ARTICLE XI
 Miscellaneous

 

SECTION 11.1.                              Compliance Certificates and Opinions, etc.  (a)  Upon any application or request by the Issuing Entity to the Indenture Trustee to take any action under this Indenture, the Issuing Entity shall furnish to the Indenture Trustee:  (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by this Indenture, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(w)                               a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

 

(x)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(y)                                 a statement that, in the opinion of each such signatory, such signatory has made (or has caused to be made) such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(z)                                  a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

 

(b)         ((i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the Lien of this Indenture, the Issuing Entity shall, in addition to any obligation imposed in Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days after such deposit) to the Issuing Entity of the Collateral or other property or securities to be so deposited.

 

(ii)                                  Whenever the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s Certificate described in clause (i), the Issuing Entity shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuing Entity of the Collateral or other property or securities to be so deposited and of all other such Collateral or other property or securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuing Entity, as set forth in the certificates delivered pursuant to clause (i) and this

 

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clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any Collateral or other property or securities so deposited if the fair value thereof to the Issuing Entity as set forth in the related Officer’s Certificate is (A) less than $25,000 or (B) less than one percent of the then Outstanding Amount of the Notes.

 

(iii)                               Other than with respect to property as contemplated by clause (v), whenever any Collateral or other property or securities are to be released from the Lien of this Indenture, the Issuing Entity shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days after such release) of the Collateral or other property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(iv)                              Whenever the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii), the Issuing Entity shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value to the Issuing Entity of the Collateral or other property or securities and of all other property, other than property as contemplated by clause (v), or securities released from the Lien of this Indenture since the commencement of the then-current fiscal year, as set forth in the certificates required by clause (iii) and this clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of Collateral or other property or securities if the fair value thereof to the Issuing Entity as set forth in the related Officer’s Certificate is (A) less than $25,000 or (B) less than one percent of the then Outstanding Amount of the Notes.

 

(v)                                 Notwithstanding Section 2.9 or any other provision of this Section, the Issuing Entity may, without compliance with the requirements of the other provisions of this Section:  (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Equipment as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents so long as the Issuing Entity shall deliver to the Indenture Trustee every six months, commencing March 1, 2014, an Officer’s Certificate of the Issuing Entity stating that all such dispositions of Collateral that occurred since the execution of the previous such Officer’s Certificate (or for the first such Officer’s Certificate, since the Closing Date) were in the ordinary course of the Issuing Entity’s business and that the proceeds thereof were applied in accordance with the Basic Documents.

 

SECTION 11.2.                              Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more

 

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other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Authorized Officer of the Issuing Entity may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate, opinion or representations with respect to the matters upon which his certificate or opinion is based is/are erroneous.  Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Seller, the Issuing Entity or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the Seller, the Issuing Entity or the Administrator, as applicable, unless such Authorized Officer or counsel knows, or in the exercise of reasonable care should know, that the certificate, opinion or representations with respect to such matters is/are erroneous.

 

Where any Person is required or permitted to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture, in connection with any application, certificate or report to the Indenture Trustee, it is provided that the Issuing Entity shall deliver any document as a condition of the granting of such application, or as evidence of the Issuing Entity’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuing Entity to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

 

SECTION 11.3.                              Acts of Noteholders.  (a)   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instrument(s) of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument(s) are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuing Entity.  Such instrument(s) (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument(s).  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and the Issuing Entity, if made in the manner provided in this Section.

 

(b)         The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

 

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(c)          The ownership of Notes shall be proved by the Note Register.

 

(d)         Any request, demand, authorization, direction, notice, consent, waiver or Act by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof, in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuing Entity in reliance thereon, whether or not notation of such action is made upon such Note.

 

SECTION 11.4.                              Notices, etc., to the Indenture Trustee, Issuing Entity and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders, or other documents provided or permitted by this Indenture, shall be in writing and, if such request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:

 

(a)               the Indenture Trustee by any Noteholder or by the Issuing Entity, shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office, or

 

(b)               the Issuing Entity by the Indenture Trustee or by any Noteholder, shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to the Issuing Entity addressed to:  CNH Equipment Trust 2013-C, in care of Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration, (facsimile: (302) 636-4140), and to New Holland Credit Company, LLC, as Administrator, 100 Brubaker Avenue, New Holland Pennsylvania, 17557, Attention: Finance Manager, (facsimile: (630) 887-5448); with a copy to: New Holland Credit Company, LLC, 6900 Veterans Boulevard, Burr Ridge, Illinois 60527, Attention: Assistant Treasurer, (facsimile: (630) 887-5448), or at any other address or facsimile number previously furnished in writing to the Indenture Trustee by the Issuing Entity or the Administrator.  The Issuing Entity shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

 

(c)                [Reserved].

 

Subject to Section 11.21, notices required to be given to the Rating Agencies by the Issuing Entity, the Indenture Trustee or the Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, or by facsimile to their respective addresses or facsimile numbers set forth above or, to the extent not set forth there, as set forth in Section 10.3 of the Sale and Servicing Agreement.

 

SECTION 11.5.                              Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of

 

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such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail service, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

 

SECTION 11.6.                              Alternate Payment and Notice Provisions.  Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuing Entity may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture or the Notes for such payments or notices.  The Issuing Entity will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

 

SECTION 11.7.                              Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by the TIA, such required provision shall control.

 

The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

 

SECTION 11.8.                              Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

SECTION 11.9.                              Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuing Entity shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents of the Indenture Trustee.

 

SECTION 11.10.                       Severability.  Any provision of this Indenture or the Notes that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or of the Notes, as applicable, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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SECTION 11.11.                       Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Noteholders, the Trustee, a Successor Servicer, any other party secured hereunder and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

SECTION 11.12.                       Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date; provided, however, that interest on the Notes will be calculated and accrue as set forth in the definition of “Class Interest Amount” and “Interest Period” in the Indenture.

 

SECTION 11.13.                       Governing Law.  This Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

 

SECTION 11.14.                       Counterparts.  This Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

SECTION 11.15.                       Recording of Indenture.  If this Indenture is subject to recording in any public recording offices, such recording is to be effected by the Issuing Entity and, at its expense, accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

SECTION 11.16.                       Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity, the Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against:  (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, officer, director, employee or agent of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any owner of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Trustee have no such obligations in their individual capacities) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuing Entity hereunder, the Trustee shall be subject to, and entitled to the benefits of, Articles VI, VII and VIII of the Trust Agreement.

 

53

 

SECTION 11.17.                       No Petition.  The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Seller or the Issuing Entity, or solicit or join or cooperate with or encourage any institution against the Seller or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents.  The foregoing shall not limit the rights of the Indenture Trustee to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted against the Issuing Entity by any Person other than the Indenture Trustee.

 

SECTION 11.18.                       Inspection.  The Issuing Entity agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuing Entity’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuing Entity, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuing Entity’s affairs, finances and accounts with the Issuing Entity’s officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.  The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information; provided, however, that the foregoing shall not be construed to prohibit:  (i) disclosure of any and all information that is or becomes publicly known, or information obtained by the Indenture Trustee from sources other than the Issuing Entity or Servicer, (ii) disclosure of any and all information:  (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory or self-regulatory body having or claiming authority to regulate or oversee any aspects of the Indenture Trustee’s business or that of its Affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Indenture Trustee or an Affiliate or any officer, director, employee or shareholder thereof is subject, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by the Indenture and approved in advance by the Issuing Entity or (E) to any Affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same; provided, that the Indenture Trustee advises such recipient of the confidential nature of the information being disclosed and such recipient agrees to keep such information confidential, and provided further, that the Indenture Trustee promptly notifies the Issuing Entity of any disclosure of such information that it is required to make pursuant to the preceding clause (A), (B) or (C) so that the Issuing Entity may seek appropriate protective orders or restrictions on the disclosure of the information involved; (iii) any other disclosure authorized by the Issuing Entity or the Servicer or (iv) disclosure to the other parties to the transactions contemplated by the Basic Documents.

 

SECTION 11.19.                       Subordination.  Issuing Entity and each Noteholder by accepting a Note acknowledge and agree that such Note represents indebtedness of Issuing Entity and does not represent an interest in any assets (other than the Trust Estate) of CNHCR (including by virtue of any deficiency claim in respect of obligations not paid or otherwise satisfied from the Trust Estate and proceeds thereof).  In furtherance of and not in derogation of the foregoing, to the extent CNHCR enters into other securitization transactions, the Issuing Entity as well as each Noteholder by accepting a Note acknowledge and agree that it shall have

 

54

 

no right, title or interest in or to any assets (or interests therein) (other than Trust Estate) conveyed or purported to be conveyed by CNHCR to another securitization trust or other Person or Persons in connection therewith (whether by way of a sale, capital contribution or by virtue of the granting of a lien) (“Other Assets”).  To the extent that, notwithstanding the agreements and provisions contained in the preceding sentences of this subsection, the Issuing Entity or any Noteholder either (i) asserts an interest or claim to, or benefit from, Other Assets, whether asserted against or through CNHCR or any other Person owned by CNHCR, or (ii) is deemed to have any such interest, claim or benefit in or from Other Assets, whether by operation of law, legal process, pursuant to applicable provisions of insolvency laws or otherwise (including by virtue of Section 1111(b) of the Bankruptcy Code or any successor provision having similar effect under the Bankruptcy Code), and whether deemed asserted against or through CNHCR or any other Person owned by CNHCR, then the Issuing Entity and each Noteholder by accepting a Note further acknowledge and agree that any such interest, claim or benefit in or from Other Assets is and shall be expressly subordinated to the indefeasible payment in full of all obligations and liabilities of CNHCR which, under the terms of the relevant documents relating to the securitization of such Other Assets, are entitled to be paid from, entitled to the benefits of, or otherwise secured by such Other Assets (whether or not any such entitlement or security interest is legally perfected or otherwise entitled to a priority of distribution or application under applicable law, including insolvency laws, and whether asserted against CNHCR or any other Person owned by CNHCR), including, the payment of post-petition interest on such other obligations and liabilities.  This subordination agreement shall be deemed a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.  Each Noteholder further acknowledges and agrees that no adequate remedy at law exists for a breach of this Section 11.19 and the terms of this Section 11.19 may be enforced by an action for specific performance.

 

SECTION 11.20.                       Information Requests.  The parties hereto shall provide any information reasonably requested by the Issuing Entity, Seller or any of their Affiliates, at the expense of the Issuing Entity, Seller or any of their Affiliates, as applicable, in order to comply with or obtain more favorable treatment for the Issuing Entity, the Seller or any of their Affiliates under any current or future law, rule, regulation, accounting rule or principle.

 

SECTION 11.21.                       Communications with Rating Agencies.  The parties hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) agree that any notices or requests to, or any other written communications with, any of the Rating Agencies, or any of their respective officers, directors or employees, to be given or provided to such Rating Agencies pursuant to, in connection with or related, directly or indirectly, to the Basic Documents, the Collateral or the Notes, shall be in each case either (i) furnished to the Seller who shall forward such communication to the Rating Agencies pursuant to Section 10.18 of the Sale and Servicing Agreement; or (ii) furnished directly to the Rating Agencies with a prior copy to the Seller.  In either case, the parties hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) further agree to provide such notices, requests and communications or copies thereof, as applicable, to the Seller at least one Business Day prior to the date when such notices, requests and communications are required to be delivered (or are in fact delivered, whichever is earlier) to the Rating Agencies pursuant to the Basic Documents.  So long as any Notes are Outstanding, each party hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) agrees that neither it nor any party on its behalf shall engage in any oral communications with respect to

 

55

 

the transactions contemplated hereby, under the Basic Documents or in any way relating to the Notes with any Rating Agency or any of their respective officers, directors or employees, without the participation of the Seller.

 

[the remainder of this page intentionally left blank]

 

56

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers duly authorized as of the day and year first above written.

 

	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington Trust Company,
    
	
 
    	
 
    	
not in its individual capacity but solely as   Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dorri Costello
    
	
 
    	
 
    	
Name:
    	
Dorri   Costello
    
	
 
    	
 
    	
Title:
    	
Assistant   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Louis Bodi
    
	
 
    	
 
    	
Name:
    	
Louis   Bodi
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark Esposito
    
	
 
    	
 
    	
Name:
    	
Mark   Esposito
    
	
 
    	
 
    	
Title:
    	
Assistant   Vice President
    

 

 

APPENDIX A

Definitions

 

“180-Day Receivable” with respect to any Collection Period means any Receivable as to which a scheduled payment is 180 days or more past due by the last day of such Collection Period and which has not become a Liquidated Receivable or a Repossessed Receivable; provided that a Receivable shall cease to be a 180-Day Receivable if the Servicer subsequently receives payment in full of each scheduled payment that was previously 180-days or more past due.

 

“A-1 Note” means any of the Issuing Entity’s 0.25% Class A-1 Asset Backed Notes.

 

“A-1 Note Final Scheduled Maturity Date” means the September 15, 2014 Payment Date.

 

“A-1 Note Rate” means 0.25% per annum, computed on the basis of the actual number of days in that Interest Period and a year of 360 days.

 

“A-1 Noteholders” means the holders of record of the A-1 Notes.

 

“A-2 Note” means any of the Issuing Entity’s 0.63% Class A-2 Asset Backed Notes.

 

“A-2 Note Final Scheduled Maturity Date” means the January 17, 2017 Payment Date.

 

“A-2 Note Rate” means 0.63 % per annum, computed on the basis of a 360-day year of twelve 30-day months.

 

“A-2 Noteholders” means the holders of record of the A-2 Notes.

 

“A-3 Note” means any of the Issuing Entity’s 1.02% Class A-3 Asset Backed Notes.

 

“A-3 Note Final Scheduled Maturity Date” means the August 15, 2018 Payment Date.

 

“A-3 Note Rate” means 1.02% per annum, computed on the basis of a 360-day year of twelve 30-day months.

 

“A-3 Noteholders” means the holders of record of the A-3 Notes.

 

“A-4 Note” means any of the Issuing Entity’s 1.67% Class A-4 Asset Backed Notes.

 

“A-4 Note Final Scheduled Maturity Date” means the August 16, 2021 Payment Date.

 

“A-4 Note Rate” means 1.67% per annum, computed on the basis of a 360-day year of twelve 30-day months.

 

“A-4 Noteholders” means the holders of record of the A-4 Notes.

 

“Act” is defined in Section 11.3(a) of the Indenture.

 

1

 

“Administration Agreement” means the Administration Agreement dated as of August 1, 2013 among the Administrator, the Issuing Entity, the Indenture Trustee and the Trustee.

 

“Administration Fee” means the fee payable to the Administrator pursuant to Section 3 of the Administration Agreement.

 

“Administrator” means NH Credit, or any successor Administrator under the Administration Agreement.

 

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.  The term “Affiliated” has a correlative meaning.

 

“Aggregate Statistical Contract Value” means, $784,525,857.20 which amount is equal to the aggregate Statistical Contract Value of all Receivables as of the Cutoff Date.

 

“Amount Financed” with respect to a Receivable means the amount advanced under such Receivable toward the purchase price of the Financed Equipment, or, in the case of any retail installment loan or consumer installment loan, the amount advanced to the related Obligor that is secured by Financed Equipment, and any related costs, including any insurance financed thereby.

 

“Annual Percentage Rate” or “APR” of a Receivable means the annual rate of finance charges in effect from time to time under the related Contract.

 

“Asset Balance” means, for any Payment Date, the Pool Balance as of the beginning of the current Collection Period.

 

“Assignment” is defined in Section 2.1 of the Sale and Servicing Agreement.

 

“Authorized Officer” means, with respect to the Issuing Entity, any officer of the Trustee who is authorized to act for the Trustee in matters relating to the Issuing Entity and who is identified on the list of Authorized Officers delivered by the Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President, Assistant Treasurer, Assistant Secretary, or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuing Entity and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (in each case as such list may be modified or supplemented from time to time thereafter).

 

“Average Delinquency Ratio” on any Payment Date means the average of the Delinquency Ratios for the preceding three calendar months.

 

2

 

“Average Delinquency Ratio Test” for the Payment Date occurring in, or following, a month specified below will be met if the Average Delinquency Ratio for such Payment Date is less than the percentage specified opposite such Payment Date:

 

	
Payment Date
    	
 
    	
Percentage
    	
 
    
	
February 2015 
    	
 
    	
1.75
    	
%
    
	
August 2015
    	
 
    	
2.50
    	
%
    
	
February 2016
    	
 
    	
3.00
    	
%
    
	
August 2016
    	
 
    	
3.50
    	
%
    

 

“Bankruptcy Code” means the United States Bankruptcy Code, Title 11 of the United States Code, as amended.

 

“Basic Documents” means the Certificate of Trust, the Trust Agreement, the Purchase Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement and other documents and certificates delivered in connection therewith.

 

“Benefit Plan” is defined in Section 3.4 of the Trust Agreement.

 

“Book-Entry Notes” means a beneficial interest in the Notes of a particular Class, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10 of the Indenture.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions or trust companies in The City of New York, New York, Wilmington, Delaware, Chicago, Illinois, New Holland, Pennsylvania, and Racine, Wisconsin are authorized or obligated by law, regulation or executive order to remain closed.

 

“Certificate Distribution Account” is defined in Section 5.1 of the Trust Agreement.

 

“Certificate of Trust” means the Certificate of Trust substantially in the form of Exhibit B to the Trust Agreement filed for the Trust pursuant to Section 3810(a) of the Trust Statute.

 

“Certificate Register” and “Certificate Registrar” means the register mentioned and the registrar appointed pursuant to Section 3.4 of the Trust Agreement.

 

“Certificated Security” has the meaning assigned thereto in Section 8-102(a)(4) of the UCC.

 

“Certificateholder” means a Person in whose name a Trust Certificate is registered.

 

“Certificates” means the Trust Certificates (as defined in the Trust Agreement).

 

3

 

“Class” means any class of Notes.

 

“Class A Noteholder” means any holder of a Class A Note.

 

“Class A Notes” means the A-1 Notes, the A-2 Notes, the A-3 Notes and the A-4 Notes.

 

“Class B Note” means any of the Issuing Entity’s 2.06% Class B Asset Backed Notes.

 

“Class B Note Final Scheduled Maturity Date” means the August 16, 2021 Payment Date.

 

“Class B Note Rate” means 2.06% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

 

“Class B Noteholder” means any holder of a Class B Note.

 

“Class Final Scheduled Maturity Date” means, as to any Class of Notes, the final scheduled maturity date for that Class, as designated by the defined term that begins with the designation of that Class and ends with the phrase “Final Scheduled Maturity Date.”  For instance, the Class Final Scheduled Maturity Date for the A-1 Notes is the A-1 Note Final Scheduled Maturity Date.

 

“Class Interest Amount” means, with respect to any Payment Date (the “current Payment Date”) and any Class of Notes, an amount equal to the sum of (a) the aggregate amount of interest accrued on that Class of Notes at the applicable Interest Rate from and including the preceding Payment Date (or, in the case of the initial Payment Date, from and including the Closing Date) to but excluding the current Payment Date plus (b) the Class Interest Shortfall for that Class of Notes and the current Payment Date.

 

“Class Interest Shortfall” means, with respect to any Payment Date (the “current Payment Date”) and any Class of Notes, the excess of the Class Interest Amount for the preceding Payment Date over the amount in respect of interest on that Class of Notes that was actually deposited in the Note Distribution Account on such preceding Payment Date, plus interest on such excess, to the extent permitted by law, at a rate per annum equal to the Interest Rate on that Class of Notes, from such preceding Payment Date to but excluding the current Payment Date.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act that has been designated as the “Clearing Agency” for purposes of the Indenture.

 

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Closing Date” means August 29, 2013.

 

4

 

“CNH America” means CNH America LLC, a Delaware limited liability company, and its successors and assigns.

 

“CNH Global” means CNH Global N.V., a company organized in the Kingdom of The Netherlands, and its successors and assigns.

 

“CNHCA” means CNH Capital America LLC, a Delaware limited liability company, and its successors and assigns.

 

“CNHCA Assets” is defined in Section 2.1 of the Purchase Agreement.

 

“CNHCA Assignment” means the document of assignment attached to the Purchase Agreement as Exhibit A.

 

“CNHCR” means CNH Capital Receivables LLC, a Delaware limited liability company, and its successors in interest to the extent permitted hereunder.

 

“CNHCR Assets” is defined in Section 2.1 of the Sale and Servicing Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

 

“Collateral” is defined in the Granting Clause of the Indenture.

 

“Collection Account” means the account designated as such, established and maintained pursuant to Section 5.1(a) of the Sale and Servicing Agreement.

 

“Collection Period” means, with respect to any Payment Date, the period from the end of the preceding Collection Period (or, if for the first Payment Date, from the beginning of the day after the Cutoff Date) to and including the last day of the calendar month preceding the calendar month in which the Payment Date occurs.

 

“Commission” means the Securities and Exchange Commission.

 

“Contract” means a Retail Installment Contract.

 

“Contract Value” means, with respect to any day (including the Cutoff Date), the sum of (a) the present value of the future Scheduled Payments discounted monthly at an annual rate equal to the Specified Discount Factor; plus (b) the amount of any past due payments.

 

“Control” with respect to any Federal Book Entry Security, the Indenture Trustee shall have obtained control if:

 

(i)                                     the Indenture Trustee is a participant in the book entry system maintained by the Federal Reserve Bank that is acting as fiscal agent for the Issuing Entity of such Federal Book Entry Security, and such Federal Reserve Bank has indicated by book entry that such Federal Book Entry Security has been

 

5

 

credited to the Indenture Trustee’s securities account in such book entry system; or

 

(ii)                                  the Indenture Trustee (1) is registered on the records of a Securities Intermediary as the person having a Securities Entitlement in respect of such Federal Book Entry Security against such Securities Intermediary; or (2) has obtained the agreement, in writing, of the Securities Intermediary for such Securities Entitlement that such Securities Intermediary will comply with Entitlement Orders of the Indenture Trustee without further consent of any other Person; and (b) the Securities Intermediary is a participant in the book entry system maintained by the Federal Reserve Bank that is acting as fiscal agent for the Issuing Entity of such Federal Book Entry Security; and (c) such Federal Reserve Bank has indicated by book entry that such Federal Book Entry Security has been credited to the Securities Intermediary’s securities account in such book entry system.

 

“Corporate Trust Office” means, (a) with respect to the Indenture Trustee, the office of the Indenture Trustee in New York at which at any particular time its corporate trust business shall be administered, and all notices to the Indenture Trustee shall be directed to the Indenture Trustee’s office located at 60 Wall Street, MS NYC 60-2720, New York, New York 10005, Attention: TSS-SFS, facsimile no. (212) 553-2458, and for purposes of presentment and surrender of the Notes, at DB Services Americas Inc., 5022 Gate Parkway, Suite 200, Jacksonville, Florida 32256; or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Seller, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders and the Seller), and (b) with respect to the Trustee, the principal corporate trust office of the Trustee located at 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration; or at such other address as the Trustee may designate from time to time by notice to the Certificateholders and the Depositor, or the principal corporate trust office of any successor Trustee (the address of which the successor Trustee will notify the Certificateholders and the Depositor).

 

“Cumulative Net Loss Ratio” on any Payment Date means the ratio, expressed as a percentage, of (a) the aggregate Measured Losses on the Receivables since the Cutoff Date through the last day of the related Collection Period, to (b) the Pool Balance as of the Cutoff Date.

 

“Cumulative Net Loss Ratio Test” for the Payment Date occurring in, or following, a month specified below will be met if the Cumulative Net Loss Ratio for such Payment Date is less than the percentage specified opposite such Payment Date:

 

	
Payment Date
    	
 
    	
Percentage
    	
 
    
	
February 2015 
    	
 
    	
0.40
    	
%
    
	
August 2015
    	
 
    	
0.55
    	
%
    
	
February 2016
    	
 
    	
0.65
    	
%
    
	
August 2016
    	
 
    	
0.75
    	
%
    

 

6

 

“Cutoff Date” means July 31, 2013.

 

“Cutoff Date APR” means 3.10%, which is an annual rate that equals the weighted average APR of the Receivables as of the Cutoff Date.

 

“DB Trust” means Deutsche Bank Trust Company Americas, or its successor.

 

“Dealer” means the dealer (which may include retail outlets owned in whole or in part by CNH America LLC) or other third-party that originated and assigned the respective Receivable to CNHCA or NH Credit, as applicable, under a Dealer Agreement.

 

“Dealer Agreement” means the retail financing agreement, warranty agreement or other agreement between the applicable Dealer and CNHCA or NH Credit, as applicable, which governs the terms of sales of Receivables from that Dealer to CNHCA or NH Credit, as applicable.

 

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Definitive Notes” is defined in Section 2.10 of the Indenture.

 

“Delinquency Ratio” for any calendar month means the ratio, expressed as a percentage, of (a) the sum, for all of the Receivables, of all scheduled payments that are 60 days or more past due (other than Purchased Receivables and Liquidated Receivables) as of the end of such month, determined in accordance with the Servicer’s then-current practices, to (b) the Pool Balance as of the last day of such month.

 

“Delivery” means, when used with respect to Trust Account Property:

 

(i)                                     with respect to a Certificated Security, transfer of such Certificated Security to the Indenture Trustee or its nominee or custodian by physical delivery to the Indenture Trustee or its nominee or custodian, endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank; and

 

(ii)                                  with respect to any such Trust Account Property that constitutes an Uncertificated Security (including any investments in money market mutual funds, but excluding any Federal Book Entry Security), (A) registration of the Indenture Trustee as the registered owner by the Issuing Entity, or (B) satisfaction of the requirements for obtaining “control” pursuant to Section 8-106(c)(2) of the UCC.

 

7

 

“Depositor” means the Seller in its capacity as Depositor under the Trust Agreement.

 

“Determination Date” means, with respect to any Transfer Date, the second Business Day prior to such Transfer Date.

 

“Eligible Deposit Account” means either:  (a) a segregated account with an Eligible Institution or any other segregated account, the deposit of funds in which satisfies the Rating Agency Condition or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories that signifies investment grade.

 

“Eligible Institution” means:  (a) the corporate trust department of the Indenture Trustee or the Trustee or (b) a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), which:  (i) has either a long-term or short-term senior unsecured debt rating or certificate of deposit rating which satisfies the Rating Agency Condition and (ii) whose deposits are insured by the FDIC.

 

“Eligible Investments” mean book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form that 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 each of the Rating Agencies in the highest investment category granted thereby;

 

(c)                                  commercial paper having, at the time of the investment or contractual commitment to invest therein, a rating from each of the Rating Agencies in the highest investment category granted thereby;

 

(d)                                 investments in money market funds having a rating from each of the Rating Agencies in the highest investment category granted thereby (including funds for which the Indenture Trustee or the Trustee or any of their respective Affiliates is investment manager or advisor);

 

(e)                                  bankers’ acceptances issued by any depository institution or trust company referred to in clause (b);

 

8

 

(f)                                   repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed as to timely payment by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b); and

 

(g)                                  any other investment which satisfies the Rating Agency Condition and which is in the highest investment category granted by each applicable Rating Agency;

 

provided, that investments described in clauses (b) through (g) shall be made only so long as making such investments will not require the Issuing Entity to register as an investment company under the Investment Company Act of 1940, as amended.

 

“Entitlement Order” has the meaning assigned thereto in Section 8-102(a)(8) of the UCC.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder.

 

“Event of Default” is defined in Section 5.1 of the Indenture.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Act Reports” means any reports on Form 10-D, Form 8-K and Form 10-K filed or to be filed by the Seller with respect to the Issuing Entity under the Exchange Act.

 

“Executive Officer” means, with respect to any corporation or limited liability company, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation or limited liability company; and with respect to any partnership, any general partner thereof.

 

“Expenses” is defined in Section 8.2 of the Trust Agreement.

 

“Federal Book Entry Security” means an obligation (i) issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association, or any other direct obligation of, or obligation fully guaranteed as to timely payment of principal and interest by, the United States of America, that is a book-entry security held through the Federal Reserve System pursuant to federal book entry regulations, and (ii) the perfection of a security interest in which is governed pursuant to federal regulations by Article 8 of the UCC.

 

“FDIC” means the Federal Deposit Insurance Corporation or any successor.

 

“Final Scheduled Maturity Date” means the latest to occur of the Class Final Scheduled Maturity Dates.

 

“Financed Equipment” means property, including any agricultural, construction, forestry or other equipment, together with all accessions thereto, securing an Obligor’s indebtedness

 

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under a Retail Installment Contract, including any Substitute Equipment that has been substituted (in accordance with Section 4.14 of the Sale and Servicing Agreement) for a piece of equipment that originally secured such indebtedness under a Retail Installment Contract (“Replaced Equipment”).  Following the substitution of the Substitute Equipment pursuant to Section 4.14 of the Sale and Servicing Agreement, the Replaced Equipment shall no longer be considered Financed Equipment for any purposes in the Basic Documents.

 

“Financial Asset” has the meaning assigned thereto in Section 8-102(a)(9) of the UCC.

 

“First Principal Payment Amount” has the meaning assigned thereto in Section 5.6(b)(vi) of the Sale and Servicing Agreement.

 

“Fitch” means Fitch Ratings, Inc., or its successors.

 

“Form 10-D Disclosure Item” shall mean with respect to any Person, (a) any legal proceedings pending against such Person or of which any property of such Person is then subject, or (b) any governmental proceeding known to be contemplated by governmental authorities against such Person or of which any property of such Person would be subject, in each case that would be material to the Noteholders.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a Lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture, and other forms of the verb “to Grant” shall have correlative meanings.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Holder” means (a) with respect to a Note, the Person in whose name a Note is registered on the Note Register and (b) with respect to a Certificate, a Certificateholder, as the context may require.

 

“Indemnified Parties” is defined in Section 8.2 of the Trust Agreement.

 

“Indenture” means the Indenture dated as of August 1, 2013 between the Issuing Entity and the Indenture Trustee, as the same may be amended and supplemented from time to time.

 

“Indenture Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as Indenture Trustee under the Indenture, or any successor Indenture Trustee under the Indenture.

 

“Independent” means, when used with respect to any specified Person, that the Person:  (a) is in fact independent of the Issuing Entity, any other obligor upon the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or

 

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any material indirect financial interest in the Issuing Entity, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuing Entity, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.

 

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuing Entity Order in the exercise of reasonable care and approved by the Indenture Trustee, and such opinion or certificate shall State that the signer has read the definition of “Independent” in the Indenture and that the signer is Independent within the meaning thereof.

 

“Initial Pool Balance” means the Pool Balance as of the Cutoff Date, which is $755,545,796.97.

 

“Insolvency Event” means, with respect to a specified Person:  (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days, or (b) the commencement by such Person of a voluntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

 

“Instrument” has the meaning assigned thereto in Section 9-102(47) of the UCC.

 

“Interest Period” means (a) with respect to the first Payment Date, the period from and including the Closing Date to, but excluding, the first Payment Date, and (b) with respect to any other Payment Date, the period from and including the immediately preceding Payment Date to, but excluding, that Payment Date.

 

“Interest Rate” means (a) as to the A-1 Notes, the A-1 Note Rate, (b) as to the A-2 Notes, the A-2 Note Rate, (c) as to the A-3 Notes, the A-3 Note Rate, (d) as to the A-4 Notes, the A-4 Note Rate and (e) as to the Class B Notes, the Class B Note Rate.

 

“Investment Earnings” means, with respect to any Payment Date, the interest and other investment earnings (net of losses and investment expenses) on amounts on deposit in the Trust

 

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Accounts to be deposited into the Collection Account on the related Transfer Date pursuant to Section 5.1(b) of the Sale and Servicing Agreement.

 

“Investment Property” is defined in Section 9-102(49) of the UCC.

 

“Issuing Entity” means CNH Equipment Trust 2013-C until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained in the Indenture and required by the TIA, each other obligor on the Notes.

 

“Issuing Entity Order” and “Issuing Entity Request” means a written order or request, respectively, signed in the name of the Issuing Entity by any one of its Authorized Officers and delivered to the Indenture Trustee.

 

“Item 1119 Party” means the Seller, CNHCA, the Servicer, the Indenture Trustee, the Trustee, any underwriter of the Notes and any other material transaction party identified by the Seller or CNHCA to the Indenture Trustee or the Trustee in writing.

 

“Lien” means a security interest, lien, charge, pledge, equity or encumbrance of any kind, other than (i) tax liens, mechanics’ liens and any liens that attach to the related Receivable by operation of law as a result of any act or omission by the related Obligor and (ii) any lien against the Financed Equipment resulting from a cross-collateralization provision in the related Contract.

 

“Liquidated Receivable” means any Receivable liquidated by the Servicer through the sale or other disposition of the related Financed Equipment or that the Servicer has, after using all reasonable efforts to realize upon the Financed Equipment, determined to charge off without realizing upon the Financed Equipment.

 

“Liquidation Proceeds” means, with respect to any Liquidated Receivable, the monies collected in respect thereof from whatever source (including the proceeds of insurance policies with respect to the related Financed Equipment (to the extent not used to purchase Substitute Equipment) or Obligor and payments made by a Dealer pursuant to the related Dealer Agreement with respect to such Receivable), other than Recoveries, net of the sum of any amounts expended by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Receivable.

 

“Liquidity Receivables Purchase Agreement” is defined in the Recitals of the Purchase Agreement.

 

“Measured Losses” means, for any Collection Period, the sum of (a) for each Receivable that became a Liquidated Receivable during such Collection Period, the difference between (i) the Principal Balance plus accrued and unpaid interest on such Receivable less the Write Down Amount for such Receivable (if such receivable was a 180-Day Receivable or Repossessed Receivable at the time of liquidation), if any, and (ii) the Liquidation Proceeds received with respect to such Receivable during such Collection Period, (b) with respect to any Receivable that became a 180-Day Receivable or a Repossessed Receivable during such Collection Period, the Write Down Amount, if any, for that Receivable and (c) with respect to each other 180-Day Receivable or Repossessed Receivable, the amount of the adjustment, if any, to the Write Down Amount for such Receivable for the related Collection Period.

 

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“Modification Purchase Event” is defined in Section 4.2 of the Sale and Servicing Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc., or its successor.

 

“NH Credit” means New Holland Credit Company, LLC, a Delaware limited liability company, and its successors and assigns.

 

“Note Balance” means the aggregate Outstanding Amount of the Notes from time to time.

 

“Note Depository Agreement” means the agreement between the Issuing Entity and The Depository Trust Company, as the initial Clearing Agency, dated as of or around the Closing Date.

 

“Note Distribution Account” means the account designated as such, established and maintained pursuant to Section 5.1(a)(ii) of the Sale and Servicing Agreement.

 

“Note Monthly Principal Distributable Amount” means, with respect to any Payment Date, the amount necessary to be paid on the Notes to reduce the Outstanding Amount of the Notes (after giving effect to the application of the First Principal Payment Amount to reduce such Outstanding Amount) to an amount equal to the Asset Balance for that Payment Date, less the amount of the excess, if any, of the Asset Balance at the beginning of the prior Collection Period over the Outstanding Amount of the Notes as of, and after giving effect to the distributions on, the previous Payment Date; provided that (a) the Note Monthly Principal Distributable Amount shall not exceed the aggregate Outstanding Amount of the Notes (after giving effect to the application of the First Principal Payment Amount to reduce such Outstanding Amount) and (b) on the final maturity date for each Class of Notes, the Note Monthly Principal Distributable Amount will at least equal the amount necessary to repay the Outstanding Amount of that Class of Notes and of any other Class of Notes payable prior to that Class of Notes (after giving effect to the application of the First Principal Payment Amount to reduce such Outstanding Amount).  For purposes of this definition only, the A-1 Notes, A-2 Notes, A-3 Notes and the A-4 Notes shall each be deemed to be a separate Class of Notes.

 

“Note Owner” means, with respect to a Book-Entry Note, the Person who is the owner of such Book-Entry Note, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with the Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of the Clearing Agency).

 

“Note Pool Factor” means, as of the close of business on any Payment Date with respect to any Class of Notes, the Outstanding Amount of that Class of Notes divided by the original Outstanding Amount of that Class of Notes (carried out to the seventh decimal place). The Note Pool Factor for each Class will be 100% as of the Closing Date, and, thereafter, will decline to reflect reductions in the Outstanding Amount of the Notes.

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.4 of the Indenture.

 

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“Noteholders” means the Class A Noteholders and the Class B Noteholders.

 

“Noteholders’ Distributable Amount” means, with respect to any Payment Date, the sum of:  (a) the Class Interest Amount for each Class of Notes and (b) the Note Monthly Principal Distributable Amount.

 

“Notes” means the Class A Notes and the Class B Notes.

 

“Obligor” means, with respect to any Receivable, any Person who owes payments under the Receivable.

 

“Officer’s Certificate” means a certificate signed by one of the following:  the Chairman of the Board, the President, the Vice Chairman of the Board, an Executive Vice President, any Vice President, a Treasurer, Assistant Treasurer, Secretary or Assistant Secretary of the Seller, Administrator or Servicer, as appropriate.

 

“Opinion of Counsel” means a written opinion of counsel (who may, except as otherwise expressly provided in this Agreement, be an employee of or counsel to the Seller or the Servicer), which counsel and opinion shall be reasonably acceptable to the Indenture Trustee, the Trustee or the Rating Agencies, as applicable.

 

“Originator” means CNHCA.

 

“Outstanding” means, as of the date of determination, all Notes theretofore authenticated and delivered under the Indenture except:

 

(i)                                     Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(ii)                                  Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture); and

 

(iii)                               Notes in exchange for or in lieu of other Notes that have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided, that in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuing Entity, any other obligor upon the Notes, the Seller or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be

 

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regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuing Entity, any other obligor upon the Notes, the Seller or any Affiliate of any of the foregoing Persons.

 

“Outstanding Amount” means the aggregate principal amount of all Notes, or Class of Notes, as applicable, Outstanding at the date of determination.

 

“Owned Contracts” is defined in the Recitals of the Purchase Agreement.

 

“Paying Agent” means (a) with respect to the Notes, the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuing Entity to make the payments to and distributions from the Collection Account and the Note Distribution Account, including payment of principal of or interest on the Notes on behalf of the Issuing Entity, and (b) with respect to the Certificates, any paying agent or co-paying agent appointed pursuant to Section 3.9 of the Trust Agreement, and shall initially be Deutsche Bank Trust Company Americas.

 

“Payment Date” means, with respect to each Collection Period, the fifteenth day of the calendar month following the end of that Collection Period, or, if such day is not a Business Day, the next Business Day, commencing on September 16, 2013.

 

“Person” means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

 

“Pool Balance” means, at any time, the sum of the aggregate Contract Values of the Receivables as of the beginning of a Collection Period (after giving effect to all payments received from Obligors and Purchase Amounts to be remitted by the Servicer, CNHCA or the Seller, as the case may be, with respect to the preceding Collection Period, if any, and all Realized Losses on Receivables liquidated during such preceding Collection Period, if any) less the aggregate Write Down Amount as of the last day of the preceding Collection Period, if any.

 

“Posted Date” is defined in Section 5.3 of the Sale and Servicing Agreement.

 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

“Preliminary Prospectus” means the prospectus dated August 14, 2013 and the prospectus supplement (subject to completion, dated August 14, 2013) relating to the Class A Notes and Class B Notes.

 

“Preliminary Prospectus Date” means the date of the prospectus supplement (subject to completion) included in the Preliminary Prospectus.

 

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“Principal Balance” of a Receivable, as of the close of business on the last day of a Collection Period, means the Amount Financed minus the sum of:  (i) that portion of all Scheduled Payments paid on or prior to such day allocable to principal using the simple interest method, (ii) any refunded portion of insurance premiums included in the Amount Financed, (iii) any payment of the Purchase Amount with respect to the Receivable allocable to principal and (iv) any prepayment in full or any partial prepayments applied to reduce the Principal Balance of the Receivable.

 

“Prior Securitization” means a prior securitization by a CNH Equipment Trust.

 

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

 

“Prospectus” means the prospectus dated August 14, 2013, and the prospectus supplement dated August 20, 2013, relating to the Class A Notes and Class B Notes.

 

“Prospectus Date” means the date of the prospectus supplement included in the Prospectus.

 

“Purchase Agreement” means the Purchase Agreement dated as of August 1, 2013 between the Seller and CNHCA, as the same may be amended and supplemented from time to time.

 

“Purchase Amount” means, as of the close of business on the last day of a Collection Period, an amount equal to the Contract Value of the applicable Contract, as of the first day of the immediately following Collection Period (or, with respect to any applicable Contract that is a Liquidated Receivable, as of the day immediately prior to such Contract becoming a Liquidated Receivable less any Liquidation Proceeds actually received by the Issuing Entity) plus interest accrued and unpaid thereon as of such last day at a rate per annum equal to, in the case of any Contract transferred on the Closing Date, the Cutoff Date APR.

 

“Purchase Price” is defined in Section 2.1 of the Purchase Agreement.

 

“Purchased Contracts” is defined in the Recitals of the Purchase Agreement.

 

“Purchased Receivable” means a Receivable purchased as of the close of business on the last day of a Collection Period by the Servicer or CNHCA pursuant to Section 4.6 of the Sale and Servicing Agreement, by CNHCA pursuant to Section 6.2 of the Purchase Agreement, or by the Seller pursuant to Section 3.2 of the Sale and Servicing Agreement, or as of the first day of a Collection Period by CNHCA pursuant to Section 9.1(a) of the Sale and Servicing Agreement and Section 6.2 of the Purchase Agreement.

 

“Rating Agency” means, to the extent the applicable following rating agency is hired by CNHCA to rate the Notes and such rating agency is still rating such Notes, each of Standard & Poor’s, Fitch and Moody’s.

 

“Rating Agency Condition” means, with respect to any action, that (with respect to each of the following rating agencies to the extent the following rating agency is hired by CNHCA to

 

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rate the Notes and such rating agency is still rating such Notes) (a) Standard & Poor’s and Fitch shall have each been given at least 10 Business Days’ prior notice thereof and (b) Moody’s shall have been given at least 10 Business Days’ prior notice thereof and shall not have notified the Issuing Entity and the Indenture Trustee that such action will result in a reduction or withdrawal of its then current rating of any Class of the Notes.

 

“Reacquired Receivables” means Receivables that (i) have been purchased by the Servicer, repurchased by CNHCA or the Seller, or otherwise transferred to the Servicer, Seller or CNHCA or their Affiliate pursuant to the terms of the Basic Documents or (ii) are designated or identified to be purchased by the Servicer, repurchased by CNHCA or the Seller, or otherwise transferred to the Servicer, Seller or CNHCA or their Affiliate pursuant to the terms of the Basic Documents; provided  however, with respect to the preceding clause (ii), such Receivables shall only become Reacquired Receivables the instant before (x) such purchase, repurchase or transfer pursuant to the Basic Documents, and (y) the full amount, if any, required to be paid for such Receivables having been paid and/or deposited as and when required under the Basic Documents.

 

“Realized Losses” means, with respect to any Liquidated Receivable, the excess of the Principal Balance of such Liquidated Receivable plus accrued but unpaid interest thereon over the amount of any related Liquidation Proceeds.

 

“Receivable” means any Contract included in the Schedule of Receivables delivered by CNHCA to CNHCR on the Closing Date or the Schedule of Receivables delivered by the Servicer to the Trustee on the Closing Date (other than Reacquired Receivables).

 

“Receivable Files” means the documents specified in Section 3.3 of the Sale and Servicing Agreement.

 

“Record Date” means, with respect to a Payment Date or Redemption Date, the close of business on the fourteenth day of the calendar month in which such Payment Date or Redemption Date occurs, or, if Definitive Notes are issued, the close of business on the last day of the calendar month preceding the month of such Payment Date, whether or not such day is a Business Day, or if Definitive Notes were not outstanding on such date, the date of issuance of the Definitive Note.

 

“Recoveries” means, with respect to any Liquidated Receivable, monies collected in respect thereof, from whatever source (other than from the sale or other disposition of the Financed Equipment), after such Receivable became a Liquidated Receivable.

 

“Redemption Date” means the Payment Date specified by the Servicer or the Issuing Entity pursuant to Section 10.1(a) of the Indenture.

 

“Redemption Price” means the unpaid principal amount of the Notes redeemed, plus accrued and unpaid interest thereon at the applicable interest rate to but excluding the Redemption Date.

 

“Registered Holder” means the Person in whose name a Note is registered on the Note Register on the applicable Record Date.

 

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“Regulation AB” means Regulation AB under the Securities Act of 1933, as amended.

 

“Replaced Equipment” is defined in “Financed Equipment” above.

 

“Reportable Event” shall mean any event required to be reported on Form 8-K, and in any event, the following:

 

(a)                                 entry into a definitive agreement related to the Issuing Entity or the Notes or an amendment to a Basic Document, even if the Seller is not a party to such agreement (e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB);

 

(b)                                 termination of a Basic Document (other than by expiration of the agreement on its stated termination date or as a result of all parties completing their obligations under such agreement), even if the Seller is not a party to such agreement (e.g., a servicing agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB);

 

(c)                                  with respect to the Servicer only, the occurrence of a Servicer Default;

 

(d)                                 an Event of Default;

 

(e)                                  the resignation, removal, replacement, substitution, of the Indenture Trustee or the Trustee; and

 

(f)                                   with respect to the Indenture Trustee only, a required distribution to holders of the Notes is not made as of the required Payment Date under the Indenture.

 

“Repossessed Receivable” with respect to any Collection Period will be any Receivable as to which the Financed Equipment securing the defaulted Receivable has been repossessed on or prior to the last day of such Collection Period and which has not become a Liquidated Receivable.

 

“Responsible Officer” means, with respect to the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee, including any Vice President, Assistant Vice President, Secretary or Assistant Secretary, or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Retail Installment Contract” means an equipment retail installment contract or retail installment loan, including any consumer installment loan, secured by Financed Equipment.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of August 1, 2013 among the Issuing Entity, the Seller and the Servicer.

 

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“Sale Proceeds” is defined in Section 9.1(b) of the Sale and Servicing Agreement.

 

“Schedule of Receivables” means, collectively, the listings of the Receivables attached to, or incorporated by reference in, the CNHCA Assignment and the Assignment (each of which schedules may be in the form of a compact disk or any other computer-readable medium).

 

“Scheduled Payment” on a Receivable means that portion of the payment required to be made by the Obligor during any Collection Period sufficient to amortize the Principal Balance under the simple interest method, in each case, over the term of the Receivable and to provide interest at the APR.

 

“Secretary of State” means the Secretary of State of the State of Delaware.

 

“Securities Account” has the meaning assigned thereto in Section 8-501(a) of the UCC.

 

“Securities Entitlement” has the meaning assigned thereto in Section 8-102(a)(17) of the UCC.

 

“Securities Intermediary” is defined in Section 8-102(a)(14) of the UCC.

 

“Seller” means CNHCR.

 

“Servicer” means NH Credit, as the servicer of the Receivables, and any successor to NH Credit (in the same capacity) pursuant to Section 7.3 or 8.2 of the Sale and Servicing Agreement.

 

“Servicer Default” means an event specified in Section 8.1 of the Sale and Servicing Agreement.

 

“Servicer’s Certificate” means an Officer’s Certificate of the Servicer, substantially in the form of Exhibit C to the Sale and Servicing Agreement.

 

“Servicing Criteria” shall mean the “servicing criteria” set forth in Item 1122(d) of Regulation AB.

 

“Servicing Fee” means, for any Collection Period, the fee payable to the Servicer for services rendered during such Collection Period, determined pursuant to Section 4.7 of the Sale and Servicing Agreement.

 

“Servicing Procedures” is defined in Section 4.1 of the Sale and Servicing Agreement.

 

“Simple Interest Receivable” means any Receivable under which the portion of a payment allocable to interest and the portion allocable to principal is determined by allocating a fixed level payment between principal and interest, such that such payment is allocated first to the accrued and unpaid interest at the Annual Percentage Rate for such Receivable on the unpaid principal balance and the remainder of such payment is allocable to principal.

 

“Specified Discount Factor” equals 4.10%.

 

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“Specified Spread Account Balance” means on the Closing Date, 2.25% of the sum of the Pool Balance as of the Cutoff Date and on any Payment Date thereafter the lesser of, (a) 2.25% of the Pool Balance as of the Cutoff Date and (b) the outstanding principal amount of the Notes.  However, if (A) the Specified Spread Account Reduction Trigger is met on the Payment Date in February 2015 or any Payment Date thereafter, the percentage in clause (a) will be reduced to 2.00% on such Payment Date and will remain at such percentage for each Payment Date thereafter unless further reduced on the Payment Dates as provided in the following clauses (B),(C) or (D); (B) the Specified Spread Account Reduction Trigger is met on the Payment Date in August 2015 or any Payment Date thereafter, the percentage in clause (a) of the preceding sentence will be reduced to 1.75% on such Payment Date (regardless of whether the Specified Spread Account Reduction Trigger was met on the Payment Date in February 2015 or any Payment Date thereafter and will remain at such percentage for each Payment Date thereafter unless further reduced on the Payment Date as provided in the following clauses (C) or (D); (C) the Specified Spread Account Reduction Trigger is met on the Payment Date in February 2016 or any Payment Date thereafter, the percentage in clause (a) of the preceding sentence will be reduced to 1.50% on such Payment Date (regardless of whether the Specified Spread Account Reduction Trigger was met on the Payment Dates in February 2015 or any Payment Date thereafter or August 2015 or any Payment Date thereafter) and will remain at such percentage for each Payment Date thereafter unless further reduced on the Payment Date as provided in the following clause (D); and (D) the Specified Spread Account Reduction Trigger is met on the Payment Date in August 2016 or any Payment Date thereafter, the percentage in clause (a) of the preceding sentence will be reduced to 1.15% on such Payment Date (regardless of whether the Specified Spread Account Reduction Trigger was met on the Payment Dates in February 2015 or any Payment Date thereafter, August 2015) or any Payment Date thereafter or February 2016 or any Payment Date thereafter) and will remain at such percentage for each Payment Date thereafter.  In addition to the ability to amend the “Specified Spread Account Balance” definition pursuant to Section 9.1(a) of the Indenture, the Specified Spread Account Balance may also be reduced or modified without the consent of the Holders of the Notes if the Rating Agency Condition is satisfied with respect to such reduction or modification.

 

“Specified Spread Account Reduction Trigger” for the Payment Dates in February 2015, August 2015, February 2016 or August 2016 or any Payment Date after such Payment Dates will be met if the Average Delinquency Ratio Test and the Cumulative Net Loss Ratio Test for such Payment Date are met on such Payment Date or a Payment Date thereafter.

 

“Spread Account” means the account designated as such, established and maintained pursuant to Section 5.1(a) of the Sale and Servicing Agreement.

 

“Spread Account Deposit” means, $16,999,780.43.

 

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or its successor.

 

“State” means any one of the 50 states of the United States of America or the District of Columbia.

 

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“Statistical Contract Value” of a Receivable means the current balance of the Receivable on the Servicer’s records.

 

“Substitute Equipment” is defined in Section 4.14 of the Sale and Servicing Agreement.

 

“Successor Servicer” is defined in Section 3.7(e) of the Indenture.

 

“TIA” means the Trust Indenture Act.

 

“Total Distribution Amount” means, with respect to any Payment Date, the aggregate amount of collections on or with respect to the Receivables with respect to the related Collection Period.  Collections on or with respect to the Receivables include all payments made by or on behalf of the Obligors (including any late fees, prepayment charges, extension fees and other administrative fees or similar charges allowed by applicable law with respect to the Receivables), any proceeds from insurance policies covering the Financed Equipment (to the extent not used to purchase Substitute Equipment) or related Obligor, Liquidation Proceeds, the Purchase Amount of each Receivable that became a Purchased Receivable in respect of the related Collection Period (to the extent deposited into the Collection Account), Investment Earnings for such Payment Date and payments made by a Dealer pursuant to the related Dealer Agreement with respect to such Receivable, on the Payment Date specified in Section 5.8(b) of the Sale and Servicing Agreement; provided, however, that the Total Distribution Amount shall not include:  (i) all payments or proceeds (including Liquidation Proceeds) of any Receivables the Purchase Amount of which has been included in the Total Distribution Amount in a prior Collection Period or (ii) any Recoveries.

 

“Transfer Date” means the Business Day preceding the fifteenth day of each calendar month.

 

“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code. References to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

 

“Trust” means the Issuing Entity.

 

“Trust Account Property” means the Trust Accounts, all amounts and investments held from time to time in any Trust Account (whether in the form of deposit accounts, physical property, book-entry securities, uncertificated securities or otherwise), and all proceeds of the foregoing.

 

“Trust Accounts” has the meaning assigned thereto in Section 5.1(b) of the Sale and Servicing Agreement.

 

“Trust Agreement” means the Trust Agreement dated as of August 1, 2013 between the Seller and the Trustee, as the same may be amended and supplemented from time to time.

 

“Trust Certificate” means a certificate evidencing the beneficial interest of a Certificateholder in the Trust, substantially in the form of Exhibit A to the Trust Agreement.

 

21

 

“Trust Estate” means (a) with respect to the Indenture, all the money, instruments, rights and other property that are subject or intended to be subject to the Lien and security interest of the Indenture for the benefit of the Noteholders (including all property and interests Granted to the Indenture Trustee), including all proceeds thereof, and (b) with respect to the Trust Agreement, all right, title and interest of the Trust in and to the property and rights assigned to the Trust pursuant to Article II (other than Section 2.1(b)) of the Sale and Servicing Agreement, all funds on deposit from time to time in the Trust Accounts and the Certificate Distribution Account and all other property of the Trust from time to time, including any rights of the Trustee and the Trust pursuant to the Sale and Servicing Agreement and the Administration Agreement.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as in force on the date of the Indenture unless otherwise specifically provided.

 

“Trust Officer” means, in the case of the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject and, with respect to the Trustee, any officer in the Corporate Trustee Administration Department of the Trustee with direct responsibility for the administration of the Trust Agreement and the Basic Documents on behalf of the Trustee.

 

“Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may be amended from time to time.

 

“Trustee” means Wilmington Trust Company, a Delaware trust company, not in its individual capacity but solely as trustee under the Trust Agreement, and any successor Trustee thereunder.

 

“Turbo Principal Payment Amount” is defined in Section 5.6(b)(x) of the Sale and Servicing Agreement.

 

“Uncertificated Security” has the meaning assigned thereto in Section 8-102(a)(18) of the UCC.

 

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time.

 

“Underwriting Agreement” means the Underwriting Agreement dated August 20, 2013 among CNHCA, CNHCR, and Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Rabo Securities USA, Inc., as representatives of the several underwriters named therein.

 

“Write Down Amount” for any Collection Period for any 180-Day Receivable or Repossessed Receivable will be the excess of (a) the Principal Balance plus accrued and unpaid interest of such Receivable as of the last day of the Collection Period during which the Receivable became a 180-Day Receivable or Repossessed Receivable, as applicable, over (b) the estimated realizable value of the Receivable, as determined by the Servicer in accordance with

 

22

 

its then-current servicing procedures for the related Collection Period, which amount may be adjusted to zero by the Servicer in accordance with its normal servicing procedures if the Receivable has ceased to be a 180-Day Receivable as provided in the definition of “180-Day Receivable.”

 

23

 

EXHIBIT A-1
  to Indenture

 

FORM OF A-1 NOTES

 

	
REGISTERED
    	
$165,000,000 (1)
    
	
No. R-1
    	
CUSIP NO. 12613SAA0
    

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CNH EQUIPMENT TRUST 2013-C
  0.25% CLASS A-1 ASSET BACKED NOTES

 

CNH Equipment Trust 2013-C, a statutory trust organized and existing under the laws of the State of Delaware (including any successor, the “Issuing Entity”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED SIXTY-FIVE MILLION DOLLARS ($165,000,000), partially payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the A-1 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of the September 15, 2014 Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.  The Issuing Entity will pay interest on this Note at the rate per annum shown above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture.  Interest on this Note will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding the then current Payment Date or, if no interest has yet been paid, from the date hereof.  Interest will be computed on the basis of a 360-day year and the actual number of days in the applicable Interest Period.  Such principal of and interest on this Note shall be paid in the manner specified in the Indenture.

 

(1)                                 Denominations of $1,000 and in greater whole-dollar denominations in excess thereof.

 

Exhibit A-1 (Page 1)

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

Exhibit A-1 (Page 2)

 

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

 

Dated:  August         , 2013

 

	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust Company, not in its individual capacity but solely as Trustee under the   Trust Agreement
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
					

 

Exhibit A-1 (Page 3)

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

Dated:  August         , 2013

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-1 (Page 4)

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuing Entity, designated as its 0.25% Class A-1 Asset Backed Notes (herein called the “A-1 Notes” or the “Notes”), all issued under an Indenture dated as of August 1, 2013 (such Indenture, as supplemented or amended, is herein called the “Indenture”) between the Issuing Entity and Deutsche Bank Trust Company Americas, not in its individual capacity but solely as trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.

 

The Notes, the A-2 Notes, the A-3 Notes and the A-4 Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

The Issuing Entity shall pay interest on overdue installments of interest at the A-1 Note Rate to the extent lawful.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in the Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any holder of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such partner, owner or beneficiary.

 

It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, the Notes qualify as debt.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as debt.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Seller or the Issuing Entity, or join in any institution against the Seller or the Issuing Entity of, any bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

Exhibit A-1 (Page 5)

 

Each Noteholder or Note Owner, by acceptance of a Note, or in the case of Note Owner, a beneficial interest in the Note, represents that either (a) it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, (iii) any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”), or (iv) a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the purchase and holding of the Note, or a beneficial interest therein, will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, neither Deutsche Bank Trust Company Americas, in its individual capacity, any owner of a beneficial interest in the Issuing Entity, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuing Entity.  The Holder of this Note by the acceptance hereof, and each Note Owner by the acceptance of a beneficial interest herein, each agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder and Note Owner shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

Exhibit A-1 (Page 6)

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

(name and address of assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                                                               , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
 
    	
*
    
	
 
    	
 
    	
Signature   Guaranteed:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signatures   must be guaranteed by an “eligible   guarantor institution” meeting the requirements of the Note   Registrar, which requirements include membership or participation in STAMP or   such other “signature guarantee program”   as may be determined by the Note Registrar in addition to, or in substitution   for, STAMP, all in accordance with the Securities Exchange Act of 1934, as   amended.
    	
 
    

 

*                                         NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular without alteration, enlargement or any change whatsoever.

 

Exhibit A-1 (Page 7)

 

EXHIBIT A-2

to Indenture

 

FORM OF A-2 NOTES

 

	
REGISTERED
    	
 
    	
$250,000,000 (1)
    
	
No. R-1
    	
 
    	
CUSIP NO. 12613SAB8
    

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CNH EQUIPMENT TRUST 2013-C

0.63% CLASS A-2 ASSET BACKED NOTES

 

CNH Equipment Trust 2013-C, a statutory trust organized and existing under the laws of the State of Delaware (including any successor, the “Issuing Entity”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) partially payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the A-2 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of the January 17, 2017 Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture. No payments of principal of the Notes will be made until the principal of the A-1 Notes has been paid in full. The Issuing Entity will pay interest on this Note at the A-2 Note Rate, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture. Interest on this Note will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding the then current Payment Date or, if no interest has yet been paid, from the date hereof.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified in the Indenture.

 

(1)                                 Denominations of $1,000 and in greater whole-dollar denominations in excess thereof.

 

Exhibit A-2 (Page 1)

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

Exhibit A-2 (Page 2)

 

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

 

	
Dated:
    	
August         ,   2013
    	
 
    
	
 
    	
 
    
	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust Company,
    
	
 
    	
not   in its individual capacity but solely as Trustee under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-2 (Page 3)

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

Dated:  August         , 2013

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-2 (Page 4)

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of the Issuing Entity, designated as its 0.63% Class A-2 Asset Backed Notes (herein called the “A-2 Notes” or the “Notes”), all issued under an Indenture dated as of August 1, 2013 (such Indenture, as supplemented or amended, is herein called the “Indenture”) between the Issuing Entity and Deutsche Bank Trust Company Americas, not in its individual capacity but solely as trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.

 

The Notes, the A-1 Notes, the A-3 Notes and the A-4 Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

The Issuing Entity shall pay interest on overdue installments of interest at the A-2 Note Rate to the extent lawful.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in the Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any holder of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such partner, owner or beneficiary.

 

It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, the Notes qualify as debt.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as debt.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Seller or the Issuing Entity, or join in any institution against the Seller or the Issuing Entity of, any bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings under any United States

 

Exhibit A-2 (Page 5)

 

federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

Each Noteholder or Note Owner, by acceptance of a Note, or in the case of Note Owner, a beneficial interest in the Note, represents that either (a) it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, (iii) any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”), or (iv) a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the purchase and holding of the Note, or a beneficial interest therein, will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, neither Deutsche Bank Trust Company Americas, in its individual capacity, any owner of a beneficial interest in the Issuing Entity, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuing Entity.  The Holder of this Note by the acceptance hereof, and each Note Owner by the acceptance of a beneficial interest herein, each agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder and Note Owner shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

Exhibit A-2 (Page 6)

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

	
 
    
	
(name and address of assignee)
    

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                                                                   , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
*
    
	
 
    	
Signature   Guaranteed:
    
	
 
    	
 
    
	
 
    	
 
    	
Signatures   must be guaranteed by an “eligible guarantor   institution” meeting the requirements of the Note Registrar, which   requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the   Note Registrar in addition to, or in substitution for, STAMP, all in   accordance with the Securities Exchange Act of 1934, as amended.
    
	
 
    

 

*                      NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular without alteration, enlargement or any change whatsoever.

 

Exhibit A-2 (Page 7)

 

EXHIBIT A-3

to Indenture

 

FORM OF A-3 NOTES

 

	
REGISTERED
    	
 
    	
$223,000,000 (1)
    
	
No. R-1
    	
 
    	
CUSIP NO. 12613SAC6
    

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CNH EQUIPMENT TRUST 2013-C

1.02% CLASS A-3 ASSET BACKED NOTES

 

CNH Equipment Trust 2013-C, a statutory trust organized and existing under the laws of the State of Delaware (including any successor, the “Issuing Entity”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of TWO HUNDRED TWENTY-THREE MILLION DOLLARS ($223,000,000), partially payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the A-3 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of the August 15, 2018 Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture. Except as provided in Sections 5.4 and 8.2(e) of the Indenture, no payments of principal of the Notes will be made until the principal of the A-2 Notes has been paid in full, and in any case, no payments of principal of the Notes will be made until the principal of the A-1 Notes has been paid in full. The Issuing Entity will pay interest on this Note at the A-3 Note Rate, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture. Interest on this Note will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding the then current Payment Date or, if no interest has yet been paid, from the date hereof.  Interest will be computed on the basis of a 360-day year consisting of

 

(1)                                 Denominations of $1,000 and in greater whole-dollar denominations in excess thereof.

 

Exhibit A-3 (Page 1)

 

twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified in the Indenture.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

Exhibit A-3 (Page 2)

 

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

 

Dated:  August         , 2013

 

	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust Company,
    
	
 
    	
not   in its individual capacity but solely as Trustee under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-3 (Page 3)

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

Dated:  August         , 2013

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-3 (Page 4)

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of the Issuing Entity, designated as its 1.02% Class A-3 Asset Backed Notes (herein called the “A-3 Notes” or the “Notes”), all issued under an Indenture dated as of August 1, 2013 (such Indenture, as supplemented or amended, is herein called the “Indenture”) between the Issuing Entity and Deutsche Bank Trust Company Americas, not in its individual capacity but solely as trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.

 

The Notes, the A-1 Notes, the A-2 Notes and the A-4 Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

The Issuing Entity shall pay interest on overdue installments of interest at the A-3 Note Rate to the extent lawful.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in the Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any holder of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such partner, owner or beneficiary.

 

It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, the Notes qualify as debt.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as debt.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Seller or the Issuing Entity, or join in any institution against the Seller or the Issuing Entity of, any bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings under any United States

 

Exhibit A-3 (Page 5)

 

federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

Each Noteholder or Note Owner, by acceptance of a Note, or in the case of Note Owner, a beneficial interest in the Note, represents that either (a) it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, (iii) any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”), or (iv) a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the purchase and holding of the Note, or a beneficial interest therein, will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, neither Deutsche Bank Trust Company Americas, in its individual capacity, any owner of a beneficial interest in the Issuing Entity, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuing Entity.  The Holder of this Note by the acceptance hereof, and each Note Owner by the acceptance of a beneficial interest herein, each agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder and Note Owner shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

Exhibit A-3 (Page 6)

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

	
 
    
	
(name and address of assignee)
    

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                                                                     , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
*
    
	
 
    	
Signature   Guaranteed:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signatures   must be guaranteed by an “eligible guarantor   institution” meeting the requirements of the Note Registrar, which   requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the   Note Registrar in addition to, or in substitution for, STAMP, all in   accordance with the Securities Exchange Act of 1934, as amended.
    

 

*                                         NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular without alteration, enlargement or any change whatsoever.

 

Exhibit A-3 (Page 7)

 

EXHIBIT A-4

to Indenture

 

FORM OF A-4 NOTES

 

	
REGISTERED
    	
$100,500,000 (1)
    
	
No. R-1
    	
CUSIP NO. 12613SAD4
    

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CNH EQUIPMENT TRUST 2013-C

1.67% CLASS A-4 ASSET BACKED NOTES

 

CNH Equipment Trust 2013-C, a statutory trust organized and existing under the laws of the State of Delaware (including any successor, the “Issuing Entity”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED MILLION FIVE HUNDRED THOUSAND DOLLARS ($100,500,000), partially payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the A-4 Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of the August 16, 2021 Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture. Except as provided in Sections 5.4 and 8.2(e) of the Indenture, no payments of principal of the Notes will be made until the principal of the A-2 Notes and the A-3 Notes has been paid in full, and in any case, no payments of principal of the Notes will be made until the principal of the A-1 Notes has been paid in full. The Issuing Entity will pay interest on this Note at the A-4 Note Rate, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture. Interest on this Note will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding the then current Payment Date or, if no interest has yet been paid, from the date hereof.  Interest will be computed on the basis of a 360-day year

 

(1)                                 Denominations of $1,000 and in greater whole-dollar denominations in excess thereof.

 

Exhibit A-4 (Page 1)

 

consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified in the Indenture.

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

Exhibit A-4 (Page 2)

 

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

 

	
Dated:   August         , 2013
    	
 
    
	
 
    	
 
    
	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    
	
 
    	
By:
    	
Wilmington   Trust Company,
    
	
 
    	
not   in its individual capacity but solely as Trustee under the Trust Agreement
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-4 (Page 3)

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

Dated:  August         , 2013

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-4 (Page 4)

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of the Issuing Entity, designated as its 1.67% Class A-4 Asset Backed Notes (herein called the “A-4 Notes” or the “Notes”), all issued under an Indenture dated as of August 1, 2013 (such Indenture, as supplemented or amended, is herein called the “Indenture”) between the Issuing Entity and Deutsche Bank Trust Company Americas, not in its individual capacity but solely as trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.

 

The Notes, the A-1 Notes, the A-2 Notes and the A-3 Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

The Issuing Entity shall pay interest on overdue installments of interest at the A-4 Note Rate to the extent lawful.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in the Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any holder of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such partner, owner or beneficiary.

 

It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, the Notes qualify as debt.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as debt.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Seller or the Issuing Entity, or join in any institution against the Seller or the Issuing Entity of, any bankruptcy, reorganization or arrangement, insolvency or liquidation proceedings under any United States

 

Exhibit A-4 (Page 5)

 

federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

Each Noteholder or Note Owner, by acceptance of a Note, or in the case of Note Owner, a beneficial interest in the Note, represents that either (a) it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, (iii) any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”), or (iv) a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the purchase and holding of the Note, or a beneficial interest therein, will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, neither Deutsche Bank Trust Company Americas, in its individual capacity, any owner of a beneficial interest in the Issuing Entity, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuing Entity.  The Holder of this Note by the acceptance hereof, and each Note Owner by the acceptance of a beneficial interest herein, each agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder and Note Owner shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

Exhibit A-4 (Page 6)

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

	
FOR   VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
    
	
 
    
	
(name and address of assignee)
    

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                                                                                     , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
* 
    
	
 
    	
 
    	
Signature   Guaranteed:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signatures   must be guaranteed by an “eligible guarantor  institution” meeting the   requirements of the Note Registrar, which requirements include membership or   participation in STAMP or such other “signature guarantee   program” as may be determined by the Note Registrar in addition   to, or in substitution for, STAMP, all in accordance with the Securities   Exchange Act of 1934, as amended.
    
	
 
    	
 
    

 

*                                         NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular without alteration, enlargement or any change whatsoever.

 

Exhibit A-4 (Page 7)

 

EXHIBIT A-5
 to Indenture

 

FORM OF CLASS B NOTES

 

	
REGISTERED
    	
 
    	
$17,000,000 (1)
    
	
No. R-1
    	
 
    	
CUSIP   NO. 12613SAE2
    

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CNH EQUIPMENT TRUST 2013-C

2.06% CLASS B ASSET BACKED NOTES

 

CNH Equipment Trust 2013-C, a statutory trust organized and existing under the laws of the State of Delaware (including any successor, the “Issuing Entity”), for value received, hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of SEVENTEEN MILLION DOLLARS ($17,000,000) partially payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class B Notes pursuant to Section 3.1 of the Indenture; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of the August 16, 2021 Payment Date and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.  No payments of principal of the Notes will be made on any Payment Date until the A-1 Notes, the A-2 Notes, the A-3 Notes and the A-4 Notes have been paid in full.  The Issuing Entity will pay interest on this Note at the rate per annum shown above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.1 of the Indenture.  Interest on this Note will accrue for each Payment Date from the most recent Payment Date on which interest has been paid to but excluding the then current Payment Date or, if no interest has yet been paid, from the date hereof.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified in the Indenture.

 

(1)                                 Denominations of $1,000 and in greater whole-dollar denominations in excess thereof.

 

Exhibit A-5 (Page 1)

 

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

Exhibit A-5 (Page 2)

 

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer.

 

Dated:  August         , 2013

 

	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
By:   
    	
Wilmington   Trust Company, 
   not in its individual capacity but solely as Trustee under the Trust   Agreement
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
					

 

Exhibit A-5 (Page 3)

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

Dated:  August         , 2013

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
 
    	
not   in its individual capacity but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit A-5 (Page 4)

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuing Entity, designated as its 2.06% Class B Asset Backed Notes (herein called the “Class B Notes” or the “Notes”), all issued under an Indenture dated as of August 1, 2013 (such Indenture, as supplemented or amended, is herein called the “Indenture”) between the Issuing Entity and Deutsche Bank Trust Company Americas, not in its individual capacity but solely as trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.  All terms used in this Note that are not otherwise defined herein and that are defined in the Indenture shall have the meanings assigned to them in or pursuant to the Indenture.

 

The Class B Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture, but the interest of the Class B Noteholders in such collateral is subordinated and second to the rights of the Class A Noteholders.

 

The Issuing Entity shall pay interest on overdue installments of interest at the Class B Note Rate to the extent lawful.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in the Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against: (i) the Indenture Trustee or the Trustee in their individual capacities, (ii) any owner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of:  (a) the Indenture Trustee or the Trustee in their individual capacities, (b) any holder of a beneficial interest in the Issuing Entity, the Trustee or the Indenture Trustee or of (c) any successor or assign of the Indenture Trustee or the Trustee in their individual capacities, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such partner, owner or beneficiary.

 

It is the intent of the Seller, the Servicer, the Noteholders and the Note Owners that, for purposes of federal and State income tax and any other tax measured in whole or in part by income, the Notes qualify as debt.  Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, agrees to treat, and to take no action inconsistent with the treatment of, the Notes for such tax purposes as debt.

 

Each Noteholder or Note Owner, by acceptance of a Note, or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that by accepting the benefits of the Indenture that such Noteholder will not at any time institute against the Seller or the Issuing Entity, or join in any institution against the Seller or the Issuing Entity of, any bankruptcy,

 

Exhibit A-5 (Page 5)

 

reorganization or arrangement, insolvency or liquidation proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

Each Noteholder or Note Owner, by acceptance of a Note, or in the case of Note Owner, a beneficial interest in the Note, represents that either (a) it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, (iii) any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”), or (iv) a governmental plan (as defined in Section 3(32) of ERISA) that is subject to any law substantially similar to ERISA or Section 4975 of the Code or (b) the purchase and holding of the Note, or a beneficial interest therein, will not result in a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any substantially similar applicable law.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, neither Deutsche Bank Trust Company Americas, in its individual capacity, any owner of a beneficial interest in the Issuing Entity, nor any of their respective partners, beneficiaries, agents, officers, directors, employees, successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Indenture Trustee for the sole purposes of binding the interests of the Indenture Trustee in the assets of the Issuing Entity.  The Holder of this Note by the acceptance hereof, and each Note Owner by the acceptance of a beneficial interest herein, each agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder and Note Owner shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

Exhibit A-5 (Page 6)

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

	
FOR   VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
    
	
 
    
	
(name and address of assignee)
    

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                                           , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
*
    
	
 
    	
 
    	
Signature   Guaranteed:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signatures   must be guaranteed by an “eligible guarantor   institution” meeting the requirements of the Note Registrar, which   requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the   Note Registrar in addition to, or in substitution for, STAMP, all in   accordance with the Securities Exchange Act of 1934, as amended.
    
	
 
    	
 
    

 

*                                         NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular without alteration, enlargement or any change whatsoever.

 

Exhibit A-5 (Page 7)

 

EXHIBIT B
 to Indenture

 

FORM OF SECTION 3.9 OFFICER’S CERTIFICATE

 

Deutsche Bank Trust Company Americas

 

Pursuant to Section 3.9 of the Indenture, dated as of August 1, 2013 (the “Indenture”) between CNH Equipment Trust 2013-C (the “Issuing Entity”) and Deutsche Bank Trust Company Americas, as Indenture Trustee, the undersigned hereby certifies that:

 

(a)                                 a review of the activities of the Issuing Entity during the previous fiscal year and of performance under the Indenture has been made under the supervision of the undersigned; and

 

(b)                                 to the best knowledge of the undersigned, based on such review, the Issuing Entity has complied with all conditions and covenants under the Indenture throughout such year. [or, if there has been a default in the compliance of any such condition or covenant, this certificate is to specify each such default known to the undersigned and the nature and status thereof]

 

	
 
    	
CNH   EQUIPMENT TRUST 2013-C
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

Exhibit B (Page 1)

 

Schedule P

 

1.                                      General.  The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in all of the Issuing Entity’s right, title and interest in, to and under (i) the Receivables, (ii) the security interests in the Financed Equipment granted by Obligors pursuant to the Receivables and (iii) the Sale and Servicing Agreement (including all rights of the Seller under the Purchase Agreement assigned to the Issuing Entity pursuant to the Sale and Servicing Agreement), in each case, in favor of the Indenture Trustee, which, (a) security interest is enforceable upon execution of the Indenture against creditors of and purchasers from the Issuing Entity as such enforceability may be limited by applicable Debtor Relief Laws, now or hereafter in effect, and by general principles of equity (whether considered in a suit at law or in equity), and (b) upon filing of the financing statements described in clause 4 below will be prior to all other Liens.

 

2.                                      Characterization.  The Receivables constitute “tangible chattel paper” within the meaning of UCC Section 9-102.  The rights granted under the agreements described in clause 1(ii) through (iv) constitute “general intangibles” within the meaning of UCC Section 9-102.  The Issuing Entity has taken or will take all steps necessary to perfect its security interest in the property securing the Receivables within 10 days of the Closing Date.

 

3.                                      Creation.  Immediately prior to the grant to the Indenture Trustee pursuant to the Indenture, the Issuing Entity owns and has good and marketable title to, or has a valid security interest in, the Receivables free and clear of any Lien, claim or encumbrance of any Person.

 

4.                                      Perfection.  The Issuing Entity has caused or will have caused, within ten days of the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest granted to the Indenture Trustee under the Indenture in the Receivables.  With respect to the Collateral that constitutes tangible chattel paper, the Servicer or a Subservicer, as custodian, received possession of such tangible chattel paper after the Indenture Trustee received a written acknowledgment (which is contained in the Sale and Servicing Agreement) from such custodian that it is acting solely as agent of the Indenture Trustee.  All financing statements filed under this clause 4 contain a statement that “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party”.

 

5.                                      Priority.  Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, the Issuing Entity has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral.  The Issuing Entity has not authorized the filing of and is not aware of any financing statements against the Issuing Entity that include a description of collateral covering the Collateral other than any financing statement (i) relating to the security interest granted to the Indenture Trustee under the Indenture, (ii) that has been terminated or relating to a security interest which has been released, or (iii) that has been granted pursuant to the terms of the Basic Documents.  None of the tangible chattel paper that constitutes or evidences the Collateral has any marks or notations indicating that they have pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.  The Issuing Entity is not aware of any judgment, ERISA or tax lien filings against it.

 

Schedule P (Page 1)

 

6.                                      Survival of Perfection Representations.  Notwithstanding any other provision of the Indenture or any other Basic Document, the Perfection Representations contained in this Schedule P shall be continuing, and remain in full force and effect (other than with respect to Reacquired Receivables).

 

7.                                      No Waiver.  The parties to the Indenture:  (i) shall not, without obtaining a confirmation of the then-current rating of the Notes, waive a material breach of any of the representations and warranties in this Schedule P (the “Perfection Representations”); (ii) shall provide the Ratings Agencies with prompt written notice of any material breach of the Perfection Representations, and shall not, without obtaining a confirmation of the then-current rating of the Notes (as determined after any adjustment or withdrawal of the ratings following notice of such breach) waive a material breach of any of the Perfection Representations.

 

8.                                      Servicer to Maintain Perfection and Priority.  The Servicer covenants that, in order to evidence the interests of Issuing Entity and the Indenture Trustee under this Agreement, Servicer shall take such action, or execute and deliver such instruments as may be necessary or advisable (including, without limitation, such actions as are requested by Issuing Entity) to maintain and perfect, as a first priority interest, the Indenture Trustee’s security interest in the Receivables.  Servicer shall, from time to time and within the time limits established by law, prepare and present to the Indenture Trustee for the Indenture Trustee to authorize the Servicer to file, all financing statements, amendments, continuations, initial financing statements in lieu of a continuation statement, terminations, partial terminations, releases or partial releases, or any other filings necessary or advisable to continue, maintain and perfect the Indenture Trustee’s security interest in the Receivables as a first-priority interest (each a “Filing”).  Issuing Entity shall promptly authorize in writing Servicer to, and Servicer shall, effect such Filing under the Uniform Commercial Code without the signature of the Indenture Trustee or Issuing Entity where allowed by applicable law.

 

Schedule P (Page 2)

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