Document:

Exhibit 4.2

                             EXTENSION AGREEMENT
                             -------------------

      This EXTENSION AGREEMENT ("Agreement") is entered into effective
      as of March 8, 2007 (the "Effective Date"), by and between Charger
      Investments, LLC a California limited liability Corporation ("Charger"
      or "Lender") and Rapid Link Incorporated, a Delaware corporation
      ("Rapid Link" or the "Company").

                               R E C I T A L S:

      A.   Rapid Link executed and delivered to Lender that certain 10%
           Secured Convertible Debenture (the "Debenture") dated March 8,
           2006, payable to the order of Lender in the principal amount of
           $400,000; and

      B.   Lender and Rapid Link executed that certain Security Agreement
           (the "Security Agreement") dated of even date with the Debenture,
           to secure the payment of the Debenture and performance by Rapid
           Link of the other obligations set forth in the Debenture; and

      C.   Rapid Link executed and delivered to Lender that certain Common
           Stock Purchase Warrant (the "Warrant") dated March 8, 2006,
           whereby Lender became entitled, for a term of five (5) years, to
           subscribe for and purchase from Rapid Link shares of common stock
           (the "Warrant Shares") upon the terms and subject to the
           conditions set forth in the Warrant; and

      D.   Lender and Rapid Link executed that certain Securities Purchase
           Agreement (the "Securities Purchase Agreement") dated of even date
           with the Debenture and the Warrant, whereby Rapid Link sold to
           Lender the Debenture and the Warrant for an aggregate amount of
           FOUR HUNDRED THOUSAND and NO/100 DOLLARS ($400,000.00); and

      E.   Lender, Rapid Link, and Charger Investments, LLC ("Charger" or
           the "Subordinate Lender"), executed that certain Subordination
           Agreement (the "Subordination Agreement") dated of even date with
           the Debenture and Warrant, whereby the obligations created in the
           Subordinate Loan Documents (as defined in the Subordination
           Agreement) were subordinated to the obligations created by the
           Loan Documents (as defined below); and

      F.   All of the above documents are hereinafter collectively referred
           to herein as the "Loan Documents"; and

      G.   Rapid Link and Lender have agreed to extend the maturity date of
           the Debenture by one year (the "Extension") upon and subject to
           the satisfaction of the terms and conditions contained herein; and

      NOW, THEREFORE, for and in consideration of the premises and the mutual
 covenants and agreements contained herein, and for other good and valuable
 consideration, the receipt and sufficiency of which are hereby acknowledged,
 Lender and Rapid Link hereby agree as follows:

      1.   Recitals.  The above recitals serve as the basis for this
           Agreement, and are incorporated herein and made a part hereof for
           all purposes.  Rapid Link and Lender each hereby acknowledge the
           above recitals to be true and correct as of the date hereof and
           are incorporated herein and made a part hereof for all purposes.
           The recitals are a substantive, contractual part of this
           Agreement.

      2.   Extension of Terms. Effective as of the Effective Date, the
           following modifications shall be deemed made to the Loan
           Documents:

           (a)  the Maturity Date of the Debenture, as that term is defined
                in the Debenture, shall be extended to the earlier of (i)
                March 8, 2008; or (ii) the consummation of a Change of
                Control Transaction, as that term is defined in the Loan
                Documents (the "New Maturity Date"); and

           (b)  the Termination Date of the Warrant, as that term is defined
                in the Warrant, shall be extended to March 8, 2012.

      3.   Additional Warrant  Shares.  In consideration  of  the  Extension,
           Rapid Link shall  grant to Lender  additional warrant shares  (the
           "Additional Warrant  Shares") in  accordance  with the  terms  and
           conditions of the Common Stock Purchase Warrant attached hereto as
           Exhibit "A"  (the "New  Warrant"). The  Additional Warrant  Shares
           described in Clause (b) in the  first page of the New Warrant  are
           in addition to the Warrant Shares  described in Clause (c) in  the
           first page of the Warrant.

      4.   Affirmation of Security.  Rapid Link hereby renews, but does not
           extinguish, the security interests created and evidenced by the
           Security Agreement and the other Loan Documents. Rapid Link
           covenants to observe, comply with and perform each of the terms
           and provisions of the Loan Documents, as modified hereby.

      5.   Confirmation of Subordination Agreement.     Charger hereby
           acknowledges that the terms and provisions of the Subordination
           Agreement remain in full force and effect, and that the
           Subordinate Loan Documents remain subordinate to the Loan
           Documents, as modified hereby.

      6.   Acknowledgment by Rapid Link.  Except as otherwise specified
           herein, the terms and provisions hereof shall in no manner impair,
           limit, restrict or otherwise affect the obligations of Rapid Link
           to Lender, as evidenced by the Loan Documents.  Rapid Link hereby
           acknowledges, agrees and represents that (i) Lender has extended
           the term of the Debenture and Rapid Link is indebted to Lender
           pursuant to the terms of the Debenture for the extended term,
           which ends on the New Maturity Date; (ii) Rapid Link has agreed,
           in consideration of the Extension, to grant to Lender the
           Additional Warrant Shares in accordance with the terms of the New
           Warrant, (iii) the security interests created and evidenced by the
           Loan Documents are valid and subsisting security interests of the
           respective dignity and priority recited in the Loan Documents;
           (iv) there are no claims or offsets against, or defenses or
           counterclaims to, the terms or provision of the Loan Documents,
           and the other obligations created or evidenced by the Loan
           Documents, as modified hereby; (v) Rapid Link has no claims,
           offsets, defenses or counterclaims arising from any Lender's acts
           or omissions with respect to the Loan Documents or Lender's
           performance under the Loan Documents; (vi) the representations and
           warranties contained in the Loan Documents are true and correct
           representations and warranties of Rapid Link, as of the date
           hereof; (vii) Lender is not in default and no event has occurred
           which, with the passage of time, giving of notice, or both, would
           constitute a default by Lender of Lender's obligations under the
           terms and provisions of the Loan Documents; and (viii) Lender has
           no obligation to advance any additional funds to Rapid Link or any
           other party pursuant to the Loan Documents.

      7.   No Waiver of Remedies.  Except as may be expressly set forth
           herein, nothing contained in this Agreement shall prejudice, act
           as, or be deemed to be a waiver of any right or remedy available
           to Lender by reason of the occurrence or existence of any fact,
           circumstance or event constituting a default under the Loan
           Documents.

      8.   Omitted

      9.   Additional Documentation.  From time to time, Rapid Link shall
           execute or procure and deliver to Lender such other and further
           documents and instruments evidencing, securing or pertaining to
           the Loan Documents as shall be reasonably requested by Lender so
           as to evidence or effect the terms and provisions hereof.  Upon
           Lender's request, Rapid Link shall cause to be delivered to
           Lender an opinion of counsel, satisfactory to Lender as to form,
           substance and rendering attorney, opining to (i) the validity and
           enforceability of this Agreement and the terms and provisions
           hereof, and any other agreement executed in connection with the
           transaction contemplated hereby; (ii) the authority of Rapid
           Link, and any constituents of Rapid Link, to execute, deliver
           and perform its or their respective obligations under the Loan
           Documents, as hereby modified; and (iii) such other matters as
           reasonably requested by Lender.

      10.  Effectiveness of the Loan Documents.  Except as expressly modified
           by the terms and provisions hereof, each of the terms and
           provisions of the Loan Documents are hereby ratified and shall
           remain in full force and effect, as modified hereby.

      11.  Governing Law.  THE TERMS AND PROVISIONS HEREOF SHALL BE GOVERNED
           BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
           CALIFORNIA, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN.

      12.  Time.  Time is of the essence in the performance of the covenants
           contained herein and in the Loan Documents.

      13.  Binding Agreement.  This Agreement shall be binding upon the
           heirs, executors, administrators, personal representatives,
           successors and assigns of the parties hereto.

      14.  Headings.  The section headings hereof are inserted for
           convenience of reference only and shall in no way alter, amend,
           define or be used in construction or interpretation of the text
           of such section.

      15.  Construction.  Whenever the context hereof so requires, reference
           to the singular shall include the plural and likewise, the plural
           shall include the singular; words denoting gender shall be
           construed to mean the masculine, feminine or neuter, as
           appropriate; and specific enumeration shall not exclude the
           general, but shall be construed as cumulative of the general
           recitation.

      16.  Severability.  If any clause or provision of this Agreement is or
           should ever be held to be illegal, invalid or unenforceable under
           any present or future law applicable to the terms hereof, then and
           in that event, it is the intention of the parties hereto that the
           remainder of this Agreement shall not be affected thereby, and
           that in lieu of each such clause or provision of this Agreement
           that is illegal, invalid or unenforceable, such clause or
           provision shall be judicially construed and interpreted to be as
           similar in substance and content to such illegal, invalid or
           unenforceable clause or provision, as the context thereof would
           reasonably suggest, so as to thereafter be legal, valid and
           enforceable.

      17.  Counterparts.  To facilitate execution, this Agreement may be
           executed in as many counterparts as may be convenient or required.
            It shall not be necessary that the signature and acknowledgment
           of, or on behalf of, each party, or that the signature and
           acknowledgment of all persons required to bind any party, appear
           on each counterpart.  All counterparts shall collectively
           constitute a single instrument.  It shall not be necessary in
           making proof of this Agreement to produce or account for more
           than a single counterpart containing the respective signatures and
           acknowledgment of, or on behalf of, each of the parties hereto.
           Any signature and acknowledgment page to any counterpart may be
           detached from such counterpart without impairing the legal effect
           of the signatures and acknowledgments thereon and thereafter
           attached to another counterpart identical thereto except having
           attached to it additional signature and acknowledgment pages.

      18.  Notice of Final Agreement.  THIS EXTENSION AND THE OTHER LOAN
           DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
           HERETO AND THERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
           AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
           OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF
           AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
           CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF
           THE PARTIES HERETO OR THERETO.  THERE ARE NO ORAL AGREEMENTS AMONG
           THE PARTIES HERETO OR THERETO.  THE PROVISIONS OF THIS
           MODIFICATION AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED OR WAIVED
           ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE RESPECTIVE PARTIES
           TO SUCH DOCUMENTS.

                     {See next page for signature pages}

           EXECUTED effective as of the date first above written:

                                    LENDER:

                                    CHARGER INVESTMENTS, LLC

                                    By:    JERRY CRUMPLER
                                           GENERAL PARTNER

                                    By:    /s/Jerry Crumpler
                                           -----------------------------
                                    Name:  Jerry Crumpler
                                    Title: Authorized Signatory

                                    RAPID LINK:

                                    RAPID LINK INCORPORATED

                                    By:    /s/ John Jenkins
                                           -----------------------------
                                    Name:  John Jenkins
                                    Title: Chief Executive Officer

<PAGE>

                                 EXHIBIT "A"

 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
 EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
 OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
 REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
 ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
 EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
 AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
 REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
 APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
 TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
 ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON
 EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
 MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES AS PERMITTED BY LAW
 AND THE SECURITIES PURCHASE AGREEMENT PURSUANT TO WHICH THE SECURITIES WERE
 ISSUED.

                        COMMON STOCK PURCHASE WARRANT                   NO. 2

                    To Purchase Shares of Common Stock of

                           RAPID LINK INCORPORATED

      This COMMON STOCK PURCHASE WARRANT (this "Warrant") certifies that, for
 value received, CHARGER  GROWTH FUND, L.P.,  a Delaware limited  partnership
 (the "Holder"), is entitled, upon the  terms and subject to the  limitations
 on exercise and  the conditions  hereinafter set forth,  at any  time on  or
 after the date hereof, March 8,  2007 (the "Initial Exercise Date"), and  on
 or prior to the close  of business on the  fifth anniversary of the  Initial
 Exercise Date (the "Termination Date"), to  subscribe for and purchase  from
 RAPID LINK INCORPORATED, a Delaware corporation (the "Company"), such number
 of shares of common  stock, par value  $001 per share,  of the Company  (the
 "Common Stock"),  subject to  adjustment herein  (the "Warrant  Shares")  as
 follows:

           a)   800,000 at an Exercise Price equal to $.10; plus

           b)   an additional 20,000 per month to vest and become exercisable
 on the last day  of each Rapid  Link fiscal quarter  prior to the  Company's
 satisfaction in full of the Debenture,  or the Holder's complete  conversion
 thereof, as the case may be, such  Warrant Shares to have an Exercise  Price
 equal to $.10 per share.

      Section 1.     Definitions.  Capitalized terms  used and not  otherwise
 defined herein shall have the meanings set forth in that certain  Securities
 Purchase Agreement (the "Purchase Agreement"), dated March 8, 2006,  entered
 into by and among the Company and the Holder.

      Section 2.     Exercise.

           a) Exercise   of  Warrant.    Exercise   of  the  purchase  rights
      represented by this  Warrant may be  made at any  time or  times on  or
      after the Initial Exercise Date and  on or before the Termination  Date
      (each, an  "Exercise  Date") by  delivery  to  the Company  of  a  duly
      executed facsimile copy of the Notice of Exercise Form annexed   hereto
      (or such other office or agency of  the Company as it may designate  by
      notice in  writing to  the registered  Holder at  the address  of  such
      Holder appearing  on  the books  of  the Company);  provided,  however,
      within five  Business Days  of  the date  said  Notice of  Exercise  is
      delivered to  the  Company,  the Holder  shall  have  surrendered  this
      Warrant to the Company and the Company shall have received  payment  of
      the aggregate Exercise Price  of the shares  thereby purchased by  wire
      transfer or cashier's check drawn on a United States bank.

                 Exercise Price.   The Exercise  Price (so  called herein) of
 each share of Common Stock under this  Warrant shall be equal to the  amount
 set forth  above in  the paragraph  immediately preceding  Section 1.    Any
 reference to the Exercise  Price herein shall relate  to the Exercise  Price
 relevant to such Warrant Shares as described above.

           b) Cashless Exercise.  If at any time after one year from the date
      of  issuance  of  this  Warrant  there  is  no  effective  Registration
      Statement registering the resale of the  Warrant Shares by the  Holder,
      then this Warrant  may also be  exercised at such  time by  means of  a
      "cashless exercise" in which the Holder shall be entitled to receive  a
      certificate for  the number  of Warrant  Shares equal  to the  quotient
      obtained by dividing [(A-B) (X)] by (A), where:

                (A) = the price of said Common Stock determined by reference
                to the last reported sale price for the Common Stock on such
                day on the principal securities exchange on which the Common
                Stock is listed or admitted to trading or if no such sale
                takes place on such date, the average of the closing bid and
                asked prices thereof as officially reported, or, if not so
                listed or admitted to trading on any securities exchange,
                the last sale price for the Common Stock on the National
                Association of Securities Dealers national market system on
                such date, or, if there shall have been no trading on such
                date or if the Common Stock shall not be listed on such
                system, the average of the closing bid and asked prices in
                the over-the-counter market as furnished by any NASD member
                firm selected from time to time by the Company for such
                purpose or, if the Common Stock is not traded, then such
                price as is reasonably determined by the Company's Board
                of Directors (the "Market Value");

                (B) = the Exercise Price of this Warrant, as adjusted; and

                (X) = the number of Warrant Shares issuable upon exercise of
                this Warrant in accordance with the terms of this Warrant by
                means of a cash exercise rather than a cashless exercise.

            Notwithstanding anything herein to the contrary, on the
      Termination Date, this Warrant shall be automatically exercised via
      cashless exercise pursuant to this Section 2(c).

           c) Exercise  Limitations.  The Holder shall  not have the right to
      exercise any  portion  of  this  Warrant,  pursuant  to  Section  2  or
      otherwise, to  the extent  that after  giving effect  to such  issuance
      after exercise, the Holder (together with the Holder's affiliates),  as
      set forth on the applicable Notice of Exercise, would beneficially  own
      in excess of 4.99% (or as applicable, 9.99%) of the number of shares of
      the Common Stock  outstanding immediately after  giving effect to  such
      issuance.  For purposes of the  foregoing determination, the number  of
      shares of  Common  Stock  beneficially owned  by  the  Holder  and  its
      affiliates shall include the number of shares of Common Stock  issuable
      upon such exercise of this Warrant less the number of shares of  Common
      Stock which  would be  issuable upon  (A)  exercise of  the  remaining,
      nonexercised portion of this Warrant and (B) exercise or conversion  of
      the  unexercised  or  unconverted  portion  of  any  other   Securities
      (including, without  limitation,  any  other  Debentures  or  Warrants)
      subject to  a limitation  on conversion  or exercise  analogous to  the
      limitation contained herein beneficially  owned by the Holder.   Except
      as set forth in  the preceding sentence, for  purposes of this  Section
      2(c), beneficial  ownership  shall  be calculated  in  accordance  with
      Section 13(d) of the Exchange Act.   To the extent that the  limitation
      contained in this  Section 2(c) applies,  the determination of  whether
      this Warrant is exercisable (in relation  to other securities owned  by
      the Holder) and of which a portion of this Warrant is exercisable shall
      be in the sole discretion of such Holder.  For purposes of this Section
      2(c), in determining the number of outstanding shares of Common  Stock,
      the Holder may rely on the number of outstanding shares of Common Stock
      as reflected in (x)  Schedule 3.1(g) to the  Purchase Agreement, (y)  a
      more recent  public announcement  by the  Company, including  the  most
      recent annual or quarterly report of  Form 10-KSB or 10-QSB filed  with
      the Commission; or (z) any other notice by the Company or the Company's
      transfer agent  setting forth  the number  of  shares of  Common  Stock
      outstanding.  Upon  the written  or oral  request  of the  Holder,  the
      Company shall within two Business Days confirm orally and in writing to
      the Holder the number of shares of Common Stock then outstanding.   The
      provisions of this Section  2(c) may be waived  by the Holder upon,  at
      the election of the Holder, not less than 61 days' prior notice to  the
      Company, and  the provisions  of this  Section 2(c)  shall continue  to
      apply until such  61st day (or  such later date,  as determined by  the
      Holder, as may be specified in such notice of waiver).

           d) Mechanics of Exercise.

                     i. Authorization   of  Warrant  Shares.     The  Company
                covenants that all  Warrant Shares which  may be issued  upon
                the exercise  of  the  purchase rights  represented  by  this
                Warrant  will,   upon  exercise   of  the   purchase   rights
                represented by  this  Warrant, be  duly  authorized,  validly
                issued, fully  paid  and  non-assessable and  free  from  all
                taxes, liens and charges in  respect of the issuance  thereof
                (other than  taxes  in  respect  of  any  transfer  occurring
                contemporaneously with such issuance).  The Company covenants
                that during the  period the Warrant  is outstanding, it  will
                reserve from  its  authorized  and unissued  Common  Stock  a
                sufficient number of  shares to provide  for the issuance  of
                the Warrant Shares upon the  exercise of any purchase  rights
                under this Warrant.  The  Company further covenants that  its
                issuance of this Warrant  shall constitute full authority  to
                its officers who are charged with the duty of executing stock
                certificates to execute and issue the necessary  certificates
                for the  Warrant Shares  upon the  exercise of  the  purchase
                rights under this Warrant.   The Company  will take all  such
                reasonable action as  may be  necessary to  assure that  such
                Warrant Shares  may  be  issued as  provided  herein  without
                violation of  any applicable  law or  regulation, or  of  any
                requirements of  the Trading  Market  upon which  the  Common
                Stock may be listed.

                     ii.    Delivery    of   Certificates    Upon   Exercise.
                Certificates  for   shares  purchased   hereunder  shall   be
                transmitted by  the  transfer agent  of  the Company  to  the
                Holder by crediting the account of the Holder's prime  broker
                with  the  Depository  Trust  Company  through  its   Deposit
                Withdrawal Agent Commission ("DWAC") system if the Company is
                a participant in such system and  if the certificates may  be
                issued  without  a  restrictive  legend  in  accordance  with
                applicable federal securities laws, and otherwise by physical
                delivery to the address specified by the Holder in the Notice
                of Exercise within two (2) Business Days from the delivery to
                the Company of the Notice of Exercise Form, surrender of this
                Warrant and payment  of the aggregate  Exercise Price as  set
                forth above ("Warrant  Share Delivery Date").   This  Warrant
                shall be  deemed  to have  been  exercised on  the  date  the
                Exercise Price  is  received by  the  Company.   The  Warrant
                Shares shall be deemed to have been issued, and Holder or any
                other person  so  designated to  be  named therein  shall  be
                deemed to have become a holder  of record of such shares  for
                all purposes, as of the date  the Warrant has been  exercised
                by payment to the Company of the Exercise Price and all taxes
                required to  be  paid by  the  Holder, if  any,  pursuant  to
                Section 2(d)(vii) prior to the issuance of such shares,  have
                been paid.

                     iii. Delivery  of New Warrants  Upon Exercise.  If  this
                Warrant shall have been exercised in part, the Company shall,
                at the time  of delivery of  the certificate or  certificates
                representing Warrant Shares, deliver to Holder a new  Warrant
                evidencing the rights of  Holder to purchase the  unpurchased
                Warrant Shares called for by this Warrant, which new  Warrant
                shall in all other respects be identical with this Warrant.

                     iv.  Rescission  Rights.  If  the Company fails to cause
                its transfer agent to transmit to the Holder a certificate or
                certificates representing the Warrant Shares pursuant to this
                Section 2(d)(iv) by the Warrant Share Delivery Date, then the
                Holder will have the right to rescind such exercise.

                     v. Failure to Timely Deliver Certificates Upon Exercise.
                 In addition to any other rights available to the Holder,  if
                the Company or  the Company's transfer  agent fails to  cause
                delivery to  the  Holder  of a  certificate  or  certificates
                representing the  Warrant Shares  or if  the Company  or  its
                transfer agent fails to deliver such certificates without the
                restrictive legend (if applicable)  on or before the  Warrant
                Share Delivery Date, the Company  shall pay to Purchaser,  in
                cash, as partial liquidated damages and not as a penalty, the
                greater of (i) $500 for each  Business Day after the  Warrant
                Share Delivery Date until such certificate is delivered  with
                an appropriate legend or without a restrictive legend, as the
                case may be; and (ii) the  difference in the Market Value  of
                the Warrant Shares on the Warrant Share Delivery Date and the
                date  such  shares  are  actually  received  by  the  Holder.
                Nothing herein shall limit Purchaser's right to pursue actual
                damages for  the Company's  failure to  deliver  certificates
                representing any Securities as required herein, and Purchaser
                shall have the right to pursue  all remedies available to  it
                at law or in equity  including, without limitation, a  decree
                of specific performance and/or injunctive relief.

                     vi. No Fractional Shares or Scrip.  No fractional shares
                or scrip representing fractional shares shall be issued  upon
                the exercise of this Warrant.  As to any fraction of a  share
                which Holder  would otherwise  be entitled  to purchase  upon
                such exercise, the Company shall round such fractional  share
                up to the next whole number.

                     vii. Charges,   Taxes   and  Expenses.      Issuance  of
                certificates for Warrant Shares shall be made without  charge
                to the  Holder  for  any  issue  or  transfer  tax  or  other
                incidental  expense  in  respect  of  the  issuance  of  such
                certificate, all of which taxes and expenses shall be paid by
                the Company, and  such certificates  shall be  issued in  the
                name of  the  Holder or  in  such name  or  names as  may  be
                directed by the Holder; provided, however, that in the  event
                certificates for Warrant Shares  are to be  issued in a  name
                other  than  the  name  of  the  Holder,  this  Warrant  when
                surrendered  for  exercise  shall   be  accompanied  by   the
                Assignment Form attached hereto duly executed by the  Holder;
                and the  Company may  require, as  a condition  thereto,  the
                payment of a sum sufficient to reimburse it for any  transfer
                tax incidental thereto.

                     viii. Closing of  Books.  The Company will not close its
                stockholder books or records in any manner which prevents the
                timely exercise  of  this  Warrant,  pursuant  to  the  terms
                hereof.

      Section 3.     Certain Adjustments.

           a) Stock  Dividends and Splits. If the  Company, at any time while
      this Warrant is  outstanding: (A) pays  a stock  dividend or  otherwise
      make a distribution or distributions on  shares of its Common Stock  or
      any other equity or equity equivalent  securities payable in shares  of
      Common Stock  (which, for  avoidance of  doubt, shall  not include  any
      shares of Common Stock issued by the Company pursuant to this Warrant),
      (B) subdivides outstanding shares of Common Stock into a larger  number
      of shares,  (C) combines  (including by  way  of reverse  stock  split)
      outstanding shares of Common Stock into a smaller number of shares,  or
      (D) issues by reclassification of shares of the Common Stock any shares
      of capital stock of the Company,  then in each case the Exercise  Price
      shall be multiplied by a fraction  of which the numerator shall be  the
      number of shares of  Common Stock (excluding  treasury shares, if  any)
      outstanding before such event and of which the denominator shall be the
      number of shares of Common Stock  outstanding after such event and  the
      number of  shares  issuable upon  exercise  of this  Warrant  shall  be
      proportionately adjusted.  Any adjustment made pursuant to this Section
      3(a) shall become effective immediately after  the record date for  the
      determination of  stockholders entitled  to  receive such  dividend  or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or re-classification.

           b) Subsequent Equity  Sales. If the Company at any time while this
      Warrant is outstanding, shall offer, sell, grant any option to purchase
      or offer,  sell  or grant  any  right  to reprice  its  securities,  or
      otherwise dispose  of  or issue    any  Common Stock  or  Common  Stock
      Equivalents entitling any Person to acquire shares of Common Stock,  at
      an effective price per  share less than the  then Exercise Price  (such
      lower price, the "Base Share Price" and such issuances collectively,  a
      "Dilutive Issuance"),  as  adjusted hereunder  (if  the holder  of  the
      Common Stock or Common Stock Equivalents  so issued shall at any  time,
      whether by operation of  purchase price adjustments, reset  provisions,
      floating conversion, exercise or exchange  prices or otherwise, or  due
      to warrants, options or rights per share which is issued in  connection
      with such issuance, be entitled to receive shares of Common Stock at an
      effective price per share which is  less than the Exercise Price,  such
      issuance shall be deemed  to have occurred for  less than the  Exercise
      Price), then, the  Exercise Price shall  be reduced to  equal the  Base
      Share Price.  Such adjustment shall be made whenever such Common  Stock
      or Common Stock Equivalents are issued.   The Company shall notify  the
      Holder in  writing,  no  later than  the  Business  Day  following  the
      issuance of any  Common Stock or  Common Stock  Equivalents subject  to
      this section, indicating therein the  applicable issuance price, or  of
      applicable reset  price, exchange  price,  conversion price  and  other
      pricing terms  (such  notice  the "Dilutive  Issuance  Notice").    For
      purposes of  clarification,  whether  or not  the  Company  provides  a
      Dilutive Issuance  Notice  pursuant  to this  Section  3(b),  upon  the
      occurrence of any Dilutive  Issuance, after the  date of such  Dilutive
      Issuance the Holder is entitled to  receive a number of Warrant  Shares
      based upon  the  Base Share  Price  regardless of  whether  the  Holder
      accurately refers to the Base Share Price in the Notice of Exercise.

           c) Pro  Rata Distributions.  If the Company,  at any time prior to
      the Termination Date, shall distribute to  all holders of Common  Stock
      (and not to Holders of the  Warrants) evidences of its indebtedness  or
      assets or rights or warrants to subscribe for or purchase any  security
      other than the Common Stock (which  shall be subject to Section  3(b)),
      then in  each  such  case  the Exercise  Price  shall  be  adjusted  by
      multiplying the  Exercise  Price in  effect  immediately prior  to  the
      record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of  which the denominator shall be  the
      closing bid price  of the Common  Stock on the  then principal  Trading
      Market determined as of the record date mentioned above (if the closing
      bid price of  the Common  Stock on  the then  principal Trading  Market
      shall then  be determinable  and otherwise  the fair  market value  per
      share as determined  by the Board  of Directors in  good faith, and  of
      which the numerator shall be such closing bid price of the Common Stock
      on the then principal Trading Market on such record date less the  then
      per share fair market value at such record date of the portion of  such
      assets or evidence  of indebtedness  so distributed  applicable to  one
      outstanding share of  the Common Stock  as determined by  the Board  of
      Directors in  good faith.   In  either case  the adjustments  shall  be
      described in a  statement provided  to the  Holders of  the portion  of
      assets or evidences of indebtedness so distributed or such subscription
      rights applicable to one share of Common Stock.  Such adjustment  shall
      be made  whenever  any  such distribution  is  made  and  shall  become
      effective immediately after the record date mentioned above.

           d) Fundamental Transaction.  If, at any time while this Warrant is
      outstanding, there  occurs a  Fundamental Transaction,  then, upon  any
      subsequent conversion of this Warrant, the Holder shall have the  right
      to receive, for each Warrant Share  that would have been issuable  upon
      such exercise absent such Fundamental Transaction, at the option of the
      Holder, (a) upon  exercise of  this Warrant,  the number  of shares  of
      Common Stock  of  the successor  or  acquiring corporation  or  of  the
      Company,  if   it  is   the   surviving  corporation,   and   Alternate
      Consideration receivable upon  or as a  result of such  reorganization,
      reclassification, merger, consolidation or  disposition of assets by  a
      Holder of the number of shares  of Common Stock for which this  Warrant
      is exercisable immediately prior to such event or (b) if the Company is
      acquired in an all  cash transaction, cash equal  to the value of  this
      Warrant as determined by the difference between the applicable Exercise
      Price and the amount of cash paid per share to the shareholders of  the
      Company (the  "Alternate Consideration").   For  purposes of  any  such
      exercise,  the   determination  of   the   Exercise  Price   shall   be
      appropriately adjusted to apply  to such Alternate Consideration  based
      on the amount  of Alternate Consideration  issuable in  respect of  one
      share of Common Stock in such Fundamental Transaction, and the  Company
      shall apportion the Exercise Price among the Alternate Consideration in
      a reasonable  manner reflecting  the relative  value of  any  different
      components of the Alternate Consideration.  If holders of Common  Stock
      are given  any choice  as to  the securities,  cash or  property to  be
      received in a Fundamental Transaction, then  the Holder shall be  given
      the same choice as to the Alternate Consideration it receives upon  any
      exercise of this  Warrant following such  Fundamental Transaction.   To
      the extent  necessary  to  effectuate  the  foregoing  provisions,  any
      successor to  the  Company  or surviving  entity  in  such  Fundamental
      Transaction shall issue to the Holder a new warrant consistent with the
      foregoing provisions and evidencing the Holder's right to exercise such
      warrant into  Alternate  Consideration.  The  terms  of  any  agreement
      pursuant to which a Fundamental  Transaction is effected shall  include
      terms requiring any such successor or  surviving entity to comply  with
      the provisions of this Section 3(d) and insuring that this Warrant  (or
      any such  replacement security)  will be  similarly adjusted  upon  any
      subsequent transaction analogous to a Fundamental Transaction.

           e) Exempt Issuance. Notwithstanding the foregoing, no adjustments,
      Alternate Consideration, nor  notices shall  be made,  paid, or  issued
      under this Section 3 in respect of an Exempt Issuance.

           f) Calculations.  All calculations under  this Section  3 shall be
      made to the nearest cent or the nearest 1/100th of a share, as the case
      may be. The number of shares  of Common Stock outstanding at any  given
      time shall not includes shares of Common Stock owned or held by or  for
      the account of the Company, and  the description of any such shares  of
      Common Stock shall be considered  on issue or sale  of Common  Stock.
      For purposes of this  Section 3, the number  of shares of Common  Stock
      deemed to be issued and outstanding as of a given date shall be the sum
      of the number of shares of Common Stock (excluding treasury shares,  if
      any) issued and outstanding.

           g) Voluntary  Adjustment By Company.  The Company may  at any time
      during the term of this Warrant reduce the then current Exercise  Price
      to any amount  and for  any period of  time deemed  appropriate by  the
      Board of Directors of the Company.

           h) Intentionally Omitted.

           i) Notice to Holders.

                     i.  Adjustment to Exercise Price.  Whenever the Exercise
                Price is adjusted  pursuant to  this Section  3, the  Company
                shall promptly mail to each Holder a notice setting forth the
                Exercise Price  after such  adjustment  and setting  forth  a
                brief statement of  the facts requiring  such adjustment.  If
                the Company  issues a  variable  rate security,  the  Company
                shall be deemed to have issued  Common Stock or Common  Stock
                Equivalents at  the lowest  possible conversion  or  exercise
                price at which such securities may be converted or  exercised
                in the case of a Variable Rate Transaction (as defined in the
                Purchase Agreement), or the lowest possible adjustment  price
                in  the  case  of  an  MFN   Transaction.    The  term   "MFN
                Transaction" shall mean  a transaction in  which the  Company
                issues  or  sells  any   securities  in  a  capital   raising
                transaction or series of related transactions which grants to
                an investor the right to receive additional shares based upon
                future transactions of  the Company on  terms more  favorable
                than those granted to such investor in such offering.

                     ii. Notice  to  Allow  Exercise by  Holder.  If  (A) the
                Company shall declare a dividend (or any other  distribution)
                on the Common Stock; (B) the Company shall declare a  special
                nonrecurring cash dividend on or  a redemption of the  Common
                Stock; (C) the  Company shall authorize  the granting to  all
                holders of the Common Stock  rights or warrants to  subscribe
                for or purchase any shares of  capital stock of any class  or
                of any rights; (D)  the approval of  any stockholders of  the
                Company  shall   be   required   in   connection   with   any
                reclassification of the  Common Stock,  any consolidation  or
                merger to which the Company is a party, any sale or  transfer
                of all or substantially all of the assets of the Company,  of
                any compulsory  share exchange  whereby the  Common Stock  is
                converted into other  securities, cash or  property; (E)  the
                Company  shall   authorize  the   voluntary  or   involuntary
                dissolution, liquidation or winding up of the affairs of  the
                Company; then, in each  case, the Company  shall cause to  be
                mailed to the Holder at its  last address as it shall  appear
                upon the  Warrant  Register  of  the  Company,  at  least  20
                calendar days  prior to  the applicable  record or  effective
                date hereinafter specified, a notice stating (x) the date  on
                which a  record  is to  be  taken  for the  purpose  of  such
                dividend, distribution, redemption, rights or warrants, or if
                a record is not to be taken, the date as of which the holders
                of the  Common  Stock  of  record  to  be  entitled  to  such
                dividend, distributions, redemption,  rights or warrants  are
                to  be   determined   or  (y)   the   date  on   which   such
                reclassification, consolidation,  merger, sale,  transfer  or
                share exchange is expected to become effective or close,  and
                the date  as of  which it  is expected  that holders  of  the
                Common Stock of  record shall be  entitled to exchange  their
                shares of  the Common  Stock for  securities, cash  or  other
                property    deliverable    upon    such     reclassification,
                consolidation, merger,  sale,  transfer  or  share  exchange;
                provided, however that the failure to mail such notice or any
                defect therein or in the mailing thereof shall not affect the
                validity of the corporate action required to be specified  in
                such notice.  The Holder is entitled to exercise this Warrant
                during the 20-day period commencing  the date of such  notice
                to the effective date of the event triggering such notice.

      Section 4.     Transfer of Warrant.

           a) Transferability.    Subject to  compliance with  any applicable
      securities laws and the conditions set forth in Sections 5(a) and  4(d)
      hereof and to the provisions of Section 4.1 of the Purchase  Agreement,
      this Warrant and all rights hereunder are transferable, in whole or  in
      part, upon surrender  of this Warrant  at the principal  office of  the
      Company,  together   with  a   written  assignment   of  this   Warrant
      substantially in the form attached hereto  duly executed by the  Holder
      or its agent or attorney and funds sufficient to pay any transfer taxes
      payable upon the making of such transfer.  Upon such surrender and,  if
      required, such payment,  the Company shall  execute and  deliver a  new
      Warrant or Warrants in the name of the assignee or assignees and in the
      denomination  or  denominations   specified  in   such  instrument   of
      assignment, and shall issue  to the assignor  a new Warrant  evidencing
      the portion of  this Warrant not  so assigned, and  this Warrant  shall
      promptly be  cancelled.    A Warrant,  if  properly  assigned,  may  be
      exercised by a new  holder for the purchase  of Warrant Shares  without
      having a new Warrant issued.

           b) New  Warrants. This  Warrant  may be  divided or  combined with
      other Warrants upon presentation hereof at the aforesaid office of  the
      Company, together  with  a  written notice  specifying  the  names  and
      denominations in which  new Warrants are  to be issued,  signed by  the
      Holder or its agent  or attorney.  Subject  to compliance with  Section
      4(a), as to  any transfer  which may be  involved in  such division  or
      combination, the Company  shall execute and  deliver a  new Warrant  or
      Warrants in  exchange for  the Warrant  or Warrants  to be  divided  or
      combined in accordance with such notice.

           c) Warrant Register. The Company shall register this Warrant, upon
      records to be maintained by the Company for that purpose (the  "Warrant
      Register"), in the name of the record Holder hereof from time to  time.
      The Company may deem and treat  the registered Holder  of this  Warrant
      as the absolute owner hereof for the purpose of any exercise hereof  or
      any distribution  to the  Holder, and  for all  other purposes,  absent
      actual notice to the contrary.

           d) Transfer Restrictions. If, at the time of the surrender of this
      Warrant in connection with any transfer  of this Warrant, the  transfer
      of this  Warrant  shall not  be  registered pursuant  to  an  effective
      registration statement under  the Securities Act  and under  applicable
      state securities  or blue  sky  laws, the  Company  may require,  as  a
      condition of allowing such transfer (i)  that the Holder or  transferee
      of this Warrant, as the case may  be, furnish to the Company a  written
      opinion of counsel (which opinion shall be in form, substance and scope
      customary for opinions  of counsel in  comparable transactions) to  the
      effect that such transfer  may be made  without registration under  the
      Securities Act and under applicable state securities or blue sky  laws,
      (ii) that the holder or transferee  execute and deliver to the  Company
      an investment letter in  form and substance  acceptable to the  Company
      and (iii) that the transferee be an "accredited investor" as defined in
      Rule 501(a) of Regulation D promulgated  under the Securities Act or  a
      qualified institutional  buyer as  defined in  Rule 144A(a)  under  the
      Securities Act.

      Section 5.     Covenants.

           (a)  Negative Covenants. So long as any portion of this Warrant is
 outstanding, without the prior written consent of the Holder, which  consent
 may be withheld in the sole discretion  of the Holder, the Company will  not
 and will not permit any of its Subsidiaries to directly or indirectly:

                i.   Sale of  Assets,  Dissolution,  Etc.    Transfer,  sell,
           assign, lease or otherwise dispose of all or substantially all  of
           its properties or assets, or any assets or properties necessary or
           desirable for the  proper conduct  of its  business, or  transfer,
           sell, assign  or otherwise  dispose of  any  of its  accounts,  or
           contract rights to any person or  entity, or change the nature  of
           its business, wind-up, liquidate or dissolve,  or agree to any  of
           the foregoing, other than in the ordinary course of business;

                ii.  No Further  Issuance  of  Securities.    Other  than  in
           accordance herewith or with respect to an Exempt Issuance, create,
           issue or permit the issuance of  any additional securities of  the
           Company or of any of its  Subsidiaries (including with respect  to
           any Qualifying Transaction),  if any,  or any  rights, options  or
           warrants to acquire any  such securities; provided, however,  that
           in the  event  that  Company  desires  to  issue  securities  with
           preferences or rights greater than that which the Common Stock has
           and the Holder  consents to same,  the Holder will  then have  the
           option of converting all or any  part of this Debenture into  such
           stock in lieu of the Common Stock;;

                iii. Agreement.     Enter into any  agreement obligating  the
           Company to undertake any of the matters set forth in this  Section
           5(a).

           (b)  Affirmative Covenants.    So  long as  any  portion  of  this
 Warrant is outstanding and unless the Holder otherwise consents in  writing,
 which consent may  be withheld  in the sole  discretion of  the Holder,  the
 Company will:

                i.   True Books.  Keep  true books of  record and account  in
           which full, true and  correct entries will be  made of all of  its
           dealings and  transactions,  and  set  aside  on  its  books  such
           reserves as may  be required by  GAAP, consistently applied,  with
           respect to  all taxes,  assessments,  charges, levies  and  claims
           referred to in  (a) above,  and with  respect to  its business  in
           general, and include such reserves in interim as well as  year-end
           financial statements; and

                ii.  Right of Inspection.   Permit any  person designated  by
           the Holder, at the Holder's expense,  to visit and inspect any  of
           the properties, books and financial reports of the Company, all at
           such reasonable times upon three (3) Business Days prior notice to
           the Company, and as  often as the  Holder may reasonably  request,
           provided the Holder does not unreasonably interfere with the daily
           operations of the  Company and Holder  executes a  confidentiality
           agreement.

      Section 6.     Miscellaneous.

           a) Title to Warrant.  Prior to the Termination Date and subject to
      compliance with applicable  laws and Section  4 of  this Warrant,  this
      Warrant and all rights hereunder are transferable, in whole or in part,
      at the office or agency of  the Company by the  Holder in person or  by
      duly authorized attorney, upon surrender of this Warrant together  with
      the Assignment Form annexed hereto  properly endorsed.  The  transferee
      shall sign  an  investment  letter in  form  and  substance  reasonably
      satisfactory to the Company.

           b) No Rights as Shareholder Until Exercise.  This Warrant does not
      entitle  the  Holder  to  any  voting  rights  or  other  rights  as  a
      shareholder of the  Company prior  to the  exercise hereof.   Upon  the
      surrender of this  Warrant and the  payment of  the aggregate  Exercise
      Price (or  by means  of a  cashless exercise),  the Warrant  Shares  so
      purchased shall be and  be deemed to  be issued to  such Holder as  the
      record owner of such shares as of the close of business on the later of
      the date of such surrender or payment.

           c) Loss, Theft,  Destruction or Mutilation of Warrant. The Company
      covenants that  upon  receipt by  the  Company of  evidence  reasonably
      satisfactory to it  of the loss,  theft, destruction  or mutilation  of
      this Warrant or any stock certificate  relating to the Warrant  Shares,
      and in case  of loss, theft  or destruction, of  indemnity or  security
      reasonably satisfactory to it (which, in the case of the Warrant, shall
      not  include  the  posting  of  any  bond),  and  upon  surrender   and
      cancellation of such  Warrant or stock  certificate, if mutilated,  the
      Company will make  and deliver a  new Warrant or  stock certificate  of
      like tenor and dated as of  such cancellation, in lieu of such  Warrant
      or stock certificate.

           d) Saturdays,  Sundays, Holidays, etc.   If the  last or appointed
      day for  the  taking of  any  action or  the  expiration of  any  right
      required or  granted herein  shall be  a Saturday,  Sunday or  a  legal
      holiday, then such action may be  taken or such right may be  exercised
      on the next succeeding day not a Saturday, Sunday or legal holiday.

           e) Authorized Shares.

            The Company  covenants  that  during the  period  the  Warrant is
      outstanding, it will  reserve from its  authorized and unissued  Common
      Stock a sufficient number of shares to provide for the issuance of  the
      Warrant Shares  upon the  exercise of  any purchase  rights under  this
      Warrant.   The Company  further covenants  that  its issuance  of  this
      Warrant shall constitute full authority to its officers who are charged
      with the duty of executing stock certificates to execute and issue  the
      necessary certificates for the Warrant Shares upon the exercise of  the
      purchase rights under  this Warrant.   The Company will  take all  such
      reasonable action  as may  be necessary  to  assure that  such  Warrant
      Shares may  be  issued as  provided  herein without  violation  of  any
      applicable law or  regulation, or of  any requirements  of the  Trading
      Market upon which the Common Stock may be listed.

            Except and to the extent as waived or consented to by the Holder,
      the Company shall  not by  any action,  including, without  limitation,
      amending   its   certificate   of   incorporation   or   through    any
      reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale  of securities or  any other voluntary  action, avoid  or
      seek to avoid the observance or performance of any of the terms of this
      Warrant, but will at all times in good faith assist in the carrying out
      of all such  terms and  in the taking  of all  such actions  as may  be
      necessary or appropriate to protect the  rights of Holder as set  forth
      in this Warrant against impairment.  Without limiting the generality of
      the foregoing, the Company will (a)  not increase the par value of  any
      Warrant Shares above  the amount  payable therefor  upon such  exercise
      immediately prior to  such increase  in par  value, (b)  take all  such
      action as may be necessary or appropriate in order that the Company may
      validly and legally issue fully  paid and nonassessable Warrant  Shares
      upon the exercise of this Warrant, and (c) use commercially  reasonable
      efforts to obtain all such authorizations, exemptions or consents  from
      any public  regulatory  body  having jurisdiction  thereof  as  may  be
      necessary to enable the Company to  perform its obligations under  this
      Warrant.

            Before taking any action  which would result  in an adjustment in
      the number of Warrant Shares for  which this Warrant is exercisable  or
      in the Exercise Price, the Company shall obtain all such authorizations
      or exemptions thereof, or  consents thereto, as  may be necessary  from
      any public regulatory body or bodies having jurisdiction thereof.

           f) Jurisdiction.   All  questions   concerning  the  construction,
      validity, enforcement  and  interpretation  of this  Warrant  shall  be
      determined in accordance with the provisions of the Purchase Agreement.

           g) Restrictions.   The Holder acknowledges that the Warrant Shares
      acquired upon the  exercise of this  Warrant, if  not registered,  will
      have restrictions upon resale imposed  by state and federal  securities
      laws.

           h) Expenses.   If  the  Company willfully  and knowingly  fails to
      comply with  any  provision  of this  Warrant,  which  results  in  any
      material damages to the  Holder, the Company shall  pay to Holder  such
      amounts as  shall  be  sufficient  to  cover  any  costs  and  expenses
      including, but not  limited to, reasonable  attorneys' fees,  including
      those of appellate  proceedings, incurred by  Holder in collecting  any
      amounts due  pursuant  hereto or  in  otherwise enforcing  any  of  its
      rights, powers or remedies hereunder.

           i) Notices.   Any  notice, request  or other  document required or
      permitted to be given or delivered  to the Holder by the Company  shall
      be delivered in accordance with the  notice provisions of the  Purchase
      Agreement.

           j) Limitation  of Liability.  No  provision hereof, in the absence
      of any  affirmative  action  by Holder  to  exercise  this  Warrant  or
      purchase Warrant Shares,  and no enumeration  herein of  the rights  or
      privileges of Holder, shall  give rise to any  liability of Holder  for
      the purchase  price of  any Common  Stock or  as a  stockholder of  the
      Company, whether  such  liability is  asserted  by the  Company  or  by
      creditors of the Company.

           k) Remedies.   Holder, in  addition to being  entitled to exercise
      all rights  granted by  law, including  recovery  of damages,  will  be
      entitled to specific performance of its rights under this Warrant.  The
      Company agrees that monetary damages would not be adequate compensation
      for any loss incurred by reason of a breach by it of the provisions  of
      this Warrant and hereby agrees to  waive the defense in any action  for
      specific performance that a remedy at law would be adequate.

           l) Successors and Assigns.  Subject to applicable securities laws,
      this Warrant  and the  rights and  obligations evidenced  hereby  shall
      inure to  the benefit  of and  be binding  upon the  successors of  the
      Company and  the  successors and  permitted  assigns of  Holder.    The
      provisions of this Warrant  are intended to be  for the benefit of  all
      Holders from time to time of  this Warrant and shall be enforceable  by
      any such Holder or holder of Warrant Shares.

           m) Amendment and  Waiver.  This Warrant may be modified or amended
      only with the written consent of the Company and the Holder.  No course
      of dealing or any delay or  failure to exercise any right hereunder  on
      the part of Holder shall operate as a waiver of such right or otherwise
      prejudice Holder's rights, powers or remedies, notwithstanding the fact
      that all rights hereunder terminate on the Termination Date.

           n) Severability.    Wherever  possible,  each  provision  of  this
      Warrant shall be  interpreted in  such manner  as to  be effective  and
      valid under applicable law, but if any provision of this Warrant  shall
      be prohibited by or invalid under applicable law, such provision  shall
      be ineffective to the extent of such prohibition or invalidity, without
      invalidating  the  remainder  of  such  provisions  or  the   remaining
      provisions of this Warrant.

           o) Headings.    The headings  used  in  this Warrant  are  for the
      convenience of reference only and shall not, for any purpose, be deemed
      a part of this Warrant.

           p) Registration Rights. The Holder has certain rights with respect
      to the  registration  of  the Warrant  Shares  upon  exercise  of  this
      Warrant, such  rights  being specifically  set  forth in  the  Purchase
      Agreement entered into  by and between  Holder and the  Company on  the
      date hereof.

                           [Signature Page Follows]

        IN WITNESS WHEREOF, the Company has caused this Warrant to be
   executed by its officer thereunto duly authorized as of the date first
   written above.

                                      RAPID LINK INCORPORATED

                                      By:    /s/ John Jenkins
                                             -----------------------------
                                      Name:  John Jenkins
                                      Title: Chief Executive OfficerExhibit 10.1

 

 

 

 

 

SEVENTH AMENDED AND RESTATED

LIQUIDITY AGREEMENT

 

among

 

BUNGE ASSET FUNDING CORP.

 

THE FINANCIAL INSTITUTIONS LISTED

ON THE SIGNATURE PAGES HERETO

 

CITIBANK, N.A.,

as Syndication Agent,

BNP PARIBAS,

as Documentation Agent,

CREDIT SUISSE, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,

as Documentation Agent,

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”, NEW YORK BRANCH,

as Documentation Agent,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

Dated as of June 11, 2007

 

 

 

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Lead Arrangers and Joint Bookrunners

 

 

TABLE OF CONTENTS

 

	 	 	
PAGE

	
ARTICLE I DEFINITIONS
	
1

	
SECTION 1.01
	
Definitions
	
1

	 	 
	
ARTICLE II COMMERCIAL PAPER OPERATIONS
	
2

	
SECTION 2.01
	
Issuance of Commercial Paper
	
2

	
SECTION 2.02
	
Commercial Paper Account; Payment of Commercial Paper
	
2

	 	 
	
ARTICLE III LIQUIDITY LOANS
	
3

	
SECTION 3.01
	
Liquidity Loans
	
3

	
SECTION 3.02
	
The Liquidity Loan Notes
	
9

	
SECTION 3.03
	
Interest.
	
10

	
SECTION 3.04
	
Responsibilities of Each Liquidity Bank
	
11

	
SECTION 3.05
	
Confirming Letters of Credit
	
11

	 	 
	
ARTICLE IV OTHER CREDIT TERMS
	
11

	
SECTION 4.01
	
Fees.
	
11

	
SECTION 4.02
	
Termination or Reduction of the Aggregate Liquidity Commitment
	
12

	
SECTION 4.03
	
Extensions of the Aggregate Liquidity Commitment
	
13

	
SECTION 4.04
	
Proceeds
	
15

	
SECTION 4.05
	
Increased Costs; Capital Adequacy
	
15

	
SECTION 4.06
	
Taxes
	
18

	
SECTION 4.07
	
Addition, Removal and Downgrading of Liquidity Banks
	
18

	
SECTION 4.08
	
Illegality
	
19

	
SECTION 4.09
	
Unavailability of LIBOR Liquidity Loans
	
19

	 	 
	
ARTICLE V PAYMENTS
	
20

	
SECTION 5.01
	
Payments on Non Business Days
	
20

	
SECTION 5.02
	
Prepayments
	
20

	
SECTION 5.03
	
Cash Collateral Account
	
20

	
SECTION 5.04
	
Method and Place of Payment, etc
	
21

	
SECTION 5.05
	
Draws on and Exchange of the Letter of Credit
	
21

	 	 
	
ARTICLE VI CONDITIONS PRECEDENT
	
23

	
SECTION 6.01
	
Conditions to Effectiveness
	
23

	
SECTION 6.02
	
Conditions to Each Issuance of Commercial Paper
	
26

 

 

	
SECTION 6.03
	
Conditions Precedent to the Making of Each Liquidity Loan
	
27

	
SECTION 6.04
	
Conditions to the Making of any Liquidity Loan Following a Mandatory CP Wind-Down Event
	
27

	 	 
	
ARTICLE VII COVENANTS
	
27

	
SECTION 7.01
	
Affirmative Covenants
	
28

	
SECTION 7.02
	
Negative Covenants
	
30

	 	 
	
ARTICLE VIII MANDATORY LIQUIDATION EVENTS, MANDATORY CP WIND-DOWN EVENTS AND REMEDIES
	
31

	
SECTION 8.01
	
Mandatory Liquidation Events
	
31

	
SECTION 8.02
	
Mandatory CP Wind-Down Events
	
34

	
SECTION 8.03
	
Remedies.
	
34

	 	 
	
ARTICLE IX REPRESENTATIONS AND WARRANTIES
	
35

	
SECTION 9.01
	
Corporate Existence
	
35

	
SECTION 9.02
	
Corporate Power; Authorization; Enforceable Obligation
	
35

	
SECTION 9.03
	
No Legal Bar
	
36

	
SECTION 9.04
	
No Material Litigation
	
36

	
SECTION 9.05
	
Security Interest.
	
36

	
SECTION 9.06
	
Commercial Paper; Investment Company Act
	
37

	
SECTION 9.07
	
Securities Act
	
37

	
SECTION 9.08
	
Accuracy of Information
	
37

	
SECTION 9.09
	
Taxes and ERISA Liability
	
37

	
SECTION 9.10
	
Federal Regulations
	
37

	
SECTION 9.11
	
No Change
	
38

	
SECTION 9.12
	
Solvency
	
38

	 	 
	
ARTICLE X THE ADMINISTRATIVE AGENT AND THE LIQUIDITY BANKS
	
38

	
SECTION 10.01
	
Appointment of the Administrative Agent
	
38

	
SECTION 10.02
	
Resignation of the Administrative Agent
	
42

	
SECTION 10.03
	
Obligations Several
	
42

	
SECTION 10.04
	
Multiple Capacities
	
42

	
SECTION 10.05
	
Agent Communications
	
43

	
SECTION 10.06
	
Documentation Agent and Syndication Agent
	
43

	 	 
	
ARTICLE XI MISCELLANEOUS
	
43

	
SECTION 11.01
	
Computations
	
43

	
SECTION 11.02
	
Exercise of Rights
	
43

 

-ii-

 

	
SECTION 11.03
	
Amendment and Waiver
	
44

	
SECTION 11.04
	
Expenses and Indemnification.
	
45

	
SECTION 11.05
	
Successors and Assigns.
	
46

	
SECTION 11.06
	
Notices, Requests, Demands
	
49

	
SECTION 11.07
	
Survival
	
49

	
SECTION 11.08
	
GOVERNING LAW
	
49

	
SECTION 11.09
	
Counterparts
	
50

	
SECTION 11.10
	
Setoff
	
50

	
SECTION 11.11
	
Further Assurances
	
50

	
SECTION 11.12
	
No Bankruptcy Petition Against BAFC; Liability of BAFC.
	
50

	
SECTION 11.13
	
No Recourse Loan
	
51

	
SECTION 11.14
	
Knowledge of BAFC
	
51

	
SECTION 11.15
	
Descriptive Headings
	
51

	
SECTION 11.16
	
Consent to Jurisdiction and Service of Process
	
51

	
SECTION 11.17
	
Confidentiality
	
52

	
SECTION 11.18
	
Final Agreement
	
52

	
SECTION 11.19
	
U.S.A. PATRIOT Act
	
52

	 	 	 
	
EXHIBIT A
	
Form of Liquidity Loan Note
	
A-1

	
EXHIBIT B
	
Form of Assignment and Assumption Agreement
	
B-1

	 	 	 
	
ANNEX Y
	
List of Liquidity Bank Percentages
	
Y-1

 

-iii-

 

SEVENTH AMENDED AND RESTATED

 

LIQUIDITY AGREEMENT

 

SEVENTH AMENDED AND RESTATED LIQUIDITY AGREEMENT, dated as of June 11, 2007 (as amended, supplemented or otherwise modified in accordance with the terms hereof and in effect from time to time, this “Agreement”), among BUNGE ASSET FUNDING CORP., a Delaware corporation (hereinafter, together with its successors and assigns, called “BAFC”), the lenders that are parties hereto (hereinafter each, together with its successors and assigns, a
“Liquidity Bank”, and collectively, together with their successors and assigns, the “Liquidity Banks”), and JPMORGAN CHASE BANK, N.A., a New York banking corporation, as agent for the Liquidity Banks (hereinafter, together with its successors and assigns in such capacity, the “Administrative Agent”). This Agreement amends and restates that certain Sixth Amended and Restated Liquidity Agreement, dated as of June 28, 2004, among BAFC, the Liquidity Banks and the Administrative Agent.

 

WITNESSETH:

 

WHEREAS, BAFC proposes to issue and sell its Commercial Paper in the United States commercial paper market and utilize the net proceeds thereof to make advances under the Series 2000-1 VFC Certificate;

 

WHEREAS, BAFC has made application to the Liquidity Banks for the commitment of the Liquidity Banks to make loans to BAFC, the proceeds of which shall be used to either make payments in respect of BAFC’s Commercial Paper or to fund advances under the Series 2000-1 VFC Certificate; and

 

WHEREAS, subject to the terms and conditions set forth herein, the Liquidity Banks are willing to make such loans to BAFC;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01 Definitions. Except as otherwise expressly provided below or elsewhere herein, or unless the context otherwise requires, capitalized terms used herein shall have the meanings assigned to such terms in Annex X (as amended, supplemented or otherwise modified and in effect from time to time, “Annex X”) attached to the Fifth Amended and Restated Pooling Agreement, dated as of June
28, 2004, among BAFC, Bunge Management Services, Inc., as the Servicer, and The Bank of New York, as Trustee (as amended, supplemented or otherwise modified and in effect from time to time, the “Pooling Agreement”), which is incorporated by reference herein.

 

ARTICLE II

 

COMMERCIAL PAPER OPERATIONS

 

SECTION 2.01 Issuance of Commercial Paper. 

 

(a) Subject to the provisions of this Section 2.01 and to Article VI hereof, so long as the Depositary is not in receipt of instructions then in effect from the Administrative Agent, given in accordance with this Section
2.01 and the Depositary Agreement, not to issue or deliver Commercial Paper because a No-Issuance Condition for Commercial Paper has occurred and is continuing, BAFC shall have the right prior to the Liquidity Commitment Expiration Date, from time to time to issue and sell Commercial Paper pursuant to the terms of this Agreement and the Depositary Agreement. Any instructions to cease Commercial Paper issuance from the Administrative Agent to the Depositary shall specify the event as being the reason to cease issuing and delivering Commercial Paper. The Administrative Agent agrees that it shall only instruct the Depositary not to issue or deliver Commercial Paper if there shall have occurred one or more of the events described in this subsection 2.01(a). If the Administrative Agent shall, as permitted by this subsection 2.01(a) and the Depositary Agreement, instruct the Depositary not to issue or deliver Commercial Paper, BAFC shall not thereafter issue and sell any Commercial Paper. Concurrently with the giving of any such instructions to the Depositary, the Administrative Agent shall give notice thereof to BAFC, the Servicer, the Collateral Agent, the Letter of Credit Agent, each Placement Agent and the Series 2000-1 Rating Agencies, but failure to do so shall not impair the effect of such instructions.

 

(b) BAFC agrees that each CP Note shall (i) be in the applicable form attached to the Depositary Agreement and be completed in accordance with this Agreement and the Depositary Agreement, (ii) be dated the date of issuance thereof, (iii) be made payable to the order of a named payee or bearer, (iv) have a maturity date which shall be a Business Day not later than the earliest to occur of (A) the one hundred and eightieth (180th) day following the issuance thereof, (B) the third (3rd) Business Day prior to the Liquidity Commitment Expiration Date and (C) the third (3rd) Business Day prior to the L/C Expiration Date in effect on the date of the issuance thereof,
and (v) be in a Face Amount of $100,000 or an integral multiple of $1,000 in excess thereof; provided that no issuance of Commercial Paper shall be made if, after giving effect to such issuance, the Credits Outstanding shall exceed the Aggregate Available Liquidity Commitment. All Commercial Paper shall be delivered and issued against payment therefor in accordance with the terms of this Agreement and the Depositary Agreement.

 

SECTION 2.02 Commercial Paper Account; Payment of Commercial Paper. 

 

(a) Contemporaneously with the execution and delivery by BAFC of the Depositary Agreement, and for the purposes of this Agreement, the Security Agreement and the Depositary Agreement, the Depositary shall establish at its banking

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offices in The City of New York a special purpose non-interest bearing trust account for the sole and exclusive benefit of the Secured Parties (said account being referred to herein and in the Depositary Agreement as the “Commercial Paper Account”), over which the Depositary shall have sole dominion and control and sole right of withdrawal. Proceeds of the sale of Commercial Paper shall be deposited in the Commercial Paper Account and used to the extent necessary to pay matured and concurrently maturing Commercial Paper; otherwise proceeds of the sale of Commercial Paper shall be transferred to the Cash Collateral Account for
disposition in accordance with the Security Agreement.

 

(b) Contemporaneously with the execution and delivery by BAFC of the Depositary Agreement and for the purposes of this Agreement, the Security Agreement and the Depositary Agreement, the Depositary shall establish at its banking offices in The City of New York a special purpose, non-interest bearing trust account, for the sole and exclusive benefit of the holders of the outstanding Commercial Paper, over which the Depositary shall have sole dominion and control and the sole right of withdrawal (said account being referred to herein and in the Depositary Agreement as the “Special Payment Account”). Proceeds of a Liquidity Loan made in accordance with subsection 3.01(a)(ii), (iii) or (iv) hereof and Section 8(b), (c) or (d) of the Depositary Agreement and all funds received from the Collateral Agent at any time that the Collateral Agent indicates that a Security Agreement Event of Default exists and is continuing shall be deposited in the Special Payment Account and used to the extent necessary to pay in full the Commercial Paper as it matures. BAFC shall have no legal, equitable or beneficial interest in the Special Payment Account.

 

ARTICLE III

 

LIQUIDITY LOANS

 

SECTION 3.01 Liquidity Loans. 

 

(a) Subject to and upon the terms and conditions herein set forth, each Liquidity Bank severally agrees on a revolving basis prior to the Liquidity Commitment Expiration Date, to make a loan or loans (each a “Liquidity Loan” and collectively, the “Liquidity Loans”) to BAFC, which Liquidity Loans
may be repaid and the principal amount thereof (with the exception of Exiting Loans) reborrowed and bear interest in accordance with the provisions hereof and shall be made by the Liquidity Banks (with the exception of Exiting Loans) pro rata on the basis of their Percentages of the Aggregate Liquidity Commitment as follows:

 

(i) If, on any Business Day that Commercial Paper matures, BAFC is unable to or is not permitted to (including, but not limited to, as a result of the occurrence of a Mandatory CP Wind-Down Event) issue additional Commercial Paper in an aggregate net amount sufficient to repay in full all Commercial Paper maturing on such day (the excess of the amount required to

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pay in full all such Commercial Paper maturing on such day after giving effect to any disbursement with respect to such maturing Commercial Paper from the Cash Collateral Account or the Commercial Paper Account, over the sum of the net amount obtained by the issuance of Commercial Paper on such day, being hereinafter referred to as a “Commercial Paper Deficit”), each Liquidity Bank shall, upon (x) receipt of notice (which may be a facsimile) from the Depositary to the effect that BAFC is unable to so issue and sell additional Commercial Paper at any price and the amount of the Commercial Paper Deficit and (y) request of BAFC
(which may be contained in the notice referred to in the preceding clause (x)) or the Depositary (the Depositary acting as attorney-in-fact for BAFC), and subject to the limitations imposed by subsection 3.01(c) and Section 6.03 hereof, make a Liquidity Loan in an aggregate principal amount equal to (1) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times (B) the Commercial Paper Deficit, less (2) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times (B) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the Daily Report delivered on such day (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange).

 

(ii) If the Depositary shall have failed to timely receive from the Administrative Agent the notice of extension of the Liquidity Commitment Expiration Date described in subsection 4.03(b) or (c) hereof, then each Liquidity Bank shall, subject to the limitations imposed by subsection 3.01(c) and Section 6.03, no later than the fifth Business Day prior to any upcoming Liquidity Commitment Expiration Date make a Liquidity Loan in a principal amount equal to (1) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment times (B) the Face Amount of all Commercial Paper outstanding on such day, after giving effect to funds otherwise available to pay such Commercial Paper on such day, less (2) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times, (B) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the Daily Report delivered on such day (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange).

 

(iii) Not later than the fifth Business Day prior to any upcoming Liquidity Commitment Expiration Date with respect to which there exists an Exiting Bank, the Exiting Bank shall, upon receipt by the Administrative Agent of a request from BAFC or the Depositary (acting as attorney-in-fact for BAFC), and subject to the limitations imposed by subsection 3.01(c) and Section 6.03, make a Liquidity Loan (i.e., an Exiting Loan as defined in subsection 4.03(c)(ii) hereof) in a principal amount equal to (1) the product of (A) such Exiting Bank’s Percentage of the Aggregate Liquidity Commitment (prior to any reduction as a

-4-

result of the removal of the Exiting Bank) times (B) the Face Amount of Commercial Paper then outstanding, after giving effect to funds otherwise available to pay such Commercial Paper on such day, less (2) the product of (A) such Exiting Bank’s Percentage of the Aggregate Liquidity Commitment, times (B) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the Daily Report delivered on such day (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange).

 

(iv) In the event of the occurrence of a Mandatory Liquidation Event, then each Liquidity Bank shall immediately in accordance with subsection 3.01(b), subject to the limitations imposed by subsection 3.01(c) and Section
6.03, make a Liquidity Loan in a principal amount equal to (1) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment times (B) the Face Amount of all Commercial Paper outstanding on such day, after giving effect to funds otherwise available to pay such Commercial Paper on such day, less (2) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times (B) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the Daily Report delivered on such day (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange).

 

(v) Following the occurrence and continuation of a Mandatory CP Wind-Down Event, each Liquidity Bank shall in addition to its obligations under subsection 3.01(a)(i), upon receipt by the Administrative Agent of a Notice of Borrowing from BAFC or the Depositary (acting as attorney-in-fact for BAFC) in accordance with subsection 3.01(b) and subject to the limitations imposed by subsection 3.01(c), Section 6.03 and Section 6.04, make a Liquidity Loan in a principal amount equal to (1) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment times (B) the amount of the Borrowing requested by
BAFC or the Depositary, less (2) the product of (A) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times (B) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the Daily Report delivered on such day (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange). Prior to the occurrence of a Mandatory Liquidation Event, the proceeds of each Liquidity Loan made pursuant to this clause (v) shall be deposited in the Cash Collateral Account and may be used by BAFC to fund additional advances under the Series 2000-1 VFC
Certificate.

 

(b) In order to effect Borrowings hereunder, BAFC or the Depositary (the Depositary acting as attorney-in-fact for BAFC in accordance with Section 8 of the Depositary Agreement), shall give the Administrative Agent telephonic (confirmed in writing promptly thereafter) or written notice (each, a “Notice of Borrowing”) of the

-5-

aggregate principal amount of any Liquidity Loan required by subsection 3.01(a) hereof  (i) for each Borrowing consisting of a Prime Rate Liquidity Loan, not later than 11:00 a.m. (New York City time) on the date of such Borrowing, or (ii) for each Borrowing consisting of a LIBOR Liquidity Loan, not later than 11:00 A.M. (New York City time) three Business Days before the date of such Borrowing. Each such Notice of Borrowing shall specify: (i) the type of
Liquidity Loan comprising such Borrowing, (ii) the amount of such Borrowing required by subsection 3.01(a) hereof; and (iii) in the case of a Borrowing consisting of a LIBOR Liquidity Loan, the Interest Period with respect thereto. The Administrative Agent shall promptly (and, in any event, by 1:30 P.M. (New York City time) if the Administrative Agent has received the Notice of Borrowing by 11:00 A.M. (New York City time) from BAFC or the Depositary) give each Liquidity Bank telephonic notice (confirmed in writing promptly thereafter) of such request. Each Borrowing requested pursuant to subsection 3.01(a)(v) shall be in an amount equal to at least
$10,000,000 and multiples of $1,000,000 in excess thereof (or if the then Aggregate Available Liquidity Commitment is less than $10,000,000, such lesser amount). Each Borrowing pursuant to subsections 3.01(a)(i), (ii), (iv) and (v) shall be made ratably by the Liquidity Banks in proportion to each Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment. No later than 3:00 P.M. (New York City time) on the date on which a Liquidity Loan is to be made, the Administrative Agent acting on behalf of the Liquidity Banks will make available to BAFC in freely transferable Dollars and in immediately available funds the Liquidity Loan received by the
Administrative Agent from the Liquidity Banks required to be made on such day by the Liquidity Banks by remitting the proceeds of such Liquidity Loan to the Commercial Paper Account (or with respect to Liquidity Loans made pursuant to subsection 3.01(a)(v), to the Cash Collateral Account) for application by the Depositary in accordance with the terms of the Depositary Agreement. BAFC may subsequently (prior to the occurrence and continuation of a Mandatory Liquidation Event) elect to convert a Prime Rate Liquidity Loan to a LIBOR Liquidity Loan, or to continue to maintain a LIBOR Liquidity Loan as a LIBOR Liquidity Loan for an additional Interest Period, in accordance with the procedures set forth in subsection 3.01(h) below.

 

(c) Notwithstanding any other provision hereof or of any other Transaction Document, no Liquidity Loan shall be made by a Liquidity Bank to BAFC in a principal amount exceeding, together with the aggregate principal amount of such Liquidity Bank’s then outstanding Liquidity Loans, (i) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment minus (ii) the product of (x) such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, times (y) the Series 2000-1 Invested Percentage of Defaulted Loans reflected on the most recent Daily Report (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange).

 

(d) Subject to Section 3.01(c), Section 6.03 and 8.03(a) hereof, each Liquidity Loan shall be made by the Liquidity Banks notwithstanding
the occurrence of any Mandatory Liquidation Event.

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(e) BAFC hereby agrees that it shall use the proceeds of each Liquidity Loan solely to make payments in respect of maturing Commercial Paper or, in the case of Liquidity Loans made in the circumstances set forth in subsection 3.01(a)(v), to fund advances under the Series 2000-1 VFC Certificate.

 

(f) Each Liquidity Loan shall mature and become due and payable on the Liquidity Commitment Expiration Date (which Liquidity Commitment Expiration Date, in the case of an Exiting Loan, shall be the Liquidity Commitment Expiration Date with respect to which such Exiting Loan is made, and not, for the avoidance of doubt, the Liquidity Commitment Expiration Date as it may have been extended by the other Liquidity Banks pursuant to Section 4.03) or, if earlier, the date on which a Mandatory
Liquidation Event has occurred and the Administrative Agent shall have declared the Liquidity Loans due and payable. In addition, each Liquidity Loan shall be repaid in accordance with Section 5.02 hereof and Articles V and VI of the Security Agreement.

 

(g) 

 

(i) After receiving telephonic notice (confirmed in writing promptly thereafter) from the Administrative Agent of a Notice of Borrowing, each Liquidity Bank (or solely an Exiting Bank in the case of an Exiting Loan) shall make available to the Administrative Agent, at its office in New York, New York in immediately available funds, prior to 2:30 P.M., New York City time, on the day such telephonic notice is received, with respect to any Borrowing consisting of a Prime Rate Liquidity Loan, or three Business Days after such telephonic notice is received, with respect to any Borrowing consisting of a LIBOR Liquidity Loan, such Liquidity Bank’s Percentage of
such Liquidity Loan (or amount of Exiting Loan, as applicable) required to be made on such day; provided, however, that with respect to any Liquidity Bank that is assigned a short-term credit rating below “A-1” or “P-1” by S&P or Moody’s, respectively, the Administrative Agent shall draw on any letter of credit or other similar instrument issued by a bank that is confirming such Liquidity Bank’s obligation to make such Liquidity Loans prior to 2:30 p.m., New York City time, on the day such Liquidity Loan is required to be made as set forth above. Each Liquidity Bank shall indemnify and hold harmless the Administrative Agent
from and against any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, costs and expenses (including, without limitation, attorneys’ fees and expenses) resulting from any failure on the part of such Liquidity Bank to provide the Administrative Agent with such Liquidity Bank’s Percentage of any Liquidity Loan (or amount of Exiting Loan, as applicable) paid by the Administrative Agent in accordance with the provisions of subsections 3.01(a)(i)-(iv) and any Liquidity Bank that shall fail to fund its Percentage of such Liquidity Loan shall pay interest on any such shortfall at the daily Federal Funds Effective Rate until such amount has been paid.

-7-

(ii) With respect to any Borrowing requested to be made pursuant to subsection 3.01(a)(v), unless the Administrative Agent shall have been notified in writing by any Liquidity Bank prior to 2:30 P.M., New York City time, on the day such Borrowing is to be made that such Liquidity Bank will not make available to the Administrative Agent its Percentage of such Borrowing, the Administrative Agent may assume that such Liquidity Bank will make such amount available to the Administrative Agent
on the date of such Borrowing, and the Administrative Agent may, in reliance upon such assumption, make available to BAFC a corresponding amount. If such amount is not made available to the Administrative Agent at or before the required time on the date of such Borrowing, such Liquidity Bank shall pay to the Administrative Agent, on demand, such amount, with interest thereon at a rate equal to the daily Federal Funds Effective Rate for the period from and including the date of such Borrowing to the date such Liquidity Bank makes such amount immediately available to the Administrative Agent. If such Liquidity Bank’s Percentage of such Borrowing is not made available to the Administrative Agent by such Liquidity Bank within three (3) Business Days after the date of such Borrowing, the Administrative Agent also shall be entitled to recover such amount from BAFC, together with interest from the date such amount was made available to BAFC at the rate per annum then applicable to such Borrowing
hereunder.

 

(h) In the event BAFC wishes to convert an existing LIBOR Liquidity Loan to a Prime Rate Liquidity Loan, BAFC shall give telephonic (confirmed in writing promptly thereafter) or written notice to the Administrative Agent of such election by 1:00 p.m. (New York City time) on the date at least one (1) Business Day prior to the date on which BAFC specifies (in accordance with this Section 3.01(h)) that such conversion is to take effect; provided, that any such conversion of LIBOR Liquidity Loans may only be made on the last day of the Interest Period with respect thereto. In the event BAFC wishes to convert an existing Prime Rate Liquidity Loan to a LIBOR Liquidity Loan or to continue an existing LIBOR Liquidity Loan as a LIBOR Liquidity Loan for an additional Interest Period, BAFC shall give telephonic (confirmed in writing promptly thereafter) or written notice to the Administrative Agent of such election (A) in the case of a conversion, by 1:00 p.m. (New York City time) on the date at least three (3) Business Days prior to the date on which BAFC specifies (in accordance with this subsection 3.01(h)) that such conversion is to take effect,
or (B) in the case of a continuation, by 1:00 p.m. (New York City time) on the date at least three (3) Business Days prior to the last day of the applicable Interest Period. In the event BAFC fails to timely give the notice of election described above, or if a Mandatory Liquidation Event shall have occurred, an existing Prime Rate Liquidity Loan shall continue as a Prime Rate Liquidity Loan, and an existing LIBOR Liquidity Loan shall, at the end of the Interest Period applicable thereto, convert to a Prime Rate Liquidity Loan thereafter (subject to later election of BAFC in accordance with this subsection 3.01(h)). The term “Interest Period” means
the period with respect to a LIBOR Liquidity Loan commencing (x) in the case of the first Interest Period with respect to an initial Borrowing of such LIBOR

-8-

Liquidity Loan, on the Liquidity Loan disbursement date, (y) in the case of conversion of a Prime Rate Liquidity Loan to a LIBOR Liquidity Loan, on the date of conversion and (z) in all other cases, on the last day of the immediately preceding Interest Period, and ending on the date one (1), two (2), three (3) or six (6) month(s) thereafter as selected by BAFC in the Notice of Borrowing or notice of conversion; provided, however, that:

 

(i) BAFC may not select an Interest Period that extends beyond the Liquidity Commitment Expiration Date;

 

(ii) whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the following
calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and

 

(iii) for purposes of determining an Interest Period, a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in the month in which such Interest Period is to end or
if such Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period is to end.

 

SECTION 3.02 The Liquidity Loan Notes. 

 

(a) BAFC’s obligation to pay the principal of and interest on all the Liquidity Loans made by each Liquidity Bank or, in the case of an Exiting Loan, by an Exiting Bank, shall be evidenced by a single note of BAFC with respect to each such Liquidity Bank (or Exiting Bank, as the case may be) (each, a “Liquidity Loan Note” and collectively, the “Liquidity Loan Notes”) which shall: (1) be dated the date such Liquidity Bank becomes a party to this Agreement; (2) be in the stated principal amount equal to the relevant Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment (as the same may be decreased pursuant to Section 4.02 or 4.03 hereof); (3) bear interest as provided in Section 3.03 hereof; (4) be payable on the earlier of the Liquidity Commitment
Expiration Date and the date on which a Mandatory Liquidation Event has occurred and the Administrative Agent shall have declared the Liquidity Loan Note to be due and payable; (5) be entitled to the benefits of this Agreement, the Guaranty, the Letter of Credit and the Security Agreement; and (6) be substantially in the form of Exhibit A to this Agreement with blanks appropriately completed in conformity herewith. Each Liquidity Bank shall, and is hereby authorized to, make a notation on the schedule attached to its Liquidity Loan Note (or on a continuation of such schedule), or in the records of such Liquidity Bank, of the date and amount of the payment of principal thereon (which notations shall, in absence of evidence to the contrary, be presumptive evidence of the outstanding principal amount thereof) and prior to any transfer of its

 

-9-

 

Liquidity Loan Note, such Liquidity Bank shall endorse the outstanding principal amount of such Liquidity Loan Note on the schedule attached thereto; provided, however, that the failure to make such a notation shall not adversely affect such Liquidity Bank’s rights with respect to the Liquidity Loans.

 

(b) Although the Liquidity Loan Note of each Liquidity Bank shall be dated the date such Liquidity Bank becomes a party to this Agreement, interest in respect thereof shall be payable only for the periods during which Liquidity Loans are outstanding thereunder. In addition, although the stated principal amount of the Liquidity Loan Note shall be equal to the related Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, such Liquidity Loan Note shall be enforceable with respect to BAFC’s obligation to pay the principal thereof only to the extent of the unpaid principal amount of the Liquidity Loans outstanding thereunder at the time such
enforcement shall be sought.

 

SECTION 3.03 Interest.

 

(a) BAFC shall pay interest prior to maturity, and prior to the occurrence of a Mandatory Liquidation Event, on the unpaid principal amount of each LIBOR Liquidity Loan from and including the first day of the Interest Period applicable to such LIBOR Liquidity Loan to but excluding the last day of such Interest Period (or, if occurring earlier, to maturity, whether by acceleration or otherwise), at a rate per annum (calculated on the basis of actual days elapsed in a year of 360 days) equal to the Series 2000-1 Applicable Margin plus the LIBOR Rate in effect from time to time, payable as provided in subsection 3.03(b) herein. Prior to maturity and prior to the occurrence of a Mandatory Liquidation Event, BAFC shall pay interest on the unpaid principal amount of each Prime Rate Liquidity Loan from and including the date such Liquidity Loan is made (or converted to a Prime Rate Liquidity Loan) to but excluding the date such Liquidity Loan is converted to a LIBOR Liquidity Loan (or, if occurring earlier, to maturity, whether by acceleration or otherwise), at a rate per annum (calculated on the basis of actual days elapsed in a year of 365 or 366 days, as the case may be) equal to the ABR in effect from time to time plus the Series 2000-1 Applicable Margin. 

 

(b) BAFC agrees to pay interest in respect of the unpaid principal amount of and interest on, each Liquidity Loan after maturity thereof (whether by acceleration or otherwise) or during the continuance of a Mandatory Liquidation Event, until paid in full at a rate per annum equal to the sum of (i) 2.0%, plus (ii) the interest rate then in effect with respect to such Liquidity Loan, plus (iii) the Series 2000-1 Applicable Margin then in effect.

 

(c) Accrued interest in respect of each Liquidity Loan shall be payable in arrears on (i) with respect to any LIBOR Liquidity Loan having an Interest Period of three months or less, the last day of such Interest Period, (ii) with respect to any LIBOR Liquidity Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last

 

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day of such Interest Period, (iii) with respect to any Prime Rate Liquidity Loan, the last day of each March, June, September and December to occur while such Prime Rate Liquidity Loan is outstanding and (iv) with respect to any Liquidity Loan, on the date of any prepayment (with respect to the amount prepaid), on the date of conversion of such Liquidity Loan, at maturity (whether by acceleration, demand or otherwise) and after such maturity, on demand.

 

SECTION 3.04 Responsibilities of Each Liquidity Bank. The failure of any Liquidity Bank to make any advance to be made by it as part of any Liquidity Loan shall not relieve any other Liquidity Bank of its obligation hereunder to make its advance on the date of such Liquidity Loan, but no Liquidity Bank shall be responsible for the failure of any other Liquidity Bank to make the Liquidity Loan to be made by such Liquidity Bank on the date of any Liquidity Loan.

 

SECTION 3.05 Confirming Letters of Credit. The full amount of each payment made to the Administrative Agent under any confirming letter of credit issued on behalf of any Liquidity Bank pursuant to the terms hereof, shall be applied to such Liquidity Bank’s obligation to make the Liquidity Loans in respect of which such drawing is made to the same extent as if the amount thereof had been paid directly to the Administrative Agent by such Liquidity Bank. Each such payment shall be deemed to satisfy such Liquidity Bank’s obligation to fund hereunder to the extent of
such payment.

 

ARTICLE IV

 

OTHER CREDIT TERMS

 

SECTION 4.01 Fees. 

 

(a) Prior to the Liquidity Commitment Expiration Date or the termination of the Aggregate Liquidity Commitment in accordance with Section 8.03, BAFC agrees to pay to the Administrative Agent for distribution to each Liquidity Bank pro rata in accordance with their respective Percentage of the Aggregate Liquidity Commitment, a fee (the “Commitment Fee”) which shall accrue on each day in an amount equal to the product of (i) the Unused Fee Rate times (ii) the excess of the average Aggregate Liquidity Commitment on such day over the average outstanding principal balance of any Liquidity Loans on such day. The Commitment Fee shall be paid quarterly in arrears commencing on the Distribution Date in December, 2000.

 

(b) If the average principal amount of Liquidity Loans outstanding during any fiscal quarter of BAFC exceeds an amount equal to fifty percent (50%) of the average Aggregate Liquidity Commitment during such fiscal quarter, BAFC agrees to pay to the Administrative Agent for distribution to each Liquidity Bank that has made a Liquidity Loan pro rata in accordance with such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment, a fee (the “Utilization Fee”) which
shall accrue on each day during such fiscal quarter in an amount equal to the product of (i) the Utilization

 

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Fee Rate times (ii) the average principal amount of Liquidity Loans outstanding during such fiscal quarter. The Utilization Fee shall be paid quarterly in arrears on the first Distribution Date following each fiscal quarter in which the condition set forth in the immediately preceding sentence exists.

 

(c) BAFC shall indemnify each Liquidity Bank against, and on demand reimburse each Liquidity Bank for, any loss, premium, penalty or expense which such Liquidity Bank may pay or incur (including, without limitation, any loss or expense incurred by reason of the relending, depositing or other employment of funds acquired by such Liquidity Bank to fund a Liquidity Loan) as a result of (i) any failure by BAFC to borrow a Liquidity Loan on a date specified therefor in a Notice of Borrowing (whether or not withdrawn), or to continue as, or convert a LIBOR Liquidity Loan in accordance with the related notice, (ii) any prepayment of a LIBOR Liquidity Loan prior to
the end of the applicable Interest Period pursuant to Section 5.02 hereof or purchase of a LIBOR Liquidity Loan pursuant to subsection 4.05(d) hereof (including but not limited to any loss on the reemployment of funds) or (iii) any failure by BAFC to prepay a Liquidity Loan on a date specified therefor in a notice of prepayment pursuant to Section 5.02 hereof. Each Liquidity Bank shall furnish BAFC with a certificate prepared in good faith setting forth the basis for determining any
additional amount to be paid to it hereunder, and such certificate shall be conclusive, absent manifest error, as to the contents thereof.

 

(d) BAFC agrees to pay the Administrative Agent for its own account the fees set forth in any fee letter between BAFC and the Administrative Agent in full force and effect as of the date hereof and at the times set forth in such fee letter.

 

SECTION 4.02 Termination or Reduction of the Aggregate Liquidity Commitment. 

 

(a) Subject to this subsection 4.02(a), BAFC shall have the right, at any time and from time to time to (i) terminate the Aggregate Liquidity Commitment in whole or (ii) permanently reduce the Aggregate Liquidity Commitment in increments of $1,000,000 and integral multiples of $1,000,000 in excess thereof, without penalty, by giving at least three (3) Business Days’ prior written notice to the Administrative Agent and the Depositary specifying the scheduled date (which shall be a
Business Day) of such termination or reduction and the amount of any permitted partial reduction. The termination or reduction of the Aggregate Liquidity Commitment shall be effective on the scheduled date specified in BAFC’s notice; provided, however, that no such termination of the Aggregate Liquidity Commitment shall be effective if, on the scheduled date thereof, any Liquidity Loan would remain outstanding after such scheduled date, in which case such termination shall be effective on the first Business Day on which no Liquidity Loans shall be outstanding; provided, further, that no such reduction in the Aggregate Liquidity Commitment shall be effective if, on the scheduled date thereof, the Credits Outstanding would exceed the Aggregate Available Liquidity Commitment as so reduced; and provided further, that no termination of the Aggregate
Liquidity

 

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Commitment shall be effective if, on the scheduled date thereof, any Commercial Paper shall be outstanding in which case such termination shall be effective on the first Business Day on which no Commercial Paper shall be outstanding. After giving notice of termination of the Aggregate Liquidity Commitment pursuant to this subsection 4.02(a), BAFC shall not make any further advances under the Series 2000-1 VFC Certificate.

 

(b) In the event that (i) an injunction suspending the issuance of the Commercial Paper shall have been issued or proceedings therefor shall have been initiated by the Securities and Exchange Commission, or (ii) BAFC, any Liquidity Bank, a Placement Agent or any other Person shall have been found in a judicial or administrative proceeding to have violated the Securities Act in connection with the issuance of the Commercial Paper, or (iii) BAFC, any Liquidity Bank, a Placement Agent or any other Person shall have offered, issued or sold to or solicited any offer to acquire any of the Commercial Paper or any part thereof from anyone so as to bring the issuance
and sale of the Commercial Paper within the registration and prospectus delivery requirements of Section 5 of the Securities Act, then, in any of such events, BAFC shall not thereafter issue or sell any Commercial Paper without the Administrative Agent’s written approval and the Person affected by one of the aforesaid events shall notify BAFC, the Depositary, each Placement Agent, the Letter of Credit Agent and the Administrative Agent, as the case may be.

 

(c) In the event that BAFC has received notice that any Collateral Account, the Collection Account, the Commercial Paper Account, the Special Payment Account or any funds on deposit in, or otherwise to the credit of, any of such accounts are or have become subject to any stay, writ, order, judgment, warrant, attachment, execution or similar process, then in any of such events (until such event has been remedied), BAFC shall promptly notify each Placement Agent of such event and shall not thereafter issue or sell any Commercial Paper without the Administrative Agent’s written approval.

 

SECTION 4.03 Extensions of the Aggregate Liquidity Commitment. 

 

(a) Subject to subpart (b) and (c) of this Section 4.03 and other provisions of this Agreement permitting earlier termination, the Aggregate Liquidity Commitment and this Agreement shall terminate on the Liquidity Commitment Expiration Date.

 

(b) On any Business Day which is at least forty-five (45) days prior to the then-current Liquidity Commitment Expiration Date, BAFC may notify the Administrative Agent in writing of BAFC’s desire to extend the Liquidity Commitment Expiration Date, whereupon the Administrative Agent shall notify each Liquidity Bank of such desire of BAFC. Each Liquidity Bank shall have the right, in its sole discretion after a new credit review, to determine whether to extend the Liquidity Commitment Expiration Date with respect to its Percentage of the Aggregate Liquidity Commitment. The
Administrative Agent shall initially notify BAFC, the Collateral Agent and the

 

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Depositary of the decisions of the Liquidity Banks regarding such extension no later than twenty-five (25) days before the then-current Liquidity Commitment Expiration Date and if it has not provided such notification, such failure shall be deemed to be a rejection of extension of such Liquidity Commitment Expiration Date.

 

If such initial notice indicates that all the Liquidity Banks desire to extend, then BAFC, the Liquidity Banks and the Administrative Agent shall execute such documents as shall be appropriate to evidence the extension no later than three (3) Business Days prior to the then-current Liquidity Commitment Expiration Date, and upon execution and delivery of such documents and delivery by the Administrative Agent to the Depositary of written notice of such extension, the Liquidity Commitment Expiration Date shall be so extended. If the Administrative Agent’s initial notice described above indicates that not all the Liquidity Banks desire to extend, then the provisions of subsection 4.03(c) below shall apply. 

 

(c) If any Liquidity Bank does not consent to the extension of a Liquidity Commitment Expiration Date pursuant to subsection 4.03(b) hereof, BAFC shall, with the consent of the Administrative Agent, use its best efforts to obtain a successor Liquidity Bank(s) to assume each such non-extending Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment at any time prior to or as of the Liquidity Commitment Expiration Date at BAFC’s option, upon payment in full to such
non-extending Liquidity Bank of all its outstanding Liquidity Loans and all interest, fees and other obligations owed by BAFC to such Liquidity Bank hereunder and receipt of written confirmation from the Series 2000-1 Rating Agencies that the addition of such successor Liquidity Bank(s) will not result in any reduction in or withdrawal of the rating of the Commercial Paper. To the extent BAFC is unable to obtain a successor Liquidity Bank, BAFC may:

 

(i) to the extent that the reduction of the Aggregate Liquidity Commitment provided for in this clause (i) does not cause the Aggregate Liquidity Commitment to fall below the outstanding Face Amount of the Commercial Paper, remove such non-extending Liquidity Bank(s) as a Liquidity Bank(s) and reduce the Aggregate Liquidity Commitment by an amount equal to such non-extending Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment; or

 

(ii) to the extent that the reduction of the Aggregate Liquidity Commitment provided for in this clause (ii) causes the Aggregate Liquidity Commitment to fall below the outstanding Face Amount of the Commercial Paper, remove all such non-extending Liquidity Banks (each, an “Exiting Bank” and collectively, the “Exiting Banks”) as a Liquidity Bank or Liquidity Banks and reduce the then-existing Aggregate Liquidity Commitment by an amount equal to the sum of each Exiting Bank’s Percentage of the Aggregate Liquidity Commitment; provided, that, notwithstanding anything else herein or in the Security Agreement to the contrary, (A) each Exiting Bank shall make a Liquidity

 

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Loan to BAFC (an “Exiting Loan”) as provided in subsection 3.01(a)(iii) of this Agreement, and the proceeds of such Exiting Loan shall be applied by BAFC to repay a corresponding amount of Commercial Paper as it matures, and (B) such Exiting Loan shall only be repayable and repaid in accordance with Section 5.2 of the Security Agreement from Collections on any day no greater than an amount equal to all Collections deposited on such day in the Cash Collateral Account times a fraction, the numerator of which is the initial principal amount of such Exiting Loan and the denominator of which is the sum of the initial principal amounts of all Exiting Loans, until such Exiting Loan is repaid in full (provided, however, that if any other Liquidity Bank subsequently exits pursuant to this clause (ii) prior to the repayment in full of such Exiting Loan, such fraction shall be recalculated on the basis of the principal amount of such Exiting
Loan at such time over the sum of such principal amount and the initial principal amounts of all Exiting Loans at such time).

 

If a Liquidity Commitment Expiration Date is to be extended in accordance with the provisions above and (if applicable) one or more successors are obtained, BAFC, the Liquidity Banks willing to extend such Liquidity Commitment Expiration Date, the Administrative Agent and such successor Liquidity Bank(s) (if applicable) shall sign such documents and instruments as shall be appropriate to evidence the extension of such Liquidity Commitment Expiration Date and (if applicable) such successor Liquidity Bank’s or Liquidity Banks’ assumption of a non-extending Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment. Upon the execution and delivery of such documents and instruments, such Liquidity Commitment Expiration Date shall be so extended.

 

SECTION 4.04 Proceeds. The proceeds of Commercial Paper shall be used by BAFC to (i) make advances under the Series 2000-1 VFC Certificate to the extent permitted by the Transaction Documents and (ii) repay maturing Commercial Paper or Liquidity Loans. The proceeds of the Liquidity Loans shall be used by BAFC only to make payments in respect of maturing Commercial Paper and, in the circumstances set forth in subsection 3.01(a)(v), to make advances under the Series 2000-1 VFC Certificate to the extent permitted by the Transaction Documents.

 

SECTION 4.05 Increased Costs; Capital Adequacy. 

 

(a) If, on or after the date of this Agreement, the adoption of any law or regulation, or any change therein, or any change in the interpretation or administration thereof by any court, administrative or governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or compliance by any Liquidity Bank with any request or directive issued after the date hereof (whether or not having the force of law) of any such authority, central bank or comparable agency shall either:

 

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against (or against any class of, a change in or in

 

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the amount of) assets or liabilities of, or commitments or extensions of credit by, any Liquidity Bank; 

 

(ii) shall subject any Liquidity Bank to any tax of any kind with respect to this Agreement, the Liquidity Loan Notes or any Liquidity Loan made by it, or change the basis of taxation of payments to such Liquidity Bank in respect thereof (except for changes in the rate or the basis of tax on the overall net income of such Liquidity Bank); or

 

(iii) impose on any Liquidity Bank any other condition regarding this Agreement or its Liquidity Commitment,

 

and the result of any event referred to in clause (i)-(iii) above shall be to increase the cost to any Liquidity Bank of issuing or maintaining its Liquidity Commitment or its LIBOR Liquidity Loans or to reduce the amounts receivable by any Liquidity Bank hereunder (which increase in cost or reduction in amounts receivable shall be the result of any Liquidity Bank’s reasonable allocation of the aggregate of such cost increase or reductions resulting from such events), then, upon written demand by any Liquidity Bank, BAFC shall, within ten (10) Business Days of receipt of such demand, be obligated to pay to such Liquidity Bank, from time to time as specified by such Liquidity Bank, additional amounts which in the aggregate shall be sufficient to compensate such Liquidity Bank for such increased cost or
reduction, together with interest on each such amount from the date demanded until payment in full thereof at a rate per annum equal to the lesser of (A) the Legal Rate or (B) ABR. A certificate setting forth in reasonable detail such increased cost incurred or reduction in amounts receivable by any Liquidity Bank as a result of any event mentioned in clause (i), (ii) or (iii) of this subsection, submitted by any Liquidity Bank to BAFC, shall, unless otherwise required by law, be conclusive, absent manifest error, as to the amount thereof. Each Liquidity Bank shall give BAFC and the Administrative Agent notice, within a reasonable period of time of such Liquidity Bank having actual knowledge of the occurrence of any event that will entitle such Liquidity Bank to claim the payment of additional amounts under this subsection 4.05(a). Notwithstanding the foregoing, BAFC shall not be required to pay any Liquidity Bank, as applicable, such additional amounts to the extent such amounts relate to periods prior to one hundred and twenty (120) days of BAFC’s receipt of such demand; provided that, if such change in law giving rise to such increased cost or reduction is retroactive, then the one hundred and twenty (120) day period shall be extended to include the period of retroactive effect thereof.

 

(b) If any of the events requiring payments of additional amounts by BAFC under subsection (a) occurs, each Liquidity Bank shall take such steps as may be reasonable to avoid BAFC being required to pay any additional amounts and shall consult with BAFC in good faith with a view to agreeing to alternative arrangements which would not subject such Liquidity Bank to any unreimbursed cost and would not otherwise be disadvantageous to such Liquidity Bank, whereby any such requirement can be avoided or mitigated, including without limitation, fulfilling any such Liquidity Bank’s
obligations through another branch or affiliate.

 

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(c) If any Liquidity Bank shall have determined that on or after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Liquidity Bank or any corporation controlling such Liquidity Bank with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate
of return on the capital of such Liquidity Bank or such corporation as a consequence of the Liquidity Commitment or its obligations hereunder or under any participation agreement to a level below that which such Liquidity Bank or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the policies of such Liquidity Bank or such corporation with respect to capital adequacy) by an amount deemed by such Liquidity Bank to be material, then from time to time, within ten (10) Business Days after demand by such Liquidity Bank, BAFC shall be obligated to pay or cause to be paid to such Liquidity Bank such additional amount or amounts as will compensate such Liquidity Bank for such reduction. Each Liquidity Bank shall give BAFC and the Administrative Agent notice within a reasonable time of such Liquidity Bank having actual knowledge of the occurrence of any event that will entitle the Liquidity Bank to claim the payment of additional amounts under this
subsection 4.05(c). Notwithstanding the foregoing, BAFC shall not be required to pay any Liquidity Bank, as applicable, such additional amounts to the extent such amounts relate to periods prior to one hundred and twenty (120) days of BAFC’s receipt of such demand; provided that, if such change in law giving rise to such reduction is retroactive, then the one hundred and twenty (120) day period shall be extended to include the period of retroactive effect thereof.

 

(d) If any Liquidity Bank on its own behalf makes a demand for amounts owed under this Section 4.05, BAFC shall have the right, if no event then exists which is or with the lapse of time or notice or both would be a Mandatory Liquidation Event, within ninety (90) days of the date of such demand, to remove such Liquidity Bank (the “Affected Person”) and to designate another lender (the “Replacement Person”) reasonably acceptable to the Administrative Agent and meeting the requirements of Section 11.05 hereof to purchase the Affected Person’s outstanding Liquidity Loans and to assume the Affected Person’s obligations under this Agreement; provided that increased costs incurred by such Liquidity Bank prior to the date of its replacement shall have been paid as provided
in the previous paragraph; and provided further, that BAFC first receives confirmation from the Series 2000-1 Rating Agencies that such replacement will not result in the reduction or withdrawal of the rating of the Commercial Paper. The Affected Person agrees to sell to the Replacement Person its outstanding Liquidity Loans (at par, with accrued interest through the date of purchase, in immediately available funds) and to delegate to the Replacement Person its obligations to BAFC and its future obligations to the Administrative Agent under this Agreement. Upon such sale
and delegation by the Affected Person and the purchase and assumption

 

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by the Replacement Person, and compliance with the provisions of Section 11.05 hereof, the Affected Person shall cease to be a Liquidity Bank hereunder and the Replacement Person shall become a Liquidity Bank under this Agreement. Each Affected Person shall continue to be entitled to receive from BAFC its share of interest, fees, costs and other sums which have not been assigned by the Affected Person to the Replacement Person.

 

(e) Notwithstanding anything in this Agreement to the contrary, it is understood that any Participant shall be entitled to the payment of increased costs under this Section 4.05 and Section 4.06 hereof to the extent such increased costs would have been required to be paid had no participating interest been
sold.

 

SECTION 4.06 Taxes. 

 

(a) All payments made by BAFC under this Agreement shall be made free and clear of, and without reduction for or on account of, any present or future stamp or other taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or assessed by any country (or by any political subdivision or taxing authority thereof or therein), excluding income and franchise taxes now or hereafter imposed on the overall net income of any Liquidity Bank (such non-excluded taxes being called “Tax” or “Taxes”). If any Taxes are required under applicable law to be withheld from any amounts payable to any Liquidity Bank hereunder, the amounts so payable to any such Liquidity Bank shall be increased to the extent necessary to yield to any such Liquidity Bank (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement. Whenever any Tax is payable by BAFC, as promptly as possible thereafter, BAFC shall send any such Liquidity Bank an original official receipt showing payment thereof.

 

(b) If and to the extent that the effect of subsection (a) can be mitigated by virtue of the provisions of United States federal income tax law or any applicable double-tax convention, the applicable Liquidity Banks shall submit to BAFC: (i) any necessary forms required for the purpose of ensuring the application of any double-tax convention or (ii) a properly executed Form W-8BEN or Form W-8ECI (or successor form to either).

 

SECTION 4.07 Addition, Removal and Downgrading of Liquidity Banks. If at any time the short-term credit rating assigned to any Liquidity Bank by S&P or Moody’s is withdrawn, downgraded or otherwise below “A-1” or “P-1”, respectively, and with respect to any such Liquidity Bank there is not a confirming obligation under a letter of credit or other similar instrument to fund Liquidity Loans hereunder by a bank that has been assigned a short-term credit rating of at least “A-1” and “P-1” by S&P and Moody’s,
respectively, then BAFC may, upon five (5) Business Days’ prior written notice given to the Administrative Agent and such affected Liquidity Bank, replace such affected Liquidity Bank with a bank having short-term ratings of at least “A-1” by S&P and “P-1” by Moody’s or with a Liquidity Bank already a party to this Agreement (which bank shall sign such documents and instruments as

 

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shall be appropriate to assume the obligations of such affected Liquidity Bank hereunder), provided that no such replacement pursuant to this sentence shall be effective unless each Series 2000-1 Rating Agency shall have confirmed in writing to BAFC and the Administrative Agent that such replacement would not result in a withdrawal or reduction of the rating by such Series 2000-1 Rating Agency of the Commercial Paper. In the event that such affected Liquidity Bank is not replaced within thirty (30) days, such affected Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment and its Liquidity Commitment shall be reduced by such
amount whereupon the Percentages of the Aggregate Liquidity Commitment of the Liquidity Banks remaining shall be automatically adjusted so as to equal 100% in the aggregate, and the Administrative Agent shall notify the Liquidity Banks of such adjustment, provided that in no event shall any such action under this sentence be effective hereunder if the Credits Outstanding would exceed the Aggregate Available Liquidity Commitment as so reduced unless the provisions of subsection 4.03(c)(ii) are complied with as if such affected Liquidity Bank were an Exiting Bank. Until such time as one of the actions required by the preceding provisions of this Section hereof
is completed, the affected Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment shall not be terminated.

 

SECTION 4.08 Illegality. If, after the date of this Agreement, the introduction of, or any change in, any applicable law, rule or regulation or in the interpretation or administration thereof by any Governmental Authority shall, in the reasonable opinion of counsel to any Liquidity Bank, make it unlawful for such Liquidity Bank to make or maintain any LIBOR Liquidity Loan, then such Liquidity Bank may, by notice to BAFC (with notice to the Administrative Agent), immediately declare that such LIBOR Liquidity Loan shall be due and payable. BAFC shall repay any such LIBOR
Liquidity Loan declared so due and payable in full on the last day of the Interest Period applicable thereto or earlier if required by law, together with accrued interest thereon. Each Liquidity Bank will promptly notify BAFC and the Administrative Agent of any event of which such Liquidity Bank has knowledge which would entitle it to prepayment pursuant to this Section 4.08 and will use its reasonable efforts to mitigate the effect of any event if, in the sole and absolute opinion of such Liquidity Bank, such efforts will avoid the need for such prepayment and will not be otherwise disadvantageous to such Liquidity Bank.

 

SECTION 4.09 Unavailability of LIBOR Liquidity Loans. If, with respect to any LIBOR Liquidity Loan requested by BAFC, the Administrative Agent or the Majority Liquidity Banks shall have determined in good faith (which determination shall, save for manifest error, be conclusive and binding upon BAFC and the Liquidity Banks) that (a) deposits of sufficient amount and maturity for funding such LIBOR Liquidity Loan are not available to the Liquidity Banks in the relevant market in the ordinary course of business, (b) by reason of circumstances affecting the relevant market,
adequate and fair means do not exist for ascertaining the rate of interest to be applicable to such LIBOR Liquidity Loan or (c) the rate of interest to be applicable to such LIBOR Liquidity Loan does not adequately reflect the cost of funding such Liquidity Loan, as determined by the Majority Liquidity Banks, then (i) the Administrative Agent, upon its determination as provided above or upon receiving notice from the Majority Liquidity Banks as to their determination as provided above, shall promptly give

 

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notice thereof to BAFC, (ii) the notice requesting such LIBOR Liquidity Loan shall be canceled, and (iii) no Liquidity Bank shall be under any obligation to make additional LIBOR Liquidity Loans to BAFC unless and until the Administrative Agent shall have notified BAFC that LIBOR Liquidity Loans are again available hereunder.

 

ARTICLE V

 

PAYMENTS

 

SECTION 5.01 Payments on Non-Business Days. Whenever any payment to be made hereunder or under a Liquidity Loan Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest shall be payable at the applicable rate during such extension.

 

SECTION 5.02 Prepayments. 

 

(a) BAFC shall have the right to prepay the Liquidity Loans in whole or in part, without premium (but subject to subsection 4.01(c)), at any time on the following terms and conditions: (i) BAFC shall deliver notice to the Administrative Agent no later than 10:00 a.m., New York City time, (A) with respect to any LIBOR Liquidity Loan, three (3) Business Days prior to such repayment date and (B) with respect to any Prime Rate Liquidity Loan, on the date of such repayment, (ii) each
prepayment shall be in a principal amount of not less than $1,000,000 and integral multiples of $1,000,000 in excess thereof or equal to the then outstanding principal amount of the Liquidity Loans being prepaid and (iii) each prepayment must be accompanied by the payment of accrued interest on the amount prepaid to the date of prepayment.

 

(b) If, on any day, the Credits Outstanding exceeds the then current Aggregate Available Liquidity Commitment, BAFC shall be obligated to prepay Liquidity Loans in an amount equal to such excess but not exceeding the amount of such Liquidity Loans made by the Liquidity Banks to BAFC.

 

(c) If on any day on which any Liquidity Loan is outstanding BAFC is able to sell Commercial Paper, BAFC shall be obligated to sell Commercial Paper in an amount sufficient to prepay Liquidity Loans in an amount equal to the lesser of (x) the aggregate amount of Liquidity Loans outstanding or (y) the proceeds from the sale of the maximum amount of Commercial Paper that BAFC is able to sell on such day in excess of the proceeds needed to pay Commercial Paper maturing on such day.

 

SECTION 5.03 Cash Collateral Account. For the purpose of facilitating the transactions contemplated by this Agreement, the Collateral Agent has established on behalf of BAFC a special purpose trust account (for the benefit of the Secured Parties), identified as the BAFC Cash Collateral Account, the operation of which shall be governed by the Security Agreement (said account being referred to as the “Cash Collateral Account”).

 

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SECTION 5.04 Method and Place of Payment, etc. All payments by BAFC under this Agreement and the Liquidity Loan Notes owing to the Liquidity Banks shall be made to the Administrative Agent without setoff or counterclaim for distribution to each Liquidity Bank (or to an Exiting Bank, in the case of an Exiting Loan) in accordance with the Liquidity Facility Fee Letter and the Liquidity Loan Notes not later than 2:00 p.m. (New York City time) on the date when due and shall be made in freely transferable Dollars and in immediately available funds at the Payment Office. Upon
receipt of such payment, the Administrative Agent shall promptly remit to each Liquidity Bank its pro rata share (or, in the case of payments with respect to Exiting Loans, the entire amount) of the payment.

 

SECTION 5.05 Draws on and Exchange of the Letter of Credit. 

 

(a) Draws for Defaulted Loans. If, on any given day, the Administrative Agent has received a Servicer’s Certificate with respect to a Defaulted Loan with instructions to draw on the Letter of Credit or the Administrative Agent otherwise obtains knowledge of the existence of a Defaulted Loan, the Administrative Agent will draw on the Letter of Credit on such date and if necessary, request the Collateral Agent to withdraw amounts deposited in the Reserve Account on such date in an aggregate amount equal to the lesser of (x) the Series 2000-1 Invested Percentage of the
aggregate unpaid principal amount and accrued and unpaid interest (or discount) thereon to and including the day prior to the day the Loan has become a Defaulted Loan (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange) and (y) the Letter of Credit Amount then in effect and shall deposit and apply the draw amount in accordance with subsection 5.05(c) hereof and shall instruct the Collateral Agent to reimburse the Letter of Credit Banks for such draw in accordance with the terms of the Security Agreement; provided that, if the required draw is made pursuant to clause (y)
above, the Administrative Agent shall, upon receipt of notice from the Collateral Agent of payment of the Repayment Amount to the Letter of Credit Bank, submit as promptly as practicable a successive draw on the Letter of Credit for the lesser of (i) the amount of such excess principal plus accrued and unpaid interest (or discount) on such Defaulted Loan (calculated by converting any Defaulted Loans denominated in Approved Currencies other than Dollars into Dollars at the Rate of Exchange) over the Letter of Credit Amount prior to giving effect to the first draw or (ii) the entire remaining reinstated Letter of Credit Commitment then available.

 

(b) Draws Upon L/C Expiration Date. If the L/C Expiration Date has not been extended by any Letter of Credit Bank pursuant to Section 2.01 of the Letter of Credit Reimbursement Agreement on or before such date and if the Administrative Agent has received from the Servicer a Servicer’s Certificate directing it to do so or the Administrative Agent otherwise obtains knowledge that the L/C
Expiration Date has not been extended by any Letter of Credit Bank and either each Exiting Letter of Credit Bank has not been replaced or the Letter of Credit Commitment has not been reduced in accordance with subsection 2.01(d) of the Letter of Credit Reimbursement Agreement,

 

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then the Administrative Agent shall, on or after the fifth Business Day preceding the upcoming L/C Expiration Date, draw on the Letter of Credit for the entire Letter of Credit Commitment Shares of each Exiting Letter of Credit Bank and apply same in accordance with subsection 5.05(c)(ii) hereof.

 

(c) Deposits of Letter of Credit Drawings. The Administrative Agent shall deposit all Letter of Credit Disbursements as follows:

 

(i) Deposit of Draws for Defaulted Loans. Letter of Credit Disbursements pursuant to subsection 5.05(a) hereof related to Defaulted Loans shall be deposited into the Cash Collateral Account to be applied to the payment of Liquidity Bank Obligations in accordance with Sections 5.2 and 6.2 of the Security Agreement.

 

(ii) Deposit of Draws Upon L/C Expiration Date. Letter of Credit Disbursements drawn pursuant to subsection 5.05(b) hereof shall be deposited into the Reserve Account. Thereafter, the Administrative Agent shall, upon receipt of a Servicer’s Certificate or upon obtaining knowledge of the existence of a Defaulted Loan, in lieu of drawing on the Letter of Credit with respect to any Exiting Letter
of Credit Bank, request withdrawals from the Collateral Agent out of the Reserve Account of draw amounts with respect to Defaulted Loans and deposit of such amounts by the Collateral Agent into the Cash Collateral Account. The Administrative Agent shall provide notice to BAFC and the Servicer as promptly as practicable of the fact and amount of such drawings.

 

(d) Notification of Drawings. The Administrative Agent shall deliver a copy of each drawing certificate presented to the Letter of Credit Agent to BAFC, the Servicer, the Guarantor and the Collateral Agent within one Business Day after presenting such drawing certificate.

 

(e) Notification of Failure of Letter of Credit Bank to Honor Drawing. The Administrative Agent shall notify BAFC, the Guarantor, the Servicer and the Collateral Agent as promptly as practicable if any Letter of Credit Bank should fail or refuse to honor a drawing under the Letter of Credit.

 

(f) Replacement Letter of Credit.  The Administrative Agent shall present the Letter of Credit to the Letter of Credit Agent and receive the replacement Letter of Credit from the Letter of Credit Bank in a simultaneous exchange on the date requested by BAFC pursuant to subsection 2.01(c) of the Letter of Credit Reimbursement Agreement. In addition, if the Letter of Credit is to be replaced pursuant to subsection 2.01(e) of the Letter of Credit Reimbursement Agreement, the Administrative Agent shall present the Letter of Credit to the Letter of Credit Agent and receive the replacement Letter of Credit on the date specified in BAFC’s request to the Letter of Credit Agent in accordance with such subsection 2.01(e). Upon receipt of such replacement Letter of

 

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Credit, or upon receipt of an amended Letter of Credit pursuant to such subsection 2.01(e), the Administrative Agent shall notify BAFC, the Servicer and the Collateral Agent by telephone, and shall subsequently transmit a facsimile of such amended or replacement Letter of Credit to said parties.

 

(g) Letter of Credit Amount. On each day prior to and on the Liquidity Commitment Expiration Date, the sum of (i) the amount of funds on deposit in the Reserve Account and (ii) the amount of the Letter of Credit that is in full force and effect shall equal the Letter of Credit Commitment; provided, however, that upon the downgrade or removal of S&P’s and Moody’s long-term unsecured debt rating of the Guarantor, BLFC or the Trust which requires the Letter of Credit Commitment to be increased in accordance with subsection 2.01(e) of the Letter of Credit Reimbursement Agreement, BAFC shall have thirty (30) days to either (x) obtain a substitute Letter of Credit or an amendment to the existing Letter of Credit reflecting the Letter of Credit Commitment as so increased or (y) deposit additional funds in the Reserve Account in an amount equal to the amount by which the Letter of Credit Commitment is required to be increased. Following the deposit by BAFC of any amounts in the Reserve Account, the Administrative Agent
may, upon receipt of a Servicer’s Certificate or upon obtaining knowledge of the existence of a Defaulted Loan, request withdrawals from the Collateral Agent out of the Reserve Account of draw amounts with respect to Defaulted Loans and deposit of such amounts by the Collateral Agent into the Cash Collateral Account. The Administrative Agent shall provide notice to BAFC and the Servicer as promptly as practicable of the fact and amount of such drawings.

 

ARTICLE VI

 

CONDITIONS PRECEDENT

 

SECTION 6.01 Conditions to Effectiveness. This Agreement shall become effective on the first day on which all of the following conditions have been satisfied:

 

(a) Agreement. Each Liquidity Bank, the Administrative Agent and BAFC shall have signed a counterpart copy of this Agreement and delivered the same to the Administrative Agent.

 

(b) Depositary Agreement. BAFC and the Depositary shall have executed and delivered the Depositary Agreement; such Agreement shall be in full force and effect; and the Administrative Agent shall have received a fully executed counterpart thereof.

 

(c) The Liquidity Loan Notes. There shall have been delivered to the Administrative Agent for the account of each Liquidity Bank a Liquidity Loan Note payable to the order of such Liquidity Bank in the amount and as otherwise provided for in Article III hereto.

 

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(d) Security Agreement. BAFC, the Servicer, the Administrative Agent, the Letter of Credit Agent and the Collateral Agent shall have executed and delivered the Security Agreement; such Agreement shall be in full force and effect; and the Administrative Agent shall have received a fully executed counterpart thereof.

 

(e) Guaranty. The Guarantor shall have executed and delivered the Guaranty; the Guaranty shall be in full force and effect; and the Administrative Agent shall have received a fully executed counterpart thereof.

 

(f) Letter of Credit Reimbursement Agreement. BAFC, the Letter of Credit Agent and the Letter of Credit Banks shall have executed and delivered the Letter of Credit Reimbursement Agreement; such Agreement shall be in full force and effect; and the Administrative Agent shall have received a fully executed counterpart thereof.

 

(g) Letter of Credit. The Letter of Credit Agent and the Letter of Credit Banks shall have executed the Letter of Credit and delivered it to the Administrative Agent; the Letter of Credit shall be in full force and effect.

 

(h) Other Agreements. Each of the other parties thereto shall have executed and delivered the Placement Agency Agreement and each of the other Transaction Documents, each of which shall be in full force and effect, and the Administrative Agent shall have received fully executed counterparts thereof.

 

(i) No Series 2000-1 Early Amortization Event or Potential Series 2000-1 Early Amortization Event. As of the date hereof, there shall exist no Series 2000-1 Early Amortization Event or Potential Series 2000-1 Early Amortization Event.

 

(j) Representations and Warranties. All representations and warranties of (i) BAFC contained in this Agreement and in the other Transaction Documents or in any document, certificate or financial or other statement delivered in connection herewith or therewith and (ii) the Servicer, the Guarantor and the Company contained in the Transaction Documents, shall be true and correct with the same force and effect as though such representations and warranties had been made as of the date hereof.

 

(k) Opinions of Counsel. The Administrative Agent, each Liquidity Bank, the Letter of Credit Agent, BAFC and each Placement Agent shall have received (i) from Winston & Strawn LLP, counsel for the Servicer and New York counsel for the Guarantor, a favorable opinion dated the date hereof covering the matters as such parties shall reasonably request, (ii) from Conyers Dill and Pearman, Bermuda counsel for the Guarantor, a favorable opinion dated the date hereof covering the matters as such parties shall reasonably request and (iii) from Winston & Strawn LLP,
counsel for BAFC, a favorable opinion dated the date hereof covering the matters as such parties shall reasonably request.

 

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(l) Closing Certificates. The Administrative Agent shall have received in sufficient counterparts for each Liquidity Bank a certificate, dated the date hereof and executed by a Responsible Officer of each of BAFC, the Company and the Servicer stating that all of the conditions specified in Section 6.01(i) as applicable to it are then satisfied.

 

(m) Filings, etc. All filings (including, without limitation, pursuant to the UCC) and recordings shall have been accomplished with respect to the Security Agreement in such jurisdictions as may be required or permitted by law to establish, perfect, protect and preserve the rights, titles, interests, remedies, powers, privileges, liens and security interests of the Collateral Agent in the collateral covered by the Security Agreement and any giving of notice or the taking of any other action to such end (whether similar or dissimilar) required or permitted by law shall
have been given or taken. On or prior to the Series 2000-1 Issuance Date, BAFC and the Collateral Agent shall have received copies of (i) UCC searches from the New York Secretary of State (and applicable local UCC searches), each showing no liens as to BAFC, and (ii) satisfactory evidence as to any such filing, recording, registration, giving of notice or other action so taken or made.

 

(n) Documentation and Proceedings. The Administrative Agent shall have received copies of the Certificate of Incorporation of BAFC (certified by the Secretary of State of Delaware), certificates of appropriate officials as to the existence and good standing (if applicable) of BAFC and the Guarantor, and Bylaws of BAFC, Board of Directors resolutions in respect of the Transaction Documents to which BAFC or the Guarantor, as applicable, is a party, and incumbency certificates with respect to BAFC and the Guarantor, all satisfactory in form and substance to the
Administrative Agent.

 

(o) Bank Accounts. The Cash Collateral Account, the Commercial Paper Account and the Special Payment Account shall have been established.

 

(p) Compliance with Laws. The Administrative Agent shall have received evidence reasonably satisfactory to it that the business conducted and proposed to be conducted by BAFC is in compliance with all applicable laws and regulations and that all registrations, filings, licenses and/or consents required to be obtained by BAFC in connection therewith have been made or obtained.

 

(q) Other Conditions Precedent. The conditions precedent to the Letter of Credit Reimbursement Agreement shall have been satisfied concurrently.

 

(r) Fees. The Administrative Agent shall have received payment of all fees and other amounts due and payable to it or the Liquidity Banks on or before the date hereof.

 

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(s) BAFC Rating. The Administrative Agent shall have received a letter from S&P confirming its “A-1” rating of BAFC’s commercial paper and a letter from Moody’s confirming its “P-1” rating of BAFC’s commercial paper.

 

(t) BL, Trust and BLFC Rating. The Administrative Agent shall have received evidence reasonably satisfactory to it that BL’s long-term unsecured debt rating is at least “BBB-” by S&P and either the Trust’s or BLFC’s long-term unsecured debt rating is at least “Baa3” by Moody’s.

 

(u) Guarantor Financials. The Administrative Agent shall have received (i) audited consolidated financial statements of BL for its fiscal year ended December 31, 2006, and (ii) unaudited consolidated financial statements for its fiscal quarter ended March 31, 2007.

 

SECTION 6.02 Conditions to Each Issuance of Commercial Paper. The right of BAFC to issue Commercial Paper is subject at the time of such issuance of Commercial Paper to the satisfaction of the following conditions listed in this Section 6.02 (in addition to the condition set forth in the proviso to Section
2.01(b)) with each issuance of Commercial Paper.

 

(a) Ratings. At the time of each issuance of Commercial Paper, a rating of at least “A-1”, in the case of S&P, and at least “P-1”, in the case of Moody’s, shall be in full force and effect.

 

(b) Representations and Warranties. At the date of such issuance of Commercial Paper and after giving effect thereto, all representations and warranties of (i) BAFC contained in this Agreement and in the other Transaction Documents or in any document, certificate or financial or other statement delivered in connection herewith or therewith, unless waived by the Administrative Agent and Letter of Credit Agent, and (ii) the Servicer, the Guarantor and the Company contained in the Transaction Documents, or in any document, certificate or financial or other statement
delivered in connection therewith, unless waived by the Administrative Agent and Letter of Credit Agent, in each case shall be true and correct with the same force and effect as though such representations and warranties had been made as of such date.

 

(c) Liquidity Agreement. The Liquidity Agreement shall be in full force and effect on the date of such issuance of Commercial Paper.

 

(d) Private Placement Memorandum. Each credit report, private placement memorandum or information circular to be used by BAFC in connection with the offer or sale of the Commercial Paper shall, only insofar as the same shall describe the Administrative Agent or the obligations of the Administrative Agent hereunder, have been approved in writing by the Administrative Agent or, only insofar as the same shall describe any Liquidity Bank or the obligations of any Liquidity Bank hereunder, the Administrative Agent shall obtain the prior written approval of such Liquidity
Bank.

 

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(e) No Mandatory Liquidation Event or Mandatory CP Wind-Down Event. At the time of each issuance of Commercial Paper and after giving effect thereto, (i) no Mandatory Liquidation Event shall have occurred, and (ii) no Mandatory CP Wind-Down Event shall have occurred with respect to which the Administrative Agent shall have instructed the Depositary not to issue additional Commercial Paper.

 

SECTION 6.03 Conditions Precedent to the Making of Each Liquidity Loan. In addition to the requirements of subsection 3.01(c) hereof, no Liquidity Bank shall be required to make a Liquidity Loan if at or prior to the time of making such Liquidity Loan an Insolvency Event (as described in clauses (i)-(iii) of the definition of “Insolvency Event”) shall have occurred with respect to
BAFC.

 

SECTION 6.04 Conditions to the Making of any Liquidity Loan Following a Mandatory CP Wind-Down Event. In addition to the requirements of subsection 3.01(c) and Section 6.03 hereof, no Liquidity Bank shall be required to make a
Liquidity Loan pursuant to subsection 3.01(a)(v) hereof unless the following conditions are satisfied on each day on which such Liquidity Loan is to be made:

 

(a) Representations and Warranties. At the date on which such Liquidity Loan is to be made and after giving effect to such Liquidity Loan, all representations and warranties of (i) BAFC contained in this Agreement and in the other Transaction Documents or in any document, certificate or financial or other statement delivered in connection herewith or therewith, unless waived by the Administrative Agent and (ii) the Servicer, the Guarantor and the Company contained in the Transaction Documents, or in any document, certificate or financial or other statement delivered in
connection therewith, unless waived by the Administrative Agent, in each case shall be true and correct with the same force and effect as though such representations and warranties had been made as of such date.

 

(b) No Mandatory Liquidation Event or Potential Mandatory Liquidation Event. At the date on which such Liquidity Loan is to be made and after giving effect to such Liquidity Loan, no Mandatory Liquidation Event or Potential Mandatory Liquidation Event shall have occurred.

 

ARTICLE VII

 

COVENANTS

 

While this Agreement is in effect (i.e., until all indebtedness and other amounts payable by BAFC hereunder and under the Commercial Paper and the Liquidity Loan Notes shall have been paid in full and the Liquidity Banks no longer have any Liquidity Commitment hereunder), BAFC agrees that:

 

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SECTION 7.01 Affirmative Covenants. BAFC shall:

 

(a) provide the Administrative Agent all information that the Administrative Agent may reasonably request in writing concerning the business of BAFC within a reasonable period of time considering the nature of the request; provided that with respect to any information relating to an annual audited report, the same may be delivered within one hundred and twenty (120) calendar days after the end of BAFC’s fiscal year;

 

(b) furnish or cause to be furnished to the Administrative Agent in sufficient number for each Liquidity Bank, copies of all documents and other notices furnished to BAFC under the Transaction Documents and to the Letter of Credit Agent under the Letter of Credit Reimbursement Agreement;

 

(c) execute and deliver to the Administrative Agent and the Liquidity Banks all such documents and instruments and do all such other acts and things as may be necessary or reasonably required by the Administrative Agent to enable the Collateral Agent or the Administrative Agent to exercise and enforce their respective rights under this Agreement, the Letter of Credit Reimbursement Agreement, the Letter of Credit, the Guaranty and the Security Agreement, and to realize thereon, and record and file and rerecord and refile all such documents and instruments, at such time or times, in such manner and at such place or places, all as may be necessary or required by
the Administrative Agent to validate, preserve and protect the position of the Collateral Agent, the Administrative Agent and the Liquidity Banks under this Agreement, the Letter of Credit Reimbursement Agreement, the Letter of Credit, the Guaranty and the Security Agreement;

 

(d) take all actions necessary to ensure that all taxes and other governmental claims in respect of BAFC’s operations and assets are promptly paid when due, except those contested in good faith;

 

(e) comply in all material respects with obligations it assumes under the Transaction Documents;

 

(f) comply with all Requirements of Law except where the failure to so comply would not reasonably be expected to have a material adverse effect on its ability to perform its obligations under the Transaction Documents;

 

(g) for the benefit of the Administrative Agent and the Liquidity Banks, and for so long as this Agreement shall be in effect, perform and comply with each of its respective agreements, warranties and indemnities contained in this Agreement and the other Transaction Documents;

 

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(h) give prompt notice to the Administrative Agent of any material default or event of default by any Obligor under any Loan or Loan Documents of which BAFC is aware;

 

(i) advise the Administrative Agent of the occurrence of each Default, Event of Default or Mandatory CP Wind-Down Event as promptly as practicable after BAFC becomes aware of any such Default, Event of Default or Mandatory CP Wind-Down Event, and shall notify the Series 2000-1 Rating Agencies of any Mandatory CP Wind-Down Event and Mandatory Liquidation Event;

 

(j) beginning with the fiscal year commencing in 2000, furnish to the Series 2000-1 Rating Agencies and the Administrative Agent in sufficient number for each Liquidity Bank as soon as available, but in any event within one hundred and twenty (120) days after the end of each fiscal year of BAFC audited financial statements consisting of the balance sheet of BAFC as of the end of such year and the related statements of income and retained earnings and statements of cash flow for such year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year (provided that comparative figures shall not be required with respect to such financial statements delivered at the end of BAFC’s fiscal year ending in 2000), certified by Independent Public Accountants satisfactory to the Administrative Agent to the effect that such financial statements fairly present in all material respects the financial condition and results of operations of BAFC in accordance with GAAP consistently applied;

 

(k) beginning with the fiscal year commencing in 2000, furnish to the Series 2000-1 Rating Agencies and the Administrative Agent as soon as available but in any event within sixty (60) days after the end of each of the first three quarters for each fiscal year of BAFC, unaudited financial statements consisting of a balance sheet of BAFC as at the end of such quarter and a statement of income and retained earnings for such quarter, setting forth (in the case of financial statements furnished for calendar quarters subsequent to the first full calendar year of BAFC) in comparative form the corresponding figures for the corresponding quarter of the preceding
fiscal year; and BAFC will additionally furnish, or cause to be furnished, to the Administrative Agent together with the financial statements required pursuant to clause (j) and this clause (k) a certificate of a Responsible Officer of BAFC stating that (x) the attached financial statements have been prepared in accordance with GAAP and accurately reflect the financial condition of BAFC and (y) to the best knowledge of such Responsible Officer, no Mandatory CP Wind-Down Event or Mandatory Liquidation Event was continuing at the end of such quarter or on the date of such statement or, if such Mandatory CP Wind-Down Event or Mandatory Liquidation Event was continuing at the end of such quarter or on the date of such statement, specifying the name and period of existence thereof;

 

(l) (i) except as otherwise permitted by the Transaction Documents, preserve, renew and keep in full force and effect its corporate existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable

 

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in the normal conduct of its business, except where the failure to maintain the same would not have a Material Adverse Effect; and

 

(m) on each day after the Liquidity Loans (with accrued interest thereon) have become due and payable (whether at the stated maturity, by acceleration or otherwise), give the notice contemplated by Section 2.06 of the Series 2000-1 Supplement, such notice to specify an amount equal to the lesser of (i) the funds on deposit in the Series 2000-1 Collection Subaccount on such day and (ii) the outstanding amount of the Liquidity Loans (with accrued interest thereon) and all other amounts
owing under this Agreement.

 

SECTION 7.02 Negative Covenants. BAFC will not:

 

(a) contract for, create, incur, assume or suffer to exist any Lien, security interest, charge or other encumbrance of any nature upon any of its property or assets, whether now owned or hereafter acquired except for Permitted Liens and as otherwise provided for in the Security Agreement or the Depositary Agreement;

 

(b) create, incur, assume or suffer to exist any Indebtedness, whether current or funded, or any other liability except Permitted Indebtedness;

 

(c) except as contemplated by the Transaction Documents, 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 assets, stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person;

 

(d) enter into any merger, consolidation, joint venture, syndicate or other form of combination with any Person, or sell, lease or transfer or otherwise dispose of any of its assets or receivables or purchase any asset, or engage in any transaction which would result in a change of control of BAFC. BAFC will not create any subsidiary of BAFC without the prior written consent of the Administrative Agent;

 

(e) enter into or be a party to any agreement or instrument other than the Transaction Documents or documents and agreements incidental thereto;

 

(f) make any expenditure (by long-term or operating lease or otherwise), excluding those relating to foreclosure, for capital assets (both realty and personalty), unless such expenditure is approved in writing by the Administrative Agent;

 

(g) engage in any business or enterprise or enter into any material transaction other than as contemplated by the Transaction Documents;

 

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(h) amend its Certificate of Incorporation or Bylaws without the prior written consent of the Administrative Agent;

 

(i) grant any powers of attorney to any Person for any purposes except (i) where permitted by the Transaction Documents or (ii) to the Collateral Agent for the purposes of the Security Agreement;

 

(j) except with respect to Liquidity Loans made after the occurrence of a Mandatory CP Wind-Down Event pursuant to subsection 3.01(a)(v), advance any funds under the Series 2000-1 VFC Certificate if at such time any Liquidity Loan remains outstanding;

 

(k) advance any funds under the Series 2000-1 VFC Certificate if at the time of or after giving effect to such advance, a Series 2000-1 Early Amortization Event has occurred and is continuing, unless such advance is approved in advance by the Majority Liquidity Banks and the Majority Letter of Credit Banks; or

 

(l) take any action which would permit the Servicer to have the right to refuse to perform any of its respective obligations under the Servicing Agreement.

 

ARTICLE VIII

 

MANDATORY LIQUIDATION EVENTS,

MANDATORY CP WIND-DOWN EVENTS AND REMEDIES

 

SECTION 8.01 Mandatory Liquidation Events. Upon notice from the Administrative Agent that any of the following events has occurred (each a “Mandatory Liquidation Event”), the remedies of Section 8.03(a) hereof shall
apply:

 

(i) Letter of Credit. The Letter of Credit has not been reinstated within three (3) Business Days of any draw pursuant to Section 5.05(a) hereof;

 

(ii) Delinquent Loans. Any Loan constitutes a Delinquent Loan for a period of more than three (3) successive Business Days;

 

(iii) Guarantor or Designated Obligor Cross-Default. The Guarantor or any of the Designated Obligors shall (A) default in the observance or performance of any agreement or condition relating to any of its outstanding Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, the effect of which default is to cause or permit such Indebtedness to become due prior to its stated maturity or (B) fail to pay when due any material amounts due under any agreement to which any such Person is a party; provided, however, that no Mandatory Liquidation Event shall be deemed to occur under clause (A) or (B) of this paragraph unless the aggregate amount of

 

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Indebtedness in respect of which any payment default or other default referred to in this paragraph shall have occurred shall be equal to at least $50,000,000;

 

(iv) Insolvency. An Insolvency Event shall occur with respect to BAFC, the Guarantor, any Designated Obligor or the Company;

 

(v) Change of Control. A Change of Control with respect to the Guarantor shall occur;

 

(vi) Investment Company. BAFC or the Guarantor shall become an “investment company” within the meaning of the 1940 Act and shall not be exempt from compliance with the 1940 Act;

 

(vii) Judgments Against BAFC. Final, non-appealable judgment or judgments for the payment of money in an aggregate amount in excess of $50,000 shall have been rendered against BAFC and the same shall have remained unsatisfied and in effect for any period of thirty (30) consecutive days during which no stay of execution shall have been obtained;

 

(viii) Commercial Paper Payments. Failure by BAFC to pay or cause to be paid any amount in respect of Commercial Paper when due;

 

(ix) Certain Payments. Failure by BAFC to pay or cause to be paid (i) any of the fees described in Section 4.01 hereof when due within three (3) Business Days from the date due; (ii) fees due under subsection 2.11(a) of the
Letter of Credit Reimbursement Agreement or any other amounts due under the Letter of Credit Reimbursement Agreement within three (3) Business Days from the date due; (iii) any Liquidity Loan under subsection 3.01(f) and Section 5.02 hereof on the date due; or (iv) interest on any Liquidity Loan within three (3) Business Days of the date such interest is due;

 

(x) Representations. Any representation or warranty or other written statement made or deemed made by BAFC, the Company or the Guarantor in this Agreement or in any other Transaction Document or in any document entered into in connection herewith or therewith, shall prove to have been incorrect when made in any material respect;

 

(xi) Covenants. (a) Failure by BAFC, the Company or the Guarantor to observe or perform any covenant or agreement contained in subsections 5.05(g), 7.01(i) and 7.01(l) hereof (with respect to BAFC), subsections 2.06(g) and 2.06(j)(i) and (ii) of the Pooling Agreement (with respect to the Company) and subsections 8.1(c)(i) and (ii), 8.1(g)(i), 8.1(h), 8.1(i) and 8.2 of the Guaranty (with respect to the Guarantor); or (b) failure by BAFC, the Company or the Guarantor to observe or perform any other
covenant or agreement contained herein or in any other Transaction Document to which it is a

 

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party and not constituting a Mandatory Liquidation Event under any other clause of this Article VIII and the continuance of such default for thirty (30) days after the earlier of (x) the date on which a Responsible Officer of BAFC, the Company or the Guarantor has knowledge of such failure and (y) BAFC, the Company or the Guarantor receives written notice thereof from the Administrative Agent;

 

(xii) Default Under Other Documents. (a) A Series 2000-1 Early Amortization Event or a Potential Series 2000-1 Early Amortization Event shall have occurred and be continuing or (b) an Early Amortization Event described in Section 7.01 of the Pooling Agreement (without taking into account any Supplements) shall occur; 

 

(xiii) Default under the Guaranty. The Guarantor shall default under the Guaranty or the Guaranty shall have become invalid or ineffective or the Guarantor or any affiliate thereof shall challenge its effectiveness;

 

(xiv) Judgments Against Guarantor and Designated Obligors. One or more judgments for the payment of money (to the extent not bonded or covered by insurance to the reasonable satisfaction of the Letter of Credit Agent and the Administrative Agent) shall be rendered against the Guarantor or any of the Designated Obligors or any combination thereof in an aggregate amount greater than $50,000,000, and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by
a judgment creditor to levy upon assets or properties of the Guarantor or any of the Designated Obligors to enforce any such judgment and no stay of enforcement shall be in effect; 

 

(xv) Effectiveness of Other Documents. Any of the Transaction Documents shall cease, for any reason, to be in full force and effect, or the Company, the Servicer, the Guarantor, the Sellers or BAFC shall so assert in writing; or

 

(xvi) Other Cross-Defaults. BLFC or any other Investor Certificateholder that is an Affiliate of the Guarantor shall (i) default in making any payment of any principal of any Indebtedness or of any material amounts under any other agreement to which it is a party on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if

 

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required, such Indebtedness to become due prior to its stated maturity or to become payable; provided, that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (xvi) shall not at any time constitute a Mandatory Liquidation Event unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (xvi) shall have occurred and be continuing with respect to Indebtedness or other amounts the outstanding principal amount of which exceeds in the aggregate $50,000,000; provided, further, that the immediately preceding proviso shall be deemed inapplicable at any time that any Purchased Loan shall constitute a Defaulted Loan or shall have constituted a Delinquent Loan for a period of more than three (3) successive Business Days. 

 

SECTION 8.02 Mandatory CP Wind-Down Events. Upon the occurrence of any of the following events (each a “Mandatory CP Wind-Down Event”), the remedies of Section 8.03(b) hereof shall apply:

 

(a) Guarantor’s Adjusted Net Debt/Consolidated Adjusted Capitalization Ratio. The ratio of the Guarantor’s consolidated Adjusted Net Debt to consolidated Adjusted Capitalization (each as calculated at the end of each fiscal quarter of the Guarantor) is greater than 0.585:1.0; or

 

(b) Guarantor’s EBITDA. The Guarantor’s consolidated Adjusted EBITDA (as calculated on a rolling four quarter basis) is less than $400,000,000.

 

SECTION 8.03 Remedies. 

 

(a) At any time during the continuance of any Mandatory Liquidation Event and so long as such Mandatory Liquidation Event shall continue unremedied, the Administrative Agent, by written notice to BAFC, the Series 2000-1 Rating Agencies, and the Depositary (with a copy to each Placement Agent and the Collateral Agent), (i) shall instruct the Depositary not to issue or deliver any additional Commercial Paper, and (ii) may, with the consent of the Majority Liquidity Banks, and shall, at the written request of the Majority Liquidity Banks, (A) declare the principal of and accrued interest in respect of the Liquidity Loan Notes to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by BAFC, anything contained herein or in the Liquidity Loan Notes to the contrary notwithstanding, and/or (B) subject to the

 

immediately following sentence declare the Aggregate Liquidity Commitment terminated, whereupon the Aggregate Liquidity Commitment and the obligation of the Liquidity Banks to make the Liquidity Loans hereunder shall terminate immediately and any accrued fees or premiums shall forthwith become due and payable without any further notice of any kind and/or (C) instruct BAFC to, and in such event BAFC shall, instruct the Trustee to declare the principal of and accrued interest in respect of the Purchased Loans to be due and payable (provided that, for the avoidance of doubt, BAFC acknowledges and agrees that if it fails to give such instructions, the Administrative

 

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Agent may do so on its behalf). Notwithstanding the previous sentence, upon the occurrence of a Mandatory Liquidation Event described in subsection 8.01(iv) with respect to BAFC, the Guarantor or the Company or in subsection 8.01(xii)(b), the Aggregate Liquidity Commitment shall terminate automatically, and all amounts payable to the Liquidity Banks and the Liquidity Agent hereunder and under the Liquidity Loan Notes, whether for principal, interest, fees, expenses or
otherwise, shall automatically become forthwith due and payable without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived. Anything herein to the contrary notwithstanding, no declaration or termination of the Aggregate Liquidity Commitment pursuant to the foregoing provisions of this Article VIII shall affect the obligation of the Liquidity Banks to make Liquidity Loans with respect to Commercial Paper issued, authenticated and delivered by the Depositary prior to receipt of instructions from the Administrative Agent to cease issuing Commercial Paper as provided in subsection 2.01(a) hereof; provided the
conditions set forth in subsection 3.01(c) and Section 6.03 hereof are satisfied at the time of the making of any such Liquidity Loan.

 

(b) At any time during the continuance of a Mandatory CP Wind-Down Event and so long as such Mandatory CP Wind-Down Event shall continue unremedied, (i) the Administrative Agent shall, by written notice to BAFC, the Series 2000-1 Rating Agencies, and the Depositary (with a copy to each Placement Agent and the Collateral Agent), instruct the Depositary not to issue or deliver any additional Commercial Paper and (ii) subject to the terms and conditions herein (and provided that a Mandatory Liquidation Event shall not have occurred which has not been waived by the Majority Liquidity Banks), the Liquidity Banks shall make Liquidity Loans to BAFC on a revolving
basis pursuant to subsections 3.01(a)(i) and 3.01(a)(v) hereof.

 

ARTICLE IX

 

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Liquidity Banks to enter into this Agreement and to provide the credit facility provided for herein, BAFC makes the following representations and warranties to the Liquidity Banks:

 

SECTION 9.01 Corporate Existence. BAFC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, has full corporate power and authority to own its assets and to transact the business in which it is now engaged and is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction in which its business or activities requires such qualification. BAFC has no subsidiaries.

 

SECTION 9.02 Corporate Power; Authorization; Enforceable Obligation. BAFC has the corporate power, authority and legal right to execute, deliver and perform the Transaction Documents and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings on the terms and conditions hereof and the execution, delivery and performance of the Transaction Documents. No consent, license, permit, approval or

 

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authorization of, exemption by, notice or report to, or registration, filing or declaration with, any Governmental Authority is required for the execution, delivery and performance by BAFC of the Transaction Documents which has not been obtained, made, given or accomplished. This Agreement and the other Transaction Documents, including the Liquidity Loan Notes, have been executed and delivered by a duly authorized officer of BAFC, and each of the Transaction Documents constitutes and, in the case of Commercial Paper, when executed and issued in accordance with the provisions hereof and of the Depositary Agreement, will constitute, a legal, valid and binding obligation of BAFC enforceable against BAFC in accordance with its respective terms except that the enforceability thereof may be subject to the effects of
any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

SECTION 9.03 No Legal Bar. The execution, delivery and performance by BAFC of the Transaction Documents will not violate any provision of any existing law or regulation applicable to BAFC, or of any order, judgment, award or decree of any court, arbitrator or governmental authority applicable to BAFC or the Certificate of Incorporation or Bylaws of BAFC or any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which BAFC is a party or by which BAFC or any of its assets may be bound, and will not, except as otherwise provided herein or
under any of the other Transaction Documents, result in, or require, the creation or imposition of any Lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking.

 

SECTION 9.04 No Material Litigation. No litigation, investigation or administrative proceeding of or before any court, arbitrator or Governmental Authority is pending nor, to BAFC’s knowledge, threatened against BAFC or any of its assets (a) with respect to the Transaction Documents or the Borrowings hereunder or (b) that, if determined adversely, would have a material adverse effect on the business, operations, assets, financial condition or prospects of BAFC or (c) that would have a material adverse effect on the ability of BAFC to perform under the Transaction
Documents or on the rights and remedies of the Administrative Agent, the Collateral Agent and the Liquidity Banks thereunder.

 

SECTION 9.05 Security Interest. 

 

(a) (i) No effective financing statement listing BAFC as debtor (other than any which may have been filed on behalf of the Collateral Agent) covering any of the Assigned Collateral is on file in any public office; (ii) at the date of each deposit of monies in each Collateral Account, BAFC was, is or will then be the lawful owner of, and had, has or will then have good title to, such monies, free and clear of all Liens except the lien and security interest granted pursuant to the Security Agreement in favor of the Collateral Agent; and (iii) BAFC is and will be the lawful owner of, and has and will have good and marketable title to, all Assigned Collateral,
free and clear of all Liens

 

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except the lien and security interest granted pursuant to the Security Agreement in favor of the Collateral Agent and Permitted Liens.

 

(b) BAFC has not previously created any security interest which remains in effect in the Assigned Collateral, any Collateral Account or the funds deposited therein or any part thereof and will keep the Assigned Collateral, each Collateral Account and the funds deposited therein and every part thereof free and clear of all Liens except the lien and security interest granted pursuant to the Security Agreement in favor of the Collateral Agent and Permitted Liens.

 

(c) The Security Agreement creates a valid Lien on the Assigned Collateral in favor of the Secured Parties and such lien is prior in right to any other Liens and is enforceable as such against creditors of and purchasers from BAFC except to the extent foreclosure of such Lien may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws affecting creditors’ rights generally.

 

SECTION 9.06 Commercial Paper; Investment Company Act. The qualification of an indenture with respect to Commercial Paper under the Trust Indenture Act of 1939, as amended, is not required in connection with the offer, issuance, sale or delivery of Commercial Paper. BAFC is not an “investment company”, or a company “controlled” by an “investment company” within the meaning of the 1940 Act.

 

SECTION 9.07 Securities Act. The offer, issuance, sale or delivery of the Commercial Paper in accordance with the terms hereof and the Depositary Agreement will constitute exempted transactions under the Securities Act, and registration of the Commercial Paper under the Securities Act will not be required in connection with any such offer, issuance, sale or delivery of the Commercial Paper.

 

SECTION 9.08 Accuracy of Information. All Monthly Settlement Statements, Daily Reports, financial statements, records, and other information furnished by or on behalf of BAFC, the Servicer or the Guarantor to the Administrative Agent or any Liquidity Bank hereunder shall be accurate in all material respects as of their respective date.

 

SECTION 9.09 Taxes and ERISA Liability. BAFC has paid all of its Taxes when due except those Taxes the liability for which (i) BAFC has contested in good faith in appropriate proceedings and for which adequate reserves are maintained in accordance with GAAP or (ii) could not reasonably be expected to result in a Material Adverse Effect. BAFC has no ERISA plan liability and is not subject to the requirements of ERISA.

 

SECTION 9.10 Federal Regulations. No part of the proceeds of any Liquidity Loans will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Liquidity Bank or the Administrative Agent, BAFC will furnish to the Administrative Agent and each Liquidity Bank a statement to the foregoing effect in conformity

 

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with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

 

SECTION 9.11 No Change. Since December 31, 2006, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

SECTION 9.12   Solvency. BAFC is, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith will be and will continue to be, Solvent.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT AND THE LIQUIDITY BANKS

 

SECTION 10.01 Appointment of the Administrative Agent. Each Liquidity Bank hereby irrevocably appoints JPMorgan Chase Bank, N.A. as its Administrative Agent hereunder, under the Guaranty, under the Letter of Credit Reimbursement Agreement, under the Letter of Credit and under the Security Agreement and hereby authorizes the Administrative Agent to take such action on its behalf to execute, deliver and perform such documents on its behalf, and to exercise such rights, remedies, powers and privileges hereunder or thereunder as are specifically authorized to be exercised by
the Administrative Agent by the terms hereof or thereof, together with such rights, remedies, powers and privileges as are reasonably incidental thereto. The Administrative Agent may execute any of its duties hereunder and under the Security Agreement by or through agents or employees, and the Administrative Agent shall not be responsible for the negligence or misconduct of any such agents or employees selected by it with reasonable care. The relationship between the Administrative Agent and each Liquidity Bank is that of agent and principal only, and nothing herein shall be deemed to constitute or appoint the Administrative Agent a trustee or fiduciary for any Liquidity Bank or impose on the Administrative Agent any obligations other than those for which express provision is made herein, under the Guaranty, under the Letter of Credit Reimbursement Agreement, under the Letter of Credit or in the Security Agreement. Upon receipt, the Administrative Agent will forward to each Liquidity Bank (a) an
executed copy of the Transaction Documents, (b) a copy of each Monthly Settlement Statement and Daily Report, and (c) a copy of each financial statement, accountant’s certification and officer’s certificate specified in Section 7.01 hereof and in Section 8.1 of the Guaranty.

 

The Administrative Agent shall not have any duty to exercise any right, power, remedy or privilege granted to it hereby or thereby, or to take any affirmative action or exercise any discretion hereunder or thereunder, including, without limitation, the right of the Administrative Agent to instruct the Depositary not to issue or deliver Commercial Paper under the provisions of subsection 2.01(a) hereof and the Depositary Agreement, unless directed to do so by all the Liquidity Banks or the Majority Liquidity Banks, as applicable (and shall be fully protected in acting or refraining from acting pursuant to such directions which shall be
binding

 

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upon the Liquidity Banks), shall not, without the prior approval of all the Liquidity Banks consent to any reduction of the Letter of Credit Commitment pursuant to Section 2.01(d)(i) of the Letter of Credit Reimbursement Agreement, and shall not, without the prior approval of all the Liquidity Banks or the Majority Liquidity Banks, as applicable, consent to any material departure by BAFC or the Depositary from the terms hereof or thereof, waive any default on the part of any such party under any such agreement or instrument or amend, modify, supplement or terminate, or agree to any surrender of, any such agreement or instrument;
provided, that the foregoing limitation on the authority of the Administrative Agent is for the benefit of the Liquidity Banks and shall not impose any obligation on BAFC to investigate or inquire into the authority of the Administrative Agent in any circumstances, and BAFC shall be fully protected in carrying out any request, direction or instruction made or given to BAFC by the Administrative Agent in the exercise of any right, power, remedy or privilege granted to the Administrative Agent hereby or by the terms of any other Transaction Document, receiving or acting upon any consent or waiver granted to BAFC hereunder or thereunder by the Administrative Agent, or entering into any amendment or modification of, or supplement to, this Agreement or any other Transaction Document, and BAFC shall not be subject to the claims of any
Liquidity Bank by reason of the lack of authority of the Administrative Agent to take any such action nor shall the lack of authority on the part of the Administrative Agent in any circumstance give rise to any claim on the part of BAFC against any Liquidity Bank; and provided, further, that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, or applicable law.

 

Neither the Administrative Agent nor any Liquidity Bank, nor any of its or their respective directors, officers, agents or employees, shall be liable to any person or entity, including without limitation, the Administrative Agent, any Liquidity Bank, or any Program Party, as the case may be, for any action taken or omitted to be taken by it or them hereunder, under any other Transaction Document, or in connection herewith or therewith, except for any liability determined, in a final judgment of a court of competent jurisdiction to have resulted from the Administrative Agent’s or such Liquidity Bank’s own gross negligence or willful misconduct; nor shall the Administrative Agent or any Liquidity Bank be responsible to the Administrative Agent or any other Liquidity Bank, as the case may be, for the
validity, effectiveness, value, sufficiency or enforceability against any Program Party, of any Transaction Document or other document furnished pursuant hereto or thereto or in connection herewith or therewith. The Administrative Agent shall not be liable under this Agreement to BAFC or the Guarantor or their respective directors, officers, agents, employees or members, or any Secured Party or its directors, officers, agents, employees or stockholders for indirect, special, punitive, incidental or consequential loss or damage of any kind whatsoever, including, without limitation, lost profits. Without limitation of the generality of the foregoing, the Administrative Agent: (i) may consult with legal counsel (including counsel for BAFC), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with or in
reliance upon the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Liquidity Bank and shall not be responsible to any Liquidity Bank for any statements, warranties or representations made in or in

 

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connection with this Agreement, any other Transaction Document or any other document furnished pursuant hereto or thereto or in connection herewith or therewith; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement, any other Transaction Document or any other document furnished pursuant hereto or thereto or in connection herewith or therewith, on the part of any party hereto or thereto or to inspect the property (including the books and records) of BAFC, the Guarantor or any other Program Party; (iv) shall not be responsible to any Liquidity Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Transaction Document or any other instrument
or document furnished pursuant hereto or thereto; (v) shall incur no liability under or in respect of this Agreement, any other Transaction Document or any other document furnished pursuant hereto or thereto or in connection herewith or therewith, by acting upon or relying upon any notice, consent, certificate or other instrument or writing or telephonic instruction, or notices to the extent authorized herein or therein believed by it to be genuine and sent by the proper party or parties; and (vi) may deem and treat the payee of any Liquidity Loan Note as the owner thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof satisfactory to the Administrative Agent signed by such payee shall have been filed with the Administrative Agent.

 

Each Liquidity Bank hereby represents that it has, independently and without reliance on the Administrative Agent or any other Liquidity Bank, and based on such documents and information as it has deemed appropriate, made its own appraisal of the financial risks and other risks involved in the transactions contemplated hereunder and under the Transaction Documents and of the financial condition and affairs of BAFC, the Guarantor and the other Program Parties, and the adequacy of the security granted to the Liquidity Banks under the Security Agreement and its own decision to enter into this Agreement and the Security Agreement and the transactions contemplated hereby and thereby and agrees that it will, independently and without reliance upon the Administrative Agent or any other Liquidity Bank, and based on
such documents and information as it shall deem appropriate at the time, continue to make its own appraisals and decisions in taking or not taking action under this Agreement or the Security Agreement. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by BAFC, the Guarantor or any other Program Party of this Agreement, the other Transaction Documents or any other document referred to or provided for herein or therein or to make inquiry of, or to inspect the properties or books of BAFC, the Guarantor or other Program Parties. Except for notices, reports and other documents and information expressly required to be furnished to the Liquidity Banks by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Liquidity Bank with any credit or other information concerning BAFC, the Guarantor or other Program
Parties which may come into the possession of the Administrative Agent.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Series 2000-1 Early Amortization Event, Potential Series 2000-1 Early Amortization Event, Mandatory CP Wind-Down Event or Mandatory Liquidation Event unless the Administrative Agent has received written notice from a Liquidity Bank, the Servicer, the Company, the Guarantor or BAFC referring to this Agreement, describing such Series 2000-1

 

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Early Amortization Event, Potential Series 2000-1 Early Amortization Event, Mandatory CP Wind-Down Event or Mandatory Liquidation Event and stating that such notice is a “Notice of Series 2000-1 Early Amortization Event,” “Notice of Potential Series 2000-1 Early Amortization Event,” “Notice of Mandatory CP Wind-Down Event” or “Notice of Mandatory Liquidation Event,” as the case may be. In the event that the Administrative Agent receives such a notice of the occurrence of a Series 2000-1 Early Amortization Event, Mandatory CP Wind-Down Event, Potential Series 2000-1 Early Amortization Event or Mandatory Liquidation Event, the Administrative Agent shall promptly give notice thereof to the Liquidity Banks. The Administrative Agent shall take such action with respect to such
Series 2000-1 Early Amortization Event, Potential Series 2000-1 Early Amortization Event or Mandatory Liquidation Event as shall be reasonably directed by the Majority Liquidity Banks; provided that, if the Administrative Agent has not yet received such directions from the Majority Liquidity Banks after using reasonable efforts to receive such directions, the Administrative Agent may (but shall not be obligated to) take such action or refrain from taking such action, with respect to such Series 2000-1 Early Amortization Event, Potential Series 2000-1 Early Amortization Event or Mandatory Liquidation Event as it shall deem advisable in the best interests of the Liquidity Banks.

 

Each Liquidity Bank hereby agrees, in the ratio that such Liquidity Bank’s Percentage of the Aggregate Liquidity Commitment hereunder bears to the Aggregate Liquidity Commitment, to indemnify and hold harmless the Administrative Agent and its directors, officers, agents and employees, from and against any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, settlements, costs and expenses of any kind whatsoever (including, without limitation, fees and expenses of attorneys, accountants and experts) incurred or suffered by the Administrative Agent in its capacity as Administrative Agent hereunder as a result of any action taken or omitted to be taken by the Administrative Agent in such capacity or otherwise incurred or suffered by, made upon, or
assessed against the Administrative Agent in such capacity; provided, that no Liquidity Bank shall be liable for any portion of any such losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, settlements, costs or expenses determined, in the final judgment of a court of competent jurisdiction, to be attributable to gross negligence or willful misconduct on the part of the Administrative Agent. Without limiting the generality of the foregoing, each Liquidity Bank hereby agrees, in the ratio aforesaid, to reimburse the Administrative Agent promptly following its demand for any out-of-pocket expenses (including, without limitation, attorneys’ fees and expenses) incurred by the Administrative Agent
or its directors, officers, agents and employees hereunder or under the Security Agreement, and not promptly reimbursed to the Administrative Agent by BAFC. Each Liquidity Bank’s obligations under this paragraph shall survive the termination of this Agreement and the discharge of BAFC’s obligations hereunder.

 

The Administrative Agent shall be entitled to rely on any communication, instrument, paper or other document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons. With respect to its share of liability under this Agreement, JPMorgan Chase or any successor agent, if a Liquidity Bank, shall have the same

 

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rights, power, remedies and privileges as any other Liquidity Bank and may exercise the same as though it were not the administrative agent of the Liquidity Banks hereunder.

 

SECTION 10.02 Resignation of the Administrative Agent. The Administrative Agent may, at any time upon at least forty-five (45) days’ prior written notice to BAFC, the Servicer, the Guarantor, the Collateral Agent, the Letter of Credit Agent, the Liquidity Banks and the Depositary, and the Administrative Agent will at the direction of the Majority Liquidity Banks, resign as Administrative Agent; provided, however, that, in either case, the resignation of the Administrative Agent shall not be effective until the Majority Liquidity Banks shall have agreed to the appointment of another Liquidity Bank to perform the duties of the Administrative Agent hereunder, such replacement shall have accepted such appointment and the Letter of Credit Agent shall have delivered to the successor Administrative Agent, in exchange for the outstanding Letter of Credit held by the predecessor Administrative Agent, a substitute Letter of Credit in accordance with the terms of Section 2.01(b) of the Letter of Credit Reimbursement Agreement and the Letter of Credit. In the
event of such resignation, the Majority Liquidity Banks shall as promptly as practicable appoint a successor agent to replace the Administrative Agent. If the Majority Liquidity Banks have not appointed a successor agent within forty-five (45) days of the Administrative Agent’s resignation notice, the resigning Administrative Agent shall appoint a successor. Notwithstanding the resignation of the Administrative Agent hereunder, the provisions of Section 10.01 hereof shall continue to inure to the benefit of the Administrative Agent in respect of any action taken or omitted to be taken by the Administrative Agent in its capacity as such while it was such under this Agreement.

 

SECTION 10.03 Obligations Several. The obligations of the Liquidity Banks hereunder are several, and neither the Administrative Agent nor any Liquidity Bank shall be responsible for the obligation of any other Liquidity Bank hereunder, nor will the failure of any Liquidity Bank to perform any of its obligations hereunder relieve the Administrative Agent or any other Liquidity Bank from the performance of its obligations hereunder. Nothing contained in this Agreement, and no actions taken by the Liquidity Banks or the Administrative Agent pursuant hereto or in connection
with the Liquidity Commitment shall be deemed to constitute the Liquidity Banks, together or with the Administrative Agent, a partnership, association, joint venture or other entity.

 

SECTION 10.04 Multiple Capacities. JPMorgan Chase is serving in the following capacities for the benefit of BAFC: Administrative Agent, Liquidity Bank and Depositary. The Liquidity Banks agree that with respect to the obligations of the Liquidity Banks to lend under the Liquidity Agreement, the Liquidity Loans made by the Liquidity Banks and the Liquidity Loan Notes issued to such Liquidity Banks, and with respect to the obligations of JPMorgan Chase as Administrative Agent and Depositary, JPMorgan Chase shall have the same rights and powers under any Transaction Document
as any other Program Party, and may exercise the same as though it were not performing such duties specified herein and therein; and the terms “Liquidity Banks,” “Majority Liquidity Banks,” “holders of Liquidity Loans Notes,” or any similar terms shall, unless the context clearly otherwise indicates, include JPMorgan Chase in its individual capacity. JPMorgan Chase may accept deposits from, lend money to, and

 

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generally engage in any kind of banking, trust or other business with any Program Party or any of their Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from any Program Party or any of their Affiliates for services in connection with any Transaction Document and otherwise without having to account for the same to any other Program Party. The Liquidity Banks expressly waive any conflict of interest or any similar claims against JPMorgan Chase arising solely out of such multiple roles of JPMorgan Chase. JP Morgan Chase as a Liquidity Bank, the Administrative Agent and the Depositary shall have the same rights, powers, remedies and privileges as any Program Party and may exercise the same as though it were not acting in multiple capacities in
connection with the Transaction Documents.

 

SECTION 10.05 Agent Communications. The Administrative Agent shall provide to each Liquidity Bank a copy of each material report, certificate, statement or other communication required to be delivered to it under the Transaction Documents and which has not been delivered to the Liquidity Banks; provided, that posting by the Administrative Agent to Intralinks or to a similar electronic distribution
location shall satisfy the requirements of this Section.

 

SECTION 10.06 Documentation Agent and Syndication Agent. Neither the Documentation Agent nor the Syndication Agent shall have any duties or responsibilities hereunder in its capacity as such.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.01 Computations. All computations of interest and fees hereunder and under each Liquidity Loan Note shall be made on the basis of the actual number of days elapsed over a year of 360 (or with respect to the computation of interest on Prime Rate Liquidity Loans, 365 or 366, as the case may be) days.

 

SECTION 11.02 Exercise of Rights. No failure or delay on the part of the Administrative Agent or any Liquidity Bank to exercise any right, power or privilege under this Agreement and no course of dealing between BAFC and the Administrative Agent or any Liquidity Bank shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and except to the extent limited under this Agreement not exclusive of any rights or remedies which the Administrative Agent or any Liquidity Bank would otherwise have pursuant to law or equity. No notice to or demand on any party in any case shall entitle such party to any other or further notice or demand in similar or other circumstances, or constitute a waiver of the right of the other party to any other or further action in any circumstances without notice or demand.

 

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SECTION 11.03 Amendment and Waiver. (a) Any provision of any Commercial Paper Program Document to which neither the Administrative Agent nor the Liquidity Banks are parties, may be amended, waived, supplemented, restated, discharged or terminated (i) to cure any ambiguity, (ii) to correct any defective provisions or (iii) to add any other provisions with respect to matters or questions arising thereunder, which provisions shall not be inconsistent with any other provisions thereof, without the consent of the Administrative Agent or the Liquidity Banks; provided such amendment, waiver, supplement or restatement, does not affect BAFC’s ability to perform its obligations hereunder in any material adverse respect; and provided, further, that the Administrative Agent shall have received prior notice thereof together with copies of any documentation related thereto. Any other amendment, waiver, supplement or restatement of a provision of a Commercial Paper Program Document (including any exhibit thereto) shall require the written consent of the
Administrative Agent (acting at the direction of the Majority Liquidity Banks), the Letter of Credit Agent and BAFC; provided that any such amendment relating to the extension of the L/C Expiration Date may be made with the prior written consent of the Administrative Agent, but without the consent of the Liquidity Banks; provided further, that no such amendment of (a) this Section
11.03, or (b) the definition of Majority Liquidity Banks may be made without the prior written consent of the Administrative Agent acting at the direction of all the Liquidity Banks; provided further, that no change relating to (w) any provision requiring the ratable funding of Liquidity Loans or the ratable sharing of payments or setoffs, (x) the amount of the Aggregate Liquidity Commitment or any Liquidity Bank’s Liquidity Commitment or the principal amount of any Liquidity Loan, (y) any fees or commissions with respect to, or the interest rates of any
Liquidity Loans, or (z) the extension of the Liquidity Commitment Expiration Date, may be made without the prior written consent of all the Liquidity Banks affected by such change; provided further, that any provisions relating to release of the Assigned Collateral, any change with respect to the amount of the Letter of Credit Commitment (other than as permitted by Section 2.01(e) of the Letter of Credit Reimbursement Agreement) or forgiveness of debt, may only be amended, waived,
supplemented or restated with the written consent of BAFC and all the Secured Parties, with the exception of the Commercial Paper Holders; and provided further, that the amount of any Liquidity Bank’s Liquidity Commitment shall not be changed without the consent of such affected Liquidity Bank. Notwithstanding the preceding sentence of this Section 11.03, any provision of any Commercial Paper Program Document which by its terms requires the written consent of all (or a
specified Percentage of) the Liquidity Banks, shall not be amended, waived, supplemented or restated without the prior written consent of all (or such specified Percentage of) such Liquidity Banks. 

 

(b) Any provision of any other Transaction Document (other than any Commercial Paper Program Document) may be amended, waived, supplemented, restated, discharged or terminated with ten (10) Business Days’ prior written notice to the Administrative Agent, but without the consent of the Administrative Agent or the Liquidity Banks; provided such amendment, waiver, supplement or restatement does not (i)
render the Series 2000-1 VFC Certificate subordinate in payment to any other Series under the Trust or otherwise adversely discriminate against the Series 2000-1 VFC Certificate relative to any other Series under the Trust, (ii) reduce in any manner the amount of, or delay the timing of, distributions which are

 

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required to be made on or in respect of the Series 2000-1 VFC Certificate, (iii) change the definition of, the manner of calculating, or in any way the amount of, the interest of BAFC in the assets of the Trust, (iv) change the definitions of “Eligible Loans”, “Eligible Obligors”, “Series 2000-1 Allocated Loan Amount”, “Series 2000-1 Invested Amount” or “Series 2000-1 Target Loan Amount” or, to the extent used in such definitions, other defined terms used in such definitions, (v) result in a Mandatory Liquidation Event, (vi) amend Section 15 or 17 of the Guaranty, (vii) release the Guarantor, (viii) change any provision of the Guaranty (other than as described in clause (vi) or (vii) above) which adversely affects the rights or interest of the Liquidity Banks under the Guaranty in any material respect, (ix) change the ability of the Trustee to declare the Purchased Loans to be immediately due and payable or the ability of the Administrative Agent or the Majority Liquidity Banks to directly or indirectly require the Trustee to do so, (x) increase the Series 2000-1 Maximum Invested Amount, or (xi) effect any amendment that would cause or permit (A) the Series 2000-1 Invested Amount to exceed the Series 2000-1 Maximum Invested Amount, (B) the Series 2000-1 Target Loan Amount to exceed the Series 2000-1 Allocated Loan Amount or (C) the Credits Outstanding to exceed the Aggregate Available Liquidity Commitment. Any
amendment, waiver, supplement or restatement of a provision of a Transaction Document (including any exhibit thereto) of the type described in (x) clauses (i), (ii), (iii), (iv), (v), (viii), (ix), (x) or (xi) in the proviso above shall require the written consent of the Administrative Agent acting at the direction of the Majority Liquidity Banks, (y) clause (vi) above shall require the written consent of the Administrative Agent acting at the direction of all the Liquidity Banks, and (z) clause (vii) above shall require the written consent of all the Secured Parties, with the exception of the Commercial Paper Holders. Notwithstanding the foregoing, the Administrative Agent shall not be bound by any amendment, waiver, supplement or restatement of the Transaction Documents which affects the rights or duties of the
Administrative Agent under any of the Transaction Documents unless the Administrative Agent shall have given its prior written consent thereto. BAFC shall send written notice of any change to any Transaction Document to each Series 2000-1 Rating Agency. The Servicer shall provide a copy of any change to the Transaction Documents or the form of Loan Documents to the Administrative Agent. No change to any Transaction Document (other than the Loan Documents) will become effective until (i) prior written notice is given to the Series 2000-1 Rating Agencies and (ii) if such amendment is material, the Rating Agency Condition is satisfied with respect to the Commercial Paper issued by BAFC.

 

SECTION 11.04 Expenses and Indemnification.

 

(a) BAFC shall pay all reasonable out-of-pocket costs and expenses of the Administrative Agent incurred in connection with the preparation, execution, delivery, syndication, amendment, modification and waiver of, and of the Administrative Agent and each Liquidity Bank in connection with the enforcement of and preservation of rights under, this Agreement, the other Transaction Documents and the making and repayment of the Liquidity Loans, including the fees and out-of-pocket expenses

 

-45-

 

of counsel to the Administrative Agent and, if applicable, the Liquidity Banks; and shall reimburse the Administrative Agent for the reasonable fees and out-of-pocket expenses of counsel and other third party providers of services to the Administrative Agent in connection with any amendments, supplements or waivers to this Agreement.

 

(b) BAFC agrees to indemnify and hold harmless the Administrative Agent and each Liquidity Bank and each director, officer, employee, affiliate or agent thereof (each, an “Indemnified Party”) from and against any and all claims, losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) whatsoever which such Indemnified Party may incur (or
which may be claimed against such Indemnified Party) by reason of or in connection with the Transaction Documents or any transactions contemplated thereby, except to the extent that any such claims, losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, damages, costs or expenses are determined, in a final judgment of a court of competent jurisdiction, to result from the willful misconduct or gross negligence of such Indemnified Party. The foregoing indemnity shall include any claims, losses, liabilities, (including liabilities for penalties) actions, suits, judgments, demands, damages, costs or expenses to which the Administrative Agent or the Liquidity Banks may become subject under the Securities Act, the Securities Exchange Act of 1934, as amended, or other federal or state law or regulation arising out of or based upon any untrue statement or alleged untrue statement of a material fact in any private placement memorandum, offering memorandum or other
material provided to investors and prospective investors in connection with offers and sales of the Commercial Paper or any amendments thereof or supplements thereto or arising out of, or based upon, the omission or the alleged omission to state a material fact necessary to make the statements in such private placement memorandum, offering memorandum or other material, or any amendment thereof or supplement thereto, in light of the circumstances in which they were made, not misleading, provided, however, that BAFC will not be liable in any such case to the extent that any such losses, liabilities (including liabilities for penalties), actions, suits,
judgments, demands, damages, costs or expenses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made therein in conformity with written information furnished to BAFC by or on behalf of such Indemnified Party specifically for use in connection with the preparation thereof. Payment of indemnification obligations by BAFC is to be made from available moneys in accordance with and subject to Articles 5 and 6 of the Security Agreement.

 

(c) All obligations provided for in this Section 11.04 shall survive any termination of this Agreement.

 

SECTION 11.05 Successors and Assigns.

 

(a) This Agreement shall bind, and the benefits hereof shall inure to, BAFC, the Administrative Agent, the Liquidity Banks and their respective successors and assigns; provided that (i) BAFC may not transfer or assign any or all of its rights and obligations hereunder without the prior written consent of the Guarantor, the

 

-46-

 

Administrative Agent and all of the Liquidity Banks and (ii) any attempted assignment or transfer by BAFC without such consent shall be null and void; provided further, that no Liquidity Bank shall assign any of its rights and obligations hereunder, including its rights under the Liquidity Loan Note, to any Person unless (i) the prior written consent of the Administrative Agent and, prior to a Mandatory Liquidation Event, the Guarantor which shall not be
unreasonably withheld, shall have been obtained, unless such assignment is made to an Affiliate of the Liquidity Bank or another Liquidity Bank in which case only the consent of the Administrative Agent shall be required (such consent not to be unreasonably withheld); (ii) prior to the effective date of such assignment, such Person executes and delivers to BAFC the Assignment and Assumption Agreement substantially in the form of Exhibit B hereto to the effect that such Person agrees to be bound by the provisions of this Agreement (including the agreement set forth in Sections 11.12 and 11.17 hereof); (iii) such Liquidity Bank assigns an amount equal to no
less than $5,000,000 (or such Liquidity Bank’s entire Liquidity Commitment if less than $5,000,000) to the assignee; (iv) BAFC obtains a letter from each Series 2000-1 Rating Agency then rating the Commercial Paper to the effect that the assignment will not result in the downgrading or withdrawal of the rating assigned to the Commercial Paper; and (v) such Person, if not a U.S. Person, shall provide BAFC with appropriately executed copies of Internal Revenue Service Form W-8BEN (but only if the applicable treaty described in such form provides a complete exemption from federal income tax withholding) or, alternatively, Internal Revenue Service Form W-8ECI or any successor form with respect to each such Person (x) on or prior to execution of any such assignment and (y) upon the occurrence of any event which would require the amendment or resubmission of any such form previously provided hereunder. Notwithstanding any such assignment, (i) the Depositary shall have no obligation to communicate with
any such assignee when requesting a Liquidity Loan hereunder but shall communicate any such request to the Administrative Agent as if such assignment had not been made and (ii) all payments hereunder shall be made directly to the Administrative Agent as if no such assignment had occurred.

 

(b) Notwithstanding the foregoing and subject to subsection 11.05(c) below, each Liquidity Bank may at any time grant participations in, or otherwise transfer to, any other financial institution (a “Participant”) any Liquidity Loan or Liquidity Loans. In connection with any such transfer, each such
Liquidity Bank, at its sole discretion, shall be entitled to distribute to any Participant or potential Participant any information furnished to such Liquidity Bank pursuant to this Agreement provided the requirements of Section 11.17 hereof are met. Each Liquidity Bank hereby acknowledges and agrees that any such disposition will not alter or affect such Liquidity Bank’s direct obligations to BAFC hereunder, and that BAFC shall have no obligation to have any communication or relationship with any Participant in order to enforce such obligation of any such Liquidity Bank to BAFC hereunder. Notwithstanding the foregoing sentence, it is understood and agreed that any Liquidity Bank may enter into a participation agreement with a Participant
that may provide that such Liquidity Bank will not agree to any amendment, supplement, modification or waiver described in the second proviso to the

 

-47-

 

second sentence of Section 11.03 or related to forgiveness of debt without the consent of such Participant. Each Liquidity Bank shall promptly notify BAFC in writing of the identity and interest of each Participant upon any such disposition. The provisions of Section 4.05, Section 4.06 and
Section 11.12 hereof shall apply to any direct or indirect Participant provided that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Liquidity Bank would have been entitled to receive in respect of the amount of the participation transferred by such transferor Liquidity Bank to such Participant had no such transfer occurred. 

 

(c) With respect to any assignment or participation pursuant to this Section 11.05, the Liquidity Banks shall not be permitted to distribute any documents or other information to any potential assignee, Participant, or any Person with whom such Liquidity Bank enters into a securitization, hedge transaction or otherwise in relation to any transaction in which payments are made by reference to this Agreement or to any obligor under this Agreement (such Person, an “Other Person”), unless each such assignee, Participant or Other Person shall first agree in writing that such documents and other information are accepted by it in accordance with the provisions of Section 11.17 hereof.

 

(d) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this subsection concerning assignments of the Liquidity Loans and Liquidity Loan Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Liquidity Bank of any Liquidity Loan Note or any part of the Liquidity Loans to any Federal Reserve Bank in accordance with applicable law; provided that any sale or foreclosure of any assignment for security shall be subject to the other provisions of this subsection relating to absolute assignments.

 

(e) Notwithstanding anything to the contrary contained herein, any Liquidity Bank (a “Granting Bank”) may grant to a special purpose funding vehicle (a “SPC”), identified as such in writing from time to time by the Granting Bank to the Administrative Agent and BAFC, the option to provide to BAFC
or the Depositary in accordance with Section 3.01 all or any part of any Liquidity Loan that such Granting Bank would otherwise be obligated to make to BAFC or the Depositary pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Liquidity Loan, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Liquidity Loan, the Granting Bank shall be obligated to make such Liquidity Loan pursuant to the terms hereof. The making of a Liquidity Loan by an SPC hereunder shall
utilize the Liquidity Commitment of the Granting Bank to the same extent, and as if, such Liquidity Loan were made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Bank). In furtherance of the foregoing, each party hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to

 

-48-

 

the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 11.05, any SPC may (i) with notice to, but without the prior written consent of, BAFC and the Administrative Agent and without paying any processing fee therefore, assign all or a portion of its
interest in any Liquidity Loan to the Granting Bank or to any financial institutions (consented to by BAFC and the Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Liquidity Loans and (ii) disclose on a confidential basis any non-public information relating to its Liquidity Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This Section may not be amended without the written consent of the SPC.

 

SECTION 11.06 Notices, Requests, Demands. Except where telephonic instructions or notices are authorized herein to be given, all notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shall be in writing and shall be personally delivered or sent by registered, certified or express mail (or other overnight courier service), postage prepaid, return receipt requested, or by facsimile transmission, and shall be deemed to be given for purposes of this Agreement on the day that such writing is delivered or sent
to the intended recipient thereof in accordance with the provisions of this Section. Unless otherwise specified in a notice sent or delivered in accordance with the foregoing provisions of this Section, notices, demands, instructions and other communications in writing shall be given to or made upon the respective parties hereto at their respective Notice Addressees (or to their respective facsimile transmission numbers), and, in the case of telephonic instructions or notices, by calling the telephone number or numbers indicated for such party.

 

If to a Liquidity Bank other than the Administrative Agent, notice shall be made in accordance with the information set forth with respect to each Liquidity Bank on the signature page hereto.

 

SECTION 11.07 Survival. All representations and warranties contained in Article IX shall survive the execution and delivery of this Agreement and each Liquidity Loan Note and shall continue only so long as and until such time as all indebtedness hereunder and under Commercial Paper and the Liquidity Loan Notes shall have been paid in full and the Liquidity Banks no longer have any Liquidity Commitment hereunder. The provisions of Sections 4.05, 4.06, 10.01, 11.04 and 11.12 hereof shall also survive termination of this Agreement.

 

SECTION 11.08 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND

 

-49-

 

 UNDER EACH LIQUIDITY LOAN NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 11.09 Counterparts. This Agreement may be executed in any number of copies, and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument.

 

SECTION 11.10 Setoff. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of a Mandatory Liquidation Event, each Liquidity Bank is hereby authorized at any time or from time to time, without notice to BAFC or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Liquidity Bank to or for the credit or the account of BAFC against
and on account of the obligations and liabilities of BAFC to such Liquidity Bank under this Agreement and the Liquidity Loan Notes, including, without limitation, all claims of any nature or description arising out of or connected with this Agreement or the Liquidity Loan Notes, irrespective of whether or not such Liquidity Bank shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured; provided, however, that the rights of the Administrative Agent and the Liquidity Banks to the Collateral Accounts shall be governed by the Security Agreement.

 

If any Liquidity Bank, whether by setoff or otherwise, has payment made to it upon its Liquidity Loans (other than payments received pursuant to Sections 4.03(c)(ii), 4.05, 4.06 or 11.04) in a greater proportion than that received by any other Liquidity Bank, such Liquidity Bank agrees, promptly upon demand, to purchase a portion of the Liquidity Loans held by the other Liquidity Banks so that after such purchase each Liquidity Bank will hold its ratable proportion of Liquidity Loans.

SECTION 11.11 Further Assurances. BAFC agrees to do such further acts and things and to execute and deliver to the Administrative Agent such additional assignments, agreements, powers and instruments, as the Administrative Agent may reasonably require or reasonably deem advisable to carry into effect the purposes of this Agreement or to better assure and confirm unto the Administrative Agent its rights, powers and remedies hereunder.

 

SECTION 11.12 No Bankruptcy Petition Against BAFC; Liability of BAFC. 

 

(a) Each of the Administrative Agent, Liquidity Banks and the Participants hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all outstanding Commercial Paper, it will not institute against, or join with or assist any other Person in instituting against, BAFC, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any Applicable Insolvency Laws. This Section 11.12 shall
survive the termination of this Agreement.

 

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(b) Notwithstanding any other provision hereof or of any other Transaction Documents, the sole remedy of the Administrative Agent, any Liquidity Bank or any other Person in respect of any obligation, covenant, representation, warranty or agreement of BAFC under or related to this Agreement or any other Transaction Document shall be against the assets of BAFC. Neither the Administrative Agent, nor any Liquidity Bank nor any other Person shall have any claim against BAFC to the extent that such assets are insufficient to meet such obligations, covenant, representation, warranty or agreement (the difference being referred to herein as a “shortfall”) and all claims in respect of the shortfall shall be extinguished; provided, however, that the provisions of this Section 11.12 apply solely to the obligations of BAFC and shall not extinguish such shortfall for purposes of the obligations of the Guarantor to any Person under the Guaranty. 

 

SECTION 11.13 No Recourse Loan. The obligations of BAFC under this Agreement, the Liquidity Loan Notes, the Depositary Agreement, the Security Agreement and all other Transaction Documents are solely the corporate obligations of BAFC. No recourse shall be had for the payment of any amount owing in respect of Liquidity Loans or for the payment of any fee hereunder or any other obligation or claim arising out of or based upon this Agreement, the Liquidity Loan Notes, the Depositary Agreement, the Security Agreement, or any other Transaction Document against any member,
employee, officer, director or incorporator of BAFC.

 

SECTION 11.14 Knowledge of BAFC. BAFC shall be entitled to assume that no Mandatory Liquidation Event shall have occurred and be continuing, unless a Responsible Officer of BAFC has actual knowledge thereof or BAFC has received notice from any Person that such Person considers that such a Mandatory Liquidation Event has occurred and is continuing.

 

SECTION 11.15 Descriptive Headings. The descriptive headings of the various sections of this Agreement are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

SECTION 11.16 Consent to Jurisdiction and Service of Process. The parties irrevocably agree that any legal proceeding in respect of this Agreement may be brought in the courts of the State of New York sitting in the Borough of Manhattan or the United States District Court of the Southern District of New York (collectively, the “Specified Courts”). The parties hereby irrevocably submit to the nonexclusive jurisdiction of the state and federal courts of the State of New York. The parties hereby irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any Specified Court, and hereby further irrevocably waive any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. The parties further irrevocably consent to the service of process out of any of the Specified Courts in any such suit, action or proceeding by the mailing of copies thereof by certified mail, return receipt requested, postage

 

-51-

 

prepaid, to any party at its address as provided in this Agreement or as otherwise provided by applicable law. Nothing herein shall affect the right of any party to commence proceedings or otherwise proceed against any other party in any jurisdiction or to serve process in any other manner permitted by applicable law. The parties hereto agree 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 applicable law.

 

SECTION 11.17 Confidentiality. Each Liquidity Bank and the Administrative Agent hereby agree that all knowledge of information, practices, books, correspondence and records provided to it by BAFC is to be regarded as confidential information and agrees that (i) it shall retain in strict confidence and shall use reasonable efforts to ensure that its representatives retain in strict confidence and will not disclose without the prior written consent of BAFC any or all of such information, practices, books, correspondence and records furnished to them and (ii) it will not,
and will use its best efforts to ensure that its representatives will not, make any use whatsoever (other than for the purposes contemplated by this Agreement and the other Transaction Documents) of any of such information, practices, books, correspondence and records without the prior written consent of BAFC, unless such information is generally available to the public or is required by law, regulation, court order, stock exchnage or by any regulatory authority having jurisdiction over it, to be disclosed.

 

This Section 11.17 shall survive the termination of this Agreement.

SECTION 11.18 Final Agreement. THIS WRITTEN AGREEMENT AND THE LIQUIDITY LOAN NOTES REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

SECTION 11.19 U.S.A. PATRIOT Act.  Each Liquidity Bank hereby notifies BAFC that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies BAFC, which information includes the name and address of BAFC and other information that will allow such
Liquidity Bank to identify BAFC in accordance with the Act.

 

 

[signature page follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Seventh Amended and Restated Liquidity Agreement to be duly executed and delivered as of the date first above written.

 

	 	 	
BUNGE ASSET FUNDING CORP.

 

By:  /s/ Hunter Smith

Printed Name: Hunter Smith

Title: President

	 	 	
JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Liquidity Bank

 

By:  /s/ Barbara A. Marks

Printed Name: Barbara A. Marks

Title: Vice President

 

	 	 	
CITIBANK, N.A.,

as Liquidity Bank

 

By:  /s/ John Judge

Printed Name: John Judge

Title: Vice President

	 	 	
BNP PARIBAS,

as Documentation Agent and Liquidity Bank

 

By:  /s/ Florence Pourchet

Printed Name: Florence Pourchet

Title: Managing Director

 

By:  /s/ Robert J. Munczinski

Printed Name: Robert J. Munczinski

Title: Managing Director

	 	 	
CREDIT SUISSE, ACTING THROUGH ITS

CAYMAN ISLANDS BRANCH,

as Documentation Agent

 

By:  /s/ Karl Struder

Printed Name: Karl Struder

Title: Director

 

By:  /s/ Alain Schmid

Printed Name: Alain Schmid

Title: Assistant Vice President

	 	 	
CREDIT SUISSE, ACTING THROUGH ITS

CAYMAN ISLANDS BRANCH,

as Liquidity Bank

 

By:  /s/ Karl Struder

Printed Name: Karl Struder

Title: Director

 

By:  /s/ Alain Schmid

Printed Name: Alain Schmid

Title: Assistant Vice President

	 	 	
COOPERATIEVE CENTRALE RAIFFEISEN-

BOERENLEENBANK B.A., "RABOBANK 

INTERNATIONAL", NEW YORK BRANCH,

as Documentation Agent and Liquidity Bank

 

By:  /s/ John L. Church

Printed Name: John L. Church

Title: Executive Director

 

By:  /s/ Rebecca Morrow

Printed Name: Rebecca Morrow

Title: Executive Director

	 	 	
BANK OF TOKYO-MITSUBISHI UFJ TRUST

COMPANY,

as Liquidity Bank

 

By: /s/ Jesse A. Reid, Jr.

Printed Name: Jesse A. Reid, Jr.

Title: Vice President and Manager

	 	 	
CALYON NEW YORK BRANCH,

as Liquidity Bank

 

By:  /s/ Greg Hennnfent

Printed Name: Greg Hennnfent

Title: Director

 

By:  /s/ Blake Wright

Printed Name: Blake Wright

Title: Managing Director

	 	 	
HSBC BANK USA, NATIONAL

ASSOCIATION,

as Liquidity Bank

 

By:  /s/ Alan Vitulich

Printed Name: Alan Vitulich

Title: Vice President

	 	 	
SUNTRUST BANK,

as Liquidity Bank

 

By:  /s/ Hugh Brown

Printed Name: Hugh Brown

Title: Director

	 	 	
THE ROYAL BANK OF SCOTLAND PLC,

as Liquidity Bank

 

By:  /s/ Stephen Loizou

Printed Name: Stephen Loizou

Title: Associate Director

	 	 	
MORGAN STANLEY BANK,

as Liquidity Bank

 

By:  /s/ Daniel Twenge

Printed Name: Daniel Twenge

Title: Authorized Signatory

	 	 	
BANK OF MONTREAL,

as Liquidity Bank

 

By:  /s/ Robert H. Wolohan

Printed Name: Robert H. Wolohan

Title: Vice President

	 	 	
ABN AMRO BANK N.V.,

as Liquidity Bank

 

By:   /s/ Alexander M. Blodi

Printed Name: Alexander M. Blodi

Title: Managing Director

 

By:  /s/ David Carrington

Printed Name: David Carrington

Title: Director

	 	 	
DEUTSCHE BANK AG, 

NEW YORK BRANCH,

as Liquidity Bank

 

By:  /s/ Heidi Sandquist

Printed Name: Heidi Sandquist

Title: Vice President

	 	 	
By:  /s/ Ming K. Chu

Printed Name: Ming K. Chu

Title: Vice President

	 	 	
ING BANK N.V.,

as Liquidity Bank

 

By:  /s/ M.A. Moolenburgh

Printed Name: M.A. Moolenburgh

Title: Director

 

By:  /s/ L. Vriens

Printed Name: L. Vriens

Title: Director

	 	 	
SOCIETE GENERALE,

as Liquidity Bank

 

By:  /s/ Sebastien Ribatto

Printed Name: Sebastien Ribatto

Title: Managing Dircetor

	 	 	
STANDARD CHARTERED BANK, 

NEW YORK BRANCH

as Liquidity Bank

 

By:  /s/ Joel Martinez

Printed Name: Joel Martinez

Title: Syndications, Capital Markets

	 	 	 
	 	 	
By:  /s/ Andrew Y. Ng

Printed Name: Andrew Y. Ng

Title: Director

	 	 	
BANCO BILBAO VIZCAYA ARGENTARIA S.A.,

as Liquidity Bank

 

By:  /s/ Emilio de las Heras

Printed Name: Emilio de las Heras

Title: Head of New York

	 	 	
AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED,

as Liquidity Bank

 

By:  /s/ John W. Wade

Printed Name: John W. Wade

Title: Director

	 	 	
FORTIS BANK SA/NV CAYMAN ISLANDS BRANCH, 

as Liquidity Bank

 

By:  /s/ C. Roberts

Printed Name: C. Roberts

Title: Managing Director

 

By:  /s/ J. Jimenez

Printed Name: J. Jimenez

Title: Director

	 	 	
BARCLAYS BANK PLC,

as Liquidity Bank

 

By:  /s/ Esther Carr

Printed Name: Esther Carr

Title: Manager

	 	 	
MIZHUO CORPORATE BANK, LTD.,

as Liquidity Bank

 

By:  /s/ Robert Gallagher

Printed Name: Robert Gallagher

Title: Senior Vice President

	 	 	
BANCO SANTANDER CENTERAL HISPANO,

S.A., NEW YORK BRANCH,

as Liquidity Bank

 

By:  /s/ Carlos de Paula

Printed Name: Carlos de Paula

Title: Executive Director

 

By:  /s/ Ignacio Campillo

Printed Name: Ignacio Campillo

Title: Executive Director

	 	 	
THE BANK OF NOVA SCOTIA,

as Liquidity Bank

 

By:  /s/ Frans Braniotis

Printed Name: Frans Braniotis

Title: Managing Director

	 	 	
KBC BANK N.V.

as Liquidity Bank

 

By:  /s/ B. Van Leuven

Printed Name: B. Van Leuven

Title: Relationship Manager

	 	 	 
	 	 	
By:  /s/ Paul D'Haeyer

Printed Name: Paul D'Haeyer

Title: General Manager

	 	 	
CIBC INC.,

as Liquidity Bank

 

By:  /s/ Dominic J. Sorresso

Printed Name: Dominic J. Sorresso

Title: Executive Director

	 	 	
UNICREDITO ITALIANO S.P.A., 

NEW YORK BRANCH,

as Liquidity Bank

 

By:  /s/ Christopher Eldin

Printed Name: Christopher Eldin

Title: First Vice President

 

By:  /s/ Charles Michael

Printed Name: Charles Michael

Title: Vice President

 

 

ANNEX Y

 

 

	
Liquidity Commitments
	
Expiration Date: June 11, 2012

	 	 	 	 	 	 
	 	 	 	 	 	 
	
Banks
	 	
Percentage of Aggregate

Liquidity Commitment
	 	
Dollar

Amount
	 
	
JPMorgan Chase Bank, N.A.
	 	 	
7.50%
	
 
	
$
	
45,000,000
	 
	
Citibank, N.A.
	 	 	
7.50%
	
 
	
$
	
45,000,000
	
 

	
BNP Paribas
	 	 	
5.00%
	
 
	
$
	
30,000,000
	 
	
Credit Suisse, acting through its Cayman Islands Branch
	 	 	
5.00%
	
 
	
$
	
30,000,000
	 
	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank International”, New York Branch
	 	 	
5.00%
	
 
	
$
	
30,000,000
	 
	
Bank of Tokyo-Mitsubishi UFJ Trust Company
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
Calyon New York Branch
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
HSBC Bank USA, National Association
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
SunTrust Bank
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
The Royal Bank of Scotland PLC
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
Morgan Stanley Bank
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
Bank of Montreal
	 	 	
4.17%
	
 
	
$
	
25,000,000
	 
	
ABN AMRO Bank N.V.
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Deutsche Bank AG, New York Branch
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
ING Bank N.V.
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Societe Generale
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Standard Chartered Bank, New York Branch
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Banco Bilbao Vizcaya Argentaria S.A.
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Australia and New Zealand Banking Group Limited
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Fortis Bank SA/NV Cayman Islands Branch
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Barclays Bank PLC
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Mizhuo Corporate Bank, LTD.
	 	 	
3.33%
	
 
	
$
	
20,000,000
	 
	
Banco Santander Centeral Hispano, S.A., New York Branch
	 	 	
1.67%
	
 
	
$
	
10,000,000
	 
	
The Bank of Nova Scotia
	 	 	
1.67%
	
 
	
$
	
10,000,000
	 
	
KBC Bank N.V.
	 	 	
1.67%
	
 
	
$
	
10,000,000
	 
	
CIBC Inc.
	 	 	
1.67%
	
 
	
$
	
10,000,000
	 
	
Unicredito Italiano S.P.A., New York Branch
	 	 	
0.83%
	
 
	
$
	
5,000,000
	 
	
TOTAL
	 	 	
100.0%
	
 
	
$
	
600,000,000
	 

 

 

Y-1

 

EXHIBIT A to

Liquidity Agreement

 

BUNGE ASSET FUNDING CORP.

 

LIQUIDITY LOAN NOTE

 

$_______________

New York, New York

[_____________], 2007

 

FOR VALUE RECEIVED, BUNGE ASSET FUNDING CORP., a Delaware corporation (“BAFC”), hereby promises to pay to the order of ______________________________ (the “Liquidity Bank”), in lawful money of the United States of America in immediately available funds, at the office of the Administrative Agent (as defined in the Liquidity Agreement referred to below) located at New York, New York, on the Liquidity Commitment Expiration Date (as defined in the
Liquidity Agreement referred to below) the principal sum of __________________________ or, if less, then the unpaid principal amount of all Liquidity Loans (as defined in the Liquidity Agreement) made by the Liquidity Bank pursuant to the Liquidity Agreement.

 

BAFC promises also to pay interest on the unpaid principal amount of each Liquidity Loan made by the Liquidity Bank in like money at said office from the date hereof until paid at the rates and at the times provided in Section 3.03 of the Liquidity Agreement.

 

This Liquidity Loan Note evidences indebtedness incurred under and is subject to the terms and provisions of and entitled to the benefits of a Seventh Amended and Restated Liquidity Agreement, dated as of June 11, 2007 (as from time to time in effect, the “Liquidity Agreement”), among BAFC, certain lenders (including the Liquidity Bank) and JPMorgan Chase Bank, N.A., as agent for such lenders (the “Administrative Agent”). This Note is secured by
the Fourth Amended and Restated Security Agreement dated as of June 28, 2004, as from time to time in effect, among BAFC, the Administrative Agent, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank International”, New York Branch, as Letter of Credit Agent, the Servicer and The Bank of New York, as Collateral Agent.

 

As provided in the Liquidity Agreement, this Note is subject to voluntary and mandatory prepayment, in whole or in part.

 

In case a Mandatory Liquidation Event (as defined in the Liquidity Agreement) shall occur and be continuing, the principal of and accrued interest on this Liquidity Loan Note may be declared to be due and payable in the manner and with the effect provided in the Liquidity Agreement.

 

BAFC hereby waives presentment, demand, protest or notice of any kind in connection with this Note.

A-1

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

BUNGE ASSET FUNDING CORP.

 

By:  ______________________________________

Printed Name:  ______________________________

Title:  _____________________________________

 

A-2

 

EXHIBIT B to

Liquidity Agreement

 

FORM OF ASSIGNMENT AND ASSUMPTION

Reference is made to the Seventh Amended and Restated Liquidity Agreement, dated as of June 11, 2007 (the “Liquidity Agreement”), among Bunge Asset Funding Corp., JP Morgan Chase Bank, N.A. as Administrative Agent and the Liquidity Banks named therein. Terms defined in the Liquidity Agreement are used herein with the same meaning.

 

The “Assignor” and the “Assignee” referred to on Annex 1 agree as follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under the Liquidity Agreement as of the date hereof equal to the percentage interest specified on Annex 1 of all outstanding rights and obligations under the Liquidity Agreement. After giving effect to such sale and assignment, the Assignee’s Percentage of the Aggregate Liquidity Commitment and the amount of Liquidity Loans owing to the Assignee will be as set forth on Annex 1.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Transaction Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial
condition of any Program Party or the performance or observance by any Program Party of any of its obligations under the Transaction Documents or any other instrument or document furnished pursuant thereto; and (iv) attaches the Liquidity Loan Note or Notes held by the Assignor and requests that the Administrative Agent exchange such Liquidity Loan Note or Notes for a new Liquidity Loan Note or Notes payable to the order of the Assignee in an amount equal to the Percentage of the Aggregate Liquidity Commitment assumed by the Assignee pursuant hereto or new Liquidity Loan Notes payable to the order of the Assignee in an amount equal to the Percentage of the Aggregate Liquidity Commitment assumed by the Assignee pursuant hereto and to the order of the Assignor in an amount equal to the Percentage of the Aggregate Liquidity Commitment retained by the Assignor under the Liquidity Agreement, respectively, as specified on Annex 1.

 

3. The Assignee (i) confirms that it has received a copy of the Liquidity Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption; (ii) agrees that it will, independently and without reliance upon the Administrative Agent,

B-1

the Assignor or any other Liquidity 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 Liquidity Agreement; (iii) attaches the letters from each Series 2000-1 Rating Agency required by subsection 11.05(a)(iv) of the Liquidity Agreement; (iv) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Liquidity Agreement as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Liquidity Agreement are required to be performed by it as a Liquidity Bank (including the obligations set forth at Sections 11.12 and 11.17 of the Liquidity Agreement); and (vi) attaches any U.S. Internal Revenue Service form required under subsection 11.05(a)(v) of the Liquidity Agreement.

 

4. Following the execution of this Assignment and Assumption, it will be delivered to the Administrative Agent and the Guarantor for acceptance. The effective date for this Assignment and Assumption (the “Effective Date”) shall be the date of acceptance hereof by the Administrative Agent and the Guarantor, unless otherwise specified on Annex 1.

 

5. Upon such acceptance by the Administrative Agent and the Guarantor, as of the Effective Date, (i) the Assignee shall be a party to the Liquidity Agreement and, to the extent provided in this Assignment and Assumption, have the rights and obligations of a Liquidity Bank thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Assumption, relinquish its rights and be released from its obligations under the Liquidity Agreement.

 

6. Upon such acceptance by the Administrative Agent, from and after the Effective Date, the Administrative Agent shall make all payments under the Liquidity Agreement and the Liquidity Loan Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Liquidity Agreement and the Liquidity Loan Notes for periods prior to the Effective Date directly between themselves.

 

7. This Assignment and Assumption shall be governed by, and construed in accordance with, the laws of the State of New York.

 

8. This Assignment and Assumption may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Annex 1 to this Assignment and Assumption by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.

 

B-2

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Annex 1 to this Assignment and Assumption to be executed by their officers thereunto duly authorized as of the date specified thereon.

 

 

B-3

 

ANNEX 1

TO

ASSIGNMENT AND ASSUMPTION

 

	
Percentage of Aggregate Liquidity Commitment assigned:
	 	 	
__________
	
%

	 	 	 	 	 
	
Assignee’s Percentage of the Aggregate Liquidity Commitment (in Dollars) and Principal Amount of Liquidity Loan Note payable to Assignee after giving effect to such sale and assignment:
	 	
$

	
__________
	 
	 	 	 	 	 
	
Principal Amount of Liquidity Loans payable to Assignee after giving effect to such sale and assignment:
	 	
$
	
----
	 
	 	 	 	 	 
	
Assignor’s Percentage of the Aggregate Liquidity Commitment after giving effect to such sale and assignment:
	 	 	
__________
	
%

	 	 	 	 	 
	
Assignor’s Percentage of the Aggregate Liquidity Commitment (in Dollars) and Principal Amount of Liquidity Loan Note payable to Assignor after giving effect to such sale and assignment:
	 	
$
	
__________
	 
	 	 	 	 	 
	
Principal Amount of Liquidity Loans payable to Assignor after giving effect to such sale and assignment:
	 	
$
	
----
	 

Effective Date (if other than date of acceptance by Administrative Agent):    , 20__

 

 

[__________________________________],

as Assignor,

 

 

By_________________________________

Title________________________________

Dated ___________, 20__

 

 

[_________________________________],

as Assignee

 

 

By_________________________________

Title________________________________

Dated _____________, 20__

 

 

 

Accepted this ____ day of __________ 20__

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

By________________________________

Title_______________________________

Dated _____________, 20__

 

BUNGE LIMITED, 

as Guarantor

 

By_________________________________

Title________________________________

Dated ______________, 20__

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